36Kr Holdings Inc. Reports Third Quarter 2022 Unaudited Financial Results

BEIJING, Dec. 7, 2022 /PRNewswire/ — 36Kr Holdings Inc. (“36Kr” or the “Company” or “We”) (NASDAQ: KRKR), a prominent brand and a pioneering platform dedicated to serving New Economy participants in China, today announced its unaudited financial results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

Number of followers[1] as of September 30, 2022 reached 26.8 million, an increase of 18.6% from 22.6 million as of September 30, 2021. Total revenues increased by 11.5% to RMB94.6 million (US$13.3 million) in the third quarter of 2022, from RMB84.9 million in the same period of 2021. Revenues from online advertising services increased by 19.8% to RMB63.9 million (US$9.0 million) in the third quarter of 2022, from RMB53.4 million in the same period of 2021. Enterprise value-added services revenues increased by 4.7% to RMB23.6 million (US$3.3 million) in the third quarter of 2022, from RMB22.5 million in the same period of 2021. Gross profit increased by 24.0% to RMB59.1 million (US$8.3 million) in the third quarter of 2022, from RMB47.6 million in the same period of 2021. Gross profit margin further improved to 62.4% in the third quarter of 2022, from 56.1% in the same period of 2021. Net income was RMB2.5 million (US$0.4 million) in the third quarter of 2022, compared to net loss of RMB31.3 million in the same period of 2021.

[1] “Number of followers” refers to the aggregate number of followers across the official accounts we own and/or operate on various social media and online platforms, including but not limited to Weixin, Weibo, Zhihu, Toutiao, Xinhua Net, Douyin and Bilibili.

Selected Operating Data

For the Three Months Ended

September 30,

2021

2022

Online advertising services

Number of online advertising services end customers

192

231

Average revenue per online advertising services end
customer (RMB’000)[2]

277.9

276.8

Enterprise value-added services

Number of enterprise value-added services end customers

74

93

Average revenue per enterprise value-added services end
customer (RMB’000)[3]

304.0

253.4

Subscription services

Number of individual subscribers

974

99

Average revenue per individual subscriber (RMB)[4]

1,138.9

5,186.8

Number of institutional investors

87

149

Average revenue per institutional investor (RMB’000)[5]

91.0

44.3

[2] Equals revenues generated from online advertising services for a period divided by the
number of online advertising services end customers in the same period.

[3] Equals revenues generated from enterprise value-added services for a period divided
by the number of enterprise value-added services end customers in the same period.

[4] Equals revenues generated from individual subscription services for a period divided
by the number of individual subscribers in the same period.

[5] Equals revenues generated from institutional investor subscription services for a 
period divided by the number of institutional investors in the same period

Mr. Dagang Feng, Co-chairman and CEO of 36Kr, commented, “In the third quarter of 2022, despite COVID-19 resurgences and macroeconomic headwinds, our continuous innovation in content, services and commercialization alongside our operational optimizations empowered us to achieve robust revenue growth year-over-year and a fourth consecutive quarter of profitability. Bolstered by our relentless efforts to diversify our content matrix and enhance our brand influence, the number of our followers exceeded 26 million as of the end of the third quarter, representing an increase of 19% year-over-year. Furthermore, our Enterprise Review Platform continued to develop rapidly and recorded solid performance across multiple operating metrics, propelling our second growth curve and commercialization efforts. To sustain our business growth throughout 2022 and beyond, we will continue to hone our competitive edge and boost our businesses’ vitality, capitalizing on industry upgrade and digital transformation trends to unlock greater commercialization potential as we empower more and more New Economy enterprises.”

Ms. Lin Wei, Chief Financial Officer of 36Kr, added, “We continued our strong growth momentum in the third quarter, achieving another quarter of double-digit topline growth, with a 12% year-over-year increase in total revenues. Notably, our advertising business continued to soar, up 20% year-over-year, while our enterprise value-added services also recorded solid growth of 5% year-over-year. In addition, as we unceasingly endeavor to optimize our revenue mix, our cost structure and operational efficiency, our gross margin and operating margin both improved year-over-year in the third quarter of 2022, leading to another sequential quarter of profitability. We believe that our diversified portfolio of products and services, underscored by our content capability and multi-dimensional ecosystem, will firmly position us to achieve sustainable growth, fortify our business resilience, and generate greater long-term shareholder value as we move forward.”

Third Quarter 2022 Financial Results

Total revenues increased by 11.5% to RMB94.6 million (US$13.3 million) in the third quarter of 2022, from RMB84.9 million in the same period of 2021. 

Online advertising services revenues increased by 19.8% to RMB63.9 million (US$9.0 million) in the third quarter of 2022, from RMB53.4 million in the same period of 2021. The increase was primarily attributable to more innovative marketing solutions we provided to our customers as well as proactive sales strategies we adopted to navigate the challenging environment during the quarter. Enterprise value-added services revenues increased by 4.7% year-over-year to RMB23.6 million (US$3.3 million) in the third quarter of 2022, as we continuously developed various proactive enterprise-level services for our customers.  Subscription services revenues were RMB7.1 million (US$1.0 million) in the third quarter of 2022, compared to RMB9.0 million in the same period of 2021. The decrease was primarily because some of our offline training programs were cancelled or delayed due to the resurgence of COVID-19.

Cost of revenues was RMB35.5 million (US$5.0 million) in the third quarter of 2022, compared to RMB37.3 million in the same period of 2021. 

Gross profit increased by 24.0% to RMB59.1 million (US$8.3 million) in the third quarter of 2022, compared to RMB47.6 million in the same period of 2021. Gross profit margin was 62.4% in the third quarter of 2022, compared to 56.1% in the same period of 2021.

Operating expenses were RMB62.1 million (US$8.7 million) in the third quarter of 2022, a decrease of  22.7% compared to RMB80.3 million in the same period of 2021.

Sales and marketing expenses were RMB32.2 million (US$4.5 million) in the third quarter of 2022, a decrease of 9.3% from RMB35.5 million in the same period of 2021. The decrease was primarily attributable to the decrease in share-based compensation expenses and marketing expenses. General and administrative expenses were RMB16.6 million (US$2.3 million) in the third quarter of 2022, compared to RMB30.9 million in the same period of 2021. The decrease was primarily attributable to the decrease in allowance for credit losses. Research and development expenses were RMB13.4 million (US$1.9 million) in the third quarter of 2022, compared to RMB13.9 million in the same period of 2021.

Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses, as well as general and administrative expenses totaled RMB2.6 million (US$0.4 million) in the third quarter of 2022, compared to RMB4.9 million in the same period of 2021. 

Other income was RMB5.7 million (US$0.8 million) in the third quarter of 2022, compared to RMB1.5 million in the same period of 2021. The fluctuation was primarily attributable to income generated from write-offs of accounts payable in the third quarter of 2022, as the Company fulfilled all applicable notifications and other risk-eliminative measures.

Income tax expenses were RMB166.0 thousand (US$23.0 thousand) in the third quarter of 2022, compared to income tax expenses of RMB14.0 thousand in the same period of 2021.

Net income was RMB2.5 million (US$0.4 million) in the third quarter of 2022, compared to net loss of RMB31.3 million in the same period of 2021. Non-GAAP adjusted net income[6] was RMB5.1 million (US$0.7 million) in the third quarter of 2022, compared to adjusted net loss of RMB26.4 million in the same period of 2021.

[6] Non-GAAP adjusted income/(loss) represents net income/(loss) excluding share-based compensation expenses

Net income attributable to 36Kr Holdings Inc.’s ordinary shareholders was RMB1.7 million (US$0.2 million) in the third quarter of 2022, compared to net loss attributable to 36Kr Holdings Inc.’s ordinary shareholders of RMB30.5 million in the same period of 2021.

Basic and diluted net income per ADS were both RMB0.042 (US$0.006) in the third quarter of 2022, compared to basic and diluted net loss per ADS of RMB0.746 in the same period of 2021.

Certain Balance Sheet Items

As of September 30, 2022, the Company had cash, cash equivalents and short-term investments of RMB164.0 million (US$23.1 million), compared to RMB194.3 million as of June 30, 2022. The decrease was mainly attributable to net cash outflow from operating activities, as well as certain long-term investments in several New Economy start-up companies in the third quarter of 2022.

Conference Call

The Company’s management will host an earnings conference call at 7:00 AM U.S. Eastern Time on December 7, 2022 (8:00 PM Beijing/Hong Kong Time on December 7, 2022).

For participants who wish to join the call by phone, please access the link provided below to complete the pre-registration and dial in 5 minutes prior to the scheduled call start time. Upon registration, each participant will receive dial-in details to join the conference call.

Event Title:

36Kr Holdings Inc. Third Quarter 2022 Earnings Conference Call

Pre-registration link:

https://s1.c-conf.com/diamondpass/10027223-t4ny3n.html

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.36kr.com.

A replay of the conference call will be available for one week from the date of the conference, by dialing the following telephone numbers:

United States:

+1-855-883-1031

International:

+61-7-3107-6325

Hong Kong, China:

800-930-639

Mainland China:

400-120-9216

Replay PIN:

10027223

About 36Kr Holdings Inc.

36Kr Holdings Inc. is a prominent brand and a pioneering platform dedicated to serving New Economy participants in China with the mission of empowering New Economy participants to achieve more. The Company started its business with high-quality New Economy-focused content offerings, covering a variety of industries in China’s New Economy with diverse distribution channels. Leveraging traffic brought by high-quality content, the Company has expanded its offerings to business services, including online advertising services, enterprise value-added services and subscription services to address the evolving needs of New Economy companies and upgrading needs of traditional companies. The Company is supported by comprehensive database and strong data analytics capabilities. Through diverse service offerings and the significant brand influence, the Company is well-positioned to continuously capture the high growth potentials of China’s New Economy.

For more information, please visit: http://ir.36kr.com.

Use of Non-GAAP Financial Measures

In evaluating its business, the Company considers and uses two non-GAAP measures, adjusted net income/(loss) and adjusted EBITDA, as supplemental measures to review and assess its operating performance. The presentation of these two non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company presents these non-GAAP financial measures because they are used by the Company’s management to evaluate its operating performance and formulate business plans. The Company also believes that the use of these non-GAAP measures facilitates investors’ assessment of its operating performance.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company performance. The Company encourages investors to review its financial information in its entirety and not rely on a single financial measure.

Adjusted net loss represents net loss excluding share-based compensation expenses.

Adjusted EBITDA represents adjusted net income/(loss) before interest income, interest expenses, income tax expense/(credit), depreciation of property and equipment and amortization of intangible assets.  

For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and non-GAAP results” set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi are made at a rate of RMB7.1135 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on of September 30, 2022.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s goal and strategies; the Company’s future business development, results of operations and financial condition; relevant government policies and regulations relating to our business and industry; the Company’s expectations regarding the use of proceeds from this offering; the Company’s expectations regarding demand for, and market acceptance of, its services; the Company’s ability to maintain and enhance its brand; the Company’s ability to provide high-quality content in a timely manner to attract and retain users; the Company’s ability to retain and hire quality in-house writers and editors; the Company’s ability to maintain cooperation with third-party professional content providers; the Company’s ability to maintain relationship with third-party platforms; general economic and business condition in China; possible disruptions in commercial activities caused by natural or human-induced disasters; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law. 

For investor and media inquiries, please contact:

In China:

36Kr Holdings Inc.
Investor Relations
Tel: +86 (10) 5825-4188
E-mail: ir@36kr.com

The Piacente Group, Inc.
Jenny Cai
Tel: +86 (10) 6508-0677
E-mail: 36Kr@tpg-ir.com

In the United States:

The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: 36Kr@tpg-ir.com 

36Kr Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

September 30,

September 30,

2022

2022

2022

RMB’000

RMB’000

US$’000

Assets

Current assets:

Cash and cash equivalents

135,512

101,717

14,299

Short–term investments

58,796

62,272

8,754

Accounts receivable, net

163,719

211,014

29,664

Receivables due from related parties

464

246

35

Prepayments and other current assets

40,331

17,747

2,495

Total current assets

398,822

392,996

55,247

Non–current assets:

Property and equipment, net

2,641

2,702

380

Intangible assets, net

1,057

1,288

181

Long-term investments

119,747

135,303

19,021

Operating lease right-of-use assets, net

7,843

4,507

634

Total non–current assets

131,288

143,800

20,216

Total assets

530,110

536,796

75,463

Liabilities

Current liabilities:

Accounts payable

46,664

45,549

6,403

Salary and welfare payables

42,892

45,699

6,424

Taxes payable

9,838

10,070

1,416

Deferred revenue

32,353

28,894

4,062

Amounts due to related parties

54

54

8

Accrued liabilities and other payables

18,449

21,292

2,993

Short-term loan

5,000

5,000

703

Operating lease liabilities

16,533

16,441

2,311

Total current liabilities

171,783

172,999

24,320

Non-current liabilities:

Operating lease liabilities

588

236

33

Other non-current liabilities

2,000

701

99

Total non-current liabilities

2,588

937

132

Total liabilities

174,371

173,936

24,452

Shareholders’ equity

Ordinary shares

695

694

98

Treasury stock

(12,967)

(12,402)

(1,743)

Additional paid-in capital

2,056,897

2,058,775

289,418

Accumulated deficit

(1,687,137)

(1,685,394)

(236,929)

Accumulated other comprehensive loss

(7,155)

(5,239)

(736)

Total 36Kr Holdings Inc.’s shareholders’ equity

350,333

356,434

50,108

Non-controlling interests

5,406

6,426

903

Total shareholders’ equity

355,739

362,860

51,011

Total liabilities and shareholders’ equity

530,110

536,796

75,463

 

 

36Kr Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

Three Months Ended 

Nine Months Ended 

September 30,

September 30,

September 30,

September 30,

September 30,

September 30,

2021

2022

2022

2021

2022

2022

RMB’000

RMB’000

US$’000

RMB’000

RMB’000

US$’000

Revenues:

   Online advertising services

53,357

63,934

8,988

138,329

159,374

22,404

   Enterprise value-added services

22,499

23,565

3,313

43,699

47,244

6,641

   Subscription services

9,030

7,109

999

18,464

19,304

2,714

Total revenues

84,886

94,608

13,300

200,492

225,922

31,759

   Cost of revenues  

(37,261)

(35,541)

(4,996)

(88,109)

(90,222)

(12,683)

Gross profit  

47,625

59,067

8,304

112,383

135,700

19,076

Operating expenses:

   Sales and marketing expenses

(35,453)

(32,168)

(4,522)

(104,584)

(89,267)

(12,549)

   General and administrative expenses  

(30,941)

(16,559)

(2,328)

(81,014)

(30,373)

(4,270)

   Research and development expenses  

(13,940)

(13,385)

(1,882)

(34,883)

(40,507)

(5,694)

Total operating expenses  

(80,334)

(62,112)

(8,732)

(220,481)

(160,147)

(22,513)

Loss from operations  

(32,709)

(3,045)

(428)

(108,098)

(24,447)

(3,437)

Other income/(expenses):

   Share of (loss)/income from equity method investments

(132)

(69)

(10)

(4,056)

285

40

   Gain on disposal of a subsidiary

38,019

5,345

   Long-term investment income

18,464

2,596

   Short-term investment income

507

449

63

1,898

1,635

230

   Government grant

252

916

129

2,427

3,351

471

   Others, net  

828

4,404

619

1,810

7,008

985

(Loss)/income before income tax  

(31,254)

2,655

373

(106,019)

44,315

6,230

   Income tax (expenses)/credit

(14)

(166)

(23)

(9)

(171)

(24)

Net (loss)/income

(31,268)

2,489

350

(106,028)

44,144

6,206

   Net loss/(income) attributable to non-controlling interests

736

(746)

(105)

1,896

(1,386)

(195)

Net (loss)/income attributable to 36Kr Holdings Inc.’s
   ordinary shareholders  

(30,532)

1,743

245

(104,132)

42,758

6,011

Net (loss)/income

(31,268)

2,489

350

(106,028)

44,144

6,206

Other comprehensive (loss)/income

   Foreign currency translation adjustments  

175

1,916

269

(371)

3,748

527

Total other comprehensive (loss)/income

175

1,916

269

(371)

3,748

527

Total comprehensive (loss)/income

(31,093)

4,405

619

(106,399)

47,892

6,733

   Net loss/(income) attributable to non-controlling interests

736

(746)

(105)

1,896

(1,386)

(195)

Comprehensive (loss)/income attributable to 36Kr
   Holdings Inc.’s ordinary shareholders  

(30,357)

3,659

514

(104,503)

46,506

6,538

Net (loss)/income per ordinary share (RMB)

   Basic

(0.030)

0.002

0.000

(0.102)

0.041

0.006

   Diluted

(0.030)

0.002

0.000

(0.102)

0.041

0.006

Net (loss)/income per ADS (RMB)

   Basic

(0.746)

0.042

0.006

(2.538)

1.037

0.146

   Diluted 

(0.746)

0.042

0.006

(2.538)

1.037

0.146

Weighted average number of ordinary shares used in
   per share calculation

   Basic

1,023,327,262

1,035,476,294

1,035,476,294

1,025,636,483

1,031,290,397

1,031,290,397

   Diluted 

1,023,327,262

1,035,476,294

1,035,476,294

1,025,636,483

1,031,290,397

1,031,290,397

Weighted average number of ADS used in per ADS
   calculation

   Basic

40,933,090

41,419,052

41,419,052

41,025,459

41,251,616

41,251,616

   Diluted 

40,933,090

41,419,052

41,419,052

41,025,459

41,251,616

41,251,616

 

 

36Kr Holdings Inc.

UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

Three Months Ended

Nine Months Ended

September 30,

2021

September 30,

2022

September 30,

2022

September 30,

2021

September 30,

2022

September 30,

2022

RMB’000

RMB’000

US$’000

RMB’000

RMB’000

US$’000

Net (loss)/income

(31,268)

2,489

350

(106,028)

44,144

6,206

Share-based compensation expenses

4,881

2,575

362

10,880

9,268

1,303

Non-GAAP adjusted net (loss)/income

(26,387)

5,064

712

(95,148)

53,412

7,509

Interest income, net

(166)

(323)

(45)

(507)

(564)

(79)

Income tax expenses

14

166

23

9

171

24

Depreciation and amortization expenses

618

479

67

1,924

1,423

200

Non-GAAP adjusted EBITDA

(25,921)

5,386

757

(93,722)

54,442

7,654