36Kr Holdings Inc. Reports Third Quarter of 2019 Unaudited Financial Results
Third Quarter 2019 Operational and Financial Highlights
- Average monthly page views (“PV”) for the twelve-month period ended
September 30, 2019 was 389.5 million, compared to 145.6 million for the twelve-month period endedSeptember 30, 2018 . - Total revenues increased by 59.1% to
RMB130.9 million (US$18.3 million ) in the third quarter of 2019, fromRMB82.3 million in the same period of 2018. - Online advertising services revenues increased by 4.6% to
RMB54 .1 million (US$7.6 million ) in the third quarter of 2019, fromRMB51 .7 million in the same period of 2018. - Enterprise value-added services revenues increased by 202.8% to
RMB64 .0 million (US$9.0 million ) in the third quarter of 2019, fromRMB21 .1 million in the same period of 2018. - Subscription services revenues increased by 36.2% to
RMB12 .9 million (US$1.8 million ) in the third quarter of 2019, fromRMB9 .4 million in the same period of 2018. - Gross profit increased by 23.3% to
RMB55.1 million (US$7.7 million ) in the third quarter of 2019, fromRMB44.7 million in the same period of 2018. - Net loss was
RMB12.4 million (US$1.7 million ) in the third quarter of 2019, compared to net income ofRMB9.8 million in the same period of 2018. Non-GAAP adjusted net income1 increased by 22.0% toRMB13 .4 million (US$1.9 million ) in the third quarter of 2019, fromRMB11 .0 million in the same period of 2018.
First Nine Months 2019 Operational and Financial Highlights
- Total revenues increased by 115.1% to
RMB332.8 million (US$46.6 million ) in the first nine months of 2019, fromRMB154.7 million in the same period of 2018. - Online advertising services revenues increased by 30.1% to
RMB133 .6 million (US$18.7 million ) in the first nine months of 2019, fromRMB102 .7 million in the same period of 2018. - Enterprise value-added services revenues increased by 337.4% to
RMB165 .0 million (US$23.1 million ) in the first nine months of 2019, fromRMB37 .7 million in the same period of 2018. - Subscription services revenues increased by 139.0% to
RMB34 .2 million (US$4.8 million ) in the first nine months of 2019, fromRMB14 .3 million in the same period of 2018. - Gross profit increased by 72.1% to
RMB118.8 million (US$16.6 million ) in the first nine months of 2019, fromRMB69.1 million in the same period of 2018.
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1 Non-GAAP adjusted net income represents net income excluding share-based compensation.
Selected Operating Data
For the Nine Months Ended September 30, | ||||
2018 | 2019 | |||
Online advertising services | ||||
Number of online advertising services end customers | 224 | 329 | ||
Average revenue per online advertising services end customer (RMB’000)2 | 458.3 | 406.0 | ||
Enterprise value-added services | ||||
Number of enterprise value-added services end customers | 119 | 241 | ||
Average revenue per enterprise value-added services end customer (RMB’000)3 | 317.1 | 684.8 | ||
Subscription services | ||||
Number of individual subscribers | 39,657 | 14,052 | ||
Average revenue per individual subscriber (RMB)4 | 152.3 | 1,377.1 | ||
Number of institutional investor subscribers | 103 | 127 | ||
Average revenue per institutional investor subscriber (RMB’000)5 | 80.3 | 101.3 | ||
Number of enterprise subscribers | - | 262 | ||
Average revenue per enterprise subscriber (RMB’000)6 | - | 7.5 |
______________________
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 investor subscribers in the same period.
6 Equals revenues generated from enterprise subscription services for a period divided by the number of enterprise subscribers in the same period.
Mr. Dagang Feng, co-chairman and chief executive officer of 36Kr, commented, “We delivered solid performance in the third quarter of 2019. Our average monthly PV for the twelve-month period ended
“Along with significant traffic growth, our value proposition is resonating with customers as we achieved total revenues of
Ms.
Third Quarter 2019 Financial Results
Total revenues were
- Online advertising services revenues increased by 4.6% to
RMB54 .1 million (US$7.6 million ) in the third quarter of 2019, fromRMB51 .7 million in the same period of 2018. The increase was mainly attributable to an increased number of end customers.
- Enterprise value-added services revenues increased by 202.8% to
RMB64 .0 million (US$9.0 million ) in the third quarter of 2019, fromRMB21 .1 million in the same period of 2018. The increase was primarily attributable to the increase of integrated marketing service revenues and business consulting services revenues.
- Subscription services revenues increased by 36.2% to
RMB12 .9 million (US$1.8 million ) in the third quarter of 2019, fromRMB9 .4 million in the same period of 2018. This increase was primarily attributable to the increase of individual subscription services revenues in the third quarter of 2019.
Cost of revenues increased by 101.7% to
Gross profit increased by 23.3% to
Operating expenses were
- Sales and marketing expenses increased by 69.0% to
RMB31.8 million (US$4.4 million ) in the third quarter of 2019, compared toRMB18.8 million in the same period of 2018. The increase was primarily attributable to an increase in payroll-related expenses in relation to hiring new sales and marketing staff and rental expenses in relation to office expansion.
- General and administrative expenses increased by 473.8% to
RMB37 .4 million (US$5.2 million ) in the third quarter of 2019, compared toRMB6 .5 million in the same period of 2018. The increase was primarily attributable to an increase in payroll-related expenses in relation to hiring new general and administrative staff and also an increase in share-based compensation expenses resulted from the newly granted share option in the third quarter of 2019.
- Research and development expenses increased by 20.1% to
RMB8.7 million (US$1.2 million ) in the third quarter of 2019, compared toRMB7 .2 million in the same period of 2018. The increase was primarily attributable to an increase in payroll-related expenses in relation to hiring more research and development staff.
Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses and general and administrative expenses in total were
Other income increased by 476.1% to
Income tax expenses decreased by 47.8% to
Net loss was
Net loss attributable to
Basic and diluted net loss per share were both
Certain Balance Sheet Items
As of September 30, 2019, the Company had cash and cash equivalents and short-term investments of
______________________
7 Non-GAAP adjusted net income represents net income excluding share-based compensation.
First Nine Months 2019 Financial Results
Total revenues were
- Online advertising services revenues increased by 30.1% to
RMB133 .6 million (US$18.7 million ) in the first nine months of 2019, fromRMB102 .7 million in the same period of 2018. The increase was mainly attributable to an increased number of end customers.
- Enterprise value-added services revenues increased by 337.4% to
RMB165 .0 million (US$23.1 million ) in the first nine months of 2019, fromRMB37 .7 million in the same period of 2018. The increase was primarily attributable to the increase of integrated marketing service revenues and business consulting services revenues.
- Subscription services revenues increased by 139.0% to
RMB34 .2 million (US$4.8 million ) in the first nine months of 2019, fromRMB14 .3 million in the same period of 2018. This increase was primarily attributable to the increase of individual subscription services revenues associated with the increased offline trainings held in the first nine months of 2019.
Cost of revenues increased by 149.8% to
Gross profit increased by 72.1% to
Operating expenses were
- Sales and marketing expenses increased by 88.7% to
RMB81.6 million (US$11.4 million ) in the first nine months of 2019, compared toRMB43.3 million in the same period of 2018. The increase was primarily attributable to an increase in payroll-related expenses in relation to hiring new sales and marketing staff.
- General and administrative expenses increased by 482.3% to
RMB84 .3 million (US$11.8 million ) in the first nine months of 2019, compared toRMB14 .5 million in the same period of 2018. The increase was primarily attributable to an increase in payroll-related expenses in relation to hiring new general and administrative staff and also an increase in share-based compensation expenses resulted from the re-designation of ordinary shares into the convertible redeemable preferred shares and the newly granted share option in the first nine months of 2019.
- Research and development expenses increased by 88.9% to
RMB25.6 million (US$3.6 million ) in the first nine months of 2019, compared toRMB13 .6 million in the same period of 2018. The increase was primarily attributable to an increase in payroll-related expenses in relation to hiring more research and development staff.
Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses and general and administrative expenses in total were
Other income increased by 188.5% to
Income tax expenses decreased by 82.0% to RMB0.3 million (
Net loss was
Net loss attributable to
Basic and diluted net loss per share were both
Recent developments
Overseas business investment
On
Conference Call
The Company’s management will host an earnings conference call at
Dial-in details for the earnings conference call are as follows:
United States: | +1-866-519-4004 |
International: | +65-6713-5090 |
Hong Kong, China: | 800-906-601 |
Mainland China: | 400-620-8038 |
Conference ID: | 9808228 |
Participants should dial-in approximately 5 minutes before the scheduled start time and ask to be connected to the call for “36Kr Holdings Inc.”
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 accessible approximately two hours after the conclusion of the live call until
United States: | +1-855-452-5696 |
International: | +61-2-8199-0299 |
Hong Kong, China: | 800-963-117 |
Mainland China: | 400-632-2162 |
Replay Access Code: | 9808228 |
About
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 income/(loss) represents net income/(loss) excluding share-based compensation.
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
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
For investor and media inquiries, please contact:
In
Investor Relations
Tel: +86 (10) 5825-4188
E-mail: ir@36kr.com
Tel: +86 (10) 6508-0677
E-mail: 36Kr@tpg-ir.com
In
Tel: +1-212-481-2050
E-mail: 36Kr@tpg-ir.com
Unaudited Condensed Consolidated Balance Sheets
December 31, 2018 |
September 30, 2019 |
September 30, 2019 |
||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 48,968 | 207,567 | 29,040 | |||||
Short‑term investments | 145,451 | 59,724 | 8,356 | |||||
Accounts receivable, net | 182,269 | 320,906 | 44,896 | |||||
Receivables due from related parties | 11,018 | 19,563 | 2,737 | |||||
Prepayments and other current assets | 11,686 | 35,240 | 4,930 | |||||
Total current assets | 399,392 | 643,000 | 89,959 | |||||
Non‑current assets: | ||||||||
Property and equipment, net | 15,472 | 16,049 | 2,245 | |||||
Intangible assets, net | 255 | 367 | 51 | |||||
Equity method investments | - | 42,441 | 5,938 | |||||
Deferred tax assets | 306 | 1,623 | 227 | |||||
Total non‑current assets | 16,033 | 60,480 | 8,461 | |||||
Total assets | 415,425 | 703,480 | 98,420 | |||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Accounts payable | 20,270 | 63,668 | 8,907 | |||||
Salary and welfare payables | 36,160 | 36,623 | 5,124 | |||||
Taxes payable | 16,917 | 9,163 | 1,282 | |||||
Deferred revenue | 4,227 | 13,812 | 1,932 | |||||
Amounts due to related parties | 1,979 | 43,411 | 6,073 | |||||
Accrued liabilities and other payables | 5,152 | 44,427 | 6,216 | |||||
Total current liabilities | 84,705 | 211,104 | 29,534 | |||||
Total liabilities | 84,705 | 211,104 | 29,534 | |||||
Mezzanine equity | ||||||||
Series A-1 convertible redeemable preferred shares | 681 | 41,804 | 5,849 | |||||
Series A-2 convertible redeemable preferred shares | 13,500 | 77,494 | 10,842 | |||||
Series B-1 convertible redeemable preferred shares | 388,145 | 934,138 | 130,691 | |||||
Series B-2 convertible redeemable preferred shares | 45,000 | 61,923 | 8,663 | |||||
Series B-3 convertible redeemable preferred shares | 48,016 | 237,100 | 33,172 | |||||
Series B-4 convertible redeemable preferred shares | 36,000 | 89,035 | 12,456 | |||||
Series C-1 convertible redeemable preferred shares | 277,259 | 297,746 | 41,656 | |||||
Series C-2 convertible redeemable preferred shares | - | 36,977 | 5,173 | |||||
Series D convertible redeemable preferred shares | - | 169,923 | 23,773 | |||||
Redeemable non-controlling interests | 7,731 | - | - | |||||
Total mezzanine equity | 816,332 | 1,946,140 | 272,275 | |||||
Shareholders’ deficit | ||||||||
Ordinary shares | 184 | 147 | 21 | |||||
Treasury stock | - | (2,333 | ) | (327 | ) | |||
Accumulated deficit | (486,027 | ) | (1,456,999 | ) | (203,842 | ) | ||
Accumulated other comprehensive income/(loss) | 231 | 147 | 21 | |||||
Total 36Kr Holdings Inc.'s shareholders’ (deficit)/equity | (485,612 | ) | (1,459,038 | ) | (204,127 | ) | ||
Non-controlling interests | - | 5,274 | 738 | |||||
Total shareholders’ deficit | (485,612 | ) | (1,453,764 | ) | (203,389 | ) | ||
Total liabilities, mezzanine equity and shareholders’ deficit | 415,425 | 703,480 | 98,420 | |||||
Unaudited Condensed Consolidated Statements of Comprehensive Income/(Loss)
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
2018 | 2019 | 2019 | 2018 | 2019 | 2019 | ||||||||||||
RMB’000 | RMB’000 | US$’000 | RMB’000 | RMB’000 | US$’000 | ||||||||||||
Revenues: | |||||||||||||||||
Online advertising services | 51,705 | 54,082 | 7,567 | 102,665 | 133,559 | 18,685 | |||||||||||
Enterprise value-added services | 21,128 | 63,974 | 8,950 | 37,736 | 165,046 | 23,091 | |||||||||||
Subscription services | 9,449 | 12,867 | 1,800 | 14,309 | 34,192 | 4,784 | |||||||||||
Total revenues | 82,282 | 130,923 | 18,317 | 154,710 | 332,797 | 46,560 | |||||||||||
Cost of revenues | (37,605 | ) | (75,837 | ) | (10,610 | ) | (85,647 | ) | (213,957 | ) | (29,934 | ) | |||||
Gross profit | 44,677 | 55,086 | 7,707 | 69,063 | 118,840 | 16,626 | |||||||||||
Operating expenses: | |||||||||||||||||
Sales and marketing expenses | (18,794 | ) | (31,756 | ) | (4,443 | ) | (43,256 | ) | (81,636 | ) | (11,421 | ) | |||||
General and administrative expenses | (6,521 | ) | (37,416 | ) | (5,235 | ) | (14,470 | ) | (84,265 | ) | (11,789 | ) | |||||
Research and development expenses | (7,241 | ) | (8,695 | ) | (1,216 | ) | (13,576 | ) | (25,643 | ) | (3,588 | ) | |||||
Total operating expenses | (32,556 | ) | (77,867 | ) | (10,894 | ) | (71,302 | ) | (191,544 | ) | (26,798 | ) | |||||
Income/(Loss) from operations | 12,121 | (22,781 | ) | (3,187 | ) | (2,239 | ) | (72,704 | ) | (10,172 | ) | ||||||
Other income/(expenses): | |||||||||||||||||
Share of loss from equity method investments | (741 | ) | - | - | (2,794 | ) | - | - | |||||||||
Gain on disposal of a subsidiary | - | 11,454 | 1,602 | - | 11,454 | 1,602 | |||||||||||
Short-term investment income | 2,459 | 880 | 123 | 7,477 | 3,261 | 456 | |||||||||||
Others, net | 503 | 462 | 65 | 556 | 399 | 57 | |||||||||||
Income/(Loss) before income tax | 14,342 | (9,985 | ) | (1,397 | ) | 3,000 | (57,590 | ) | (8,057 | ) | |||||||
Income tax expenses | (4,561 | ) | (2,383 | ) | (333 | ) | (1,532 | ) | (276 | ) | (39 | ) | |||||
Net income/(loss) | 9,781 | (12,368 | ) | (1,730 | ) | 1,468 | (57,866 | ) | (8,096 | ) | |||||||
Accretion on redeemable non-controlling interests to redemption value | (350 | ) | (1,477 | ) | (207 | ) | (688 | ) | (1,808 | ) | (252 | ) | |||||
Accretion of convertible redeemable preferred shares to redemption value | (37,967 | ) | (276,012 | ) | (38,615 | ) | (50,518 | ) | (517,023 | ) | (72,334 | ) | |||||
Re-designation of Series A-1 into Series B-3 convertible redeemable preferred shares | - | - | - | - | (26,787 | ) | (3,748 | ) | |||||||||
Re-designation of ordinary shares into Series A-1, A-2, B-1, B-2, B-3, and issuance of Series A-1, A-2, B-1, B-2, B-3 preferred shares without consideration | - | (309,984 | ) | (43,368 | ) | - | (309,984 | ) | (43,368 | ) | |||||||
Re-designation of ordinary shares into Series C-2 | - | (36,977 | ) | (5,173 | ) | - | (36,977 | ) | (5,173 | ) | |||||||
Net loss attributable to non-controlling interests | - | 1,215 | 169 | - | 1,351 | 188 | |||||||||||
Net loss attributable to 36Kr Holdings Inc.’s ordinary shareholders | (28,536 | ) | (635,603 | ) | (88,924 | ) | (49,738 | ) | (949,094 | ) | (132,783 | ) | |||||
Net income/(loss) | 9,781 | (12,368 | ) | (1,730 | ) | 1,468 | (57,866 | ) | (8,096 | ) | |||||||
Other comprehensive income/(loss) | |||||||||||||||||
Foreign currency translation adjustments | 201 | (82 | ) | (12 | ) | 265 | (85 | ) | (12 | ) | |||||||
Total other comprehensive income/(loss) | 201 | (82 | ) | (12 | ) | 265 | (85 | ) | (12 | ) | |||||||
Total comprehensive income/(loss) | 9,982 | (12,450 | ) | (1,742 | ) | 1,733 | (57,951 | ) | (8,108 | ) | |||||||
Accretion on redeemable non-controlling interests to redemption value | (350 | ) | (1,477 | ) | (207 | ) | (688 | ) | (1,808 | ) | (252 | ) | |||||
Accretion of convertible redeemable preferred shares to redemption value | (37,967 | ) | (276,012 | ) | (38,615 | ) | (50,518 | ) | (517,023 | ) | (72,334 | ) | |||||
Re-designation of Series A-1 into Series B-3 convertible redeemable preferred shares | - | - | - | - | (26,787 | ) | (3,748 | ) | |||||||||
Re-designation of ordinary shares into Series A-1, A-2, B-1, B-2, B-3, and issuance of Series A-1, A-2, B-1, B-2, B-3 preferred shares without consideration | - | (309,984 | ) | (43,368 | ) | - | (309,984 | ) | (43,368 | ) | |||||||
Re-designation of ordinary shares into Series C-2 | - | (36,977 | ) | (5,173 | ) | - | (36,977 | ) | (5,173 | ) | |||||||
Net loss attributable to non-controlling interests | - | 1,215 | 169 | - | 1,351 | 188 | |||||||||||
Comprehensive loss attributable to 36Kr Holding Inc.’s ordinary shareholders | (28,335 | ) | (635,685 | ) | (88,936 | ) | (49,473 | ) | (949,179 | ) | (132,795 | ) | |||||
Net loss per share attributable to 36Kr Holding Inc.’s shareholders | |||||||||||||||||
-Basic | (0.097 | ) | (2.535 | ) | (0.355 | ) | (0.170 | ) | (3.239 | ) | (0.453 | ) | |||||
-Diluted | (0.097 | ) | (2.535 | ) | (0.355 | ) | (0.170 | ) | (3.239 | ) | (0.453 | ) | |||||
Weighted average number of shares | |||||||||||||||||
-Basic | 293,613,084 | 250,756,678 | 250,756,678 | 292,148,436 | 281,664,251 | 281,664,251 | |||||||||||
-Diluted | 293,613,084 | 250,756,678 | 250,756,678 | 292,148,436 | 281,664,251 | 281,664,251 | |||||||||||
Unaudited Reconciliations of GAAP and Non-GAAP Results
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||
2018 | 2019 | 2019 | 2018 | 2019 | 2019 | ||||||||||||||
RMB’000 | RMB’000 | US$’000 | RMB’000 | RMB’000 | US$’000 | ||||||||||||||
Net income/(loss) | 9,781 | (12,368 | ) | (1,730 | ) | 1,468 | (57,866 | ) | (8,096 | ) | |||||||||
Share-based compensation expenses | 1,186 | 25,750 | 3,603 | 3,920 | 54,858 | 7,675 | |||||||||||||
Non-GAAP adjusted net income/(loss) | 10,967 | 13,382 | 1,873 | 5,388 | (3,008 | ) | (421 | ) | |||||||||||
Interest expense, net | 18 | 101 | 14 | 7 | 147 | 21 | |||||||||||||
Income tax expense | 4,561 | 2,383 | 333 | 1,532 | 276 | 39 | |||||||||||||
Depreciation and amortization expenses | 300 | 900 | 126 | 788 | 2,815 | 393 | |||||||||||||
Non-GAAP adjusted EBITDA | 15,846 | 16,766 | 2,346 | 7,715 | 230 | 32 | |||||||||||||
Source: 36Kr Holdings Inc.