Prepared remarks
Thank you for standing by, and welcome to the 36Kr Holdings, Inc. 2026 First Half Earnings Conference Call. I would now like to hand the conference over to management to begin. Please go ahead.
Thank you very much. Hello, everyone, and welcome to 36Kr Holdings First Half 2026 Earnings Conference Call. The company's financial and operational results were released earlier today and have been made available online. You can also read the earnings press release by visiting the IR section of our website, ir.36kr.com. Participants on today's call will include our Chairman and CEO, Mr. Dagang Feng; and our Chief Financial Officer, Mr. Xiang Li. Mr. Feng will start the call by providing an overview of the company and the provision and highlights of first half in Chinese, followed by English interpretation. Mr. Lee will then provide details on the company's financial results before opening the call for your questions. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding those and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements, except as required under the applicable law. Please note that 36Kr's earnings press release includes a reconciliation of unaudited non-GAAP measures to the unaudited GAAP measures. And please note that all amount numbers are in RMB. I will now turn the call over to our Chairman and CEO, Mr. Dagang Feng. Sir, please go ahead.
Thank you. Hello, everyone. Thank you for joining 36Kr first half 2026 earnings conference call. In the first half of 2026, in the continued macroeconomic uncertainty, the company sustained its profitability trend and maintained solid results across all operating metrics. The key takeaway from this period's results is that our profitability is not a product of short-term financial adjustment, but sustainable commercial value built on the interplay of three strengths: content influence, industrial service capabilities, and technological application prowess. Total revenues were RMB 124 million in the first half of 2026, up 33.7% year-over-year. Gross profit was RMB 82.68 million, up 33.1% year-over-year, with a gross profit margin of 66.4%. Net income was RMB 15.37 million, while cash reserves continued to increase, providing ample liquidity to support ongoing operations and strategic investments. Those operating results stem from our long-standing strategy of being the picks-and-shovels player in the technology industry. Rather than going all in on a single technology or industry cycle, we draw our sharp insights into technology and innovation trends backed by years of expertise and robust assets to consistently capitalize on opportunities unlocked by successive waves of industry transformations from artificial intelligence and embedded intelligence to emerging industries such as nuclear fusion, quantum computing and brain-computer interface. Whatever the next wave of technological innovation emerges, 36Kr leverages its visionary content layout and commercial service capabilities to engage with and serve business, capital, technology and local industrial stakeholders across the value chain. The 36Kr Industry Future initiative is a primary example of this capability. By consistently providing forward-looking insights into the latest technology trends, we strengthen the competitive barriers around our content ecosystem, enhance our operating resilience across technology cycles and deliver long-term sustainable growth in the commercial value in the wave of technological evolution. Let's take a closer look at our major business progress for the period in the three areas: content ecosystem, commercialization and industrial services, technology and product. First, content ecosystem. We consistently strengthened our content ecosystem during the period, maintaining 36Kr content influence across China's new economy and technology innovation sectors. We continue to expand our footprint across various channels, crafting a comprehensive circulation matrix, encompassing major new media platforms like Weibo, Xiaohongshu, Toutiao, Zhihu, Bilibili, Douyin and Kuaishou among others. Broad channel exposure brought us wider overall distribution and higher visibility of our premium content. At the end of June 2026, we had approximately 36.52 million followers. Meanwhile, we stayed attuned to trends and remained focused on enhancing content quality, consistently delivering high-caliber work while maintaining the influence of our flagship channels, including 36Kr and 36Kr Pro. We ramped up our efforts to spotlight the Emergence of Intelligence, our AI-focused account covering the latest developments in AI industry trends, including coverage of teams and products from ByteDance, DeepSeek, Tencent, Zhiyun and Alibaba Tongyi. Built on a content model combining exclusive access to information with in-depth interviews, the channel has established a strong industry footprint in AI coverage. In addition, Hardcore KR sharpened its focus on the embedded intelligence value chain, differentiating itself through first-to-report coverage of start-up funding and in-depth founder interviews. Its followers increased by approximately 27%, attracted by coverage spanning key segments across the value chain, including brain chips, tactile sensors, robot-assisted manufacturing and on-device computing power. Its Hardcore KR Conversation Series offered in-depth perspective from founders on their technology roadmaps and strategic choices, building a differentiated content moat in hardcore technology coverage. Other high-quality vertical-specific accounts like 36Kr Auto, Future Consumption, 36Kr Games, 36Kr Finance and 36Kr Industry Futures also continued to build momentum, balancing broad coverage with depth of expertise in specialized domains to provide users with valuable insights into industry trends and evolving business dynamics. Beyond graphic and text content, we continue to diversify our content formats, delivering premium content across short- and long-form videos, audio, live streaming and short plays. In short video, our exceptional content creation capabilities earned us wide visibility and rave reviews from users. Our video followers reached 9.63 million. In the first half of 2026 we produced a total of 75 short videos, including a blockbuster on Douyin that garnered over 8.4 million views. On other video platforms, we consistently create in-depth pieces that generate more than 1 million views each. On the commercial video side, we continued to produce high-quality content, working closely with companies in support of clients' digital and intelligent transformation, garnering a notable 230 million total exposures with a single breakout video. For live streaming, we made full use of our existing content-specific account assets to actively develop live streaming products and explore new avenues for growth and innovation. At China Appliance and Electronic World Expo 2026 held from March 12 to 15, 36Kr launched the ANTME AI Lab live stream, conducting live on-site coverage from 8 of the most popular brand pavilions and profiling leading brands in depth, giving audience a firsthand look at the latest real-world application of AI technologies, broadcast simultaneously across device platforms. The live stream garnered 1.358 million total views and racked up over 80 million impressions network-wide. During this year's World Artificial Intelligence Conference in July, 36Kr served as an ecosystem partner and special supporting media partner, joining hands with the organizing committee to launch the KR Talk Future League Studio. The live stream combined expert panels, live exhibition coverage, video highlights, and in-depth interviews with companies, garnering 51.8 million total views and engaging 61,000 viewers across the 36Kr live stream matrix. In terms of event IP, we further elevated 36Kr's role from an observer of industry trends to a facilitator for industry cooperation. On May 19 to 20, 2026, we hosted the 2026 AI Partners Summit in Beijing, Yizhuang. It was themed "Take AI to the Front Line." The Summit focused on shifting AI from technical discussion to practical implementation, featuring a main forum and AI-plus industry matchmaking meetings that connected technology providers with businesses holding real industry demand. Over the two-day event, we facilitated more than 100 rounds of in-depth closed-door matchmaking sessions, helping companies identify potential areas of collaboration around specific scenarios. Our 2026 AI Partners Summit gathered approximately 120 million views and attracted over 1,000 on-site attendees. In addition, from June 16 to 17, 2026, we hosted Wave 2026 in Panyu, Guangdong. This mid-summer Summit gathered a great generation of investors, industry leaders, scientists and emerging entrepreneurs for 15 in-depth roundtable discussions and dozens of talks covering core topics such as AI, hardcore technology, embedded intelligence, going global, health care and youth innovation. The event also featured the Challenge for Intelligent Youth and the National AI+ scenario application competition finals. It focused on three tracks: AI agents, embedded intelligent hardware and lightweight one-person entrepreneurship, providing young innovators and their projects with a platform for exposure, evaluation and feedback, and industry connections. Wave 2026 garnered 118 million views and attracted more than 2,000 on-site attendees. Harnessing our robust content influence and extensive content distribution channels, 36Kr has developed a highly effective customer service system. This has enabled us to achieve commercialization breakthroughs in this unprecedented wave of technological innovation. In the first half of 2026, thanks to our consistent investment in our content ecosystem and our early positioning in key sectors such as AI and hard-core technology, our customer base grew significantly. New customers working with 36Kr for the first time accounted for approximately one-third of our total customer base in the period. AI and the foundation models, robotics and embedded intelligence were the primary source of our new customers. We also acquired new customers in the consumer goods, health care, travel and mobility, education and training sectors. This underscores 36Kr's leadership in new economic communication and our outstanding customer service capabilities. In terms of commercialization of online results, we generated RMB 104 million in revenue from online advertising services in the first half of 2026, up approximately 40% year-over-year. Our flagship channels, including 36Kr and 36Kr Pro, maintained industry-leading commercial value. At the same time, the influence of our subvertical media channels such as the Emergence of Intelligence, Hardcore KR, 36Kr Auto, Future Consumption, Tide and All Use continued to expand, emerging as another key driver of our revenue growth. Short video also achieved a commercialization breakthrough in the first half of 2026 with revenue approximately doubling year-over-year. Furthermore, we launched the 36Kr Pro, a new WeChat channel content offering that meaningfully enriched our product line and enabled more differentiated pricing. This broader range of product options helped propel the continued growth in our revenue from online advertising services. In institutional and entrepreneur services, we continue to optimize our business structure, establishing a dual-engine growth model, driven by our summits and rankings alongside content communications. As the primary market gradually recovered, institutional demand for communication services surged with content focus on institutional fundraising and the portfolio company financing growth rapidly, driving revenue to nearly double year-over-year. We fully leveraged the vertical accounts such as Waves and 36Kr Industry Futures to connect the content, enterprise, capital, technology and local industry resources, further unlocking their commercial value. In terms of industrial service commercialization, in addition to hosting large-scale events in key regions, we continue to advance in recurring day-to-day industrial service. Our 3-year strategic operation project with Hangzhou Qiantang New Area, including the Chinese Enterprise International Service Center Operation project and the AI Phenomena Community Operation Service project, continued to progress steadily during this period. In the first half of the year, we focused primarily on key industrial parks, including the Qiantang Embedded Intelligence Industrial Park, delivering a diverse range of operational activities built around brand exposure, resource connections and enterprise service. This initiative effectively enhanced the park's industry profile, supporting investment inflows and industry development. Building on this project, we continue to deepen our industrial service capabilities in the Yangtze River Delta, laying the foundation for replication across the region. Furthermore, at this year's events, we showcased the Yangtze River Delta's industrial resources for Great Bay Area entrepreneurs and investors, continuing to bridge technological innovation and real-world industry applications. Our industrial service is progressively shifting from one-off events towards ongoing operation and deeper customer partnerships. In applying AI technologies, we continue to pursue a dual-track strategy, improving internal efficiency while productizing our AI capabilities for external stakeholders. In the first half of 2026, we hosted the KR Star AI application challenge internally to deepen adoption of AI tools across our operations. The initiative focused on identifying practical, replicable and high-value use cases for improving productivity with AI, fostering a culture where everyone knows how to use AI. AI can be applied everywhere, and AI is consistently used to improve efficiency. The competition brought improvements across customer sales process, video and image optimization, internal process management and more, while cultivating a company-wide atmosphere of learning and knowledge sharing. We also continue to optimize our 36Kr project recommendations product. Using foundation model technology, we enable online AI-conducted interviews to dig deeper into projects and automatically generate project recommendations based on the interview content. In the first half of 2026, our 36Kr project recommendations product helped entrepreneurs secure coverage and connection for 1,117 projects, increasing the conversion rate by nearly 80% year-over-year. On the product side, 36Kr and Soften jointly launched the 36Kr Corporate Omni-intelligence WeChat Mini Program aimed at retail investors, providing daily sentiment and analysis reports for public companies and experts that help users make more informed decisions in the stock market and other investment markets. Cumulative users have reached 55,200, including more than 10,000 subscribers, up 50.8% and 61.7%, respectively, from 33,600 users and 6,187 subscribers at the end of 2025 and have more than doubled year-over-year. Our AI review hub at ai.36kr.com was launched at the end of 2025. It is positioned as a Dianping of AI tools, a community platform combining AI tools discovery and authentic user reviews, primarily serving individual and enterprise users seeking guidance in selecting AI tools. Anchored by in-depth review content and powered by product capability upgrades, our AI review segment continued to grow across user scale, ecosystem development and commercial value. On the content side, we continue to scale volume while improving quality, publishing an accumulated 401,962 AI review articles, nearly 10x the 560 articles published as of the end of 2025. Content appeal and user engagement are rising. Ecosystem appeal also continued to strengthen with 42 companies voluntarily listing their products on our AI review hub, reflecting broad market recognition of our positioning as a Dianping of the AI application segment. We also comprehensively expanded our review network, adding 260 new reviewers and launching our campus ambassador initiative, building a crowd-sourced review network spanning both professional and student users. Meanwhile, we continue to broaden our external content distribution channels with a diversified content dissemination ecosystem steadily taking shape. At the product capability level, we completed upgrades to core modules such as promotional placement, a new community framework, leaderboards and the product database. We also rolled out the AI review agent with blended testing capabilities, creating an end-to-end AI-powered workflow from conversations to review posting to content distribution. Commercially, we achieved a meaningful breakthrough on the strength of our team in deep product review content. We secured a paid commercialization partnership with Kling and Kuaishou AI, validating our closed-loop model from professional review content to commercial monetization. In short, our AI review segment continued to progress rapidly, driven by growing industry influence, greater ecosystem breadth and depth, and expanding monetization capabilities. To sum up, in the first half of 2026, we maintained a solid financial position while steadily advancing our content innovation, commercialization upgrade and AI industry application. We will continue to build depth in emerging industry and technology verticals, become a trusted authority on value, a catalyst for industry growth, a facilitator of resource connections, and contribute to shaping industry standards in the AI era. With that, I will now turn the call over to our CFO, Mr. Xiang Li, who will discuss our key financial results. Please go ahead, Xiang.
Thank you. Thank you for joining today's presentation. We will now review the first half of 2026 financial performance. Please note that all amounts are in RMB unless otherwise stated. Our company's total revenue increased by 33.7% to RMB 124.6 million in the first half of 2026 from RMB 93.2 million in the same period last year. Online advertising services revenues increased by 38.9% to RMB 103.5 million in the first half of 2026 from RMB 74.5 million in the same period last year. The increase was primarily attributable to surging demand from the AI sector for our advertising solutions. Enterprise value-added services revenue increased by 25.4% to RMB 15.3 million in the first half of 2026 from RMB 12.2 million in the same period last year. The increase was primarily driven by our ongoing refinement of service offerings aimed at margin improvement. Subscription services revenue was RMB 5.8 million in the first half of 2026 compared to RMB 6.4 million in the same period last year. The decrease was primarily due to a strategic shift in the segment's customer composition. Cost of revenues was RMB 41.9 million in the first half of 2026, a slight decrease of 1.4% from RMB 42.5 million in the same period last year. The decrease was primarily driven by the company's strict cost control measures. Gross profit increased by 63.1% to RMB 82.7 million in the first half of 2026 from RMB 50.7 million in the same period last year. Gross profit margin was 66.4% in the first half of 2026, representing an increase of 12 percentage points from 54.4% in the same period last year. The increase in gross margin was primarily driven by higher margin from our online advertising services within the AI sector and a significant increase in related revenues alongside slightly lower payroll-related costs resulting from our strategic workforce management. Operating expenses increased by 6.6% to RMB 59.6 million in the first half of 2026 from RMB 55.9 million in the same period last year. Sales and marketing expenses were RMB 29.2 million in the first half of 2026, remaining flat year-over-year, reflecting our disciplined approach to sales spending. General and administrative expenses were RMB 24.1 million in the first half of 2026, an increase of 20.5% from RMB 20 million in the same period last year. The increase was primarily related to the increase in allowance for doubtful accounts and payroll-related expenses. Research and development expenses were RMB 6.4 million in the first half of 2026, remaining flat year-over-year, primarily reflecting our continued focus on R&D efficiency and strategic program prioritization. Share-based compensation expenses recognized in cost of revenue, sales and marketing expenses, research and development expenses as well as general and administrative expenses totaled RMB 19,700 in the first half of 2026 compared to RMB 89,600 in the same period last year. Other expenses were RMB 7.7 million in the first half of 2026 compared to RMB 0.4 million of other income in the same period last year. The change was mainly due to the increase in long-term investment loss. Income tax expenses were RMB 27,000 in the first half of 2026 compared to RMB 4,000 of income tax credit in the same period last year. Net income was RMB 15.4 million in the first half of 2026 compared to a net loss of RMB 4.8 million in the same period last year. Non-GAAP adjusted net loss was RMB 15.4 million in the first half of 2026 compared to a non-GAAP adjusted net loss of RMB 4.7 million in the same period last year. Net income attributable to 36Kr Holdings Inc.'s ordinary shareholders was RMB 15 million in the first half of 2026 compared to a net loss attributable to 36Kr Holdings Inc.'s ordinary shareholders of RMB 5 million in the same period last year. Basic and diluted net income per ADS was RMB 7.058 and RMB 7.056, respectively, in the first half of 2026 compared to basic and diluted net loss per ADS of RMB 2.307 in the same period last year. Certain balance sheet items: As of June 30, 2026, the company had cash and cash equivalents, restricted cash and short-term investments of RMB 124.2 million, an increase of 6.9% from RMB 116.1 million as of December 31, 2025. The increase was mainly attributable to positive cash inflow from operating activities. Well, this concludes all our prepared remarks today. We will now open the call to questions. Operator, please go ahead.
Questions and answers
The first question will come from Lingyi Zhao with SWS Research.
I would like to translate myself. And my first question is, compared with other media outlets, what are 36Kr's key differentiators in AI content coverage? Why do advertisers choose 36Kr over specialized AI media outlets? And my second question is, looking ahead, what are the key growth engines for the company? And how does management plan to balance increased investment in content and technology to drive growth with maintaining healthy profitability and solid cash flow?
That's a great question. And the differentiation advantage in AI content coverage comes down to three key areas. First, our broad-based platform reach. Our content metrics spans AI, hardcore technology, going global, consumer goods, automotive, gaming, health care and other verticals. We have 36.52 million followers across a diverse reach of mainstream media platforms, including Weibo, Xiaohongshu, Toutiao, Zhihu, Bilibili, Douyin, and Kuaishou, among others. This allows advertisers on our platform to reach not only the AI industry audience, but also upstream and downstream business and cross-sector users simultaneously, something specialized AI media outlets cannot easily deliver. Second, our content model is built on exclusive information access combined with in-depth content output. At 36Kr, we hold ourselves to extremely high standards for content quality. We don't simply follow the latest trends. We insist on real depth. We consistently offer incisive original perspectives on industry developments and sector analysis, providing users with invaluable insight into industry trends and evolving business dynamics. Third, our end-to-end industrial service. Advertisers choose 36Kr, not only for our professional content, but more importantly, for our comprehensive service capabilities. For example, at this year's AI Partners Summit, we facilitated more than 100 rounds of in-depth closed-door matchmaking sessions centered on real-world AI implementation scenarios, effectively connecting technology providers with companies looking for practical solutions. This demonstrated the strong capabilities we build in connecting the full industry value chain with 36Kr advertisers. In addition to brand exposure, advertisers can also access industry resources and business partnership opportunities, an integrated value proposition that specialized media outlets cannot easily provide. For the second question regarding growth engines, I see four areas gaining traction. In the near term, AI customer growth will be a key driver. Approximately 40% of our new customers came from the AI sector, and we continue to see strong momentum in the segment. In the medium term, three areas will drive growth. First, we will deepen the commercialization of our sub-vertical content metrics. Our content such as the Emergence of Intelligence and Hardcore KR have achieved significant follower growth, which is now unleashing their commercial value. Second, we will scale the monetization of AI products. Our AI review hub ai.36kr.com secured paid commercialization partnerships and the user base of the 36Kr Corporate Omni-intelligence Mini Program has doubled year-over-year. Third, we will replicate our industrial service model across regions; with the Qiantang model now validated, we can roll it out in other regions. In terms of balancing investment and profitability, our philosophy is clear. We invest where we see a clear path to returns. Our financial results over the first half reflected this discipline. Gross profit margin continued to improve due to our ongoing efforts to control costs and optimize our customer mix. We place a high priority on financial health and continually improve operating efficiency while keeping our cost base lean. At the same time, we continue to invest in content. This is a core strength that we continuously build to reinforce the resilience and sustainability of our business operations. We will never pursue growth at the expense of profitability. Every investment must have a clear business rationale and a clear path to return.
The next question will come from Rui Yin with Sealand Securities.
Let me translate. What is the company's long-term strategic positioning in the AI era? How do you expect the balance between being a tech media outlet and an industrial services platform to evolve in the future?
Thank you, Rui. Our strategy positioning in the AI era is crystal clear. We have always been the picks-and-shovels supplier and enabler in technology industries. No matter how technology evolves, enterprise demand for building industry insight and access to industry resources and connections will remain strong. As AI adoption accelerates, the demand is only increasing. Our content influence, industrial service and technological application capabilities work together to form a closed loop. As for the mix between the two, content advertising remains our business foundation and our traffic gateway, while industrial services are our growth engine and the driver of margin expansion. The relationship between them is a flywheel, not a substitution. Our content influence builds customer trust and strengthens our ability to connect industry resources. In turn, our industrial services deepen our content and industry insights, ultimately attracting more advertising customers. In terms of how the balance will evolve, we expect the share of industrial services to increase steadily. We continue to deepen our 3-year strategic cooperation projects with Hangzhou Qiantang area. And our 2026 AI Partners Summit in Beijing also strengthened our ecosystem influence. Our industrial services are gradually evolving from one-off events towards ongoing operations. That said, content advertising will remain foundational to our revenue base. In the first half of this year, our flagship channels contributed nearly half of online advertising revenues and both short videos and institutional communication revenues doubled year-over-year. With both growth engines gaining momentum, we are confident in our future trajectory.
There are no further questions at this time. I would now like to hand the call back over to management for any closing remarks. Please go ahead.
Okay. Thank you once again for joining us today. If you have further questions, please feel free to contact the 36Kr Investor Relations through the contact information provided on our website.
This does conclude our conference for today. Thank you for your participation. You may now disconnect. Portions of this transcript marked "Interpreted" were spoken by an interpreter present on the live call.