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Subject: ERN

36Kr Holdings Inc. Reports Third Quarter 2021 Unaudited Financial Results


BEIJING, Dec. 9, 2021 /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 2021 ended September 30, 2021.

Third Quarter 2021 Operational and Financial Highlights


[1]Starting from January 1, 2021, 36Kr recognized revenues of certain enterprise value-added services on a net basis, to reflect the fact that the Company continuously shifted focus towards higher margin businesses hence ceased to act as a principal in certain low gross margin businesses and only acted as an agent. To increase comparability of operating results and help investors better understand our business performance and operating trends, we introduced the gross transaction value as a supplemental metric to describe our business. Gross transaction value is defined as the value of executed confirmed orders for services provided for our customers.

 

Selected Operating Data




For the Three Months Ended

September 30,



2020


2021

Online advertising services





Number of online advertising services end customers


186


192

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


274.7


277.9






Enterprise value-added services





Number of enterprise value-added services end customers


80


74

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


830.1


304.0






Subscription services





Number of individual subscribers


2,064


974

Average revenue per individual subscriber (RMB)[4]


619.4


1,138.9






Number of institutional investors


76


87

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


61.6


91.0






[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 2021, we continued to enhance our New Economy-focused content matrix and broaden our product and service offerings, further augmenting our well-rounded platform with unique, innovative services. We are pleased to have witnessed another quarter of strong growth in total user traffic, with average monthly PVs reaching a new high at 849 million for the twelve-month period ended September 30, 2021, up 50% year-over-year, marking our 14th consecutive quarter of PV growth. Moreover, we achieved solid operational performance in a relatively challenging environment, illustrating our businesses' resilience and vitality. Looking ahead, we believe that we are well poised to further broaden 36Kr's commercialization path and empower more enterprises by capitalizing on the rapid rise of hardcore technologies, the new wave of digital transformation, the concept of metaverse, as well as the development of the Beijing Stock Exchange as we are the go-to partner for hundreds and thousands of New Economy companies in China."

Ms. Lin Wei, chief financial officer of 36Kr, stated, "We delivered solid financial results across all of our business segments in the third quarter of 2021 despite multiple headwinds including COVID-19 resurgences and macroeconomic challenges. We were also able to gradually achieve a more balanced revenue mix as we tirelessly expand our enterprise value added services and subscription services. In addition, as we continued to shift our resources and focus on higher margin businesses, gross profit and gross profit margin both improved year-over-year in the third quarter of 2021. Notably, we ended the third quarter with a strong cash position as we achieved positive cash flow through the virtuous cycle of our business operations. Going forward, we will continue to solidify our industry presence and expand our monetization approaches to cultivate sustainable and long-term growth."


Third Quarter 2021 Financial Results

Total revenues were RMB84.9 million (US$13.2 million) in the third quarter of 2021, compared to RMB123.5 million in the same period of 2020. 

Cost of revenues was RMB37.3 million (US$5.8 million) in the third quarter of 2021, compared to RMB76.6 million in the same period of 2020. The decrease was primarily attributable to our continuous shift in focus towards higher margin businesses and recognition of certain revenues on a net basis. For more details, please refer to the aforementioned information in terms of enterprise value-added services revenues.

Gross profit was RMB47.6 million (US$7.4 million) in the third quarter of 2021, compared to RMB46.8 million in the same period of 2020. Gross profit margin was 56.1% in the third quarter of 2021, compared to 37.9% in the same period of 2020, the increase was primarily due to our continuous shift in focus towards higher margin businesses.

Operating expenses were RMB80.3 million (US$12.5 million) in the third quarter of 2021, compared to RMB63.2 million in the same period of 2020.

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 RMB4.9 million (US$0.8 million) in the third quarter of 2021, compared to RMB4.6 million in the same period of 2020.

Other income was RMB1.5 million (US$0.2 million) in the third quarter of 2021, compared to other income of RMB2.5 million in the same period of 2020. The decrease was primarily attributable to less government grant received in the third quarter of 2021.

Income tax expenses was RMB14 thousand (US$2 thousand) in the third quarter of 2021, compared to income tax expense of RMB21 thousand in the same period of 2020.

Net loss was RMB31.3 million (US$4.9 million) in the third quarter of 2021, compared to RMB14.0 million in the same period of 2020. Non-GAAP adjusted net loss[6]was RMB26.4 million (US$4.1 million) in the third quarter of 2021, compared to RMB9.3 million in the same period of 2020.

Net loss attributable to 36Kr Holdings Inc.'s ordinary shareholders was RMB30.5 million (US$4.7 million) in the third quarter of 2021, compared to RMB14.0 million in the same period of 2020.

Basic and diluted net loss per share were both RMB0.030 (US$0.005) in the third quarter of 2021, compared to RMB0.014 in the same period of 2020.

[6]Non-GAAP adjusted loss represents net loss excluding share-based compensation expenses.

Certain Balance Sheet Items

As of September 30, 2021, the Company had cash, cash equivalents and short-term investments of RMB178.0 million (US$27.6 million), compared to RMB149.6 million as of June 30, 2021. The increase was mainly attributable to cash inflow from operating activities.

Share Repurchase Program

On May 6, 2020, the Company announced that its Board of Directors authorized a share repurchase program under which the Company may repurchase up to a total of 1,000,000 of its American Depositary Shares ("ADSs"), each representing 25 Class A ordinary shares. As of September 30, 2021, the Company had repurchased approximately 785,713 ADSs for approximately RMB17.5 million (US$2.6 million) under this program.

Conference Call

The Company's management will host an earnings conference call at 7:00 AM U.S. Eastern Time on December 9, 2021 (8:00 PM Beijing/Hong Kong Time on December 9, 2021). Details for the conference call are as follows:

Event Title:

36Kr Holdings Inc. Third Quarter 2021 Earnings Conference Call

Conference ID:

7074133

Registration Link:

http://apac.directeventreg.com/registration/event/7074133

All participants must use the link provided above to complete the online registration process at least 20 minutes in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in number, Direct Event passcode, and a unique registrant ID, which will be used to join the conference call.

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 December 16, 2021, by dialing the following telephone numbers:

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:

7074133

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. 

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 RMB6.4434 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on of September 30, 2021.

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



December 31,
2020


September 30,
2021


September 30,
2021


RMB'000


RMB'000


US$'000







Assets






Current assets:






Cash and cash equivalents

60,846


83,941


13,027

Short?term investments

148,344


94,037


14,594

Accounts receivable, net

304,845


203,507


31,584

Receivables due from related parties

98


3,622


562

Prepayments and other current assets

16,319


25,938


4,026

Total current assets

530,452


411,045


63,793

Non?current assets:






Property and equipment, net

3,941


3,458


537

Intangible assets, net

471


839


130

Long-term investments

16,300


43,059


6,683

Operating lease right-of-use assets, net

27,365


17,642


2,738

Total non?current assets

48,077


64,998


10,088

Total assets

578,529


476,043


73,881







Liabilities                                         






Current liabilities:






Accounts payable

64,641


48,353


7,504

Salary and welfare payables

45,580


50,196


7,790

Taxes payable

18,824


11,155


1,731

Deferred revenue

18,849


39,084


6,066

Amounts due to related parties

548


1,154


179

Accrued liabilities and other payables

13,560


20,225


3,139

Operating lease liabilities

15,132


13,933


2,162

Total current liabilities

177,134


184,100


28,571

Non-current liabilities:






Operating lease liabilities

12,426


3,516


546

Total non-current liabilities

12,426


3,516


546

Total liabilities

189,560


187,616


29,117







Shareholders' equity






Ordinary shares

687


694


108

Treasury stock

(14,081)


(15,838)


(2,458)

Additional paid-in capital

2,040,693


2,047,550


317,775

Accumulated deficit

(1,638,581)


(1,742,713)


(270,465)

Accumulated other comprehensive loss

(7,897)


(8,268)


(1,283)

Total 36Kr Holdings Inc.'s shareholders' equity

380,821


281,425


43,677

Non-controlling interests

8,148


7,002


1,087

Total shareholders' equity

388,969


288,427


44,764

Total liabilities and shareholders' equity

578,529


476,043


73,881

 

 

 

36Kr Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS



Three Months Ended 


Nine Months Ended 


September 30,


September 30,


September 30,


September 30,


September 30,


September 30,


2020


2021


2021


2020


2021


2021


RMB'000


RMB'000


US$'000


RMB'000


RMB'000


US$'000

Revenues:












   Online advertising services

51,095


53,357


8,281


103,477


138,329


21,468

   Enterprise value-added services

66,404


22,499


3,492


151,850


43,699


6,782

   Subscription services

5,957


9,030


1,401


9,990


18,464


2,866

Total revenues

123,456


84,886


13,174


265,317


200,492


31,116

   Cost of revenues  

(76,626)


(37,261)


(5,783)


(190,798)


(88,109)


(13,674)

Gross profit  

46,830


47,625


7,391


74,519


112,383


17,442

Operating expenses:












   Sales and marketing expenses

(31,611)


(35,453)


(5,502)


(105,540)


(104,584)


(16,231)

   General and administrative expenses  

(20,450)


(30,941)


(4,802)


(130,644)


(81,014)


(12,573)

   Research and development expenses  

(11,181)


(13,940)


(2,163)


(29,301)


(34,883)


(5,414)

Total operating expenses  

(63,242)


(80,334)


(12,467)


(265,485)


(220,481)


(34,218)

Loss from operations  

(16,412)


(32,709)


(5,076)


(190,966)


(108,098)


(16,776)

Other income/(expenses):












   Share of loss from equity method investments

(2,021)


(132)


(20)


(7,728)


(4,056)


(629)

   Short-term investment income

583


507


79


1,069


1,898


295

   Government grant

2,382


252


39


5,050


2,427


377

   Others, net  

1,523


828


129


3,380


1,810


281

Loss before income tax  

(13,945)


(31,254)


(4,849)


(189,195)


(106,019)


(16,452)

   Income tax expenses

(21)


(14)


(2)


(16)


(9)


(1)

Net loss

(13,966)


(31,268)


(4,851)


(189,211)


(106,028)


(16,453)

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

(50)


736


114


340


1,896


294

Net loss attributable to 36Kr Holdings Inc.'s ordinary
   shareholders  

(14,016)


(30,532)


(4,737)


(188,871)


(104,132)


(16,159)













Net loss

(13,966)


(31,268)


(4,851)


(189,211)


(106,028)


(16,453)

Other comprehensive (loss) /income












   Foreign currency translation adjustments  

(3,667)


175


27


(1,522)


(371)


(58)

Total other comprehensive (loss) /income

(3,667)


175


27


(1,522)


(371)


(58)

Total comprehensive loss

(17,633)


(31,093)


(4,824)


(190,733)


(106,399)


(16,511)

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

(50)


736


114


340


1,896


294

Comprehensive loss attributable to 36Kr Holdings
    Inc.'s ordinary shareholders  

(17,683)


(30,357)


(4,710)


(190,393)


(104,503)


(16,217)













Net loss per ordinary share (RMB)












   Basic

(0.014)


(0.030)


(0.005)


(0.185)


(0.102)


(0.016)

   Diluted

(0.014)


(0.030)


(0.005)


(0.185)


(0.102)


(0.016)

Net loss per ADS (RMB)












   Basic

(0.344)


(0.746)


(0.116)


(4.625)


(2.538)


(0.394)

   Diluted 

(0.344)


(0.746)


(0.116)


(4.625)


(2.538)


(0.394)

Weighted average number of ordinary shares used in
    per share calculation












   Basic

1,019,876,247


1,023,327,262


1,023,327,262


1,020,871,848


1,025,636,483


1,025,636,483

   Diluted 

1,019,876,247


1,023,327,262


1,023,327,262


1,020,871,848


1,025,636,483


1,025,636,483

Weighted average number of ADS used in per ADS
   calculation












   Basic

40,795,050


40,933,090


40,933,090


40,834,874


41,025,459


41,025,459

   Diluted 

40,795,050


40,933,090


40,933,090


40,834,874


41,025,459


41,025,459

 

 

 

36Kr Holdings Inc.

UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS



Three Months Ended


Nine Months Ended


September 30,

2020


September 30,
2021


September 30,

2021


September 30,

2020


September 30,

2021


September 30,

2021


RMB'000


RMB'000


US$'000


RMB'000


RMB'000


US$'000













Net loss

(13,966)


(31,268)


(4,851)


(189,211)


(106,028)


(16,453)

Share-based compensation expenses

4,618


4,881


758


30,215


10,880


1,689

Non-GAAP adjusted net loss

(9,348)


(26,387)


(4,093)


(158,996)


(95,148)


(14,764)

Interest income, net

(561)


(166)


(26)


(1,343)


(507)


(79)

Income tax expenses

21


14


2


16


9


1

Depreciation and amortization expenses

1,518


618


96


4,081


1,924


299

Non-GAAP adjusted EBITDA

(8,370)


(25,921)


(4,021)


(156,242)


(93,722)


(14,543)













 

SOURCE 36Kr Holdings Inc.


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