36Kr Holdings (NASDAQ:KRKR) Q4 2024 Earnings Call

0:00 Hello ladies and gentlemen, thank you for standing by for 36 Kr Holdings Inc.'s second half and fiscal year 2024 earnings conference call. At this time all participants are in listen only mode. After management's prepared remarks there will be a question and answer session. Today's conference call is being recorded. I'll now turn the call over to your host Xin Wang, IR manager of the company. Please go ahead Xin.

0:29 Thank you very much. Hello everyone and welcome to 36KR Holdings' second half and fiscal year 2024 earnings conference call. The company's financial and operational results were released earlier today and have been made available online. You can also view the earnings press release by visiting the IR section of our website at ir.36kr.com. Participants on today's call will include our co-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 in the performance highlights for the second half and the full year in Chinese, followed by an English interpretation. Mr. Li will then provide details on the company's financial results before opening the call for your questions.

1:18 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 Security Litigation Reform Act of 1995, forward-looking statements involving inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in the company's prospectus in other public filings as filed with USSEC. The company does not assume any obligation to update Any forward-looking statements, except as required, are under F4. Please note that 36KR's earnings press release in this conference call includes discussion of unaudited gap financial measures as well as unaudited non-gap financial measures.

2:08 36KR's earnings press release contains a reconciliation of the unaudited non-gap measures to its unaudited gap measures. And please note that all amounts are in RMB. I will now turn the call over to our co-chairman and the CEO, Mr. Dagang Feng. Pell, please go ahead.

2:25 Thank you. Hello, everyone. Thank you for joining our second half of the fiscal year 2024 earnings conference call. 2024 marks a year of comprehensive operating efficiency improvements for 36KR.

3:08 Notably, our operating expenses in the second half of 2024 decreased by 50% compared to the same period of 2023. Our total operating expenses as a percentage of total revenues decreased by 17% in the second half of 2024 compared to the second half of 2023, while our gross profit margin remained about 50% for the second half of 2024. As a result, we vastly narrowed our operating losses while cash results remained essentially stable, establishing a resilient framework to support companies' long-term solid business operations.

3:47 As a result, we vastly narrowed our operating losses while cash results remained essentially stable, establishing a resilient framework to support companies' long-term solid business operations.

4:05 This operational achievements were primarily driven by our business structure in the workforce efficiency improvements throughout the year. We also consistently fortified our content ecosystem in 2024. Leveraging our peerless content creation promise in comprehensive marketing offerings, we continued to optimize our advertising operations while broadening our media reach. We embraced the emerging global expansion trends and remained focused on AGI innovation, further accelerating our implementation of the AI across real-world scenarios. This effort drove significant progress in both our global expansion and the AI application.

4:54 Let's take a closer look at the company's development from two key perspectives. First, our existing business, and second, our growth initiatives.

5:02 For our existing business, I will start with an update on our content's influence in commercialization.

5:22 In the meantime, the company continues to create high-quality content with a wide variety of content. On the basis of the flagship giant number such as 36K and 36K Pro, the company's acceleration layout is very good. In the field of smart cable, 36K cars, future consumption, 36K games, and high-quality content such as iOS, 36K finance, etc., the company continues to exert its power on high-quality content. The coverage of the construction content is wide and the accumulation depth in the segment area is deep. It represents the trend and commercial hot spots of users. At the same time, The company continues to create exclusive content for young users, promoting young food media such as Hulang Research Institute, Chaosheng, and so on. By evaluating, slowing down, customizing videos, and other multi-format games, we can bring out more young people. In August 2024, we officially launched a 36-gram game content game, which is about the value of product technology, marketing value, and human story related to games. Through pictures, live broadcasts, and other forms, we will show you the development trend of the game industry.

6:12 As of now, the company's game account is fully covered with smart manufacturing, digitalization, Shuangtan, ESG, Linkeji, Zeng Jingtexin, Xiaofei Shenghuo, and many other fields, to build a solid content ecosystem. In 2024, the Sinovac Editorial Office published a total of 8,090 articles. Of the original articles, 2,465 articles, more than 2.2 billion messages, more than 21.24 million messages, and 5.25 million shares. Of the Sinovac official accounts, the number of 100,000 articles reached 757 articles.

6:46 In terms of content ecosystem development, we continue to create high-quality content on multiple fronts while maintaining our existing content metrics. Building on flagship channels including 36kr and 36kr Pro, we broadened our reach in sub-verticals, actively expanding high-quality content-specific accounts like the emergence of intelligence, 36kr Auto, future consumption, 36kr Games, Wapes, and 36kr Finance, among others. This account made our metrics more comprehensive by adding both broad content coverage and deep expertise in specialized domains to provide users with invaluable insights into industry trends and evolving business dynamics. At the same time, we continued to tailor content experiences for younger generations by launching our OEs and tied sub-vertical median channels.

7:43 Featuring a broad content matrix of text in graphics, comics, and customized videos, the channels successfully engage the younger audiences, greatly extending our content's reach. In August 2024, we officially launched a new content-specific account, 36kr Games, dedicated to exploring gaming products, technology, business value, and cultural stories. We utilized a vibrant mix of text, Graphics, live streaming, and video formats to capture the vigorous development of the gaming sector and engage its dynamic audience. To date, our accounts cover advanced manufacturing, digitalization, dual carbon, and ESG, hardcore technology, highly specialized and innovative enterprises, consumer lifestyles, and much more, fostering a thriving content ecosystem.

8:36 In 2024, our editorial team published 8,090 articles through content-specific accounts, of which 2,465 were original, garnering over 220 million page views, more than 241,000 comments, and 5.253 million shares. Notably, on the 36 Kr official accounts alone, 753 757 of our articles achieved over 100,000 page views. Moving on to our content dissemination network, we steadily expanded our footprint across diverse channels, crafting a comprehensive circulation matrix encompassing major new medium platforms like Weibo, RedNote, Toutiao, Zhihu, Bili, Douyin, and KuaiShou, among others. Broad channel exposure brings us wider overall dissemination and higher visibility for our premium content.

10:01 Our consistent production of high-quality content expanded and diversified our user demographics, further elevating user engagement in this thickness. As of the end of 2024, we had over 35.9 million followers, marking 16 consecutive quarters of growth.

10:23 In terms of content, we changed the content gradually, such as images, long and short videos, audio and live broadcasts. In terms of short videos, we gained the wide attention and recognition of users through excellent content creation capabilities. The number of video fans on the whole platform is more than 9.31 million, of which the number of Bilibili fans has exceeded 2.47 million, achieving a total increase of 10%. The number of video fans has achieved a total increase of 58%. The short video business continues to perform brilliantly, and the debt-to-billion income ratio is constantly increasing.

10:49 We explore the growing areas for content formats throughout 2024, including text, graphics, short and long-form reviews, audio and live streaming, and reaching our content offerings with a greater diversity of styles. In terms of short review, our exceptional content creation capabilities earn us widespread visibility in the rate of reviews from users. Our video followers exceeded 9.31 million by the end of 2024. including a significant $2.47 million on Bilibili alone, up by 10% year-over-year. Our WeChat channel's followers surged by 58% year-over-year. Our short-review business continues to excel with its contribution to advertising revenue consistently on the rise.

11:39 In the video industry, our high-end program, See2034, has been newly launched in the second quarter and is closely linked to the national video brand, Douyin. In the long-form video segment, we collaborated with popular short-form video platform Douyin to launch a new season of our elite talk show series foreseeing 2034 in the second quarter.

12:13 We made notable strides in content creation and channel distribution through this robust partnership. The debut episode of Foreseeing2034 featuring new founder William Li Bing delved into upcoming shifts in the new energy vehicle sector, garnering widespread interest and racking up over 84 million views across various platforms.

12:36 In terms of live broadcasts, in 2014, we used a small number of people to actively integrate live resources, fully utilize WeChat video accounts, and cultivate a series of WeChat giant accounts. and Sanjok Projia, Chuhai Jin Chanchan, Sanjok CEO Jin Nang, etc. No matter the content influence of the live broadcast or the commercial transformation, the supplementary aspects of the low-cost products have shown progress. In 2024, we will conduct 272 live broadcasts, including the popular topics such as AI model, Chinese brand Chuhai, etc. In addition, we tried to conduct the first live delivery at the end of 2024. This live delivery has a total of 38 technological products, and the total coverage of the live broadcast room is more than 1.63 million, with 28.9 million people coming to the live broadcast room. For live streaming, this year we optimized our resources with a streamlined team in the fully-leveraged WeChat channels to cultivate an area for content-specific accounts, including 36 KR Pro Plus, Global Expansion Golden Shovel,

13:41 and 36kr CEO Tips. This effort not only significantly elevated our live streaming content's influence, but also drove commercial convergence and supplemented our low output offerings. We hosted 272 live streaming sessions in 2024, addressing a diverse spectrum of training topics, including AI large models and Chinese brands' global expansion. Additionally, we launched our first e-commerce live streaming in late 2024, Our debut episode featured 38 tech products and garnered over 1.63 million views with a live audience of 289,000. Notably, the 36kr live streaming channel ranked number one on Douyin's smart device category leaderboard during the same time period as live streaming. What's more, for the full year, our live streaming revenue surged by 68.5% year-over-year. Moving forward, we will continue to explore new live stream formats in the scenarios, delighting both our users and clients with richer content scenarios in the more diverse service models.

14:53 In terms of corporate service, in 2014, we launched a heavy IP event, New Product Power, AI Partner Summit, and achieved outstanding results. The event welcomed Ali, Baidu, Lianxiang, Intel as industry leaders, The latest development trend of deep discussion of AI technology applications The opportunity and challenge that many companies have encountered in practice The total coverage of this event is more than 100 million times Causing widespread attention in the industry In November 2020, we are looking forward to the heavy-duty IP Y42024 commercial market conference is on the way This year's conference focuses on 11 Japanese channels Y42024, which was established across the continent, continues to sink the global distribution platform Shenzhen and Y42024 and Li Changzai Future Consumption Conference, Beijing's two fairs Now let's turn to enterprise value-added services.

15:59 In 2024, we achieved substantial success with the launch of a major event IP, Advanced Productivity AI Partner Summit. In collaboration with industry giants like Alibaba, Baidu, Lenovo, and Intel, we delved into the latest trends in AI applications, sharing insights on both opportunities and challenges gleaned from day-to-day business operations. This summit attracted an impressive 100 million-plus views, sparking extensive industry buzz. Additionally, we held our highly anticipated signature IP event, the WISE 2024 Business Kings Conference in November 2024. The summit focused on 11 trending industry verticals in the featured two regional subforums. The WISE 2024 Continued to Sync Globalization Subforum, Shenzhen, and the WISE 2024 Always With You Future Consumption Conference, Beijing.

16:56 The event brought together more than 200 Chinese business leaders and elites representing a wide area of industries, including Li Kaifu, CEO of Zero One AI and the chairman of Sinovation Ventures, Lu Weibin, partner and president of the Xiaomi Group, Dai Wei, senior vice president of Lenovo Group, Jia Qingdong, vice president of Vivo, Ying Ye, CEO of BGI Group, and Zhang Peng, CEO of Zhupu. sharing visionary insights into the future for China's business advancement. A wide 2024 business case conference attracted over 850 million total views.

17:42 The 36 Research Institute, based on policy guidance, capital popularity, market demand, etc., from the perspective of industrial chain structure, economic situation, business model, and development trend, has deeply explored the key industries that have made breakthroughs and have come back to life in 2024, such as the sea, giant intelligence, low-emission economy, artificial intelligence, etc. In 2024, the number of fans of the 36 Research Institute rose by more than 11%, and the number of people affected by it increased significantly. In terms of commercialization, not only did it protect the foundation of the industry and industrial planning, but it also further increased the sales, brand consultation, and other business.

18:11 In addition to offline events, we continue to make strides in our consulting services and other enterprise value-added service offerings this year. For instance, 36KR Research Institute delved into key sectors' points for disruptive growth with significant upside potential, such as global expansion, embodied artificial intelligence, low-altitude economy, and artificial intelligence, among others. Their in-depth analysis considered factors like policy guidance, funding activity, market demands, industry chain structure, competitive landscape, business model, and development trends. In 2024, followers of 36 KR research institutes increased by over 11%, while workforce productivity ratio significantly improved.

19:02 On the commercialization front, we strengthened our foundation in industry research in the strategic market planning while expanding into due diligence, branding consulting, and other services. The various efforts I just described have also contributed to client structure optimization. Our enriched content ecosystem and diverse content distribution channels empowered us to consistently expand our portfolio of services and products this year, enhancing our commercialization capabilities.

19:54 This has enabled us to expand our outreach to clients in emerging sectors like new energy vehicles and luxury goods consumption. while actively broadening partnerships with legacy brands in traditional industries like apparel and food. These coordinated initiatives have meaningfully benefited our existing business through improved productivity, optimized business and client structures, and enhanced the sustainability of revenue streams. Going forward, we will continue to expand the boundaries of the median, explore new products in the business models for global expansion to drive revenue growth, and advance AGI applications to further optimize content production and commercialization efficiency.

20:59 First of all, in the year of 2024, we reported on the famous products of China, such as Minjing Intellect, Yuanding Intellect, Mobile Technology, Xingmai Innovations, and Manrique Technology, and continued to pay attention to the movement of Chinese companies out of the sea. In the past, Sanriku had landed in Japan, Sanriku Japan, Southeast Asia, and KIA Asia, and Sanriku overseas. This group has been growing for many years, and has been connected to overseas governments, large companies, first-class companies, and capital core circles, and has accumulated a large number of business out of the sea service cases and experiences. We have been providing media services and marketing services to Chinese companies overseas for many years. At the same time, our overseas team also helps overseas companies and companies to take in Chinese business opportunities.

21:36 Turning now to our growth initiatives. In 2024, global expansion emerged as a crucial opportunity that no Chinese company could afford to miss, and 36kr is no exception. 36KR has already established a solid presence in Japan, through 36KR Japan in Southeast Asia, while Croatia, building on years of extensive efforts by its overseas teams, 36KR has cultivated significant ties with foreign governments, major industry players, startups in capital ecosystems, amassing a wealth of success stories and experiences in facilitating global business expansion. For years, we have been providing media services and marketing support to Chinese companies overseas, while our international teams have been helping foreign institutions and enterprises tap into business opportunities in China.

22:31 On the content front, we have extensively covered globalization success stories of leading Chinese companies such as Minnesota, Naval, APER, E-Propulsion, Nationality Digital, and Marich Keeping a Close Eye on the Global Expansion Dynamics of Chinese Enterprises In terms of advanced layout, in 2020, we listed 36 European headquarters.

22:52 The content of the current European headquarters is mainly based on the original content of the 36 headquarters' initial company reports and 8.1 headquarters. It provides overseas users with rich Chinese business-related information. Europe and China can get the same information. The 36 European headquarters uses AIDC technology, We launched the 36KR European Central Station in 2024. Currently, 36KR Europe mainly features new corporate regional startups from the 36KR ecosystem, along with our regional content such as a quarter package,

23:37 equipping overseas stakeholders with timely and comprehensive information on Chinese businesses. This initiative enables 36kr Europe users to access the same information at the same time as those in China. Additionally, 36kr Europe leverages AIGC technology to empower its content ecosystem, notably improving productivity while lowering content creation costs. It currently supports browsing English, German, and Chinese with plans to add more languages in the country-specific channels.

24:16 In terms of domestic resources, under the guidance of the Beijing Information and Communications Council, the Beijing International Chamber of Commerce and Service Professional Committee, which was established as a collaborative launch unit by three people as a creative launch unit, will be officially launched on December 30, 2024. The Beijing International Chamber of Commerce and Service Professional Committee has established 26 member units in China, China's Mobile International, to maximize the synergy of domestic resources.

24:48 In December 2024, 36KR initiated and launched the Beijing International Chamber of Commerce Global Expansion Service Committee under the guidance of China Council for the Promotion of International Trade Beijing Sub-Council. Twenty-six leading institutions have joined the committee, including LinkedIn China, China Mobile International, KPMG, and Ant Financial. The committee brings together Beijing's top industry and professional service providers specializing in global expansion-related solutions to help local businesses expand into global markets, aiming to gradually enhance the international competitiveness of Beijing-based companies.

25:32 Moving on to commercialization,

26:01 At the beginning of 2025, 36KR signed an agreement to enter a strategic partnership with Hangzhou Tiantang New Area Construction and Investment Group Company for the Chinese Enterprise International Service Center Operations Project. This collaboration will leverage our expertise in organizational operations in online content distribution, as well as our vast network of global expansion resources to support Tiantang New Area In building a unique service ecosystem and operational framework for corporate global expansion, this initiative seeks to create a powerful brand for Tiantang New Area and amplifies its international influence to empower Chinese enterprises to expand globally.

26:47 In the future, Tiantang New Area will continue to focus on decontamination and cooperation resources, widely linked overseas and overseas ecological cooperation partners, and better provide overseas services to Chinese companies and institutions. and Zhu Li.

27:02 Moving forward, 36KR will remain committed to expanding and integrating cooperative resources, fostering synergy within an extensive global partnership ecosystem. This will enable us to better serve Chinese businesses and institutions in their international ventures, empowering Chinese businesses' global expansion while driving 36KR's revenue growth. In addition to exploring global expansion offerings, we continue to focus on artificial intelligence, depending on our innovative AGI applications to further optimize content production and commercialization efficiency.

27:57 We also provided intensive coverage of China's AI ecosystem throughout 2024.

28:22 We are the only tech media outlet worldwide to have exclusively interviewed Deep Seek's founder twice. For our first in-industry reports on topics like six AI tigers face the exit from pre-training in the GPU leasing dilemma for AI computing centers, to tracking and swiftly capturing the latest AI developments of tech giants like Alibaba, ByteDance, and Xiaomi. Our coverage of China's AI community is both broad and deep, amplified by our network's extensive reach.

28:59 除了内容端的敏锐视角, 像是和机器将AI技术与自身内容生态相融合, 我们在2024年上线了AI衛生图, AI实验室, AI采访解读等多核基于AI技术提高内部工作效率的工具。 同时在下半年上线了AI行政报道, 开明底层充分结合利用大模型基础及AI算法, 包括AI机器人采访。 In addition to our broad content range in the King Insights, we have actively integrated AIGC technology into our content ecosystem to enhance efficiency company-wide.

29:47 In 2024, we launched an area for AI-powered tools, including AI text-to-image, AI web, and AI financial reporting interpretation, as well as AI meeting coverage, which fully leverages large-scale AI model technologies and AI algorithms to produce AI-powered interviews and generate content. The underlying system currently incorporates multiple developers' large AI models, such as Doubao, and Tong Yuqian, among others. And we integrated DeepSeek in February 2025. AI meeting coverage has covered over 330 companies since its launch, highlighting their latest initiatives were for recent ventures.

30:32 In addition, Sinovac Business News has been online since October 2024. It has been able to support over 7,800 A-currency and steel-currency listed companies. Subtitles by the Amara.org community

31:02 In addition, we launched the 36kr corporate online intelligence in October 2024, targeting stock market investors by providing daily sentiment analysis reports for public companies. The service currently covers over 7,800 public companies listed in mainland China and Hong Kong. Users can search, filter, and subscribe to reports on their preferred company. receiving daily analysis in a personalized content format. The product's underlying sentiment data is a collaboration between 36kr and Softent, a fully owned subsidiary of Beyondsoft. Currently, subscriptions for this daily report total 324, with a cumulative user base of more than 600.

31:57 The trial of AI products and tools has further demonstrated the simplicity, sensitivity, and execution of 36K AI technology applications. In 2024, we fully exploited the advantages of AI technology in information recognition, text processing, and image generation in the field of content creation and production with AI technology and content production industry. In addition, we continuously expand the edge of the business, actively promote the application of AI technology in multi-dimensional scenarios, and cooperate with commercial technologies to launch AI intelligence analysis and other businesses. The launch of these AI products has improved our coverage and credibility of our customers,

32:33 Our exploration of AI products and tools further underscores 36kr's foresight to accumulate an outstanding execution capability in AI. Leveraging the inherent synergies between AIGC technology in the content production industry, we maximize AIGC technology utilization in our content production activities this year. including information identification, text processing, and image generation. Moreover, we continue to broaden our business scope by actively promoting AI applications across diverse business scenarios. For example, we partnered with SenseTime to jointly launch AI financial report interpretation services by introducing diverse AI products We broadened the purview in the precision of our customer outreach initiatives, effectively connecting with a diverse spectrum of enterprises in the organizations, previously beyond reach due to resource-intensive workloads and manpower limitations.

33:38 As mentioned above, Xiangliuke has achieved a comprehensive business efficiency improvement in 2024. This is due to our superior content creation capabilities, deep IP accumulation, active user groups, optimized customer structure, and diversified products and services. In 2025, In summary, 36Kr comprehensively improved its operating efficiency throughout 2024. Thanks to our peerless content creation prowess, robust IPS assets, deeply engaged users, refined customer structure, and diversified product and service lineup,

34:20 Looking ahead to 2025, as a prominent brand in the pioneering platform supporting new economy enterprises, we are poised to hone our competitive edge in content creation, broaden the reach of our products and service offerings, and further harness AI technology to empower high-quality development among new economy stakeholders.

34:44 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.

34:53 Thank you. Thank you for joining our today's conference call. We will now review the second half of 2024 and the full year financial performance. Please note that all amounts are in RMB unless otherwise stated. The company's total revenue were 128.7 million in the second half of 2024. Compared to $200.3 million in the same period of 2023, the total revenue for the full year of 2024 were $231.1 million compared to $340.2 million in the previous year. Online advertising services revenue were $100.2 million in the second half of 2024.

35:46 compared to $139.8 million in the same period of 2023. For the full year of 2024, our online advertising services revenue were $180.6 million compared to $238.7 million in the previous year. The decrease was primarily due to the reduction in advertising spending by advertisers from certain industries. and ongoing elimination of underperforming customers as a proactive measure to reduce credit risk. Enterprise value-added services revenue were $19.4 million in the second half of 2024, compared to $40.5 million in the same period of 2023.

36:36 For the full year of 2024, for enterprise value-added services, revenue was $32.8 million. Compared to $67.3 million in the previous year, the decrease was mainly due to strategically refocusing on the core high-margin business through the optimization of underperforming regional operations. Subscription services revenue were 9 million in the second half of 2024 compared to 20 million in the same period of 2023. For the full year of 2024, our subscription services revenue were 17.6 million compared to 34.2 million in the previous year. The decrease was mainly due to the strategically transitioned in the business model for training services.

37:35 Cost offered revenue was $61.8 million in the second half of 2024, compared to $88.1 million in the same period of 2023. For the full year of 2024, our cost offered revenue was $180.2 million. are currently at $7 million compared to $158.2 million in the previous year. The decrease was primarily attributable to a decrease in operating costs resulting from or improved efficiency. Gross profit was $66.9 million in the second half of 2024.

38:23 Compared to 112.2 million in the same period of 2023, gross margin was 52% in the second half of 2024, compared to 56% in the same period of 2023. For the full year 2024, our gross profit was 112.3 million. compared to 182 million in the previous year. Gross margin for the full year of 2024 was 48.6% compared to 53.5% in the previous year. Operating expenses were 73.1 million in the second half of 2024. compared to 147.5 million in the same period of 2023, representing a decrease of 50% year-over-year.

39:25 For the full year of 2024, operating expenses were 119.1 million compared to 276.2 million in the previous year, representing a decrease of 31.2% year-over-year. Sales and marketing expenses were $33.2 million in the second half of 2024, a decrease of 40% from $62.7 million in the same period of 2023. For the full year of 2024, our sales and marketing expenses were $82.6 million, a decrease of 35.2% from $100 million 27.5 million in the previous year. The decrease was primarily attributable to the decrease in payroll related expenses, rental expenses, and marketing and promotional expenses.

40:28 General and administrative expenses were 30.3 million in the second half of 2024. 58.8% decreased compared to $72.2 million in the same period of 2023. For the full year 2024, our general and admin expenses were $93.1 million and a 30% decrease compared to $107 million in the previous year. The decrease was largely attributable to the decrease in personal related expenses and partially offset by doubtful account loss. Research and development expenses were $5.6 million in the second half of 2024, a decrease of 55.6% from $12.6 million in the same period of 2023.

41:30 For the full year 2024, our R&D expenses were 14.4 million, a decrease of 65.5% from 41.7 million in the previous year. The decrease was primarily due to the workforce risk fracturing to enhance R&D efficiency. Share-based compensation gain recognized in cost of revenue, sales, and the marketing expenses and R&D expenses as well as the general and the admin expenses totaled $0.22 million in the second half of 2024 compared to the share-based compensation expenses of $0.97 million in the same period of 2023.

42:23 For the full year 2024, the total amount of share-based compensation gain was 0.18 million compared to 4.7 million of share-based compensation expenses in the previous year. The change were mainly due to the reversal of SPC expenses caused by strategic workforce optimization. Other expenses were 38.6 million in the second half of 2024. Compared to 1.1 million of other income in the same period of 2023, for the full year 2024, our other expenses were 63 million compared to 4.9 million of other income in previous year. The change was primarily driven by the impairment loss of long-term investment.

43:22 However, the company has a proactive, responsive, and upbeat about its future. Income credit was $1,000 in the second half of 2024 compared to $148,000 of income tax expenses in the same period of 2023. For the full year 2024, our income tax expenses were $64,000 compared to 42,000 of the income tax credit in previous year. Net loss were 44.9 million in the second half of 2024 compared to 36.6 million in the same period of 2023. For the full year 2024, net loss was 140.8 million compared to 89.2 million in the previous year.

44:22 Net loss attributable to 36 Kr Holdings Inc. ordinary shareholders was 42.3 million in the second half of 2024 compared to 37.7 million in the same period of 2023. For the full year 2024, the number was 136.6 million compared to 19 million in the previous year. Basic and diluted net loss per ADS were about 19.999 in the second half of 2024, compared to 17.977 in the same period of 2023. For the full year 2024, the number was about 64.7.

45:15 795 compared to 47.132 in the previous year. As of December 31, 2024, the company has a cash, cash equivalent and short-term investment of 92.5 million. Well, this concludes all our prepared remarks today. We will now open the call to questions. Operator, Please go ahead. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question.

46:02 For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Your first question comes from Zhang Yanda with SWS Research. Please go ahead.

46:21 Good evening. My first question is, the overall revenue of the company's advertising business is declining this year. How does the company view the future development trend of the advertising business?

46:34 Thank you, Yunnan. First of all, in 2024, we will actively carry out advertising products and customer optimization. Thank you for your question. I will translate your question in English. The company's overall advertising revenue declined this year. What's the company's outlook for its advertising business moving forward?

47:05 First of all, in 2024, we proactively optimized our advertising products in advertiser customer base, adjusting a certain low margin in high-risk advertising businesses. This strategy can move resulted in a greater reduction in relevant costs and expenses, driving continuous improvement in the overall profitability of our advertising business.

47:31 Xiangli, Cheng Li, I would like to introduce you to our new product. In 2020, our Internet and brand customers have remained stable. We have maintained a stable relationship with big customers such as Ali Jingdong, Lenovo, Huawei. At the same time, due to the influence of our WeChat giant accounts such as Hulang, Chaosheng, etc., we have continued to expand our high-quality customer base and continue to meet the needs of customer diversification content marketing. In 2020, the company continues to promote food and drink, restaurant chains, outdoor sports, makeup customers, and high-quality customer groups such as home appliances and home appliances, and has made significant progress. We have acquired Apple, Shizu Niao, Alborz,

48:06 Although our overall advertising revenue declined slightly, our Internet sector key accounts in the leading Venn customers remained stable in 2024. We maintained strong partnerships with key accounts like Alibaba, JD.com, Lenovo, and Huawei. Additionally, leveraging the content influence of our WeChat content-specific accounts, including OYouth and Tide, we continuously accelerated growth, and our high-quality customer base. By consistently meeting our customers' diverse content marketing needs, we continued to attract premium customers across sectors such as food and beverage, restaurant chains, sports and outdoor, beauty and personal care, home appliances and more.

48:52 We onboarded various premium global brands as partners, including Apple, Arc'teryx, Overs, KFC and P&G, with the proportion of new customers consistently on the rise. We are cautiously optimistic about our Advertising Girls trajectory for 2025. Despite the microeconomic headwinds, we continue to deepen our expertise in key content verticals that matter most to our clients, such as AI and global expansion, among others. By empowering customers across diverse industries with premium content solutions and constantly optimizing our products in the client structure, We are confident we can strengthen our advertising business resilience.

49:58 Thank you for your question. Do you have more questions?

50:05 Throughout 2024, what progress has the company made in reducing costs and improving efficiency?

50:23 Firstly, through rigorous cost control and cost structure optimization, our gross margin responded to over 50% in the second half of the year.

50:53 Secondly, as for expenses, we implemented an area for cost-cutting in the efficiency enhancement initiatives, including relocating to an office building with lower rental costs, streamlining our tech and R&D teams, adjusting unprofitable businesses, improving workforce efficiency and cooperation in upgrading our organizational structure, etc.

51:18 In addition, we are integrating AI technology in the AI tools on all fronts, effectively saving costs and elevating efficiency.

51:47 This initiative led to a significant reduction in our operating expenses in the second half of 2024, down by over 50% compared to the same period of 2023. Meanwhile, our operating expense ratio declined by 17% year-over-year. As a result, we vastly narrowed our operating losses compared to the same period of 2023, In 2025, the company will continue to refine its products and customer base in the organizational structure to further enhance overall profitability.

52:37 That's all for the answer. Thank you for your question. Do you have more questions? Thank you. Your next question comes from Ruyin with Sealand Securities. Please go ahead.

52:57 Thank you for giving me the opportunity to ask this question. I would like to ask if the company's annual business service revenue has decreased. What is the reason behind this? And what are the expectations for this year's business service? Thank you. Thank you for your question from C-Lint. What's the decline in the four-year revenue from enterprise value-added services? Can you share the outlook for this year's revenue from enterprise value-added services?

53:30 Okay, thank you. C-Lint's corporate corporate service is mainly to serve major companies and government clients. These clients are greatly affected by the situation in Hongwan. Under the situation in Hongwan, major companies may reduce their consulting services and current activities.

53:48 Small and medium enterprises and government institutions made up the majority of our enterprise value-added services clients, and they are relatively more affected by macroeconomic dynamics. Uncertainties at the macro level may prompt small and medium enterprises to curtain spending on consulting and offline initiatives. While government institutions may implement budget cuts, those factors collectively contributed to the decline in demand for enterprise value-added services.

54:21 Another important reason is that in 2020, we adjusted the original local station network and re-improved the basic service system and products. As a result, the local government's business was reduced due to the loss of the original low-power. As a result, corporate service was reduced. However, this adjustment made our product business more optimized and the sustainability and profitability became stronger.

54:41 Additionally, one more important reason, this year we strategically restructured our existing network of regional outlets and once again optimized our service architecture and offerings for government in the public services system. As a result, we scaled down low-margin, unprofitable local government projects, leading to a decline in revenue from enterprise value-added services. But on the upside, This strategic adjustment has optimized our business in the product portfolio, reinforcing both sustainability and profitability.

55:18 In 2025, many of our key IP activities will continue, such as the Waves Wave Summit for real-time users, the Waves Summit for the end of the year, and many of our digital industry sharing forums, such as AI Partners. These will serve as the basis for our services.

55:34 In 2025, we plan to carry on many of our legacy IP events, including WAVE, our signature gathering designed for individual customers, and WISE, our flagship year-end summit, along with a variety of industry-specific sharing programs and forums that cater to diverse customer segments like AI Partner. These activities will lay the groundwork for revenue growth in enterprise value-added services.

56:02 In addition, we will continue to expand our overseas related business in the 2020-2021 enterprise. In addition to Southeast Asia, Japan, the Middle East and Europe, we will continue to expand our global network layout. We will also work with Beijing's Mao Suhui to jointly explore Beijing's overseas service providers and overseas enterprise resources. In the beginning of 2020, for the first time, as a media, we worked with the local government's overseas service center to operate the business. We worked with Hanoi's front-line new area, Tianshui Co., Ltd., and some companies to cooperate with the China-China International Service Center to operate the service project. In the future, Xiangli He will continue to focus on the expansion and integration of cooperative resources, wide-ranging chain of overseas and domestic cooperative partners, provide overseas services to Chinese companies and institutions, assist Chinese companies in nationalization and development, and also promote further growth of our own business.

56:44 Moreover, we will continue to expand the initiatives related to global expansion within our enterprise value-added services in 2025, sustaining our strong globalization momentum from 2024. In addition to Southeast Asia, Japan, the Middle East, and Europe, we will further strengthen our global network and collaborate with the China Council for the Promotion of International Trade Beijing Sub-Council to tap into additional resources from Beijing-based service providers specializing in global expansion-related solutions and enterprises seeking global expansion. At the beginning of this year, we made our first foray into operating a local government's global expansion service center in our capacity as a media entity, partnering with Hangzhou Tiantang New Area Construction and Investment Group Company for the Chinese Enterprise International Service Center operation project. Moving forward, 36KR will remain committed to expanding and integrating cooperated resources, fostering synergy within an extensive global partnership ecosystem.

57:54 This will enable us to serve Chinese businesses and institutions in their international ventures, empowering Chinese businesses' global expansion while driving 36KR's revenue growth. Thank you for your question. Do you have more questions? 非常感谢管理层的解答,非常清楚。 然后我这边还有一个问题是关于AI的, 然后想请教一下公司在生存AI方面的一个内容的布局, 然后以及产品的布局,谢谢。

58:26 How does the company position itself in generative AI across content in the product offerings?

58:33 Thank you for your question. Before DeepSeq was launched, we were the only one in the world to have two exclusive interviews with DeepSeq founder Liang Wenfeng. We are also the first in the industry to report that AI Lishaohu has more and more companies that have gradually given up the supply chain, computing center, GPU, rent control, and other industries. In 2020, we also held a very influential AI Partner Summit. Thank you for your question.

59:03 Before DeepSeek gained widespread attention, we were the only tech media that worked worldwide to have exclusively interviewed DeepSeek's founder, Liang Wenfeng, twice. We were also the first in the industry to report on key industry developments like six AI tigers faced access from pre-training and GPU leasing dilemma for AI computing centers. In 2024, we also hosted the highly influential AI partner summit for AI sub-verticals. Those achievements underscored our broad and deep coverage of China's AI community, amplified by our network's extensive reach.

59:43 We also mentioned that in 2024, the company has set up several AI products, including AI satellite images, AI labs, AI financial analysis, AI global reporting, and AI global reporting, etc. Among them, through AI global reporting, the latest projects or financing companies have reached more than 330 companies, and in February, deep-seekers have been introduced. The global reporting of 36 companies has supported the subscription of more than 7,800 A-currency and steel-currency listed companies. At present, the total number of subscribers to the company's daily newspaper has reached more than 3,000, with a total number of more than 6,000.

1:00:12 As I just mentioned, the company launched an array of AI-powered products in 2024, including AI Text-to-Image, AI Lab, AI Financial Report Interpretation, AI Meeting Coverage, and 36KR Corporate Omni Intelligence, among others. Notably, AI Meeting Coverage has covered over 330 companies, highlighting their latest initiatives in fundraising ventures. and we integrated the data model in February 2025. Meanwhile, 36 Kr corporate Omni Intelligence currently covers over 7,800 public companies listed in mainland China and Hong Kong. Subscriptions for its daily reports have reached more than 3,000 and with a cumulative user base of more than 6,000.

1:01:04 In 2025, we will upgrade the AI content layout In 2025, we will continue to develop our AI content ecosystem, maintaining our edge in covering the latest AI trends and consistently delighting users with premium content associated with AIGC technology.

1:01:33 We will also further integrate AIGC technology with content production to unlock new avenues for success. Thank you for your question. Thank you. As there are no further questions, I'd now like to turn the call back over to the company for closing remarks.

1:01:54 Thank you once again for joining us today. If you have other questions, please feel free to contact 36KR's Investor Relations through the contact information provided on our website. This concludes this conference call. You may now disconnect your line. Thank you.