36Kr Holdings Inc. Earnings Call: A Deep Dive into 2024's Challenges and Future Prospects

The earnings call for 36Kr Holdings Inc. (NASDAQ: KRKR) on March 11, 2025, provided a comprehensive look into the company's financial performance for the second half of 2024 and the full fiscal year. The call highlighted both the challenges faced by the company and its strategic initiatives aimed at driving future growth. Let's break down the key takeaways and analyze the implications for investors.

Revenue Decline Across All Segments

The most striking revelation from the earnings call was the significant decline in total revenues. For the full year 2024, total revenues plummeted by 32% year-over-year to RMB231.1 million (US$31.7 million). This decline was evident across all business segments:
- Online advertising services revenue decreased by 24.3% to RMB180.6 million.
- Enterprise value-added services revenue plummeted by 51.3% to RMB32.8 million.
- Subscription services revenue fell by 48.5% to RMB17.6 million.

These declines suggest that 36Kr is facing significant headwinds in its core revenue streams. The company's CEO, Dagang Feng, acknowledged the challenging external environment of 2024, stating, "Amid the challenging external environment of 2024, we maintained our focus on long-term strategy and achieved significant operational efficiency improvements." This indicates that the company is aware of the market challenges and is taking steps to mitigate their impact.

Cost-Cutting Measures and Operational Efficiency

One of the bright spots in the earnings call was the significant reduction in operating expenses. The company achieved a 50% year-over-year reduction in operating expenses for the second half of 2024 and a 31% reduction for the full year. This aggressive cost management has led to a decrease in general and administrative expenses from RMB72.2 million in the second half of 2023 to RMB30.3 million in the second half of 2024, representing a 58% decrease.

However, the sustainability of these cost-cutting measures and the potential risks or trade-offs need to be carefully considered. While cost-cutting measures can improve short-term financial performance, they may also limit the company's ability to innovate and maintain its competitive edge. As Mr. Dagang Feng mentioned, "Amid the challenging external environment of 2024, we maintained our focus on long-term strategy and achieved significant operational efficiency improvements." While cost-cutting measures can improve short-term financial performance, they may also limit the company's ability to innovate and maintain its competitive edge.

AI-Driven Opportunities and Innovative Content Initiatives

The company's focus on AI-driven opportunities and innovative content initiatives is a key part of its long-term growth strategy. 36Kr has been proactive in covering AI developments and launched AI-powered products like AI Text to Image and AI Media Coverage, which are designed to improve the quality and reach of its content offerings.

The company's long-term strategy also includes expanding its content ecosystem and refining its omni-channel distribution matrix. This is reflected in the 10% year-over-year increase in followers to 36 million as of the end of 2024, marking the 16th consecutive quarter of follower growth. This growth in followers indicates that the company's content initiatives are resonating with its audience and driving engagement.

Financial Performance and Outlook

Despite the cost-cutting measures, the company's financial performance remains troubling. The net loss for 2024 increased by 57.8% to RMB140.8 million, compared to RMB89.2 million in 2023. This widening net loss, coupled with the significant revenue decline, suggests that 36Kr is struggling to maintain its market position in the face of industry challenges.

Looking ahead, the company's strategic direction appears to be focused on long-term growth. The CEO mentioned, "Looking ahead to 2025, we will continue to implement our innovative content initiatives and harness AI-driven opportunities to drive the Company’s high-quality, sustainable development." However, immediate revenue recovery remains a critical challenge.

Conclusion

In conclusion, the 36Kr Holdings Inc. earnings call for the full year 2024 highlighted both the challenges and opportunities facing the company. While the significant revenue decline and widening net loss are concerning, the company's focus on AI-driven opportunities and innovative content initiatives offers a glimmer of hope for future growth. Investors should monitor key metrics such as follower growth, revenue from online advertising services, and operational efficiency to assess the success of these initiatives. The company's ability to balance short-term cost savings with long-term strategic investments will be crucial for its sustainable growth and competitiveness.