- Total Revenue: RMB2.47 billion, a year-on-year increase of 13% and a quarter-on-quarter increase of 16%.
- Operating Profit: RMB790 million, a year-on-year increase of 18% and a quarter-on-quarter increase of 32%.
- Operating Profit Margin: 32%, up 1 percentage point year-on-year and 4 percentage points quarter-on-quarter.
- Net Profit Attributable to Shareholders: RMB393 million, a year-on-year increase of 588% and a quarter-on-quarter increase of 38%.
- Kingsoft Office Group Revenue: RMB1.187 billion, a 6% year-on-year increase.
- Online Games and Other Business Revenue: RMB1.286 billion, a 20% year-on-year increase and a 41% quarter-on-quarter increase.
- Gross Profit: RMB2.042 billion, an 11% year-on-year increase and a 17% quarter-on-quarter increase.
- Gross Profit Margin: 83%, decreased by 1 percentage point year-on-year and increased by 2 percentage points quarter-on-quarter.
- Research and Development Costs: RMB741 million, an 11% year-on-year increase and a 4% quarter-on-quarter increase.
- Selling and Distribution Expenses: RMB379 million, a 26% year-on-year increase and a 45% quarter-on-quarter increase.
- Administrative Expenses: RMB155 million, a 1% year-on-year increase and a 3% quarter-on-quarter decrease.
- Share-Based Compensation Costs: RMB82 million, a 10% year-on-year decrease and a 7% quarter-on-quarter increase.
- Operating Profit Before Share-Based Compensation Costs: RMB876 million, a 14% year-on-year increase and a 29% quarter-on-quarter increase.
- Net Other Losses: RMB12 million, compared with losses of RMB103 million in Q2 2023 and RMB4 million in Q1 2024.
- Share of Losses of Associates: RMB169 million, compared with RMB323 million in Q2 2023 and RMB169 million in Q1 2024.
- Income Tax Expense: RMB48 million, compared with RMB78 million in Q2 2023 and RMB42 million in Q1 2024.
- Profit Attributable to Owners of the Parent (Excluding Share-Based Compensation Costs): RMB441 million, compared with RMB123 million in Q2 2023 and RMB329 million in Q1 2024.
- Net Profit Margin (Excluding Share-Based Compensation Costs): 18%, compared with 6% in Q2 2023 and 15% in Q1 2024.
- First Half 2024 Revenue: RMB4.611 million, an 11% year-on-year increase.
- First Half 2024 Operating Profit Before Share-Based Compensation Costs: RMB1.754 million, a 20% year-on-year increase.
- First Half 2024 Profit Attributable to Owners of the Parent: RMB678 million, compared with RMB250 million in the same period last year.
- First Half 2024 Profit Attributable to Owners of the Parent (Excluding Share-Based Compensation Costs): RMB717 million, compared with RMB359 million in the prior year period.
- First Half 2024 Net Profit Margin (Excluding Share-Based Compensation Costs): 17%, compared with 9% in the first half of 2023.
- Cash Resources (as of June 30, 2024): RMB24 billion.
- Net Cash from Operating Activities (First Half 2024): RMB1.374 million.
- Cash Used for Capital Expenditure (First Half 2024): RMB164 million.
Release Date: August 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenues reached RMB2.47 billion, a year-on-year increase of 13% and a quarter-on-quarter increase of 16%.
- Operating profit reached RMB790 million, a year-on-year increase of 18% and a quarter-on-quarter increase of 32%.
- Net profit attributable to shareholders reached RMB393 million, a significant year-on-year increase of 588% and a quarter-on-quarter increase of 38%.
- Kingsoft Office Group's revenues in the second quarter reached RMB1.187 billion, a 6% year-on-year increase.
- Online games and other business revenues reached RMB1.286 billion, a 20% year-on-year increase and a significant 41% increase quarter-on-quarter.
Negative Points
- Revenue from the office software and service business decreased 3% quarter-on-quarter to RMB1.188 million.
- Gross profit margin decreased by 1 percentage point year-on-year to 83%.
- Research and development costs increased 11% year-on-year and 4% quarter-on-quarter to RMB741 million.
- Selling and distribution expenses increased by 26% year-on-year and 45% quarter-on-quarter to RMB379 million.
- Share of losses of associates was RMB169 million for the second quarter of 2024.
Q & A Highlights
Q: Could you please share your views on the performance of JX3 Ultimate after its launch?
A: (Tao Zou, CEO) The launch of JX3 Ultimate has been very successful. We observed nearly a 100% growth in daily active users, with over 10 million active users on the first day. From an income perspective, while Q2 performance was not significant due to the short time since launch, July and August have shown record-breaking daily and monthly performances, exceeding our expectations.
Q: What is your outlook on the office business, particularly the individual and institutional segments, for the upcoming quarters?
A: (Tao Zou, CEO) For the institutional segment, the localization business remains stable, and the subscription business is growing faster than expected. For the individual segment, user growth has been strong, with a 15% year-on-year increase in income. We are confident in the AI commercialization process, which is expected to enhance user experience and drive further growth.
Q: How do you view the competitive landscape for AI office applications?
A: (Tao Zou, CEO) Apart from Microsoft, we do not see other products as direct competitors. Our focus is on content creation and document treatment, areas where we excel. Other companies are more focused on AI-based content generation and productivity, which do not directly compete with our core offerings.
Q: How do you view the investment in AI given the group's sufficient cash on the balance sheet?
A: (Tao Zou, CEO) We are exploring collaborations with startup companies from both financial and business perspectives. We aim to balance shareholder returns with strategic investments in AI. In the first half of the year, we returned HKD400 million to shareholders and are looking for suitable opportunities for further investments.
Q: What are the key financial highlights for the second quarter and the first half of 2024?
A: (Yi Li, Acting CFO) Revenue for Q2 increased 30% year-on-year to RMB2,474 million. Office software and services contributed 48%, while online games and others contributed 52%. Gross profit margin was 83%. For the first half of 2024, revenue increased 11% year-on-year to RMB4,611 million, with a gross profit margin of 82%. Profit attributable to owners of the parent was RMB678 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
