36Kr Holdings Inc.

Hello, ladies and gentlemen. Thank you for standing by for 36KR 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. Thank you very much.

Hello, everyone, and welcome to 36KR holding the second half and the 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. Da Gangfeng, 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. 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 included in the company's prospectus and other public filings is filed with USSEC. The company does not assume any obligation to update any forward-looking statements except as required under . Please note that 36KR's earnings press release in this conference call include discussion of unaudited gap financial measures as well as unaudited non-gap financial measures. 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. Da Gangfeng. Pell, please go ahead.

Thank you.

Hello, everyone. Thank you for joining our second half and the first half of the year 2024 Earnings Conference Call.

2024 is a year of comprehensive improvement and performance. Especially in the second half of the year, our net profit remained 50% high, while our operating cost decreased by 50% and operating cost decreased by 17%. The second half of the year, the operating loss was greatly reduced, and the cash reserves remained stable. This laid the foundation for long-term stable operations for the company's future.

2024 marked a year of comprehensive operating efficiency improvements for 36KR. 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.

以上的经济成果主要得益于2024年我们不断优化业务结构,提高人员效率。 2024年我们继续夯实内容生态建设,凭借优质的内容原创能力以及全方位的营销服务,保持公司广告业务运营优化的同时,不断拓展能力的边界。 These operational achievements were primarily driven by our business structure and 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.

Let's take a closer look at the company's development from two key perspectives.

First, our existing business, and second, our growth initiatives. For our existing business, I will start with an update on our content's influence in commercialization.

At the same time, we continue to create high-quality content with a wide variety of content. The company is on the basis of 36K, 36K Pro, etc., and its electric giant number. The acceleration layout is a top-notch area. In the real-time offline, 36K cars, future consumption, 36K games, and the high-quality content of iOS, 36K finance, etc., we continue to exert force on the high-quality content. The coverage of the content is wide and the depth of accumulation in the segment is deep. We represent users in the industry trend and commercial hot spots. At the same time, The company continues to create exclusive content for young users, promoting young people's media such as Hualong Research Institute, Chaosheng, etc. By evaluating, slowing down, customizing videos, and other multi-format organizations, we can bring out more young people. In August 2024, we officially launched a 36-gram game content organization, focusing on 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. As of now, the company's organization is fully covered with smart manufacturing, digitalization, ESG, technology, innovation and innovation, consumer life, and many other fields, to build a solid content ecosystem. In 2024, the Sinovac Publishing House 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 Publishing House's reading volume, the number of 100,000 articles reached 757 articles.

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 in evolving business dynamics. At the same time, we continue to tailor content experiences for younger generations by launching our OEs in tight sub-vertical median channels. 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. 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, Billy, Douyin, and KuaiShou, among others. Broad channel exposure brings us wider overall dissemination and higher visibility for our premium content. 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.

In terms of content representation, we use pictures, long videos, audio, live broadcasts, etc. to gradually enrich the content form and express it. In terms of short videos, we use excellent content creation ability to gain the wide attention and recognition of users. 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 rate of income of Bilibili is constantly increasing.

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 a 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 video business continues to excel with its contribution to advertising revenue consistently on the rise.

In the long-term video industry, our high-end program, See2034, is on the rise in the second quarter, and is closely linked to the Kuomintang short 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. 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.

在直播方面,2024年我们用较少的人力积极整合现场资源,充分利用微信视频号培养出一系列微信矩阵号 We tried to do the first live delivery at the end of 2024. This live delivery has a total of 38 technology products. The total number of customers in the live broadcast room is more than 1.63 million. A total of 28.9 million people came 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, 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.

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 was hosted by ARI, Baidu, Lianxiang, Intel, and other industry giants, deep-dive into the latest development trends of AI technology applications, and share the opportunities and challenges that companies have encountered in real-time. The total number of activities this time has exceeded 100 million, causing a wide range of assistance in the industry. In November 2020, we are looking forward to the heavy-duty IP. The WES2024 Business Management Conference will be held on schedule. This year's conference will focus on 11 Japanese channels. WES2024, which was established across the continent, will continue to descend to the global distribution platform. Shenzhen and WES2024 will meet at the Future Consumption Conference in Beijing. Now let's turn to enterprise value-add data services.

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 application, 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. The event brought together more than 200 Chinese business leaders and elites representing a wide area of industries, including Li Kaifu, CEO of Zero1AI 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 Weibo, Ying Ye, CEO of BGI Group, and Zhang Peng, CEO of Zhupu. sharing visionary insights into the future for China's business advancement. Our WISE2024 Business Kings Conference attracted over 850 million total views. In addition to the many consultations, we also continue to work hard in the field of corporate service.

In addition to the many consultations, we also continue to work hard in the field of corporate service. In addition to the many consultations, we also continue to work hard in the field of corporate service. In addition to the many consultations, we also continue to work hard in the field of corporate service. In addition to the many consultations, we also continue to work hard in the field of corporate service. In addition to offline events, we continued to make strides in our consulting services and other enterprise value-added service offerings this year.

36 KR Research Institute delved into key sectors appointed for disruptive growth with a 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 the 36KR Research Institute increased by over 11%, while workforce productivity ratio significantly improved. 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.

Customer structure optimization, based on the rich content, ecosystem, and staff flow, allows us to continuously expand services and product types. So 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. This has enabled us to expand our outreach to clients in emerging sectors like new energy vehicles in luxury goods consumption, while actively broadening partnerships with legacy brands in traditional industries like parent and food.

以上举措让我们的存量业务人口提升,业务及客户结构优化,

This coordinated initiative has 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 medium, 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.

First of all, in 2024, Chuhai will become a must-see for Chinese companies. We reported on the top-notch products in the content section, such as Mijing Intellectual, Yuanding Intellectual, Yidong Technology, Xingmai Innovations, and Banrihe Technology. 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. On the content front, we have extensively covered globalization success stories of leading Chinese companies such as Minnesot, Novo, Apple, ePropulsion, Nationality Digital, and Marich, keeping a close eye on the global expansion dynamics of Chinese enterprises.

In terms of modernization, in 2020, we listed 36 European headquarters. The content of the current European headquarters is mainly based on the original content of the 36 headquarters' initial company reports, 8.1 headquarters, and so on. We launched the 36KR European Central Station in 2024.

mainly features new coverage on startups from the 36KR ecosystem, along with original content such as a quarter package 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 in English, German, and Chinese with plans to add more languages in country-specific channels.

Under the guidance of the Beijing News Agency, the Beijing International Chamber of Commerce and Trade Service Professional Committee, which was founded by three people as an initiative launch unit, will be officially launched on December 12, 2024. The Beijing International Chamber of Commerce and Trade Service Professional Committee has established 26 member units in China, China Mobile, ZRV, Antifreeze, and other institutions, including China Mobile, ZRV, Antifreeze, and other institutions, including China Mobile, China Mobile, ZRV, Antifreeze, and other institutions, including 26 member units. In addition to the famous industrial service providers and professional service providers in the Beijing-based trade sector, it is also intended to help first-tier enterprises expand the overseas market and gradually improve Beijing's international business capability.

To maximize the synergy of domestic resources, in December 2024, 26KR 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. 26 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.

In terms of commercialization, at the beginning of 2025, Shenzhen and Hangzhou Tiananmen Square Construction Investment Group, a leading company, will establish a cooperation relationship with China's international service center for operating service projects and successfully complete the signing. Moving on to commercialization.

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 Services 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 cooperative global expansion. This initiative seeks to create a powerful brand for Xiantang New Area and amplifies its international influence to empower Chinese enterprises to expand globally.

后续,战略客持续致力于拓展整合合作资源,广泛连接海内外生态合作伙伴,更好地为中国企业机构提供出海服务,助力中国企业国际化发展的同时,推动自身业务进一步增长。

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

We are the only tech media outlet worldwide to have exclusively interviewed DeepSeek'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.

AI AI AI AI AI AI AI AI AI AI AI AI AI AI 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.

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 we integrated DeepSeq in February 2025. AI meeting coverage has covered over 330 companies since its launch. Highlighting their latest initiatives were fundraising ventures.

In addition, Sinovac's company, Sinovac, has been on the line since October 2024. It has been able to support more than 7,800 A-currency and steel-currency listed companies. The number of subscribers has reached 3,024. The number of customers has exceeded 6,000.

In addition, we launched the 36KR Corporate Omni 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 Soften, a fully owned subsidiary of BeyondSoft. Currently, subscriptions for this daily report total 324, with a cumulative user base of more than 600.

The trial of AI products and tools clearly demonstrated the simplicity, sensitivity, and execution of 3.6G for AI technology applications. In 2024, with AIGC technology and the experience and compatibility of the content production industry, we fully used the advantages of AIGC technology in information recognition, text processing, and image production to achieve the effect of scripting. In addition, we continuously expanded our business boundaries, actively implemented the application of AI technology in multi-layered scenarios, and launched AI financial reporting analysis and other business with the collaboration of Changchang Technology. The introduction of these AI products has improved our coverage and credibility of our customers,

Our exploration of AI products and tools further underscores 36KR's foresight, acumen, and outstanding execution capabilities 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 demand power limitations.

To sum up, Sanrio has achieved a comprehensive business efficiency improvement in 2024. This is due to our high-quality 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, Looking ahead to 2025, as a prominent brand in the pioneering platform supporting new economy enterprises, we are pointed 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.

With that, I will now turn the call over to our CFO, Mr. Xiangli. who will discuss our key financial results. Please go ahead, Xiang.

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. 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. For the full year of 2024, our enterprise value-added services revenue were $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 transition in the business model for training services. 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 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. 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. 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, sales and marketing expenses were $82.6 million, a decrease of 35.2% from 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. General and administrative expenses were 30.3 million in the second half of 2024. 58.8% decrease 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 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. 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. 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, all 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. However, the company has a proactive responded 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 income tax credit in previous year. Net loss was $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. Net loss attributable to 36 KR Holding 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 the diluted net loss per ADS were both 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 64.795 compared to 47.132 in the previous year. As of December 31, 2024, the company has a 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. 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.

公司管理层晚上好。 我第一个问题就是今年公司的广告业务整体收入下降。 公司如何看待未来广告业务的一个发展趋势? 好的,谢谢云达。

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? 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.

Our company continues to promote food and drink, restaurant chain, outdoor sports, make-up customers, home appliances, home appliances, and other high-quality customer groups, and has made significant progress. We have acquired Apple, Shih Tzu, and Alborz.

Although our overall advertising revenue declined slightly, our internet sector key accounts in the leading brand 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 VChat content-specific accounts, including OUth and Tide, we continuously accelerated the growth in 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. 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 growth trajectory for 2025. Despite the microeconomic winds, 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. Thank you for your question. Do you have more questions?

好的,我的第二个问题是想请教一下公司2024年在降本增效方面取得哪些进展。 以上,谢谢。

Throughout 2024, what progress has the company made in reducing costs and improving efficiency? Firstly, through rigorous cost control and cost structure optimization, our gross margin responded to over 50% in the second half of the year.

including the low-end office, and the improvement of the technical production department, and the adjustment of the critical business, and the improvement of the performance of the main business, and the improvement of the structure.

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

In the second half of 2020,

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 the overall profitability. 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.

感谢给我这个提问的机会。 那个我想请问一下就是公司全年的这个企业增值服务收入是有所下降的, 然后请问下背后的原因是什么,然后对于今年的这个企业增值服务有哪些预期? 谢谢。

Thank you for your question from New Zealand. 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?

Thank you. The growth of corporate corporate services is mainly due to the large number of corporate and government clients. These clients are greatly affected by the situation in Hongwan. In the situation in Hongwan, it is unlikely that corporate companies will reduce their consulting services and current activities.

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.

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. and enforcing both sustainability and profitability.

In 2025, many of our key IP activities will continue, such as the Waves new wave conference for real-time users, the Waves conference for the new generation, and many of our digital industry sharing forums, such as AI Partners. These will serve as the foundation for our corporate services.

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.

In addition, we will continue to expand our overseas related business in the business development business in 2025. In addition to Southeast Asia, Japan, China, and Europe, we will continue to expand our global network layout and cooperate with Beijing City Trade Union and Beijing City overseas service providers and overseas business resources. In the beginning of 2025, for the first time, as a media, we took over the business operation of the overseas service center of the local government in Hanoi. We cooperated with some companies in the new area of Hanoi to establish an international service center to operate the service project. Post-pandemic, the strategy will continue to focus on expanding and integrating cooperation resources, widely connecting overseas and overseas partners, providing overseas services to Chinese companies and institutions, assisting Chinese companies in globalization, and promoting further growth of our own business.

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 will further strengthen our global network in the collaboration 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 effort 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. 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。

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

Thank you for the question. Before DeepSeq was launched, we were the only two-time exclusive interviewer for DeepSeq founder Liang Wenfeng. We are also the first exclusive interviewer in the industry. AIB Xiaohu has gradually given up training, computing center, GPU, Zuling, Kunju, etc., the most advanced media in the industry. In 2020, we also held a very influential AI partner, Cui Zhifenghui. Thank you for your question.

Before DeepSeq gained widespread attention, it was the only tech media that worked worldwide to have exclusively interviewed DeepSeq's founder, Liang Wenfeng, twice. We were also the first in the industry to report on key industry developments like six AI tigers faced the exit 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.

Just now 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 to report on recent projects or financing companies, more than 330 companies have reached, and in February, deep-seek machine intervention has been completed. 36 companies' global reporting has supported more than 7,800 A-currency and steel-currency listed companies to subscribe. At present, the total number of subscribers to the company's daily newspaper has reached more than 3,000, with a total number of over 6,000.

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, 36KR 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.

In 2025, we will upgrade our AI deployment

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. 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.

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.