36Kr : Reports Third Quarter 2021 Unaudited Financial Results - Form 6-K

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

BEIJING, December 9, 2021 / PRNEWSWIRE / - 36Kr Holdings Inc. ("36Kr" or the "Company" or "We") (NASDAQ: KRKR), a prominent brand and a pioneering platform dedicated to serving New Economy participants in China, today announced its unaudited financial results for the third quarter 2021 ended September 30, 2021.

Third Quarter 2021 Operational and Financial Highlights

●	Average monthly page views ("PV") for the twelve-month period ended September 30, 2021 increased by 49.9% to 848.7 million, from 566.3 million for the twelve-month period ended September 30, 2020.

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

●	Revenues from online advertising services increased by 4.4% to RMB53.4 million (US$8.3 million) in the third quarter of 2021, from RMB51.1 million in the same period of 2020.

●

Revenues from enterprise value-added services were RMB22.5 million (US$3.5 million) in the third quarter of 2021, compared to RMB66.4 million in the same period of 2020. Gross transaction value1 was RMB66.3 million in the third quarter of 2021, compared to RMB66.4 million in the same period of 2020.

●	Revenues from subscription services increased by 51.6% to RMB9.0 million (US$1.4 million) in the third quarter of 2021, from RMB6.0 million in the same period of 2020.

●	Gross profit was RMB47.6 million (US$7.4 million) in the third quarter of 2021, compared to RMB46.8 million in the same period of 2020. Gross profit margin was 56.1% in the third quarter of 2021, compared to 37.9% in the same period of 2020.

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

●	As of September 30, 2021, the Company had cash, cash equivalents and short-term investments of RMB178.0 million (US$27.6 million), compared to RMB149.6 million as of June 30, 2021.

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

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Selected Operating Data

		For the Three Months Ended September 30,
		2020			2021
Online advertising services
Number of online advertising services end customers			186				192
Average revenue per online advertising services end customer (RMB'000)2			274.7				277.9
Enterprise value-added services
Number of enterprise value-added services end customers			80				74
Average revenue per enterprise value-added services end customer (RMB'000)3			830.1				304.0
Subscription services
Number of individual subscribers			2,064				974
Average revenue per individual subscriber (RMB)4			619.4				1,138.9
Number of institutional investors			76				87
Average revenue per institutional investor (RMB'000)5			61.6				91.0

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

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

² Equals revenues generated from online advertising services for a period divided by the number of online advertising services end customers in the same period.

³ Equals revenues generated from enterprise value-added services for a period divided by the number of enterprise value-added services end customers in the same period.

⁴ Equals revenues generated from individual subscription services for a period divided by the number of individual subscribers in the same period.

⁵ Equals revenues generated from institutional investor subscription services for a period divided by the number of institutional investors in the same period.

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Third Quarter 2021 Financial Results

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

·

Online advertising services revenues increased by 4.4% to RMB53.4 million (US$8.3 million) in the third quarter of 2021, from RMB51.1 million in the same period of 2020. The increase was primarily attributable to more innovative marketing solutions we provided to our customers. The number of advertising customers and the average revenue per advertising customer both increased in the third quarter of 2021.

·

Enterprise value-added services revenues were RMB22.5 million (US$3.5 million) in the third quarter of 2021, compared to RMB66.4 million in the same period of 2020. The decrease was primarily because we continuously shifted our focus towards higher margin businesses and starting from the first quarter of 2021, we ceased to act as a principal in certain low gross margin businesses and only acted as an agent. As a result, revenues of such businesses were recognized on a net basis from the first quarter of 2021 onward. To increase comparability of operating results and help investors better understand our business performance and operating trends, we introduced the gross transaction value as a supplemental metric to describe our business. Gross transaction value of enterprise value-added services was RMB66.3 million in the third quarter of 2021, compared to RMB66.4 million in the same period of 2020.

·

Subscription services revenues were RMB9.0 million (US$1.4 million) in the third quarter of 2021, representing an increase of 51.6% compared to RMB6.0 million in the same period of 2020. The increase was primarily attributable to our continuous efforts to offer high-quality subscription products to our subscribers.

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

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

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

·	Sales and marketing expenses were RMB35.5 million (US$5.5 million) in the third quarter of 2021, compared to RMB31.6 million in the same period of 2020. The increase was primarily attributable to an increase in payroll-related expenses.

·

General and administrative expenses were RMB30.9 million (US$4.8 million) in the third quarter of 2021, compared to RMB20.5 million in the same period of 2020. The increase was primarily attributable to an increase in the allowance for credit losses and payroll-related expenses, partially offset by the decrease in share-based compensation expenses.

·

Research and development expenses were RMB13.9 million (US$2.2 million) in the third quarter of 2021, compared to RMB11.2 million in the same period of 2020. The increase was primarily attributable to the increase in payroll-related expenses as we bolstered our research and development capabilities.

Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses, as well as general and administrative expenses totaled RMB4.9 million (US$0.8 million) in the third quarter of 2021, compared to RMB4.6 million in the same period of 2020.

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

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

Net loss was RMB31.3 million (US$4.9 million) in the third quarter of 2021, compared to RMB14.0 million in the same period of 2020. Non-GAAP adjusted net loss⁶was RMB26.4 million (US$4.1 million) in the third quarter of 2021, compared to RMB9.3 million in the same period of 2020.

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

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

Certain Balance Sheet Items

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

Share Repurchase Program

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

Conference Call

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

Event Title:	36Kr Holdings Inc. Third Quarter 2021 Earnings Conference Call
Conference ID:	7074133
Registration Link:	http://apac.directeventreg.com/registration/event/7074133

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

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.36kr.com.

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

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A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until December 16, 2021, by dialing the following telephone numbers:

United States:	[phone]
International:	[phone]
Hong Kong, China:	800-963-117
Mainland China:	400-632-2162
Replay Access Code:	7074133

About 36Kr Holdings Inc.

36Kr Holdings Inc. is a prominent brand and a pioneering platform dedicated to serving New Economy participants in China with the mission of empowering New Economy participants to achieve more. The Company started its business with high-quality New Economy-focused content offerings, covering a variety of industries in China's New Economy with diverse distribution channels. Leveraging traffic brought by high-quality content, the Company has expanded its offerings to business services, including online advertising services, enterprise value-added services and subscription services to address the evolving needs of New Economy companies and upgrading needs of traditional companies. The Company is supported by comprehensive database and strong data analytics capabilities. Through diverse service offerings and the significant brand influence, the Company is well-positioned to continuously capture the high growth potentials of China's New Economy.

Use of Non-GAAP Financial Measures

In evaluating its business, the Company considers and uses two non-GAAP measures, adjusted net income/(loss) and adjusted EBITDA, as supplemental measures to review and assess its operating performance. The presentation of these two non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company presents these non-GAAP financial measures because they are used by the Company's management to evaluate its operating performance and formulate business plans. The Company also believes that the use of these non-GAAP measures facilitates investors' assessment of its operating performance.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company performance. The Company encourages investors to review its financial information in its entirety and not rely on a single financial measure.

Adjusted net loss represents net loss excluding share-based compensation expenses.

Adjusted EBITDA represents adjusted net income/(loss) before interest income, interest expenses, income tax expense/(credit), depreciation of property and equipment and amortization of intangible assets.

For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi are made at a rate of RMB6.4434 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on of September 30, 2021.

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Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's goal and strategies; the Company's future business development, results of operations and financial condition; relevant government policies and regulations relating to our business and industry; the Company's expectations regarding the use of proceeds from this offering; the Company's expectations regarding demand for, and market acceptance of, its services; the Company's ability to maintain and enhance its brand; the Company's ability to provide high-quality content in a timely manner to attract and retain users; the Company's ability to retain and hire quality in-house writers and editors; the Company's ability to maintain cooperation with third-party professional content providers; the Company's ability to maintain relationship with third-party platforms; general economic and business condition in China; possible disruptions in commercial activities caused by natural or human-induced disasters; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

In China:

36Kr Holdings Inc.

Investor Relations

Tel: [phone]

E-mail: [e-mail]

The Piacente Group, Inc.

Jenny Cai

Tel: [phone]

E-mail: [e-mail]

In the United States:

The Piacente Group, Inc.

Brandi Piacente

Tel: [phone]

E-mail: [e-mail]

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36Kr Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

		December 31, 2020			September 30, 2021			September 30, 2021
		RMB'000			RMB'000			US$'000
Assets
Current assets:
Cash and cash equivalents			60,846				83,941				13,027
Short-term investments			148,344				94,037				14,594
Accounts receivable, net			304,845				203,507				31,584
Receivables due from related parties			98				3,622				562
Prepayments and other current assets			16,319				25,938				4,026
Total current assets			530,452				411,045				63,793
Non-current assets:
Property and equipment, net			3,941				3,458				537
Intangible assets, net			471				839				130
Long-term investments			16,300				43,059				6,683
Operating lease right-of-use assets, net			27,365				17,642				2,738
Total non-current assets			48,077				64,998				10,088
Total assets			578,529				476,043				73,881
Liabilities
Current liabilities:
Accounts payable			64,641				48,353				7,504
Salary and welfare payables			45,580				50,196				7,790
Taxes payable			18,824				11,155				1,731
Deferred revenue			18,849				39,084				6,066
Amounts due to related parties			548				1,154				179
Accrued liabilities and other payables			13,560				20,225				3,139
Operating lease liabilities			15,132				13,933				2,162
Total current liabilities			177,134				184,100				28,571
Non-current liabilities:
Operating lease liabilities			12,426				3,516				546
Total non-current liabilities			12,426				3,516				546
Total liabilities			189,560				187,616				29,117
Shareholders' equity
Ordinary shares			687				694				108
Treasury stock			(14,081	)			(15,838	)			(2,458	)
Additional paid-in capital			2,040,693				2,047,550				317,775
Accumulated deficit			(1,638,581	)			(1,742,713	)			(270,465	)
Accumulated other comprehensive loss			(7,897	)			(8,268	)			(1,283	)
Total 36Kr Holdings Inc.'s shareholders' equity			380,821				281,425				43,677
Non-controlling interests			8,148				7,002				1,087
Total shareholders' equity			388,969				288,427				44,764
Total liabilities and shareholders' equity			578,529				476,043				73,881

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36Kr Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

		Three Months Ended			Nine Months Ended
		September 30, 2020			September 30, 2021			September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2021
		RMB'000			RMB'000			US$'000			RMB'000			RMB'000			US$'000
Revenues:
Online advertising services			51,095				53,357				8,281				103,477				138,329				21,468
Enterprise value-added services			66,404				22,499				3,492				151,850				43,699				6,782
Subscription services			5,957				9,030				1,401				9,990				18,464				2,866
Total revenues			123,456				84,886				13,174				265,317				200,492				31,116
Cost of revenues			(76,626	)			(37,261	)			(5,783	)			(190,798	)			(88,109	)			(13,674	)
Gross profit			46,830				47,625				7,391				74,519				112,383				17,442
Operating expenses:
Sales and marketing expenses			(31,611	)			(35,453	)			(5,502	)			(105,540	)			(104,584	)			(16,231	)
General and administrative expenses			(20,450	)			(30,941	)			(4,802	)			(130,644	)			(81,014	)			(12,573	)
Research and development expenses			(11,181	)			(13,940	)			(2,163	)			(29,301	)			(34,883	)			(5,414	)
Total operating expenses			(63,242	)			(80,334	)			(12,467	)			(265,485	)			(220,481	)			(34,218	)
Loss from operations			(16,412	)			(32,709	)			(5,076	)			(190,966	)			(108,098	)			(16,776	)
Other income/(expenses):
Share of loss from equity method investments			(2,021	)			(132	)			(20	)			(7,728	)			(4,056	)			(629	)
Short-term investment income			583				507				79				1,069				1,898				295
Government grant			2,382				252				39				5,050				2,427				377
Others, net			1,523				828				129				3,380				1,810				281
Loss before income tax			(13,945	)			(31,254	)			(4,849	)			(189,195	)			(106,019	)			(16,452	)
Income tax expenses			(21	)			(14	)			(2	)			(16	)			(9	)			(1	)
Net loss			(13,966	)			(31,268	)			(4,851	)			(189,211	)			(106,028	)			(16,453	)
Net loss/(income) attributable to non-controlling interests			(50	)			736				114				340				1,896				294
Net loss attributable to 36Kr Holdings Inc.'s ordinary shareholders			(14,016	)			(30,532	)			(4,737	)			(188,871	)			(104,132	)			(16,159	)
Net loss			(13,966	)			(31,268	)			(4,851	)			(189,211	)			(106,028	)			(16,453	)
Other comprehensive (loss) /income
Foreign currency translation adjustments			(3,667	)			175				27				(1,522	)			(371	)			(58	)
Total other comprehensive (loss) /income			(3,667	)			175				27				(1,522	)			(371	)			(58	)
Total comprehensive loss			(17,633	)			(31,093	)			(4,824	)			(190,733	)			(106,399	)			(16,511	)
Net loss/(income) attributable to non-controlling interests			(50	)			736				114				340				1,896				294
Comprehensive loss attributable to 36Kr Holdings Inc.'s ordinary shareholders			(17,683	)			(30,357	)			(4,710	)			(190,393	)			(104,503	)			(16,217	)
Net loss per ordinary share (RMB)
Basic			(0.014	)			(0.030	)			(0.005	)			(0.185	)			(0.102	)			(0.016	)
Diluted			(0.014	)			(0.030	)			(0.005	)			(0.185	)			(0.102	)			(0.016	)
Net loss per ADS (RMB)
Basic			(0.344	)			(0.746	)			(0.116	)			(4.625	)			(2.538	)			(0.394	)
Diluted			(0.344	)			(0.746	)			(0.116	)			(4.625	)			(2.538	)			(0.394	)
Weighted average number of ordinary shares used in per share calculation
Basic			1,019,876,247				1,023,327,262				1,023,327,262				1,020,871,848				1,025,636,483				1,025,636,483
Diluted			1,019,876,247				1,023,327,262				1,023,327,262				1,020,871,848				1,025,636,483				1,025,636,483
Weighted average number of ADS used in per ADS calculation
Basic			40,795,050				40,933,090				40,933,090				40,834,874				41,025,459				41,025,459
Diluted			40,795,050				40,933,090				40,933,090				40,834,874				41,025,459				41,025,459

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36Kr Holdings Inc.

UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

		Three Months Ended			Nine Months Ended
		September 30, 2020			September 30, 2021			September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2021
		RMB'000			RMB'000			US$'000			RMB'000			RMB'000			US$'000
Net loss			(13,966	)			(31,268	)			(4,851	)			(189,211	)			(106,028	)			(16,453	)
Share-based compensation expenses			4,618				4,881				758				30,215				10,880				1,689
Non-GAAP adjusted net loss			(9,348	)			(26,387	)			(4,093	)			(158,996	)			(95,148	)			(14,764	)
Interest income, net			(561	)			(166	)			(26	)			(1,343	)			(507	)			(79	)
Income tax expenses			21				14				2				16				9				1
Depreciation and amortization expenses			1,518				618				96				4,081				1,924				299
Non-GAAP adjusted EBITDA			(8,370	)			(25,921	)			(4,021	)			(156,242	)			(93,722	)			(14,543	)

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