Beijing-based Kuaishou Technology released its 1H 2026 interim results, highlighting modest top-line growth, a sharp decline in profitability, and continued heavy investment in artificial intelligence.

Financial Performance • Q2 2026 revenue rose 1.40 % year-on-year (YoY) to RMB 35.54 billion; first-half revenue gained 2.40 % YoY to RMB 69.25 billion. • Gross profit margin narrowed to 51.60 % in Q2 from 55.70 % a year earlier, reflecting higher revenue-sharing and technology costs. • Operating profit fell 29.00 % YoY to RMB 3.76 billion; net profit dropped 36.00 % to RMB 3.15 billion. • Non-IFRS adjusted net profit decreased 28.50 % YoY to RMB 7.29 billion for 1H, producing a 10.5 % adjusted net margin versus 15.1 % a year earlier. • Adjusted EBITDA slipped 5.60 % to RMB 13.35 billion for 1H 2026.

Segment Trends • Domestic market contributed RMB 66.91 billion, up 2.90 %, but operating profit slid 30.00 % to RMB 6.83 billion. • Overseas revenue contracted 10.50 % to RMB 2.34 billion and posted a 1H operating loss of RMB 56 million. • Online marketing services grew 4.40 % in Q2 to RMB 20.64 billion, accounting for 58.10 % of total revenue. Live-streaming revenue fell 13.50 % to RMB 8.69 billion. • Kling AI remained the standout, generating more than RMB 850 million in Q2, a rise exceeding 200 % YoY and positioned as the group’s “second growth curve.”

Operating Metrics • Average daily active users (DAUs) on Kuaishou App reached 412.3 million in Q2, up from 408.9 million a year earlier. • Average monthly active users (MAUs) climbed to 797.3 million from 714.8 million. • Average online marketing services revenue per DAU increased to RMB 50.1 from RMB 48.3.

Cash Flow & Balance Sheet • Operating activities generated RMB 9.04 billion in 1H; free cash outflow driven by RMB 17.94 billion of capital expenditure, chiefly for servers and AI infrastructure. • Total available funds (cash, deposits, financial assets, restricted cash) stood at RMB 121.30 billion at 30 June 2026. • Gross borrowings rose to RMB 27.36 billion after issuing US$1.50 billion of senior notes and RMB 3.48 billion of onshore notes in January 2026. Gearing ratio reached 33.30 %.

Shareholder Returns & Capital Actions • A final dividend of HK$0.69 per share for FY 2025 (HK$3.0 billion) was paid in July 2026. • From January to August 2026 the company repurchased 59.54 million Class B shares for HK$2.52 billion; 53.57 million shares have been cancelled. • The board authorised no interim dividend for 1H 2026.

Corporate Updates • Board changes: resignation of independent non-executive director Sidney Xuande Huang; appointment of Jia Huang as independent non-executive director and audit committee chair; re-designation of Fei Zhang from non-executive to independent non-executive director. • Formation of Kling AI capital raise plan: up to US$3.00 billion investment from external parties; Group will retain control.

Outlook Management will sustain “disciplined” AI investment, targeting deeper integration across content, e-commerce, and marketing ecosystems. While acknowledging a tougher macro backdrop, Kuaishou aims to leverage Kling AI and broader AI adoption to drive long-term growth and efficiency.