Author | Liu Baodan
Editor | Huang Yu
More than two years have passed since ChatGPT broke into the mainstream, and the focus of AI large models remains on technological iteration, with slow progress in commercialization. In this context, KUAISHOU has carved out a path for AI commercialization.
On May 27, KUAISHOU released its Q1 2025 performance, achieving revenue of 32.6 billion yuan, a year-on-year increase of 10.9%, demonstrating stable performance; adjusted net profit reached 4.6 billion yuan, with an adjusted net profit margin of 14%. Overall, KUAISHOU's Q1 performance met market expectations.
Compared to the lackluster online marketing services and live streaming core businesses, KUAISHOU has opened up new avenues in its new business segment. In Q1, KUAISHOU achieved positive operating profit for the first time in a single quarter on an overall overseas level, and a more positive signal is that its Kecai AI revenue reached 150 million yuan in a single quarter.
This is a mixed financial report. For KUAISHOU, the good news is that AI and internationalization show strong potential for a second growth curve, while the concern is that maintaining its basic market share in the fiercely competitive domestic market remains fraught with challenges.
After 14 years of establishment, KUAISHOU still has tougher battles to fight.
<h2>Holding On</h2>
As a short video platform, KUAISHOU's core revenue mainly comes from online marketing services, live streaming, and other services. Against the backdrop of slowing growth in the overall internet user base, KUAISHOU's traffic economy has also begun to weaken.
Online marketing services contribute significantly to KUAISHOU's revenue. In Q1, KUAISHOU's online marketing service revenue reached 18 billion yuan, a year-on-year increase of 8%, with growth rates falling to single digits for the first time. This performance was also expected; in comparison, Baidu's core advertising revenue declined by 6% in Q1.
Content consumption and local life are important driving forces supporting KUAISHOU's advertising. In Q1, marketing spending in the short drama industry grew rapidly year-on-year. In terms of local life, KUAISHOU provides various solutions for merchants, such as private messaging and lead form collection. In Q1, marketing spending in the local life industry increased by over 50% year-on-year.
The e-commerce sector, which contributed significantly in recent years, has seen a notable slowdown in growth. In Q1, KUAISHOU's e-commerce GMV reached 332.3 billion yuan, a year-on-year increase of 15.4%, with an average monthly active buyer count of 135 million. Compared to the previous growth rates of over 30%, the growth of KUAISHOU's e-commerce business has visibly slowed. Since Q2 2024, KUAISHOU's e-commerce GMV growth has remained around 15%.
The weakness in the e-commerce business has directly led to a decline in transaction commissions. In Q1, KUAISHOU's other services (including e-commerce) revenue was 4.8 billion yuan, a year-on-year increase of 15.2%, in line with GMV growth.
KUAISHOU's second-largest core business is live streaming. In Q1, KUAISHOU's live streaming revenue reached 9.8 billion yuan, a year-on-year increase of 14.4%. After experiencing four consecutive quarters of decline, KUAISHOU's live streaming business finally returned to positive growth. Behind this, KUAISHOU has strengthened the refined operation of advantageous categories such as multi-person live streaming and group broadcasting, while also building content like live streaming stages to promote influencers and hosts.
In addition, KUAISHOU continues to deepen its involvement in vertical industries such as gaming, recruitment, and real estate. For example, in gaming, KUAISHOU helps game manufacturers break traditional promotional boundaries through the deep integration of short videos, live streaming, and community operations, while also collaborating on live streaming rights for major gaming events, co-building IP events, and operating its own esports team, KSG
KUAISHOU has provided positive guidance for the upcoming performance growth. During the conference call, KUAISHOU Technology founder and CEO Cheng Yixiao stated that, given the growth potential of key industries such as content consumption, e-commerce, and local life services is gradually being released, they are confident that KUAISHOU's online marketing service revenue growth rate will return to double digits year-on-year in the second quarter.
It is noteworthy that KUAISHOU's user growth has further slowed down. In the first quarter, KUAISHOU had 712 million monthly active users, a year-on-year increase of 2.1%. According to QuestMobile data, by March 2025, the number of monthly active users in China's mobile internet is expected to reach 1.259 billion, a year-on-year increase of 2.2%.
<h2>Expansion</h2>
Clearly, KUAISHOU has long recognized the severe situation of its core businesses such as advertising and live streaming, and has begun to make efforts to open up new businesses, including internationalization and AI.
After years of exploration, KUAISHOU's internationalization strategy has finally received positive feedback.
In the first quarter of this year, KUAISHOU's overseas revenue reached 1.3 billion yuan, a year-on-year increase of 32.7%, with online marketing revenue maintaining rapid growth year-on-year. By effectively controlling the costs and expenses of its overseas business, KUAISHOU has achieved positive quarterly operating profit overseas for the first time.
KUAISHOU has primarily focused on markets such as Brazil and Indonesia. Wall Street News learned from KUAISHOU insiders that the company's overseas revenue is growing rapidly, with commercial revenue doubling in 2023. KUAISHOU has gradually risen from an important player in the Latin American and Southeast Asian markets to a core market leader.
&#34;CICC expects KUAISHOU's overseas business to continue its profitable status in Q2 2025.&#34; Currently, KUAISHOU is conducting overseas advertising and live streaming businesses tailored to local conditions in regions such as Brazil, the Middle East, and Indonesia, especially in Brazil, where it has certain competitive advantages. The advertising business is stable, and it is cautiously exploring a second growth curve (e-commerce).
AI is undoubtedly the biggest highlight of KUAISHOU's performance this quarter. Wall Street News learned that the commercialization of Keling AI has accelerated, with Keling AI revenue exceeding 150 million yuan in the first quarter. While most other large companies and startups are still exploring AI business models, KUAISHOU's AI has already entered a revenue growth trajectory.
During the conference call, Cheng Yixiao stated that, looking at the whole year, the impact of the AI strategy, including Keling's effect on the group's overall profit margin, will be in the range of 1% to 2%. From a medium to long-term perspective, he believes that AI can become one of the company's second growth curves, contributing revenue and profit to the company.
Wall Street News learned that Keling AI's revenue mainly comes from paid subscription members on the P (Prosumer) end, including content creators and advertising professionals, who contribute 70% of the revenue. As of the first quarter of this year, Keling's global user base has surpassed 22 million, and the number of enterprise clients accessing the API has exceeded 10,000.
These rapidly growing numbers also indicate the growth potential of Keling AI. CICC expects that with the continuous growth of paid users on the P end and the expansion of enterprise clients, Keling's commercial revenue is expected to reach 100 million USD within the year.
KUAISHOU has regarded AI as a key engine to break through the growth bottleneck. Last month, KUAISHOU established the Keling AI Division, responsible for a series of large model businesses such as Keling and Ketu, with KUAISHOU Senior Vice President Gai Kun serving as the head of the Keling AI Division. This is the only division established by KUAISHOU in three years, indicating the company's high expectations for AI
AI and internationalization represent the future of KUAISHOU, and they carry the capital market's new imagination for KUAISHOU. However, both AI and going overseas have become battlegrounds that everyone is vying for. Although KUAISHOU has initially opened up the situation, it will face even more intense market competition in the future, and there are still many uncertainties in the AI technology race.
For KUAISHOU, the primary task remains to safeguard its basic market and, on this basis, strive for more resource support for new businesses. This is a strategic deployment of exchanging time for space.
Bloomberg Industry Research analysts Robert Lea and Jasmine Lyu stated that KUAISHOU's AI investments are expected to continue to drag down profit growth until 2025, while its monetization ability remains weak. &#34;Although KUAISHOU will push for further profit enhancement this year, economic headwinds, increased R&amp;D investment, and ongoing fierce competition continue to pose risks.&#34;
The optimistic aspect is that KUAISHOU has found a second growth curve for itself, but this will also be a very tough battle. However, if KUAISHOU wants to become a technology giant that can stand firm in the international market, this is a necessary path

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Unlocking the door to the second growth curve

- Kuaishou reported a Q1 2025 revenue of 32.6 billion yuan, a 10.9% year-on-year increase, with adjusted net profit reaching 4.6 billion yuan.  
- The company achieved its first positive operating profit overseas, driven by its AI segment, which generated 150 million yuan in revenue.  
- Despite these gains, Kuaishou faces challenges in maintaining its market position amid slowing user growth and intensified competition in both domestic and international markets.

The potential and concerns of KUAISHOU