36Kr (KRKR) Q4 2025 earnings review
Shrink-to-Profit Execution Succeeds, But Top-Line Growth Remains Elusive
36Kr achieved a major milestone in H2 2025: a return to profitability. After bleeding cash for years, the company posted RMB 16.2M in net income for the second half, pulling the full year into the black (RMB 11.4M). However, this turnaround wasn't driven by explosive growth. Full-year revenue actually decelerated by 1.4%. Instead, management executed a flawless "shrink-to-profit" strategy, slashing operating expenses by 36% and walking away from low-margin, high-risk clients. The top-line trend is finally reversing—with H2 revenue growing 4.7% YoY—but shrinking customer budgets indicate the macro environment remains tough.
🐂 Bull Case
Gross margin accelerated to 60.0% in H2 2025 (up 8.0 percentage points YoY). The company has successfully shed low-margin businesses and optimized its workforce, proving its core media model can generate cash.
While broader macro budgets are tight, 36Kr's tech-focused audience allowed it to capture strong advertising demand from the booming AI and high-tech sectors, driving a 5.0% ad revenue rebound in H2.
🐻 Bear Case
Despite adding 30 new online advertising customers in FY25, the average revenue per customer (ARPU) dropped 7.3%. The company is working harder to acquire smaller deals.
Subscription revenues fell 14.2% for the year. Institutional investors using the platform nearly halved (from 231 to 125), and individual subscribers were wiped out entirely due to restructuring.
⚖️ Verdict: ⚪
Neutral. Management deserves credit for stopping the bleeding and delivering profitability via aggressive cost cuts. However, until ARPU stabilizes and top-line growth accelerates beyond mid-single digits, this remains a turnaround story heavily constrained by macro headwinds.
Key Themes
Ruthless OpEx Reduction Drives the Bottom Line
The return to profitability is almost entirely a cost-control story. Operating expenses are decelerating rapidly, down 36.1% for FY25. General and Administrative (G&A) expenses took the biggest hit, plunging 54.5% due to personnel cuts and lower credit loss provisions. This leaner cost structure means any future revenue growth will drop straight to the bottom line.
AI and High-Tech Sectors Fuel Ad Rebound
After a flat FY25 overall, Online Advertising reversed its negative trend in H2, growing 5.0% YoY to RMB 105.2M. Management specifically credited "strong advertising demand from AI and high-tech companies." 36Kr’s niche positioning as a tech-first publication is acting as a shield against broader Chinese macroeconomic weakness.
Enterprise VAS Customer Quality Improves
Enterprise Value-Added Services (EVAS) revenue grew 7.7% in H2. While the total number of EVAS customers dropped from 158 to 144 in FY25, the Average Revenue Per User (ARPU) accelerated by 10.8% to RMB 230.3k. This indicates management's strategy of abandoning high-credit-risk clients in favor of premium enterprise accounts is working.
Advertising ARPU Dilution Contradicts Growth Narrative
While total ad revenue stabilized, the underlying metrics are a major concern. The company grew its ad customer base from 411 to 441 in FY25, but Average Revenue Per Customer decelerated from RMB 439.4k to RMB 407.4k. This data point contradicts the rosy narrative: 36Kr is having to sign smaller deals or offer price concessions to maintain its top line.
Subscription Segment Gutted by Restructuring
The Subscription Services segment is reversing downward sharply, dropping 14.2% YoY. The company completely eliminated its individual subscriber tier (dropping from 16 to 0) and saw a massive exodus of institutional investors, which plummeted from 231 to 125. While ARPU per institution rose, the sheer volume loss makes this segment increasingly irrelevant to the overall business.
R&D Cuts Threaten Future Innovation
Research and development expenses fell 11.8% in FY25. While management claims they are expanding AI applications across industries, R&D headcount was actually reduced. Developing proprietary AI tools usually requires significant investment; 36Kr is attempting to do it on a shrinking R&D budget.
Other KPIs
Accelerating. Up 25.5% from RMB 92.5 million at the end of 2024. Combined with positive operating cash flow generation, immediate liquidity risk is off the table. Short-term debt remains stable and manageable at RMB 20.0 million.
Stable growth. Up 2.5% YoY. This marks the 19th consecutive quarter of user growth across platforms like Weixin, Weibo, and Bilibili, maintaining the top-of-funnel traffic required to support the advertising business.
Guidance
Stable. Management opted not to provide quantitative revenue or earnings guidance for the upcoming year. Instead, they issued qualitative statements focusing on "optimizing cost structure," "maintaining stable cash flow," and exploring "AI-empowered innovative development." The lack of hard numbers indicates management still lacks clear visibility into macroeconomic recovery.
Key Questions
Limits of Cost Cutting
With G&A expenses down 54% and R&D down 12% this year, how much further can operating expenses be optimized before it begins to impact core content quality and platform stability?
Advertising Pricing Strategy
Ad customer count grew, but ARPU fell 7.3%. Is this decline a result of deliberate discounting to win market share, or a reflection of tighter overall marketing budgets among your clients?
AI Monetization Details
Management highlighted expanding AI applications across industries for 2026. What specific, monetizable AI products are currently in the pipeline, and will they be categorized under Subscriptions or Enterprise Value-Added Services?