To The Moon

Kuaishou's Q2 results broadly met market expectations. According to the company's financial report, total revenue in the second quarter grew 1.4% year-over-year to RMB 35.54 billion, marking the slowest growth rate in its history and broadly in line with the Bloomberg consensus estimate of RMB 35.51 billion. Net profit and adjusted net profit came in at RMB 3.15 billion and RMB 3.91 billion, respectively, both slightly exceeding market expectations. However, both net profit and adjusted net profit posted significant declines, mainly due to a sharp 34.7% increase in R&D spending to RMB 4.58 billion, which compressed profit margins. Nonetheless, company management reiterated its commitment to deepening AI investment as a long-term strategic direction.

Notably, Kuaishou's Kling AI delivered standout performance in the earnings report. In the second quarter, Kling AI generated over RMB 850 million in operating revenue, representing year-over-year growth of more than 200%, making it the fastest-growing segment among the company's three major business lines. However, its revenue contribution remains a very small fraction of total business, and the prospect of it becoming a primary growth driver in the future remains slim. That said, according to Kuaishou's financial report, Beijing Kling Intelligence Technology Company had already signed a capital increase agreement with several investors on July 2, 2026, with plans to secure US$3 billion in external funding. The market looks forward to seeing the post-investment AI business contribute to revenue growth at Kuaishou.