Marketingforce Management (2556) H1 2024 earnings summary

Executive summary

• Achieved revenue of RMB739.4 million for the six months ended June 30, 2024, up 26.7% year-over-year, driven by strong SaaS and precision marketing growth.

• SaaS business revenue rose 30.4% to RMB400.0 million, with user base up 13.1% and average monthly revenue per user up 16.5%.

• Precision marketing services revenue increased 22.6% to RMB339.4 million, with gross billing up 11.0% and gross profit margin declined to 11.7%.

• Adjusted net profit reached RMB47.7 million, compared to an adjusted net loss of RMB24.2 million in the prior year.

• Net loss widened to RMB820.2 million due to a one-time fair value loss on convertible redeemable preferred shares upon IPO conversion.

Financial highlights

• Gross profit increased 22.3% to RMB392.9 million; overall gross margin was 53.1%, down from 55.0% due to lower margin in precision marketing.

• SaaS gross margin improved to 88.3% (up 1.2 ppt), while precision marketing margin declined to 11.7%.

• Selling and distribution expenses rose 12.4% to RMB162.6 million, mainly from share-based payments.

• Administrative expenses increased 41.5% to RMB139.1 million, reflecting IPO and share-based compensation costs.

• Free cash outflow was RMB61.0 million, a 23.0% improvement year-over-year.

Outlook and guidance

• Focus on expanding SaaS leadership, leveraging AI and LLM technologies, and growing both SMB and key account segments.

• Plans to pursue strategic acquisitions, invest in technology, and expand overseas business lines.

• Market for marketing and sales SaaS in China expected to reach RMB4.3 trillion by 2027.