Keep Inc. Announces 2024 Annual Results

BEIJING, March 28, 2025 /PRNewswire/ -- Keep Inc. ("Keep" or the "Company"), the largest online fitness platform in China, today announced its audited annual results for the year ended December 31, 2024.

Full Year 2024 Financial Highlights

• Total revenues were RMB 2,065.7 million in 2024. Specifically, self-branded fitness products increased in 2024 in terms of both revenue scale and profitability, mainly driving by fitness gears and apparel categories, which increased by 16.0% year-over-year.
• Gross profit was RMB965.4 million in 2024, gross profit margin was 46.7% in 2024, a 1.7 percentage point increase from 45.0% in 2023.
• Adjusted net loss (non-IFRS measure) was RMB469.6 million.

Full Year 2024 Operational Highlights

Mr. Wang Ning, Chief Executive Officer of Keep Inc., commented, "As we move into 2024, while China's recovery progressed, we were encouraged by the growing popularity of sports and fitness, partly driven by the Summer Olympic Games. We refreshed our mission to 'Fuel every workout, keep the neighborhood energetic,' and dynamically adapted our strategy, leading to a comprehensive enhancement and transformation of the Keep brand and platform throughout 2024. We are generally pleased with the consistent internal responsiveness, focus, and execution as we have made to adapt to this momentum and making progress in key areas, including expanding online fitness ecosystem, embracing AI technology, and driving scale and profitability in our self-branded fitness products. While these initiatives require efforts and will temporarily impact our near-term profitability, they are critical in building our first-mover advantage and solidifying our long-term core competitiveness. We are confident in our ability to deliver sustainable operational improvements while exploring innovative opportunities to differentiate ourselves.

In 2024, we successfully executed a series of operational optimizations while maintaining solid business fundamentals. Looking forward to 2025, Keep is positioned to capitalize on the opportunities presented by data analytics and generative AI, leveraging our first-mover advantage in the sports technology sphere, navigating us to transform from a content-driven to a data-driven ecosystem, further optimize operational robustness, and deliver sustaining value for our shareholders."

2024 Annual Financial Results

Revenues

Total revenues were RMB2,065.7 million for the year ended December 31, 2024, representing a 3.4% decrease from RMB2,137.8 million for the year ended December 31, 2023, primarily due to a decrease in revenues from online membership and paid content service.

Revenues from self-branded fitness products were RMB953.9 million for the year ended December 31, 2024, representing a 0.8% increase from RMB946.1 million for the year ended December 31, 2023. The increase was mainly attributable to the increase in sales of complementary fitness products.

Revenues from online membership and paid content were RMB917.8 million for the year ended December 31, 2024, representing a 7.8% decrease from RMB995.8 million for the year ended December 31, 2023, mainly attributable to a decrease in revenues generated from our online sports events, partially offset by an increase in revenues generated from our online membership subscription.

Revenues from advertising and others were RMB193.9 million for the year ended December 31, 2024, representing a 1.0% decrease from RMB196.0 million for the year ended December 31, 2023, which was relatively stable year-on-year.

Cost of revenues

Cost of revenues was RMB1,100.3 million for the year ended December 31, 2024, representing a 6.5% decrease from RMB1,176.2 million for the year ended December 31, 2023, which has decreased more than the slight decline in our revenues during the same year, primarily due to the success of our cost containment.

Cost of self-branded fitness products was RMB651.5 million for the year ended December 31, 2024, representing a 4.7% decrease from RMB683.9 million for the year ended December 31, 2023, mainly attributable to the decrease of cost of inventories sold due to the optimized product mix and the economies of scale of our self-branded fitness products.

Cost of online membership and paid content was RMB327.3 million for the year ended December 31, 2024, representing a 11.6% decrease from RMB370.1 million for the year ended December 31, 2023, mainly attributable to the decrease of (i) RMB15.8 million in cost of online sports events in corresponding with the decrease in revenue of online sports events; (ii) RMB4.8 million in content related cost as we optimized our IP cost associated with our partnership with third party influencers; and (iii) RMB4.4 million in personnel costs (including related share-based compensation expenses).

Cost of advertising and others was RMB121.5 million for the year ended December 31, 2024, representing a 0.6% decrease from RMB122.2 million for the year ended December 31, 2023 in corresponding with related revenues.

Gross profit and gross profit margin

Gross profit was RMB965.4 million for the year ended December 31, 2024, representing a 0.4% increase from RMB961.6 million for the year ended December 31, 2023.

Gross profit margin was 46.7% for the year ended December 31, 2024, representing a 1.7 percentage point increase from 45.0% for the year ended December 31, 2023, mainly attributable to the optimized gross profit margin of self-branded fitness products and online membership and paid content.

Gross profit from self-branded fitness products increased by 15.3% from RMB262.2 million for the year ended December 31, 2023 to RMB302.4 million for the year ended December 31, 2024, mainly attributable to the increased sales of complementary fitness products and the decrease of cost of inventories sold.

Gross profit from online membership and paid content decreased by 5.6% from RMB625.7 million for the year ended December 31, 2023 to RMB590.5 million for the year ended December 31, 2024, mainly attributable to the decrease of revenues generated from our online sports events, partially offset by the decrease of cost of online membership.

Gross profit from advertising and others decreased by 1.8% from RMB73.8 million for the year ended December 31, 2023 to RMB72.4 million for the year ended December 31, 2024, primarily due to the increase in costs associated with integrated online-to-offline advertising campaigns.

Fulfillment expenses

Fulfillment expenses were RMB122.6 million for the year ended December 31, 2024, representing a 21.2% decrease from RMB155.7 million for the year ended December 31, 2023, primarily due to the optimized warehousing, packaging and delivery expenses.

Selling and marketing expenses

Selling and marketing expenses were RMB757.9 million for the year ended December 31, 2024, representing a 33.1% increase from RMB569.3 million for the year ended December 31, 2023. The increase was primarily due to an increase of RMB170.9 million in promotion and advertising expenses, as we introduced more sports-themed marketing and brand-building activities.

Administrative expenses

Administrative expenses were RMB233.2 million for the year ended December 31, 2024, representing a 11.4% increase from RMB209.3 million for the year ended December 31, 2023, primarily attributable to an increase of RMB18.4 million in administrative personnel costs. The increase in administrative personnel costs was primarily due to the increase in share-based compensation expenses.

Research and development expenses

Research and development expenses were RMB439.0 million for the year ended December 31, 2024, representing a 2.4% decrease from RMB449.7 million for the year ended December 31, 2023, primarily attributable to the decreases of: (i) RMB17.3 million in research and development personnel costs (including related share-based compensation expenses); and (ii) RMB6.6 million in cloud computing service fees as we optimized the related expenses; partially offset by an increase of RMB12.7 million in outsourcing research and development costs for smart fitness devices innovation. 

Fair value changes of convertible redeemable preferred shares

Fair value changes of convertible redeemable preferred shares were nil for the year ended December 31, 2024, compared with RMB1.4 billion for the year ended December 31, 2023. The fair value changes of convertible redeemable preferred shares before the Listing were primarily attributable to changes in the valuation of the Company. The Company did not record any further fair value changes of the convertible redeemable preferred shares following the Listing as preferred shares liabilities were redesignated and reclassified from liabilities to equity after automatically converting into ordinary shares upon the Listing.

(Loss)/profit  for the year

Loss for the year ended December 31, 2024 was RMB534.7 million, compared with a profit of RMB1.1 billion for the year ended December 31, 2023, primarily attributable to the fair value changes of convertible redeemable preferred shares of nil for the year ended December 31, 2024, compared with RMB1.4 billion for the year ended December 31 2023.

Adjusted net loss (non-IFRS measures)

Adjusted net loss (non-IFRS measures) was RMB469.6 million and RMB295.4 million for the years ended December 31, 2024 and 2023, respectively.

Cash Balance

The cash balance was RMB1.2 billion as of December 31, 2024. The cash balance includes cash and cash equivalents, short-term time deposits, restricted bank deposits and short-term investments. The Company maintains a healthy liquidity position and remains confident in the disciplined capital allocation approach, which enables the execution of the Company's long-term strategic initiatives.

Share repurchase programs

The Company repurchased a total of 11,538,500 shares of the Company on the Stock Exchange at the aggregate consideration of HK$74.3 million before expenses.

Conference Call

The Company's management will host an earnings conference call at 8:00 p.m. Beijing Time on March 28, 2025.

Participants who wish to join the call should follow the following method:

Additionally, a live and archived webcast of the conference call will be available at https://ir.keep.com/en/news_events.php.

About Keep Inc.

Keep Inc. (HKEX Stock Code: 3650) is the largest online fitness platform in China in terms of MAUs and number of workout sessions completed by users in 2022, according to CIC. Keep offers a comprehensive fitness solution to help users achieve their fitness goals. On the Keep platform, extensive, professional, and premium fitness content with diverse activities and services are offered to encourage users to engage in daily exercise. Keep platform leverages AI technology to provide personalized workout programs incorporating recorded courses and interactive live streaming classes, dynamically customized to each user's athletic levels, fitness goals, daily workout patterns and diet. Keep's services seamlessly connect the physical and digital realms, spanning smart devices, workout equipment, athletic apparel and food to provide an immersive fitness experience.

For more information on Keep Inc., visit https://keep.com/.

Forward-looking Statements

This press release contains forward-looking statements relating to the business outlook, estimates of financial performance, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realised in the future. Underlying these forward-looking statements are a lot of risks and uncertainties. In light of the risks and uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as representations by the board of directors of the Company or the Company that the plans and objectives will be achieved, and investors should not place undue reliance on such statements.

Non-IFRS Measures

To supplement our consolidated financial statements, which are presented in accordance with IFRS Accounting Standards as issued by the IASB, we also use adjusted net loss as an additional financial measure, which is not required by, or presented in accordance with, IFRS Accounting Standards.

The Company's management believe adjusted net loss provides useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as they help our management. However, our presentation of adjusted net loss may not be comparable to similarly titled measures presented by other companies. The use of adjusted net loss has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for an analysis of, our results of operations or financial condition as reported under IFRS Accounting Standards.

The following table reconciles our adjusted net loss for the years presented to the most directly comparable financial measure calculated and presented in accordance with IFRS Accounting Standards, which is (loss)/ profit for the years ended December 31, 2024 and 2023:

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SOURCE Keep Inc.