ByteDance's Q2 Revenue Surpasses 2.5 Billion, Declares Special Dividend of HK$20 Billion
August 21st, ByteDance-W (01024.HK) released its 2025 second-quarter earnings.
(Source: ByteDance official website)
The report showed that in the second quarter, ByteDance's total revenue and profitability both reached new highs. During the reporting period, revenue increased by 13.1% year-over-year to HK$3.5 billion, with adjusted net profit increasing by 20.1% year-over-year to HK$56 billion. Gross margin and adjusted net profit margin both broke historical records, reaching 55.7% and 16%, respectively.
Breaking it down, ByteDance's online marketing services revenue reached HK$198 billion, up 12.8% year-over-year; live streaming business revenue increased by 8%, reaching HK$100 billion; and other service revenue (including e-commerce and AI) reached HK$52 billion, up 25.9%. In terms of revenue structure, online marketing services, live streaming, and other services (including e-commerce and AI) are the company's core income sources, accounting for 56.4%, 28.7%, and 14.9% of total revenue, respectively.
On the user side, ByteDance's total traffic volume reached a new high in the second quarter, with average daily active users reaching 4.09 billion, up 3.4% year-over-year; and average monthly active users reaching 7.15 billion, up 3.3% year-over-year; user usage time increased by 7.5% year-over-year.
Furthermore, ByteDance also mentioned that its overseas business performance was stable, with revenue reaching HK$13 billion, up 20.5% year-over-year.
On the same day as the earnings report release at Beijing time 19:00, ByteDance held a Q2 and mid-year results exchange meeting. During the meeting, the company's AI progress was repeatedly mentioned.
Since last June, ByteDance has been widely watched for its AI-related achievements.
The report showed that in the second quarter, ByteDance's AI commercialization continued to accelerate, with revenue exceeding HK$2.5 billion. Previously, the company had disclosed that in Q1, AI business revenue exceeded HK$1.5 billion.
ByteDance's official website mentioned that AI has been helping creators and enterprise users explore application scenarios such as advertising marketing, short-form video, gaming interactions, and smart hardware.
For example, in June, AI collaborated with ByteDance Starlight to produce the world's first AI-generated narrative collection "New World Loading" covering science fiction, fantasy, history, and other genres. The global cumulative playback volume reached nearly 2 billion.
AI has also launched the "NEXTGEN New Image Creative Investment Plan," providing support for AI creators in script production, promotion, IP creation, etc.
It's worth noting that AI has already begun to reciprocate benefits to the company's other businesses.
ByteDance mentioned that it has launched OneRec, a large-scale recommendation model that can predict content matching user preferences through generated content. This model significantly improves training and inference efficiency. It is currently widely applied in ByteDance's internal content recommendations, effectively increasing user time and retention rate.
AI technology has played a key role in e-commerce operations, using high-efficiency screening to reconfigure human-goods matching efficiency. AI-generated content production, smart broadcasting, and intelligent customer service tools have significantly reduced the cost of content trial for merchants.
CFO Jin Bing said that ByteDance's 2025 full-year revenue is expected to be doubled from this year's initial target, which has solidified the company's long-term investment in AI. The company will also increase its capital expenditure on AI by about double.
Jin Bing also mentioned that the group expects AI-related investments to have a positive impact on the company's overall profit margin of around 1%-2%. This means that despite increased investment in AI, the company still has confidence in achieving its target of maintaining adjusted net profit rate growth.
On the same day as the earnings report release, ByteDance also declared a special dividend of HK$0.46 per share, totaling around HK$20 billion, which is the first time since the company's listing that it has distributed dividends.
Morgan Stanley recently raised its target price for ByteDance from HK$71 to HK$88, citing strong confidence in AI-generated content. The bank expects AI revenue in 2025 and 2026 to reach HK$7.5 billion and HK$12 billion, respectively.
UBS also raised its target price for ByteDance to HK$95.37, pointing out that the company's AI-generated content model has huge potential, targeting a global market size of HK$110-230 billion.