Kuaishou’s latest quarterly results for 2025 showed that its artificial intelligence investment is beginning to generate revenue, but also that scaling those efforts will require a sharp increase in spending.
Investors focused on the cost outlook. Kuaishou shares fell as much as 14% in Hong Kong on March 26 after management said 2026 capital expenditure could reach about RMB 26 billion (USD 3.8 billion), roughly RMB 11 billion (USD 1.6 billion) above 2025 levels.
The market reaction came despite solid fourth-quarter 2025 results. Revenue rose 11.8% year-on-year to RMB 39.6 billion (USD 5.7 billion), adjusted net profit increased 16.2% to RMB 5.5 billion (USD 796.5 million), and gross margin widened to 55.1% from 54%. But Kuaishou’s core platform appears to be maturing. Average daily active users reached 407.7 million, up 1.7% from a year earlier but down from the third quarter’s record 416.2 million, while live streaming revenue was flat at RMB 9.7 billion (USD 1.4 billion).
Advertising provided the clearest sign that AI is contributing to revenue. Online marketing services revenue rose 14.5% to RMB 23.6 billion (USD 3.4 billion), and Kuaishou said its generative recommendation and bidding models contributed about 5% of domestic online marketing services growth in the quarter. Spending tied to AI-generated marketing materials reached RMB 4 billion (USD 579.3 million), indicating that AI tools are already drawing additional advertiser spending within the core platform.
Kling, Kuaishou’s video generation model and platform, is also beginning to produce direct revenue, though it remains small relative to the overall business. The company said Kling generated RMB 340 million (USD 49.2 million) in Q4 revenue. That was less than 1% of quarterly group sales, but it showed that Kuaishou can now point to direct AI software revenue, rather than only stronger engagement or ad conversion.
Even so, domestic advertising and commerce remained the main drivers of growth. Revenue from other services, which include e-commerce and its AI platform, rose 28% to RMB 6.3 billion (USD 912.3 million), while e-commerce gross merchandise value (GMV) increased 12.9% to RMB 521.8 billion (USD 75.6 billion). That was solid, but slower than the 15.2% GMV growth Kuaishou reported in the third quarter. Management said short video-driven commerce continued to outgrow overall GMV, search tools lifted shopping mall order volume, and active merchants rose 7.3% from a year earlier to a record high. Even so, the broader pattern points to improving monetization on a user base that is expanding only modestly.
The overseas business showed a similar trend. Q4 overseas revenue rose 0.8% to RMB 1.3 billion (USD 188.3 million), while the operating loss narrowed to RMB 59 million (USD 8.5 million) from RMB 236 million (USD 34.2 million) a year earlier. That improvement suggests international performance is being supported more by tighter cost control than by faster expansion. The comparison is notable because Kuaishou reported 52.9% overseas revenue growth in the same quarter a year earlier.
Kuaishou, however, has capacity to fund that investment. It ended 2025 with RMB 104.9 billion (USD 15.2 billion) in available funds, generated RMB 26.7 billion (USD 3.9 billion) in operating cash flow for the year, proposed a final dividend of HKD 0.69 (USD 0.1) per share, and said it still expects to remain free cash flow positive this year despite the heavier AI buildout.
Note: HKD, RMB figures are converted to USD at rates of HKD 7.82 = USD 1 and RMB 6.91 = USD 1 based on estimates as of March 26, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.