Keep Inc. (“Keep” or the “Company”), the largest online fitness platform in China, announced its unaudited interim results for the six months ended June 30, 2025, on August 25,

2025.2025 First Half Financial Highlights

For the six months ended June 30, 2025, total revenue was RMB 821.8 million (≈ USD 115.8 million), representing a 20.8% year-over-year decrease. The decline was mainly attributable to the Company’s strategic transformation, with a full focus on AI, including proactive downsizing of non-core and less efficient operations, and optimization of the product mix to enhance profitability.

Gross profit for the first half of 2025 was RMB 429.1 million (≈ USD 60.4 million), with a gross profit margin of 52.2%, up 6.2 percentage points from 46.0% in the first half of 2024.

Adjusted net profit (a Non-IFRS measure) was RMB 10.3 million (≈ USD 1.45 million), compared with an adjusted net loss of RMB 160.7 million (≈ USD 22.6 million) in the first half of 2024, marking a turnaround into profitability.

Comments from Mr. Wang Ning, CEO of Keep Inc.

“2025 is a critical chapter in the Company’s transformation. We are evolving from a content-driven platform into an AI-driven and data-driven fitness agent. In 2025, we anchored our strategic focus on two pillars: advancing the AI-driven platform transformation and achieving a turnaround in profitability.

In the first half of 2025, we made solid progress on both fronts. We rebuilt our AI infrastructure and launched the foundational AI Coach features. At the same time, we reassessed and optimized our self-branded fitness product portfolio to improve profit margins, while streamlining sales channels and supply chain operations. Together, these initiatives drove the Company to achieve a major milestone — turning adjusted net profit (Non-IFRS) positive for the first time in the first half of 2025.

Building on this foundation, we launched the pilot version of our first AI Coach, Kaka. Since its debut, AI Coach Kaka has been made available to all users, with limited access for non-members. AI Coach Kaka has shown strong growth momentum, with core AI daily active users surpassing 150,000 as of the end of July 2025. Among its core features, the diet tracking module has quickly become a high-frequency, essential use case, further proving the value and stickiness of the AI Coach function.

Looking ahead, we will continue implementing a strategy centered on gross margin improvement and operational efficiency, to strengthen profit resilience. At the same time, we will seize key marketing windows to amplify product awareness and reignite business growth. We remain committed to AI product innovation as our development path to break through scale boundaries, while also driving growth in our self-branded fitness products, together powering the Company’s long-term sustainable growth.”

2025 Interim Financial Results

Revenue

For the six months ended June 30, 2025, total revenue was RMB 821.8 million (≈ USD 115.8 million), down 20.8% year-over-year (vs. RMB 1,037.3 million in the same period of 2024). The decrease was primarily due to declines in self-branded fitness products as well as online membership and paid content revenue.

• Self-branded fitness products revenue: RMB 396.7 million (≈ USD 55.9 million), down 20.9% (vs. RMB 501.5 million in 2024), mainly due to downsizing of less efficient and underperforming categories.
• Online membership and paid content revenue: RMB 337.1 million (≈ USD 47.5 million), down 22.9% (vs. RMB 437.0 million in 2024), mainly due to a decrease in online sports event revenue.
• Advertising and other revenue: RMB 88.0 million (≈ USD 12.4 million), down 11.0% (vs. RMB 98.9 million in 2024), primarily due to scaling back certain non-core businesses in 2024.

Cost of Revenue

For the six months ended June 30, 2025, cost of revenue was RMB 392.7 million (≈ USD 55.3 million), down 29.9% year-over-year (vs. RMB 560.0 million in 2024), consistent with the revenue trend.

• Self-branded fitness products cost: RMB 258.7 million (≈ USD 36.4 million), down 24.7% (vs. RMB 343.3 million in 2024), mainly due to product mix optimization and supply chain improvements that reduced inventory costs.
• Online membership and paid content cost: RMB 96.6 million (≈ USD 13.6 million), down 31.2% (vs. RMB 140.4 million in 2024), mainly due to a RMB 25.4 million reduction in event-related costs and a RMB 9.0 million reduction in third-party app store and payment channel fees, corresponding to the revenue decline.
• Advertising and other costs: RMB 37.4 million (≈ USD 5.3 million), down 51.0% (vs. RMB 76.4 million in 2024), mainly due to:

1. Offline advertising campaign cost reduction of RMB 7.6 million
2. Outsourcing and labor cost reduction of RMB 7.6 million
3. Employee welfare cost reduction of RMB 7.1 million

All related to the gradual closure of the Keepland business in 2024.

Gross Profit and Gross Margin

• Gross profit: RMB 429.1 million (≈ USD 60.4 million), down 10.1% (vs. RMB 477.3 million in 2024), primarily due to revenue decline, partly offset by cost reductions.
• Gross margin: 52.2%, up 6.2 percentage points (vs. 46.0% in 2024), mainly attributable to business structure optimization and cost improvements.

Breakdown:

• Self-branded products gross margin: 34.8% (vs. 31.5% in 2024), an increase of 3.3 percentage points, mainly due to product mix optimization, rationalized pricing, and improved cost management.
• Online membership and paid content gross margin: 71.3% (vs. 67.9% in 2024), an increase of 3.4 percentage points, mainly due to a higher proportion of subscription revenue and improved operational efficiency.
• Advertising and other gross margin: 57.5% (vs. 22.8% in 2024), a significant increase of 34.7 percentage points, mainly due to downsizing low-margin businesses and optimizing ad production costs.

Fulfillment Expenses

Fulfillment expenses in the first half of 2025 were RMB 43.8 million (≈ USD 6.2 million), down 29.3% (vs. RMB 61.9 million in 2024), mainly due to lower sales of self-branded products and online events, as well as further optimization of logistics and warehousing costs.

Sales and Marketing Expenses

Sales and marketing expenses in the first half of 2025 were RMB 223.5 million (≈ USD 31.5 million), down 30.9% (vs. RMB 323.4 million in 2024), primarily due to a RMB 102.8 million reduction in brand and marketing expenses, benefiting from improved promotion efficiency.Administrative Expenses

Administrative expenses in the first half of 2025 were RMB 82.8 million (≈ USD 11.7 million), down 8.5% (vs. RMB 90.5 million in 2024), mainly due to a RMB 24.9 million reduction in professional fees, partially offset by a RMB 19.1 million increase in administrative staff costs (including share-based compensation expenses). Share-based compensation increased by RMB 26.5 million.

R&D expenses

R&D expenses in the first half of 2025 were RMB 162.4 million (≈ USD 22.9 million), down 17.0% (vs. RMB 195.7 million in 2024), mainly due to:

• Reduction of RMB 18.7 million in R&D staff costs (including share-based compensation)
• Reduction of RMB 5.6 million in depreciation and amortization of long-term assetsReduction of RMB 3.8 million in outsourcing and other labor costs
• This was largely driven by productivity improvements from advancements in AI technology.

Loss/Profit During the Period

For the six months ended June 30, 2025, the Company recorded a net loss of RMB 35.4 million (≈ USD 5.0 million), compared to a net loss of RMB 163.4 million (≈ USD 23.0 million) in the same period of 2024. The narrowing of the loss was mainly due to improved gross margin and reduced operating expenses.

However, adjusted net profit (Non-IFRS measure) was RMB 10.3 million (≈ USD 1.45 million), compared with an adjusted net loss of RMB 160.7 million (≈ USD 22.6 million) in the same period of 2024, achieving a turnaround into profitability.

According to the above report: For the six months ended June 30, 2025, Keep recorded a net loss of RMB 35.4 million (≈ USD 5.0 million), but an adjusted net profit (Non-IFRS measure) of RMB 10.3 million (≈ USD 1.45 million).

So is the company losing money or making money? To answer this, we need to first understand what Non-IFRS measures are.

1. The Meaning of Non-IFRS Measures

IFRS refers to International Financial Reporting Standards. These are the rules that listed companies must follow when preparing financial statements, with strict accounting requirements.

Non-IFRS measures are performance indicators disclosed by companies outside of the standard financial reports. They usually exclude certain one-off, non-operating, or non-cash items, to better reflect the company’s core operating performance.

Common adjustments include:

• Share-based compensation: e.g., stock options, restricted stock awards. These are recorded as accounting expenses but do not affect actual cash flow.
• One-off expenses: e.g., M&A and restructuring costs, legal litigation costs, large-scale severance payments, which are not part of regular operations.
• Asset impairments: e.g., write-downs on inventory, goodwill, or investments. These affect profits but not necessarily actual operating cash flow.

Therefore, Non-IFRS net profit is often closer to the company’s “real operating results,” unaffected by one-time or non-cash adjustments.

2. Why a Loss under IFRS but a Profit under Non-IFRS?

Taking Keep as an example:

IFRS net profit: Includes all expenses and accounting adjustments, resulting in a net loss of RMB 35.4 million (≈ USD 5.0 million).

Adjusted net profit (Non-IFRS): After excluding certain one-off or non-cash expenses, the Company recorded an operating profit of RMB 10.3 million (≈ USD 1.45 million).

In other words:

From the accounting perspective (IFRS): a loss.

From the operational perspective (Non-IFRS): a profit.

3. Why the Company Discloses Non-IFRS Measures

By publishing Non-IFRS indicators, the Company wants to communicate to investors: Although the official accounting books still show a loss, the core business operations are already profitable.

 In conclusion

Under IFRS, Keep is still loss-making; but under Non-IFRS, its core operations have turned profitable.

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