Profit Figures Spark Discussion, Official Explanation Provided

Recent reports suggesting a potential significant fluctuation in ByteDance's net profit for 2025 have circulated widely, drawing attention from markets and industry observers. In response, senior company leadership moved quickly to clarify the situation and manage external perceptions.

Accounting Standards Are the Core Factor

Li Liang, Vice President of Douyin Group, clarified via social media that the cited figure of a "70% net profit decline" was derived under International Financial Reporting Standards (IFRS). This accounting framework incorporates certain non-cash and non-recurring items.

  • Preferred Shares & Option Costs: The book value of these financial instruments fluctuates with market valuations. Resulting accounting cost changes do not directly equate to increased cash outflow or decreased operational efficiency.
  • Increased Strategic Investment: The company has ramped up investment in emerging business sectors to cultivate future growth engines. This spending impacts reported profits in the short term but is part of a long-term strategic layout.

Li Liang emphasized that these factors are "non-operational in substance." Removing their effects provides a clearer view of the business's underlying operational health.

Core Business Foundation Remains Solid

From an operational perspective, the situation is far less severe than rumors suggest. Li Liang indicated that while the growth rate of Douyin's domestic e-commerce business has moderated as the market matures, and resources are being allocated to new ventures, the company's operating profit margin in the second half of 2025 only experienced a slight dip.

More importantly, after adjusting for non-operational items like preferred shares, ByteDance's overall revenue and profit levels continue on a growth trajectory. Notably, TikTok's e-commerce business is demonstrating robust momentum in multiple global markets, and other innovative business lines are progressing steadily according to plan, with positive internal outlooks.

This response aims to send a clear signal to investors and the public: ByteDance's core business foundation remains robust, and short-term financial statement volatility should not overshadow its long-term growth potential and strategic execution capabilities.