ByteDance hit $3 billion in net profit last year
BYTEDANCE GENERATED OVER $17 BILLION IN REVENUE LAST YEAR, SHOWING THAT THE FIRM IS STILL GROWING AT A BRISK RATE
TikTok’s parent ByteDance Ltd generated more than $17 billion in revenue and more than $3 billion of net profit last year, figures that show the world’s most valuable startup is still growing at a brisk rate, according to people familiar with the matter.
The revenue for last year was more than double the company’s tally of about $7.4 billion in 2018, propelled by phenomenal growth in user traffic that’s drawn advertisers away from Tencent Holdings Ltd and Baidu Inc. The people asked not to be identified because the financial details are private.
ByteDance has emerged as one of the tech industry’s most surprising success stories, an innovative Chinese company that is challenging the global dominance of US internet giants. It draws some 1.5 billion monthly active users to a family of apps that includes the TikTok short-video platform, its Chinese twin Douyin and the news service Toutiao. This month, the company poached Walt Disney Co. streaming czar Kevin Mayer to become chief executive officer of TikTok.
The company owes much of its success to TikTok, now the online repository of choice for lip-synching and dance videos by American teens. The ambitious company is also pushing aggressively into a plethora of new arenas from gaming and search to music. ByteDance could fetch a valuation of between $150 billion and $180 billion in an IPO, a premium relative to sales of as much as 20% to social media giant Tencent thanks to a larger global footprint and burgeoning games business, estimated Ke Yan, Singapore-based analyst with DZT Research.
“None of the Chinese tech companies has achieved this level of success in the global market before ByteDance,” he said, adding neither social media company harbors much debt. “The fact that ByteDance is making profit, if true, and sitting on a $6 billion cash pile means that it is not in a rush at all to come to market to raise capital, and therefore less likely to offer the shares at a more reasonable price for IPO investors.”
ByteDance, led by Zhang Yiming, is becoming a viable rival to the dominant American online behemoths, Facebook
Inc. and Alphabet Inc. Facebook unit Instagram brought in about $20 billion in advertising revenue in 2019, Bloomberg previously reported. Google said its video unit YouTube recorded $15.1 billion in ad sales last year.
ByteDance representatives didn’t respond to a request for comment.
That success has come despite American lawmakers raising concerns about privacy and censorship. In a rare bipartisan effort in Washington, Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer last year urged an investigation into TikTok, labeling it a national security threat.