OneConnect Reports Fourth Quarter and Full Year 2024 Financial Results Amid Strategic Changes

OneConnect Financial Technology Reports Fourth Quarter and Full Year 2024 Financial Results

On March 18, 2025, OneConnect Financial Technology Co., Ltd. unveiled its unaudited financial results for the fourth quarter and the complete year ending December 31, 2024. As a leading provider of technology-as-a-service tailored for the financial services sector in China, OneConnect experienced substantial shifts in its financial landscape over the past year.

Q4 2024 Financial Performance

In the fourth quarter of 2024, OneConnect's revenue from continuing operations amounted to RMB 415 million, representing a staggering 52.9% decrease from RMB 882 million in the same quarter of 2023. This decline is primarily attributed to a significant downturn in revenue generated from its cloud services platform, which saw a reduction of RMB 329 million. The company's gross margin also shrank to 34.2%, down from 39.0% year-over-year.

Operating losses during this period escalated, reaching RMB 148 million, a marked deterioration from an operating loss of RMB 45 million in Q4 2023. The net loss attributed to shareholders from continuing operations was RMB 569 million, compared to RMB 47 million the previous year. As a result, the net loss per basic and diluted American Depository Share (ADS) was reported at RMB -15.67, a significant decline from RMB -1.29.

Full Year 2024 Overview

For the entire year 2024, OneConnect's revenue from continuing operations fell to RMB 2,248 million, compared to RMB 3,522 million in 2023, reflecting a decline of 36.2%. The gross margin for the year was 35.8%, down from 37.7% in the prior year. The net loss attributable to shareholders was RMB 669 million, contrasting sharply with the RMB 211 million in net losses recorded the previous year. Factors contributing to this increase in losses included an uptick in impairment losses on goodwill totaling approximately RMB 132 million and the reversal of deferred income tax assets by about RMB 454 million.

Insights into Business Changes

The drastic changes in OneConnect's financial outcomes hint at underlying strategic shifts within the company. In April 2024, OneConnect completed the divestiture of its virtual banking operations to Lufax Holding Ltd, a transition that restructured its revenue reporting. Following this sale, revenues from the remaining business segments have been categorized strictly as "continuing operations."

The revenue breakdown for Q4 2024 revealed that the implementation services alone generated RMB 171 million, albeit down by 21% from RMB 216 million in the same quarter of 2023. Business origination services plummeted by 94.4%, giving rise to merely RMB 1.3 million in revenue. Conversely, the segment focusing on post-implementation support services saw a modest growth of 52.3% year-over-year, reaching RMB 20 million, fueled by growing demand from international clients.

OneConnect has acknowledged that the business adjustments affecting its cloud services have considerably impacted its financial metrics since Q3 of 2024. As the organization phases out these services, it has undergone a thorough review of its asset recoverability, leading to significant write-downs for goodwill impairment.

Future Prospects

Despite the troubling financial results, OneConnect is navigating these headwinds with hopes of enhancing its service offerings, especially within the digital banking and insurance platforms. The company continues to build long-term relationships with financial institutions, facilitating their digital transformation journeys that encompass efficiency improvements and enhanced service quality.

Looking ahead, OneConnect emphasizes its commitment to strategic innovation aimed at sustaining viability in a challenging market environment. Management remains optimistic about reconnecting with profitability as it adapts its operational models to meet evolving financial industry demands.

For detailed insights into their full financial statements, stakeholders can visit OneConnect's investor relations page at ir.ocft.com. Additionally, the forward-looking statements issued by the company are intended to guide investors on the strategic adjustments being made amidst the changing landscape in financial technology.