#China #Beijing #Q1 2025 #AI Business #Kingsoft Cloud

Kingsoft Cloud Announces First Quarter 2025 Results

Kingsoft Cloud Holdings Limited, a prominent cloud service provider in China, recently disclosed its unaudited financial results for the first quarter of 2025, which ended on March 31, 2025. Mr. Tao Zou, the CEO, remarked on the rising significance of cloud services in the AI era, especially amidst global supply chain uncertainties. Their AI segment saw remarkable growth, reporting a year-over-year increase of 228% to RMB 525 million, which comprises 39% of their public cloud services revenue.

Mr. Henry He, the CFO, highlighted the company's overall revenue growth of 10.9% from the same quarter last year, amounting to RMB 1,970 million. However, there was a sequential decline in revenue, which he attributed to seasonal trends impacting their enterprise cloud services.

Financial Highlights

• - Total Revenues: RMB 1,970.0 million (approximately US$271.5 million), a 10.9% increase compared to RMB 1,775.7 million in Q1 2024, but an 11.7% decrease from RMB 2,232.1 million in Q4 2024.
• - Public Cloud Services Revenue: RMB 1,353.5 million (US$186.5 million), up 14.0% year-over-year but down 4.0% quarter-over-quarter.
• - Enterprise Cloud Services Revenue: RMB 616.5 million (US$85.0 million), an increase of 4.8% from the previous year but a 25.0% drop compared to last quarter.

The company's gross profit for the quarter was RMB 318.3 million (US$43.9 million), which increased by 8.5% from the same period last year, with a gross margin of 16.2%. Despite this growth, adjusted gross profit, which considers non-GAAP measures excluding share-based compensation, reached RMB 327.7 million, indicating a shift in profit variance due to the rising investments in AI computing resources.

Operating Performance

Total operating expenses were noted at RMB 552.5 million, slightly decreasing by 2.6% from last year but showing a notable increase from the previous quarter. This involves selling and marketing expenditures, which saw a significant jump due to incentive structures that are aimed at bolstering talent retention and performance.

The operating loss for this quarter stood at RMB 234.2 million, a narrowing from RMB 274.2 million year-over-year. The management attributed this to improved gross profit margins and disciplined expense management practices amidst ongoing challenges.

Looking Forward

The management expressed confidence in the continued investment in AI and the company’s potential to tap into high-margin enterprise cloud projects. With a total cash and cash equivalents situation registering at RMB 2,322.7 million, Kingsoft Cloud maintains a strong financial position to support its operational strategies.

In closing, Kingsoft Cloud is keen on leveraging its significant AI business growth as a cornerstone for future developments. The company invites stakeholders to join an upcoming earnings conference call to discuss these results in depth and provide insights into their strategic vision moving forward.

For ongoing updates and financial performance disclosures, stakeholders are encouraged to visit Kingsoft Cloud's investor relations website. To conclude, Kingsoft Cloud’s trajectory illustrates the essential role of innovative cloud services in today’s digital economy, making it a strong contender in the global market.

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