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Kingsoft Cloud Reports Strong Financial Performance in Q2 2025

BEIJING, August 20, 2025 – Kingsoft Cloud Holdings Limited, a prominent player in China's cloud service sector, released its unaudited financial results for the second quarter ending June 30, 2025. The company demonstrated resilience and growth, achieving a total revenue of RMB 2,349.2 million, which marks a 24.2% increase compared to the same period last year.

Growth Driven by AI and Strategic Partnerships

The impressive growth was fueled by the soaring demands in artificial intelligence (AI), which continues to dominate the revenue landscape. The CEO, Mr. Tao Zou, highlighted that AI-related services saw an astonishing rise of over 120% year-over-year, attributing RMB 728.7 million of their revenue solely to this segment. AI has cemented its role as a powerhouse for the company, offering comprehensive solutions that range from computing resources and Platform as a Service (PaaS) platforms to various applications.

In addition, the strong revenue performance from ecosystem customers, particularly through ongoing collaborations with Xiaomi, was evident, as it brought in RMB 628.9 million, a 69.5% increase from the previous year. This collaboration reaffirmed Kingsoft Cloud's integration into the Xiaomi ecosystem, showcasing its potential to leverage strategic partnerships for sustained growth.

Revenue Breakdown and Key Metrics

In constructing this performance, public cloud services constituted the bulk of revenue, which surged 31.7% year-on-year to RMB 1,625.3 million. The increase is primarily attributed to the heightened demand for AI services and solutions. Meanwhile, enterprise cloud services also grew, bringing in RMB 723.9 million, reflecting a 10.1% increase over last year.

Despite these encouraging numbers, the gross margin tightened, recorded at 14.4%, down from 16.8% a year prior. Factors contributing to this decline included escalated server costs due to the rapid expansion of the AI division and upfront investments made for long-term contractual commitments.

Cost Dynamics and Operating Loss

The cost of revenue increased by 27.8% to RMB 2,010.4 million, primarily driven by investments in AI computing resources and an uptick in infrastructure costs to support this sector of growth. Kingsoft experienced higher depreciation due to new server acquisitions tailored for AI applications, which further added to costs.

The operating loss for the quarter stood at RMB 327.0 million, worsening from a loss of RMB 277.6 million in the same quarter last year. The company's CFO, Ms. Yi Li, noted that the loss reflects necessary but significant investments in infrastructure to maintain competitive AI services.

Future Outlook

Looking forward, Kingsoft Cloud remains optimistic about sustaining its growth trajectory throughout 2025. Mr. Zou reaffirmed the company's commitment to its AI transformations and high-quality business development, indicating plans for ongoing investment in this high-margin sector. The total cash available as of June 30, 2025, rose to RMB 5,464.1 million, offering a strong cushion for future investments and initiatives.

As Kingsoft Cloud continues to innovate and fortify its market position, the prospects for Q3 and beyond appear promising, especially in the rapidly evolving global cloud service landscape. The next earnings call is scheduled for August 20, 2025, which will provide further insights into the company's strategic plans and performance updates.