KC

This article first appeared on GuruFocus. Total Revenue: RMB3.07 billion, up 31% year-over-year. Public Cloud Revenue: RMB2.36 billion, up 45% year-over-year. Enterprise Cloud Revenue: RMB710 million. AI Cloud Gross Billings: RMB1.33 billion, up 82% year-over-year, accounting for 56% of public cloud revenue. Adjusted Gross Margin: 15.4%, up 2.4 percentage points quarter-over-quarter. Adjusted Operating Profit Margin: 4.0%, a record high, with operating profit turning positive for the first time. Adjusted EBITDA Margin: 36%, up from 32% in the same quarter last year. Adjusted Net Loss: RMB6 million, down from RMB300 million in the same quarter last year. Capital Expenditures (including right-of-use assets): RMB3.3 billion this quarter, versus RMB2.9 billion last quarter. Xiaomi-Kingsoft Ecosystem Revenue: RMB810 million, up 28% year-over-year, accounting for 26% of total revenue. Warning! GuruFocus has detected 3 Warning Signs with KC. Is KC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 19, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenue hit a record RMB3.07 billion, up 31% year-over-year, with AI cloud gross billings surging 82% to RMB1.33 billion, now 56% of public cloud revenue. Adjusted gross margin improved to 15.4%, up 2.4 percentage points quarter-over-quarter, and adjusted operating profit turned positive for the first time with a record 4.0% margin. Mass (Model-as-a-Service) revenue grew over 12x quarter-over-quarter, driven by strong adoption of open-source models and agentic workloads. Customer mix diversified: Xiaomi-Kingsoft ecosystem revenue grew 28% year-over-year, while top 5 non-ecosystem customers grew 51%, reducing concentration risk. Management successfully passed through price hikes in storage and computing power to customers, improving profitability in some cases, and is expanding asset-light managed services. Enterprise cloud revenue declined 1% year-over-year, impacted by upstream price hikes delaying SOE and government budget decisions, though management cites seasonality and business mix shifts. Capex and right-of-use assets reached RMB3.3 billion in Q2, up from RMB2.9 billion last quarter, with full-year guidance unchanged at RMB6.2 billion, indicating heavy investment pressure. Adjusted net loss was RMB6 million, though narrowed significantly from RMB300 million a year ago, still not profitable on a net basis. Chip supply constraints remain a long-term challenge, requiring reliance on multiple suppliers and domestic chip compatibility, which could limit scalability. Adjusted EBITDA margin declined to 36% from 70% in the same quarter last year, due to higher depreciation costs from AI infrastructure buildout. Q: How will improvements in open-source model capabilities affect the company's MaaS business, and given the potentially shorter payback period, will the company allocate more resources to it?A: Tao Zou (CEO) and Liu Tao (SVP) explained that open-source model development has three main impacts: a surge in demand from users adopting high-performance Chinese models like KLM and K3, an increase in agentic use cases supported by new Agent products, and a preference for cost-effective Chinese models for routine tasks. On resource allocation, the company balances MaaS with computing power leasing. Computing power is sold with long-term contracts ensuring near-100% utilization, while MaaS is subject to token price fluctuations and model preferences. The company dynamically evaluates both to ensure they complement each other. Q: How has chip procurement progressed recently, and what is the latest full-year CapEx guidance? Also, how should we view the deceleration in the enterprise cloud segment?A: Management noted that supply constraints are a long-term norm, but the industry's growth hasn't been restricted. They are mitigating this by expanding supplier partnerships and improving compatibility with domestic chips. CFO Yi Li confirmed that CapEx, including leased assets, reached RMB6.2 billion in H1 2026, and the full-year CapEx base case remains unchanged. Regarding enterprise cloud, the slowdown is attributed to upstream pricing hikes delaying SOE and government budget decisions, strong seasonality with revenue recognition concentrated in H2, and a proactive shift from project-based to operating-based models, which reclassifies revenue to public cloud. Q: What is Kingsoft Cloud's competitive advantage in the MaaS business, and what are the latest pricing trends in the AI cloud business?A: The company highlighted its unique position as a neutral cloud provider without proprietary models, allowing it to sell the models customers prefer most (e.g., GRM). Owning proprietary computing power is crucial for securing profitability. On pricing, the company successfully passed through cost hikes for storage and computing power. For storage, customers were relatively price-insensitive as it's a small portion of their overall spend, allowing for margin expansion. For computing power, the company's capabilities (PAC, operations, network) enabled it to pass through cost increases and even improve profitability, with some projects moving to an asset-light managed services model. Q: Considering the proprietary models and user ecosystems of other cloud providers, how should we think about Kingsoft Cloud's long-term positioning and sustainable margin levels?A: Management emphasized that being a neutral cloud player is a key strength, enabling good relations with all top model providers and offering the best models per customer demand. They provide highly available and reliable services backed by SLAs. For profitability, they work closely with LLM labs to optimize inference efficiency, sometimes achieving levels comparable to the model developers themselves, which is crucial for sustainable margins. Q: What is the ROIC for the computing power leasing and MaaS business models, and what are the marginal changes?A: CFO Yi Li stated that the company does not disclose separate ROIC for the two segments due to variation across projects. However, MaaS currently has much better profitability than computing power services. The company has seen continued improvement in operating leverage as fixed costs are diluted by scale, with adjusted operating profit turning positive, driving a gradual recovery in overall ROIC. They adhere to a disciplined investment strategy focused on capital efficiency. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Kingsoft Cloud Holdings Limited Sponsored ADR? Here are five stocks we like better. Record growth was driven by AI demand: Second-quarter revenue rose 31% year over year to CNY 3.07 billion, with public cloud revenue up 45%. AI cloud gross billings increased 82% and MaaS revenue grew more than 12 times sequentially. Profitability improved significantly: Adjusted operating profit reached CNY 124 million, compared with a CNY 166 million loss a year earlier, while adjusted operating margin reached 4% and adjusted net loss narrowed to CNY 6 million. Heavy AI infrastructure investment continues: First-half capital expenditures and leased assets totaled CNY 6.2 billion, more than 75% of the full-year plan, while the company maintained its CNY 15 billion annual capex target. Enterprise cloud revenue declined 1%, though management expects stronger second-half recognition. Kingsoft Cloud (NASDAQ:KC) reported record second-quarter revenue as demand for artificial intelligence cloud services accelerated, while the company said adjusted operating profit turned positive for the first time. Total revenue for the quarter reached CNY 3.07 billion, up 31% from a year earlier and 40% sequentially, according to Chief Financial Officer Li Yi. Public cloud services revenue rose 45% year over year to CNY 2.36 billion, while enterprise cloud services revenue was CNY 740 million, down 1% from the prior-year period. → Looking Beyond CrowdStrike? 3 AI Security Stocks Stand Out Chairman and Chief Executive Officer Zou Tao said AI-related demand was the principal growth driver. AI cloud gross billings increased 82% year over year to CNY 1.33 billion and accounted for 56% of public cloud revenue. MaaS, or Model-as-a-Service, revenue grew more than 12 times from the first quarter level, he said. Zou said the company’s adjusted gross margin reached 15.4%, improving 2.4 percentage points from the first quarter, while adjusted operating margin reached 4%. Kingsoft Cloud recorded adjusted operating profit of CNY 124 million, compared with an adjusted operating loss of CNY 166 million a year earlier. → 3 Robotics Stocks Under $10: Value, Momentum, or Bet? Li attributed the operating improvement to larger revenue scale, improved public cloud margins and tighter expense control. Adjusted operating expenses fell to CNY 391 million from CNY 561 million in the same quarter last year. Adjusted general and administrative expenses declined 61% year over year, which the company said was largely due to lower credit-loss expenses. Adjusted net loss narrowed to CNY 6 million from CNY 300 million in the year-earlier quarter. Non-GAAP EBITDA rose 171% year over year to CNY 1.1 billion. → Michael Burry Is Betting Against Palantir Again—Should Investors Care? The company ended June with CNY 4.67 billion in cash and cash equivalents, down from CNY 4.90 billion at the end of March, which Li said reflected continued investment in AI infrastructure. Kingsoft Cloud said its StarFlow MaaS platform had deployed 120 models and served more than 230 enterprise customers. The company said it has been launching major new models on the platform in step with their market releases and has enhanced enterprise-level access capabilities. Management also highlighted the launch of AgentKit, a platform designed to help enterprises develop production-grade AI agents. The product includes tools for secure sandbox environments, knowledge and memory management, and evaluation and governance, according to the company. During the quarter, Kingsoft Cloud delivered large-scale computing clusters to customers in embodied AI and autonomous driving, Zou said. It also expanded cooperation with a leading AI-for-science customer to support that customer’s new-business growth. In the Xiaomi and Kingsoft ecosystem, revenue reached CNY 810 million, up 28% year over year and representing 26% of Kingsoft Cloud’s total revenue. Public cloud revenue from Xiaomi and Kingsoft rose 54% in the first half, management said. In June, shareholders approved an increase in transaction caps associated with Xiaomi, bringing the combined cap for 2026 and 2027 to CNY 10 billion, 39% above the prior level. Enterprise cloud revenue included projects in public services, digital health and enterprise services. Kingsoft Cloud said it signed an agreement with the Nanjing Communications Administration of the Yangtze River to develop Jianghai Cloud, a digital infrastructure platform for Yangtze River shipping. It also cited cooperation with the Wuhan Municipal Data Bureau and Wuhan Cloud, as well as a project involving a cloud-based virtual surgery platform deployed in more than 30 hospitals. Responding to questions about slower enterprise cloud growth, Vice President Li Yijun said recent changes in upstream supply pricing have affected budgeting and decision-making among government agencies and state-owned enterprises. He added that enterprise cloud revenue recognition tends to be concentrated in the second half of the year and that the company has a delivery pipeline for that period. Li Yijun also said part of the trend reflects a deliberate shift from project-based business toward operating-based models, with some of that business classified as public cloud for financial reporting purposes. Kingsoft Cloud continued to invest heavily in computing capacity. Li said capital expenditures, together with capitalized assets obtained through lease arrangements, reached CNY 6.2 billion in the first half, representing more than 75% of the company’s full-year capital-expenditure plan. The company maintained its full-year capital-expenditure base case of CNY 15 billion. Senior Vice President Liu Tao said Kingsoft Cloud’s MaaS strategy is differentiated by its position as a neutral cloud provider without its own proprietary large language model. That allows the company to offer models based on customer preferences rather than prioritizing an affiliated model, management said. The company said it views MaaS and computing-power services as complementary. Computing-power contracts generally provide longer-term utilization and more predictable economics, management said, while MaaS is affected by token pricing, the release of new models and operating efficiency. Management said the company has raised prices for storage and computing-power services in some cases, aiming to offset higher costs and preserve or improve margins. It also said it has seen opportunities to provide managed services for customer-owned computing resources, an asset-light model that management said can carry higher gross margins. Kingsoft Cloud Holdings Limited (NASDAQ: KC) is a leading provider of cloud computing services in China, offering a comprehensive suite of infrastructure and platform solutions to enterprise customers. Established in 2012 as a subsidiary of Kingsoft Corporation, the company has grown into an independent public entity with dual listings, serving as a critical backbone for digital transformation across multiple industries. Headquartered in Beijing, Kingsoft Cloud leverages advanced technologies to optimize cloud operations and deliver scalable, reliable services. The company's core offerings span Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS), encompassing compute, storage, database, content delivery networks (CDN) and security solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Kingsoft Cloud Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Kingsoft Cloud Holdings Limited (NASDAQ:KC) shares surged 8.97% in pre-market trading on Wednesday after the cloud services provider reported stronger-than-expected second-quarter results, supported by rapid expansion in its artificial intelligence business. Revenue reached RMB3.07 billion, ahead of the consensus forecast of RMB3.03 billion and up 30.8% year-on-year from RMB2.35 billion in the second quarter of 2025. Kingsoft Cloud reported an adjusted loss per share of RMB0.02, substantially narrower than the RMB0.42 loss anticipated by analysts. Profitability improved significantly during the quarter, with Kingsoft Cloud recording a GAAP operating profit of RMB23.0 million for the first time. That compared with an operating loss of RMB327.0 million in the corresponding period last year. Adjusted operating profit reached RMB124.0 million, equivalent to a margin of 4.0%, highlighting the progress the company has made in improving operating efficiency alongside strong revenue growth. Gross margin also strengthened to 15.2% from 14.4% a year earlier, while adjusted gross margin increased to 15.4%. Artificial intelligence remained a major growth engine for Kingsoft Cloud. Gross billings from AI cloud services jumped 82% year-on-year and accounted for 56% of public cloud revenue. Public cloud services revenue increased 45.1% from the previous year to RMB2.36 billion. Enterprise cloud services were weaker, with revenue declining 1.3% to RMB714.3 million. “We are excited to deliver a quarter of both strong growth and profitability,” said Tao Zou, Chief Executive Officer. “Gross billings from our AI cloud business grew 82% year-over-year, representing 56% of public cloud revenue, driven by incremental contributions from our AI cloud infrastructure services as well as Model-as-a-Service offerings.” The figures underline the growing importance of AI infrastructure and Model-as-a-Service products to Kingsoft Cloud’s broader growth strategy. Kingsoft Cloud also made substantial progress in reducing its bottom-line losses. Net loss narrowed to RMB93.0 million from RMB456.9 million in the second quarter of 2025. On an adjusted basis, net loss improved to RMB59.8 million from RMB300.5 million a year earlier. The combination of 30.8% revenue growth, rapidly expanding AI cloud activity, stronger margins and the company’s first positive GAAP operating profit helped drive the sharp pre-market share-price reaction. Continued AI cloud growth and further progress towards sustained profitability are likely to remain key areas of focus for investors. Kingsoft Cloud Holdings stock price

BEIJING, Aug. 19, 2026 /PRNewswire/ -- Kingsoft Cloud Holdings Limited ("Kingsoft Cloud" or the "Company") (NASDAQ: KC and HKEX: 3896), a leading cloud service provider in China, today announced its unaudited financial results for the quarter ended June 30, 2026. Mr. Tao Zou, Chief Executive Officer of Kingsoft Cloud, commented: "We are excited to deliver a quarter of both strong growth and profitability. Gross billings from our AI cloud business grew 82% year-over-year, representing 56% of public cloud revenue, driven by incremental contributions from our AI cloud infrastructure services as well as Model-as-a-Service (MaaS) offerings. Profitability-wise, we recorded positive operating margin (GAAP) for the first time, and our adjusted operating profit margin increased significantly to reach 4.0%[1], thanks to our improved gross margin and operating efficiency. We remain committed to pursuing high-quality, sustainable growth strategy, deepening collaboration with customers both within and beyond our ecosystem, and strengthening our market position." Ms. Yi Li, Chief Financial Officer of Kingsoft Cloud, added, "We delivered a strong quarter, with total revenue reaching a record high of RMB3,072.0 million, representing an increase of 30.8% year-over-year. Adjusted gross profit increased by 34.6% year-over-year to RMB471.7 million, with an adjusted gross margin of 15.4%[2], an improvement from last quarter. We also reached breakeven on operating profit (GAAP), with adjusted operating profit margin reaching 4.0%, demonstrating improving profitability thanks to AI demand tailwinds and operational optimization. We remain committed to investing for sustainable long-term growth, with capital expenditures (including capitalized assets through leasing arrangements) amounting to RMB3.3 billion in Q2, an increase from Q1." Second Quarter 2026 Financial Results Total Revenues reached RMB3,072.0 million (US$452.8[3] million), increased by 30.8% year-over-year from RMB2,349.2 million in the same quarter of 2025, and increased by 13.6% quarter-over-quarter from RMB2,703.7 million in the first quarter of 2026. The increase was mainly due to revenue growth from AI-related customers, supported by continued upgrades to our AI infrastructure and product offerings. Revenues from public cloud services were RMB2,357.6 million (US$347.5 million), increased by 45.1% year-over-year from RMB1,625.3 million in the same quarter of 2025 and increased by 18.1% quarter-over-quarter from RMB1,996.3 million last quarter. The increase was mainly driven by growing demand for AI cloud services. AI cloud gross billings reached RMB1,327 million (US$195.6 million), while our other public cloud services also maintained solid growth. Revenues from enterprise cloud services were RMB714.3 million (US$105.3 million), representing a year-over-year decrease of 1.3% from RMB723.9 million in the same quarter of 2025 and a quarter-over-quarter increase of 1.0% from RMB707.4 million last quarter. Cost of revenues was RMB2,605.8 million (US$384.0 million), representing an increase of 29.6% from RMB2,010.4 million in the same quarter of 2025, which was mainly due to our continued investment in AI computing resources. IDC costs increased by 23.3% year-over-year from RMB803.1 million to RMB990.1 million (US$146.0 million) this quarter, largely in line with our revenue expansion. Depreciation and amortization costs increased from RMB552.0 million in the same quarter of 2025 to RMB963.8 million (US$142.0 million) this quarter. The increase was mainly due to the depreciation of newly acquired and leased servers, and network equipment which were mainly related to AI cloud business. Solution development and services costs increased by 3.9% year-over-year from RMB563.7 million in the same quarter of 2025 to RMB585.7 million (US$86.3 million) this quarter. The increase was mainly due to the solution personnel expansion. Fulfillment costs and other costs were RMB15.1 million (US$2.2 million) and RMB51.1 million (US$7.5 million) this quarter. Gross profit was RMB466.2 million (US$68.7 million), representing an increase of 37.6% from RMB338.9 million in the same quarter of 2025. The increase was mainly due to the expansion of our revenue scale, especially the intelligent computing services. Gross margin was 15.2% in this quarter, compared with 14.4% in the same quarter of 2025 and 12.8% last quarter. The increase was mainly due to higher profit contribution from our AI cloud business. Non-GAAP gross profit[4] was RMB471.7 million (US$69.5 million), compared with RMB350.6 million in the same period in 2025. Non-GAAP gross margin[4] was 15.4%, compared with 14.9% in the same period in 2025. Total operating expenses were RMB443.2 million (US$65.3 million), decreased by 33.4% from RMB665.8 million in the same quarter of 2025 and decreased by 13.4% from RMB511.9 million last quarter. Among which: Selling and marketing expenses were RMB113.1 million (US$16.7 million), decreased by 14.3% from RMB132.0 million in the same period in 2025 and decreased by 8.6% from RMB123.8 million last quarter. The decrease was mainly due to the decrease of share-based compensation and personnel costs. General and administrative expenses were RMB140.2 million (US$20.6 million), decreased by 58.7% from RMB339.6 million in the same period in 2025 and decreased by 28.0% from RMB194.8 million last quarter. The decrease was mainly due to the decrease of credit loss expenses and share-based compensation. Research and development expenses were RMB189.9 million (US$28.0 million), decreased by 2.3% from RMB194.3 million in the same period in 2025 and decreased by 1.8% from RMB193.3 million last quarter. The year-over-year decrease was mainly due to the decrease of personnel costs and share-based compensation. Operating profit was RMB23.0 million (US$3.4 million), compared with operating loss of RMB327.0 million in the same period in 2025 and operating loss of RMB166.1 million last quarter. The year-over-year improvement was mainly due to the increase of revenue, while the sequential improvement was mainly due to the impact of increase in gross profit. Non-GAAP operating profit[5] was RMB124.0 million (US$18.3 million), compared with operating loss of RMB166.4 million in the same period last year and operating loss of RMB59.8 million last quarter. Net loss was RMB93.0 million (US$13.7 million), narrowed by 79.6% from RMB456.9 million in the same quarter of 2025 and narrowed by 72.9% from RMB343.7 million last quarter. Non-GAAP net loss[6] was RMB59.8 million (US$8.8 million), compared with RMB300.5 million in the same quarter of 2025 and RMB237.1 million last quarter. Non-GAAP EBITDA[7] was RMB1,100.5 million (US$162.2 million), compared with RMB406.0 million in the same quarter of 2025 and RMB747.5 million last quarter. Non-GAAP EBITDA margin was 35.8%, compared with 17.3% in the same quarter of 2025 and 27.6% last quarter. Basic and diluted net loss per share was RMB0.02 (US$0.00), compared with RMB0.11 in the same quarter of 2025 and RMB0.08 last quarter. Cash and cash equivalents were RMB4,674.3 million (US$688.9 million) as of June 30, 2026, compared with RMB6,018.0 million as of December 31, 2025. The decrease was mainly due to the investment into the procurement of computing power equipment. Outstanding ordinary shares were 4,501,784,337 as of June 30, 2026, equivalent to about 300,118,956 ADSs. Conference Call Information Kingsoft Cloud's management will host an earnings conference call on Wednesday, August 19, 2026 at 8:15 am, U.S. Eastern Time (8:15 pm, Beijing/Hong Kong Time on the same day). Participants can register for the conference call by navigating to https://register-conf.media-server.com/register/BIf61186884fdb445fabf9794d01884399. Once preregistration has been completed, participants will receive dial-in numbers, direct event passcode, and a unique access PIN. To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your PIN, and you will join the conference instantly. Additionally, a live and archived webcast of the conference call will also be available on the Company's investor relations website at http://ir.ksyun.com. Use of Non-GAAP Financial Measures The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In evaluating our business, we consider and use certain non-GAAP measures, Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP operating (loss) profit, Non-GAAP operating (loss) profit margin, Non-GAAP EBITDA, Non-GAAP EBITDA margin, Non-GAAP net loss and Non-GAAP net loss margin, as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define Non-GAAP gross profit as gross profit excluding share-based compensation expenses allocated in the cost of revenues, and we define Non-GAAP gross margin as Non-GAAP gross profit as a percentage of revenues. We define Non-GAAP operating (loss) profit as operating (loss) profit excluding share-based compensation expenses and amortization of intangible assets and we define Non-GAAP operating (loss) profit margin as Non-GAAP operating (loss) profit as a percentage of revenues. We define Non-GAAP net loss as net loss excluding share-based compensation expenses and foreign exchange loss (gain), and we define Non-GAAP net loss margin as Non-GAAP net loss as a percentage of revenues. We define Non-GAAP EBITDA as Non-GAAP net loss excluding interest income, interest expense, income tax expense and depreciation and amortization, and we define Non-GAAP EBITDA margin as Non-GAAP EBITDA as a percentage of revenues. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We also believe that the use of these non-GAAP measures facilitates investors' assessment of our operating performance. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. We compensate for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure. Exchange Rate Information This press release contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from RMB to U.S. dollars, in this press release, were made at a rate of RMB6.7851 to US$1.00, the noon buying rate in effect on June 30, 2026 as certified for customs purposes by the Federal Reserve Bank of New York. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the Business Outlook, and quotations from management in this announcement, as well as Kingsoft Cloud's strategic and operational plans, contain forward-looking statements. Kingsoft Cloud may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Kingsoft Cloud's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Kingsoft Cloud's goals and strategies; Kingsoft Cloud's future business development, results of operations and financial condition; relevant government policies and regulations relating to Kingsoft Cloud' s business and industry; the expected growth of the cloud service market in China; the expectation regarding the rate at which to gain customers, especially Premium Customers; Kingsoft Cloud's ability to monetize the customer base; fluctuations in general economic and business conditions in China; and the economy in China and elsewhere generally; China's political or social conditions and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Kingsoft Cloud's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Kingsoft Cloud does not undertake any obligation to update any forward-looking statement, except as required under applicable law. About Kingsoft Cloud Holdings Limited Kingsoft Cloud Holdings Limited (NASDAQ: KC and HKEX: 3896) is a leading cloud service provider in China. With extensive cloud infrastructure, cutting-edge cloud-native products based on vigorous cloud technology research and development capabilities, well-architected industry-specific solutions and end-to-end fulfillment and deployment, Kingsoft Cloud offers comprehensive, reliable and trusted cloud service to customers in strategically selected verticals. For more information, please visit: http://ir.ksyun.com. For investor and media inquiries, please contact: Kingsoft Cloud Holdings LimitedInvestor RelationsEmail: [email protected] View original content:https://www.prnewswire.com/news-releases/kingsoft-cloud-announces-unaudited-second-quarter-2026-financial-results-302855085.html

Image source: The Motley Fool. March 25, 2026 at 8:15 a.m. ET Chairman and Chief Executive Officer — Tao Zou Chief Financial Officer — Yi Li Senior Vice President — Tao Liu Vice President, Investor Relations — Nicole Shan Mr. Zou will review our business strategies, operations and other company highlights, followed by Ms. Li, who will discuss the financial performance. We will be available to answer your questions during the Q&A session that follows. We will be conducting an interpretation. Our interpretation are for your convenience and reference purpose only. In case of any discrepancy, management statement in our original language will prevail. Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors are included in the company's filings with the U.S. SEC. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law. Finally, please note that unless otherwise stated, all financial figures mentioned during this conference call are denominated in RMB. It's now my pleasure to introduce our Chairman and CEO, Mr. Zou. Please go ahead. Tao Zou: [Interpreted] Hello, everyone, and thank you, and welcome to Kingsoft Cloud's Fourth Quarter and Fiscal Year 2025 Earnings Call. I am Zou Tao, CEO of Kingsoft Cloud. Since the beginning of 2025, the global AI industry has reached a series of milestones from the democratization sparked by the DeepSeek moment to the active competition among multimodal software models from the leap of embodied AI into the physical world to OpenCloud's closed-loop capability of understanding and execution. AI is evolving with unstoppable momentum linking across models, agents, computing power through industrial applications, reshaping every sector. As a tightly integrated component of the AI 5-layer take, cloud computing is now meeting an unprecedented surge in demand for intelligent computing. This year, we stayed committed to our high-quality and sustainable development strategy, embracing the opportunities in AI era, strengthening our capability through solid execution. We have delivered impressive results, achieving strong financial performance while forging lasting business strength. First, we recorded a historical high quarterly revenue, reaching RMB 2.76 billion, representing a year-over-year growth of 24%, among which revenues from public cloud services increased by 35% to RMB 1.9 billion. Our intelligent computing services keep driving our growth. The gross billing of AI business reached RMB 926 million, representing a 95% year-over-year and contributing 49% of our public cloud services. Second, growth in our ecosystem and external business segment is progressing hand-in-hand. On one hand, our ecosystem partnerships have remained strong and continue to deepen. This quarter, Xiaomi and Kingsoft ecosystem revenue reached RMB 804 million, a 63% year-over-year increase, accounting for 29% of total revenue. For the full year 2025, related party transactions with Xiaomi and Kingsoft ecosystem partners reached 94% of our net annual C, almost hitting the limit. On the other hand, our external customers, including leading enterprises across a wide range of high-growth industries, also shown confidence in our products and services, accounting for around 70% of total revenue. Furthermore, revenue from our top 5 non-ecosystem customers grew by 44% year-over-year, sustaining strong growth momentum. Last but not least, profitability continued to improve this quarter with adjusted gross margin increasing quarter-over-quarter to 17.1% and adjusted operating margin reaching 2.0%. We have achieved operating level profitability 2 quarters in a row, and our self-funding capability has shown sustained and significant year-over-year improvement. Now I would like to walk you through the key business highlights for the fourth quarter of 2025. In terms of public cloud services, revenue reached RMB 1.9 billion this quarter, representing a year-over-year increase of 35%. From a customer perspective, in 2025, AI continued pushing its boundaries, driving industries to fully embrace it, diversifying our customer base. Beyond leading AI enterprises and Internet giants, we now also serve automotive manufacturing, autonomous driving, embodied AI and fintech sectors, et cetera. We've solidified our cooperation within the Xiaomi and Kingsoft ecosystem while capturing new external opportunities. From a product and services perspective, we keep pushing the limits of cluster scale, supporting large-scale training and explosive inference demand. Notably in this quarter, we delivered a new inference cluster for top video streaming platform, serving over 100 million users. We also secured a major fintech customer using our token-based inference service who speak highly of our stable model and computing power services. On supply chain front, despite market uncertainties, our well-established and resilient supply chain built through years of experience allowed us to plan ahead strategically and stock key components dynamically to ensure sustainable business growth. Now in terms of enterprise cloud, revenue reached RMB 859 million this quarter, a significant quarter-over-quarter increase of 18%. Driven by the AI Plus policy, industrial intelligence solutions have become a key growth driver. The demand for specialized vertical models, real-world applications and strict data compliance makes cloud services more essential than ever in advancing industrial intelligence. The AI business of enterprise cloud is paving the way for steady long-term growth, not only representing a $1 trillion market opportunity, but also playing a critical role in driving the technological leap across industries. As a B2B cloud service provider with solid technology expertise and enterprise service capabilities, we are well positioned to capture these industrial transformation opportunities. In the area of enterprise services, we achieved key breakthroughs in high-end manufacturing industry. We provided stable and high-performance computing service to the top enterprises to support their process in intelligent manufacturing, industrial vision and AI R&D. In health care space, we launched a data agent-based AI application in health care intelligent operation process, marking a paradigm shift from digitalization to intelligence. This analysis through natural dialogue platform enables natural language insights into DRG cost control, moving hospital management from retrospective statistics to proactive intervention. While significantly lowering the barrier to data application, we have further solidified our technical moat and differentiated competitive advantages in high-value medical AI scenarios. In public services area, we partnered with telecom operators to provide sustainable and stable high-performance computing clusters for the public services sector, successfully entering key markets like Shanghai. We believe that by leveraging Kingsoft Cloud's deep vertical expertise and enterprise service experience, intelligent computing opportunities in the enterprise cloud segment represents a massive industrial frontier, generating synergies with our public cloud business. In terms of products and technology, we are building a next-generation computing services system for LLM training, inference and industrial intelligence, offering full stack capabilities from computing services to model as a service. Our technology upgrades from basic cloud computing to an AI-first AI-native cloud architecture contributing for digital and intelligent transformation across sectors. We focused on the technologies catering to model training and inference scenarios, aiming to provide highly stable, highly efficient and ready-to-use intelligent computing services. This quarter, our StarFlow platform keep upgrading with the launch of MCP, aka model context protocol cloud, process optimization and AI search features to help enterprises develop and deploy AI agents through a unified platform, gradually building a new ecosystem centered around agent-based operations. For enterprises with private deployment demand, our Galaxy Stack provides heterogeneous GPU management, rookie network and intelligent container scheduling capabilities. We also feature full stack localization with indigenous adaptation to empower intelligent transformation across verticals. Standing at a new starting point, looking ahead, we're truly excited by the limitless possibilities that lie before us. We will remain committed to our high-quality and sustainable development strategy by embracing the immense opportunities presented by the AI era, developing along with the industry and refining our core technologies. We will continue to capture the market opportunities, both within and beyond our ecosystem, optimizing the operations of our assets to enhance profitability and thereby create value for our customers, shareholders, employees and society. I will now pass the call to our CFO, Ms. Li Yi, to go over our financials for the fourth quarter and fiscal year 2025. Thank you. Yi Li: Thank you, Mr. Zou and [indiscernible], and thank you all for joining the call today. Before we walk through the details of financial results for the fourth quarter and fiscal year 2025, I would like to highlight the following aspects. First, our revenue has achieved record high, RMB 2,761 million this quarter, representing a year-over-year growth rate of 24%. Within that, revenue from public cloud services was RMB 1,902 million, increased by 35% from RMB 1,410 million in the same quarter last year. Unprecedented explosive demand for our AI business drove a 95% year-over-year billing growth, which totaled RMB 926 million. Second, profitability has seen substantial improvement. Driven by shift in our revenue structure, our adjusted gross margin continued its upward trend, rising to 70% from 60% in the previous quarter. Adjusted EBITDA margin reached 28%, up 12 percentage points from 60% in the same quarter last year, though down from 33% last quarter. The year-over-year growth was fueled by a large contribution from AI-related business, where [indiscernible] represents the primary cost component. The sequential decrease was mainly due to a nonrecurring subsidiary received last quarter, which established a high baseline. Notably, we have achieved adjusted operating profit for 2 consecutive quarters, reaching RMB 55 million this quarter, which was a 2% margin. These results validate our ability to monetize intelligent cloud opportunities and our strategic focus on high-quality enterprise services. Third, our cash and cash equivalents achieved RMB 6,018 million, strengthening our ability to further support the investment into AI business. Now I will walk you through our financial results for the fourth quarter of 2025. This quarter, total revenue were RMB 2,761 million. Of this, revenues from public cloud services were RMB 1,902 million, up 35% from RMB 1,410 million in the same quarter last year. Revenues from enterprise cloud services reached RMB 859 million during this seasonally strong quarter, which was characterized by a high volume of project completion. Total cost of revenues was RMB 2,296 million, up 27% year-over-year, which was mainly due to our investment into infrastructure to support intelligent cloud business growth. IDC costs increased by 30% year-over-year from RMB 725 million to RMB 812 million this quarter. The increase was mainly due to the increasing needs of [indiscernible], which serves the expanding AI business. Depreciation and amortization costs increased from RMB 323 million in the same quarter of 2024 to RMB 741 million this quarter. The increase was mainly due to the depreciation of newly acquired and leased servers and network equipment, which were mainly allocated to our AI business. Solution development and service costs increased by 50% year-over-year from RMB 557 million in the same quarter of 2024 to RMB 642 million this quarter. The increase was mainly due to the solution personnel expansion. Fulfillment costs and other costs were RMB 40 million and RMB 61 million this quarter. Our adjusted gross margin for the quarter was RMB 471 million, increased to 10% year-over-year and 20% quarter-over-quarter. It was mainly due to the expansion of our revenue scale, the enlarged contribution from AI business and the cost control of IDC racks and servers. Adjusted gross margin increased from 60% last quarter to 70% in this quarter, which was mainly due to the high contribution from enterprise cloud. On the expense side, excluding share-based compensation costs, our total adjusted operating expenses were RMB 459 million, increased by 3% year-over-year and increased 9% quarter-over-quarter, of which our adjusted research and development expenses were RMB 181 million, increased by 7% from same quarter last year. Adjusted selling and marketing expenses were RMB 111 million, increased by 3% year-over-year. Adjusted general and administrative expenses were RMB 168 million, decreased 1% year-over-year. Our adjusted operating profit was RMB 55 million, increased by 124% from adjusted operating profit of RMB 24 million in the same period last year. The improvement was mainly due to the expansion of our revenue scale and gross profit as well as the expense control. The total expense as a percentage of revenue keeps decreasing. Adjusted operating profit margin increased from 1% in the same period last year to 2% this quarter. Our non-GAAP EBITDA margin was RMB 785 million, increased by 180% from RMB 360 million in the same quarter last year. Our non-GAAP EBITDA margin achieved 28% compared with 60% in the same quarter last year. It was mainly due to our strong commitment to AI cloud computing development, strategic adjustment of business structure, strict control over costs and expenses. This quarter, our capital expenditure, including those financed by third parties and right-of-use assets obtained in exchange for finance lease liabilities were RMB 496 million. For the full year 2025, our total revenue achieved RMB 9,559 million, increased by 23% from RMB 7,785 million in 2024, among which revenues from public cloud services were RMB 6,634 million, increased by 33% year-over-year. Revenues from enterprise cloud services were RMB 2,925 million, increased by 5% year-over-year. Adjusted gross profit was RMB 1,542 million, increased by 40% from RMB 1,358 million last year. Adjusted gross margin was 60%, decreased from 70% last year, which was mainly due to the high cost for servers and other hardware equipment. Adjusted operating loss was RMB 152 million, narrowed significantly from RMB 431 million. Adjusted operating profit margin was minus 1.6% narrowed from minus 12.5% last year. Adjusted EBITDA profit was RMB 2,336 million, increased by 266% from RMB 639 million last year. The adjusted EBITDA margin was 24%, improved by 60% from 8% last year. Looking ahead, we aim to capitalize on the explosive growth in demand by further investing in infrastructure, enhancing service stability, managing liquidity risk and improving operating efficiency. We remain focused on AI-driven strategy, providing customers with high value-added cloud services. That's all for the introduction of our operational and financial results. Thank you all. Nicole Shan: Thank you, operator. This concludes our prepared remarks. We are now happy to take your questions. Please ask your question in both Chinese and English, if possible. Operator, please go ahead. Operator: [Operator Instructions] Our first question comes from the line of Liping Zhao from CICC. Liping Zhao: Congrats for the very good 4Q results. I have 2 questions here. First, Xiaomi recently launched the MiMo-V2 series models, which have received positive market feedback. How should we view our role and positioning within Xiaomi's AI strategy? And what strategies will be implemented around Xiaomi and Kingsoft service going forward? And secondly, how does the management view the current pricing uptrend in the cloud service industry? Has the company already adjusted prices for AI computing services? Or are there any related plans in place? To what extent are those price adjustments driven by demand or driven by the upstream procurement cost pass-through? Tao Zou: [Interpreted] The answer comes from our CEO, Mr. Tao Zou. So a little bit of background. So back in 2024, I think that was in August, we had an internal discussion around the development of AI and models for the whole Xiaomi and Kingsoft ecosystem. So the idea was that the whole Xiaomi and Kingsoft ecosystem will form a [indiscernible] portfolio of solutions where -- a whole system where Kingsoft will stay disciplined and not really developing our own large language models, which is left to -- for Xiaomi to develop. So the MiMo model and its widely recognized performance is actually an implementation and manifestation of our overall AI strategy within the Xiaomi and Kingsoft ecosystem. And secondly, back in 2025, so 1 year later from the internal discussion session, from a KC perspective, we formed a strategy that's called 1+N. So the 1 here actually refers to the Xiaomi MiMo model, which is the key to KC's inference strategy. So in the future, we will continue to adhere to this strategy, which essentially means that within the ecosystem, we will continue to serve the Xiaomi and Kingsoft ecosystem. And for external customers, we will also try to monetize our model as-a-service capabilities, thereby not only in the training area that we were able to make our revenue and profits, but also we will make our contribution in the inference era that is approaching. Tao Liu: [Interpreted] So the answer comes from our SVP, Mr. Liu Tao. So as a bit of background again. So in the Q3 last year, we had anticipated the significant pricing increase from the supply chain side. And therefore, we had dynamically and strategically stocked up some of the key components. So we did have -- so we were actually prepared for this -- what's unfolding today. Now in terms of the price hike that you were asking, so we stick to 2 principles. Number one, if we already -- for some of the customers and business where we already have contracts in place and where we have the stocking of the underlying resources, we tend to not increase the pricing. However, for some of the new customers, new contracts, especially with significant increase of usage, there's going to be significant price hiking in these kind of scenarios. Now also in terms of profitability, one thing is that we will actually try to pass through some of the upstream cost increases to our customers. And secondly, for -- we also -- depending on the demand, right, we also try to increase some of the price to reflect and increase our profit. Operator: Our next question comes from the line of Wenting Yu from CLSA. Wenting Yu: The first question is that some of your cloud service partners have announced they will shift their cloud business more towards [indiscernible] from the traditional server rental and also the subscription model. Will KC adopt a similar strategy? And how do you view the impact of this trend on industry competition and long-term profit margins? And the second question is regarding the impact from the [indiscernible] engine. It is adopting a relatively low price strategy. And how do you view the impact on the industry and also on potentially our business this year? Tao Zou: [Interpreted] Okay. So regarding your question on the shifting to model as a service strategy, we have noted some of the other peer companies who released their results earlier than us mentioning it. However, my view is that this is not actually some new concept. It is actually one of the inevitable stage of the development of AI as well as large language models from the training that we do to create them to a certain stage that they become applicable and workable in our day-to-day work and life. So in relation to our own inference-related work, model as a service work, we actually launched the StarFlow platform, as we mentioned in the prepared remarks last year. And because we are a neutral platform, we were able to host essentially all of the open source models, including also the model coming from Xiaomi to provide model as-a-service business, where this is essentially actually the fastest-growing business in the history of the company. Actually, so we talked about the Xiaomi MiMo model earlier, the way that we're providing services for Xiaomi MiMo model is also a model as-a-service business. And also for some of the large language model customers that we used to -- and we're still providing training services to them, we also provide model as-a-services business to them as well to cater to their inference needs. Now as to your second question about the price change for [indiscernible], I haven't really noticed that particular piece of news. However, the general market dynamics today is that on one hand, we're seeing explosive growth on the demand side. And we're seeing a particularly high price hiking from the supply chain side. So I do not personally think that under such circumstances, changing price to a lower level would actually be implementable and applicable in the real world. Now what I have focused more is the price hiking information from, for example, AliCloud. We have worked with them together. We have been in the industry together for many years, and this is the first time that we've seen them hiking their price. And also an addition from our SVP, Mr. Liu Tao, is that there is a difference between the catalog price and the actual price that the companies that offer as cloud players and our customers engage into. So the change in catalog price is more of a marketing kind of purpose, and it does not necessarily mean the actual price that companies enter into business. Operator: Our next question comes from the line of Timothy Zhao from Goldman Sachs. Timothy Zhao: My first question is on your financial outlook. Just wondering if you can share some color on how we should think about the revenue, EBITDA, operating profit growth outlook for this year? And also on the capital expenditure plan, what is your thought and considering the balance sheet and also the prepayment from certain customers, do you think it's possible to further raise your CapEx plan given the rising AI demand? And secondly is regarding the third-party revenue in the AI outlook. Just wondering if you can share more detailed color on your -- what specific product or what type of customers are driving the third-party AI growth? And also what is the breakdown and outlook between the mix of AI training versus AI inferences? Yi Li: All right. I will take the CapEx first. For 2026, we expect total CapEx and control assets to exceed RMB 10 billion, representing expansion from 2025 level. On funding structure, we expect approximately half of our CapEx is targeted to be covered by customer prepayment arrangements, which will significantly reduce safe funding requirements. Additionally, we plan to access more assets through short- and long-term leases with payment structure and operating cash flows to minimize upfront capital encumbrance. For the funding position and financing needs, we currently have no equity finance plans. 2026 capital expenditure are secured through 4 channels. First, proceeds from our 2025 financing; and second, customer operating receipts; and third, the strategic customer prepayments; and the fourth, the commitment credit facilities from banks and financial institutions. Incremental resource requirement will be made primarily through leasing to preserve balance sheet flexibility. For the guidance for the 2026, we expect our growth rate will accelerate and the EBITDA rate will improve much in 2026 as well. Unknown Executive: [Interpreted] So if you look at the past results as described -- as discussed in the prepared remarks, the -- for the top 5 non-ecosystem customers combined revenue for year-over-year basis revenue growth was 44%, which is really strong growth. So those would include Internet companies, autonomous driving and robotics. And then in terms of looking forward into the year of 2026, we do see extremely large demand coming from outside of the ecosystem. And to some extent that such demand is actually higher than the demand from our ecosystem. So the final revenue or financial results coming from that demand will actually be determined -- will actually be dependent on how much resources we're able to secure and deliver to such customers. Now from the perspective of products and solutions, we have -- we're actually seeing more than half of the potential demand coming in for inference versus training. And then for the StarFlow platform, which we discussed earlier, it's growing really fast for that business, and we're seeing better profit margin coming from that particular business. And this is a result, of course, from the very good application, very good application and increasing penetration for agents and core applications. Thank you. Nicole Shan: Thank you. Due to time constraint, this concludes our Q&A session. Thank you once again for joining us today. If you have any other questions, please feel free to contact us. Look forward to speaking with you again next quarter. Have a nice day. Thank you all. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. 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Image source: The Motley Fool. Wednesday, May 27, 2026 at 8:15 a.m. ET Chairman and Chief Executive Officer — Tao Zou Chief Financial Officer — Yi Li Senior Executive — Tao Liu Need a quote from a Motley Fool analyst? Email [email protected] Mr. Zou will discuss our business strategies, operations and other company highlights, followed by Ms. Li, who will discuss the financial performance. They will be available to answer your questions during the Q&A session that follows. There will be consecutive interpretations. All interpretations are for your convenience and reference purposes only. In case of any discrepancy, management's statement in the original language will prevail. Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known and unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding this and other risks, uncertainties or factors are included in the company's filings with the U.S. SEC. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law. Finally, please note that unless otherwise stated, all financial figures mentioned during this conference call are denominated in RMB. It is now my pleasure to introduce our Chairman and CEO, Mr. Zou. Please go ahead. Tao Zou: [Interpreted] Good evening, everyone, and welcome to Kingsoft Cloud's First Quarter 2026 Earnings Call. I am Tao Zou, CEO of Kingsoft Cloud. Since the beginning of 2026, the continued adoption of AI coding together with the rapid rise of AI agents have driven AI to evolve from chat-oriented to action-oriented use cases. This shift is fueling concurrent growth in both model inference and training demand, further expanding the setting of the cloud computing industry. This quarter, Kingsoft Cloud remains firmly committed to our high-quality and sustainable development strategy. We strengthened our AI cloud infrastructure and enhanced our training inference platform capabilities. In the meantime, we also further deepened our presence in industry-specific use cases, fully embracing AI's transformative role in reshaping the world. First, we sustained our momentum of high-quality growth. In terms of revenue, we reported a total revenue of RMB 2.7 billion this quarter, representing a year-over-year growth of 37.2%. Both public cloud and enterprise cloud services achieved year-over-year growth. Among them, public cloud revenue reached RMB 2.0 billion, a year-over-year increase of 47.5%. In terms of profitability, our adjusted gross profit reached RMB 351 million, up 8.6% year-over-year. Adjusted EBITDA was RMB 748 million, representing a year-over-year increase of 134.7% with adjusted EBITDA margin reaching 27.6%, a significant year-over-year improvement of 11.4 percentage points. Second, AI cloud continues to drive the company's business growth. This quarter, AI cloud gross billings reached RMB 1.0 billion, a year-over-year increase of 90.1%, accounting for over half of public cloud revenues for the first time, reaching 50.1%. Notably, our token services delivered exceptionally strong growth with April 2026 revenue skyrocketing to 53x that of January. Third, ecosystem cooperation continued to strengthen. This quarter, revenue from Xiaomi and Kingsoft Ecosystem reached RMB 838 million, a year-over-year increase of 68.9%, accounting for 31.0% of total revenue. As Xiaomi reinforces its investment in the human-car-home smart ecosystem and AI advancements, it brings for more business opportunities for us. We plan to revise the annual caps for the continuing connected transactions with Xiaomi. Following the adjustments, the revised annual caps with Xiaomi and Kingsoft for the continuing connected transactions under the 3-year framework from 2025 to 2027, we reached RMB 14.2 billion. Now let me walk you through our business highlights for the first quarter of 2026. In terms of public cloud services, revenue reached RMB 2.0 billion this quarter, representing a year-over-year increase of 47.5%. First, we continue to closely align with the large-scale and a highly visible cloud computing demand within the Xiaomi and Kingsoft Ecosystem. With a long-term and global strategic perspective, we are carefully planning and continuously refining our offerings to build products and solutions with sustainable competitive advantages. Second, we earned broad recognition from customers outside the ecosystem. Leveraging our solid product and technology capabilities, extensive project experience and strong market reputation, we rapidly expanded both our customer coverage and the depth of business cooperation. This quarter, revenue from our top 5 non-ecosystem customers increased by 66% year-over-year, maintaining strong growth momentum. We provided AI cloud services to a leading autonomous driving unicorn, enabling rapid deployment and responsive operations. This supported large-scale data processing and efficient end-to-end neural network training iterations, helping the customer capture early market opportunities. Through our StarFlow training and inference platform with best-in-class resource scheduling, elastic scalability and model deployment capabilities, we effectively supported the token demand of many top-tier Internet companies, capturing the surge in inference-driven demand. Third, we achieved a meaningful optimization of our customer mix. As inference applications continue to scale, our AI business now spans a wide range of industries, including Internet, AI companies, autonomous driving, logistics, fintech, gaming and video streaming, resulting in a more balanced customer mix. This quarter, we deeply empowered a leading AI for science customer, ensuring its rapid business growth and stable platform operations. We also supported a top logistics technology company in executing large-scale co-development projects, enabling its engineering teams through flexible multi-modal utilization and significantly improving R&D efficiency and innovation capability. This diversified customer mix and business portfolio not only drive revenue growth, but also enable us to schedule computing resources more flexibly in off-peak periods, improve resource utilization and enhance profitability. In terms of enterprise cloud services, revenue reached RMB 710 million this quarter, representing a year-over-year increase of 14.7%. In the public services sector, we launched the state-owned cloud platform in Shenzhen, focusing on the core needs of state-owned enterprises for high security, strong compliance and strict data confidentiality and fully enabling the digital and intelligent upgrade of office, business and management use cases. Leveraging Kingsoft Cloud's technology foundation, we adopted an integrated architecture that is provincial platform plus multi-prefecture and counting platforms to build a supply chain public information platform in Hubei, enabling resources efficiency, data interoperability and business collaboration and have now supported the sales migration of multiple municipal and country-level platforms to the cloud. We also partnered with a leading domestic chip manufacturer to build a full stack intelligent computing service system spanning from underlying chips to upper layer applications, advancing the large-scale commercial deployment of domestically developed intelligent computing cloud solutions and meeting the demand for high security and highly controllable computing capabilities. In the digital health care sector, we collaborated with Union Hospital affiliated with Tongji Medical College of Huazhong University of Science and Technology, one of the top-ranked hospitals in China on the data governance project. Through a systematic data management framework, we helped the hospital transition from fragmented management to standardized governance, setting a benchmark for the intelligent transformation of large medical institutions. We also signed a contract for a large-scale medical consortium platform project based on the Data Middle Platform. This project highlights our end-to-end professional capabilities in planning, designing, construction and operation within the medical consortium space, laying the foundation for large-scale replication and rollout across health care institutions. In the enterprise services sector, we delivered a green energy operation platform for a leading clean energy service provider, enabling effective intensive management of large heavy-duty truck fleet. We further extended into the broader green and low-carbon industrial chain, exploring digital solutions for solid waste management and driving large-scale business deployment. In terms of products and technology, we continue to stay committed to a technology-driven approach closely aligned with AI cloud demand and have comprehensively upgraded our products and services. During the quarter, in response to increasingly diverse model requirements, our StarFlow platform significantly expanded its model ecosystem. We added new API services for speech recognition and speech synthesis, expanded image and video generation models and delivered a more refined user management experience. To address growing demand for AI agents, we launched Agent Engine, enabling customers to efficiently develop, deploy and manage agents. We also introduced one-click agent deployment on our cloud hosts, supporting mainstream agent applications such as OpenClaw and Hermes, achieving deployment within 5 minutes and significantly lowering the barrier to adoption. For AI training and inference use cases, KS3 cache accelerator now delivers stable millisecond-level low latency, balancing performance and cost efficiency. To meet the rising demand for private deployment of AI across industries, our Galaxy Stack platform reached a key milestone, adding StarFlow and security modules and completing a full stack closed-loop private deployment solution for AI cloud, covering cloud infrastructure, integrated training and inference token services and security guardrails. Overall, in this wave of AI innovation from text generation to multi-modal capabilities, from training to inference, from chatting to real-world task execution and from agents to course, the pace of innovation and deepening applications continues to reinforce our conviction that AI will fundamentally reshape industries across the board. Kingsoft Cloud will continue to uphold its strategy of high-quality and sustainable development, increase investment, deepen its focus on core products and solutions and continuously enhance profitability, creating a greater long-term value for our customers, shareholders, employees and society. Next, I will hand over to our CFO, Ms. Yi Li, who will walk you through our first quarter financial results. Thank you. Yi Li: Thank you, Mr. Zou and [indiscernible], and thank you all for joining the call today. I will now discuss the first quarter financial results using RMB as currency. Before we walk through the details of the financial results for the first quarter, I would like to highlight the following aspects. First, our revenue has been consecutively achieved year-over-year growth for 8 quarters, reaching RMB 2,704 million this quarter. For the first time, our AI business became a majority revenue driver, contributing over 50% of our public cloud services revenue and marking a pivotal structural shift in our growth mix. This quarter, our AI business revenue increased 91% year-over-year, amounting to RMB 998 million. Second, our adjusted gross profit was RMB 351 million, increased by 7% year-over-year despite overall supply chain challenges. Our adjusted EBITDA margin was 28%, increased by 11 percentage points year-over-year, thanks to our AI revenue growth. Third, in light of strong demand across diverse sectors, we remain steadfast in investing our infrastructure as our capital expenditures and leased assets obtained in combination grew 38% year-over-year to RMB 3 billion this quarter, and we expect to continue to invest to facilitate further business expansion throughout the year. Now I will walk you through our financial results for the first quarter of 2026. This quarter, total revenues were RMB 2,704 million. Of this, revenues from public cloud sources were RMB 1,996 million, up 47% from RMB 1,353 million in the same quarter last year. Revenues from enterprise premium services reached RMB 707 million, up 50% from RMB 616 million in the same quarter last year. Total cost of revenues was RMB 2,358 million, up 43% year-over-year, which was mainly due to our investment into AI computing resources. IDC costs increased by 26% year-over-year from RMB 723 million to RMB 911 million this quarter. The increase was mainly due to increase of rack services, which served the expanding AI business. Depreciation and amortization costs increased from RMB 379 million in the same quarter of 2025 to RMB 819 million this quarter. The increase was mainly due to the depreciation of newly acquired and leased servers and network equipment, which were mainly related to AI business. Solution development and services costs increased by 14% year-over-year from RMB 505 million in the same quarter of 2025 to RMB 575 million this quarter. The increase was mainly due to the solution personnel expansion of Camelot. Fulfillment costs and other costs were RMB 2 million and RMB 51 million this quarter. Our adjusted gross profit for the quarter was RMB 351 million, increased by 7% year-over-year and decreased by 25% quarter-over-quarter. Adjusted gross margin decreased from 17% last quarter to 13% this quarter. The decrease was mainly due to the higher cost of server along with the expansion of our AI business as well as upfront costs incurred for future revenue-generating activities with certain customers. On the expense side, excluding share-based compensation expenses, our total adjusted operating expenses were RMB 455 million, remaining stable compared with same quarter last year and last quarter, of which our adjusted R&D expenses were RMB 184 million, decreased by 8% from same quarter last year. Adjusted selling and marketing expenses were RMB 112 million, increased by 4% year-over-year. Adjusted general and administrative expenses were RMB 159 million, increased by 34% year-over-year. Our adjusted operating loss was RMB 60 million, increased by 7% from adjusted operating loss of RMB 56 million in the same period last year. The improvement was mainly due to the expansion of revenue scale. Adjusted operating loss margin decreased from 3% in the same period last year to 2% this quarter, representing a decrease of 0.6 percentage points. Our non-GAAP EBITDA profit was RMB 748 million, increased by 135% from RMB 390 million in the same quarter last year. Our non-GAAP EBITDA margin achieved 28% compared with 16% in the same quarter last year. It was mainly due to our strong commitment to AI cloud computing development and strategic adjustment of business structure. This quarter, our capital expenditure, including those financed by third parties and right-of-use assets obtained in exchange for financially settled leases were RMB 2,985 million. Looking ahead, we aim to capitalize on the explosive growth in demand by further investing in infrastructure, enhancing service stability, managing liquidity risk and improving operating efficiency. We remain focused on AI-driven strategy, providing customers with high-value-added cloud services. That's all for the introduction of our operational and financial results. Thank you all. Unknown Executive: This concludes our prepared remarks. Thank you for your attention. We are now happy to take your questions. Please ask your questions in both Mandarin and English, if possible. Operator, please go ahead. Operator: [Operator Instructions] We will take our first question, and the question comes from Liping Zhao from CICC. Liping Zhao: [Interpreted] Congrats on another strong quarter. So I have 2 questions. The first one is relating to your StarFlow MaaS platform. Mr. Zou mentioned that the revenue of the MaaS platform increased 53x from January to April. Could you share the current revenue scale and margin levels? And what's management's outlook on this business? And the second question is about the AI pricing compared to the fourth quarter of 2025, have there been increases in the average pricing for the newly signed public cloud contracts in the first quarter and second quarter of this year? If so, by how much? Tao Liu: [Interpreted] So our token business actually started off at a relatively small base, let's say, end of last year and the beginning of this year. However, traditionally, we have already maintained a very strong customer base of very large-scale leading customers. So at the beginning of this year, we're starting to meet huge demand coming from such customers in light of the surge of agent demand, the surge of AI coding demand in such use cases. So obviously, the demand was huge and very strong, but it's generally -- but in a way, our business was restricted by the underlying resources that is available to us. So I would say that, obviously, we're optimistic about the growth of this business. However, we need to -- due to that uncertainty we just mentioned, we would like to, let's say, see a couple more quarters before disclosing more details to the market of how that business grows. And secondly, in terms of margin levels, I would say that the margin levels for this token business, inference business in general is higher than traditional cloud computing business. And we do see a lot of improvement in margin from a certain perspective, for example, coming from technology advancement, coming from the optimization of algorithms, coming from the optimizing that algorithms with the relevant models and also optimization and improvement coming from operating models. So I would say we're cautiously optimistic about the margin. But again, due to still currently in a quickly expanding phase, it's not in a static phase. So we will not, at this stage, talk more about the specific margin numbers. Tao Zou: [Interpreted] So in relation to your second question about the selling and purchasing price in relation to our business. So yes, as far as we recognize, the demand for our cloud computing services have been surging tremendously. So is the pricing from our upstream, which includes from components to holistic servers to other raw materials. So the current consensus of the market, including our customers, is that the price hiking, the price surge trend will actually continue, not only already happened in Q1, but also will continue in Q2 and maybe some quarters to follow. So they would believe that the current time point to secure more computing power is actually the right moment to do so. And because of that, the pass-through of the price -- of the cost pressure coming from our upstream is actually doable and would not affect our -- it would not negatively affect our margin levels in this current market situation. Operator: Your next question comes from the line of Wenting Yu from CLSA. Wenting Yu: [Interpreted] The first question is regarding the gross margin in the first quarter. We noticed that the gross margin dropped a bit in first Q, and what are the main reasons? Has the positive effect of the product price increase has been factored in already? And the second question is with ongoing high demand for computing power, large model companies are adapting their resource allocation and forming partnerships beyond public cloud vendors to GPU rental companies and telcos. How does management think of cloud competitive position and advantages in this landscape? Yi Li: Great question. For the first -- the first quarter margin, we can see a 3% percentage decrease. This is mainly -- I think the first factor is the seasonal factor because there is the 30% revenue come from the public -- enterprises cloud. So that is the first reason. And the second one is the upfront cost incurred for future revenue generating activities with certain customers. For the coming quarters, we expect the gross margin will recover to normal level. Tao Zou: [Interpreted] So this is a very interesting question. It's a very good question. So in fact, we observed a relatively interesting change in market landscape starting in the second half of 2025. That is some of the used to be competitors are actually becoming cooperation partners in this wake of strong AI demand. And what you mentioned in your question is also -- it also exemplifies the close cooperation between private enterprises and state-owned enterprises. And we think that this demonstrates a couple of things. Number one, this is fundamentally a complementary capabilities from -- or I would say, complementary institutions coming from different backgrounds of enterprises, which we have mentioned back in the general computing, GPU computing age, and this is actually manifesting itself again in this new AI for intelligent cloud era. And secondly, we think that this fundamentally reflects the strong discrepancy between -- or the strong gap, the big gap between supply and demand in today's market. So everybody actually needs to come together and to overcome shortcomings that each one of us have to form holistic and overall solutions to serve the end customers. So again, your question is more from a competition perspective. But from our understanding and experience, we're actually seeing a more kind of cooperative perspective of the story. Everybody has the shortcomings and we work together to serve the needs of the end customers. Operator: Your next question comes from the line of Daley Li from Bank of America Securities. Huiqun Li: [Interpreted] I have 2 questions here. First question about the demand outlook for the public cloud. The 1Q result is pretty strong. And how do we see the demand trend in Q2 and the second half this year? Regarding the demand mix, how is the trend for inferencing and model training? And the second question is about the contract term with our clients. As the upstream costs are in a rising trend, are we taking like a shorter-term contract -- any change in terms of the contract terms? Tao Liu: [Interpreted] So in terms of AI demand, as we mentioned, it's seasonally strong. And looking at the second quarter, we currently actually have a very long list of our backlog, which is mainly subject to the supply chain restrictions. Now for the sectors that drive this growth, we're currently covering quite a few sectors, which we have all seen simultaneously having explosively strong demand, starting from the Internet, from large language model AI labs, from autonomous driving and from robotics. And I would say that out of which the autonomous driving and robotics generally tend to have very strong model training requirements and demand. And particularly for robotics, they have also -- also for autonomous driving, actually, they have also a lot of data processing or data treatment requirements demand for the training of their models. And for the inference side of the story, we have the Internet companies and large language model companies coming from their demand for AI coding and agents such use cases. So this is a general overview of the demand side of things. Now since you also mentioned about the contract period, we had relatively standard contract periods in the past. But then now in light of this new -- the supply chain, the price surge, we currently have more flexible kind of contract period arrangements, which maximizes our profit and benefits. Operator: Your final question comes from the line of Timothy Zhao from Goldman Sachs. Timothy Zhao: [Interpreted] Congrats on the very strong results. My first question is regarding your revenue from Xiaomi and Kingsoft Cloud -- and Kingsoft Ecosystem. I noticed that the revenue growth accelerated compared to the fourth quarter of last year. Just wondering especially related to Xiaomi after the MiMo large language model launch and especially MiMo V2.5, have you observed any specific change on the demand for Kingsoft Cloud resources and the breakdown between training and inferences? And after you announced the [indiscernible] transaction -- revenue cap with Xiaomi for this year and next, just wondering how do you think about the utilization rate versus last year? And my second question is regarding your CapEx and also lease assets. I noticed that the total amount spent was around RMB 3 billion in the first quarter. Just wondering if you can provide us an update on how you think about this total CapEx number for this year? Tao Liu: [Interpreted] So on the training, the vast majority of those resource demands come from Kingsoft Cloud. We continue to see growth -- growing demand in that respect. In inference demand, especially since the launch of V2. MiMo V2, a lot of underlying resource has been reallocated to do the training for that -- to do the inference for that model. Now in terms of the prediction for future growth of inference coming from MiMo, we are relatively optimistic. However, it's ultimately subject to the return on Xiaomi's side. So probably we don't have to personally comment on that, but we generally remain optimistic about that. Yi Li: For CapEx in the future, actually, the AI era present huge opportunities for us. Fortunately, we launched our intelligent computing business back in 2023. We have well established our supply chain capabilities, and our supply network is in place now. As Mr. Tao Liu has mentioned, we have seen a certain demand from our strong customer demand. But we have to admit the supply chain capacity is the primary limiting factor for the capital spending for the 2026. And we estimate that our base estimate to say for the 2026 is around RMB 15 billion to RMB 20 billion at this moment. Operator: This concludes today's question-and-answer session. I will now hand back for closing remarks. Unknown Executive: Thank you, operator. Thank you once again for joining us today. If you have any further questions, please feel free to contact us. Looking forward to speaking with you again next quarter. Have a nice day. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. 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See the 10 stocks » *Stock Advisor returns as of May 29, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Kingsoft Cloud (KC) Q1 2026 Earnings Transcript was originally published by The Motley Fool

BEIJING, May 27, 2026 /PRNewswire/ -- Kingsoft Cloud Holdings Limited ("Kingsoft Cloud" or the "Company") (NASDAQ: KC and HKEX: 3896), a leading cloud service provider in China, today announced its unaudited financial results for the first quarter ended March 31, 2026. Mr. Tao Zou, Chairman of the Board and Chief Executive Officer of Kingsoft Cloud, commented: "We continued to advance our 'High Quality and Sustainable Development Strategy'. The gross billing of AI business grew 90% year-over-year, accounting for more than half of the revenue from public cloud services for the first time. We are excited about the vast opportunities in this new era, from computing power to vertical solutions, as we continued to invest in infrastructure, enhance our capabilities, and strengthen customer base both within and outside of the ecosystem." Ms. Yi Li, Chief Financial Officer of Kingsoft Cloud, added, "We delivered a solid quarter, with our total revenue reaching RMB2,703.7 million, an increase of 37.2% year-over-year. Our adjusted gross profit was RMB351.4 million, increased by 7.2% year-over-year, despite overall supply chain challenges. Our adjusted EBITDA margin was 27.6%, increased by 11.4 percentage points year-over-year, in line with our AI revenue growth. In light of strong demand across diverse sectors, we remain steadfast in investing in our infrastructure, as our capital expenditures and leased assets obtained in combination amounted to RMB3 billion in Q1, and we expect to continue to invest to facilitate further business expansion throughout the year." First Quarter 2026 Financial Results Total Revenues reached RMB2,703.7 million (US$392.0[1] million), increased by 37.2% year-over-year from RMB1,970.0 million in the same quarter of 2025, and decreased by 2.1% quarter-over-quarter from RMB2,761.4 million in the fourth quarter of 2025. The year-over-year increase was mainly due to the revenue growth from Xiaomi and Kingsoft Ecosystem and AI related customers and our further penetration into enterprise cloud customers. The quarter-over-quarter decrease was mainly due to the seasonality impact for enterprise cloud. Revenues from public cloud services were RMB1,996.3 million (US$289.4 million), increased by 47.5% year-over-year from RMB1,353.5 million in the same quarter of 2025 and increased by 4.9% quarter-over-quarter from RMB1,902.4 million last quarter. The increase was mainly due to higher overall revenue driven by the growth of AI demands. Revenues from enterprise cloud services were RMB707.4 million (US$102.6 million), representing a year-over-year increase of 14.7% from RMB616.5 million in the same quarter of 2025 and a quarter-over-quarter decrease of 17.6% from RMB859.0 million last quarter. The sequential decrease was mainly due to the Chinese New Year impact and differentiated delivery schedules for various projects. Cost of revenues was RMB2,358.0 million (US$341.8 million), representing an increase of 42.8% from RMB1,651.7 million in the same quarter of 2025, which was mainly due to our investment into AI computing resources. IDC costs increased by 26. 1% year-over-year from RMB722.8 million to RMB911.1 million (US$132.1 million) this quarter, largely in line with our revenue expansion. Depreciation and amortization costs increased from RMB378.5 million in the same quarter of 2025 to RMB818.9 million (US$118.7 million) this quarter. The increase was mainly due to the depreciation of newly acquired and leased servers, and network equipment which were mainly related to AI business. Solution development and services costs increased by 13.8% year-over- year from RMB505.2 million in the same quarter of 2025 to RMB574.8 million (US$83.3 million) this quarter. The increase was mainly due to the solution personnel expansion of Camelot. Fulfillment costs and other costs were RMB1.8 million (US$0.3 million) and RMB51.4 million (US$7.4 million) this quarter. Gross profit was RMB345.7 million (US$50.1 million), representing an increase of 8.6% from RMB318.3 million in the same quarter of 2025. The increase was mainly due to the expansion of our revenue scale, especially the AI business. Gross margin was 12.8% in this quarter, compared with 16.2% in the same quarter of 2025 and 16.9% in the fourth quarter last year. The decrease was mainly due to the higher cost of servers along with the expansion of AI business, as well as upfront costs incurred for future revenue-generating activities with certain customers. Non-GAAP gross profit[2] was RMB351.4 million (US$50.9 million), compared with RMB327.7 million in the same period in 2025. Non-GAAP gross margin[2] was 13.0%, compared with 16.6% in the same period in 2025. Total operating expenses were RMB511.9 million (US$74.2 million), decreased by 7.4% from RMB552.5 million in the same quarter of 2025 and decreased by 3.8% from RMB531.8 million last quarter. Among which: Selling and marketing expenses were RMB123.8 million (US$17.9 million), decreased by 14.2% from RMB144.3 million in the same period in 2025 and increased by 0.7% from RMB122.9 million last quarter. The year-over-year decrease was mainly due to the decrease of share-based compensation, and the quarter-over-quarter increase was mainly due to the increase of personnel costs and marketing expenses. General and administrative expenses were RMB194.8 million (US$28.2 million), increased by 7.0% from RMB182.0 million in the same period in 2025 and decreased by 10.9% from RMB218.7 million last quarter. The year-over-year increase was mainly due to the increase of credit loss expenses, and the quarter-over-quarter decrease was mainly due to the decrease of personnel costs, and share-based compensation, as well as the decrease of credit loss expenses. Research and development expenses were RMB193.3 million (US$28.0 million), decreased by 14.5% from RMB226.2 million in the same period in 2025 and increased by 1.6% from RMB190.2 million last quarter. The year-over-year decrease was mainly due to the decrease of personnel costs and share-based compensation. Operating loss was RMB166.1 million (US$24.1 million), narrowed by 29. 1% from RMB234.2 million in the same period in 2025 and increased by 150.0% from RMB66.5 million last quarter. The year-over-year improvement was mainly due to the increase of revenue, while the sequential increase was mainly due to the impact of decrease in gross profit. Non-GAAP operating loss[3] was RMB59.8 million (US$8.7 million), compared with operating loss of RMB55.8 million in the same period last year and operating profit of RMB54.6 million last quarter. Net loss was RMB343.7 million (US$49.8 million), increased by 8.7% from RMB316.1 million in the same quarter of 2025 and increased by 111.0% from RMB162.9 million last quarter. Non-GAAP net loss[4] was RMB237.1 million (US$34.4 million), compared with RMB190.6 million in the same quarter of 2025 and RMB94.6 million last quarter. Non-GAAP EBITDA[5] was RMB747.5 million (US$108.4 million), compared with RMB318.5 million in the same quarter of 2025 and RMB785.2 million last quarter. Non-GAAP EBITDA margin was 27.6%, compared with 16.2% in the same quarter of 2025 and 28.4% last quarter. Basic and diluted net loss per share was RMB0.08 (US$0.01), compared with RMB0.08 in the same quarter of 2025 and RMB0.04 last quarter. Cash and cash equivalents were RMB4,903.8 million (US$710.9 million) as of March 31, 2026, compared with RMB6,018.0 million as of December 31, 2025. The decrease was mainly due to the investment into the procurement of computing power equipment. Outstanding ordinary shares were 4,490,544,972 as of March 31, 2026, equivalent to about 299,369,665 ADSs. Conference Call Information Kingsoft Cloud's management will host an earnings conference call on Wednesday, May 27, 2026 at 8:15 am, U.S. Eastern Time (8:15 pm, Beijing/Hong Kong Time on the same day). Participants can register for the conference call by navigating to https://register-conf.media-server.com/register/BI0c3c6d36e97944f292b62e0d1101c115. Once preregistration has been completed, participants will receive dial-in numbers, direct event passcode, and a unique access PIN. To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your PIN, and you will join the conference instantly. Additionally, a live and archived webcast of the conference call will also be available on the Company's investor relations website at http://ir.ksyun.com. Use of Non-GAAP Financial Measures The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In evaluating our business, we consider and use certain non-GAAP measures, Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP operating (loss) profit, Non-GAAP operating (loss) profit margin, Non-GAAP EBITDA, Non-GAAP EBITDA margin, Non-GAAP net loss and Non-GAAP net loss margin, as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define Non-GAAP gross profit as gross profit excluding share-based compensation expenses allocated in the cost of revenues, and we define Non-GAAP gross margin as Non-GAAP gross profit as a percentage of revenues. We define Non-GAAP operating (loss) profit as operating loss excluding share-based compensation expenses and amortization of intangible assets, and we define Non-GAAP operating (loss) profit margin as Non-GAAP operating (loss) profit as a percentage of revenues. We define Non-GAAP net loss as net loss excluding share-based compensation expenses and foreign exchange (gain) loss, and we define Non-GAAP net loss margin as Non-GAAP net loss as a percentage of revenues. We define Non-GAAP EBITDA as Non-GAAP net loss excluding interest income, interest expense, income tax expense (benefit) and depreciation and amortization, and we define Non-GAAP EBITDA margin as Non-GAAP EBITDA as a percentage of revenues. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We also believe that the use of these non-GAAP measures facilitates investors ' assessment of our operating performance. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. We compensate for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure. Exchange Rate Information This press release contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from RMB to U.S. dollars, in this press release, were made at a rate of RMB6.8980 to US$1.00, the noon buying rate in effect on March 31, 2026 as certified for customs purposes by the Federal Reserve Bank of New York. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the Business Outlook, and quotations from management in this announcement, as well as Kingsoft Cloud's strategic and operational plans, contain forward-looking statements. Kingsoft Cloud may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Kingsoft Cloud's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Kingsoft Cloud's goals and strategies; Kingsoft Cloud's future business development, results of operations and financial condition; relevant government policies and regulations relating to Kingsoft Cloud' s business and industry; the expected growth of the cloud service market in China; the expectation regarding the rate at which to gain customers, especially Premium Customers; Kingsoft Cloud's ability to monetize the customer base; fluctuations in general economic and business conditions in China; and the economy in China and elsewhere generally; China's political or social conditions and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Kingsoft Cloud's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Kingsoft Cloud does not undertake any obligation to update any forward-looking statement, except as required under applicable law. About Kingsoft Cloud Holdings Limited Kingsoft Cloud Holdings Limited (NASDAQ: KC and HKEX:3896) is a leading cloud service provider in China. With extensive cloud infrastructure, cutting-edge cloud-native products based on vigorous cloud technology research and development capabilities, well-architected industry-specific solutions and end-to-end fulfillment and deployment, Kingsoft Cloud offers comprehensive, reliable and trusted cloud service to customers in strategically selected verticals. For more information, please visit: http://ir.ksyun.com. For investor and media inquiries, please contact: Kingsoft Cloud Holdings Limited Wayne WangTel: +86 (10) 6292-7777 Ext. 6300Email:[email protected] Other information Mr. Tian Kaiyan has served as our senior vice president since 2025. View original content:https://www.prnewswire.com/news-releases/kingsoft-cloud-announces-unaudited-first-quarter-2026-financial-results-302783025.html

This article first appeared on GuruFocus. Total Revenue: RMB2.7 billion, a year-over-year growth of 37.2%. Public Cloud Revenue: RMB2.0 billion, a year-over-year increase of 47.5%. Enterprise Cloud Revenue: RMB710 million, a year-over-year increase of 14.7%. AI Cloud Gross Billings: RMB1.0 billion, a year-over-year increase of 90.1%. Adjusted Gross Profit: RMB351 million, up 8.6% year over year. Adjusted EBITDA: RMB748 million, a year-over-year increase of 134.7%. Adjusted EBITDA Margin: 27.6%, an improvement of 11.4 percentage points year over year. Revenue from Xiaomi and Kingsoft Ecosystem: RMB838 million, a year-over-year increase of 68.9%. Cost of Revenues: RMB2,358 million, up 43% year over year. IT Cost: RMB911 million, a year-over-year increase of 26%. Depreciation and Amortization Costs: RMB890 million, up from RMB379 million in the same quarter last year. Adjusted Operating Loss: RMB60 million, an increase from RMB56 million in the same period last year. Non-GAAP EBITDA Profit: RMB748 million, increased by 135% from the same quarter last year. Capital Expenditures: RMB2,985 million, including those financed by third parties and right of use assets. Warning! GuruFocus has detected 2 Warning Signs with KC. Is KC fairly valued? Test your thesis with our free DCF calculator. Release Date: May 27, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Kingsoft Cloud Holdings Ltd (NASDAQ:KC) reported a total revenue of RMB2.7 billion for Q1 2026, marking a year-over-year growth of 37.2%. Public cloud revenue reached RMB2.0 billion, a year-over-year increase of 47.5%. AI cloud gross billings increased by 90.1% year-over-year, accounting for over half of public cloud revenue for the first time. Revenue from the Xiaomi and Kingsoft ecosystem grew by 68.9% year-over-year, contributing significantly to total revenue. Adjusted EBITDA was RMB748 million, representing a year-over-year increase of 134.7%, with a margin improvement of 11.4 percentage points. Adjusted gross margin decreased from 70% last quarter to 30% this quarter, primarily due to higher server costs and upfront costs for future revenue-generating activities. Total cost of revenues increased by 43% year-over-year, driven by investments in AI computing resources. Depreciation and amortization costs rose significantly due to newly acquired and leased servers and network equipment. Adjusted operating loss increased by 7% from the same period last year, despite revenue growth. The company faces supply chain restrictions, which limit its ability to meet the strong demand for AI services. Q: Could you share the current revenue scale and margin levels of the StarFlow MaaS platform, and what is management's outlook on this business? A: Our token business started from a small base but has seen huge demand from large-scale customers. We are optimistic about its growth but will wait a few more quarters before disclosing more details. The margin levels for this business are generally higher than traditional cloud computing, with improvements from technology advancements and algorithm optimization. However, due to its rapid expansion, we are not providing specific margin numbers at this stage. Q: Have there been increases in the average pricing for newly signed public cloud contracts in the first and second quarters of this year? A: Yes, there has been a significant increase in demand for our cloud computing services, which has led to price hikes. This trend is expected to continue in Q2 and possibly beyond. The cost pressure from upstream is manageable and should not negatively affect our margins. Q: What are the main reasons for the drop in gross margin in Q1, and has the product price increase been factored in? A: The 3% decrease in gross margin is due to seasonal factors, with 30% of revenue coming from enterprise cloud, and upfront costs for future revenue-generating activities. We expect the gross margin to recover to normal levels in the coming quarters. Q: How does management view Kingsoft Cloud's competitive position in the landscape of high demand for computing power and partnerships beyond public cloud vendors? A: We see a shift towards cooperation among former competitors due to the strong AI demand. This reflects complementary capabilities and the need to overcome supply-demand gaps. We view this as a cooperative opportunity rather than purely competitive. Q: What is the demand outlook for public cloud in Q2 and the second half of the year, and how is the demand mix for inferencing and model training? A: AI demand remains exceedingly strong, with a backlog subject to supply chain restrictions. Sectors like autonomous driving and robotics have strong model training demands, while internet companies and large language models drive inference demand. We have flexible contract arrangements to maximize benefits amid rising upstream costs. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Kingsoft Cloud Holdings Limited Sponsored ADR? Here are five stocks we like better. Kingsoft Cloud posted strong Q1 2026 results, with revenue up 37.2% year over year to RMB 2.7 billion and public cloud revenue rising 47.5%. Adjusted EBITDA reached RMB 748 million, with a 27.6% margin. AI cloud became the key growth engine, contributing 50.1% of public cloud revenue for the first time and driving AI business revenue up 91% to RMB 998 million. Management said demand for AI coding, inference and token services is accelerating rapidly. Growth is broadening beyond Xiaomi ecosystem customers, with non-ecosystem top-five customer revenue up 66% and AI services expanding into autonomous driving, logistics, fintech, gaming and video streaming. The company also plans heavy infrastructure investment, guiding full-year 2026 capex to roughly RMB 15 billion to RMB 20 billion. Kingsoft Cloud (NASDAQ:KC) reported stronger first-quarter 2026 revenue as demand for artificial intelligence-related cloud services accelerated, with management saying AI cloud became the majority contributor to the company’s public cloud services revenue for the first time. Chairman and CEO Tao Zou said total revenue reached RMB 2.7 billion in the quarter, up 37.2% year over year. Public cloud revenue rose 47.5% to RMB 2.0 billion, while enterprise cloud revenue increased 14.7% to RMB 710 million. Adjusted gross profit was RMB 351 million, and adjusted EBITDA reached RMB 748 million, with an adjusted EBITDA margin of 27.6%, according to Zou. → Voya Financial Grows Earnings Across All 3 Business Segments “Since the beginning of 2026, the continued adoption of AI coding, together with the rapid rise of AI agents, have driven AI to evolve from chat-oriented to action-oriented use cases,” Zou said through a translator. He said that shift is increasing demand for both model inference and training, expanding the cloud computing market opportunity. Management said AI cloud gross billings reached RMB 1.0 billion in the quarter, up 90.1% from a year earlier. Zou said AI cloud accounted for 50.1% of public cloud revenue, marking the first time it represented more than half of that segment. → SpaceX Gets the Attention, But These 4 Stocks Could Get the Returns CFO Yi Li said the company’s AI business revenue increased 91% year over year to RMB 998 million. She described the quarter as “a pivotal structural shift” in Kingsoft Cloud’s growth mix. Zou highlighted rapid growth in the company’s token services business, saying April 2026 revenue from those services was 53 times the level recorded in January. During the question-and-answer session, Senior Vice President Tao Liu said the token business began from a relatively small base at the end of last year and beginning of this year but is benefiting from strong demand from large customers, particularly for AI coding and agent use cases. → Ross Stores Earnings Beat Sends Stock To New Highs Liu said the inference and token services business generally carries a higher margin than traditional cloud computing, supported by technology improvements, algorithm optimization and operating model enhancements. However, he said the company would not provide specific margin figures because the business remains in a rapid expansion phase. Revenue from the Xiaomi and Kingsoft ecosystem totaled RMB 838 million, up 68.9% year over year and equal to 31.0% of total revenue, Zou said. He said Xiaomi’s investment in its “human-car-home” smart ecosystem and AI initiatives is creating additional opportunities for Kingsoft Cloud. The company plans to revise annual caps for continuing connected transactions with Xiaomi. Zou said the revised annual caps with Xiaomi and Kingsoft under the 2025-to-2027 framework would reach RMB 14.2 billion. In response to a question from Goldman Sachs analyst Timothy Zhao about Xiaomi’s MiMo large language model, Liu said most training-related resource demand comes through Kingsoft Cloud and that the company continues to see growing demand. He added that since the launch of MiMo V2, resources have been reallocated toward inference for that model, and management remains optimistic about future inference growth tied to MiMo, while noting that it ultimately depends on Xiaomi’s returns. Zou said revenue from Kingsoft Cloud’s top five non-ecosystem customers increased 66% year over year. He cited AI cloud services provided to an autonomous driving company to support large-scale data processing and end-to-end neural network training iterations. The company also said its StarFlow training and inference platform supported token demand from top-tier internet companies. Zou said Kingsoft Cloud’s AI business now spans industries including internet, AI companies, autonomous driving, logistics, fintech, gaming and video streaming. During the Q&A session, Liu said demand in the second quarter is supported by a “very long list of backlog,” with supply chain constraints being the main limiting factor. He said autonomous driving and robotics customers tend to have strong model training requirements, while internet companies and large language model companies are driving inference demand for AI coding and agents. In enterprise cloud, Zou cited several public services, healthcare and enterprise services projects. The company launched a state-owned cloud platform in Shenzhen for state-owned enterprises with security, compliance and data confidentiality needs. It also built a supply chain public information platform in Hubei using an architecture described as a provincial platform plus multiple prefecture and county platforms. In healthcare, Kingsoft Cloud worked with Union Hospital affiliated with Tongji Medical College of Huazhong University of Science and Technology on a data governance project. The company also signed a contract for a large-scale medical consortium platform project based on its Data Middle Platform. On the product side, Zou said the StarFlow platform expanded its model ecosystem with new API services for speech recognition and speech synthesis, as well as more image and video generation models. Kingsoft Cloud also launched Agent Engine for developing, deploying and managing AI agents, and introduced one-click agent deployment on cloud hosts for applications including OpenClaw and Hermes. Li said total cost of revenues was RMB 2.358 billion, up 43% year over year, mainly due to investment in AI computing resources. Depreciation and amortization rose to RMB 890 million from RMB 379 million a year earlier, reflecting newly acquired and leased servers and network equipment tied largely to the AI business. Adjusted operating expenses, excluding share-based compensation, were RMB 455 million and remained stable versus both the prior year and prior quarter, Li said. Adjusted operating loss was RMB 60 million, compared with RMB 56 million a year earlier, while adjusted operating loss margin narrowed to 2% from 3%. Capital expenditures, including third-party financed spending and right-of-use assets obtained through financially settled leases, were RMB 2.985 billion in the quarter. Li said the company expects to keep investing in infrastructure to support expansion and later estimated full-year 2026 capital spending at roughly RMB 15 billion to RMB 20 billion, while noting supply chain capacity is the primary limiting factor. Senior Vice President Kaiyan Tian said rising upstream prices for components, servers and other materials continued in the first quarter and are expected by market participants to continue into the second quarter and potentially beyond. He said customers believe now is the right time to secure more computing power, making it possible for the company to pass through cost pressures without negatively affecting margins in the current market environment. Li said first-quarter gross margin was affected by seasonal factors and upfront costs tied to future revenue-generating activities with certain customers. She said the company expects gross margin to recover to a normal level in coming quarters. Kingsoft Cloud Holdings Limited (NASDAQ: KC) is a leading provider of cloud computing services in China, offering a comprehensive suite of infrastructure and platform solutions to enterprise customers. Established in 2012 as a subsidiary of Kingsoft Corporation, the company has grown into an independent public entity with dual listings, serving as a critical backbone for digital transformation across multiple industries. Headquartered in Beijing, Kingsoft Cloud leverages advanced technologies to optimize cloud operations and deliver scalable, reliable services. The company's core offerings span Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS), encompassing compute, storage, database, content delivery networks (CDN) and security solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Kingsoft Cloud Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.