Beijing Kingsoft Office Software (688111) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues reached RMB 2.47 billion, up 13% year-on-year and 16% quarter-on-quarter, with operating profit of RMB 719 million, up 18% year-on-year and 13.2% quarter-on-quarter.

• Net profit attributable to shareholders surged 588% year-on-year to RMB 393 million in Q2 2024; H1 2024 net profit was RMB 721 million, up 20.38% year-on-year.

• H1 2024 revenue was RMB 2.41 billion, up 11.09% year-on-year, with domestic personal office subscription revenue up 22.17%.

• Monthly active devices reached 602 million, up 3.08% year-on-year; annual paid personal users reached 38.15 million, up 14.79%.

• R&D investment for H1 2024 was RMB 808 million, up 12.61% year-on-year, accounting for 33.47% of revenue.

Financial highlights

• Q2 2024 revenue: RMB 2,474 million, up 30% year-on-year and 60% quarter-on-quarter.

• Office software and services contributed 48% of Q2 revenue, online games and others 52%.

• Gross profit margin was 83% in Q2, down one percentage point year-on-year, up two points quarter-on-quarter; H1 gross margin was 84.9%.

• Operating profit before share-based compensation: RMB 876 million, up 14% year-on-year and 29% quarter-on-quarter.

• Cash resources as of June 30, 2024: RMB 24 billion.

Outlook and guidance

• Continued focus on user-centric, technology-driven innovation and sustainable long-term value creation.

• Office business expects strong growth in institutional subscriptions, with a shift from annual to monthly billing smoothing revenue recognition.

• AI commercialization and SaaS transition progressing, with WPS AI 2.0 launched and commercialized.

• Plans to accelerate public cloud business and optimize revenue structure.