Kingsoft Cloud (KC) Q1 2025 earnings summary

Executive summary

• Revenue grew 11% year-over-year to RMB 1.97 billion, driven by strong AI business momentum and ecosystem partnerships, but declined 11.7% sequentially due to seasonality.

• AI business gross billing surged 228% year-over-year to RMB 525 million, now 39% of public cloud revenue.

• Non-GAAP gross profit grew 9.6% year-over-year to RMB 327.7 million, with non-GAAP EBITDA margin at 16.2%.

• Adjusted operating loss narrowed by 56% year-over-year to RMB 55.8 million.

• Xiaomi and Kingsoft ecosystem revenue surged 50% year-over-year to RMB 500 million, contributing 25% of total revenue.

Financial highlights

• Total revenue: RMB 1,970 million, up 11% year-over-year.

• Public cloud revenue: RMB 1,353.5 million, up 14% year-over-year; enterprise cloud revenue: RMB 616.5 million, up 5% year-over-year, but down 25% sequentially.

• AI business gross billing: RMB 525 million, up 228% year-over-year and 11% quarter-over-quarter.

• Non-GAAP gross profit: RMB 327.7 million, up 9.6% year-over-year, but down 23.4% quarter-over-quarter.

• Non-GAAP EBITDA profit: RMB 318.5 million, up 8.6% year-over-year; margin at 16.2%.

• Adjusted operating loss: RMB 55.8 million, narrowed by 56% year-over-year.

• Cash and cash equivalents: RMB 2,322.7 million as of March 31, 2025.

• Net loss was RMB 316.1 million, improved from RMB 363.6 million year-over-year.

• Non-GAAP net loss was RMB 190.6 million, improved from RMB 217.3 million year-over-year.

Outlook and guidance

• Expect margin profile to improve in subsequent quarters, especially in the second half of the year, driven by AI project deployments and ecosystem demand.

• No formal top-line revenue guidance provided, but management anticipates better OP and EBITDA margins as AI business penetration increases.

• Management remains confident in AI-related investments and sustainable business development despite global supply chain uncertainties.

• Cloud infrastructure ready to serve growing AI demand; confident in capturing AI capital opportunities.