Kingsoft (3888) Q2 2024 earnings summary

Executive summary

• Achieved strong revenue and operating profit growth in Q2 2024, with total revenues of RMB2,474 million, up 13% year-over-year and 16% quarter-over-quarter, driven by office software and online games.

• Operating profit reached RMB794 million, up 18% year-over-year and 32% quarter-over-quarter; net profit attributable to shareholders was RMB393 million, a significant increase from Q2 2023.

• H1 2024 revenue was RMB4,611 million (+11% YoY); net profit attributable to owners was RMB678 million (+171% YoY).

• Continued strategic focus on AI, collaboration, cloud, and content, with major launches including WPS AI 2.0 and JX3 Ultimate.

• Share repurchase of HKD 400 million in H1 2024, representing 1.5% of total shareholding.

Financial highlights

• Q2 2024 revenue: RMB2,474 million (+13% YoY, +16% QoQ); office software/services contributed 48%, online games/others 52%.

• Office software/services Q2 revenue: RMB1,188 million (+6% YoY, -3% QoQ); online games/others: RMB1,286 million (+20% YoY, +41% QoQ).

• Gross profit: RMB2,042 million (+11% YoY, +17% QoQ); gross margin 83% (down 1pp YoY, up 2pp QoQ).

• H1 2024 gross profit: RMB3,782.7 million (+9% YoY); gross margin 82%.

• Net cash from operating activities: RMB1,374.3 million (H1 2024).

Outlook and guidance

• Expect continued growth in office subscription business, with accelerating contract growth and strong user base expansion.

• AI commercialization is progressing well, with confidence in future growth as product experience improves.

• Gaming segment anticipates strong performance from JX3 Ultimate and ongoing content updates, with new releases and events planned for H2 2024.