Kingsoft Cloud (KC) Q1 2025 earnings summary

Executive summary

• Achieved 11% year-over-year revenue growth to RMB 1.97 billion, driven by strong AI business momentum and ecosystem partnerships, though revenue 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.

• Adjusted gross profit reached RMB 327.7 million, up 9.6% year-over-year, with adjusted gross margin at 16.6%.

• Adjusted operating loss narrowed to RMB 55.8 million, a 56% improvement year-over-year.

• Adjusted EBITDA reached RMB 318.5 million, with a margin of 16.2%.

Financial highlights

• Public cloud revenue rose 14% year-over-year to RMB 1.35 billion; enterprise cloud revenue increased 5% year-over-year to RMB 616 million.

• Cost of revenues increased 11.4% year-over-year, mainly due to AI computing investments; IDC costs fell 6% due to procurement controls.

• 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.

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

Outlook and guidance

• Management expects margin profile to improve in the second half of the year, with top-line growth from large AI projects and ecosystem demand.

• No formal full-year revenue guidance provided, but margin expansion anticipated as AI business scales.

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