Kingsoft Cloud (KC) Q3 2024 earnings summary

Executive summary

• Achieved 16% year-over-year revenue growth in Q3 2024, reaching RMB 1,885.6 million, outpacing industry average and marking a return to double-digit growth.

• Both public cloud and enterprise cloud businesses delivered double-digit year-over-year growth, driven by AI and ecosystem strategies.

• AI revenue surged, now accounting for 31% of public cloud revenue, with a 6.9-fold year-over-year increase and reaching RMB 362 million.

• Revenue from Xiaomi and Kingsoft ecosystem grew 36% year-over-year, supporting strong market share gains.

• Gross profit rose 54.6% year-over-year to RMB 303.4 million, with gross margin improving to 16.1% from 12.1% last year.

Financial highlights

• Q3 2024 revenue reached RMB 1.89 billion, up 16% year-over-year.

• Adjusted gross profit was RMB 308 million, up 56.7% year-over-year; adjusted gross margin rose to 16.3%.

• Adjusted EBITDA was RMB 185 million, with a margin of 9.8%, up 13 percentage points year-over-year.

• Net operating cash inflow was CNY 228 million, reflecting strong cash generation.

• Cash and equivalents stood at CNY 1,617.9 million as of September 30, 2024.

Outlook and guidance

• Q4 2024 expected to deliver accelerated revenue growth, exceeding industry average.

• Profitability, including adjusted operating profit, anticipated to improve significantly in Q4.

• AI and ecosystem strategies projected to further increase revenue contribution and market share.

• Applying for a three-year revenue cap of CNY 11.3 billion from Xiaomi and Kingsoft Group, supporting future growth.