Kingsoft (3888) Q2 2024 earnings summary

Executive summary

• Achieved double-digit revenue and profit growth in Q2 and H1 2024, with Q2 revenue at RMB2,474 million, up 13% year-over-year and 16% quarter-on-quarter, and H1 revenue at RMB4,610.6 million, up 11% year-over-year.

• Operating profit for Q2 2024 reached RMB794 million, up 18% year-over-year and 32% quarter-on-quarter; H1 2024 profit attributable to owners was RMB677.9 million, up from RMB249.5 million in H1 2023.

• Office software and services and online games contributed nearly equally to revenue, with office software at 52% and online games at 48% in H1 2024.

• Launched WPS AI 2.0 and expanded AI-driven office solutions for individuals, enterprises, and government clients.

• JX3 Ultimate mobile game launch significantly boosted user engagement and revenue.

Financial highlights

• Q2 2024 revenue: RMB2,474 million, up 13% year-over-year and 16% quarter-on-quarter; H1 2024 revenue: RMB4,610.6 million, up 11% year-over-year.

• Q2 2024 operating profit: RMB794 million, up 18% year-over-year and 32% quarter-on-quarter.

• Q2 2024 gross margin: 83% (down 1 percentage point year-over-year, up 2 points quarter-on-quarter); H1 2024 gross margin: 82%.

• Net profit margin (including share-based compensation): 18% in Q2 2024, compared to 6% in Q2 2023.

• Cash and bank deposits as of June 30, 2024, totaled RMB19,713.9 million.

Outlook and guidance

• Continued focus on user-centric, technology-driven innovation, AI, cloud, and collaboration to enhance office software and sustain long-term value.

• Online games business to deepen established segments and pursue innovation, with new releases and events planned for H2 2024.

• Office business subscription transformation is accelerating, with contract growth outpacing income growth.

• AI commercialization is progressing well, with strong confidence in future growth.