How did KC's Q4 2024 earnings surprise investors?

Kingsoft Cloud's (KC) Q4 2024 earnings report surprised investors with strong revenue growth and profitability, marking a significant turnaround from the previous year's decline. 1. **Revenue Growth**: Kingsoft Cloud reported a total revenue of RMB2.23 billion for Q4 2024, marking a 30% year-over-year growth. This growth rate doubled from the previous quarter, positioning the company as a leader in the industry. The company demonstrated balanced growth across its segments, with Public Cloud revenue increasing by 34% year-over-year and Enterprise Cloud revenue rising by 23% over the same period. 2. **Profitability**: Kingsoft Cloud achieved profitability for the first time, reporting a non-GAAP operating margin of 1.1%, a significant turnaround from a previous loss of 10.9%. The company's focus on AI applications and strategic partnerships with Xiaomi and Kingsoft Group contributed to this robust performance. The AI-related business saw a surge, with gross billing reaching RMB474 million, reflecting a nearly 500% year-over-year growth and contributing 34% to the Public Cloud revenue. Revenues from the Xiaomi and Kingsoft ecosystem grew by 78% year-over-year, reaching RMB493 million, increasing the ecosystem’s share of total revenues to 22%. 3. **Stock Reaction**: Following the earnings release, Kingsoft Cloud's stock surged, reflecting investor optimism about the company's growth prospects and profitability. The stock price soared after the results, which were marginally better than expected, with revenues slightly beating the consensus. Overall, Kingsoft Cloud's Q4 2024 earnings showcased strong growth in revenue and profitability, driven by strategic focus on AI applications, ecosystem partnerships, and effective cost management. These factors contributed to a positive surprise for investors and bolstered confidence in the company's future growth trajectory.