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What is Kingsoft Cloud's gross profit margin?

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What were the key takeaways from Kingsoft Cloud's earnings call?

What factors drove the changes in Kingsoft Cloud's revenue and profit?

- **Revenue Surge**: 31% YoY growth to RMB 2.48 billion, driven by 49% public cloud expansion and 120% intelligent computing billings.\n- **Profit Breakthrough**: First positive net profit (RMB 28.73 million) with 16% gross margin.\n- **Ecosystem Dominance**: Xiaomi/Kingsoft ecosystem contributes 28% of revenue (+84% YoY).\n- **AI Expansion**: Launching model API services and advancing enterprise AI projects in healthcare and public services.\n- **Cost Efficiency**: Operating expenses down 70% YoY, with 8% of HKD 2.8B raise allocated to AI infrastructure.\n- **Future Growth**: Robotics, API services, and inference-driven margin expansion.\n

**【CEO Summary Section】**
- **Revenue Growth**: Q3 2025 revenue reached RMB 2.48 billion, up 31% YoY (vs. 24% in Q2). Public cloud revenue surged 49% YoY to RMB 1.75 billion, while intelligent computing cloud gross billings rose 120% YoY to RMB 782 million (45% of public cloud revenue).\n- **Ecosystem Contribution**: Xiaomi/Kingsoft ecosystem revenue hit RMB 691 million (+84% YoY), accounting for 28% of total revenue.\n- **Profitability**: Adjusted gross profit up 28% YoY to RMB 393 million. First positive adjusted net profit of RMB 28.73 million.\n- **Key Initiatives**:\n  - Expanded AI inference support for top internet firms\n  - Launched StarFlow platform with model API services\n  - Advanced enterprise cloud projects in public services (e.g., Qingyang City) and healthcare (AI + TCM)\n  - Wuhan R&D expansion (2.8x 2022 headcount)\n
**【CFO Financial Commentary】**
- **Revenue Mix**: Public cloud (71%), enterprise cloud (29%).\n- **Gross Margin**: 16% (vs. 5% Q2), driven by intelligent cloud scale.\n- **Cost Control**: Operating expenses down 70% YoY to RMB 421 million.\n- **Capital Raise**: HKD 2.8 billion raised (8% for AI infrastructure).\n- **Margin Outlook**: EBITDA margin ~20% for 2025, with Q3 improvement boosted by one-time income.\n
**【Q&A Highlights】**
- **AI Revenue Drivers**: Delayed revenue recognition from Q2, expanding inference demand.\n- **Margin Trends**: Higher margins expected from inference vs. training.\n- **Future Growth**: Robotics, API services, and enterprise AI adoption.\n- **Resource Allocation**: Mix of procurement (for large, reliable clients) and leasing (flexibility for smaller firms), no fixed allocation ratio.\n- **Pricing**: Similar for training/inference; API services may offer better margins.\n

Kingsoft Cloud Holdings Limited (KC) Q3 2025 Earnings Call Transcript

- **Revenue Growth Accelerates**: Q2 revenue up 24% YoY to RMB 2.35 billion, driven by 32% YoY public cloud growth.
- **AI Dominates Public Cloud**: AI gross billings reach RMB 728 million (120% YoY), accounting for 45% of public cloud revenue.
- **Ecosystem Synergy**: Xiaomi/Kingsoft ecosystem revenue jumps 70% YoY to RMB 629 million (27% of total).
- **Enterprise AI Expansion**: 10% YoY growth in enterprise cloud, with AI projects in healthcare and finance.
- **Gross Margin Stabilization**: 45.6% gross margin with mixed procurement models, offsetting leasing cost pressures.
- **CapEx Intensifies**: RMB 10 billion annual CapEx target, RMB 5 billion spent in H1 for AI clusters.


**【CEO Summary Section】**
- Q2 2025 revenue reached RMB 2.35 billion, up 24% YoY, with public cloud growing 32% YoY to RMB 1.63 billion.
- AI gross billings surged 120% YoY to RMB 728 million, accounting for 45% of public cloud revenue.
- Xiaomi and Kingsoft ecosystem revenue rose 70% YoY to RMB 629 million, contributing 27% of total revenue.
- Enterprise cloud revenue increased 10% YoY to RMB 724 million, driven by AI adoption in public services and healthcare.
- New Galaxy Stack version supports multi-processor platforms and private deployment, enhancing AI workload optimization.

**【CFO Financial Commentary】**
- Adjusted gross profit reached RMB 1.07 billion, up 8.4% YoY, with gross margin at 45.6%.
- Operating expenses totaled RMB 560.7 million, up 1% YoY, with R&D costs down 8.5% YoY.
- Non-GAAP EBITDA profit was RMB 400 million, up 5.7x YoY, with EBITDA margin at 73%.
- CapEx for the year is expected to be RMB 10 billion, with RMB 5 billion spent in H1.
- Gross margin impacted by higher leasing costs for AI clusters, but stabilized at current levels.

**【Q&A Key Highlights】**
- H2 2025 revenue growth expected to accelerate, with stronger demand for inference computing power.
- Gross margin stabilization at current levels due to mixed procurement models (self-owned, profit-sharing, agent).
- AI capacity utilization remains strong, with domestic chip supply sufficient for customer demand.
- Enterprise cloud growth to benefit from AI adoption in healthcare, finance, and public services.
- Agent model for customer procurement and operation being piloted with key clients.


Kingsoft Cloud Holdings Limited (KC)-20 Aug 25-2025 Q2 Earnings call transcript

- **Revenue Growth**: Q1 2025 revenue up 11% YoY to RMB1.97 billion, with public cloud leading at 14% YoY growth.
- **AI Dominance**: AI gross billing surging 200% YoY to RMB525 million (39% of public cloud), with new clusters set to launch in Q2.
- **Ecosystem Synergy**: Xiaomi and Kingsoft collaboration contributes 25% of revenue, up 50% YoY.
- **Profitability**: Non-GAAP EBITDA margin expands to 16.2% (vs 1.9% YoY), but QoQ gross margin decline reflects AI investment headwinds.
- **Q2 Outlook**: Revenue momentum to accelerate as Q1 cluster deployments contribute, with margin improvement driven by AI scale and ecosystem deals.


**【CEO Business Highlights】**
- Q1 2025 total revenue reached RMB1.97 billion, up 11% YoY, driven by 14% YoY growth in public cloud (RMB1.35 billion) and 5% YoY growth in enterprise cloud (RMB616 million). 
- AI gross billing surged 200% YoY to RMB525 million (39% of public cloud revenue), with QoQ growth of 11%. New AI computing clusters launching in Q2 will further boost AI business.
- Ecosystem collaboration with Xiaomi and Kingsoft contributed RMB500 million (25% of total revenue), up 50% YoY. Xiaomi's 7B-parameter model was trained on Kingsoft Cloud clusters.
- Non-GAAP gross profit rose 9.6% YoY to RMB327 million, but QoQ margin declined 2.6pts to 16.6% due to lower enterprise cloud mix and upfront AI investments.

**【CFO Financial Breakdown】**
- Q1 2025 total revenue: RMB1.97 billion (+11% YoY)
- Public cloud: RMB1.35 billion (+14% YoY)
- Enterprise cloud: RMB616 million (+5% YoY)
- AI gross billing: RMB525 million (+200% YoY)
- CapEx: RMB605 million (flexible financing via leasing and bank loans)
- Non-GAAP operating loss: RMB55.8 million (narrowed 56% YoY)
- Non-GAAP EBITDA margin: 16.2% (vs 1.9% YoY)

**【Key Q&A Insights】**
1. **Q1 Growth Slowdown**: Enterprise cloud QoQ decline due to seasonal project delays; public cloud growth delayed by cluster delivery timing. Q2 will see revenue from Q1 cluster deployments.
2. **Xiaomi Demand**: Xiaomi's AI inference needs will drive incremental revenue, though timing varies by project.
3. **Government AI Pricing**: All-in-one AI machines priced based on hardware configuration, targeting public service and state-owned asset sectors.
4. **Profit Margin Outlook**: Q2+ margin improvement expected as AI business scales and ecosystem collaboration drives higher-margin revenue. Non-GAAP EBITDA margin to lead operating margin recovery.
5. **CapEx Strategy**: RMB605 million Q1 CapEx includes own cash and third-party leasing; 2025 total AI investment to be disclosed in Q2.
6. **Model Size Trends**: Shift to smaller models (e.g., 30B/10B params) benefits Kingsoft Cloud by reducing reliance on large model training and increasing inference workloads from Xiaomi ecosystem.


Kingsoft Cloud Holdings Limited (KC) Q1 2025 Earnings Call Transcript

- **30% YoY revenue growth**: Public cloud (+34%) and enterprise cloud (+23%) lead industry recovery.
- **AI dominance**: 500% YoY AI gross billing (RMB 474M) powers 34% of public cloud revenue.
- **Ecosystem strength**: Xiaomi-Kingsoft revenue up 78% YoY to RMB 493M (22% of total).
- **Profitability breakthrough**: First positive non-GAAP operating profit, EBITDA margin at 16.1%.
- **2025 vision**: RMB 10B AI investment, targeting 30%+ AI revenue contribution.

**【CEO Business Overview】**
- Q4 2024 total revenue reached RMB 2.23 billion, up 30% YoY, with public cloud (+34%) and enterprise cloud (+23%) both outpacing industry growth.
- Non-GAAP operating profit turned positive for the first time at RMB 24.4 million, with operating margin improving 12ppt to 1.1%.
- AI-related gross billing surged 500% YoY to RMB 474 million, contributing 34% of public cloud revenue.
- Xiaomi-Kingsoft ecosystem revenue grew 78% YoY to RMB 493 million, accounting for 22% of total revenue.

**【CFO Financial Highlights】**
- Q4 2024 non-GAAP gross profit reached RMB 427.7 million (+63% YoY), with gross margin at 19.2%.
- Non-GAAP EBITDA margin expanded to 16.1%, up 17.7ppt YoY.
- 2025 capital expenditure plan includes RMB 10 billion for AI infrastructure, supported by ecosystem partnerships.
- Cash reserves of RMB 2.65 billion provide liquidity for growth and AI investments.

**【Q&A Key Takeaways】**
- AI inference demand accelerating across industries, with Xiaomi-Kingsoft ecosystem driving 76% YoY revenue growth.
- 2025 revenue growth expected to accelerate, with AI-related revenue targeting 30%+ of public cloud.
- Margin expansion to continue, with EBITDA margin leading the way.
- Asset-light model and ecosystem support mitigate supply chain risks.

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