Kingsoft Cloud's 2025 Q2 Earnings Call: Navigating Contradictions in Growth Strategy, AI Investment, and Supply Challenges

Growth Model and Capital Expenditure Strategy, Revenue Growth Outlook and AI as a Growth Driver, AI CapEx and Funding Sources, Impact of Chip Restrictions and Domestic Production, Inference vs. Training Demand in AI are the key contradictions discussed in Kingsoft Cloud's latest 2025Q2 earnings call.



Revenue Growth and AI Impact:
- Kingsoft Cloud reported revenue of RMB 2.35 billion for Q2 2025, growing by 24% year-over-year, with a significant acceleration from previous quarters.
- The growth was driven by the high-speed growth of AI intelligent computing business and the increased demand for basic cloud services.

AI Gross Billings and Public Cloud Growth:
- AI gross billings reached RMB 728 million, representing a year-over-year increase of over 120% and a quarter-over-quarter growth of 39%, accounting for 45% of public cloud revenue.
- The rapid development of Gen AI and its implementation across diverse industry verticals have lifted the ceiling of cloud services market.

Xiaomi and Kingsoft Ecosystem Contribution:
- Revenue from Xiaomi and Kingsoft ecosystem reached RMB 629 million, up 70% year-over-year, contributing 27% to total revenue.
- The growth was attributed to the firm's strategic positioning as the sole cloud platform of the Xiaomi and Kingsoft ecosystem, pursuing symbiotic growth and mutual success.

Public and Enterprise Cloud Performance:
- Public cloud revenue increased by 32% year-over-year to RMB 1.63 billion, while enterprise cloud revenue grew by 10% to RMB 724 million.
- The growth in public cloud was driven by AI-related business and strong demand for IT delivery services, while enterprise cloud benefited from high demand in public services and health care sectors.

Financial Performance and AI Investment:
- Adjusted gross profit increased by 8.4% year-over-year, mainly due to the expansion of revenue scale and enlarged contribution from AI business.
- The company has strong liquidity with RMB 464.1 million in cash and cash equivalents, supporting operations and AI investments, primarily from public equity offerings and private placements.