Summary of Conference Call Company and Industry Overview - The conference call primarily discusses **Kingsoft Cloud** and its strategic direction under the leadership of the new CEO, **Zou**, who has made adjustments to the company's business strategy since mid-2022 [1][14]. Key Financial Metrics - The company has shown a positive trend in financial performance, with a gross profit margin reaching **16.3%** in Q3, indicating room for further improvement [4]. - Adjusted profit margins have also improved, with the adjusted EBITDA margin reaching **9.8%** in Q3, with expectations for further growth in Q4 [5][34]. - The revenue composition is shifting, with a decrease in the CDN business and an increase in the AI business, which is expected to contribute significantly to future revenue [2][6]. Strategic Focus Areas - The company emphasizes its commitment to **AI** and has seen AI revenue account for **31%** of its cloud revenue by Q3, reflecting rapid growth in this segment [9]. - Collaboration with **Xiaomi** and **Kingsoft** is highlighted as a key opportunity, particularly in AI applications and cloud services [3][8]. - The company is investing in R&D, with new centers established in **Beijing** and **Wuhan**, aiming to leverage local talent and reduce costs [10][26]. Customer and Revenue Dynamics - The customer base is diversifying, with a notable reduction in reliance on a single large client, which now accounts for about **10%** of total revenue [7][8]. - Revenue from Xiaomi and Kingsoft has increased significantly, contributing to over **36%** of total revenue growth in Q3 [8]. - The company is also focusing on sustainable growth through strategic partnerships and ecosystem development, which is expected to enhance its market position [9][10]. Market Challenges and Opportunities - The company faces challenges related to bandwidth cost increases and pricing pressures, which have impacted profit margins [7]. - Despite these challenges, the company anticipates a healthy growth trajectory in the AI and industry cloud sectors, with expectations for continued double-digit growth [6][39]. - The overall market for AI cloud services has shown robust demand, with the company positioned to capitalize on this trend [21][41]. Future Outlook - The company is optimistic about its future, with plans to enhance its AI capabilities and expand its market share in the cloud services sector [12][41]. - There is a focus on maintaining a balance between revenue growth and cost management, ensuring sustainable profitability [25][34]. - The management is confident in achieving operational profitability in the near term, driven by improved margins and cost efficiencies [34][35]. Additional Insights - The company is exploring innovative financing options to support its growth initiatives, including potential collaborations with Xiaomi and Kingsoft for funding [24][25]. - The strategic direction includes a commitment to maintaining a multi-cloud approach to mitigate risks associated with dependency on single cloud providers [29][31]. This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic focus, financial performance, and market outlook.

Group 1 - The stock price of Kingsoft Cloud has significantly increased, reaching HKD 3.87, which is an increase of HKD 0.46 or 13.49% compared to the previous trading day [1] - The stock exhibited a volatility of 8.50% and a turnover rate of 1.52% [1] - Analysts from Credit Lyonnais and CICC have raised their target prices for Kingsoft Cloud to USD 5.5 and USD 6.5 respectively [1] Group 2 - Bank of America has also revised its revenue forecasts for Kingsoft Cloud upwards by 4% to 8% for the years 2024 to 2026 [1]

Investment Rating - The report upgrades the investment rating of the company to "Buy" [2] Core Views - The company achieved total revenue of 1.89 billion yuan in Q3 2024, representing a year-on-year growth of 16.0%, primarily driven by accelerated growth in AI business [1] - The adjusted EBITDA margin reached 9.8%, showing strong operational momentum, with a significant year-on-year increase of 12.6 percentage points [1] - The company is expected to continue benefiting from its ecosystem with Xiaomi and Kingsoft, with a revenue cap of 11.3 billion yuan from 2025 to 2027 [1] Summary by Sections Financial Performance - Q3 2024 gross profit was 300 million yuan, up 54.6% year-on-year, with a gross margin of 16.1%, an increase of 4.0 percentage points [1] - Public cloud revenue in Q3 2024 was 1.18 billion yuan, a year-on-year increase of 15.6%, while AI revenue reached 360 million yuan, accounting for 31% of public cloud revenue [1] - Industry cloud revenue was 710 million yuan in Q3 2024, reflecting a year-on-year and quarter-on-quarter increase of 16.7% and 8.0%, respectively [1] Strategic Developments - The company signed a cooperation agreement with Zhuhai High-tech Zone to support the development of a "Cloud Smart City" [1] - The company is focusing on enhancing profitability and sustainability in its industry cloud projects, particularly in public services, healthcare, and finance [1] Profitability Forecast - The adjusted net profit for 2024 is revised down to -2.09 billion yuan, while the forecasts for 2025 and 2026 are adjusted up to -210 million yuan and 160 million yuan, respectively [1] - The company is expected to achieve positive adjusted operating profit margin by 2025 [1]

Group 1 - The core viewpoint of the report is that Kingsoft Cloud's revenue for the third quarter increased by 16% year-on-year, reaching 1.89 billion yuan, slightly exceeding market expectations, primarily driven by significant growth in AI revenue and a recovery in enterprise cloud business [1] - Gross margin improved by 4 percentage points year-on-year [2] - Bank of America expects further improvement in gross margin in the fourth quarter due to the expansion of AI business and adjustments in enterprise cloud projects, raising the target price from HKD 1.7 to HKD 3.4 while maintaining a "neutral" rating [2]

Market Performance - The Dow Jones Industrial Average rose by 139.53 points, or 0.32%, to close at 43,408.47 [1] - The Nasdaq Composite fell by 21.32 points, or 0.11%, to 18,966.14 [1] - The S&P 500 edged up by 0.13 points to 5,917.11 [1] Large-Cap Tech Stocks - Netflix surged over 1% to reach a new high [1] - Apple and Meta saw slight increases [1] - Tesla and Google dropped more than 1% [1] - Amazon, Microsoft, Nvidia, and Intel experienced minor declines [1] Chinese ADRs - The Nasdaq Golden Dragon China Index gained 1.44% [1] - Kingsoft Cloud soared over 42% [1] - iQIYI rose more than 4% [1] - Bilibili increased over 3% [1] - New Oriental and TAL Education Group both climbed more than 2% [1] - XPeng Motors, Baidu, and NIO saw gains of less than 1% [1] - Li Auto fell more than 1% [1]

Revenue and Profitability - Total revenue reached RMB 1,885.6 million (USD 268.71 million), a year-on-year increase of 16.0% compared to RMB 1,625.2 million in the same quarter of 2023[8]. - Gross profit was RMB 303.4 million (USD 43.2 million), significantly increasing by 54.6% from RMB 196.2 million in the same quarter of 2023[8]. - Non-GAAP EBITDA was RMB 185.4 million (USD 26.4 million), compared to RMB -45.4 million in the same quarter of 2023, with a non-GAAP EBITDA margin of 9.8%[8]. - Public cloud service revenue was RMB 1,175.5 million (USD 167.5 million), a 15.6% increase year-on-year from RMB 1,016.6 million[13]. - Industry cloud service revenue was RMB 710.0 million (USD 101.2 million), a 16.7% increase year-on-year from RMB 608.5 million[14]. - AI-related business revenue reached RMB 362 million, accounting for approximately 31% of public cloud revenue[11]. - Revenue from the ecosystem related to Xiaomi and Kingsoft saw a significant year-on-year increase of 36%[11]. - Adjusted gross margin increased to 16.3%, a 4.5-fold increase from 3.6% in Q2 2022[11]. - Adjusted EBITDA margin improved from a loss of 8.6% in Q2 2022 to a profit of 9.8%, an increase of 18.4 percentage points[11]. Operating Costs and Losses - Operating costs for the quarter were RMB 1,582.2 million (USD 225.5 million), an increase of 10.7% compared to RMB 1,429.0 million in the same quarter of 2023[15]. - Total operating expenses amounted to RMB 1,447.1 million (USD 206.2 million), including long-term asset impairment of RMB 919.7 million (USD 131.1 million), which increased by 44.6% from RMB 1,001.1 million in the same quarter of 2023[19]. - The operating loss for the quarter was RMB 1,143.8 million (USD 163.0 million), compared to RMB 804.8 million in the same quarter of 2023 and RMB 277.6 million in the previous quarter[22]. - Net loss was RMB 1,061.1 million (USD 151.2 million), an increase from RMB 789.7 million in the same quarter of 2023 and RMB 353.7 million in the previous quarter[22]. Cash Flow and Financial Position - Cash and cash equivalents as of September 30, 2024, were RMB 1,617.9 million (USD 230.6 million), down from RMB 1,837.8 million as of June 30, 2024[23]. - As of December 31, 2023, total assets amounted to RMB 15,070,278, increasing to RMB 16,696,584 by September 30, 2024, representing a growth of approximately 10.8%[38]. - Total liabilities increased from RMB 7,824,374 on December 31, 2023, to RMB 11,125,436 by September 30, 2024, reflecting a rise of about 42.9%[40]. - Cash and cash equivalents decreased from RMB 2,255,287 on December 31, 2023, to RMB 1,617,935 by September 30, 2024, a decline of about 28.3%[38]. - The company reported a net decrease in cash and cash equivalents of RMB (1,091,459) thousand for the three months ended September 30, 2023[53]. Research and Development - Research and development expenses increased by 17.7% year-over-year to RMB 235.9 million (USD 33.6 million), primarily due to rising labor costs[19]. - The company has a strong foundation in cloud technology research and development, which supports its advanced cloud-native products[35]. Strategic Outlook - The company maintained a strong belief in its "high-quality sustainable development strategy," leading to robust performance in the third quarter[11]. - The company expects steady growth in Q4 2024, driven by public cloud and industry cloud, with anticipated accelerated revenue growth and improved profitability[26]. - The company plans to continue its market expansion efforts and invest in new product development to enhance its competitive position in the industry[44]. - The company is focusing on strategic acquisitions to bolster its market presence and drive future growth[44]. Non-GAAP Financial Metrics - The company utilizes several non-GAAP financial metrics, including non-GAAP gross profit and non-GAAP EBITDA, to assess its operational performance[30]. - Non-GAAP gross profit is defined as gross profit excluding stock-based compensation expenses, while non-GAAP gross margin is the percentage of non-GAAP gross profit to revenue[30]. Forward-Looking Statements - Forward-looking statements regarding the company's business outlook and strategic plans are subject to inherent risks and uncertainties[34]. - The company does not undertake to update any forward-looking statements unless required by applicable law[34]. - The company emphasizes the importance of reviewing its financial data in a holistic manner rather than relying on a single financial metric[31].

Summary of Conference Call Transcript Company and Industry - The discussion revolves around a company that operates in the digital advertising or technology sector, specifically focusing on CPN (Cost Per Name) related products. The company has a significant client base, including a major short video platform. Core Points and Arguments - The business segment's contribution to overall revenue is gradually increasing, indicating a shift in the revenue mix [1] - The client composition is changing, with a notable mention of a leading short video company that was previously the largest client, contributing approximately one-third of the total revenue [1] Other Important but Possibly Overlooked Content - The evolving client base suggests potential diversification of revenue sources, which may mitigate risks associated with reliance on a single major client [1]

Revenue and Profitability - Revenue for the first six months of 2024 was RMB 3,667,464 thousand, a slight decrease of 0.9% compared to the same period in 2023[7] - Gross profit increased significantly by 52.6% to RMB 611,600 thousand in the first half of 2024[7] - Net loss decreased by 35.2% to RMB 717,334 thousand in the first six months of 2024[7] - Gross margin improved to 16.7% in 2024, up from 10.8% in 2023[9] - Adjusted gross margin (non-GAAP) reached 17.0% in 2024[9] - Adjusted EBITDA margin (non-GAAP) turned positive at 2.6% in 2024, compared to -5.2% in 2023[13] - Adjusted net loss margin (non-GAAP) improved to -14.1% in 2024 from -19.7% in 2023[13] - Normalized adjusted EBITDA margin was 1.9% in 2024, up from -4.6% in 2023[13] - Adjusted net loss decreased to RMB 518.4 million (USD 71.3 million) from RMB 727.4 million in the same period last year[15] - Adjusted EBITDA turned positive to RMB 93.8 million (USD 12.9 million) compared to a loss of RMB 191.9 million in the previous year[15] - Total revenue reached RMB 3,667.5 million (USD 504.7 million), with public cloud services contributing RMB 2,421.9 million (USD 333.3 million) and industry cloud services contributing RMB 1,245.4 million (USD 171.4 million)[16] - Gross profit increased by 52.6% to RMB 611.6 million (USD 84.2 million), with a gross margin of 16.7%, up from 10.8% in the same period last year[16] - Adjusted EBITDA margin improved to 2.6%, a 7.8 percentage point increase from -5.2% in the previous year[16] - Total revenue reached RMB 3,667.5 million (USD 504.7 million), a decrease of 0.9% compared to RMB 3,699.8 million in the same period of 2023, primarily due to the reduction of services to CDN customers, offset by strong revenue growth from AI-related customers[24] - Revenue from public cloud services increased by 4.7% to RMB 2,421.9 million (USD 333.3 million) from RMB 2,313.2 million in the same period of 2023, driven by growth in AI-related services[24] - Revenue from industry cloud services decreased by 10.1% to RMB 1,245.4 million (USD 171.4 million) from RMB 1,385.2 million in the same period of 2023, due to a focus on selected vertical industries and high-quality projects[24] - Gross profit increased significantly by 52.6% to RMB 611.6 million (USD 84.2 million) from RMB 400.8 million in the same period of 2023, with a gross margin of 16.7% compared to 10.8% in the previous year[25] - Net loss decreased significantly to RMB 717.3 million (USD 98.7 million) from RMB 1,107.1 million in the same period of 2023, primarily due to reduced operating losses and foreign exchange fluctuations[26] - Non-GAAP EBITDA turned positive to RMB 93.8 million (USD 12.9 million) from RMB -191.9 million in the same period of 2023, with a non-GAAP EBITDA margin of 2.6% compared to -5.2% in the previous year[26] - Total revenue for the six months ended June 30, 2024, was RMB 3,667,464 thousand, compared to RMB 3,699,803 thousand for the same period in 2023[90] - Gross profit for the six months ended June 30, 2024, was RMB 611,600 thousand, up from RMB 400,791 thousand for the same period in 2023[90] - Net loss for the six months ended June 30, 2024, was RMB 717,334 thousand, compared to RMB 1,107,093 thousand for the same period in 2023[90] - Public cloud services revenue for the six months ended June 30, 2024, was RMB 2,421,912 thousand, up from RMB 2,313,183 thousand for the same period in 2023[90] - Industry cloud services revenue for the six months ended June 30, 2024, was RMB 1,245,400 thousand, down from RMB 1,385,152 thousand for the same period in 2023[90] - Net loss for the first half of 2024 decreased to RMB 717,334 thousand (USD 98,709 thousand) compared to RMB 1,107,093 thousand in the same period of 2023[95] - Basic and diluted net loss per share improved to RMB 0.20 (USD 0.03) in the first half of 2024 from RMB 0.31 in the same period of 2023[91] - Comprehensive loss attributable to Kingsoft Cloud Holdings Limited shareholders decreased to RMB 692,343 thousand (USD 95,270 thousand) in the first half of 2024 from RMB 897,537 thousand in 2023[91] - The net loss attributable to Kingsoft Cloud Holdings Limited for the first six months of 2024 was RMB 712,586 ($98,056)[154] - Basic and diluted loss per share for the first six months of 2024 was RMB 0.20 ($0.03)[154] - Revenue from providing public cloud services to Xiaomi Group increased from RMB 379,893 in 2023 to RMB 490,133 ($67,445) in the first six months of 2024[157] - Revenue from providing public cloud services to Kingsoft Software Group increased from RMB 99,386 in 2023 to RMB 136,596 ($18,796) in the first six months of 2024[157] - The company's net loss under US GAAP was RMB 1,107,093, while under IFRS it was RMB 1,111,318 for the six months ended June 30, 2023[164] - The company's net loss under US GAAP was RMB 717,334, while under IFRS it was RMB 705,722 for the six months ended June 30, 2024[170] Operating Expenses and Costs - R&D expenses amounted to RMB 435.9 million (USD 60.0 million), with 1,186 R&D personnel as of June 30, 2024[20] - Operating expenses totaled RMB 1,163.3 million (USD 160.1 million), a decrease from RMB 1,361.8 million in the same period of 2023, with reductions in general and administrative expenses due to improved business quality[26] - Depreciation and amortization expenses increased to RMB 528,450 thousand (USD 72,717 thousand) in the first half of 2024 from RMB 510,519 thousand in 2023[95] - Employee benefit expenses for the six months ended June 30, 2024, amounted to RMB 214.3 million (USD 29.5 million)[33] - Equity incentive expenses for the first six months of 2023 and 2024 were RMB 43,106 and RMB 149,244 ($20,537) respectively[146] Cash Flow and Financial Position - Cash and cash equivalents decreased by 18.5% to RMB 1,837.8 million (USD 252.9 million) as of June 30, 2024, compared to RMB 2,255.3 million as of December 31, 2023[27] - Cash outflow from operating activities reduced to RMB 170,167 thousand (USD 23,415 thousand) in the first half of 2024 from RMB 206,157 thousand in 2023[95] - Investment activities resulted in a net cash outflow of RMB 1,823,846 thousand (USD 250,970 thousand) in the first half of 2024, primarily due to purchases of property and equipment[95] - Net cash generated from financing activities was RMB 1,636,046 thousand (USD 225,127 thousand) in the first half of 2024, a significant increase from RMB (118,773) thousand in the same period of 2023[96] - Cash and cash equivalents, including restricted cash, decreased to RMB 2,096,404 thousand (USD 288,475 thousand) as of June 30, 2024, down from RMB 3,823,087 thousand as of June 30, 2023[96] - Total assets increased from RMB 15,070,278 thousand as of December 31, 2023, to RMB 16,460,960 thousand as of June 30, 2024[84] - Cash and cash equivalents decreased from RMB 2,255,287 thousand as of December 31, 2023, to RMB 1,837,757 thousand as of June 30, 2024[84] - Property and equipment net increased from RMB 2,186,145 thousand as of December 31, 2023, to RMB 3,882,522 thousand as of June 30, 2024[84] - Total liabilities increased from RMB 7,824,374 thousand as of December 31, 2023, to RMB 9,759,174 thousand as of June 30, 2024[88] - Total equity decreased from RMB 7,245,904 thousand as of December 31, 2023, to RMB 6,701,786 thousand as of June 30, 2024[86] - Accumulated deficit increased to RMB 13,027,627 thousand (USD 1,792,661 thousand) as of June 30, 2024, from RMB 11,237,969 thousand as of December 31, 2023[92] - The number of ordinary shares outstanding increased to 3,596,874,352 as of June 30, 2024, from 3,539,136,595 as of December 31, 2023[92] - Short-term borrowings increased to RMB 834,519 thousand (USD 114,834 thousand) in the first half of 2024, up from RMB 544,002 thousand in the same period of 2023[96] - Long-term borrowings amounted to RMB 226,861 thousand (USD 31,217 thousand) in the first half of 2024, compared to none in the same period of 2023[96] - The company's cumulative deficit reached RMB 13,027,627 thousand (USD 1,792,661 thousand) as of June 30, 2024[99] - Net current liabilities stood at RMB 1,181,377 thousand (USD 162,563 thousand) as of June 30, 2024[99] - The company's operations are primarily funded through customer contracts, equity financing, and borrowings from third parties and related parties[99] - The company maintains existing credit facilities with Xiaomi Group, its subsidiaries, and banks[99] - Total borrowings to be repaid in the remaining six months of 2024 amount to RMB 1,584,865 thousand (USD 218,085 thousand)[144] - Borrowings scheduled for repayment in 2025 total RMB 2,025,554 thousand (USD 278,726 thousand)[144] - The company has an unfulfilled purchase commitment of RMB 553,942 (USD 76,225) for internet data center services as of June 30, 2024[161] - The company's cumulative other comprehensive income was RMB 575,585 (USD 79,203) as of June 30, 2024[162] Equity and Shareholder Information - Lei Jun, the company's director, holds a 12.25% stake in the company through controlled entities[35] - Kingsoft Software is the largest shareholder with a 37.40% stake in the company as of June 30, 2024[38] - The total number of issued shares as of June 30, 2024, is 3,805,284,801 shares[39] - The Bank of New York Mellon Corporation holds 1,073,779,732 shares (long position) and 1,063,142,295 shares (short position) in The Bank of New York Mellon[39] - Xiaomi beneficially holds 449,701,000 shares, and its wholly-owned subsidiary Green Better Limited holds 16,460,000 shares[39] - The total number of shares available for issuance under the 2013 Share Option Plan is 26,330,754 shares, representing approximately 0.69% of the total issued shares[42] - The 2013 Share Option Plan has a 10-year validity period starting from February 27, 2013, and has expired as of the latest practicable date[45] - The total number of shares available for issuance under the 2013 Share Award Plan is 23,383,090 shares, representing approximately 0.61% of the total issued shares[48] - The 2013 Share Award Plan has a 10-year validity period starting from February 22, 2013, and has expired as of the latest practicable date[50] - The 2021 Equity Incentive Plan was adopted on November 15, 2021, and amendments were approved by the board on December 20, 2022, effective after the Hong Kong listing[51] - The total number of shares that may be issued upon exercise of all options and awards under the 2021 Equity Incentive Plan and any other share plans of the company shall not exceed 10% of the total issued shares immediately following the Hong Kong listing, amounting to 380,528,480 shares[55] - The total number of shares that may be issued upon exercise of all options and awards granted to service provider participants under the 2021 Equity Incentive Plan and any other share plans of the company shall not exceed 1% of the total issued shares immediately following the Hong Kong listing, amounting to 38,052,848 shares[55] - As of January 1, 2024, and June 30, 2024, the number of options and awards available for grant under the plan authorization limit were 226,083,503 and 191,111,525 shares, respectively, while the number of options and awards available for grant under the service provider sub-limit remained at 38,052,848 shares[56] - The total number of shares that may be issued under the 2021 Equity Incentive Plan as of the latest practicable date is 341,294,939 shares, representing approximately 8.97% of the total issued shares[56] - The total number of shares issued and to be issued to each selected participant upon vesting or exercise of awards granted and to be granted under the 2021 Equity Incentive Plan and any other share plans of the company within any 12-month period shall not exceed 1% of the total issued shares, unless approved by shareholders[57] - The 2021 Equity Incentive Plan has a remaining term of approximately 7 years and 2 months as of the latest practicable date[62] - The exercise price of stock options cannot be lower than the fair market value of the shares on the grant date, and post-Hong Kong listing, it must not be lower than the higher of the closing price on the grant date or the average closing price over the preceding 5 trading days[61] - No consideration is required for accepting awards under the 2021 Equity Incentive Plan, including restricted stock units, stock options, or other types of awards[60] - The vesting period for awards under the 2021 Equity Incentive Plan is generally not less than 12 months, unless the Board approves a shorter period under specific circumstances[59] - As of June 30, 2024, 25,629,891 stock options remain unexercised by grantees, with a weighted average exercise price of $0.07422 per share[64] - During the reporting period, no stock options were granted, and 220,188 options expired[64] - The 2021 Equity Incentive Plan allows for accelerated vesting in cases of death, disability, or uncontrollable events[59] - The exercise price for stock options granted to directors and senior management ranges from $0.07422 to $2.91 per share[64] - The 2021 Equity Incentive Plan permits mixed or accelerated vesting schedules, such as vesting evenly over 12 months[59] - Stock options can be exercised after vesting and before the expiration date[65] - Restricted stock units granted on January 19, 2024, with a fair value of $0.17 per unit[67] - Restricted stock units granted on March 22, 2024, with a fair value of $0.21 per unit[68] - Restricted stock units granted on June 3, 2024, with a fair value of $0.17 per unit[68] - 29,332,770 restricted stock units granted during the reporting period[67] - 9,362,539 restricted stock units exercised during the reporting period[67] - 2,080,000 restricted stock units unexercised as of the reporting period[67] - No performance targets attached to any restricted stock units granted during the reporting period[68] - The company granted 36,867,275 equity awards under the 2021 Equity Incentive Plan as of June 30, 2024[145] - The fair value of share awards granted in 2023 was $0.44, while for the first six months of 2024, it ranged from $0.17 to $0.21[146] - Kingsoft Cloud Holdings Limited was incorporated on January 3, 2012, in the Cayman Islands as an exempted company[178] - The company's American Depositary Shares (ADS) represent 15 ordinary shares each[178] - The reporting period for the interim report is the six months ended June 30, 2024[179] - Kingsoft Cloud's shares were listed on the Hong Kong Stock Exchange on December 30, 2022[179] - The company's primary shareholder is Xiaomi Group, listed on the Hong Kong Stock Exchange under the stock code 1810[180] - The company's financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP)[180] - Kingsoft Cloud's subsidiaries and consolidated affiliated entities are controlled through contractual arrangements[178] - The company's shares are denominated in

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 Kingsoft Cloud Holdings Limited 金山云控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：3896） （納斯達克股票代碼：KC） 內幕消息 截至二零二四年六月三十日止三個月的 未經審核財務業績 本公告乃根據香港聯合交易所有限公司證券上市規則第13.09條及證券及期貨條例 （第571章）第XIVA部刊發。 金山云控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然宣佈本公司、 其子公司及併表聯屬實體（統稱「本集團」）根據美國證券交易委員會（「美國證交 會」）適用規則刊發的截至二零二四年六月三十日止三個月未經審核簡明綜合業績 （「第二季度業績」）。 第二季度業績乃根據美利堅合眾國公認會計準則（「美國公認會計準則」）編製，其 有別於國際財務報告準則。 本公告附件一為本公司於二零二四年八月二十日（美國東部時間）就第二季度業績 刊發的新聞稿全文，其中部分內容可能構成 ...

Revenue and Profitability - Total revenue for the first half of 2024 reached RMB 3,667.5 million (USD 504.7 million), with public cloud service revenue at RMB 2,421.9 million (USD 333.3 million) and industry cloud service revenue at RMB 1,245.4 million (USD 171.4 million)[6] - Total revenue for 2024 was RMB 3,667,464 thousand (USD 504,660 thousand), with public cloud services contributing RMB 2,421,912 thousand (USD 333,266 thousand)[11] - Total revenue reached RMB 3,667.5 million (USD 504.7 million), a decrease of 0.9% YoY, primarily due to the reduction in CDN services, offset by strong growth in AI-related customer revenue[13] - Revenue from public cloud services increased by 4.7% YoY to RMB 2,421.9 million (USD 333.3 million), driven by growth in AI-related services[13] - Revenue from industry cloud services decreased by 10.1% YoY to RMB 1,245.4 million (USD 171.4 million), due to a focus on selected vertical industries and high-quality projects[13] - Revenue from public cloud services increased to RMB 2,421,912 million in 2024, up 4.7% from RMB 2,313,183 million in 2023[42] - Industry cloud services revenue decreased to RMB 1,245,400 million in 2024 from RMB 1,385,152 million in 2023, a decline of 10.1%[42] - Gross profit increased by 52.6% YoY to RMB 611.6 million (USD 84.2 million), with a gross margin of 16.7%, up from 10.8% in the same period of 2023[6] - Gross profit for 2024 was RMB 611,600 thousand (USD 84,159 thousand), an increase from RMB 400,791 thousand in 2023[11] - Gross profit increased significantly by 52.6% YoY to RMB 611.6 million (USD 84.2 million), with a gross margin of 16.7%, up from 10.8% in the same period last year[13] - Gross profit for the six months ended June 30, 2024, was RMB 611,600 thousand (USD 84,159 thousand), an increase from RMB 400,791 thousand in the same period of 2023[30] - Non-GAAP gross profit rose by 55.2% YoY to RMB 622.5 million (USD 85.7 million), with a non-GAAP gross margin of 17.0%, compared to 10.8% in 2023[6] - Adjusted EBITDA turned positive at RMB 93.8 million (USD 12.9 million), a significant improvement from RMB -191.9 million in the first half of 2023[6] - Adjusted EBITDA margin improved to 2.6%, up by 7.8 percentage points from -5.2% in the same period last year[6] - Non-GAAP EBITDA turned positive to RMB 93.8 million (USD 12.9 million), compared to a loss of RMB 191.9 million in the same period last year[14] - Normalized adjusted EBITDA (excluding gains/losses from property and equipment sales) was RMB 69.96 million (USD 9.6 million), compared to RMB -170.3 million in 2023[5] - Net loss decreased by 35.2% YoY to RMB 717.3 million (USD 98.7 million), with a net loss margin of -19.6%, down from -29.9% in 2023[5] - Non-GAAP net loss decreased to RMB 518.4 million (USD 71.3 million), with a non-GAAP net loss margin of -14.1%, compared to -19.7% in 2023[5] - Adjusted net loss (non-GAAP) improved to RMB 518.4 million (USD 71.3 million), down from RMB 727.4 million in the first half of 2023[5] - Net loss attributable to Kingsoft Cloud Holdings Limited for 2024 was RMB 712,586 thousand (USD 98,056 thousand)[12] - Net loss decreased significantly to RMB 717.3 million (USD 98.7 million) from RMB 1,107.1 million YoY, driven by reduced operating loss and foreign exchange fluctuations[14] - Net loss attributable to Kingsoft Cloud Holdings Limited for the six months ended June 30, 2024, was RMB 712,586 thousand (USD 98,056 thousand), compared to RMB 1,106,333 thousand in the same period of 2023[30] - Net loss attributable to Kingsoft Cloud Holdings Limited shareholders decreased to RMB 692,343 thousand (USD 95,270 thousand) in the first half of 2024, compared to RMB 897,537 thousand in 2023[31] - Net loss attributable to ordinary shareholders for the six months ended June 30, 2024 was RMB (712,586), a decrease from RMB (1,106,333) in the same period of 2023[50] - Basic and diluted loss per share for the six months ended June 30, 2024 was RMB (0.20), compared to RMB (0.31) for the same period in 2023[50] - Weighted average number of ordinary shares outstanding for basic and diluted loss per share calculation was 3,632,583,338 for the six months ended June 30, 2024, compared to 3,547,111,168 in 2023[50] Operational Efficiency and Costs - Operating loss for 2024 was RMB 551,726 thousand (USD 75,921 thousand), a significant improvement from RMB 960,982 thousand in 2023[11] - Operating loss decreased to RMB 551.7 million (USD 75.9 million) from RMB 961.0 million YoY, reflecting improved operational efficiency[14] - Operating loss for the six months ended June 30, 2024, was RMB 551,726 thousand (USD 75,921 thousand), an improvement from RMB 960,982 thousand in the same period of 2023[30] - R&D expenses for the reporting period were RMB 435.9 million (USD 60.0 million), with 1,186 R&D personnel as of June 30, 2024[9] - The company's total number of employees is 11,311, with 80.7% (9,132 employees) in solution development and services, 10.5% (1,186 employees) in R&D, 5.7% (648 employees) in general and administrative functions, and 3.1% (345 employees) in sales and marketing[21] - Net cash used in operating activities was RMB 170,167 thousand (USD 23,415 thousand) in the first half of 2024, an improvement from RMB 206,157 thousand in 2023[34] - Net cash used in investing activities increased significantly to RMB 1,823,846 thousand (USD 250,970 thousand) in the first half of 2024, compared to net cash provided by investing activities of RMB 576,486 thousand in 2023[34] - The company's accumulated deficit reached RMB 13,027,627 thousand (USD 1,792,661 thousand) as of June 30, 2024, with a net current liability position of RMB 1,181,377 thousand (USD 162,563 thousand)[37] - Kingsoft Cloud Holdings Limited had cash, cash equivalents, and restricted cash of RMB 2,096,404 thousand (USD 288,475 thousand) as of June 30, 2024[37] - Cash and cash equivalents decreased by 18.5% to RMB 1,837.8 million (USD 252.9 million) as of June 30, 2024, compared to December 31, 2023[15] - Cash and cash equivalents decreased to RMB 1,837,757 thousand (USD 252,884 thousand) as of June 30, 2024, from RMB 2,255,287 thousand at the end of 2023[32] - Total liabilities increased to RMB 9,759,174 thousand (USD 1,342,907 thousand) as of June 30, 2024, compared to RMB 7,824,374 thousand at the end of 2023[33] - Capital-to-debt ratio increased to 66.0% as of June 30, 2024, up from 36.2% as of December 31, 2023[17] - Accounts payable as of June 30, 2024 were RMB 1,980,088 (USD 272,469), an increase from RMB 1,805,083 as of December 31, 2023[51] - Accounts payable aged over 1 year increased to RMB 899,056 (USD 123,714) as of June 30, 2024, compared to RMB 717,320 as of December 31, 2023[51] Cloud Services and AI - The company's cloud products include unified IaaS, PaaS, SaaS, AI capabilities, and development services, with a focus on cloud computing, storage, and distribution[7] - The company has designed industry-specific solutions for verticals such as internet, public services, healthcare, and financial services, leveraging deep industry insights[7] - The company plans to continue advancing high-quality sustainable development and focus on AI to enhance strategic customer service within the Xiaomi Kingsoft ecosystem[10] - Revenue from public cloud services increased by 4.7% YoY to RMB 2,421.9 million (USD 333.3 million), driven by growth in AI-related services[13] - Revenue from public cloud services increased to RMB 2,421,912 million in 2024, up 4.7% from RMB 2,313,183 million in 2023[42] Data Centers and Infrastructure - The company operates two data centers in China with approximately 100,000 servers and EB-level storage capacity as of June 30, 2024[8] - The Wuhan R&D center has grown to about 600 employees, accounting for over one-third of the company's R&D team, with 50% holding master's degrees[9] Financial and Legal Matters - The company entered into a financial leasing framework agreement with China Merchants Bank Financial Leasing Co., Ltd. on August 20, 2024, with a total leasing principal not exceeding RMB 300 million[27] - The company did not repurchase, sell, or redeem any of its listed securities during the reporting period and held no treasury shares as of June 30, 2024[23] - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2024[27] - The company has no significant litigation or arbitration that could materially adversely affect its operations during the reporting period[24] - The Audit Committee reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2024, and agreed with the accounting policies and practices adopted by the company[26] - The company did not declare any dividends for the six months ended June 30, 2024 and 2023[51] - The interim results announcement was published on the Hong Kong Stock Exchange website (www.hkexnews.hk) and the company's website (ir.ksyun.com)[52] - The interim report for the six months ended June 30, 2024 will be published on the same websites and distributed to shareholders as needed[52] Investments and Equity - Total unrealized losses on equity investments, including impairments, amounted to RMB 16,026 million in 2024, compared to RMB 5,063 million in 2023[43] - Government subsidies decreased to RMB 4,735 million in 2024 from RMB 69,240 million in 2023[44] - Accounts receivable net of credit loss provisions increased to RMB 1,680,965 million in 2024 from RMB 1,529,915 million in 2023[44] - Trade receivables overdue for more than 1 year decreased to RMB 78,710 million in 2024 from RMB 141,371 million in 2023[45] - Corporate income tax expense (benefit) showed a benefit of RMB 8,480 million in 2024 compared to an expense of RMB 6,371 million in 2023[49] - Deferred tax benefits increased to RMB 34,064 million in 2024 from RMB 19,969 million in 2023[49] Assets and Liabilities - Total assets increased to RMB 16,460,960 thousand (USD 2,265,104 thousand) as of June 30, 2024, up from RMB 15,070,278 thousand at the end of 2023[32] - Total liabilities increased to RMB 9,759,174 thousand (USD 1,342,907 thousand) as of June 30, 2024, compared to RMB 7,824,374 thousand at the end of 2023[33] - The company has no significant investments or capital asset plans as of June 30, 2024[18]