Financial Data and Key Metrics Changes - Company achieved total revenue of RMB1.89 billion, reflecting a 16% year-over-year increase, marking a return to double-digit growth [15][36] - Adjusted gross profit reached RMB308 million, up 56.7% year-over-year, with an adjusted gross margin of 16.3% [15][38] - Adjusted EBITDA reached RMB185 million, with an adjusted EBITDA margin of 9.8%, showing a significant year-over-year increase of 13 percentage points [10][16] - Net operating cash inflow amounted to RMB228 million, demonstrating strong cash-generating ability from operating activities [16][32] Business Line Data and Key Metrics Changes - Public cloud services revenue reached RMB1.18 billion, representing a year-on-year increase of 16% [17][36] - AI revenue surged to RMB362 million, accounting for 31% of public cloud revenues, with triple-digit year-over-year growth for five consecutive quarters [11][29] - Enterprise cloud services revenue amounted to RMB710 million, up 16.7% year-over-year, driven by increased demand in selected verticals [20][36] Market Data and Key Metrics Changes - Revenue contribution from Xiaomi and Kingsoft ecosystem increased by 36% year-over-year, with the ecosystem clients contributing 28% of public cloud revenue [13][30] - Company’s market share has steadily increased amid a decline in market share for other Internet cloud service providers [14] Company Strategy and Development Direction - Company continues to focus on high-quality and sustainable development strategy, enhancing profitability and cash-generating capabilities [25][41] - Emphasis on AI transformation and collaboration with Xiaomi and Kingsoft ecosystem to capitalize on growth opportunities [12][25] - Plans to explore new AI business models and deepen cooperation with ecosystem partners [12][25] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential from the Xiaomi and Kingsoft ecosystem, driven by strong AI opportunities [45][47] - Anticipated continued improvement in profitability and market share, with a focus on AI and cloud demand [33][35] - Guidance for Q4 2024 indicates expectations for accelerated revenue growth and improved profitability [33][34] Other Important Information - Company has secured additional CapEx resources for AI investments, applying for a cap of RMB11.3 billion for the next three years from related party transactions [59][60] - Strong liquidity position with cash and cash equivalents totaling RMB1,617.9 million [40] Q&A Session Summary Question: Growth potentials of strategic customers and service strategy - Management highlighted the rapid growth of business opportunities from the Xiaomi and Kingsoft ecosystem, supported by strong AI-related functions and customer demand [45][46] Question: Outlook on adjusted EBITDA margin and operating margin - Management noted significant expansion in gross margin and EBITDA margin, with expectations for continued improvement in operating profit [48][50] Question: Margin profile of AI business and revenue from Xiaomi and Kingsoft Group - Management indicated that AI-related products deliver higher gross margins compared to traditional public cloud services, with both segments achieving double-digit growth [54][56] Question: Outlook for CapEx for this year and next year - Management confirmed secured CapEx resources and plans to utilize funding from shareholders to support AI business growth without diluting public shareholders [59][60]

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） (1) 重續及修訂有關二零二二年金山軟件框架 協議的持續關連交易；及 (2) 重續及修訂有關二零二二年小米框架 協議的持續關連交易 獨立董事委員會及獨立股東之獨立財務顧問 重續及修訂持續關連交易 茲提述上市文件。於二零二二年十二月二十日，本公司(i)與金山軟件訂立二零 二二年金山軟件框架協議，內容有關本集團提供雲服務及接受綜合物業管理及 行政服務，初始期限自上市日期起至二零二四年十二月三十一日止為期三年； 及(ii)與小米訂立二零二二年小米框架協議，內容有關本集團提供雲服務、購買 定制終端設備及軟件和接受融資租賃，初始期限自上市日期起至二零二四年十 二月三十一日止為期三年。 董事會欣然宣佈，於二零二四年十一月十九日（交易時段後），本公司( ...

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].

Mr. Henry He, Chief Financial Officer of Kingsoft Cloud, added, "We recorded another strong quarter with growth in both revenue and profits. The Company achieved a double-digit year-on-year growth in total revenue, reaching RMB1,885.6 million, restoring the high-speed growth of revenue. Meanwhile, the growth rates of our gross profit and EBITDA profit far exceed the industry average level. Compared with the adjusted gross profit margin of 3.6% in the second quarter of 2022, which was before the Company carr ...

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。 1 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） 本公司應屆股東特別大會的記錄日期 金山云控股有限公司（「本公司」）董事（各為一名「董事」，統稱為「董事」）會（「董 事會」）宣佈，確定本公司每股面值0.001美元普通股（「股份」）的持有人是否符合 資格出席本公司應屆股東特別大會（「股東特別大會」）及於會上表決的記錄日期將 為香港時間二零二四年十一月二十九日（星期五）營業時間結束時（「股份記錄日 期」）。 為符合資格出席應屆股東特別大會及於會上表決，(1)就登記於本公司香港股份過 戶登記處的股份而言，所有有效的股份過戶文件連同相關股票必須在不遲於香港 時間二零二四年十一月二十九日（星期五）下午四時三十分前送達本公司香港股份 過戶登記處卓佳證券登記有限公司（「香港股份過戶登記處」），地址 ...

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） 本公司董事會（「董事會」）宣佈，為加快對人工智能基礎設施的投資，於二零二四 年十一月十一日，北京金山雲網絡技術有限公司（本公司的併表聯屬實體，「金山 雲網絡」）與中信金融租賃有限公司（「中信金融租賃」）經公平協商後訂立融資租賃 協議（「該協議」），據此，中信金融租賃同意通過售後回租若干服務器的方式向金 山雲網絡提供融資租賃服務，融資租賃本金總額為人民幣250百萬元。該協議期 限為3年，首期年利率為4.35%。 本公司相信，訂立該協議將通過補充營運資金，拓寬本公司的融資渠道、增加本 公司的流動資金來源及優化本公司資本架構。 於本公告日期，訂立該協議及該協議項下的交易不構成《香港聯合交易所有限公 司證券上市規則》項下的須予公佈的交易或關連交易。 承董事會命 金山云控股有 ...

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） 董事會會議召開日期 金山云控股有限公司（「本公司」）之董事會（「董事會」）謹此宣佈，本公司將於二 零二四年十一月十九日（星期二）舉行董事會會議，以（其中包括）考慮及通過本公 司、其子公司及併表聯屬實體截至二零二四年九月三十日止三個月的未經審計第 三季度業績及其發佈。 本公司的管理層將於北京╱香港時間二零二四年十一月十九日（星期二）下午八時 十五時（即美國東部時間同日上午七時十五時）舉行業績電話會議。 有意參加電話會議的參與者請在會議計劃開始時間前使用下文提供的連結完成在 線登記。於登記後，參與者將收到電話會議進入信息（包括電話會議進入碼、個 人辨識碼（個人進入碼）、撥號以及一封載有如何連入電話會議的詳細指示電子郵 件）。 參與者在線登記： ...

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

Financial Data and Key Metrics Changes - Kingsoft Cloud's revenue for Q2 2024 reached RMB1.89 billion, reflecting a sequential growth of 6.5% and a year-over-year increase of 3.1% [9][20] - Adjusted gross profit was RMB323 million, a 56.4% increase year-over-year, with an adjusted gross margin of 17.1%, marking the eighth consecutive quarter of improvement [10][23] - Adjusted EBITDA reached RMB60.59 million, with an adjusted EBITDA margin of 3.2%, showing a significant increase of 6.5 percentage points year-over-year [10][19] - Net operating cash inflow amounted to RMB150 million, demonstrating the company's cash-generating ability from operations [10][21] Business Line Data and Key Metrics Changes - Public cloud services revenue was RMB1.23 billion, a year-over-year increase of 6.5% and a quarter-over-quarter increase of 4% [11][22] - Revenue from AI businesses surged to RMB326 million, accounting for 26.3% of public cloud revenues, doubling from the previous quarter [12][21] - Enterprise cloud services revenue reached RMB657 million, up from RMB588 million in the previous quarter, driven by accelerated project deliveries [14][22] Market Data and Key Metrics Changes - Revenue contribution from Xiaomi and Kingsoft ecosystem reached RMB370 million, a year-over-year increase of 36.9% [11][39] - Kingsoft Cloud ranked in the leaders quadrant in the China e-government cloud market and among the top six in the e-government cloud operations service market [14] Company Strategy and Development Direction - The company is focusing on high-quality and sustainable development, with a strategic shift towards high-value services and phasing out low-margin businesses [6][8] - Kingsoft Cloud is enhancing its AI capabilities, with a significant portion of its revenue now coming from AI-related services, indicating a strong market position [12][34] - The company is committed to expanding its partnerships within the Xiaomi and Kingsoft ecosystem to drive future growth [18][39] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing improvements in financial metrics and the effectiveness of the high-quality sustainable development strategy [19][25] - The company anticipates continued growth in AI revenues and plans to leverage its computing power and partnerships to capture more market opportunities [34][36] - Management highlighted the importance of maintaining a balance between internal and external client revenue contributions, particularly in the AI sector [41] Other Important Information - The company has completed a dual primary listing on the Hong Kong Stock Exchange and is included in the Hang Seng Composite Index, enhancing its capital market presence [8] - Kingsoft Cloud is investing heavily in AI, with over 95% of its capital expenditures directed towards AI-related initiatives [29] Q&A Session Summary Question: CapEx guidance for the next two quarters and ROI of AI investment - Management indicated that over 95% of CapEx is related to AI investments, with expectations for significant revenue growth from these investments [29][30] Question: Revenue contribution from Xiaomi and Kingsoft Group - Revenue from these groups increased by 36.9% year-over-year, contributing RMB370 million this quarter, driven by AI-related services [39][40] Question: Outlook for CDN revenue - Management expects to maintain a minimum of RMB300 million in standard CDN business revenue while focusing on higher-margin CDN services [44]