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]

Summary of Conference Call Industry Overview - The discussion revolves around the banking industry in China, highlighting its differences compared to the U.S. banking sector [1]. Key Points and Arguments - The revenue growth for the company was reported at only 3%, with a significant historical improvement of 9 percentage points [1]. - The company emphasizes the unique opportunities presented by AI, suggesting that despite a smaller scale, Chinese banks are positioned to leverage these advancements [1]. Additional Important Content - The call indicates a need to recognize the distinct market dynamics between Chinese and American banks, particularly in the context of technological advancements like AI [1].

Summary of Conference Call Company and Industry - The discussion revolves around **Kingsoft Cloud** and its performance in the **cloud computing industry** in China. Core Points and Arguments - **Revenue Growth**: Kingsoft Cloud reported a **3% increase in revenue** for the last quarter, indicating a positive trend in financial performance [1]. - **Profitability Improvement**: The company achieved a significant turnaround, with profitability improving to a **100% positive margin**, marking a historical increase of **9 percentage points** [1]. - **Market Comparison**: There is a notable distinction between the Chinese banking sector and the U.S. banking situation, suggesting that while the scale may be smaller in China, there are unique opportunities, particularly in the context of **AI advancements** [1]. Other Important Content - The emphasis on the **AI opportunity** highlights the potential for growth and innovation within the Chinese market, which may differ from trends observed in the U.S. [1].

Investment Rating - The report maintains a "Buy" rating for the company [2]. Core Views - The company achieved its first positive adjusted EBITDA in 1Q24, with a corresponding adjusted EBITDA margin of 1.9% [2]. - Revenue for 1Q24 was CNY 1.78 billion, a year-on-year decline of 4.8%, primarily due to a reduction in CDN business scale and stricter selection of industry cloud projects, although partially offset by growth in AI revenue [2]. - The gross margin reached 16.5%, marking a historical high and an increase of 6.1 percentage points year-on-year and 1.8 percentage points quarter-on-quarter, driven by optimization of public cloud revenue structure and effective cost control [2]. Summary by Sections 1Q24 Performance - Public cloud revenue was CNY 1.19 billion, up 2.9% year-on-year and 12.9% quarter-on-quarter, mainly due to AI revenue growth [2]. - AI revenue reached CNY 160 million in 1Q24, a 93% increase quarter-on-quarter, accounting for 13.5% of public cloud revenue [2]. - Industry cloud revenue was CNY 590 million, down 17.2% year-on-year and 12.3% quarter-on-quarter, impacted by strict project selection and the Spring Festival holiday [2]. 2024 Outlook - AI is expected to be a key growth driver for public cloud business, with capital expenditure exceeding CNY 1.2 billion in 1Q24 to enhance infrastructure for AI training [2]. - The establishment of a wholly-owned subsidiary, Beijing Kingsoft Intelligent Technology Co., Ltd., aims to seize opportunities in enterprise digital transformation and AI professional services [2]. - The company anticipates a steady improvement in gross margin to 17% and an adjusted EBITDA margin of 4% for the full year 2024 [2]. Profit Forecast and Valuation - The report adjusts the net profit forecasts for 2024-2026, increasing by 3.1% for 2024 to a loss of CNY 1.32 billion, and maintaining a "Buy" rating based on expected improvements in profitability [2].

金山云 年第一季度业绩交流 原文 24 240522_ 2024年05月23日09:51 发言人1 00:00 无效无效无效无效无效无效无效无效。 发言人1 00:22 无效。今天。 发言人2 00:26 今天。 发言人1 00:30 无效。 发言人1 00:40 哎呦。 发言人1 00:47 无效。 ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2024 reached RMB1.78 billion, increasing by 3.1% quarter-over-quarter [6][19] - Adjusted gross profit for the quarter was approximately RMB300 million, marking a 54% year-over-year increase [7][21] - Adjusted EBITDA turned positive for the first time, reaching RMB33.19 million with an adjusted EBITDA margin of 1.9%, improving by 8.9 percentage points year-over-year [6][19] Business Line Data and Key Metrics Changes - Public cloud services revenues were RMB1.19 billion, up 12.9% quarter-over-quarter, with AI revenue surging to RMB160 million, a 93% increase quarter-over-quarter [7][19] - Enterprise cloud services revenues amounted to RMB590 million, reflecting a decrease from RMB670.3 million in the previous quarter due to fewer project deliveries during the Chinese New Year [19][20] Market Data and Key Metrics Changes - Revenues from the Xiaomi and Kingsoft ecosystem contributed 19% to total revenues, an increase of 4 percentage points year-over-year [8] - CDN revenue remained stable, accounting for 23% of total revenues, with ongoing efforts to enhance profitability through high value-added product sales [9] Company Strategy and Development Direction - The company is focused on high-quality and sustainable development, emphasizing high-margin products and services, particularly in AI [15][24] - Kingsoft Cloud has established Kingsoft AI as a wholly-owned subsidiary to capitalize on opportunities in intelligent digital transformation [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of profitability improvements, citing better revenue mix and operational efficiency as key drivers [28][30] - The company anticipates continued growth in AI revenue and plans to invest significantly in infrastructure and technology to support this growth [36][38] Other Important Information - As of March 31, 2024, cash and cash equivalents stood at RMB1.8 billion, providing liquidity for operations and investments [23] - The company was recognized in S&P Global's Sustainable Yearbook and received a single A rating in MSCI ESG ratings, highlighting its commitment to corporate responsibility [24] Q&A Session Summary Question: Expectations for adjusted EBITDA margin improvement and coping with aggressive pricing strategies - Management expects continued improvement in EBITDA margins driven by better revenue mix and operational efficiency, with no numeric guidance provided [28][30] Question: Drivers of significant AI revenue growth and CapEx guidance - AI revenue growth is attributed to diversified client demand and ongoing investments, with total investment in AI expected to multiply compared to the current quarter [36][38]

Exhibit 99.1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Kingsoft Cloud Holdings Limited 金山云控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 3896) (Nasdaq S ...

Financial Performance - For Q1 2024, Kingsoft Cloud reported total revenue of RMB 1,775.7 million (approximately USD 245.91 million), a 3.1% increase from RMB 1,722.5 million in Q4 2023, but a 4.8% decrease from RMB 1,864.4 million in Q1 2023[4] - Adjusted EBITDA turned positive at RMB 33.2 million, representing a margin of 1.9%, compared to a loss of RMB 130.5 million in Q1 2023[3] - Adjusted gross profit increased by 53.8% year-over-year to RMB 299.1 million, with an adjusted gross margin of 16.8%, up 6.4 percentage points from 10.4% in Q1 2023[3] - Gross profit was RMB 293.3 million (USD 40.6 million), a significant increase of 51.0% compared to RMB 194.2 million in the same period of 2023, indicating improved revenue quality[6] - Gross margin improved to 16.5%, up from 10.4% in the same period of 2023[6] - Operating loss narrowed to RMB 274.2 million (USD 38.0 million), significantly improved from RMB 342.7 million in the previous quarter and RMB 597.9 million in the same period of 2023[6] - Net loss was RMB 363.6 million (USD 50.4 million), compared to RMB 286.8 million in the previous quarter and RMB 608.8 million in the same period of 2023[6] - Non-GAAP net loss was RMB 217.3 million (USD 30.1 million), down from RMB 250.4 million in the previous quarter and RMB 412.5 million in the same period of 2023[8] - Non-GAAP EBITDA was RMB 33.2 million (USD 4.6 million), improving from RMB -27.7 million in the previous quarter and RMB -130.5 million in the same period of 2023[8] Revenue Breakdown - Public cloud service revenue rose by 12.9% quarter-over-quarter to RMB 1,187.4 million, driven by increased contributions from AI-related customers[4] - AI-related revenue accounted for approximately 13% of public cloud service revenue in Q1 2024, up from 8% in the previous quarter[3] - Industry cloud service revenue decreased by 12.3% quarter-over-quarter to RMB 588.2 million, and down 17.2% year-over-year from RMB 710.0 million[4] Cost Management - Operating costs decreased by 11.2% year-over-year to RMB 1,482.4 million, with significant reductions in internet data center costs[4] - Total operating expenses decreased to RMB 567.4 million (USD 78.6 million), down from RMB 595.9 million in the previous quarter and RMB 792.1 million in the same period of 2023[6] Research and Development - Research and development expenses increased to RMB 232.0 million (USD 32.1 million), compared to RMB 175.2 million in the previous quarter and RMB 215.4 million in the same period of 2023[6] Cash and Assets - Cash and cash equivalents as of March 31, 2024, were RMB 1,811.7 million (USD 250.9 million), down from RMB 2,255.3 million as of December 31, 2023[8] - As of March 31, 2024, total assets amounted to RMB 15,952,480 thousand, an increase from RMB 15,070,278 thousand as of December 31, 2023, reflecting a growth of approximately 5.85%[15] - Cash and cash equivalents decreased to RMB 1,811,739 thousand from RMB 2,255,287 thousand, representing a decline of about 19.7%[15] - Total liabilities increased to RMB 8,944,691 thousand as of March 31, 2024, up from RMB 7,824,374 thousand, indicating a rise of approximately 14.3%[16] - The company's equity decreased to RMB 7,007,789 thousand from RMB 7,245,904 thousand, a decline of about 3.3%[16] - Accounts receivable net amount increased to RMB 1,649,807 thousand from RMB 1,529,915 thousand, showing a growth of approximately 7.8%[15] - The company reported a total of RMB 6,238,190 thousand in current assets as of March 31, 2024, compared to RMB 6,098,124 thousand, marking an increase of about 2.3%[15] - Short-term bank loans rose to RMB 1,218,629 thousand from RMB 1,110,896 thousand, reflecting an increase of approximately 9.7%[16] - The company’s goodwill remained stable at RMB 4,605,724 thousand as of both reporting dates[15] - Non-current liabilities increased significantly to RMB 1,909,498 thousand from RMB 995,784 thousand, indicating a rise of approximately 91.7%[16] - The company’s restricted cash increased to RMB 279,021 thousand from RMB 234,194 thousand, representing a growth of about 19.1%[15] Sustainability and ESG - The company has invested billions of RMB in AI over the past year, focusing on optimizing its business portfolio and controlling costs[3] - Kingsoft Cloud released its fourth ESG report since its IPO in 2020, highlighting its commitment to sustainable development[3] - The company emphasizes profitability and sustainability in its selected verticals, including public cloud services, state-owned cloud, healthcare, and financial services[4]

Financial Performance - Total revenues for the year ended December 31, 2023, were RMB 8,180.1 million, a decrease of 13.8% from RMB 7,047.5 million in 2022[11]. - Gross profit for 2023 was RMB 429.5 million, representing a significant increase of 97.9% from RMB 850.2 million in 2022[11]. - Net loss attributable to Kingsoft Cloud Holdings for 2023 was RMB 2,688.4 million, an increase of 18.8% compared to RMB 2,183.6 million in 2022[11]. - Non-GAAP adjusted gross profit for 2023 was RMB 859.9 million, up 93.2% from RMB 445.2 million in 2022[24]. - Average revenues per Public Cloud Service Premium Customer decreased to RMB 20.1 million in 2023 from RMB 26.7 million in 2022[21]. - Revenues from public cloud services were RMB 4,381.7 million, while revenues from enterprise cloud services were RMB 2,664.0 million in 2023[24]. - Gross margin improved to 12.1% in 2023, compared to 5.3% in 2022[24]. - Adjusted net loss margin for 2023 was 18.3%, an improvement from 24.4% in 2022[17]. Customer and Market Metrics - The number of Public Cloud Service Premium Customers increased to 214 in 2023 from 197 in 2022[21]. - Revenues from public cloud services were RMB 4,381.7 million (US$617.2 million), representing a decrease of 18.3% from RMB 5,360.3 million in 2022[36]. - The single largest customer accounted for 14.7% of total revenue, while the top five customers accounted for 47.3% of total revenue for the year ended December 31, 2023[136]. Research and Development - Research and development expenses were RMB 784.8 million (US$110.5 million), down from RMB 971.2 million in 2022[39]. - The workforce in the Wuhan R&D team grew to over 500 people, accounting for approximately 40% of total R&D personnel[31]. - The company established an AI Research and Development Center in 2023, focusing on application, algorithm, and platform capabilities[30]. Capital and Assets - Total capital expenditure for 2023 was RMB 1,964.7 million (US$276.7 million)[28]. - Cash and cash equivalents as of December 31, 2023, amounted to RMB 2,255.3 million (US$317.7 million), a decrease of 34.0% from RMB 3,419.2 million in 2022[42]. - The total assets of the Consolidated Affiliated Entities amounted to RMB 8,042.7 million as of December 31, 2023, representing approximately 53.4% of the total assets of the Group[123]. Corporate Governance - Kingsoft Cloud is committed to high corporate governance standards, ensuring the protection of shareholder interests and enhancing corporate value[186]. - The Board comprises seven members, including two executive Directors, two non-executive Directors, and three independent non-executive Directors, meeting the independence requirements of the Listing Rules[191][196]. - The Company has fully complied with all code provisions of the Corporate Governance Code during the reporting period[187]. - The Board met five times during the reporting period, with all Directors actively participating in meetings[194]. Loans and Financial Arrangements - Kingsoft Corporation has agreed to provide a loan facility of up to RMB 1.5 billion to the Group from December 5, 2023, to December 31, 2025[85]. - The Group borrowed RMB 500 million from the Unsecured Loan Facility at a fixed annual interest rate of 3.75%, to be fully repaid by September 2024[87]. - Kingsoft Cloud Holdings Limited has entered into multiple loan agreements with Ms. Qiu Weiqin, providing interest-free loans, with repayment structured through equity transfers[105]. Impairment and Recoverability - The company recognized a total impairment loss of RMB 653.67 million (US$92.067 million) on long-lived assets for the year ended December 31, 2023, due to declines in public cloud service revenue[68]. - The company performed a recoverability test for the public cloud asset group as of December 31, 2023, and no further impairment was considered necessary[69]. Compliance and Regulatory Matters - The company has complied with relevant laws and regulations impacting its operations, including the Hong Kong Companies Ordinance and the Corporate Governance Code[80]. - Kingsoft Cloud is in the process of applying for VAT Licenses for value-added telecommunications services, which are essential for its cloud service offerings[118]. - The contractual arrangements are designed to navigate foreign investment restrictions in the PRC, particularly in the telecommunications sector[115]. Employee and Management Structure - The company has a total of 10,493 employees, with 79% (8,265) in solution development and services, 12% (1,243) in research and development, 6% (613) in general and administrative, and 3% (372) in sales and marketing[49]. - The Company has taken out liability insurance to provide appropriate coverage for the Directors[151]. - The roles of chairman and chief executive officer are separated, with Mr. Lei Jun as Chairman and Mr. Zou Tao as acting CEO[198].

Financial Performance - For the fiscal year ending December 31, 2023, Kingsoft Cloud reported total revenue of RMB 7,047,461 thousand, a decrease of 13.8% compared to RMB 8,180,107 thousand in 2022[7]. - Gross profit for 2023 was RMB 850,169 thousand, representing a significant increase of 97.9% from RMB 429,538 thousand in 2022[7]. - The net loss attributable to Kingsoft Cloud for 2023 was RMB 2,176,340 thousand, a reduction of 18.1% from RMB 2,658,184 thousand in 2022[7]. - Adjusted gross profit for 2023 was RMB 859,926 thousand, with an adjusted gross margin of 12.2%, up from 5.4% in 2022[10]. - The company reported a pre-tax loss of RMB 2,165,688 thousand for 2023, which is 18.7% less than the loss of RMB 2,663,915 thousand in 2022[7]. - Adjusted net loss for 2023 was RMB 2,183,647 thousand (USD 307,559 thousand), compared to RMB 2,688,388 thousand in 2022[12]. - Adjusted EBITDA for 2023 was RMB (265,064) thousand (USD (37,334) thousand), improving from RMB (754,958) thousand in 2022[12]. - Operating loss was RMB 2,108.6 million (USD 297.0 million), compared to RMB 2,251.4 million in 2022[25]. - Net loss was RMB 2,183.6 million (USD 307.6 million), down from RMB 2,688.4 million in 2022[25]. - Non-GAAP net loss was RMB 1,291.1 million (USD 181.9 million), with no previous figure provided for comparison[25]. Revenue Breakdown - Total revenue for 2023 reached RMB 7,047.5 million (USD 992.6 million), with public cloud service revenue at RMB 4,381.7 million (USD 617.2 million) and industry cloud service revenue at RMB 2,664.0 million (USD 375.2 million)[16]. - Revenue from public cloud services was RMB 4,381.7 million (USD 617.2 million), down 18.3% from RMB 5,360.3 million in 2022[23]. - Industry cloud services revenue amounted to RMB 2,664.0 million (USD 375.2 million), a decrease of 5.4% from RMB 2,817.0 million in 2022[23]. Cost Management and Efficiency - Operating costs were RMB 6,197.3 million (USD 872.9 million), a reduction of 20.0% from RMB 7,750.6 million in 2022[23]. - The adjusted gross margin increased significantly, indicating improved operational efficiency and cost management strategies[9]. - Adjusted net loss margin for 2023 was 31.0%, compared to 32.9% in 2022, indicating improved efficiency[12]. - The normalized adjusted EBITDA margin for 2023 was 3.4%, down from 8.9% in 2022, reflecting challenges in operational efficiency[12]. Strategic Initiatives and Future Outlook - The company plans to continue focusing on product development and market expansion to drive future growth[9]. - Kingsoft Cloud is actively exploring new technologies and potential acquisitions to enhance its competitive position in the market[9]. - The management remains optimistic about future performance despite the recent revenue decline, citing strategic initiatives and market opportunities[9]. Research and Development - Research and development expenses were RMB 784.8 million, with a total of 1,243 R&D personnel as of December 31, 2023[19]. - The company established an AI R&D center in 2023, focusing on application, algorithms, and platform capabilities[19]. - The Wuhan R&D team grew to over 500 members, accounting for approximately 40% of the total R&D personnel[19]. Financial Position and Capital Management - Cash and cash equivalents as of December 31, 2023, were RMB 2,255.3 million (USD 317.7 million), a decrease of 34.0% from RMB 3,419.2 million as of December 31, 2022[28]. - The debt-to-equity ratio as of December 31, 2023, was 36.2%, up from 20.1% as of December 31, 2022[30]. - Capital expenditures totaled RMB 1,964.7 million (USD 276.7 million) in 2023, focusing on enhancing high-performance computing capabilities[18]. Corporate Governance and Compliance - The company has established a remuneration committee to determine the compensation policy for directors and senior management[96]. - The board consists of seven members, including two executive directors, two non-executive directors, and three independent non-executive directors[115]. - The company has fully complied with all provisions of the corporate governance code during the reporting period[113]. - The independent non-executive directors have confirmed that there are no conflicts of interest between the group and Kingsoft Software during the reporting period[120]. Shareholder and Equity Information - Major shareholder Kingsoft Software owns 1,423,246,584 shares, accounting for 37.40% of the issued share capital[162]. - The company has a total of 449,701,000 shares held beneficially by Xiaomi Group, representing 11.82% of the issued share capital[162]. - The board does not recommend the distribution of a final dividend for the fiscal year ending December 31, 2023[92]. Risks and Challenges - The company faces significant risks related to competition, data security, and potential impairment of goodwill, which constitutes a large portion of total assets[42]. - The company may be adversely affected by the ongoing political tensions between China and the United States[53]. - The company faces significant uncertainties regarding the interpretation and application of current and future Chinese laws and regulations, which may impact the enforceability of contracts with variable interest entities[52]. Related Party Transactions - The company confirmed that all related party transactions were conducted on normal commercial terms and were fair and reasonable to shareholders[85]. - The annual cap for cloud services provided by Kingsoft Group to the company is RMB 265.3 million, with actual transactions amounting to approximately RMB 236.0 million for the year ending December 31, 2023[58].