Financial Data and Key Metrics Changes - For the full year of 2023, adjusted gross margin increased to 12.2%, up from 5.4% in 2022, representing a significant improvement of 6.8 percentage points [6][23] - Adjusted gross profit for 2023 was RMB860 million, nearly doubling from RMB445 million in 2022 [6][23] - Normalized adjusted EBITDA improved to negative 3.4% in 2023 from negative 8.9% in 2022 [6][23] - In Q4 2023, total revenues reached RMB1.72 billion, a 6.0% increase quarter-over-quarter [7][18] - Adjusted gross margin for Q4 2023 was 15.2%, marking a 3.1 percentage point increase quarter-over-quarter [7][18] Business Line Data and Key Metrics Changes - Public cloud services revenue for Q4 2023 was RMB1.05 billion, a 3.5% increase quarter-over-quarter [7][18] - Excluding CDN business, public cloud revenue increased by 11.8% quarter-over-quarter [7] - Enterprise cloud services revenue was RMB670 million, increasing by 10.2% quarter-over-quarter [10][19] - CDN revenue decreased by nearly 10% compared to the previous quarter, contributing approximately 23% of total revenue [10][18] Market Data and Key Metrics Changes - Revenue from the Xiaomi and Kingsoft ecosystem reached 16% of total revenue, up 5 percentage points year-over-year [8] - AI business represented approximately 8% of public cloud revenues, with an 82% increase quarter-over-quarter [9] Company Strategy and Development Direction - The company is strategically adjusting its business mix and embracing AI opportunities to lay a solid foundation for sustainable development [6][16] - Focus on enhancing operational management and building strengths in technology and innovation [6][16] - The company aims to improve profitability through strict cost control and talent training [16] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive trend of profitability continuing into 2024, driven by synergies within the Xiaomi and Kingsoft Group ecosystems [23] - The company is optimistic about the demand for AI-related services and the potential for new customer growth [34][36] Other Important Information - The company signed a loan facility agreement with Kingsoft Corporation for RMB1.5 billion to support AI business development [9][22] - Cash and cash equivalents, along with long-term investments, amounted to RMB2.3 billion as of December 31, 2023, ensuring sufficient liquidity for operations [22] Q&A Session Summary Question: Can management provide insights on the AI strategy and CapEx plans? - Management highlighted the competitive positioning of AI products and the ongoing investment based on customer demand, though specifics on CapEx were not disclosed [25][30][31] Question: What are the drivers for gross margin improvement moving forward? - Management identified three key drivers: the stable CDN revenue contribution, cost-cutting measures, and improved project quality leading to higher margins [26][27][28] Question: What is the outlook for the enterprise cloud segment in 2024? - Management noted opportunities arising from the migration of state-owned asset companies to the cloud and the integration of digital assets with cloud services [42][45] Question: How does the company view the competitive landscape and pricing pressures? - Management acknowledged ongoing price competition but emphasized that customer satisfaction and service quality are more critical than pricing alone [46][48]

Revenue Performance - Total revenue for Q4 2023 reached RMB 1,722.5 million (USD 242.6 million), a 6.0% increase from RMB 1,625.2 million in Q3 2023, but a 19.2% decrease from RMB 2,131.0 million in Q4 2022[5] - Total revenue for the fiscal year 2023 was RMB 7,047.5 million (USD 992.6 million), a decrease of 13.8% from RMB 8,180.1 million in 2022[10] - Public cloud service revenue was RMB 4,381.7 million (USD 617.2 million), down 18.3% from RMB 5,360.3 million in 2022[10] - Industry cloud service revenue was RMB 2,664.0 million (USD 375.2 million), a decrease of 5.4% from RMB 2,817.0 million in 2022[10] - Public cloud service revenue increased by 3.5% quarter-over-quarter to RMB 1,052.0 million (USD 148.2 million), but decreased by 21.7% year-over-year from RMB 1,344.3 million[5] - Industry cloud service revenue was RMB 670.3 million (USD 94.4 million), a 10.2% increase from the previous quarter but a 14.7% decrease year-over-year[5] Profitability and Margins - Adjusted gross margin for 2023 was 12.2%, significantly up from 5.4% in 2022, with adjusted gross profit nearly doubling to RMB 859.9 million from RMB 445.2 million[4] - Gross profit reached RMB 253.1 million (USD 35.7 million), a significant increase of 56.3% compared to RMB 162.0 million in the same period of 2022, with a gross margin of 14.7% compared to 7.6% in 2022[7] - Operating loss narrowed to RMB 342.7 million (USD 48.3 million), significantly improved from RMB 804.8 million in the previous quarter and RMB 662.4 million in the same period of 2022[7] - Net loss was RMB 286.8 million (USD 40.4 million), a considerable reduction from RMB 789.7 million in the previous quarter and RMB 521.7 million in the same period of 2022[7] - The net loss for the three months ended December 31, 2023, was RMB 521,657 thousand, compared to a net loss of RMB 286,836 thousand for the same period in 2022, representing an increase in losses of 82%[26] - The net loss margin for the three months ended December 31, 2023, was -24.5%, compared to -16.7% for the same period in 2022, indicating a worsening profitability situation[27] Cost Management - Operating costs decreased by 25.4% year-over-year to RMB 1,469.3 million (USD 206.9 million), with IDC costs down 30.0% to RMB 740.4 million (USD 104.3 million)[5] - The company plans to continue strict cost control and believes there is potential for further improvement in profitability in 2024[4] - Total operating expenses amounted to RMB 595.9 million (USD 83.9 million), a substantial decrease from RMB 1,001.1 million in the previous quarter and RMB 824.3 million in the same period of 2022[7] Research and Development - The company established an AI research center and launched a Model-as-a-Service (MaaS) solution, enhancing data security features[4] - The workforce at the Wuhan research center exceeded 500 employees by the end of 2023, representing about 40% of the total R&D staff[4] - Research and development expenses were RMB 175.2 million (USD 24.7 million), further reduced from RMB 200.4 million in the previous quarter and RMB 255.5 million in the same period of 2022[7] Financial Position - Cash and cash equivalents and short-term investments totaled RMB 2,255.3 million (USD 317.7 million) as of December 31, 2023, indicating strong cash reserves[9] - Total current assets decreased from RMB 9,048,353,000 in 2022 to RMB 6,098,124,000 in 2023, a decline of approximately 32.3%[20] - Total non-current assets increased from RMB 8,267,878,000 in 2022 to RMB 8,972,154,000 in 2023, an increase of approximately 8.5%[20] - Total assets decreased from RMB 17,316,231,000 in 2022 to RMB 15,070,278,000 in 2023, a decline of approximately 12.9%[20] - Total current liabilities increased from RMB 6,658,626,000 in 2022 to RMB 6,828,590,000 in 2023, an increase of approximately 2.6%[20] - The total liabilities as of December 31, 2023, were RMB 7,824,374 thousand, slightly up from RMB 7,732,732 thousand in 2022, an increase of 1.2%[21] Future Outlook - The company is focusing on high-quality revenue expansion and improving profitability while creating value for customers, shareholders, employees, and society[4] - The company plans to hold an earnings conference call on March 20, 2024, at 8:15 AM ET[14] - The company plans to focus on expanding its public cloud services, which generated revenue of RMB 1,051,966 thousand for the three months ended December 31, 2023, compared to RMB 1,344,293 thousand in the same period of 2022, indicating a strategic shift in focus[22] Non-GAAP Metrics - The company utilizes several non-GAAP financial metrics to assess its operational performance, including non-GAAP gross profit and non-GAAP EBITDA[15] - Non-GAAP net loss was RMB 250.4 million (USD 35.3 million), compared to RMB 313.3 million in the previous quarter and RMB 552.7 million in the same period of 2022[9] - Adjusted EBITDA for the twelve months ended December 31, 2023, was RMB (726,170) thousand, compared to RMB (754,958) thousand for the same period in 2022, showing a slight improvement in operational performance[26] - The adjusted net loss for the three months ended December 31, 2023, was RMB (552,677) thousand, compared to RMB (250,410) thousand for the same period in 2022, representing a 120% increase in adjusted losses[26] - The adjusted net loss rate for the three months ended December 31, 2023, was -25.9%, compared to -14.5% for the same period in 2022, highlighting a decline in financial health[27] Cash Flow and Investments - The company reported a decrease in cash flow from operating activities to RMB 16,787 thousand for the three months ended December 31, 2023, down from RMB 370,446 thousand for the same period in 2022, reflecting operational challenges[28] - The net cash used in investing activities for the three months ended December 31, 2023, was RMB (1,414,761) thousand, compared to RMB (1,414,761) thousand for the same period in 2022, indicating a significant increase in investment outflows[28] - The company reported a net cash provided by financing activities of RMB 1,154,815 thousand for the three months ended December 31, 2023, compared to a net cash used of RMB (806,656) thousand for the same period in 2022, indicating a positive shift in financing[28] Currency and Exchange - The exchange rate used for converting RMB to USD is 7.0999 RMB per 1.00 USD as of December 31, 2023[17] - The company experienced a foreign exchange loss of RMB (132,290) thousand for the three months ended December 31, 2023, compared to a loss of RMB (74,011) thousand for the same period in 2022, indicating increased volatility in currency exchange[26]

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 7,047,461 thousand, a decrease of 13.8% compared to RMB 8,180,107 thousand in 2022[2] - Gross profit for the same period was RMB 850,169 thousand, representing a significant increase of 97.9% from RMB 429,538 thousand in 2022[2] - Net loss attributable to Kingsoft Cloud Holdings Limited was RMB 2,658,184 thousand, an increase of 18.1% compared to RMB 2,176,340 thousand in 2022[2] - Adjusted gross profit for 2023 was RMB 859,926 thousand, with an adjusted gross margin of 12.2%, up from 5.4% in 2022[5] - Adjusted net loss for 2023 was RMB 1,291,121 thousand, with an adjusted net loss margin of 18.3%, improved from 24.4% in 2022[6] - Adjusted EBITDA for 2023 was RMB (265,064) thousand, with an adjusted EBITDA margin of 3.8%, compared to (754,958) thousand and 9.2% in 2022[6] - The company reported a decrease in pre-tax loss of 18.7% from RMB (2,663,915) thousand in 2022 to RMB (2,165,688) thousand in 2023[2] - Operating loss was RMB 2,108.6 million (USD 297.0 million), an improvement from RMB 2,251.4 million in 2022[17] - Net loss was RMB 2,183.6 million (USD 307.6 million), compared to a net loss of RMB 2,688.4 million in 2022[17] - The company reported a total comprehensive loss attributable to shareholders of RMB (2,074,072) for the year ended December 31, 2023, compared to RMB (1,997,228) in the previous year, marking a 3.9% increase in losses[35] Revenue Breakdown - Total revenue for fiscal year 2023 reached RMB 7,047.5 million (USD 992.6 million), a decrease from RMB 8,180.1 million in 2022[14] - Public cloud service revenue was RMB 4,381.7 million (USD 617.2 million), while industry cloud service revenue was RMB 2,664.0 million (USD 375.2 million)[14] - Revenue from public cloud services was RMB 4,381,741 (USD 617,155) for the year ended December 31, 2023[48] Expenses and Costs - Research and development expenses for 2023 amounted to RMB 784.8 million, with a total of 1,243 R&D personnel as of December 31, 2023[11] - Capital expenditures totaled RMB 1,964.7 million (USD 276.7 million) in 2023, focusing on enhancing generative AI computing capabilities[10] - Sales and marketing expenses decreased to RMB 460.2 million (USD 64.8 million) from RMB 560.1 million in 2022[17] - The company’s total operating costs for the year were RMB 6,197,292 thousand, an increase from RMB 7,750,569 thousand in the previous year, reflecting a rise of approximately 12.5%[34] Assets and Liabilities - Cash and cash equivalents amounted to 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[19] - Total assets as of December 31, 2023, amounted to RMB 15,070,278, a decrease of 13.0% from RMB 17,316,231 in the previous year[36] - The total liabilities increased slightly to RMB 7,824,374 from RMB 7,732,732, reflecting a 1.2% rise[37] - The total equity attributable to shareholders decreased to RMB 6,890,152 from RMB 8,801,020, a decline of 21.6%[37] - Accounts payable as of December 31, 2023, totaled RMB 1,805,083, a decrease of approximately 21.6% from RMB 2,301,958 in 2022[58] Strategic Focus - The company plans to continue focusing on product development and market expansion strategies to improve financial performance in the upcoming periods[3] - The company aims to maintain strict control over costs and expenditures to improve operational efficiency and profitability[13] - The company has expanded its business scope into selected vertical industries, including internet, public services, healthcare, gaming, AI, and financial services[9] Governance and Compliance - The company has fully complied with the corporate governance code as per the Hong Kong Stock Exchange during the reporting period[26] - The audit committee reviewed the unaudited annual results for the year ended December 31, 2023, ensuring compliance with accounting policies[29] - The company has adopted an insider trading policy to regulate all transactions by directors and employees, ensuring compliance with the standard code[27] Other Financial Metrics - The company did not recommend the distribution of a final dividend for the year ended December 31, 2023[31] - Basic and diluted loss per share for 2023 was RMB 0.61, down from RMB 0.73 in 2022, reflecting an improvement of about 16.4%[56] - The company did not declare any dividends for the years ended December 31, 2023, and 2022[57] - The company reported a net cash used in operating activities for the year ended December 31, 2023, was RMB (169,070), compared to RMB 188,974 in the previous year, indicating a significant shift in cash flow[38]

Kingsoft Cloud Holdings Limited Sponsored ADR (KC) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years ...

BEIJING, March 08, 2024 (GLOBE NEWSWIRE) -- Kingsoft Cloud Holdings Limited (NASDAQ:KC) ("Kingsoft Cloud" or the "Company"), a leading independent cloud service provider in China, today announced that it will release its unaudited financial results for the fourth quarter and fiscal year 2023 ended December 31, 2023 before the open of U.S. markets on Wednesday, March 20, 2024. Kingsoft Cloud's management will host an earnings conference call on Wednesday March 20, 2024 at 8:15 am, U.S. Eastern Time (8:15 pm, ...

BEIJING, March 08, 2024 (GLOBE NEWSWIRE) -- Kingsoft Cloud Holdings Limited (NASDAQ: KC and HKEX: 3896) (“Kingsoft Cloud” or the “Company”), a leading independent cloud service provider in China, today announced that it will release its unaudited financial results for the fourth quarter and fiscal year 2023 ended December 31, 2023 before the open of U.S. markets on Wednesday, March 20, 2024. Kingsoft Cloud’s management will host an earnings conference call on Wednesday March 20, 2024 at 8:15 am, U.S. Easter ...

BEIJING, Feb. 08, 2024 (GLOBE NEWSWIRE) -- Kingsoft Cloud Holdings Limited ("we," "Kingsoft Cloud" or the "Company") (NASDAQ:KC), a leading independent cloud service provider in China, today announced that each of the proposed resolutions submitted for shareholders' approval as set forth in the notice of extraordinary general meeting dated January 12, 2024 have been adopted at the meeting held in Beijing, China today. Safe Harbor Statement This announcement contains forward-looking statements. These stateme ...

BEIJING, Jan. 11, 2024 (GLOBE NEWSWIRE) -- Kingsoft Cloud Holdings Limited ("we," "Kingsoft Cloud" or the "Company") (NASDAQ:KC), a leading independent cloud service provider in China, today announced that it will hold an extraordinary general meeting of the Company's shareholders (the "EGM") at 10:00 a.m., Hong Kong time on February 8, 2024 at Chongxian Hall, 2nd Floor, Conference Building, Taishan Hotel, No. 8 Anning Beili, Xisanqi, Haidian District, Beijing, PRC for the purposes of considering and, if th ...

Kingsoft Cloud Holdings Limited (NASDAQ:KC) Q3 2023 Results Conference Call November 21, 2023 7:15 AM ET Company Participants Wayne Wong - IR Manager Tao Zou - Vice Chairman and CEO Haijian He - CFO Conference Call Participants Xiaodan Zhang - CICC Timothy Zhao - Goldman Sachs Katrina Chiu - Citi Operator Good day and thank you for standing by. Welcome to Kingsoft Cloud's Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, ...

Revenue Performance - Total revenue for Q3 2023 was RMB 1,625.2 million (USD 222.8 million), a decrease of 17.5% compared to RMB 1,968.8 million in Q3 2022[4] - Public cloud service revenue was RMB 1,016.6 million (USD 139.3 million), down 24.5% year-over-year from RMB 1,346.0 million[4] - Industry cloud service revenue was RMB 608.5 million (USD 83.4 million), a slight decrease of 2.2% from RMB 622.0 million in Q3 2022[4] - Total revenue for the nine months ended September 30, 2023, was RMB 5,325,011 thousand, a decrease of 12% compared to RMB 6,049,094 thousand for the same period in 2022[15] - The company’s total income from public cloud services for the nine months ended September 30, 2023, was RMB 1,993,662 thousand, down from RMB 2,031,058 thousand for the same period in 2022[15] Profitability and Margins - Adjusted gross margin reached a historical high of 12.1%, up 5.8 percentage points from the same period last year[3] - Gross profit increased by 60.3% year-over-year to RMB 196.2 million (USD 26.9 million)[4] - Public cloud services gross profit reached RMB 48.1 million (USD 6.6 million), a significant improvement from a gross loss of RMB 22.1 million in the same period last year, with a gross margin of 4.7% compared to -1.6% year-over-year[6] - Industry cloud services gross profit was RMB 147.3 million (USD 20.2 million), up from RMB 143.8 million in the same period last year, with a gross margin increase from 23.1% to 24.2%[6] - The adjusted net loss margin for Q3 2023 was -22.1%, an improvement from -27.0% in Q3 2022[20] - The normalized adjusted EBITDA margin for Q3 2023 was -5.9%, compared to -10.3% in Q3 2022, indicating a 43.1% improvement[20] Operating Expenses and Losses - Total operating expenses amounted to RMB 1,001.1 million (USD 137.2 million), compared to RMB 569.7 million in the previous quarter and RMB 626.6 million in the same period last year[6] - Operating loss was RMB 804.8 million (USD 110.3 million), compared to an operating loss of RMB 363.1 million in the previous quarter and RMB 504.2 million in the same period last year[6] - Operating loss for the nine months ended September 30, 2023, was RMB 1,892,192 thousand, compared to RMB 2,149,306 thousand for the same period in 2022, indicating a reduction in losses[15] Cash Flow and Financial Position - Operating cash flow for the quarter was RMB 20.4 million, marking the second consecutive quarter of positive cash flow[3] - Cash flow from operating activities for Q3 2023 was RMB 20,372 thousand, down from RMB 100,929 thousand in Q3 2022[21] - Cash flow from investing activities for Q3 2023 was RMB 165,089 thousand, compared to RMB 323,754 thousand in Q3 2022, showing a decrease of 48.9%[21] - Cash flow used in financing activities for Q3 2023 was RMB (1,263,894) thousand, significantly higher than RMB (130,694) thousand in Q3 2022[21] - The net cash increase for Q3 2023 was RMB (1,078,433) thousand, contrasting with an increase of RMB 293,989 thousand in Q3 2022[21] - Cash and cash equivalents and short-term investments as of September 30, 2023, totaled RMB 2,612.1 million (USD 358.0 million)[8] - The ending cash and cash equivalents for Q3 2023 were RMB 2,731,628 thousand, down from RMB 3,206,354 thousand in Q3 2022[21] Net Loss and Adjusted Metrics - Net loss was RMB 789.7 million (USD 108.2 million), compared to a net loss of RMB 498.3 million in the previous quarter and RMB 801.4 million year-over-year[6] - Non-GAAP net loss narrowed to RMB 313.3 million (USD 42.9 million) from RMB 315.0 million in the previous quarter and RMB 530.7 million in the same period last year[7] - The net loss for Q3 2023 was RMB 498,272 thousand, a decrease from RMB 801,447 thousand in Q3 2022, representing a 37.9% improvement[20] - Adjusted net loss for Q3 2023 was RMB 314,960 thousand, compared to RMB 530,680 thousand in Q3 2022, reflecting a 40.7% reduction[20] - The adjusted EBITDA for Q3 2023 was a loss of RMB 61,395 thousand, an improvement from a loss of RMB 201,994 thousand in Q3 2022, indicating a 69.6% enhancement[20] Strategic Focus and Partnerships - The company continues to deepen strategic planning and cooperation with Xiaomi and Kingsoft to meet AI and cloud demands[3] - The company has a strong focus on cloud services, leveraging advanced cloud-native products and industry-specific solutions[12] - The company is committed to expanding its market presence and enhancing its cloud infrastructure capabilities[12]