Core Viewpoint - Kingsoft Cloud Holdings Limited reported a significant improvement in its financial performance for Q1 2024, achieving profitability in adjusted EBITDA and a sequential increase in revenue, driven primarily by growth in AI-related services. Financial Performance - Total revenues for Q1 2024 reached RMB1,775.7 million (US$245.91 million), a 3.1% increase from RMB1,722.5 million in Q4 2023, but a 4.8% decrease from RMB1,864.4 million in Q1 2023 [4][10]. - Adjusted EBITDA turned profitable at RMB33.2 million, with an adjusted EBITDA margin of 1.9%, compared to a loss of RMB130.5 million in Q1 2023 [2][11]. - Adjusted gross profit was RMB299.1 million, a 53.8% increase from RMB194.4 million in Q1 2023, with an adjusted gross margin of 16.8%, up from 10.4% in the same quarter last year [2][8]. Revenue Breakdown - Revenues from public cloud services increased by 12.9% quarter-over-quarter to RMB1,187.4 million (US$164.4 million) and by 2.9% year-over-year [5]. - Revenues from enterprise cloud services were RMB588.2 million (US$81.5 million), reflecting a decrease of 12.3% from the previous quarter and a 17.2% decline from Q1 2023 [5]. - AI-related revenue contributed approximately 13% of total revenues from public cloud services, up from 8% in the previous quarter [2]. Cost Management - Cost of revenues decreased significantly by 11.2% year-over-year to RMB1,482.4 million (US$205.3 million), primarily due to the scaling down of CDN services [6]. - Total operating expenses were RMB567.4 million (US$78.6 million), down from RMB595.9 million in the previous quarter and RMB792.1 million in Q1 2023 [8]. Profitability Metrics - Gross profit for Q1 2024 was RMB293.3 million (US$40.6 million), a 51.0% increase from RMB194.2 million in Q1 2023, with a gross margin of 16.5% [8][10]. - Net loss narrowed to RMB363.6 million (US$50.4 million) from RMB608.8 million in the same quarter of 2023 [10][11]. Cash Position - As of March 31, 2024, cash and cash equivalents were RMB1,811.7 million (US$250.9 million), down from RMB2,255.3 million at the end of 2023, primarily due to operational expenses and investments in computing power [11].

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]

BEIJING, May 09, 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 first quarter 2024 ended March 31, 2024 before the open of U.S. markets on Wednesday, May 22, 2024. Kingsoft Cloud's management will host an earnings conference call on Wednesday May 22, 2024 at 8:15 am, U.S. Eastern Time (8:15 pm, Beijing/Hong Kong Time on ...

BEIJING, May 09, 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 first quarter 2024 ended March 31, 2024 before the open of U.S. markets on Wednesday, May 22, 2024. Kingsoft Cloud’s management will host an earnings conference call on Wednesday May 22, 2024 at 8:15 am, U.S. Eastern Time (8:15 pm, Beijing/H ...

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].

BEIJING, April 30, 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 filed its annual report on Form 20-F for the fiscal year ended December 31, 2023 with the Securities and Exchange Commission ("SEC") on April 30, 2024. The annual report can be accessed on the Company's investor relations website at http://ir.ksyun.com as well as the SEC's website at http://www.sec.go ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 WASHINGTON, D.C. 20549 FORM 20-F For the fiscal year ended December 31, 2023. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITI ...

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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]