Kingsoft Cloud Holdings Limited (NASDAQ:KC) Q2 2021 Earnings Conference Call August 25, 2021 8:00 AM ET Company Participants Nicole Shan - IR Manager Yulin Wang - CEO Haijian He - CFO Conference Call Participants Brian Gong - Citigroup Thomas Chong - Jefferies Joel Ying - Nomura Operator Good day and thank you for standing by. Welcome to the Kingsoft Cloud Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a ...

Kingsoft Cloud Holdings Limited. (NASDAQ:KC) Q1 2021 Results Earnings Conference Call May 18, 2021 8:00 AM ET Company Participants Nicole Shan - IR Manager Yulin Wang - CEO Haijian He - CFO Conference Call Participants Brian Gong - Citigroup Joel Ying - Nomura Kyna Wong - Credit Suisse Thompson Wu - UBS Elsie Cheng - Goldman Sachs Operator Good morning ladies and gentlemen, and thank you for standing by for Kingsoft Cloud First Quarter 2021 Earnings Conference Call. At this time all participants are in a li ...

Taxation - The company reported a statutory income tax rate of 25% for its PRC entities, with a preferential rate of 15% for certain qualified entities from 2019 to 2021 [475]. - The company did not make any provisions for Hong Kong profit tax for the years ended December 31, 2018, 2019, and 2020 due to no assessable profits [474]. Revenue Recognition - The company adopted ASC 606 for revenue recognition, applying a five-step model to account for contracts with customers [478]. - Revenue from public cloud services is recognized over time based on monthly utilization records, reflecting simultaneous consumption and delivery of services [481]. - The company provides customized cloud-based solutions with revenue recognized at a point in time upon customer acceptance, while maintenance revenue is recognized over time [482]. - Revenue is allocated to each performance obligation based on standalone selling prices, with contract assets and liabilities recognized in the balance sheets [479]. - The company provides integrated cloud-based services and recognizes revenue over time based on monthly utilization records [481]. - The enterprise cloud services include customized solutions with revenue recognized at a point in time upon customer acceptance and over time for maintenance services [482]. Financial Performance - The company recorded a net loss of RMB962.2 million (US$147.5 million) for the year ended December 31, 2020, compared to RMB1,111.2 million in 2019 [504]. - Adjusted EBITDA for the year ended December 31, 2020 was RMB(119,098) [502]. - The company's accumulated deficits increased to RMB5,864.4 million (US$898.8 million) as of December 31, 2020 [504]. - Revenues increased by 66.2% from RMB 3,956.4 million in 2019 to RMB 6,577.3 million (US$1,008.0 million) in 2020 [453]. - Revenues from public cloud services rose by 49.4% from RMB 3,458.8 million in 2019 to RMB 5,166.9 million (US$791.9 million) in 2020, driven by increased average revenues per customer [454]. - Revenues from enterprise cloud services surged by 182.3% from RMB 486.3 million in 2019 to RMB 1,372.7 million (US$210.4 million) in 2020, attributed to a rise in the number of premium customers [456]. - The adjusted net loss margin improved to (12.5%) for the year ended December 31, 2020, compared to (24.2%) in 2019 [502]. - The gross margin for 2020 was 5.4%, an improvement from 0.2% in 2019 [502]. Cash Flow and Investments - As of December 31, 2020, the company had cash and cash equivalents of RMB3,424.7 million (US$524.9 million) and short-term investments of RMB2,693.0 million (US$412.7 million) [503]. - The company incurred net cash used in operations of RMB290.4 million (US$44.5 million) for the year ended December 31, 2020 [504]. - Net cash used in operating activities was RMB290.4 million (US$44.5 million) in 2020, compared to RMB439.1 million in 2019 and RMB383.1 million in 2018 [508][510][511]. - The net cash generated from financing activities in 2020 was RMB6,124.2 million (US$938.6 million), significantly higher than RMB64.5 million in 2019 and RMB2,435.8 million in 2018 [514][515]. - The net cash used in investing activities in 2020 was RMB4,314.0 million (US$661.2 million), primarily due to short-term investments and property purchases [512]. - Capital expenditures increased to RMB1,591.6 million (US$243.9 million) in 2020, up from RMB999.7 million in 2019 and RMB1,096.2 million in 2018 [516]. Shareholder Equity and Compensation - The Series A convertible preferred shares are classified as permanent equity, while Series B, C, D, and D+ shares are classified as mezzanine equity due to potential redemption [486]. - Share-based compensation is accounted for under ASC 718, with fair values determined using the binomial option-pricing model [490]. - The company has not recognized any beneficial conversion features for preferred shares as the fair values were less than the conversion prices during the periods presented [488]. - As of March 31, 2021, options to purchase a total of 83,962,324 ordinary shares are outstanding under the 2013 Share Option Scheme [543]. - The maximum aggregate number of ordinary shares available for exercise under the 2013 Share Option Scheme is 209,750,000 [543]. - The company has entered into employment agreements with each executive officer for an indefinite duration [540]. - The company granted 47,000,000 awards to Yulin Wang with an exercise price ranging from nil to $0.86978, expiring on January 20, 2030 [555]. Employee and Labor Relations - The company employed 2,166 full-time employees as of December 31, 2020, with 59% in research and development, 25% in sales and marketing, and 12% in general administration [570]. - The company has not experienced any material labor disputes and maintains a good working relationship with its employees [572]. - The company participates in various employee social security plans under PRC law, contributing specified percentages of salaries and bonuses [572]. Corporate Governance - The audit committee consists of three independent directors, including Mr. Mingto Yu, who qualifies as an "audit committee financial expert" [561]. - The compensation committee is responsible for reviewing and approving compensation for executive officers and incentive compensation plans [563]. - The nominating and corporate governance committee assists in selecting qualified individuals for the board and evaluating board performance [564]. Market and Customer Insights - The total revenues from Premium Customers increased from RMB 2,114.2 million in 2018 to RMB 6,449.2 million (US$ 938.4 million) in 2020, accounting for 95.3%, 97.4%, and 98.1% of total revenues in those years respectively [442]. - The number of Premium Customers grew from 154 in 2018 to 322 in 2020, with the average revenue per Premium Customer increasing from RMB 13.7 million to RMB 20.0 million [443]. - The net dollar retention rate for Public Cloud Service Premium Customers was 161% in 2018, decreasing to 146% in 2020 [443]. - Public cloud services generated revenues of RMB 5,166.9 million (US$ 791.9 million) in 2020, representing 78.5% of total revenues [445]. - The company plans to continue investing in technology, talent, and infrastructure to enhance its cloud services capabilities [438]. - The company aims to capture market opportunities in traditional industries and public service organizations through its enterprise cloud services [440]. - The total number of Public Cloud Service Premium Customers increased from 139 in 2018 to 191 in 2020 [443]. - The company is focused on enhancing the quality and efficiency of its products and solutions to retain existing customers and acquire new ones [436]. Impairment and Asset Management - The company evaluates long-lived assets for impairment based on future undiscounted cash flows, recognizing impairment losses when necessary [484]. - Impairment of long-lived assets is evaluated based on future undiscounted cash flows, recognizing impairment losses when necessary [484]. Miscellaneous - There are no known trends or uncertainties that could materially affect the company's financial condition for the year ended December 31, 2020 [521]. - The company has not entered into any financial guarantees or derivative contracts that would affect its financial obligations [523].

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Kingsoft Cloud Holdings Limited (NASDAQ:KC) Q2 2020 Earnings Conference Call August 18, 2020 8:00 AM ET Company Participants Nicole Shan - Investment Relations Manager Yulin Wang - Chief Executive Officer Haijian He - Chief Financial Officer Conference Call Participants Alex Yao - JPMorgan Kyna Wong - Credit Suisse Dan Wong - Macquarie Operator Ladies and gentlemen, thank you for standing by. And welcome to the Kingsoft Cloud's second quarter 2020 earnings conference call. [Operator Instructions] Please be ...

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