KINGSOFT CLOUD-金山云(03896) - 2024 - 中期财报

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