Guo Ji Jin Rong Bao·2025-08-21 13:30Core Viewpoint - Kingsoft's financial performance shows a mixed picture, with strong growth in office software and services but a significant decline in the gaming sector, impacting overall revenue [4][3]. Group 1: Financial Performance - For Q2 2025, Kingsoft reported revenue of 23.07 billion RMB, a decrease of 7% year-on-year and 1% quarter-on-quarter [4]. - Gross profit fell by 9% to 18.54 billion RMB, with a gross margin of 80%, down 3 percentage points year-on-year [4]. - Net profit attributable to shareholders increased by 35% to 5.32 billion RMB [4]. Group 2: Office Software and Services - Revenue from office software and services reached 13.56 billion RMB, representing a year-on-year growth of 14% and a quarter-on-quarter increase of 4%, accounting for 58.77% of total revenue [2][4]. - The growth in this segment is attributed to the performance of WPS 365 and personal WPS services, driven by product strength, high-quality service, and enhanced customer retention [2]. Group 3: Gaming Sector Performance - The gaming and other business segment generated revenue of 9.52 billion RMB, a significant decline of 26% year-on-year and 8% quarter-on-quarter, making up 41.26% of total revenue [3][4]. - The decline in gaming revenue is primarily due to underperformance of key titles such as "Dust White Zone" and "Jian Wang 3," which faced high comparative bases from the previous year [3]. - The gaming market, particularly for second-dimensional games, has been experiencing a downturn, with a reported 8% decrease in sales revenue for the first half of 2025 [5]. Group 4: AI and R&D Investment - Kingsoft's investment in AI is increasing, with R&D expenses rising by 18.7% to 9.59 billion RMB, representing 36.07% of revenue, an increase of 2.6 percentage points year-on-year [2]. - The company is focusing on AI integration across its office software components, which is seen as a key growth area in the industry [2].