Guo Ji Jin Rong Bao·2025-11-20 14:45Core Viewpoint - Kingsoft's core business is showing a diverging trend, with significant revenue decline in its gaming segment while the office software segment experiences growth [2][5]. Financial Performance - For Q3 ending September 30, 2025, Kingsoft reported total revenue of 2.419 billion RMB, a 17% year-on-year decrease [3]. - Gross profit fell by 21% to 1.944 billion RMB, and net profit nearly halved, down 48% to 213 million RMB [2][3]. - Office software and services revenue was 1.521 billion RMB, up 26% year-on-year, accounting for 63% of total revenue [3][5]. - Network gaming and other revenues plummeted by 47% to 898 million RMB, making up 37% of total revenue [2][3]. Office Software Segment - The growth in office software revenue is attributed to the performance of WPS software, WPS 365, and personal business, driven by increased demand from private enterprises and local state-owned enterprises [5]. - As of September 30, WPS Office had 669 million monthly active devices, an 8.83% increase year-on-year [5]. - The number of paid personal users reached 41.79 million, a 10% increase from the previous year [5]. AI and R&D Investment - Kingsoft is focusing on AI development, with R&D expenses rising by 18.48% to 1.495 billion RMB, representing 35.77% of revenue [6]. - The company has launched WPS AI 3.0 and is enhancing its product offerings in AI, collaboration, and internationalization [5][6]. Gaming Segment Challenges - The gaming segment's revenue dropped significantly, with marketing expenses for Q3 reaching 564 million RMB, a 55% year-on-year increase [10]. - The decline in gaming revenue is attributed to reduced contributions from existing games and the slow market establishment of new titles [10]. - The performance of the game "Limitless Mecha" has been disappointing, with a significant drop in player engagement shortly after launch [10][12]. Competitive Landscape - The office software market is highly competitive, with products like Microsoft Office, ByteDance's Feishu, and Tencent Docs competing directly with WPS Office [8]. - Balancing commercialization and user experience remains a critical challenge for Kingsoft in the face of intense competition [8].