Financial Data and Key Metrics Changes - Kingsoft Cloud reported a year-over-year revenue growth of 11%, reaching RMB1.97 billion [8][19] - Non-GAAP gross profit increased by 9.6% year-over-year, totaling RMB327.7 million, but saw a quarter-over-quarter decrease of 23.4% [22] - Non-GAAP EBITDA margin improved to 16.2%, up from 1.9% in the same quarter last year [24] Business Line Data and Key Metrics Changes - Public cloud revenue reached RMB1.35 billion, a 14% increase year-over-year, driven by AI-related business [8][20] - AI gross billing surged to RMB525 million, representing over 200% year-over-year growth and accounting for 39% of public cloud revenue [10][13] - Enterprise cloud revenue was RMB616 million, up 5% year-over-year, but experienced a 25% sequential decline due to seasonal factors [20][21] Market Data and Key Metrics Changes - Revenue from the Xiaomi and Tingsoft ecosystem reached RMB500 million, a 50% increase year-over-year, contributing 25% to total revenue [11] - The public service sector is advancing AI applications, with Kingsoft Cloud building a rich set of model resources through an open-source model marketplace [14] Company Strategy and Development Direction - The company is focusing on high-quality and sustainable development, particularly in AI [8] - Kingsoft Cloud aims to strengthen its ecosystem cooperation and computing infrastructure deployment to advance its AI cloud services [12][18] - The company is leveraging partnerships for financing AI infrastructure, including financial leasing and bank loans [46] Management Comments on Operating Environment and Future Outlook - Management acknowledged market pressures and supply chain uncertainties but expressed confidence in long-term strategies [12] - The company expects better operating margins in the second half of the year, driven by top-line growth and AI project deployments [41] - Management highlighted the importance of tracking gross margin and EBITDA margin profiles as indicators for future performance [41] Other Important Information - Total capital expenditure for the quarter was RMB605 million, with a focus on AI infrastructure [20][46] - The company is prepared for potential impacts from chip restrictions, having built inventory and strengthened local partnerships [49][51] Q&A Session Summary Question: What are the reasons behind the weaker growth in public and enterprise cloud? - Management noted seasonality impacts, particularly due to the Chinese New Year and project delivery cycles, affecting enterprise cloud revenue [29] Question: Can management elaborate on the latest demand from Xiaomi? - The demand from Xiaomi is significant, with their new language model trained on Kingsoft's cluster, indicating potential for future revenue growth [30] Question: What are the business opportunities in the government affairs AI field? - The market for AI in government affairs is developing rapidly, leading to a joint solution with Kingsoft Office [34][35] Question: What is the outlook for non-GAAP operating margin in subsequent quarters? - Management expects improved operating margins in the second half of the year, contingent on top-line growth and project deployments [40][41] Question: How is the AI CapEx and OpEx structured? - Total CapEx for the quarter was RMB605 million, with a breakdown of OpEx including R&D and sales expenses [48]

Kingsoft Cloud Holdings (KC) Q1 2025 Earnings Call May 28, 2025 08:15 AM ET Speaker0 and thank you for standing by. Welcome to the Kingsford Cloud First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicole Schen, IR Director of Kingsoft Cl ...