Kingsoft Cloud Announces Unaudited First Quarter 2024 Financial Results
Kingsoft Cloud (NASDAQ: KC) reported its unaudited financial results for Q1 2024. Total revenues stood at RMB 1,775.7 million (US$245.91 million), showing a QoQ increase of 3.1% but a YoY decline of 4.8%. Adjusted EBITDA turned positive at RMB 33.2 million with a margin of 1.9%. Adjusted gross profit rose 53.8% YoY to RMB 299.1 million.
Revenues from public cloud services increased by 12.9% QoQ to RMB 1,187.4 million, driven by AI-related revenues contributing 13%. However, revenues from enterprise cloud services fell 12.3% QoQ to RMB 588.2 million.
Operating expenses decreased to RMB 567.4 million, leading to a reduced operating loss of RMB 274.2 million. The net loss was RMB 363.6 million, showing an improvement from the previous year.
The company announced the resignation of Vice President Yifeng Qian and reported cash and cash equivalents of RMB 1,811.7 million as of March 31, 2024.
- Adjusted EBITDA turned positive at RMB 33.2 million.
- Adjusted gross profit rose 53.8% YoY to RMB 299.1 million.
- Revenues from public cloud services increased by 12.9% QoQ to RMB 1,187.4 million.
- Gross profit increased 51.0% YoY to RMB 293.3 million.
- Operating expenses decreased to RMB 567.4 million.
- Operating loss narrowed to RMB 274.2 million from RMB 597.9 million YoY.
- Non-GAAP net loss improved to RMB 217.3 million from RMB 412.5 million YoY.
- Total revenues decreased by 4.8% YoY to RMB 1,775.7 million.
- Revenues from enterprise cloud services decreased by 12.3% QoQ to RMB 588.2 million.
- Net loss increased to RMB 363.6 million from RMB 286.8 million last quarter.
- Cash and cash equivalents decreased to RMB 1,811.7 million from RMB 2,255.3 million as of December 31, 2023.
Insights
The first quarter financial results for Kingsoft Cloud show a notable turnaround in profitability thanks to strategic cost controls and business mix optimization. The adjusted EBITDA turned positive, reflecting disciplined expense management and the redirection towards higher-margin services like AI, which now contributes
Kingsoft Cloud's financials reveal a deliberate pivot towards AI, with a significant increase in AI-related revenues from
BEIJING, May 22, 2024 (GLOBE NEWSWIRE) -- Kingsoft Cloud Holdings Limited (“Kingsoft Cloud” or the “Company”) (NASDAQ: KC and HKEX: 3896), a leading independent cloud service provider in China, today announced its unaudited financial results for the first quarter ended March 31, 2024.
Mr. Tao Zou, Chief Executive Officer of Kingsoft Cloud, commented, “We welcome 2024 with an important milestone in our journey of high-quality and sustainable development. Our adjusted EBITDA turned profit, arriving at RMB33.2 million, representing an adjusted EBITDA margin of
Mr. Henry He, Chief Financial Officer of Kingsoft Cloud, added, “We are pleased to achieve growth in both sequentially revenue expansion and profitability improvements. This quarter our adjusted gross margin was
In April, we have released our fourth Environmental, Social and Governance (ESG) report since our listing in 2020, demonstrating our ambitions into the sustainable development.”
First Quarter 2024 Financial Results
Total Revenues reached RMB1,775.7 million (US
Revenues from public cloud services increased by | ||
Revenues from enterprise cloud services were RMB588.2 million (US | ||
__________________________
1 This press release contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB7.2203 to US
Other revenues were RMB0.1 million (US | ||
Cost of revenues was RMB1,482.4 million (US
Gross profit was RMB293.3 million (US
Total operating expenses were RMB567.4 million (US
Selling and marketing expenses were RMB116.8 million (US
General and administrative expenses were RMB218.7 million (US
Research and development expenses were RMB232.0 million (US
Operating loss was RMB274.2 million (US
Net loss was RMB363.6 million (US
__________________________
2 Non-GAAP gross profit is defined as gross profit excluding share-based compensation allocated in the cost of revenues and we define Non-GAAP gross margin as Non-GAAP gross profit as a percentage of revenues. See “Use of Non-GAAP Financial Measures” set forth at the end of this press release.
Non-GAAP net loss3 was RMB217.3 million (US
Non-GAAP EBITDA4 was RMB33.2 million (US
Basic and diluted net loss per share was RMB0.10 (US
Cash and cash equivalents were RMB1,811.7 million (US
Outstanding ordinary shares were 3,580,816,010 as of March 31, 2024, equivalent to about 238,721,067 ADSs.
Resignation of a Vice President
Mr. Yifeng Qian, one of our vice presidents and responsible for operation and management of certain Internet business segments, has recently tendered his resignation from his current position with the Company, effective from May 20, 2024. The resignation of Mr. Qian is due to his other personal commitments and does not result from any dispute or disagreement with the Company. The Company would like to extend sincere gratitude to Mr. Qian for his service and contributions to the Group and wishes him all the best in the future.
Conference Call Information
Kingsoft Cloud’s management will host an earnings conference call on Wednesday, May 22, 2024 at 8:15 am, U.S. Eastern Time (8:15 pm, Beijing/Hong Kong Time on the same day).
Participants can register for the conference call by navigating to https://register.vevent.com/register/BI48df2a86950a454eb6c5bcef5b120b4c. Once preregistration has been completed, participants will receive dial-in numbers, direct event passcode, and a unique access PIN.
To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your PIN, and you will join the conference instantly.
Additionally, a live and archived webcast of the conference call will also be available on the Company’s investor relations website at http://ir.ksyun.com.
Use of Non-GAAP Financial Measures
The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In evaluating our business, we consider and use certain non-GAAP measures, Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP EBITDA, Non-GAAP EBITDA margin, Non-GAAP net loss and Non-GAAP net loss margin, as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define Non-GAAP gross profit as gross profit excluding share-based compensation allocated in the cost of revenues, and we define Non-GAAP gross margin as Non-GAAP gross profit as a percentage of revenues. We define Non-GAAP net loss as net loss excluding share-based compensation, foreign exchange (gain) loss and impairment of long-lived assets, and we define Non-GAAP net loss margin as Non-GAAP net loss as a percentage of revenues. We define Non-GAAP EBITDA as Non-GAAP net loss excluding interest income, interest expense, income tax expense (benefit) and depreciation and amortization, and we define Non-GAAP EBITDA margin as Non-GAAP EBITDA as a percentage of revenues. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We also believe that the use of these non-GAAP measures facilitates investors’ assessment of our operating performance.
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3 Non-GAAP net loss is defined as net loss excluding share-based compensation, foreign exchange (gain) loss and impairment of long-lived assets, and we define Non-GAAP net loss margin as Non-GAAP net loss as a percentage of revenues. See “Use of Non-GAAP Financial Measures” set forth at the end of this press release.
4 Non-GAAP EBITDA is defined as Non-GAAP net loss excluding interest income, interest expense, income tax expense (benefit) and depreciation and amortization, and we define Non-GAAP EBITDA margin as Non-GAAP EBITDA as a percentage of revenues. See “Use of Non-GAAP Financial Measures” set forth at the end of this press release.
These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.
We compensate for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.
Exchange Rate Information
This press release contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from RMB to U.S. dollars, in this press release, were made at a rate of RMB7.2203 to US
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the Business Outlook, and quotations from management in this announcement, as well as Kingsoft Cloud’s strategic and operational plans, contain forward-looking statements. Kingsoft Cloud may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Kingsoft Cloud’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Kingsoft Cloud’s goals and strategies; Kingsoft Cloud’s future business development, results of operations and financial condition; relevant government policies and regulations relating to Kingsoft Cloud’s business and industry; the expected growth of the cloud service market in China; the expectation regarding the rate at which to gain customers, especially Premium Customers; Kingsoft Cloud’s ability to monetize the customer base; fluctuations in general economic and business conditions in China; and the economy in China and elsewhere generally; China’s political or social conditions and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Kingsoft Cloud’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Kingsoft Cloud does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
About Kingsoft Cloud Holdings Limited
Kingsoft Cloud Holdings Limited (NASDAQ: KC and HKEX:3896) is a leading independent cloud service provider in China. With extensive cloud infrastructure, cutting-edge cloud-native products based on vigorous cloud technology research and development capabilities, well-architected industry-specific solutions and end-to-end fulfillment and deployment, Kingsoft Cloud offers comprehensive, reliable and trusted cloud service to customers in strategically selected verticals.
For more information, please visit: http://ir.ksyun.com.
For investor and media inquiries, please contact:
Kingsoft Cloud Holdings Limited
Nicole Shan
Tel: +86 (10) 6292-7777 Ext. 6300
Email: ksc-ir@kingsoft.com
KINGSOFT CLOUD HOLDINGS LIMITED | ||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(All amounts in thousands) | ||||||
Dec 31, 2023 | Mar 31, 2024 | Mar 31, 2024 | ||||
RMB | RMB | US$ | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | 2,255,287 | 1,811,739 | 250,923 | |||
Restricted cash | 234,194 | 279,021 | 38,644 | |||
Accounts receivable, net | 1,529,915 | 1,649,807 | 228,496 | |||
Prepayments and other assets | 1,812,692 | 1,995,805 | 276,415 | |||
Amounts due from related parties | 266,036 | 501,818 | 69,501 | |||
Total current assets | 6,098,124 | 6,238,190 | 863,979 | |||
Non-current assets: | ||||||
Property and equipment, net | 2,186,145 | 3,138,111 | 434,623 | |||
Intangible assets, net | 834,478 | 791,101 | 109,566 | |||
Prepayments and other assets | 870,781 | 757,010 | 104,845 | |||
Equity investments | 259,930 | 254,546 | 35,254 | |||
Goodwill | 4,605,724 | 4,605,724 | 637,885 | |||
Amounts due from related parties | 56,264 | 12,264 | 1,699 | |||
Operating lease right-of-use assets | 158,832 | 155,534 | 21,541 | |||
Total non-current assets | 8,972,154 | 9,714,290 | 1,345,413 | |||
Total assets | 15,070,278 | 15,952,480 | 2,209,392 | |||
LIABILITIES, NON-CONTROLLING INTERESTS AND SHAREHOLDERS EQUITY | ||||||
Current liabilities: | ||||||
Short-term bank loans | 1,110,896 | 1,218,629 | 168,778 | |||
Accounts payable | 1,805,083 | 1,926,718 | 266,847 | |||
Accrued expenses and other current liabilities | 2,838,085 | 2,627,576 | 363,915 | |||
Income tax payable | 63,961 | 60,288 | 8,350 | |||
Amounts due to related parties | 931,906 | 1,135,180 | 157,221 | |||
Current operating lease liabilities | 78,659 | 66,802 | 9,252 | |||
Total current liabilities | 6,828,590 | 7,035,193 | 974,363 | |||
Non-current liabilities: | ||||||
Long-term bank loans | 100,000 | 198,352 | 27,471 | |||
Deferred tax liabilities | 142,565 | 121,567 | 16,837 | |||
Amounts due to related parties | 40,069 | 838,121 | 116,078 | |||
Other liabilities | 634,803 | 668,238 | 92,550 | |||
Non-current operating lease liabilities | 78,347 | 83,220 | 11,526 | |||
Total non-current liabilities | 995,784 | 1,909,498 | 264,462 | |||
Total liabilities | 7,824,374 | 8,944,691 | 1,238,825 | |||
Shareholders’ equity: | ||||||
Ordinary shares | 25,443 | 25,576 | 3,542 | |||
Treasury stock | (208,385 | ) | (208,385 | ) | (28,861 | ) |
Additional paid-in capital | 18,811,028 | 18,921,780 | 2,620,636 | |||
Statutory reserves funds | 21,765 | 21,765 | 3,014 | |||
Accumulated deficit | (12,315,041 | ) | (12,674,451 | ) | (1,755,391 | ) |
Accumulated other comprehensive income | 555,342 | 576,087 | 79,787 | |||
Total Kingsoft Cloud Holdings Limited shareholders’ equity | 6,890,152 | 6,662,372 | 922,727 | |||
Non-controlling interests | 355,752 | 345,417 | 47,840 | |||
Total equity | 7,245,904 | 7,007,789 | 970,567 | |||
Total liabilities, non-controlling interests and shareholders’ equity | 15,070,278 | 15,952,480 | 2,209,392 | |||
KINGSOFT CLOUD HOLDINGS LIMITED | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||
(All amounts in thousands, except for share and per share data) | ||||||||
Three Months Ended | ||||||||
Mar 31, 2023 | Dec 31, 2023 | Mar 31, 2024 | Mar 31, 2024 | |||||
RMB | RMB | RMB | US$ | |||||
Revenues: | ||||||||
Public cloud services | 1,153,674 | 1,051,966 | 1,187,370 | 164,449 | ||||
Enterprise cloud services | 709,976 | 670,331 | 588,162 | 81,459 | ||||
Others | 750 | 153 | 152 | 21 | ||||
Total revenues | 1,864,400 | 1,722,450 | 1,775,684 | 245,929 | ||||
Cost of revenues | (1,670,215 | ) | (1,469,312 | ) | (1,482,431 | ) | (205,314 | ) |
Gross profit | 194,185 | 253,138 | 293,253 | 40,615 | ||||
Operating expenses: | ||||||||
Selling and marketing expenses | (88,053 | ) | (126,477 | ) | (116,752 | ) | (16,170 | ) |
General and administrative expenses | (303,493 | ) | (294,240 | ) | (218,695 | ) | (30,289 | ) |
Research and development expenses | (215,370 | ) | (175,155 | ) | (231,963 | ) | (32,127 | ) |
Impairment of long-lived assets | (185,135 | ) | - | - | - | |||
Total operating expenses | (792,051 | ) | (595,872 | ) | (567,410 | ) | (78,586 | ) |
Operating loss | (597,866 | ) | (342,734 | ) | (274,157 | ) | (37,971 | ) |
Interest income | 14,068 | 12,442 | 8,370 | 1,159 | ||||
Interest expense | (27,927 | ) | (46,992 | ) | (51,066 | ) | (7,073 | ) |
Foreign exchange gain (loss) | 93 | 74,011 | (42,737 | ) | (5,919 | ) | ||
Other loss, net | (7,946 | ) | (16,741 | ) | (8,207 | ) | (1,137 | ) |
Other income (expense), net | 12,286 | 33,776 | (11,190 | ) | (1,550 | ) | ||
Loss before income taxes | (607,292 | ) | (286,238 | ) | (378,987 | ) | (52,491 | ) |
Income tax (expense) benefit | (1,529 | ) | (598 | ) | 15,371 | 2,129 | ||
Net loss | (608,821 | ) | (286,836 | ) | (363,616 | ) | (50,362 | ) |
Less: net loss attributable to non-controlling interests | (1,833 | ) | (2,688 | ) | (4,206 | ) | (583 | ) |
Net loss attributable to Kingsoft Cloud Holdings Limited | (606,988 | ) | (284,148 | ) | (359,410 | ) | (49,779 | ) |
Net loss per share: | ||||||||
Basic and diluted | (0.17 | ) | (0.08 | ) | (0.10 | ) | (0.01 | ) |
Shares used in the net loss per share computation: | ||||||||
Basic and diluted | 3,546,512,621 | 3,570,915,939 | 3,614,662,846 | 3,614,662,846 | ||||
Other comprehensive (loss) income, net of tax of nil: | ||||||||
Foreign currency translation adjustments | (29,833 | ) | (67,636 | ) | 20,704 | 2,867 | ||
Comprehensive loss | (638,654 | ) | (354,472 | ) | (342,912 | ) | (47,495 | ) |
Less: Comprehensive loss attributable to non-controlling interests | (1,834 | ) | (2,662 | ) | (4,247 | ) | (588 | ) |
Comprehensive loss attributable to Kingsoft Cloud Holdings Limited shareholders | (636,820 | ) | (351,810 | ) | (338,665 | ) | (46,907 | ) |
KINGSOFT CLOUD HOLDINGS LIMITED | ||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS | ||||
(All amounts in thousands, except for percentage) | ||||
Three Months Ended | ||||
Mar 31, 2023 | Dec 31, 2023 | Mar 31, 2024 | Mar 31, 2024 | |
RMB | RMB | RMB | US$ | |
Gross profit | 194,185 | 253,138 | 293,253 | 40,615 |
Adjustments: | ||||
– Share-based compensation expenses (allocated in cost of revenues) | 224 | 9,330 | 5,814 | 805 |
Adjusted gross profit (Non-GAAP Financial Measure) | 194,409 | 262,468 | 299,067 | 41,420 |
KINGSOFT CLOUD HOLDINGS LIMITED | ||||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS | ||||||
(All amounts in thousands, except for percentage) | ||||||
Three Months Ended | ||||||
Mar 31, 2023 | Dec 31, 2023 | Mar 31, 2024 | ||||
Gross margin | 10.4 | % | 14.7 | % | 16.5 | % |
Adjusted gross margin (Non-GAAP Financial Measure) | 10.4 | % | 15.2 | % | 16.8 | % |
KINGSOFT CLOUD HOLDINGS LIMITED | ||||||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS | ||||||||
(All amounts in thousands, except for percentage) | ||||||||
Three Months Ended | ||||||||
Mar 31, 2023 | Dec 31, 2023 | Mar 31, 2024 | Mar 31, 2024 | |||||
RMB | RMB | RMB | US$ | |||||
Net Loss | (608,821 | ) | (286,836 | ) | (363,616 | ) | (50,362 | ) |
Adjustments: | ||||||||
– Share-based compensation expenses | 11,309 | 110,437 | 103,595 | 14,348 | ||||
– Foreign exchange (gain) loss | (93 | ) | (74,011 | ) | 42,737 | 5,919 | ||
– Impairment of long-lived assets | 185,135 | - | - | - | ||||
Adjusted net loss (Non-GAAP Financial Measure) | (412,470 | ) | (250,410 | ) | (217,284 | ) | (30,095 | ) |
Adjustments: | ||||||||
– Interest income | (14,068 | ) | (12,442 | ) | (8,370 | ) | (1,159 | ) |
– Interest expense | 27,927 | 46,992 | 51,066 | 7,073 | ||||
– Income tax expense (benefit) | 1,529 | 598 | (15,371 | ) | (2,129 | ) | ||
– Depreciation and amortization | 266,535 | 187,542 | 223,146 | 30,905 | ||||
Adjusted EBITDA (Non-GAAP Financial Measure) | (130,547 | ) | (27,720 | ) | 33,187 | 4,595 | ||
– Loss (gain) on disposal of property and equipment | 20,216 | - | (23,821 | ) | (3,299 | ) | ||
Excluding loss or gain on disposal of property and equipment, normalized Adjusted EBITDA | (110,331 | ) | (27,720 | ) | 9,366 | 1,296 | ||
KINGSOFT CLOUD HOLDINGS LIMITED | ||||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS | ||||||
(All amounts in thousands, except for percentage) | ||||||
Three Months Ended | ||||||
Mar 31, 2023 | Dec 31, 2023 | Mar 31, 2024 | ||||
Net loss margin | -32.7 | % | -16.7 | % | -20.5 | % |
Adjusted net loss margin (Non-GAAP Financial Measure) | -22.1 | % | -14.5 | % | -12.2 | % |
Adjusted EBITDA margin (Non-GAAP Financial Measure) | -7.0 | % | -1.6 | % | 1.9 | % |
Normalized Adjusted EBITDA margin | -5.9 | % | -1.6 | % | 0.5 | % |
KINGSOFT CLOUD HOLDINGS LIMITED | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
(All amounts in thousands) | ||||||||
Three Months Ended | ||||||||
Mar 31, 2023 | Dec 31, 2023 | Mar 31, 2024 | Mar 31, 2024 | |||||
RMB | RMB | RMB | US$ | |||||
Net cash (used in) generated from operating activities | (271,387 | ) | 16,787 | (321,336 | ) | (44,505 | ) | |
Net cash generated from (used in) investing activities | 319,670 | (1,414,761 | ) | (1,169,017 | ) | (161,907 | ) | |
Net cash generated from financing activities | 103,994 | 1,154,815 | 1,112,096 | 154,024 | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (19,818 | ) | 1,013 | (20,464 | ) | (2,834 | ) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 152,277 | (243,159 | ) | (378,257 | ) | (52,388 | ) | |
Cash, cash equivalents and restricted cash at beginning of period | 3,533,726 | 2,731,627 | 2,489,481 | 344,789 | ||||
Cash, cash equivalents and restricted cash at end of period | 3,666,185 | 2,489,481 | 2,090,760 | 289,567 | ||||
FAQ
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