Anusuya Lahiri
2 min read
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Kingsoft Cloud Holdings (NASDAQ:KC) stock dropped on Wednesday after the company reported first-quarter 2025 results.
The company reported quarterly revenue of 1.97 billion Chinese yuan ($271.5 million), up 10.9% year-on-year (Y/Y) compared to the analyst consensus estimate of 2.24 billion Chinese yuan ($308.67 million).
Revenue declined 11.7% Q/Q, mainly due to the seasonal impact of the enterprise cloud.
The Y/Y revenue growth was led by increased contributions from Xiaomi, Kingsoft Ecosystem and AI-related customers, along with further penetration into enterprise cloud customers.
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Revenues from public cloud services increased by 14.0% Y/Y to 1.35 billion Chinese yuan ($186.5 million), mainly led by higher AI demands. The revenue declined by 4.0% Q/Q.
Revenues from enterprise cloud services were 616.5 million Chinese yuan ($85.0 million), an increase of 4.8% Y/Y. The revenue declined 25% Q/Q due to the impact of the Chinese New Year and differentiated delivery schedules for various projects.
The adjusted gross profit was 327.7 million Chinese yuan ($45.2 million), down from 427.7 million Chinese yuan ($58.94 million) in the preceding quarter. The company reported Y/Y growth in profit from 299.1 million Chinese yuan ($41.22 million) a year ago.
The quarterly margin declined to 16.6% from 19.2% in the preceding quarter due to the growing investment into AI and the delay of high-margin profile enterprise cloud projects.
Adjusted operating loss stood at 55.8 million Chinese yuan ($7.7 million) versus operating loss of 127.0 million Chinese yuan ($17.50 million) a year ago quarter.
Kingsoft, which clocked an adjusted loss per ADS of 11 cents, missed the consensus estimate of loss of 9 cents, and held 2.32 billion Chinese yuan ($320.1 million) in cash and equivalents as of March 31, 2025.
This quarter, Kingsoft Cloud’s AI business saw a significant increase in gross billing, rising by 228% year-over-year to 525 million Chinese yuan, the company said. This now represents 39% of their public cloud services.
Tao Zou, CEO of Kingsoft Cloud, expressed conviction in cloud services as infrastructure in the AI era is gaining greater traction despite uncertainties in the global supply chain.
Price Action: KC stock is trading lower by 7.05% to $11.99 at last check Wednesday.
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