Kingsoft Cloud Holdings Ltd. ((KC)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Kingsoft Cloud Holdings Ltd. painted a positive picture of the company’s financial health and strategic direction. The sentiment was overwhelmingly optimistic, driven by significant revenue growth and the company’s first-time profitability. The impressive performance was largely attributed to the booming AI business and strategic ecosystem partnerships with Xiaomi and Kingsoft. Despite some increased costs, the overall sentiment was one of strong growth and effective strategic execution.
Record Revenue Growth
Kingsoft Cloud reported a remarkable total revenue of RMB2.23 billion for the fourth quarter of 2024, marking a 30% year-over-year growth. This growth rate doubled from the previous quarter, positioning the company as a leader in the industry.
Public and Enterprise Cloud Revenue Growth
The company demonstrated balanced growth across its segments, with Public Cloud revenue increasing by 34% year-over-year and Enterprise Cloud revenue rising by 23% over the same period.
First-Time Profitability
Achieving profitability for the first time, Kingsoft Cloud reported a non-GAAP operating margin of 1.1%, a significant turnaround from a previous loss of 10.9%.
AI Business Surge
The AI-related business saw a surge with gross billing reaching RMB474 million, reflecting a nearly 500% year-over-year growth and contributing 34% to the Public Cloud revenue.
Xiaomi and Kingsoft Ecosystem Growth
Revenues from the Xiaomi and Kingsoft ecosystem grew by 78% year-over-year, reaching RMB493 million. This growth increased the ecosystem’s share of total revenues to 22%.
Increased Depreciation and Amortization Costs
The company faced a significant rise in depreciation and amortization costs, which increased from RMB146.9 million to RMB343.1 million this quarter, primarily due to newly acquired GPU services.
Cost Pressure from Solution Development
Solution development and service costs rose by 10.8% year-over-year to RMB557 million, driven by the expansion in Camelot personnel to support the company’s revenue growth.
Forward-Looking Guidance
Looking ahead, Kingsoft Cloud anticipates continued revenue growth and profitability improvement in 2025, fueled by advancements in AI and strategic partnerships within the Xiaomi and Kingsoft ecosystem. The company expects these factors to drive further success and solidify its market position.
In summary, Kingsoft Cloud’s earnings call highlighted a period of robust growth and strategic success, marked by record revenues and first-time profitability. The company’s focus on AI and strategic partnerships appears to be paying off, setting the stage for continued success in the coming year.