Kingsoft Corp ((HK:3888)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Kingsoft Corporation presented a mixed outlook, reflecting both achievements and challenges. While the company celebrated significant strides in its office software and services business, particularly with WPS 365 and software localization projects, it faced hurdles with declining total revenue, online games revenue, and operating profit. Increased expenses and a notable decrease in profit further painted a challenging financial landscape for the company.
Growth in Office Software and Services Business
Kingsoft Corporation’s office software and services business showcased impressive growth, with revenue increasing by 26% year-over-year and 12% quarter-over-quarter, reaching RMB 1,521 million. This growth was primarily driven by the WPS software, WPS 365, and the WPS individual business, highlighting the company’s strong performance in this segment.
WPS 365 Business Expansion
The WPS 365 business experienced remarkable expansion, with revenue reaching RMB 201 million, marking a 72% increase year-on-year. This growth was attributed to enhanced collaboration and AI product offerings, underscoring Kingsoft’s strategic focus on innovation and technology.
WPS Software Business Localization Projects
Revenue from the WPS software business reached RMB 391 million, up 51% year-on-year. This increase was driven by robust localization projects and AI-enabled products tailored for government scenarios, showcasing Kingsoft’s commitment to adapting its offerings to meet diverse market needs.
Increase in WPS Office Active Devices
As of September 13, 2025, WPS Office global monthly active devices rose to 669 million, reflecting a 9% year-on-year increase. The PC version saw a 14% growth to 316 million, while the mobile version increased by 5% to 353 million, indicating a steady rise in user engagement across platforms.
Decline in Total Revenue
Despite some positive developments, Kingsoft’s total revenue fell to RMB 2.419 billion, a year-on-year decrease of 17%, although there was a quarter-on-quarter increase of 5%. This decline highlights the challenges the company faces in maintaining overall revenue growth.
Decrease in Online Games Revenue
Revenue from the online games and other business segments decreased significantly by 47% year-over-year and 6% quarter-over-quarter to RMB 898 million. This decline was primarily due to lower contributions from existing games and new games still in development.
Decline in Operating Profit
Operating profit before share-based compensation costs saw a steep decline, decreasing by 70% year-over-year and 21% quarter-over-quarter to RMB 357 million. This drop reflects the financial pressures the company is currently facing.
Increased Expenses
The company reported increased expenses, with research and development costs rising by 4% year-over-year and 5% quarter-over-quarter. Selling and distribution expenses also surged by 55% year-over-year and 33% quarter-over-quarter, indicating higher investments in strategic areas.
Profit Decline
Profit attributable to owners of the parent was RMB 213 million for this quarter, compared to RMB 413 million and RMB 532 million for the third quarter of 2024 and the second quarter of 2025, respectively. This significant decline in profit highlights the financial challenges Kingsoft is navigating.
Forward-Looking Guidance
During the earnings call, Kingsoft Corporation provided forward-looking guidance, emphasizing several key financial metrics and strategic priorities. The company reported total revenue for the third quarter of 2025 at RMB 2.419 billion, with a year-on-year decrease of 17% but a quarter-on-quarter increase of 5%. The office software and services segment continued to perform robustly, with a 26% year-over-year revenue growth. The company remains focused on AI collaboration and internationalization, with progress in AI-powered products and a strong cash position of RMB 26 billion as of September 30, 2025.
In summary, Kingsoft Corporation’s earnings call reflected a mixed sentiment, with notable achievements in the office software and services segment overshadowed by declines in total revenue and operating profit. The company’s focus on AI and localization projects presents a path forward, despite the current financial challenges. Investors and stakeholders will be keenly watching Kingsoft’s strategic moves in the coming quarters.