KINGSOFT CLOUD (03896) announces third-quarter financial performance, with total revenue reaching 1.886 billion yuan, an increase of 16.0% year-on-year.

KINGSOFT CLOUD (03896) announced its performance for the third quarter of 2024, with total revenue reaching RMB 1.886 billion, an increase of 16.0% year-on-year. Gross profit was RMB 303.4 million, an increase of 54.6% year-on-year. Research and development expenses were approximately RMB 236 million, an increase of 17.7% year-on-year. Non-GAAP EBITDA was approximately RMB 185 million, turning from a loss to a profit year-on-year. The announcement stated that the increase in revenue was mainly due to revenue growth from Xiaomi and Kingsoft ecosystems and AI-related customers, as well as an increase in demand for industry cloud, partially offset by the company's voluntary reduction in the scale of low-profit content delivery network (CDN) services. Mr. Zou Tao, CEO of KINGSOFT CLOUD, said, "This quarter, our firm belief in and strong execution of the 'high-quality sustainable development strategy' continue to deliver robust performance. We are pleased to announce that revenue in the third quarter of 2024 further accelerated by 16%, and the non-GAAP EBITDA profit margin rapidly increased to 9.8%. The AI business continued to expand to RMB 362 million, accounting for approximately 31% of public cloud revenue. In addition, our revenue from the ecosystem increased significantly by 36% year-on-year as we deeply invested in the Xiaomi and Kingsoft ecosystems and explored substantial business opportunities in areas such as electric vehicles, LLM, and WPS AI. We believe we are on the right track and have the momentum to create more success in the future." Mr. He Haijian, CFO of KINGSOFT CLOUD, added, "We once again achieved strong quarterly performance, with growth in revenue and profits. The company's total revenue achieved double-digit year-on-year growth, reaching RMB 18.856 billion, signaling a recovery in revenue growth. At the same time, our gross profit and EBITDA profit growth rates far exceeded the industry average. Compared to the adjusted gross profit margin of 3.6% in the second quarter of 2022 (before the company's business restructuring and AI transformation), the adjusted gross profit margin in this quarter has increased by 4.5 times to 16.3%. The adjusted EBITDA profit margin has significantly increased from a loss of 8.6% in the second quarter of 2022 to a profit of 9.8% in this quarter, an increase of 18.4 percentage points. The company's revenue structure adjustment and AI strategic transformation have achieved significant results."