Beijing Kingsoft Office Software, Inc (688111.SH) revenue in 2023 is 4.556 billion, a year-on-year growth of 17.27%. WPS AI accelerates the commercialization process.

On the evening of March 20, Beijing Kingsoft Office Software, Inc (688111.SH) officially announced its 2023 annual report data. In 2023, Beijing Kingsoft Office Software, Inc's revenue and net profit both saw comprehensive growth, with operating income of 4.556 billion yuan, a year-on-year increase of 17.27%; net profit attributable to owners of the parent company was 1.318 billion yuan, a year-on-year increase of 17.92%; net profit attributable to owners of the parent company after deducting non-recurring gains and losses was 1.262 billion yuan, a year-on-year increase of 34.45%, with profitability continuing to improve. In its main business, subscription services as Beijing Kingsoft Office Software, Inc's core growth engine saw revenues of 3.611 billion yuan in 2023, accounting for 79% of total revenue, an 8 percentage point increase year-on-year. WPS 365 drove growth in institutional subscription revenue and promoted the implementation of new quality office productivity. In 2023, Beijing Kingsoft Office Software, Inc launched the WPS 365 new quality office productivity platform for organizational clients, driving domestic institutional subscription and service revenue to 957 million yuan, a 38.36% increase year-on-year. During the reporting period, WPS 365 deeply served the digital transformation needs of domestic institutional clients and continued to explore feasible solutions for the landing of WPS AI in political and enterprise office scenarios, such as providing services in the document domain like AI-generated content, personalized knowledge base retrieval, and data intelligent analysis, promoting the accelerated iteration of the new generation of office software and the practical implementation of new quality office productivity in various office scenarios. By the end of 2023, Beijing Kingsoft Office Software, Inc has served more than 17,000 top government and enterprise clients, including government clients in Yunnan, Zhejiang, Shandong, as well as the Shanghai Stock Exchange, China Securities Co., Ltd., Hua Xia Bank, Xiamen Bank Co., Ltd., State Grid Zhejiang, Hubei Tourism, Guangdong Airport, Geely, Xiangxing, Aux, Iflytek Co., and other well-known enterprises, forming an industry benchmark effect. In the public cloud field, the number of paying enterprises increased by 83% year-on-year. In the education industry, Beijing Kingsoft Office Software, Inc leveraged innovative technology advantages to promote the development of digital education office. In 2023, WPS 365 Education Edition covered more than 30 universities including Tsinghua University, Shanghai Jiao Tong University, Fudan University, Beihang University, Northwestern Polytechnical University, Xi'an Jiaotong University, Sichuan University, Jilin University, reaching over 360,000 students and teachers. By the end of 2023, Beijing Kingsoft Office Software, Inc has covered over 130 schools of the 985/211 project. Member upgrades drove rapid growth in personal subscription services, WPS AI accelerated commercialization process. In 2023, Beijing Kingsoft Office Software, Inc upgraded its WPS member benefits structure, covering different user groups with precise packaging of diverse rights combinations, constantly improving personal user conversion and average customer expenditure, driving rapid growth in personal subscription service revenue. During the reporting period, domestic personal office service subscription revenue for Beijing Kingsoft Office Software, Inc reached 2.653 billion yuan, a year-on-year increase of 29.42%. During the same period, Beijing Kingsoft Office Software, Inc released the WPS AI intelligent office application based on large language models, focusing on the strategic directions of AIGC (content creation), Copilot (smart assistant), and Insight (knowledge insight), leading the AI landing in the domestic office software field and bringing achievements to users. WPS AI completed the filing in November and started public testing, and with the commercialization of WPS AI in the future, Beijing Kingsoft Office Software, Inc is expected to further expand the payment space for personal subscription services. It is worth mentioning that despite the adverse impact of sluggish global PC shipment volumes, Beijing Kingsoft Office Software, Inc's active device numbers and paying users continued to grow. Data from research firm Gartner showed that the total global personal computer shipments in 2023 were 241.8 million units, a year-on-year decrease of 14.8%, marking the second consecutive year of double-digit decline. By the end of 2023, Beijing Kingsoft Office Software, Inc's main product monthly active device number had reached 598 million, a year-on-year increase of 4.36%, and the cumulative annual paying personal users increased by 18.43% to 35.49 million. During the reporting period, Beijing Kingsoft Office Software, Inc gradually shrunk and officially closed its domestic personal edition third-party commercial advertisements in December, further optimizing its revenue structure. In 2023, internet advertising promotion services and other revenue decreased by 605 million yuan compared to the previous year. Research and development investment exceeds 30% AI reconstructs intelligent office. In 2023, Beijing Kingsoft Office Software, Inc invested 1.472 billion yuan in research and development, accounting for approximately 32% of its income, with research and development expenses growing by 1.0.60% of the total workforce are researchers, contributing 68% to the stable development of the product.In the past year, Beijing Kingsoft Office Software, Inc. has reconstructed its product power through AI, establishing a technological barrier for WPS AI in document application scenarios, and starting public testing in the fourth quarter. During this period, WPS AI actively integrated mainstream large models, integrating them with WPS Office and WPS 365 to provide users with a better intelligent office experience. In addition, Beijing Kingsoft Office Software, Inc. has also completed the construction of the WPS AI infrastructure platform, providing technical support for specific requirements of AI in office scenarios, ensuring the application efficiency of WPS AI. In the field of privatized office services, the new generation base architecture launched by Beijing Kingsoft Office Software, Inc. resolves the technical barriers in the process of promoting down-market applications in government and enterprise industries, providing higher stability and a richer document cloud experience, greatly reducing operational costs. Beijing Kingsoft Office Software, Inc. has always adhered to the philosophy of "technology-based" and "customer first", focusing on the "multi-screen, cloud, content, collaboration, AI" strategy to provide office services for users from more than 220 countries and regions worldwide.