Kingsoft Cloud's Q1 2025 Results: AI Growth Amidst Revenue Shortfall

Kingsoft Cloud CEO Expresses Conviction In AI-Driven Future Despite Q1 Revenue Shortfall - Kingsoft Cloud Holdings (NASDAQ:KC)

Kingsoft Cloud Holdings 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. Also Read: Photronics Stock Falls After Earnings Miss, CEO Transition Shake-Up 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. Read Next: Microsoft Pulls Ahead In AI Race With Key Partnerships Across OpenAI, Nvidia, And Elon Musk's xAI Photo by T. Schneider via Shutterstock KCKingsoft Cloud Holdings Ltd$11.98-7.13%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum99.03Growth8.66QualityNot AvailableValue25.23Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Why Kingsoft Cloud Holdings Stock Plummeted by Nearly 8% Today | The Motley Fool

China's Kingsoft Cloud Holdings (KC -7.79%) was under something of a cloud with investors on Wednesday. They traded out of the niche tech company's U.S.-listed American Depositary Receipts (ADRs) after the release of its first-quarter results, leaving the securities with an almost 8% decline in price at market close. That was a far steeper drop than the S&P 500's (^GSPC -0.56%) 0.6%. For the quarter, Kingsoft Cloud came in at 1.97 billion yuan ($274 million), a nearly 11% increase from the same period of 2024. Management attributed this to higher take from the business of top Chinese tech company Xiaomi and that from artificial intelligence (AI) consumers, among other factors. However, the company still landed rather deeply in the red. Its net loss was nearly 314 million yuan ($44 million) against the year-ago deficit of 359 million yuan ($50 million). On a per-ADR basis, it only managed to trim the shortfall to 0.08 yuan ($0.01), versus first quarter 2024's loss of 0.10 yuan ($0.01). At least that net loss was narrower than expected, as analysts tracking Kingsoft Cloud stock were modeling a far steeper per-ADR figure of 0.62 yuan ($0.09). However, they were also anticipating higher revenue of 2.03 billion ($282 million). In its earnings release, management touted the emergence of AI technology and its effect on the company's fundamentals. It pointed out that billing for AI services increased by 228% on a year-over-year basis (to 525 million yuan, or $73 million). That accounted for 39% of the company's draw from public cloud services. With that kind of potential, I'd imagine that many Kingsoft Cloud investors are growing impatient for their company to drag itself out of the red on the bottom line, as it continues to consistently post bottom-line losses. Like many of them, personally, I'd stay away from the stock until those numbers start to meaningfully improve.