KINGSOFT CLOUD(KC)2024-11-19 15:34Financial Data and Key Metrics Changes - Company achieved total revenue of RMB1.89 billion, reflecting a 16% year-over-year increase, marking a return to double-digit growth [15][36] - Adjusted gross profit reached RMB308 million, up 56.7% year-over-year, with an adjusted gross margin of 16.3% [15][38] - Adjusted EBITDA reached RMB185 million, with an adjusted EBITDA margin of 9.8%, showing a significant year-over-year increase of 13 percentage points [10][16] - Net operating cash inflow amounted to RMB228 million, demonstrating strong cash-generating ability from operating activities [16][32] Business Line Data and Key Metrics Changes - Public cloud services revenue reached RMB1.18 billion, representing a year-on-year increase of 16% [17][36] - AI revenue surged to RMB362 million, accounting for 31% of public cloud revenues, with triple-digit year-over-year growth for five consecutive quarters [11][29] - Enterprise cloud services revenue amounted to RMB710 million, up 16.7% year-over-year, driven by increased demand in selected verticals [20][36] Market Data and Key Metrics Changes - Revenue contribution from Xiaomi and Kingsoft ecosystem increased by 36% year-over-year, with the ecosystem clients contributing 28% of public cloud revenue [13][30] - Company’s market share has steadily increased amid a decline in market share for other Internet cloud service providers [14] Company Strategy and Development Direction - Company continues to focus on high-quality and sustainable development strategy, enhancing profitability and cash-generating capabilities [25][41] - Emphasis on AI transformation and collaboration with Xiaomi and Kingsoft ecosystem to capitalize on growth opportunities [12][25] - Plans to explore new AI business models and deepen cooperation with ecosystem partners [12][25] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential from the Xiaomi and Kingsoft ecosystem, driven by strong AI opportunities [45][47] - Anticipated continued improvement in profitability and market share, with a focus on AI and cloud demand [33][35] - Guidance for Q4 2024 indicates expectations for accelerated revenue growth and improved profitability [33][34] Other Important Information - Company has secured additional CapEx resources for AI investments, applying for a cap of RMB11.3 billion for the next three years from related party transactions [59][60] - Strong liquidity position with cash and cash equivalents totaling RMB1,617.9 million [40] Q&A Session Summary Question: Growth potentials of strategic customers and service strategy - Management highlighted the rapid growth of business opportunities from the Xiaomi and Kingsoft ecosystem, supported by strong AI-related functions and customer demand [45][46] Question: Outlook on adjusted EBITDA margin and operating margin - Management noted significant expansion in gross margin and EBITDA margin, with expectations for continued improvement in operating profit [48][50] Question: Margin profile of AI business and revenue from Xiaomi and Kingsoft Group - Management indicated that AI-related products deliver higher gross margins compared to traditional public cloud services, with both segments achieving double-digit growth [54][56] Question: Outlook for CapEx for this year and next year - Management confirmed secured CapEx resources and plans to utilize funding from shareholders to support AI business growth without diluting public shareholders [59][60]