Group’s operating profit increased to RMB601.6 million, marking a 31% year-on-year growth
Beijing / HONG KONG, NFAPost: Kingsoft Corporation Limited, a leading Chinese software and Internet service company, has announced the first quarter results for the period ended March 31, 2024.
In the first quarter of 2024, the revenue of Kingsoft increased 8% year-on-year to RMB2,136.9 million. Among them, revenue from office software and services, and online games and others represented 57% and 43% of the Group’s total revenue for the first quarter of 2024, respectively.
Gross profit for the first quarter of 2024 increased 7% year-on-year to RMB1,740.7 million, while operating profit was RMB601.6 million increased 31% year-on-year.
Commenting on the company’s first-quarter performance, Kingsoft Chairman Jun LEI said the company is off to a good start in 2024 with solid performance.
“With opportunities arising from the booming digital economy, Kingsoft Office Group focuses on AI and collaboration, deepening the R&D and commercialisation of related products, and actively advances the implementation of new productive forces in the office field,” said Kingsoft Chairman Jun LEI.
Kingsoft Chairman Jun LEI also said online games business maintains the strategy of prime games, focusing on deepening and expanding the classic JX online series while continuously exploring new game genres.
“In the future, we will continue to dig deeper into the office and gaming fields, and with the help of technology and innovation, we will continue to enhance our core competitiveness and strive to bring more returns to our users and investors,” said Kingsoft Chairman Jun LEI.
Kingsoft Chief Executive Officer Tao ZOU said in the first quarter, the Group demonstrated steady financial performance. as the total revenue for the first quarter amounted to RMB2,136.9 million, representing a year-on-year increase of 8%.
“Among the total revenue, Kingsoft’s revenue from the office software and services business was RMB1,225.3 million, representing a year-on-year increase of 17%, this was primarily driven by the growth of both domestic individual office subscription business and institutional subscription business. The operating profit of the Group for the first quarter increased remarkably to RMB601.6 million, marking a 31% year-on-year growth,” said Kingsoft Chief Executive Officer Tao ZOU.
He also pointed out that the above achievements reflect the company;s insistence on technology as the core, customer-oriented, and continuous improvement of products and services to bring users excellent experience.
BUSINESS REVIEW
Office Software and Services
Revenue from the office software and services business for the first quarter of 2024 increased 17% year-on-year to RMB1,225.3 million. The year-on-year increase was mainly due to the growth of domestic individual office subscription business, institutional subscription business and institutional licensing business of Kingsoft Office Group, partially offset by the decreased internet advertising business. The growth of domestic individual office subscription business was mainly attributable to the increases in both the user stickiness and paying ratio, resulting from enriched membership benefits. The growth of domestic institutional subscription business was mainly because we continuously promoted the transformation to subscription models, as the launch of WPS 365, the new productive forces in office. The increase of institutional licensing business was mainly driven by purchase orders on localization solutions. The decrease of internet advertising business was mainly due to the shut-down of the domestic third-party advertising business at the end of 2023.
Kingsoft Office Group continued optimising its product portfolio to support intelligent office solutions. In terms of domestic individual subscription business, we continuously enriched the membership benefits to enhance user stickiness and paying ratio. With regard to domestic institutional subscription business, we kept improving the product system, enhancing service experience, expanding ecosystem channels, and actively promoting the transformation to cloud and collaboration office. Driven by orders in the localization industry, the institutional licensing business achieved growth. In March, WPS AI began its initial commercialization. In April, we launched upgraded WPS 365, the new productive forces in office, covering the upgraded versions of WPS Office, WPS AI Enterprise Edition, and WPS Collaboration, and providing users with one-stop AI office solutions.
Online Games and others
Revenue from the online games and others business for the first quarter of 2024 decreased 1% year-on-year. The slight year-on-year decrease was primarily due to a natural decline in revenue from certain existing games, partially offset by revenue contribution from titles released in the second half of 2023.
The online gaming business maintained the strategy of prime games in the first quarter of 2024. The flagship JX3 Online demonstrated resilience and vitality, maintaining steady performance. For the mobile version JX3 Ultimate, we initiated extensive testing in collaboration with players to continuously improve the game quality. It is expected to be launched in June 2024, realizing full-platform accessibility for the flagship JX3 Online, and offering players unified gaming experience across multiple platforms.
We also achieved phased progress in exploring new game genres, upheld the principle of user-first and paid high attention to user feedback and suggestions. We actively operated the anime shooter game, Snowbreak: Containment Zone, which achieved significant increases in both daily active users and gross receipts in the first quarter. The sci-fi game Mecha BREAK received the license approval in March 2024, and is undergoing testing and continuous optimisation in Chinese Mainland and overseas regions, while maintaining in the top 100 of the Steam Global Wishlist since its debut.
Kingsoft Chairman Jun LEI said looking ahead, Kingsoft Office Group will remain dedicated to investing in R&D of AI and collaboration, continuously exploring the application of WPS AI in office scenarios across various industries.
“Online games business will keep focusing on prime games, listening to user feedback and providing high-quality gaming experience. We firmly believe that these efforts will strengthen the Group’s core competitiveness and lay a solid foundation for our long-term sustainable development,” said Kingsoft Chairman Jun LEI.
About Kingsoft Corporation Limited
Kingsoft is a leading software and Internet services company based in China listed on the stock exchange of Hong Kong. It has three main subsidiaries including Kingsoft Office, Seasun and Kingsoft Shiyou. Following the implementation of its “mobile internet transformation” strategy, Kingsoft has completed the comprehensive transformation of its overall business and management models, and formed a strategic platform with office software and interactive entertainment as the pillars and cloud services and AI as the new directions. The Company has more than 7,000 staff around the world and enjoys a large market share in China. For more information, please visit http://www.kingsoft.com.
Kingsoft Cloud
Nsdaq listed Kingsoft Cloud Holdings Limited, a leading independent cloud service provider in China, announced its unaudited financial results for the first quarter ended March 31, 2024.
Kingsoft Cloud Holdings Limited Chief Executive Officer Tao Zou commented that the company welcomes 2024 with an important milestone in its journey of high-quality and sustainable development.
“Our adjusted EBITDA turned profit, arriving at RMB33.2 million, representing an adjusted EBITDA margin of 1.9%. Our revenue has returned to sequential increase for the past two quarters and our adjusted gross margin has been consecutively increased for seven quarters. During the past year, we have been well on track to optimize our business mix, embrace AI opportunities, invest into cutting-edge technology and take strict control over costs and expenses,” said Kingsoft Cloud Holdings Limited Chief Executive Officer Tao Zou.
Kingsoft Cloud Holdings Limited Chief Executive Officer Tao Zou also pointed out that the company has been investing billions of RMB into AI area and for this quarter, AI revenue contributed approximately 13% of revenues from public cloud services, compared with 8% last quarter.”
Kingsoft Cloud Holdings Limited CFO Henry He said the company is pleased to achieve growth in both sequentially revenue expansion and profitability improvements.
“This quarter our adjusted gross margin was 16.8%, significantly increased by 6.4 percentage points from 10.4% in the same quarter of 2023. Adjusted gross profit was RMB299.1 million, increased by 53.8% from RMB194.4 million in the first quarter of 2023. Adjusted EBITDA turned profit, arriving at RMB33.2 million, significantly improved from negative RMB130.5 million in the same quarter of 2023,” said Kingsoft Cloud Holdings Limited CFO Henry He.
He also said the company released its fourth Environmental, Social and Governance (ESG) report since our listing in 2020, demonstrating our ambitions into the sustainable development. First Quarter 2024 Financial Results Total Revenues reached RMB1,775.7 million (US$245.91 million), increased steadily by 3.1% quarter-over-quarter from RMB1,722.5 million in the fourth quarter 2023.
“The increase was mainly due to the expanded revenue from AI related customers. Total revenues decreased by 4.8% from RMB1,864.4 million in the same period of 2023. The decrease was in line with our expectation along with our proactive scaling down of content delivery network (CDN) services, and more stringent project selection of enterprise cloud projects, while was partially offset by the increase from AI related revenues,” said Kingsoft Cloud Holdings Limited CFO Henry He.
Revenues from public cloud services increased by 12.9% from RMB1,052.0 million in last quarter to RMB1,187.4 million (US$164.4 million). The increase was mainly due to the revenue contribution from AI customers. Revenues from public cloud services increased by 2.9%, compared with RMB1,153.7 million in the same quarter of 2023. The year-over-year increase was mainly due to the growth of AI demands and partially offset by the above-mentioned scaling down of our CDN services.
Kigsoft Cloud’s revenues from enterprise cloud services were RMB588.2 million (US$81.5 million), representing a decrease of 12.3% from RMB670.3 million last quarter and a decrease of 17.2% from RMB710.0 million in the same quarter of 2023. The company keeps focus in selected verticals such as public services cloud, state-owned enterprise cloud, healthcare and financial services, and take profitability and sustainability of the enterprise cloud projects as our priorities.
(Inputs from ACN Newswire & GLOBE NEWSWIRE)
