Q2 2024 Kingsoft Cloud Holdings Ltd Earnings Call Transcript
Key Points
- Gross margins improved significantly from low single digits to 17%, indicating better profitability.
- AI services revenue contribution to public cloud increased from 0% to 26%, showcasing strong growth in a high-potential area.
- Quarterly costs and expenses decreased by approximately RMB300 million, representing 15% of quarterly revenues, demonstrating effective cost management.
- Revenue from high-value-added products and services has grown, offsetting the pressure from the proactive adjustment of CDN services.
- Net operating cash inflow amounted to RMB150 million, highlighting strong cash-generating ability from operating activities.
- Depreciation and amortization costs increased from RMB202.1 million to RMB265.9 million, mainly due to the depreciation of new servers.
- Adjusted selling and marketing expenses rose to RMB117.5 million from RMB97.9 million last quarter, representing 6.2% of total revenues.
- Adjusted G&A expenses increased to RMB237.7 million compared to RMB178.7 million last quarter.
- The company is still phasing out low-margin businesses, with CDN services revenue contribution decreasing from approximately 40% to 20%, which may impact short-term revenue.
- Capital expenditures for the quarter were RMB654.8 million, reflecting significant investments in infrastructure, which could strain financial resources if not managed properly.
Good day and Thank you for standing by. Welcome to the Kingsoft Cloud's second-quarter 2024 earnings conference call. (Operator instructions) Please be advised today's conference is being recorded.
I would now like to hand the conference over to your first speaker today, Nicole Shan, IR Director of Kingsoft Cloud. Please go ahead.
Thank you, operator. Hello, everyone, and thank you for joining us today. Kingsoft Cloud's second-quarter 2024 earnings release was distributed earlier today and is available on our IR website at ir.ksyun.com, as well as on GlobeNewswire services.
On the call today, from Kingsoft Cloud, we have our Vice Chairman and the CEO, Mr. Tao Zou; and the CFO, Mr. Haijian He. Mr. Zou will review our business strategy, operations and the company highlights, followed by Mr. He, who will discuss the financials and the guidance. They will be available to answer your questions during the Q&A session that follows. There will be consecutive interpretation. All
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