Kingsoft Cloud Q1: Earnings Miss, 14% Topline Decline, Revenue Mix Adjustment & More

  • Kingsoft Cloud Holdings Limited KC shares are trading lower after first-quarter FY23 earnings missed estimates.
  • The China-based technology firm reported a first-quarter FY23 revenue of $271.48 million, missing the consensus of $282.80 million. 
  • EPS loss was $(0.25), missing the analyst consensus of $(0.23) loss.
  • The lackluster results were mainly due to the proactive scaling down of CDN services, with its gross billings decreasing by 11.7% Y/Y.
  • Revenues from public cloud services decreased by 16.4% Y/Y, and enterprise cloud services fell 10.4% Y/Y.
  • The non-GAAP gross margin expanded 660 bps to 10.4%, mainly due to our strategic adjustment of revenue mix, optimized enterprise cloud project selection and efficient cost control measures.
  • Kingsoft held $649.7 million in cash and equivalents at quarter end.
  • CFO Henry He added, "Looking ahead, we will continue to take various measures to cut down expenses and we believe we are well on track to quarterly adjusted EBITDA breakeven."
  • Outlook: Kingsoft sees Q2 revenue of RMB1.85 billion -RMB2.00 billion.
  • Price Action: KC shares traded lower by 7.4% at $4.40 on the last check Tuesday.
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