Kingsoft Cloud Holdings Limited

Good day and thank you for standing by. Welcome to the Kingsoft Cloud's third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicole Shan. Please go ahead.

Thank you, Heidi. Hello, everyone, and thank you for joining us today. InSouth Cloud's third quarter 2024 earnings release was distributed earlier today and is available on our IR website at ir.ksyun.com. as well as our global newsware services. On the call today from Kingsoft Cloud, we have our Vice Chairman and the CEO, Mr. Zhou Tao, and the CFO, Mr. Henry He. Mr. Zhou will review our business strategies, operations, and company highlights, followed by Mr. He, who will discuss the financials and the guidance. There will be available to answer your question during the Q&A session that follows. There will be conductive integration. Our integrations are for your convenience and reference purpose only. In case of any discrepancies, management's statement in the original language will prevail. Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Security Exchange Act of 1934 as the money and as defined in the U.S. Priority Security Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectation and current market and operating conditions. and relate to events that involve no or no risk, uncertainties, and other factors of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ maturely from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors are included in the company's filing with the US SEC. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise except as required under applicable law. Finally, please note that unless otherwise stated, all financial figures mentioned during this conference call are denominated in RMB. It's now my pleasure to introduce our Vice Chairman and the CEO, Mr. Zhou. Please go ahead. Thank you.

Hello, everyone. Welcome to today's meeting. This is the third quarter of 2024. I'm Zhou Tao, CEO of Q3. In this quarter, we will continue to work on high-quality, sustainable strategic beliefs, beliefs, and execution. First of all, our revenue will accelerate growth. Based on Q2 achieving the same rate of growth as before, Q3's growth rate will reach 16% and reach the same level as the industry. This is due to the early development of revenue structure in 2022. This quarter, both public and industry clouds have achieved the same growth of two-digit numbers. The two-person drive and development base are more solid. Next, our profit level is increasing rapidly. On the basis of EBITDA's Q1 Q2 3.2% transfer rate, Q3 acceleration increased to 10% of double-digit. After adjustment, the operating loss rate increased by 16.2% to 7% compared to the large-capacity reduction, further increasing the development of high-capacity. Third, we continue to use AI to lead the transformation. The proportion of AI business revenue to the public sector continues to increase to 3.1%. Continuous achievement of quarter-high-speed growth. Over the past five seasons, AI has increased by more than three times. This season, AI has increased by 6.9 times, leading the industry by more than three times. We are also exploring a new model of AI business. We are working with China's leading comprehensive professional service companies, to achieve in-depth cooperation. We rely on the full-time ability of our AI to build its large-model training, reasoning, application development, and long-term operation capabilities. Fourth, we fully embrace the great historical opportunities of Xiaomi Jinshan Ecology. From Xiaomi cars, AIoT, games, large models, to WPS, AI, In this quarter, our revenue from Xiaomi Jinshan Ecology has increased by 36%. In particular, we see that Xiaomi's entire line of business has achieved rapid growth, especially in the automotive industry, which has been highly recognized by the market. As the only strategic cloud manufacturer of Xiaomi Jinshan Ecology, we will do our best to support Xiaomi's pricing, and the demand for cloud services to increase in other businesses. With the rapid growth of AI income in the leading industry and the clear development of AI application scenarios in Xiaomi Jinshan Ecosystems, we first seized the opportunity to change the market structure. In the context of the decline in market responsibility of other cloud service providers, our market responsibility has steadily increased.