Kingsoft Cloud Holdings Limited

Good day and thank you for standing by. Welcome to the Kings of Clouds first quarter 2025 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 on your telephone. You will then hear an automatic message advising your hand is raised. To restore 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, IR Director of Kings of Cloud. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us today. Kings of Cloud's first quarter 2025 earnings release was distributed earlier today and is available on our IR website at ir.ksyun.com. as well as on the DINewsware services. On the call today from Kingsoft Club, we have our West German CEO, Mr. Zhou Tao, and the CFO, Mr. Henry Hu. Mr. Zhou will review our business strategies, operations, and company highlights, followed by Mr. Hu, who will discuss the financial performance. He will be available to answer your question during the Q&A session that follows. There will be consecutive interpretations. Our interpretations are for your convenience and the reference purpose only. In case of any discrepancy, management's layman 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 demanded and as defined in the U.S. Private 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 UNs that involve known or unknown risks, uncertainties, and other factors. All 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 risk, uncertainty, or factors are included in the company's filings with the U.S. 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 the first quarter of Jinshan Yun's business phone conference in 2025. I am Jinshan Yun's CEO, Zhou Tao. This quarter, we will continue to strongly promote our company's business, focusing on the key areas of AI, with high-quality sustainable development as our goal. First of all, our revenue has increased by 11%, reaching 19.7 billion yuan. The public and industry clouds has achieved the same growth. Among them, the number of employees has increased by 14% and has achieved a revenue of RMB13.5 billion. Next, we will continue to make progress with AI. In this quarter, the revenue of AI business accounts has reached RMB5.3 billion, and the growth rate has increased by more than 200%, while the growth rate has increased by 11%. and continue to increase the ratio of revenue to 39%. In addition, this quarter, we are using a more flexible way of funding investment to strengthen the construction of the fortune-telling group. It is expected to provide services online in the second quarter to further accelerate the increase in AI revenue. Third, as the only strategic cloud platform of Xiaomi Jinshan Ecosystem, We have successfully promoted our business cooperation with Sengtai. This quarter, Xiaomi and Jinshan Sengtai's revenue has reached 500 million yuan, which is a 50% increase in the same ratio. The net revenue ratio has been further improved to 25%. Our cooperation with Xiaomi Jinshan in the AI field continues to advance and is growing day by day, fully integrating both sides' advantageous resources. together with Xiaomi Jinshan to expand the cloud-based facilities of the AI era. Finally, from the profit level, after this quarter's adjustment, the net profit is 3.3 billion yuan, which is 9.6% increase. After adjustment, EBITDA has reached 16.2%, which is 14.3% increase. is mainly due to the continuous improvement of the AI income ratio. However, we also realized that there was a fluctuation in the return on profits. By adjusting the return on net profit by 2.6%, which is 16.6%, the drop in net profit is mainly due to the decrease in the ratio of revenue in the industry, which leads to a reduction in contribution profits. and the change in the pre-calculated cost. After adjustment, the operating profit was lowered by the net profit. This quarter, the loss was 55,810,000 yuan. After adjustment, the operating profit rate fell by 2.8%. Compared to the loss of the same period last year, the loss of 7.2% increased by 4.4%. the return on interest from profit to loss. Although in the short term of this quarter's financial industry, there is a return on interest fluctuation, market change and supply chain factors are intertwined, but from a long-term perspective, we are firmly following the long-term good strategic layout, steady sales, in Xiaomi Jinshan Ecotourism Cooperation, AI应用部署方面助劳根基,推动公司整体AI云服务的战略布局.