Kingsoft Cloud Holdings Ltd (NASDAQ:KC) posts net loss was 506.7 million Chinese yuan

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Kingsoft Cloud Holdings Ltd (NASDAQ:KC) stock fell 2.03% (As on Nov 25, 4:20:38 AM UTC-4, Source: Google Finance) after the company in the third quarter of FY 21 has reported that its third-quarter net loss was 506.7 million Chinese yuan or $78.6 million, wider than prior year’s loss of 105.3 million yuan. Total revenues reached 2.41 billion yuan or $374.61 million, a growth of 39.6 percent from 1.73 billion yuan a year ago, due to the growth in both public cloud services and enterprise cloud services for premium customers. Non-GAAP net loss was RMB363.7 million (US$56.4 million), compared with net loss of RMB169.1 million in the same quarter of 2020.

Non-GAAP EBITDA was RMB-140.6 million (US$-21.8 million), compared with RMB-26.3 million in the same quarter of 2020. The decrease of Non-GAAP EBITDA was due to the changes of gross profits, the increase of personnel expenses and one time off Camelot transaction expenses. Non-GAAP EBITDA margin was -5.8%, compared with -1.5% in the same quarter of 2020.

Moreover, the revenues from public cloud services were RMB1,686.0 million (US$261.7 million), representing an increase of 28.7% from RMB1,309.7 million in the same period of 2020 and a quarter-over-quarter incremental increase of RMB135.2 million. Revenues from public cloud services have been increasing for seven consecutive quarters since our first quarterly results after IPO. The increase was mainly due to the stable relations with top premium customers, engagement with new high-profile customers and cross-selling of the diversified products and solutions. Revenues from enterprise cloud services were RMB726.9 million (US$112.8 million), representing an increase of 77.7% from RMB409.1 million in the same period of 2020. The increase was mainly due to the strong demand in the market and the capabilities to provide industry-specific solutions, partially offset by the power shortage issues which delayed certain delivery process of enterprise cloud projects.

Furthermore, Non-GAAP gross profit decreased by 19.7% to RMB92.2 million (US$14.3 million), from RMB114.8 million in the same period in 2020. Non- GAAP gross margin was 3.8%, compared with 6.6% in the same period in 2020. The decrease was mainly due to lower than expected utilization of the underlying public cloud infrastructure which was budgeted based on demand forecast as of the beginning of the year, and industry-wide public cloud demand turned out to be lower than expected.

Looking ahead for the fourth quarter, the company expects total revenues to be between 2.63 billion yuan and 2.83 billion yuan, representing a year- over-year growth of 37 percent to 47 percent.

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