Kingsoft Cloud Holdings Limited Q4 FY2025 earnings call

Since the beginning of 2025, the global AI industry has seen rapid development. Kingsoft Cloud has adhered to its high - quality and sustainable development strategy. In the fourth quarter, it achieved a historical high quarterly revenue. Public cloud services saw growth, with customer base diversifying. Enterprise cloud services benefited from the AI Plus policy, achieving growth in various industries. In terms of products and technology, the company is building a next - generation computing services system for LLM training, inference and industrial intelligence, and upgrading platforms like StarFlow.

Fourth quarter total revenue reached RMB 27.61 billion, a year - on - year growth of 24%. Revenue from public cloud services was RMB 19.02 billion, up 35% year - on - year. The gross billing of AI business reached RMB 926 million, a 95% year - on - year growth, contributing 49% of public cloud services. Revenue from enterprise cloud services in the fourth quarter was RMB 8.59 billion, with a significant quarter - over - quarter increase of 18%.

In 2026, it is expected that total capital expenditure and control assets will exceed RMB 10 billion. The growth rate is expected to accelerate and the EBITDA rate will improve. Approximately half of the capital expenditure is targeted to be covered by customer prepayment arrangements. 2026 capital expenditure are secured through proceeds from 2025 financing, customer operating receipts, strategic customer prepayments and commitment credit facilities from banks and financial institutions.

This conference call contains forward - looking statements which are based on current expectations and market and operating conditions. There are known or unknown risks, uncertainties and other factors that may cause actual results to differ materially from forward - looking statements. Further information regarding these risks are included in the company's filings with the U.S. SEC.

Q: Congrats for the very good 4Q results. I have 2 questions here. First, Xiaomi recently launched the MiMo - V2 series models, which have received positive market feedback. How should we view our role and positioning within Xiaomi's AI strategy? And what strategies will be implemented around Xiaomi and Kingsoft service going forward? And secondly, how does the management view the current pricing uptrend in the cloud service industry? Has the company already adjusted prices for AI computing services? Or are there any related plans in place? To what extent are those price adjustments driven by demand or driven by the upstream procurement cost pass - through?

A: The answer comes from our CEO, Mr. Tao Zou. So a little bit of background. So back in 2024, we had an internal discussion around the development of AI and models for the whole Xiaomi and Kingsoft ecosystem... Tao Liu: [Interpreted] So the answer comes from our SVP, Mr. Liu Tao. So as a bit of background again. So in the Q3 last year, we had anticipated the significant pricing increase from the supply chain side...

Q: The first question is that some of your cloud service partners have announced they will shift their cloud business more towards [indiscernible] from the traditional server rental and also the subscription model. Will KC adopt a similar strategy? And how do you view the impact of this trend on industry competition and long - term profit margins? And the second question is regarding the impact from the [indiscernible] engine. It is adopting a relatively low price strategy. And how do you view the impact on the industry and also on potentially our business this year?

A: Tao Zou: [Interpreted] Okay. So regarding your question on the shifting to model as a service strategy... Tao Zou: [Interpreted] Now what I have focused more is the price hiking information from, for example, AliCloud...

Q: My first question is on your financial outlook. Just wondering if you can share some color on how we should think about the revenue, EBITDA, operating profit growth outlook for this year? And also on the capital expenditure plan, what is your thought and considering the balance sheet and also the prepayment from certain customers, do you think it's possible to further raise your CapEx plan given the rising AI demand? And secondly is regarding the third - party revenue in the AI outlook. Just wondering if you can share more detailed color on your -- what specific product or what type of customers are driving the third - party AI growth? And also what is the breakdown and outlook between the mix of AI training versus AI inferences?

A: Yi Li: All right. I will take the CapEx first... Unknown Executive: [Interpreted] So if you look at the past results as described -- as discussed in the prepared remarks...