Kingsoft Cloud Q2 Results Beat Estimates, AI Cloud Billing Up 82%, Shares Surge

Kingsoft Cloud Holdings Ltd. shares rose on Wednesday after the company reported second-quarter 2026 results that beat analyst expectations, driven by accelerating demand for AI-related cloud services.

AI Cloud Demand Drives Revenue Growth

Kingsoft Cloud reported second-quarter revenue of RMB 3.07 billion, up 30.8% year-over-year. Revenue surpassed the analyst consensus estimate of $447.8 million.

Revenue grew 13.6% quarter-over-quarter. The company attributed the sequential growth primarily to enhanced demand from AI-related customers, as well as continued upgrades to its AI infrastructure and products.

Public Cloud Revenue Surges

Public cloud services revenue rose 45.1% year-over-year to RMB 2.36 billion. Revenue grew 18.1% quarter-over-quarter as AI demand remained strong.

Enterprise cloud services revenue declined 1.3% year-over-year to RMB 714.35 million. However, it grew 1% quarter-over-quarter.

Profitability Improves

Adjusted gross profit increased to RMB 471.7 million, compared with RMB 350.6 million in the same period last year.

Adjusted gross margin improved to 15.4%, versus 14.9% in the year-ago period and 13% in the prior quarter. Kingsoft Cloud attributed this to stronger AI demand and operational improvements.

The company posted adjusted operating profit of RMB 124 million, compared with an adjusted operating loss of RMB 166.4 million in the year-ago period.

Kingsoft Cloud reported an adjusted loss of 3 cents per American Depositary Share, beating the analyst consensus estimate of a 10-cent loss per share.

The company held cash and cash equivalents of RMB 4.67 billion as of the end of the quarter on June 30.

AI Demand Boosts Growth and Profitability

Kingsoft Cloud management highlighted accelerating AI demand and improved profitability, while stating it would continue investing to support long-term growth.

Chief Executive Officer Zou Tao said the company's AI cloud business gross billing grew 82% year-over-year, accounting for 56% of public cloud revenue. Growth came from increased contributions from AI infrastructure services and model-as-a-service offerings.

Zou also highlighted that Kingsoft Cloud achieved its first positive GAAP operating margin. Its adjusted operating margin reached 4%, benefiting from stronger gross margins and higher operational efficiency.

Chief Financial Officer Li Yi attributed the profitability improvement to AI demand and operational enhancements. Li stated that Kingsoft Cloud remains committed to investing for long-term growth.

Second-quarter capital expenditures reached RMB 3.3 billion, higher than the first quarter.

KC Stock Performance

As of Wednesday's press time, Kingsoft Cloud shares were up 8.12% at $11.72.