[Management View]
Kingsoft Cloud Holdings Limited reported a total revenue of RMB 1.97 billion, an 11% YoY increase, driven by growth in both public and enterprise cloud segments. Public cloud revenue reached RMB 1.35 billion, up 14% YoY, with significant contributions from AI. AI gross billing was RMB 525 million, reflecting over 200% YoY growth. The Xiaomi and Kingsoft ecosystem revenue was RMB 500 million, a 50% YoY increase.

[Outlook]
The company anticipates improved operating and EBITDA margins in the second half of 2025. Strategic capital allocation to AI computing clusters is expected to support revenue growth, with official service launch anticipated in Q2 2025. No formal top-line guidance was provided.

[Financial Performance]
- Total revenue: RMB 1.97 billion, up 11% YoY
- Public cloud revenue: RMB 1.35 billion, up 14% YoY
- AI gross billing: RMB 525 million, up over 200% YoY
- Xiaomi and Kingsoft ecosystem revenue: RMB 500 million, up 50% YoY
- Enterprise cloud revenue: RMB 616 million, up 5% YoY, but down 25% QoQ
- Non-GAAP gross profit: RMB 327.7 million, up 9.6% YoY, down 23.4% QoQ
- Non-GAAP gross margin: 16.6%, down from 19.2% in Q4 2024
- Non-GAAP operating loss: RMB 55 million, improved from negative 7.2% in Q1 2024
- Non-GAAP EBITDA margin: 16.2%, up 14.3 percentage points YoY

[Q&A Highlights]
Question 1: For both public cloud and enterprise cloud, the growth seems weaker than expected. What are the reasons behind this, and how should we see the full-year growth?
Answer: The seasonality impact, especially for enterprise cloud, and the timing of cluster deliveries affected Q1 growth. Revenue and profit from delivered clusters will reflect in Q2. Xiaomi's model training demand significantly contributes to AI business growth.

Question 2: Kingsoft Cloud and Kingsoft Office launched an AI all-in-one model machine for government affairs. What are the business opportunities and pricing models?
Answer: The market for AI in government office automation is growing rapidly. The integrated solution combines software and hardware, with pricing varying based on hardware configuration.

Question 3: Can we have an update on AI CapEx and OpEx breakdown? Is the chip ban affecting CapEx momentum?
Answer: Q1 CapEx was RMB 605 million. Financing includes internal cash, leasing, and bank loans. The chip ban has a limited short-term impact due to inventory but may have a mid to long-term effect. Cooperation with Made in China resources is being strengthened.

Question 4: How do recent gross margin trends for AI cloud leasing services and the open sourcing of R1 by Deepstick affect the industry?
Answer: Market concentration and new profit-sharing models with resource partners impact gross margins. The success of Deepstick has led to increased demand from new industry entrants, balancing any negative impact.

[Sentiment Analysis]
Analysts and management maintained a cautiously optimistic tone, focusing on strategic growth areas and addressing concerns about seasonality and supply chain issues.

[Quarterly Comparison]
| Metric | Q1 2025 | Q4 2024 | Q1 2024 |
|-------------------------------|------------------|------------------|------------------|
| Total Revenue | RMB 1.97 billion | RMB 1.77 billion | RMB 1.77 billion |
| Public Cloud Revenue | RMB 1.35 billion | RMB 1.18 billion | RMB 1.18 billion |
| AI Gross Billing | RMB 525 million | RMB 473 million | RMB 175 million |
| Xiaomi and Kingsoft Ecosystem | RMB 500 million | RMB 333 million | RMB 333 million |
| Enterprise Cloud Revenue | RMB 616 million | RMB 822 million | RMB 588 million |
| Non-GAAP Gross Profit | RMB 327.7 million| RMB 427.7 million| RMB 299 million |
| Non-GAAP Gross Margin | 16.6% | 19.2% | 16.8% |
| Non-GAAP Operating Loss | RMB 55 million | RMB 45 million | RMB 127 million |
| Non-GAAP EBITDA Margin | 16.2% | 18.5% | 1.9% |

[Risks and Concerns]
- Decline in non-GAAP gross margin due to lower enterprise cloud revenue and front-loaded investments.
- Potential mid to long-term impact from supply chain issues and chip restrictions.
- Pricing dynamics and profit-sharing models compressing gross margins for new AI infrastructure projects.

[Final Takeaway]
Kingsoft Cloud Holdings Limited demonstrated solid revenue growth driven by AI and strategic partnerships, despite seasonal and supply chain challenges. The company is well-positioned to capitalize on AI opportunities, with expectations for improved margins in the latter half of 2025. Investors should monitor gross margin, EBITDA margin, and R&D trends as key indicators of future performance.