Kingsoft Cloud Holdings Limited (NASDAQ:KC) shares surged 8.97% in pre-market trading on Wednesday after the cloud services provider reported stronger-than-expected second-quarter results, supported by rapid expansion in its artificial intelligence business.
Revenue reached RMB3.07 billion, ahead of the consensus forecast of RMB3.03 billion and up 30.8% year-on-year from RMB2.35 billion in the second quarter of 2025.
Kingsoft Cloud reported an adjusted loss per share of RMB0.02, substantially narrower than the RMB0.42 loss anticipated by analysts.
Kingsoft Cloud Reaches First GAAP Operating Profit
Profitability improved significantly during the quarter, with Kingsoft Cloud recording a GAAP operating profit of RMB23.0 million for the first time. That compared with an operating loss of RMB327.0 million in the corresponding period last year.
Adjusted operating profit reached RMB124.0 million, equivalent to a margin of 4.0%, highlighting the progress the company has made in improving operating efficiency alongside strong revenue growth.
Gross margin also strengthened to 15.2% from 14.4% a year earlier, while adjusted gross margin increased to 15.4%.
AI Cloud Business Drives Revenue Expansion
Artificial intelligence remained a major growth engine for Kingsoft Cloud. Gross billings from AI cloud services jumped 82% year-on-year and accounted for 56% of public cloud revenue.
Public cloud services revenue increased 45.1% from the previous year to RMB2.36 billion. Enterprise cloud services were weaker, with revenue declining 1.3% to RMB714.3 million.
“We are excited to deliver a quarter of both strong growth and profitability,” said Tao Zou, Chief Executive Officer. “Gross billings from our AI cloud business grew 82% year-over-year, representing 56% of public cloud revenue, driven by incremental contributions from our AI cloud infrastructure services as well as Model-as-a-Service offerings.”
The figures underline the growing importance of AI infrastructure and Model-as-a-Service products to Kingsoft Cloud’s broader growth strategy.
Net Loss Narrows Sharply
Kingsoft Cloud also made substantial progress in reducing its bottom-line losses. Net loss narrowed to RMB93.0 million from RMB456.9 million in the second quarter of 2025.
On an adjusted basis, net loss improved to RMB59.8 million from RMB300.5 million a year earlier.
The combination of 30.8% revenue growth, rapidly expanding AI cloud activity, stronger margins and the company’s first positive GAAP operating profit helped drive the sharp pre-market share-price reaction. Continued AI cloud growth and further progress towards sustained profitability are likely to remain key areas of focus for investors.