Kingsoft Cloud Beats Earnings Estimates Despite Revenue Miss
November 22, 2023
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Kingsoft Cloud ($NASDAQ:KC) reported its financial results for the first quarter of 2021, beating estimates on earnings per share despite a revenue miss. Revenue, however, was lower than forecasted at $222.75M, missing the consensus estimate by $19.16M. Kingsoft Cloud is focused on providing cloud computing solutions for enterprise customers in China. In addition to its cloud products, Kingsoft Cloud also offers a range of artificial intelligence and big data solutions.
Earnings
Despite missing its revenue estimates in its latest earnings report as of June 30 2021, KINGSOFT CLOUD was able to beat its earnings estimates. The total revenue for the quarter was 2173.69M CNY, a 14.0% increase from the same time period last year. However, the net income for the quarter was 220.35M CNY, a decrease from the previous year. Nevertheless, KINGSOFT CLOUD has seen an overall growth in total revenue over the past three years, increasing from 1835.4M CNY to 2173.69M CNY.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Kingsoft Cloud. More…
| Total Revenues | Net Income | Net Margin |
| 7.8k | -2.41k | -28.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Kingsoft Cloud. More…
| Operations | Investing | Financing |
| -89.4 | 956.75 | -1.06k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Kingsoft Cloud. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 16.13k | 7.85k | 33.92 |
Key Ratios Snapshot
Some of the financial key ratios for Kingsoft Cloud are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.2% | – | -29.1% |
| FCF Margin | ROE | ROA |
| -19.6% | -17.6% | -8.8% |
Price History
On Tuesday, Kingsoft Cloud stock opened at $5.0 and closed at $4.8, a plunge of 12.3% from its last closing price of 5.5. Despite the significant drop in its stock price, the company reported earnings that exceeded analyst estimates. Revenue, however, was a different story. This was due to the disruption of the cloud computing market caused by the coronavirus pandemic.
Despite the revenue miss, investors responded positively to the earnings beat and sent the stock up in after-hours trading. Moving forward, Kingsoft Cloud plans to focus on expanding its customer base and increase R&D investments to further develop its cloud platform offerings. The company is also looking at various cost-cutting measures to mitigate the impact of the pandemic on its financials. Live Quote…
Analysis
At GoodWhale, we’ve done an in-depth analysis of KINGSOFT CLOUD‘s financials to better understand its current state. Our Star Chart ratings show that KINGSOFT CLOUD has an intermediate health score of 4/10, indicating that the company is likely to pay off debt and fund future operations. We also found that KINGSOFT CLOUD is classified as a ‘cheetah’, a type of company that has achieved high revenue or earnings growth but is considered less stable due to lower profitability. Given its strong growth, medium asset and weak dividend and profitability ratings, investors who are interested in high growth companies and willing to accept the risks associated with such companies may be interested in KINGSOFT CLOUD. Investors looking for a more stable company may want to look elsewhere. More…
Peers
Kingsoft Cloud Holdings Ltd is a cloud services company that offers public cloud services to businesses and individual customers. The company operates in China and Hong Kong. Kingsoft Cloud has a wide range of products and services, including storage, computing, networking, and security. The company has a strong market position in China, where it is one of the leading providers of public cloud services.
Kingsoft Cloud’s main competitors are Tintri Inc, Montnets Cloud Technology Group Co Ltd, and Ucloud Technology Co Ltd. These companies are also providers of public cloud services in China.
– Tintri Inc ($OTCPK:TNTRQ)
Tintri Inc is a data storage company that offers products and services for virtualization, cloud computing, and application management. It has a market cap of 675.02k as of 2022 and a return on equity of 116.12%. The company’s products are designed to simplify and automate the management of data storage in virtual and cloud environments.
– Montnets Cloud Technology Group Co Ltd ($SZSE:002123)
Montnets Cloud Technology Group Co Ltd is a Chinese cloud computing company with a market cap of 8.78B as of 2022. The company’s Return on Equity (ROE) is -4.37%. Montnets provides cloud-based enterprise communications solutions, including unified communications, VoIP, and cloud contact center services. The company also offers a variety of other products and services, such as enterprise instant messaging, video conferencing, and cloud storage.
– Ucloud Technology Co Ltd ($SHSE:688158)
As of 2022, Ucloud Technology Co Ltd has a market cap of 5.66B and a Return on Equity of -11.13%. The company provides cloud-based services to businesses and government organizations. Its services include Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and software as a service (SaaS).
Summary
Investors reacted negatively to Kingsoft Cloud‘s first quarter earnings report, as the company reported a GAAP EPS of -$0.03 which was better than estimates by $0.16, but still a significant loss. Revenue came in at $222.75M which missed estimates by $19.16M. On the same day the stock price moved down, signaling that investors were not impressed with the results. Going forward, investors may be looking for improvement in the company’s bottom line to maintain a positive outlook on Kingsoft Cloud.
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