Kingsoft Stock Drops On Q3 Revenue Miss, Margin Contraction

Benzinga2021-11-24

Kingsoft Cloud Holdings Ltd (NASDAQ:KC) reported third-quarter FY21 revenue growth of 39.6% year-on-year to $374.6 million (RMB2.4 billion), missing the consensus of $397.2 million. EPS loss was $(0.02).

  • Revenues from public cloud services rose 28.7% Y/Y to $261.7 million, and enterprise cloud services increased 77.7% Y/Y to $112.8 million.
  • The non-GAAP gross margin contracted 280 bps to 3.8% due to lower than expected utilization of its underlying public cloud infrastructure. The non-GAAP EBITDA margin loss was (5.8)% versus (1.5)% last year.
  • Kingsoft held $930.4 million in cash and equivalents and generated $2.2 million in operating cash flow.
  • Kingsoft won Pinduoduo Inc (NASDAQ:PDD), a Chinese e-commerce platform, as a new customer this quarter.
  • Kingsoft started working with Shouqi, an emerging ride-hailing application.
  • Kingsoft is on track to integrate Camelot to build out its enterprise cloud services business.
  • Outlook: Kingsoft sees Q4 revenue of RMB2.63 billion - RMB2.83 billion, implying 37% - 47% Y/Y growth.
  • Price Action: KC shares traded lower by 3.09% at $19.1 in the premarket session on the last check Wednesday.
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