Kingsoft Cloud Holdings Ltd. (NASDAQ:KC) stock jumped Wednesday after the company reported second-quarter 2026 results that beat analyst estimates as demand for AI-related cloud services accelerated.
AI Cloud Demand Drives Revenue Growth
Kingsoft Cloud reported revenue of 3.07 billion Chinese yuan ($452.75 million), up 30.8% year over year. Revenue beat the analyst consensus estimate of $447.80 million.
Revenue also rose 13.6% from the previous quarter. The company attributed the sequential growth mainly to stronger demand from AI-related customers and continued upgrades to its AI infrastructure and products.
Public Cloud Revenue Jumps
Public cloud services revenue increased 45.1% year over year to 2.36 billion Chinese yuan ($347.47 million). Revenue rose 18.1% from the previous quarter as AI demand remained strong.
Enterprise cloud services revenue fell 1.3% year over year to 714.35 million Chinese yuan ($105.28 million). However, it increased 1% sequentially.
Profitability Improves
Adjusted gross profit increased to 471.7 million Chinese yuan ($69.5 million) from 350.6 million Chinese yuan a year earlier.
Adjusted gross margin improved to 15.4% from 14.9% a year earlier and 13% in the previous quarter. Kingsoft Cloud cited stronger AI demand and operational improvements.
The company posted an adjusted operating profit of 124 million Chinese yuan ($18.3 million), compared with an adjusted operating loss of 166.4 million Chinese yuan a year earlier.
Kingsoft Cloud reported an adjusted loss of 3 cents per American depositary share, beating the analyst consensus estimate for a loss of 10 cents per ADS.
The company ended the quarter with 4.67 billion Chinese yuan ($688.9 million) in cash and cash equivalents as of June 30.
AI Demand Lifts Growth And Profitability
Kingsoft Cloud executives highlighted accelerating AI demand and improving profitability while signaling continued investment to support long-term growth.
CEO Tao Zou said gross billings from the company’s AI cloud business jumped 82% year over year and accounted for 56% of public cloud revenue. Growth came from higher contributions from AI infrastructure services and Model-as-a-Service offerings.
Zou also highlighted Kingsoft Cloud’s first positive GAAP operating margin. Its adjusted operating margin reached 4%, helped by stronger gross margins and greater operating efficiency.
CFO Yi Li attributed the profitability gains to AI demand and operational improvements. Li said Kingsoft Cloud remains committed to investing for long-term growth.
Second-quarter capital expenditures, including assets financed through leasing arrangements, reached 3.3 billion Chinese yuan, up from the first quarter.
KC Price Action
Kingsoft Cloud shares were up 8.12% at $11.72 at the time of publication Wednesday, according to Benzinga Pro.
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