Revenue growth has accelerated to 30.4% YoY in 2026Q2, but gross margins remain constrained in the 12.8%-16.9% range, suggesting growth is being purchased at the expense of profitability.
Kingsoft Cloud Holdings Limited (KC) annual income statement — 8-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 |
|---|
| Sales/Revenue | 11.01B | 9.56B | 7.79B | 7.05B | 8.18B | 9.06B | 6.58B | 3.96B | 2.22B |
| Revenue Growth % | 30.46% | 22.78% | 10.47% | -13.85% | -9.72% | 37.76% | 66.25% | 78.36% | - |
| Cost of Goods Sold | 9.35B | 8.06B | 6.44B | 6.2B | 7.75B | 8.71B | 6.22B | 3.95B | 2.42B |
| COGS % of Revenue | - | 84.27% | 82.78% | 87.94% | 94.75% | 96.12% | 94.57% | 99.81% | 109.03% |
| Gross Profit | 1.66B | 1.5B | 1.34B | 850.17M | 429.54M | 351.29M | 356.98M | 7.71M | -200.39M |
| Gross Margin % | 15.05% | 15.73% | 17.22% | 12.06% | 5.25% | 3.88% | 5.43% | 0.19% | -9.03% |
| Gross Profit Growth % | - | 12.12% | 57.72% | 97.93% | 22.28% | -1.6% | 4530.73% | 103.85% | - |
| Operating Expenses | 1.77B | 2.03B | 2.17B | 2.2B | 2.66B | 2.08B | 1.56B | 1.15B | 779.03M |
| OpEx % of Revenue | - | 21.25% | 27.83% | 31.28% | 32.49% | 22.91% | 23.78% | 29.1% | 35.12% |
| Selling, General & Admin | 889.8M | 1.12B | 854.06M | 863.73M | 1.21B | 1.01B | 757.22M | 494.15M | 338.52M |
| SG&A % of Revenue | - | 11.68% | 10.97% | 12.26% | 14.84% | 11.1% | 11.51% | 12.49% | 15.26% |
| Research & Development | 772.53M | 810.3M | 845.99M | 784.81M | 971.22M | 1.04B | 775.13M | 595.17M | 440.52M |
| R&D % of Revenue | - | 8.48% | 10.87% | 11.14% | 11.87% | 11.52% | 11.78% | 15.04% | 19.86% |
| Other Operating Expenses | 1M | 103.91M | 466.55M | 556.15M | 472.66M | 26.18M | 31.88M | 61.92M | 0 |
| Operating Income | -109.36M | -527.37M | -825.67M | -1.35B | -2.23B | -1.72B | -1.21B | -1.14B | -979.42M |
| Operating Margin % | -0.99% | -5.52% | -10.61% | -19.22% | -27.24% | -19.03% | -18.35% | -28.9% | -44.15% |
| Operating Income Growth % | - | 36.13% | 39.04% | 39.22% | -29.22% | -42.84% | -5.57% | -16.76% | - |
| EBITDA | 3.62B | 1.95B | 437.42M | -414.04M | -1.07B | -868.85M | -449.21M | -538.95M | -567.07M |
| EBITDA Margin % | 32.93% | 20.43% | 5.62% | -5.88% | -13.09% | -9.59% | -6.83% | -13.62% | -25.56% |
| EBITDA Growth % | 314.54% | 346.48% | 205.65% | 61.34% | -23.26% | -93.42% | 16.65% | 4.96% | - |
| D&A (Non-Cash Add-back) | 3.48B | 2.48B | 1.26B | 940.48M | 1.16B | 855.6M | 758.04M | 604.58M | 412.35M |
| EBIT | -58.13M | -449.85M | -1.75B | -2.02B | -2.53B | -1.52B | -937.84M | -1.1B | -957.98M |
| Net Interest Income | -485.94M | -405.82M | -205.57M | -67.61M | -58.07M | 19.64M | 63.97M | 73.49M | 80.7M |
| Interest Income | 121.6M | 78.66M | 27.39M | 78.4M | 82.16M | 71.01M | 72.91M | 78.4M | 121.04M |
| Interest Expense | 607.54M | 484.48M | 232.96M | 146.01M | 140.23M | 51.37M | 8.94M | 4.91M | 40.34M |
| Other Income/Expense | -492.04M | -420.52M | -1.15B | -811.17M | -435.51M | 148.44M | 259.96M | 41.34M | -17.39M |
| Pretax Income | -601.4M | -947.89M | -1.98B | -2.17B | -2.66B | -1.58B | -947.29M | -1.1B | -996.81M |
| Pretax Margin % | -5.46% | -9.92% | -25.44% | -30.73% | -32.57% | -17.39% | -14.4% | -27.86% | -44.94% |
| Income Tax | 5.75M | -4.2M | -1.52M | 17.96M | 24.47M | 15.74M | 14.9M | 9M | 9.63M |
| Effective Tax Rate % | -0.96% | 0.44% | 0.08% | -0.83% | -0.92% | -1% | -1.57% | -0.82% | -0.97% |
| Net Income | -601.5M | -936.25M | -1.97B | -2.18B | -2.66B | -1.59B | -962.26M | -1.11B | -1.01B |
| Net Margin % | -5.46% | -9.79% | -25.26% | -30.88% | -32.5% | -17.53% | -14.63% | -28.09% | -45.37% |
| Net Income Growth % | 70.3% | 52.39% | 9.63% | 18.13% | -67.32% | -65.1% | 13.4% | -10.41% | - |
| Net Income (Continuing) | -607.15M | -943.69M | -1.98B | -2.18B | -2.69B | -1.59B | -962.2M | -1.11B | -1.01B |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | -3.79M | -3.99M | 337.28M | 355.75M | 782.48M | 888.47M | 61K | 0 | 0 |
| EPS (Diluted) | -2.00 | -3.30 | -8.10 | -9.15 | -10.95 | -6.90 | -6.15 | -19.65 | -33.23 |
| EPS Growth % | 75.04% | 59.26% | 11.48% | 16.44% | -58.7% | -12.2% | 68.7% | 40.87% | - |
| EPS (Basic) | - | -3.30 | -8.10 | -9.15 | -10.95 | -6.90 | -6.15 | -19.65 | -33.23 |
| Diluted Shares Outstanding | 300.12M | 273.8M | 245.09M | 238.41M | 242.8M | 230.6M | 160.86M | 59.6M | 53.16M |
| Basic Shares Outstanding | 300.12M | 273.8M | 245.09M | 238.41M | 242.8M | 230.6M | 157.62M | 57.05M | 30.59M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying KC stock.
For fiscal year 2025, Kingsoft Cloud Holdings Limited (KC) reported total revenue of $9.56B. This represents a 330.9% increase compared to $2.22B in 2018.
Kingsoft Cloud Holdings Limited (KC) reported a net loss of $936.3M for the fiscal year ending 2025.
Kingsoft Cloud Holdings Limited (KC) reported an operating income of $-527.4M, resulting in an operating profit margin of -5.5%. This margin reflects the operational efficiency of the business before interest and taxes.
Kingsoft Cloud Holdings Limited (KC) generated $1.50B in gross profit for the year, representing a gross profit margin of 15.7%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Persistent negative operating margins
Top-Line Momentum Accelerates
Kingsoft Cloud's revenue growth has accelerated sharply, reaching 30.4% year-over-year in 2026Q2, a significant improvement from the 3.1% growth seen in 2024Q2, suggesting successful market share gains in the competitive Chinese cloud sector.
The acceleration from low-teens to over 30% growth indicates the company is capturing demand, likely driven by its ecosystem ties and neutrality positioning. However, this growth durability is questionable given the lumpy, project-based nature of its Enterprise Cloud segment and the intense pricing pressure from hyperscale competitors. Investors should monitor whether this growth is being bought with unsustainable pricing or reflects genuine value-added service adoption.
Structurally Low Gross Margin Ceiling
Despite revenue growth, the gross margin has remained constrained in the 12.8%-16.9% range over the past ten quarters, significantly below peers like Alibaba Cloud (39.8%), indicating a lack of pricing power and a heavy reliance on low-margin infrastructure services.
The persistently low gross margin suggests Kingsoft Cloud is primarily competing on price in the commodity IaaS market, where its smaller scale puts it at a disadvantage against hyperscalers. The slight improvement to 15.2% in 2026Q2 is encouraging but insufficient to change the fundamental profitability equation. A meaningful shift toward higher-margin PaaS or SaaS offerings is required to break this structural ceiling, which has not yet materialized in the financials.
Operating Leverage Remains Elusive
Operating income turned positive at $22.9M in 2026Q2, but this appears driven by a one-time SG&A anomaly rather than scalable operating leverage, as SG&A expenses have been highly volatile and R&D costs remain a significant drag.
The swing to a 0.7% operating margin in 2026Q2 is notable, but the preceding quarter's -6.1% margin and the erratic SG&A line (which swung from -$7.9M to $318.5M) suggest this is not a sustainable trend. True operating leverage would require consistent SG&A discipline and R&D efficiency as revenue scales, neither of which is evident. The company's cost structure appears to be scaling roughly in line with revenue, preventing meaningful margin expansion.
Net Losses Masked by Non-Operating Items
The net loss narrowed to -$92.8M in 2026Q2, but this improvement is partly due to non-operating items, as the operating loss was only $22.9M, highlighting that reported EPS does not reflect core operational performance.
The disconnect between operating income and net income suggests significant non-operating expenses or income, potentially including interest on its large cash balance or foreign exchange impacts. The heavy stock-based compensation of $57.3M in 2026Q2 also dilutes shareholders and represents a real economic cost not fully captured in GAAP EPS. Investors should focus on operating metrics, as the bottom line is heavily influenced by factors outside the core cloud business.
High Fixed-Cost Structure Limits Flexibility
Cost of goods sold consistently consumes 83-87% of revenue, reflecting the high fixed costs of data center operations and bandwidth, which leaves minimal gross profit to cover substantial R&D and SG&A overhead.
The COGS dominance underscores the capital-intensive nature of the business, where scaling revenue does not proportionally reduce unit costs. R&D spending has been maintained at a high level (around $190M per quarter), which is necessary for competitiveness but delays the path to profitability. The volatility in SG&A suggests potential inefficiencies or non-recurring charges, making it difficult to model a clear trajectory for operating expense control.
Growth at the Expense of Profitability
The strongest challenge to the narrative is that the recent revenue acceleration may be unsustainable, as it coincides with persistently negative operating margins and a gross margin that shows no structural improvement, suggesting growth is being purchased with aggressive pricing.
Short-sellers would focus on the fact that despite 30%+ revenue growth, the company remains deeply unprofitable on an operating basis. The gross margin has not expanded despite scale, indicating that any pricing power from the 'neutrality' moat is limited. If the Chinese cloud market enters a price war, Kingsoft Cloud's smaller scale and high fixed costs could lead to severe margin compression, making its current growth trajectory a potential value trap rather than a path to sustainable profitability.