Lei Jun's Cloud company saw a strong growth and reduced losses in the third quarter.
Kingsoft Cloud released the third-quarter financial report of the year. China’s cloud provider recorded a quarterly earning of CNY 1,728.8 million, a year-on-year revenue growth of 72.6%. Public cloud and enterprise cloud business recognized strong growth. Particularly, the revenue share from enterprise cloud increased from 11.4% to 23.7% from 3Q2019 to 3Q2020.
During the third quarter financial report conference call, the CEO claimed that enterprises had become used to online working style after the pandemic and this introduces an ongoing promising growth of public Cloud services. The rapid growth of online activities during the pandemic piled up the demand for Cloud services. In the third quarter, Kingsoft Cloud sped up service delivery to meet the demand gap. It is worth mentioning that healthcare cloud growth peaked in the post-pandemic era.
The landscape of the cloud market in China remains stable and the overall market is still at a bourgeoning phase. Kingsoft Cloud’s costs on IDC increased by 51.2% YoY given the expanding business and the costs as a percentage of revenue decreased from 70.0% to 61.3%. The company attributed the change to improved efficiency.
At this stage, Kingsoft Cloud is yet to make a profit. However, the net loss shrunk from CNY 420.1 million to CNY 105.3 million quarter to quarter.