Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2020

Commission file number: 001-39278

 

 

Kingsoft Cloud Holdings Limited

(Exact Name of Registrant as Specified in Its Charter)

 

 

Kingsoft Tower, No. 33, Xiao Ying West Road,

Haidian District

Beijing, 100085, the People’s Republic of China

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 

 


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    Kingsoft Cloud Holdings Limited
Date:   August 18, 2020     By:   /s/ Haijian He
        Name:   Haijian He
        Title:   Chief Financial Officer


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1    Press Release
EX-99.1

Exhibit 99.1

 

LOGO

Kingsoft Cloud Announces Unaudited Second Quarter 2020 Financial Results

BEIJING, CHINA, August 18, 2020 – Kingsoft Cloud Holdings Limited (“Kingsoft Cloud” or the “Company”) (NASDAQ: KC), a leading independent cloud service provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2020.

Second quarter 2020 Financial Highlights

Total revenues were RMB1,534.8 million (US$1217.2 million) in the second quarter of 2020, representing an increase of 64.1 % year-over-year.

Gross profit was RMB80.7 million (US$11.4 million) or 5.3% gross margin in the second quarter of 2020, compared with gross loss of RMB20.3 million or -2.2% gross margin in the second quarter of 2019.

Non-GAAP gross profit2, was RMB83.8 million (US$11.9 million) or 5.5% Non-GAAP gross margin in the second quarter of 2020, compared with Non-GAAP gross loss of RMB16.5 million or -1.8% Non-GAAP gross margin in the second quarter of 2019.

Net loss was RMB420.1 million (US$59.5 million) or -27.4% net loss margin in the second quarter of 2020, compared with net loss of RMB319.7 million or net loss margin of -34.2% in the second quarter of 2019.

Non-GAAP EBITDA3, was RMB-35.9 million (US$-5.1 million) or -2.3% Non-GAAP EBITDA margin in the second quarter of 2020, compared with RMB-117.6 million or -12.6% Non-GAAP EBITDA margin in the second quarter of 2019.

Excluding the one-time IPO-related expenses, normalized Non-GAAP EBITDA4 was RMB-26.8 million (US$-3.8 million) or -1.7% normalized Non-GAAP EBITDA margin.

 

1 

This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB7.0651 to US$1.00, the noon buying rate in effect on June 30, 2020 as certified for customs purposes by the Federal Reserve Bank of New York.

2 

Non-GAAP gross profit is defined as gross profit excluding share-based compensation allocated in the cost of revenues. and we define Non-GAAP gross margin as Non-GAAP gross profit as a percentage of revenues. See “Reconciliation of GAAP and Non-GAAP results” set forth at the end of this press release.

3 

Non-GAAP EBITDA is defined as Non-GAAP net loss excluding interest income, interest expense, income tax expense and depreciation and amortization, and Non-GAAP net loss is defined as net loss excluding share-based compensation, foreign exchange loss, changes in fair value of financial instruments and other (income) expense, net. Non-GAAP EBITDA margin is defined as Non-GAAP EBITDA as a percentage of revenues. See “Reconciliation of GAAP and Non-GAAP results” set forth at the end of this press release.

4 

Normalized Non-GAAP EBITDA is defined as Non-GAAP net loss excluding listing expenses, interest income, interest expense, income tax expense and depreciation and amortization. Normalized Non-GAAP EBITDA margin is defined as normalized Non-GAAP EBITDA as a percentage of revenues. See “Reconciliation of GAAP and Non-GAAP results” set forth at the end of this press release.

 

1


“We delivered solid operational and financial results for the second quarter of 2020. Our total revenues increased by 64.1% year-over-year to RMB1,534.8 million, driven by solid growth in both public cloud and enterprise cloud services.” commented Mr. Yulin Wang, Chief Executive Officer of Kingsoft Cloud. “We will continue to invest in technology, such as edge computing, big data, transcoding and others. We are confident that our cutting-edge technology and ability to effectively execute our strategy will ideally position us to capture the growth opportunities the cloud industry will create in the future.”

Mr. Henry He, Chief Financial Officer of Kingsoft Cloud added that “Despite the uncertain macroeconomic environment, we are pleased to see that we are consistently delivering faster revenue growth than the general public cloud industry in China and continued to improve our bottom-line performance, as we achieving greater economies of scale. It demonstrates our ability to provide quality services to our customers even in challenging market conditions.”

First, our previous guidance for the second quarter ranged from RMB1.50 billion to RMB1.54 billion. The total revenues during the quarter came in at the mid-to-top end of our guidance, at RMB1.535 billion, representing an increase of 64.1% year-over-year. Our enterprise services revenue was RMB246.1 million. Despite the impact of the second wave of the pandemic in June, enterprise cloud services achieved significant growth of 259.3% on a year-over-year and 35.5% on a quarter-over-quarter basis.

Second, we generated a positive gross profit for the fourth consecutive quarter and our adjusted gross margin has now improved for eight quarters in a row. Specifically, the adjusted gross margin increased from -1.8% in the second quarter of 2019 to 5.5% in this quarter, an improvement of 7.3 percentage points.

Third, excluding the one-time IPO-related expenses and other Non-GAAP adjustments, our normalized adjusted EBITDA margin increased as well, up from -12.6% in the second quarter of 2019 to -1.7% in this quarter, representing an improvement of 10.9 percentage points. Adjusted EBITDA margin has now steadily improved for eight consecutive quarters.”

Second quarter 2020 Financial Results

Total Revenues reached RMB1,534.8 million (US$217.2 million), an increase of 64.1% from RMB935.1 million in the same period of 2019. The increases were primarily due to the growth in both public cloud services and enterprise cloud services for our premium customers.

 

2


-

Revenues from public cloud services were RMB1,287.1 million (US$182.2 million), representing an increase of 48.6% from RMB866.3 million in the same period of 2019.

-

Revenues from enterprise cloud services were RMB246.1 million (US$34.8 million), representing an increase of 259.3% from RMB68.5 million in the same period of 2019.

-

Other revenues were RMB1.6 million (US$0.2 million).

Cost of revenues was RMB1,454.0 million (US$205.8 million), representing an increase of 52.2% from RMB955.4 million in the same period of 2019, primarily attributable to increase in IDC costs and depreciation and amortization costs, as we continue to grow our business. IDC costs increased by 31.6% to RMB978.4 million (US$138.5 million) from RMB743.5 million in the same period of 2019. The increase in IDC costs was in line with the Company’s expanding business and was partially offset by improved efficiency and utilization of bandwidth. However, IDC costs as a percentage of total revenues decreased from 79.5% during the same period of last year to 63.8% in the second quarter of 2020. Depreciation and amortization costs increased by 59.1% to RMB217.5 million (US$30.8 million) from RMB136.7 million in the same period of 2019, primarily due to new servers and other fixed assets purchased. As a percentage of total revenues, depreciation and amortization costs decreased from 14.6% during the same period of 2019 to 14.2% in the second quarter of 2020.

Gross profit was RMB80.7 million (US$11.4 million), compared to gross loss of RMB20.3 million in the same period in 2019. Gross margin was 5.3%, representing an increase of 7.5 percentage points from -2.2% in the same period in 2019.

Non-GAAP gross profit was RMB83.8 million (US$11.9 million), compared to Non-GAAP gross loss of RMB16.5 million in the same period in 2019. Non-GAAP gross margin was 5.5%, representing an increase of 7.3 percentage points from -1.8% in the same period in 2019. The increase was primarily due to our continued leverage on economies of scale.

Selling and marketing expenses were RMB109.8 million (US$15.5 million), representing an increase of 39.0% from RMB79.0 million in the same period in 2019, mainly due to the increase in share-based compensation expenses, as well as the salaries and welfare of selling and marketing personnel.

General and administrative expenses were RMB170.4 million (US$24.1 million), an increase of 180.3% from RMB60.8 million in the same period in 2019, mainly due to the increase in share-based compensation expenses from 11.3 million in the second quarter of 2019 to 97.3 million (US$13.8 million) in the second quarter of 2020, as we recognized one-time share-based compensation upon our IPO in May 2020.

Research and development expenses were RMB230.8 million (US$32.7 million), an increase of 60.8% from RMB143.5 million in the same period in 2019, primarily due to the increase in share-based compensation expenses, as well as the salaries and welfare of research and development personnel.

Operating loss was RMB430.3 million (US$60.9 million), compared with RMB303.5 million in the same quarter of 2019.

 

3


Net loss was RMB420.1 million (US$59.5 million), compared with RMB319.7 million in the same quarter of 2019.

Non-GAAP net loss was RMB237.7 million (US$33.6 million), compared with RMB235.8 million in the same quarter of 2019.

Non-GAAP EBITDA was RMB-35.9 million (US$-5.1 million), compared with RMB-117.6 million in the same quarter of 2019. Non-GAAP EBITDA margin was -2.3%, compared to -12.6% in the same quarter of 2019. The steady increase of Non-GAAP EBITDA margin was due to the revenue growth and operating leverage. Excluding the one-time IPO-related expenses, normalized Non-GAAP EBITDA was RMB-26.8 million (US$-3.8 million) or -1.7% normalized Non-GAAP EBITDA margin.

Basic and diluted net loss per share was RMB-0.19 (US$-0.03), compared with RMB-0.36 in the same quarter of 2019.

Cash and cash equivalents and short-term investments were RMB5,763.8 million (US$815.8 million) as of June 30, 2020, compared to RMB2,198.4 million as of March 31, 2020. The increase was primarily driven by the net proceeds received from IPO in May 2020.

Outstanding ordinary shares were 3,146,466,493 as of June 30, 2020, equivalent to about 209,764,433 ADSs.

Business Outlook

For the third quarter of 2020, the Company expects total revenues to be between RMB1.67 billion and RMB1.74 billion, representing a year-over-year growth of 67% to 74%. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.

Conference Call Information

The Company will hold a conference call on Tuesday, August 18, 2020, at 8:00 A.M. Eastern Time (8:00 P.M. Beijing/Hong Kong Time on the same day) to discuss the financial results.

Participants can register for the conference call by navigating to http://apac.directeventreg.com/registration/event/9178197. Once preregistration has been completed, participants will receive dial-in numbers, direct event passcode, and a unique registrant ID.

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your registrant ID, and you will join the conference instantly.

 

4


A telephone replay of the call will be available after the conclusion of the conference call through 9:00 a.m. U.S. Eastern Time, August 26, 2020. The dial-in details for the replay are as follows:

International: +61-2-8199-0299

U.S. Toll Free: +1-855-452-5696

Mainland China Toll Free: 800-870-0206

Hong Kong Toll Free: 800-963-117

Conference ID: 9178197

A live and archived webcast of the conference call will also be available at the Company’s investor relations website at http://ir.ksyun.com/.

Use of Non-GAAP Financial Measures

The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In evaluating our business, we consider and use certain non-GAAP measures, Non-GAAP gross (loss) profit, Non-GAAP gross margin, Non-GAAP EBITDA and Non-GAAP EDITDA margin, as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define Non-GAAP gross (loss) profit as gross (loss) profit excluding share-based compensation allocated in the cost of revenues, and we define Non-GAAP gross margin as Non-GAAP gross (loss) profit as a percentage of revenues. We define Non-GAAP net loss as net loss excluding share-based compensation, foreign exchange (gain) loss, changes in fair value of financial instruments and other (income) expense, net. We define Non-GAAP EBITDA as Non-GAAP net loss excluding interest income, interest expense, income tax expense and depreciation and amortization, and we define Non-GAAP EBITDA margin as Non-GAAP EBITDA as a percentage of revenues. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We also believe that the use of these non-GAAP measures facilitates investors’ assessment of our operating performance. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

We compensate for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.

 

5


Exchange Rate Information

This press release contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from RMB to U.S. dollars, in this press release, were made at a rate of RMB7.0651 to US$1.00, the noon buying rate in effect on June 30, 2020 as certified for customs purposes by the Federal Reserve Bank of New York.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as Kingsoft Cloud’s strategic and operational plans, contain forward-looking statements. Kingsoft Cloud may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including but not limited to statements about Kingsoft Cloud’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Kingsoft Cloud’s goals and strategies; Kingsoft Cloud’s future business development, results of operations and financial condition; the expected growth of the cloud service market in China; the expectation regarding the rate at which to gain customers, especially Premium Customers; Kingsoft Cloud’s ability to monetize the customer base; fluctuations in general economic and business conditions in China; the impact of the COVID-19 to Kingsoft Cloud’s business operations and the economy in China and elsewhere generally; China’s political or social conditions and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Kingsoft Cloud’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Kingsoft Cloud does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Kingsoft Cloud Holdings Limited

Kingsoft Cloud Holdings Limited (NASDAQ: KC) is a leading independent cloud service provider in China. Kingsoft Cloud has built a comprehensive and reliable cloud platform consisting of extensive cloud infrastructure, cutting-edge cloud products and well-architected industry-specific solutions across public cloud, enterprise cloud and AIoT cloud services.

 

6


For more information, please visit: http://ir.ksyun.com.

For investor and media inquiries, please contact:

Kingsoft Cloud Holdings Limited

Nicole Shan

Tel: +86 (10) 6292-7777 Ext. 6300

Email: ksc-ir@kingsoft.com

Christensen

Ms. Linda Bergkamp

Phone: +1-480-614-3004

E-mail: lbergkamp@christensenir.com

 

7


KINGSOFT CLOUD HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands)

 

     December 31,
2019
    Jun 30,
2020
    Jun 30,
2020
 
     RMB     RMB     US$  

ASSETS

      

Current assets:

      

Cash and cash equivalents

     2,023,263       3,310,487       468,569  

Accounts receivable, net

     1,347,481       1,642,276       232,449  

Short-term investments

     225,425       2,453,343       347,248  

Prepayments and other assets

     421,938       533,994       75,582  

Amounts due from related parties

     131,632       112,139       15,872  
  

 

 

   

 

 

   

 

 

 

Total current assets

     4,149,739       8,052,239       1,139,720  
  

 

 

   

 

 

   

 

 

 

Non-current assets:

      

Property and equipment, net

     1,720,974       1,834,221       259,617  

Intangible assets, net

     7,428       7,918       1,121  

Prepayments and other assets

     36,468       31,657       4,481  

Equity investments

     114,876       115,917       16,407  

Amounts due from related parties

     2,336       5,758       815  

Operating lease right-of-use assets

     —         270,593       38,300  
  

 

 

   

 

 

   

 

 

 

Total non-current assets

     1,882,082       2,266,064       320,741  
  

 

 

   

 

 

   

 

 

 

Total assets

     6,031,821       10,318,303       1,460,461  
  

 

 

   

 

 

   

 

 

 

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT

 

Current liabilities

      

Accounts payable

     1,254,589       1,735,686       245,670  

Accrued expenses and other current liabilities

     949,213       831,331       117,667  

Short-term loans

     100,000       228,487       32,340  

Income tax payable

     11,930       19,325       2,735  

Amounts due to related parties

     104,259       113,229       16,027  

Operating lease liabilities

     —         66,298       9,384  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     2,419,991       2,994,356       423,823  
  

 

 

   

 

 

   

 

 

 

Non-current liabilities

      

Long-term bank loan

     74,351       74,351       10,524  

Deferred tax liabilities

     206       118       17  

Operating lease liabilities

     —         205,656       29,109  
  

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     74,557       280,125       39,650  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     2,494,548       3,274,481       463,473  
  

 

 

   

 

 

   

 

 

 

Mezzanine equity:

      

Series B convertible preferred shares

     337,268       —         —    

Series C redeemable convertible preferred shares

     1,043,147       —         —    

Series D redeemable convertible preferred shares

     5,965,273       —         —    

Series D+ redeemable convertible preferred shares

     388,844       —         —    
  

 

 

   

 

 

   

 

 

 

Total mezzanine equity

     7,734,532       —         —    
  

 

 

   

 

 

   

 

 

 

Shareholders’ deficit:

      

Series A convertible preferred shares

     123,186       —         —    

Ordinary shares

     5,558       21,497       3,043  

Additional paid-in capital

     91,746       12,139,745       1,718,270  

Accumulated deficit

     (4,902,097     (5,653,611     (800,218

Accumulated other comprehensive income

     484,348       536,380       75,920  
  

 

 

   

 

 

   

 

 

 

Total Kingsoft Cloud Holdings Limited shareholders’ deficit

     (4,197,259     7,044,011       997,015  

Noncontrolling interests

     —         (189     (27
  

 

 

   

 

 

   

 

 

 

Total deficit

     (4,197,259     7,043,822       996,988  
  

 

 

   

 

 

   

 

 

 

Total liabilities, mezzanine equity and shareholders’ deficit

     6,031,821       10,318,303       1,460,461  
  

 

 

   

 

 

   

 

 

 

 

8


KINGSOFT CLOUD HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(All amounts in thousands, except for share and per share data)

 

    Three Months Ended     Six Months Ended  
    Jun 30,
2019
    March 31,
2020
    Jun 30,
2020
    Jun 30,
2020
    Jun 30,
2019
    Jun 30,
2020
    Jun 30,
2020
 
    RMB     RMB     RMB     US$     RMB     RMB     US$  

Revenues:

             

Public cloud services

    866,348       1,208,514       1,287,139       182,183       1,629,183       2,495,653       353,237  

Enterprise cloud services

    68,465       181,587       246,081       34,831       151,431       427,668       60,532  

Others

    309       862       1,535       217       309       2,397       339  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    935,122       1,390,963       1,534,755       217,231       1,780,923       2,925,718       414,108  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues

    (955,407     (1,320,192     (1,454,011     (205,802     (1,846,281     (2,774,203     (392,663
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross (loss) profit

    (20,285     70,771       80,744       11,429       (65,358     151,515       21,445  

Operating expenses:

             

Selling and marketing expenses

    (79,013     (87,968     (109,775     (15,538     (131,831     (197,743     (27,989

General and administrative expenses

    (60,782     (75,977     (170,421     (24,122     (95,912     (246,398     (34,875

Research and development expenses

    (143,468     (195,650     (230,828     (32,672     (267,832     (426,478     (60,364
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    (283,263     (359,595     (511,024     (72,332     (495,575     (870,619     (123,228
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

    (303,548     (288,824     (430,280     (60,903     (560,933     (719,104     (101,783

Interest income

    23,699       10,095       20,937       2,963       49,685       31,032       4,392  

Interest expense

    (2,025     (1,884     (1,791     (253     (4,925     (3,675     (520

Foreign exchange loss

    (38,625     (40,144     (2,883     (408     (13,832     (43,027     (6,090

Changes in fair value of financial instruments

    —         198       —         —         —         198       28  

Other income (expense), net

    2,652       (5,259     (4,342     (615     13,588       (9,601     (1,359
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

    (317,847     (325,818     (418,359     (59,216     (516,417     (744,177     (105,332

Income tax expense

    (1,892     (5,829     (1,697     (240     (4,682     (7,526     (1,065
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

    (319,739     (331,647     (420,056     (59,456     (521,099     (751,703     (106,397

Less: net (loss) income attributable to noncontrolling interests

    —         (306     117       17       —         (189     (27
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Kingsoft Cloud Holdings Limited

    (319,739     (331,341     (420,173     (59,473     (521,099     (751,514     (106,370

Accretion to redemption value of redeemable convertible preferred shares

    —         (19,768     —         —         —         (19,768     (2,798
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to ordinary shareholders

    (319,739     (351,109     (420,173     (59,473     (521,099     (771,282     (109,168
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share:

             

Basic and diluted

    (0.36     (0.39     (0.19     (0.03     (0.59     (0.49     (0.07

Shares used in the net loss per share computation:

             

Basic and diluted

    894,711,200       898,305,836       2,218,943,950       2,218,943,950       882,649,211       1,565,900,651       1,565,900,651  

Other comprehensive income, net of tax of nil:

             

Foreign currency translation adjustments

    66,881       51,349       683       97       14,632       52,032       7,365  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss

    (252,858     (280,298     (419,373     (59,359     (506,467     (699,671     (99,032

Less: Comprehensive (loss) income attributable to noncontrolling interests

    —         (306     117       17       —         (189     (27
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss attributable to Kingsoft Cloud Holdings Limited shareholders

    (252,858     (279,992     (419,490     (59,376     (506,467     (699,482     (99,005

Accretion to redemption value of redeemable convertible preferred shares

    —         (19,768     —         —         —         (19,768     (2,798
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss attributable to ordinary shareholders

    (252,858     (299,760     (419,490     (59,376     (506,467     (719,250     (101,803
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

9


KINGSOFT CLOUD HOLDINGS LIMITED

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except for percentage)

 

     Three Months Ended  
     Jun 30,
2019
    March 31,
2020
     Jun 30,
2020
     Jun 30,
2020
 
     RMB     RMB      RMB      US$  

Gross (loss) profit

     (20,285     70,771        80,744        11,429  

Adjustments:

          

– Share-based compensation expenses

     3,824       3,426        3,009        426  

Adjusted gross (loss) profit

     (16,461     74,197        83,753        11,855  

 

     Three Months Ended
     Jun 30,
2019
  March 31,
2020
  Jun 30,
2020

Gross margin

   -2.2%   5.1%   5.3%

Adjusted gross margin

   -1.8%   5.3%   5.5%

 

     Three Months Ended  
     Jun 30,
2019
    March 31,
2020
    Jun 30,
2020
    Jun 30,
2020
 
     RMB     RMB     RMB     US$  

Net Loss

     (319,739     (331,647     (420,056     (59,456

Adjustments:

        

– Share-based compensation expenses

     48,000       43,084       175,148       24,791  

– Foreign exchange loss

     38,625       40,144       2,883       408  

– Changes in fair value of financial instruments

     —         (198     —         —    

– Other (income) expense, net

     (2,652     5,259       4,342       615  

Adjusted net loss

     (235,766     (243,358     (237,683     (33,642

Adjustments:

        

– Interest income

     (23,699     (10,095     (20,937     (2,963

– Interest expense

     2,025       1,884       1,791       253  

– Income tax expense

     1,892       5,829       1,697       240  

– Depreciation and amortization

     137,995       206,362       219,227       31,030  

Adjusted EBITDA

     (117,553     (39,378     (35,905     (5,082

-IPO expenses

     —         5,288       9,119       1,291  

Excluding IPO expenses, normalized Non-GAAP EBITDA

     (117,553     (34,090     (26,786     (3,791

 

     Three Months Ended
     Jun 30,
2019
  March 31,
2020
  Jun 30,
2020

Net loss margin

   -34.2%   -23.8%   -27.4%

Adjusted net loss margin

   -25.2%   -17.5%   -15.5%

Adjusted EBITDA Margin

   -12.6%   -2.8%   -2.3%

Normalized Non-GAAP EBITDA Margin

   -12.6%   -2.5%   -1.7%

 

10


KINGSOFT CLOUD HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)

 

     Three Months Ended  
     Jun 30,
2019
     Jun 30,
2020
     Jun 30,
2020
 
     RMB      RMB      US$  

Net cash used in operating activities

     (2,282      (2,568      (363

Net cash generated from (used in) investing activities

     376,493        (2,673,218      (378,369

Net cash (used in) generated from financing activities

     (266,120      4,006,944        567,146  

Effect of exchange rate changes on cash and cash equivalents

     4,749        9,457        1,338  

Net increase in cash and cash equivalents

     108,091        1,331,158        188,414  

Cash and cash equivalents at beginning of period

     1,633,028        1,969,872        278,817  

Cash and cash equivalents at end of period

     1,745,868        3,310,487        468,569  

 

11