Kingsoft Cloud (KC) Earnings Review: 2Q26 clean beat driven by AI billings +82% yoy; MaaS 12x growth qoq as a new margin-accretive growth driver; Buy

Research evidence excerpt

Equity Research

20 August 2026 | 2:23PM HKT

Kingsoft Cloud (KC)

Earnings Review: 2Q26 clean beat driven by AI billings +82% yoy; MaaS 12x growth

qoq as a new margin-accretive growth driver; Buy

KC

12m Price Target: $18.00

Price: $12.37

Upside: 45.5%

Kingsoft Cloud (KC)‘s 2Q26 results beat expectations on revenue

and adj. EBITDA. Revenue grew +31% yoy to Rmb3.1bn (3%/1%

above GSe/Visible Alpha Consensus), which was primarily driven by

+45% yoy public cloud revenue growth. AI gross billings grew

+82% yoy to Rmb1.3bn, which was equivalent to 43%/56% of total

revenue/public cloud revenue (vs. 37%/50% in 1Q26).

Xiaomi/Kingsoft ecosystem revenue growth moderated to +28%

yoy in 2Q26 (vs. +69% yoy in 1Q26), while public cloud revenue

from top 5 non-ecosystem customers grew robustly +51% yoy.

Revenue from enterprise cloud declined -1% yoy to Rmb717mn,

primarily on i) seasonality of revenue recognition towards 2H26E,

and ii) strategic adjustment of revenue structure towards

higher-valued AI business.

Gross margin grew +0.4pp yoy/+2.4pp qoq to 15.4% (above GSe

14.3%), due to higher profit contribution from AI cloud business

especially from non-ecosystem customers. Adj. EBITDA grew

+171% yoy in 2Q26 to Rmb1.1bn (21% above GSe/consensus) with

adj. EBITDA margin +18.5pp yoy to a historical high level of 35.8%.

Non-GAAP operating profit turned positive to Rmb124mn (above

GSe of Rmb13mn), with non-GAAP operating margin expanding

+11.1pp yoy/+6.2pp qoq to a historical high at 4.0%. Capex

(including capitalized assets through lease arrangement) reached

Rmb3.2bn in 2Q26 (vs. Rmb3bn in 1Q26 or GSe of Rmb16.2bn

capex in 2026E).

We highlight key themes from management:

1) MaaS services as an emerging growth driver with higher

margin: Revenue from MaaS services grew 12x qoq to Rmb120mn,

accounting for 9% of AI revenue (GSe). We see MaaS carries a higher

margin level vs. GPU compute, which should support GPM

expansion. That said, MaaS business is more volatile vs. GPU

compute business and is subject to factors including token price

BUY

Timothy Zhao

Goldman Sachs (Asia) L.L.C.

Ronald Keung, CFA

Goldman Sachs (Asia) L.L.C.

Eunice Liu

Goldman Sachs (Asia) L.L.C.

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