Kingsoft Corp Ltd
HKEX:3888
Kingsoft Corp Ltd
Kingsoft Corp Ltd., a name deeply intertwined with the evolution of China's software landscape, crafts a narrative of resilience and innovation. Founded in 1988, Kingsoft embarked on its journey through the burgeoning software market with a focus on office software, internet security, and entertainment content. Known for its flagship products like WPS Office, Kingsoft has successfully positioned itself as a formidable player in the office software suite market, rivalling international giants by offering robust, cost-effective alternatives tailor-made for the local market. WPS Office, which includes word processing, spreadsheet, and presentation applications, thrives on a freemium model, capitalizing on user growth by converting free users to premium memberships. This model generates a sustainable revenue stream through subscription fees, catering to both individual users and enterprises seeking cost-effective software solutions.
Over the years, Kingsoft has diversified its portfolio, becoming a large technology and service company with several key business segments. Its cloud service division, Kingsoft Cloud, stands as a testament to this diversification, leveraging the boom in digital transformation and cloud adoption across industries. Providing cloud infrastructure as a service (IaaS), its revenue gains traction from sectors such as gaming, video streaming, and online education, which lean heavily on cloud solutions for scalable and robust digital operations. Meanwhile, Kingsoft’s gaming segment, primarily revolving around mobile and PC-based games, taps into revenue models rooted in in-app purchases and advertising, artfully combining engagement with monetization. Thus, Kingsoft Corp Ltd. weaves its success story through strategic adaptability and a keen understanding of its evolving market landscape.
Kingsoft Corp Ltd., a name deeply intertwined with the evolution of China's software landscape, crafts a narrative of resilience and innovation. Founded in 1988, Kingsoft embarked on its journey through the burgeoning software market with a focus on office software, internet security, and entertainment content. Known for its flagship products like WPS Office, Kingsoft has successfully positioned itself as a formidable player in the office software suite market, rivalling international giants by offering robust, cost-effective alternatives tailor-made for the local market. WPS Office, which includes word processing, spreadsheet, and presentation applications, thrives on a freemium model, capitalizing on user growth by converting free users to premium memberships. This model generates a sustainable revenue stream through subscription fees, catering to both individual users and enterprises seeking cost-effective software solutions.
Over the years, Kingsoft has diversified its portfolio, becoming a large technology and service company with several key business segments. Its cloud service division, Kingsoft Cloud, stands as a testament to this diversification, leveraging the boom in digital transformation and cloud adoption across industries. Providing cloud infrastructure as a service (IaaS), its revenue gains traction from sectors such as gaming, video streaming, and online education, which lean heavily on cloud solutions for scalable and robust digital operations. Meanwhile, Kingsoft’s gaming segment, primarily revolving around mobile and PC-based games, taps into revenue models rooted in in-app purchases and advertising, artfully combining engagement with monetization. Thus, Kingsoft Corp Ltd. weaves its success story through strategic adaptability and a keen understanding of its evolving market landscape.
Revenue Decline: Total revenue for Q3 2025 was RMB 2.419 billion, down 17% year-on-year but up 5% quarter-on-quarter.
Office Software Growth: Office software and services revenue grew 26% year-on-year, driven by strong performance in WPS software, WPS 365, and the individual business.
Gaming Revenue Drop: Online games and other business revenue fell 47% year-on-year and 6% quarter-on-quarter, mainly due to lower contributions from existing games.
AI & Internationalization: Management emphasized AI-powered product innovation and international expansion as core strategic focuses.
Profitability Pressures: Gross profit margin dropped 4 percentage points year-on-year to 80%, flat quarter-on-quarter; operating profit before share-based compensation sank 70% year-on-year.
High R&D & Marketing Spend: R&D and selling expenses rose sharply, reflecting continued investment in AI and product launches.
Cash Position: The group ended the quarter with RMB 26 billion in cash resources, highlighting strong liquidity.
Optimism on Sustainability: Management expressed confidence that office business growth could be sustained given robust membership, AI adoption, and enterprise momentum.
