KC - Earnings call transcript Q4 2021 | Kingsoft Cloud Holdings Limited

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Operator

Good day. And welcome to Kingsoft Cloud's Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. turn Kingsoft over Cloud. to IR Nicole like of Manager would the to call Shan, I

You begin. may

Nicole Shan

Thank you, year Michelle. available well us was today. as Hello, earlier on everyone, and Cloud's distributed services. at quarter thanks our fourth on IR and ir.ksyun.com, and GlobeNewswire fiscal today XXXX website release Kingsoft earnings is for as joining

the He. the On during company the business and the Wang; that CEO, Mr. the call Yulin Mr. our follows. by today followed There financials your session will review from Mr. highlights, Kingsoft available Mr. Henry He, Cloud, operations discuss questions will to answer Q&A and we guidance. have our will be interpretations. Wang CFO, be will the who They and consecutive

for case convenience only. in your management's statement purpose reference of original discrepancy, are language prevail. In the and Our will any interpretations

uncertainties would involve beyond update of otherwise, applicable are or information, as not company's statements. Act or you of forward-looking company Section the with operating factors Before and to Securities statements the which as these that future control, events Exchange a These forward-looking the Securities are to under forward-looking are statements other undertake regarding result current we company's may U.S. company's new which as in the included filings defined U.S. the of differ to statements uncertainties Private in achievements the any performance and many materially actual information this or required contains XX-E the meaning within like begin, of and to the results, obligation mandated predict and forward-looking from management's The of does other to and conference Further any law. the call conditions risks, except as the of I remind or upon cause SEC. those XXXX all which Reform Act of are in events expectations Litigation market current risks, XXXX. and unknown factors, based relate and known difficult that

stated, otherwise pleasure financial in this introduce RMB. call Finally, ahead. conference are my Please our now all CEO, Wang. during mentioned figures to please unless note denominated Mr. Yulin go that It's

Yulin Wang

our fiscal year-over-year. you XXXX [Foreign Language] all earnings RMBX.XX joining call. you, year And quarter fourth quarter, generated and Nicole. In thank for increase billion an revenues, total fourth XX% of the Thank we representing in

cloud billion, and public our cloud reached Our up billion, year-over-year. revenues RMBX.XX reached revenues services XXX% enterprise services RMBX.XX

RMBX.XX and new traffic public year. services public opportunities. total XX% and reached the the enterprise and but demand to regulation full increase services, cloud pandemic, XXXX, year businesses. full grow, cautious of our cloud an billion, companies For to especially year revenues continued pressures from RMBX.XX was [Foreign which cloud among the RMBX.XX revenues reached sector market faced take began half pace billion challenges Within the a of our of of Language] investing new year-over-year, second and XXXX in a Internet a at approach to respectively. The slower the billion, in Internet headwinds, more driven as

we and front, to challenging strategy the maintained our amidst we execute premium continued environment, relationships. customer the customer on On robust successfully customer

effort Nevertheless, As business of the initiatives. heart premium an scale CDN downsizing we and slowdown our CDN XXX Currently, growth with efficiency the sustainable, High Adapting we carried is and business notes, in long-term achieve development. environment, we the ourselves CDN [Foreign our out We of are embrace foundation strategic optimizing quality at resources, healthy repositioning review adjusting services. our Language] to in conducted from growth. of above align industry of priority the and of and to XXXX, better started underlying market evolving a XXX intend resource facilitate of our already and our increased of to enjoy number and allocation balance the services, the improving optimize customers to year cloud growth. have sustainable profitability to our healthy to end in which core demand, core changes margins to XXXX. the proactively team

aim we gradually and to including In as technology improve stickiness. optimized allocation to to addition, continue margin we resources and data higher competitiveness database and our customer big supply computing, our products services, solutions Due strengthen some [ph] rigidity as as the process will term to take maximize relevant from resources. temporary side adjust financial our time it to soon contract possible We restrictions, the to fully results. resulting complete

margin quarter EBITDA While margin gross overall in our of to revenue provide the XXXX. our a is a and Moreover, public improve of QX, the healthier XXXX negative to cloud had structure on our expect profitability. first in impact we expected and compared and long-term for foundation growth, see adjusted higher the adjustment revenue adjustments a and solid with margin with medium QX

of quarter us the We Language] relationships customer's base. needs EBITDA experience, years in our quarterly With advantageous selling by the have to customer and expect at rich portfolio. track record XXXX. a our we line deeper established positive turn close into positions fourth our and successful tapping This with offering adjusted front cross of exploiting premium [Foreign the large, margin of

helped The its value leading In of Beijing, with facilitated [Foreign the not high the intelligent storage, station During which to provided we cloud-elastic projects Language] we the platform computing Turning business. improve [Foreign in livestreaming source space, client, to other including, selectively capabilities, establishment scenarios livestreaming in computing but limited China, Language] digital and has quarter, experience and the data video short we station needs, sector. a business video high expanded Kuaishou, comprehensive to, and of computing our recording, Kuaishou services featuring added and its explored mobility power products user offer. transcoding can our and dispatching.

service car Shouqi Winter served the customer, for the hailing, Games. taxi as Our Olympic Beijing exclusive provider

and and an a online container experience. partner a service comprehensive services architecture. deliver suite digitalization full cloud-native We a we mobility help base, stable As smooth Shouqi, to integrated services developed provided cloud it of provided of consulting

deployed which Weiling debut architecture and Entertainment R&D cubic resources, provider. to made as meter Migu framework, its key and DevOps, we Interactive and areas, On and micro launched to as Language] solution storage with Language] well power Xiaomi and including Enterprise business. program, provide several Our services computing major Moving cloud gaming gaming Cloud the including phones. computing security. stack the front, full processes, official together self-computing to professional data five TV function on technologies, gaming [Foreign Xiaomi, proud engine, solutions Xiaomi serve covered [Foreign the software a We're processing cloud

this of for of Mr. appointment maintained Wang announced while Earlier digital growth, charge Our the continues from as year, benefiting fast we Service continued revenues the President to Public in responsible Shouhu units, our he be business trend transformation. of management. in currently Shouhu appointment cloud its Camelot operation XXXX integration Camelot and is joined The of operations overall growth the will the management. and company services. into promote Camelot the accelerate responsible and our enterprise of and efficient for

over months. Further, terms of Vice customer Camelot, Global consulting. in products with and others governance that, few He President of worked the on has progress of IBM we and at years XX he expertise experience the [Foreign technology, each in base over resources Before past a made management sharing Headquarter. Language] integration have as corporate and

Internet, jointly provinces. has Kingsoft from and new jointly Jiangsu been deployment Cloud, the engaging part retail have the to with Camelot cooperation As Camelot software. solutions office customers, and Kingsoft including consumer places work first The ranging Beijing, and sectors Hubei in started Gansu, of on company

enterprise base, deepen We products, expect Language] this business. different cloud year thereby solutions, regions integrated class integration and rapid is talent storage of of regions our to shu resources, our to including accelerated transporting Western approval data customer and for year With the engagement and top-down construction technology, a be propel of of calculation from planning dong the launched. of national [Foreign our of growth system, data for suan officially xi center the customer

technology a are taking cloud we As project. company core this part in with leading capabilities,

to including far, also At have XX service first public over financials in and over call the Henry, cloud implemented so, and we Greater Area service deploying cybersecurity XXX I Beijing Language] public provided Hong computing for of [Foreign cluster for We the services a support Xinyang big measures, more delivered [Foreign Olympics. over resource So our now including will the Kong, stable cybersecurity computing clusters. various systems and pilot XXXX the intensive support hub, doing for guarantee, Guangdong, departments XX automatic data our the and center and the the Gansu Delta go service national platform to Language] efficient Winter built projects is the region. the public services. data which service In during same protection the provider, in CFO, project than we operations bureaus. one hubs, quarter. Beijing's to safeguarded time, By we're the service, pass as Yangtze River on-site cybersecurity alarm guaranteed of we Bay Macau and as addition,

Haijian He

you, everyone, joining And Thank Yulin. the welcome, call. for

diving you past details, walk like the to following the for financial Before summary through the quarter. I would into

QX, revenue billion revenue in reached representing RMBX.XX strong XX.X% of total a Our growth year-over-year.

impact computing, including challenging due leading clients. able and the with our market enterprise Internet Despite cloud customers, declined environment, margin relationships CDN from remain business, increased this XX.X% cloud sequentially by were premium quarter adverse quarter. gross storage core Our to this to the of stable services, The our we product. including

also connected slower clients pace in bottom the the cloud general has However, expected, softened starting line than half as revenue resource last from on to the a line. top have our new been been of and demand our efficiency from year, technology at sector affected second increasing and to our us budget the public affected Internet

our had Our adverse services CDN total. profit gross impact in on

it's We initiatives a already is optimization are and a that adopted. impact search addressed being few view by in temporal,

margin gross QX compared expected to and our XXXX. with margin see EBITDA in QX XXXX We improve adjusted adjusted to

more to adjusted We overall QX measures, plans control in our will XXXX. operational improve optimal allocation efficiency breakeven take active EBITDA and also resource implement cost achieve

had amounting XX, and December sufficiently cash equivalents for we As investments to cash term and billion, of RMBX.XX us operations. providing short XXXX,

and RMBX disciplined the XXXX. full We CapEx plan for also year approach billion RMBX.X of to in keep CapEx maintain our will billion to our expect to range

bandwidth will in The I In go our of RMBX.XX consisting billion. detail. costs. major of Now revenue component more QX, year-over-year IDC and financials XX% to cost IDC was grew costs, cost through

disposed of to quarter, weaker in continued cost demand. we some of IDC certain lower Further, resources, expected earlier the we we despite expenses. IDC one-time XXXX utilized a During causing than committed incur

XX.X% IDC grew amortization result, Depreciation were projects deployment the costs efficiency. cloud RMBXXX.X staff savings Other a which million. revenue costs mainly due billion enterprise synergies in XX.X% The the reflects increase increased growth RMBXXX.X and million. costs by to Staff and million, Camelot. improving the cost RMBXXX.X delivering costs were to offset by RMBX.XX year-over-year Camelot QX. by was and of to from As cost

integration out synergies, XXXX, gradually with caused impact decrease including million expenses our one-time is based carried is Camelot from business have In expenses expected The be RMBXXX.X It were on terms starting a Total for expected plan. total in QX quarter. product to and the we of increasing and percentage with and to of integration expenses, needs expenses QX. organizational the at from as previous alignment non-GAAP million, operating maximize revenue quarters. a similar level to RMBXXX.X of sequentially research

and were adjusted compensation based million. RMBXXX.X share Excluding expenses R&D D&A,

RMBXXX.X As this R&D slightly quarter. expenses expenses in were and X.X% a Adjusted, total million. of percentage selling QX X.X% revenue, from decreased marketing to

As a QX million. they this G&A X.X% quarter. revenue, X.X% increased Adjusted RMBXXX.X expenses in were from percentage of total to

this revenue, quarter. increased in percentage X.X% to a they of As from total X.X% QX

sufficient deposits cash As RMBX.XX had of term billion. equivalents December XXXX, XX, to cash and and amount we short

was this year full the quarter, million RMBXXX and million. was CapEx CapEx RMBXXX the During

to Kong liquidity main protection, preparation provide the board in launched already a addition, and we Hong greater Stock with In for our new Exchange. shareholders primary of listing have

vote, with We one few Chinese share, are structure. of one very single-class one share ADRs a simple

for spinoff had transparent record whereby itself disclosures, XXXX, is been decade, Hong in track Group subsidiary Kong NASDAQ a our of a on listed Kingsoft including in Group of Before a Kingsoft with we company almost ours.

and a market cooperation on approvals above on Kong While successful listing present mentioned we Kong the added base will Hong rules, further Hong shareholders, process, included practice believe listing, prevailing ongoing large diversified we be status. the parties. case multidimensional we Index Kingsoft Kingsoft and meanwhile, regulatory primary us could our our signed we on Kong Stock We various Seng participate listing strengthen Group to may ties, exploration favorable in the a the in capital Xiaomi rules. factors subject our listing to improve shareholder agreement, and shareholders. capital Based and close assuming factors expect be a strategic and a right Xiaomi. rata conditions, to U.S. and from eligible cooperation And conditions. market not regulatory and investment is further be with to secondary future. namely potentially. due anti status the market would be both agreement of more pro to Group defined and in liquidity to We to to China-Hong Through eligible for Composite Recently, strategic grab transactions to Hang also market with the be cooperate In for our the financing with partners the strategic into According Connect and maintained as dilution listing subsequent conditions. as have constituent opportunities in increase and contingent approval listing will have basis, subject always their

always and data has certification been of of terms and in TRUSTe. priorities. key data protection attained privacy, one privacy Finally, we our enterprise, Privacy governance from have the security

and regulations, a is for best revenue market practice and objectives. like international the standards is We outlook, to company to to to and compliance been The our profit shareholders' leading have more report, which remain during be stakeholders. shareholders environment. our XXXX managing laws We focus environment and will secure understand details preparing industry in to provide the do offer would to committed published May. ESG data in company company help understand on We and and data expected the priorities with our stable volatile especially also

increase improved product the of RMBX.XX First quarter XX%. cloud representing expect high be We into and XXXX, revenue product year-over-year investment to of CDN our quality billion we to of a mix all, for our RMBX.XX XX% between billion of total de-prioritized and first offerings.

As result, year-over-year could of to revenue be approximately in XXXX. XX% the a products CDN declined by QX XX%

increasing revenue cloud to We XX% services, XXXX. services core growth, remain quality to XX% year-over-year expect QX by and our healthy rapid computing around enterprise including high cloud and in from services

EBITDA profitability stable market in higher turn to gross margin assumptions, XXXX. first be adjusted quarter that adjusted margin also in breakeven compared the view and expect QX. EBITDA to margin starting improve a the we're our with by Second, expected adjusted our The XXXX. On is QX XXXX of condition quarterly QX will we

We plan. on to prudent will CapEx remain continue

to the typical maintenance cloud to on generating demands We from of XXXX CapEx full CapEx. product of conditions. the only out for that level XXXX require billion of high billion, different would like market We quality will a of plan will growth good support relatively size to expect sustainable year be be The which will our CapEx our adjust be for between the of existing small to has meet offerings. RMBX discretion sufficient the revenues which RMBX.X on quality also model, point prioritized high demands new a company incremental products, to economic

in from adopting value not based The is our shareholders including, current you. Finally, comments exploring we options tools, market our and is conditions, a value. views limited All market variable on significantly the are long-term but company from the shareholders. currently and share capital Thank deviates and view market valuation to voices operational company above long-term to intrinsic actively hearing and deliver subject that change. are are of to preliminary repurchase these forecasts current which programs and to our

Nicole Shan

English, if Thank Mandarin question questions. please remarks. possible. and we happy Thank you. your to in your are ask go Thanks and prepared This concludes your ahead. Please for take both attention, now Operator, you. our

Operator

comes Brian question from first Our Instructions] [Operator with Citi. Gong

open. is line Your

Brian Gong

questions. Good question. have taking evening, I management. for Thanks my two

management at given we strong softness? year First we to - XXXX how our enterprise restructure the growth What cloud. cloud is Can and you. the the and done about segment. outlook be the growth growth macro should would that, Will Thank growth share would this computing And for rate? second storage And on drive public how will look is be what your organic like? growth question look be on full services? Camelot's

Haijian He

like briefly you would Brian, into your question just us? for to Chinese translate

Brian Gong

[Foreign myself. I Sure, Language] will translate sure.

Yulin Wang

briefly to CEO Language] translate [Foreign answered. me what Allow the

a in in which cloud XXXX of in actually the demand cloud, constitutes slowdown of space. a were space, view customer the of think Internet the is majority our our the firms terms from similar space, So which lot to that public Internet public obviously experiencing the of larger we business,

the one However, customers on the the are hand, hand, use also increasing because other service on Internet doing in be slowing cloud of of from demand public But we're I think, and cost the migrating costs. general is and demand that cutting, for down. seeing see to seems new what space down. slowing the cloud will saving actually these we benefit which And public them therefore, observation

number a However, to there's the increase. potential that percentage, that do actually for believe usage we

And reason, cloud XXXX basically, okay. from is medium Because see do XXXX that so term little that public a XXXX, around actually for growth that we videos spent we're do that the situation the feel quite remained relatively time to of we CDN on that bit The and frame, on service. same - optimistic for we see time a different.

volatility However, uncertainty and around which of the business, margin the is our actually decrease. and our issue the efficiency caused to profit

that therefore, that CDN resources efficiency in of talked prepared the lower and to we adjustment get remarks notes. some brought So the of and the about about rid

robust in much also the cloud it is business, out it business, of public storage we're within However, less computing is the growth. and side impacted the and still pointing seeing worth that

As just growing non-CDN the pace. we're still the fast Henry is commented while CDN now, business and a at significantly downwards, business, adjusting

for cloud. of the We demand see issue do cloud, industry In we from a growth believe the terms enterprise with still fourth the - very the demand we there. that is of demand quarter situation, XXXX. XXXX There's do COVID think enterprise see strong cloud, tremendous for is throughout

such increased COVID that projects. However, is the the situation issue uncertainty of the

out evaluate we, to projects growth et brought need in of quarter cloud huge And of demand, in project profitability cetera. actually an demand this business. of the to enterprise with made quality, our balance market great do all that business to cycles the integration in parameters comprehensively what back the team, this inroads of the with from as is terms last enterprise and fourth into Camelot integration scale from implementation Camelot, So we and in have And year.

jointly growing are great also in and that actually, So Thank engaging starting which with customers see we we working potential improving in you. business. time, the on

Brian Gong

That's Thank very you. helpful.

Operator

CICC. with from Our Zhao next question comes Liping

Your line is open.

Liping Zhao

questions. I Language] my here. for [Foreign taking two Thanks have questions

So first competition. the about is

and active in see becoming As cloud. Huawei more enterprise Ali, more can we that and are Tencent

in the about health financial industry is what's So competition management's these company's cetera? in and hitting us And will like the coming verticals is XXXX? the cloud, so public cloud R&D quarters? Thanks. in secondly And service, key care, public margin impact the et enterprise focus

Yulin Wang

the meet such of the adoption services many to the at situation in of complicated And COVID you requires the industry now, enterprise secondly of mentioned quite To stage, Two [Foreign huge. so project cloud, there are competition key customers honest, many is of and terms as for speed enterprise - the cloud, is to because growth mentioned really which is the current and things. uncertainty be the other verticals worrying deployment clients. of Language] cloud needs about service explosive and market. issue So rather of industry and the issues market resolved our their providers delivery. demand the local competition One industries in demands at for the transformation for so digital the the hand, explosively enhance to impacts this to demand the industry such the is than increases I growing be cloud, meet the that

cloud means capabilities So vendors' that more own that each is actually important.

financial into to we already know health the edges, highlight. there and care. rates our verticals Now And would accumulation one have services, how market. entered we competitive and growth and of quite is had shifting Chinese clients public achieved the have significant fastest three services are expertise of our of in I the things own have several namely, One [ph] that like to

regard. delivering enhanced cross have is therefore, steady, situation already servicing and in the customer that our been we secondly, of solution capabilities, And disruption. greatly that our So COVID of Camelot and has product to advantageous capability with in of that and accumulated region and advantages integration particularly particular, of clients, us and service relatively under

services think of of zero are do the R&D generally In technology of cloud technology focus, the of - view from good. terms to we that is not products evolution continuity is our like one. something our The

stable is continuous it of a process more more and and products. providing powerful So solutions

the needs particular, And we continue is industry I on industry that X public PaaS with our in to So cloud projects combine and adopted. level, database the significant performance Thank delivery scale it like will operation they an is with speed to research, the the another big we in which on mention application the are doing you. stability focused to growth a on will of capability. and focus the IaaS of technology R&D becoming increasingly the some upgrading would are the cloud, containers. of those of important point products, explosive as have once And to impact moves data analytics clients and in the services the and and

Nicole Shan

Thank Okay. you.

Operator

question Jefferies. comes Chong Thomas next from Our with

line open. Your is

Thomas Chong

the question second, Language] assumption? the my [Foreign half, have and my is taking margin three about growth of management the our questions. Thank given environments. long-term first the about first second questions. And COVID rate question in it's and And is regulatory about third you. situation. the My the headwinds Thanks update macro the I for

Yulin Wang

And [Foreign is first Language] compliance question So perspectives. in ourselves. terms several answer of the to I'd of from regulatory like the environment,

regard, we to we more signals regulators. business, the from communication Internet communication with standards and policies And clear our we compliance the is general the a haven't that to secondly which continue As sectors. regulatory maintain regulatory seen ourselves. maintained to daily On the frequent highest and regulators,

the which industry shu western enterprise we continue support, is project. cloud suan, dong to data xi the including transporting government policy side, or cloud computation on However, see for

ADRs, question the of to profitability to think monitor. in the which to growth stabilizing to for we're will companies, first towards period where XXXX, this of in adjust at and we're adjustment terms half that need changes an level third some to signals, we looking forward, the of be - the going it continue the government happened continue happy And see XXXX. The for general Chinese which the is attitude companies to Internet still is do likely policy of from especially

believe environment, the guidance we're And general which recovery still becomes with believe in innovation also clear, we general. year. our growth the as the that will However, in of and policy of industry drive confident capability business the the the then of and do we further sector the second half

performance terms efficiencies that Now in mentioned, the think of order made year, progress be XXXX adjustment that in the and and of of business, do quarter also our - performance. And breaking fourth And as gross improve is the of in you. repositioning almost we the also of our even the track think the stability adjustment do we regard. we improvement to confident financial profile. to great adjusted and our in XXXX. improving have and financial EBITDA it we We our sales, inroads margin a and in following on have well stability we'll of that the Thank completed in year margin prove EBITDA improving

Operator

question Ying Joel with Our from comes Nomura. next

open. is line Your

Joel Ying

So actually questions. have I Language] [Foreign two

this what's percentage of you. by recruit moment question XXXX? in as about The cloud R&D one public for how XXXX? how many how what have is, percentage of at much for And CDN second and is XXXX? XXXX, Thank is, end And the many the staff? And expectation employees do in of first business we're to going is total we your business

Haijian He

sure. Yes, you, Thank This Henry. is Joel.

total the gradually CDN a declined percentage really looking back has So the the you that already years, if for few you're as trends past our business of observed may revenue.

year as And revenue a the below revenue carry contribution from the of of declined to in reduce XX% our out total the percentage into for So the CDN year to CDN XXXX. already XXXX, our revenue intention further products the of range XX%.

I two So objectives. actually have major

hopefully in is with value. relatively we clients of than the terms want CDN total or offer less in give the revenue revenue will stable business relationships XX% a us even relatively one in while top streams remaining contribute, That percentage, we back XX% of a and it the to dollar have terms revenue. diversified XXXX, to quality of of contribution. think I higher will our First But more XX% cut

the or deeper is relationships, this we we're again, to region looking looking we the as other opportunities our or which clients, also, as cross-selling products. into and of nodes into when we lot computing cross-selling relationships point. actually the adjust, first into with harm will opportunities storage. So a our we're client And which and But think losing evaluate the client which not for I well

reach So in to process mentioned, as of realizing the greater of making synergies And a team us already we also nationwide our probably the COVID terms gave some second for in integration. question, adjustments in which environment. especially of remember acquisition that year, challenging a last completed as you network Camelot, we're the Yulin delivery, in a

a are information there share. few So we can

you give the integrations terms And the we for and capacity. delivery of the in all, alignment us of our disclosed team year quality overlapping also, XX%, provide we actually will client native cloud give that range perspective Camelot functions, the a but active the us as employees if of are us, our in did stable of personnel, technology in-house. First also XXXX. great a in like original percentage adjustments team, And zero and some efficiency more capacity six, services. services by with has we deliver our wider the a number last will give of can I think the from end including And that increased to of higher product research compare very of R&D total levels, R&D-related on over significantly Cloud Kingsoft and with total of employee IPO actually functions. size, percent, And

investment us cloud mentioned. only I adjust but to the capacity functions, dockers, flexibility the area SaaS more and also moving into PaaS and especially Yulin Thank that not database, the including think just So more you. technology, as a data gives containers, to big

Joel Ying

Henry. you, Thank

Operator

Kyna Credit comes Our Suisse. from with next question Wong

open. Your line is

Kyna Wong

translate So Language] myself. let [Foreign me

How one about actually breakdown. bandwidth costs operator. And will redundancy, IDC of But like [Technical first the the of lockup implemented be the that, XXXX? about that, the we resources. for you in could the we The overall that restructuring bandwidth. redundancy end CapEx by second cost review And question much a of some given one Difficulty] should should business we usage of is is the Thanks. self-built it contract about in underlying contract that XXXX after signed like if with period? will believe expect cost have improve with the Where of a the be structure consider lockup the operator you new the

Yulin Wang

only So of [Foreign the in to and business, is spent as accurate. on And year whereby, because answering last It relatively business, been have adjustments. is consider service. And for huge. questions, demand the volatility overall in only there it CDN mainly mentioned - some is is is and fact, focuses market in adjustment the of the the previous answer actual that to is there prepare providing really other still earlier, and CapEx which your based spent need to lead computing resources our cloud money on order and years, on budgeting Language] in we time, question, a money always plan the there nature

efficiency is it and that perspective, therefore, decreases are our increased business. profitability, we that because volatility our downsizing from and of However, the

and with this adjustment year. has largely completed fourth the quarter completed in quarter of the remainder be that first However, in the to some

primarily IDC and been cycle for underlying So completed as risk as a has for require well. that does [ph] pointed out, because Haijian renegotiation, the

less for the the fourth of And year. - margin been quarter in terms in the this CapEx, CapEx expect other the ongoing to starting constructing year, you has So in relatively And we quarter has of seasonality CapEx. planned. due know, of been self as IDC third every than owned the terms self quarter to do see improvement

that because last less bit it's of a However, year, little the conducted. adjustments we

So cautious the little year. we will Thank pacing were a however, bit in up catch in that of this you. with that, we

Operator

There to turn call any remarks. I'd are questions. further closing for no Nicole Shan back to over the like

Nicole Shan

once thanks, Thank you, everyone, today. for again Michelle. And joining us

please next questions, look again you free further any to you. Thank have you day. us. to Have We feel with quarter. forward If a nice speaking contact

Operator

program. the This does conclude

now may You disconnect.

Kingsoft Cloud Holdings Limited (KC) 24 Mar 222021 Q4 Earnings call transcript