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- Kingsoft Cloud Holdings Limited KC shares are trading lower after first-quarter FY23 earnings missed estimates.
- The China-based technology firm reported a first-quarter FY23 revenue of $271.48 million, missing the consensus of $282.80 million.
- EPS loss was $(0.25), missing the analyst consensus of $(0.23) loss.
- The lackluster results were mainly due to the proactive scaling down of CDN services, with its gross billings decreasing by 11.7% Y/Y.
- Revenues from public cloud services decreased by 16.4% Y/Y, and enterprise cloud services fell 10.4% Y/Y.
- The non-GAAP gross margin expanded 660 bps to 10.4%, mainly due to our strategic adjustment of revenue mix, optimized enterprise cloud project selection and efficient cost control measures.
- Kingsoft held $649.7 million in cash and equivalents at quarter end.
- CFO Henry He added, "Looking ahead, we will continue to take various measures to cut down expenses and we believe we are well on track to quarterly adjusted EBITDA breakeven."
- Outlook: Kingsoft sees Q2 revenue of RMB1.85 billion -RMB2.00 billion.
- Price Action: KC shares traded lower by 7.4% at $4.40 on the last check Tuesday.
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