Kingsoft Ecosystem 2025: Gaming Crash, WPS Saves the Day, Cloud Cost Reductions

Ask AI · How Will the Product Gap Period in the Gaming Business Affect Kingsoft’s Future Development?

On March 25–26, Kingsoft Software, Kingsoft Cloud, and Kingsoft Office released their 2025 full-year financial results. Kingsoft Software is the Hong Kong–listed parent company, holding control of Kingsoft Office listed on China’s A-share market, and also serving as an important equity-method affiliate shareholder in Kingsoft Cloud, which is listed on both the US and Hong Kong exchanges. To understand this relationship is to make sense of the data discrepancy in Kingsoft Software’s financial statements: operating profit from its core business (1.78 billion yuan) is cut in half (down 51% year over year), yet the net profit attributable to shareholders rises 29% year over year. This is mainly thanks to a gain of as much as 1.25 billion yuan in “Other net income.” This is because, during the year, Kingsoft Cloud issued new shares, diluting Kingsoft Software’s shareholding; under accounting standards, Kingsoft Software recognized approximately 1.18 billion yuan of book gains from the “deemed sale of subsidiary.” In other words, the increase in net profit is essentially driven by a one-off accounting figure that has nothing to do with core operating performance. On the contrary, because the gaming business has lost momentum, both revenue and core operating profit have seen steep declines. Meanwhile, the office software business (that is, Kingsoft Office, which is consolidated into Kingsoft Software’s “Office Software and Services” segment) maintained growth. Among them, the WPS 365 business aimed at organizations is growing the fastest; growth in the personal subscription business has slowed, but overseas markets are a noteworthy incremental factor. Next, let’s look at Kingsoft Cloud: the biggest highlight is that its net loss narrowed significantly by more than 1 billion yuan year over year, mainly due to three factors. First, rapid growth in public cloud revenue (especially AI compute services revenue) drove the overall improvement in losses. Particularly in Q4, AI business Gross Billing reached 930 million yuan, up 95% year over year. Second, historical liabilities were cleared. In 2024, Kingsoft Cloud recorded impairment losses of as much as 920 million yuan for long-term assets such as old servers; in 2025, this item fell to zero. Just this one item “narrowed losses” by more than 900 million yuan. Third, strict cost control. While revenue grew at a double-digit rate, operating expenses such as R&D expenses were actually negative growth or only slightly increased. It is worth noting that Kingsoft Cloud’s current losses mainly come from cost pressure during the “depreciation period” of servers: depreciation amortization recorded in revenue cost in 2025 was 2.32 billion yuan (1.09 billion yuan in 2024). The losses on the books are not an operating problem. It is also notable that on the day the financial report was released, Lei Jun formally resigned as a non-executive director and chairman of Kingsoft Cloud. Zou Tao, CEO of Kingsoft Software, took over as chairman; Qu Heng, vice president of Xiaomi Group, took over the non-executive director seat, and the Xiaomi group’s seats on Kingsoft Cloud’s board were not reduced. Overall, Kingsoft Cloud rode the tailwind of AI compute to dramatically reduce losses; WPS is finding incremental growth in the B端 and overseas markets; but the gaming business dragged down Kingsoft Software’s overall performance. In 2026, whether the gaming business can get through the product gap period, and whether WPS’s AI commercialization can generate more substantive revenue—are the key points external observers are watching. (Planning: Jin Yufang; Figure design: Li Yuhui)