金山软件(03888.HK) 2025年第三季度业绩电话会
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会议摘要
Kingsoft Corporation reported a 17% year-over-year revenue decline to RMB 2.419 billion in Q3 2025, with a 5% quarter-over-quarter increase. Office software, especially WPS and WPS 365, showed steady growth, while the online games segment declined due to existing game revenue drops and new game development stages. Key highlights included AI integration progress, WPS 365 customer base expansion, and game content improvement efforts. The company is investing in AI, localization, and its Wuhan industrial base, aiming for AI commercialization, market potential, and sustainable growth, despite short-term high sales and marketing expenses.
会议速览
Kingsoft's 2025 Q3 Earnings Call: Forward-Looking Statements and Multilingual Q&AThe call, moderated by the IR director, emphasized forward-looking statements' unreliability, introduced multilingual Q&A with on-site translation, and outlined management's dual-language remarks. A third-party interpreter ensured smooth communication, prioritizing original remarks over translations.
Kingsoft's 2025 Q3 Earnings: AI & Internationalization Drive Office Software Growth Amidst Online Games Revenue DeclineKingsoft reported Q3 2025 revenue of RMB 2.419 billion, down 17% YoY but up 5% QoQ. Office software and services, particularly WPS 365, showed robust growth. Online games revenue decreased due to low contributions from existing titles and the early development phase of new games, including the global launch of Sci-Fi Nature Brick.
King Office's Q3 2025 Highlights: Revenue Growth and AI Product SuccessKing Office group reported significant financial improvements in Q3 2025, with revenue acceleration and optimized profitability. The rollout of AI-powered WPS products drove user growth and revenue increases. WPS 365 Business expanded customer base, while AI-enabled projects supported government digital transformation, contributing to segment revenue growth.
Online Games Business Thrives on Quality Content and Global ExpansionJF 3 Online's 16th anniversary and expansion, Snow Brick Containment Zoo's user retention, and Micro Break's gameplay optimization highlight the business's commitment to high-quality content. With upcoming launches of Good School and Angry Bird in China, the focus remains on developing classical franchises and new genres for sustainable global growth.
Q3 Financials: Revenue Trends in Office Software, Online Games, and ServicesRevenue from office software services surged 26% YoY and 12% QoQ, driven by WP software and P soft office growth, while online games revenue dipped 47% YoY and 6% QoQ, impacted by lower Ye revenue. Total revenue stood at 2000.419 million, with office software contributing 33% and online games 37%.
Financial Review: Revenue, Profit Margins, and Expenditure TrendsDiscussed significant year-over-year decreases in gross profits and margins, attributed to lower high-margin sales contributions. Noted increases in research, distribution, and administrative costs, driven by AI investments and promotional activities. Highlighted fluctuations in share-based compensation and net gains, alongside robust cash reserves.
Analysis of Gaming Revenue Decline and Office Business Growth DriversA discussion on the decline in gaming revenue, strategies for existing games, and the pipeline for new games, along with updates on 'My Public'. The main drivers behind the accelerated growth in the office business during Q3 are explored, questioning the sustainability of this momentum.
Strategic Planning for Game Development and Customer EngagementDiscussion centers on the strategic development of games, focusing on privacy, technology upgrades, and enhancing customer experience through new content and playways. Plans include upgrading older games, launching new ones, and improving operational services for long-term success.
Enterprise Growth and AI-Driven Success in Membership and InnovationA discussion highlights key areas of enterprise growth, including a 20% increase in monthly active members post-AI 3.0 release, positive user feedback enhancing industry competitiveness, and a 51% rise in software and information innovation, signaling a robust and expanding market presence.
Sustainable Growth Strategies: Policy, Innovation, and Enhanced Delivery for Future SuccessThe dialogue outlines strategies for sustainable growth, emphasizing policy-oriented information innovation, enhanced delivery, and increased RD investment. Key points include a 90% growth rate from a shorter perspective, a 10% increase in bracelet growth, and the potential for enterprise members to use products more frequently. The discussion highlights the importance of timely delivery, internal and external cooperation, and the establishment of a solid industrial base, particularly in Wuhan, as foundational elements for future success.
Transitioning to the Next Question in a Conference CallOperator acknowledges readiness and facilitates the transition to the next question posed by an individual from CLSA, maintaining the flow of the conference call.
Strategic Priorities for Office 365 Expansion and Online Game DevelopmentThe dialogue explores international market opportunities for Office 365, identifying strategic regions and competitive assessments against Microsoft Office. It also discusses the company's focus on game genres for the next two years, emphasizing IP titles and expansion into overseas markets.
Strategic Overseas Expansion: Competing with Microsoft in AI and Mobile Content ServicesDiscusses strategies for overseas growth, emphasizing competitive advantages in AI and mobile content services over Microsoft, including early mobile adoption and AI-enhanced document platforms.
Exploring Overseas Opportunities in Gaming with Optimized Products and Technical OperationsThe discussion highlights the company's strong foundation in gaming, with certified titles like G.X. 4, Angry Birds, and Snow Break Containment Zone, and upcoming launches. It emphasizes the potential of overseas markets, noting successful performances by domestic companies abroad. The focus is on continuous product and operational optimization for mobile gaming, preparing for future expansions.
AI Business Progress & Marketing Expenses UpdateThe company shared updates on the AI business's development, highlighting strategic collaborations and early-stage projects across various industries. Despite high marketing expenses, they forecasted normalization in future quarters, emphasizing long-term investment for sustainable growth and profitability.
要点回答
Q：What are the key priorities for Kingsoft Corporation as mentioned in the third quarter 2025 earnings conference call?
A：The key priorities for Kingsoft Corporation in the third quarter 2025 were prioritizing and strengthening core businesses with AI collaboration and internationalization.
Q：What was the year-over-year and quarter-over-quarter revenue change for Kingsoft in the third quarter?
A：Kingsoft's total revenue in the third quarter was down 17% year over year but up 5% quarter over quarter, reaching RMB 2.419 billion.
Q：How did Kingsoft's online games business perform in terms of revenue and new game launches in the third quarter?
A：The online games business saw acceleration in localization projects, with revenue reaching RMB 391 million, up 51% year over year. It celebrated the 16th anniversary of its flagship game JF 3 Online, launched its annual expansion pack, and had new games like the anime shooter game Snow Brick Containment Zoo and sci-fi micro game Micro Break. Additionally, Good School and Angry Birds are expected to launch in China.
Q：What was the impact of AI collaboration on Kingsoft's businesses in the third quarter?
A：AI collaboration enhanced Kingsoft's businesses by accelerating the localization of office software and driving the growth and sustainable development of new game genres, focusing on high-quality content and global publishing.
Q：What were the revenue contributions from the office software and services business and the online games and other business in the third quarter?
A：Revenue from the office software and services business increased by 26% year over year and 12% quarter over quarter to RMB 1.520.21 million. Revenue from online games and other business decreased by 47% year over year and 6% quarter over quarter to RMB 890.28 million.
Q：What are the main factors contributing to the year-over-year and quarter-over-quarter revenue decreases in the gaming business?
A：The year-over-year and quarter-over-quarter revenue decreases in the gaming business were mainly attributable to higher investments in AI and collaboration products, lower accrued performance, and increased promotional and advertisement expenditures associated with online games.
Q：How did the increase in business administrative expenses occur, and what factors contributed to it?
A：The increase in business administrative expenses was mainly due to higher personnel-related expenses and increased depreciation arising from the consolidation and operation of the Wuhan campaign, which supports the group's long-term development.
Q：What is the trend in share-based compensation costs, and what causes the variation?
A：Share-based compensation costs have been inconsistent, increasing by 37% year over year and 30% quarter over quarter to 80 million, but then decreasing by 70% year over year and 21% quarter over quarter to 357 million. The variations are mainly due to the changing market share of certain types of the company's operations.
Q：What is the current status of the company's cash position?
A：The company has a strong cash position, as at September 30th, 2025, the group had cash resources of 26 billion.
Q：What are the operational strategies and the means to gain pipelines for the existing games?
A：The company's operational strategies for existing games focus on the face of floats and the snow break containing zone, along with targeting customer operations and service. There are plans for long-term upgrading, including new playways and new content, as part of the regular way and target for technology and operation improvements.
Q：What is the current status and the update on the progress of the public?
A：The specific details on the progress of the public were not provided in the transcript, but the company has mentioned ongoing efforts in the gaming business and strategies for existing games, implying a continued focus on these initiatives.
Q：What are the main drivers behind the accelerated growth in the third quarter of the office business, and will the momentum be sustainable?
A：The main drivers behind the accelerated growth in the third quarter of the office business include membership growth, the payment conversion rate, and the up value, particularly for AI members. The company is confident about the sustainability of this growth, especially from a policy-oriented perspective for information innovation and based on the improvement in the membership and the payment conversion rate.
Q：What investment is the company planning in terms of Research and Development (R&D)?
A：The company plans to continue making a bigger investment in Research and Development (R&D), with an expected investment reaching 35-36% privilege, compared to 32-33% previously.
Q：What are the company's strategic priorities and competitive advantages in the international market for Office 365?
A：The company views opportunities for Office 365 in international markets positively, with strategic priorities including transformation from edit tools to content service platforms and a mobile-first approach, which differentiates their product in the market. The company has a long-term competitive strategy against Microsoft, with strengths in the mobile end, AI technology, and a platform approach offering more than just a document add tool.
Q：What are the company's plans and priorities for online games over the next two years?
A：The company plans to focus on their existing pipeline of two IP titles and will also consider other game jars for the next two years. The management assesses opportunities for games to expand into the overseas market positively, drawing on past performance and market receptiveness.
Q：Can the company share the progress of its AI business and how does it plan to achieve commercialization?
A：The company has made progress in AI business since April through collaboration with various partners, including projects in different industries and regions. An AI product center has been set up to further develop the application of AI in different industries. While the details are still at an early stage and not fully disclosed, the company believes in the potential for restructured systems in various industries using AI.
Q：What are the expectations for sales and marketing expenses in the short term and the next quarter or Q1 in 2020-2026?
A：The company anticipates that sales and marketing expenses will return to a normal situation in the next quarter or Q1 in 2020-2026 after a period of promotion and launch of products. Long-term, the company expects to return to a reasonable cost level, emphasizing the need for increased investments in the early stage of development, particularly in AI, for sustainable long-term growth.
