Kingsoft Cloud reported an 82% increase in AI cloud gross billings during the second quarter of 2026 as rapidly growing artificial intelligence demand helped the company achieve a positive GAAP operating margin for the first time.
AI cloud gross billings reached RMB1.33 billion, or approximately $195.6 million, and represented 56% of public cloud revenue.
The growth reflected increased contributions from AI cloud infrastructure services as well as the company’s Model-as-a-Service offerings.
Total revenue increased 30.8% year-over-year to a record RMB3.07 billion, or approximately $452.8 million, and rose 13.6% sequentially.
Public cloud revenue increased substantially faster, climbing 45.1% to RMB2.36 billion, or $347.5 million. Kingsoft Cloud attributed the increase primarily to growing demand for AI cloud services.
The higher AI workload also coincided with improving profitability.
GAAP operating margin reached positive 0.7%, marking Kingsoft Cloud’s first positive operating margin. Adjusted operating margin rose to 4%, compared with negative 7.1% a year earlier.
Adjusted gross profit increased 34.6% to RMB471.7 million, while adjusted gross margin reached 15.4%.
Kingsoft Cloud is continuing to invest aggressively in infrastructure to support AI demand. Capital expenditures, including assets capitalized through leasing arrangements, totaled approximately RMB3.3 billion during the quarter, exceeding quarterly revenue.
Operating cash flow reached RMB2.85 billion, or approximately $420.2 million, while investing activities used RMB2.91 billion, or approximately $429.3 million.
The combination of 82% AI billing growth and Kingsoft Cloud’s first positive GAAP operating margin provides an indication that the company’s heavy investment in AI infrastructure is beginning to generate operating leverage, even as capital requirements remain substantial.
KEY QUOTE:
“Gross billings from our AI cloud business grew 82% year-over-year, representing 56% of public cloud revenue.”
“Profitability-wise, we recorded positive operating margin (GAAP) for the first time.”
Tao Zou, Chief Executive Officer of Kingsoft Cloud
