Kingsoft Cloud Q1: AI Capex Spending Needs To Be Justified Over The Next Few Quarters

Kingsoft Cloud Holdings Limited delivered 37.2% y/y revenue growth, driven by AI demand and public cloud services, but profitability remains pressured by upfront investments. Gross margin fell to 12.8% as KC expanded AI computing capacity, with management expecting margin recovery as investments in infrastructure translate into future revenue. KC's adjusted EBITDA margin surged to 27.6%, but leverage remains elevated at 5x, reflecting significant debt and ongoing unprofitability amid aggressive capex plans.