KC Kingsoft Cloud

Nicole Shan IR Manager
Yulin Wang CEO
Haijian He CFO
Brian Gong Citigroup
Liping Zhao CICC
Thomas Chong Jefferies
Kyna Wong Credit Suisse
Call transcript
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Good day. Thank you for standing by and welcome to the Kingsoft Cloud Third Quarter 2021 Earnings Conference Call. [Operator Instructions] I must advise you that this conference is being recorded. I would now like to hand the conference over to your first speaker today, Nicole Shan, IR Manager of Kingsoft Cloud. Thank you. ahead. go Please

Nicole Shan

website Hello today. operator. was thank for our you earlier on well Thank newswire global Cloud everyone third us services. IR on available Kingsoft and release quarter joining as today as you, is and at XXXX distributed earnings

prevail. will Q&A purpose will CEO, and Mr. be are will He. call interpretation. will during of Mr. original available today to our reference answer review Cloud, the will management interpretation accompanying In only. your and by be Wang; session discuss questions our the we Kingsoft the Yulin discrepancy, for guidance. All and who CFO, operations in any highlights, and Wang There He, followed that convenience On have business case They your follows. from Mr. financials statement consecutive Mr. Haijian language

or to may result any not the information, except U.S. cause Further begin, events, of These risks, statements Before factors, XXXX in materially of undertake or call required other within actual law. forward-looking to filings predict statements of Private forward-looking uncertainties statements company's included from to are I to any which statements. this XXXX. Security The SEC. Securities the the and that with Act like many of a condition of beyond conference we applicable factors the in this as company under which remind the that difficult Litigation relate defined current or market contains information forward-looking amended and XX-E and forward-looking new control, as the other otherwise, Act future are operating and management's based events as company's known involve expectation uncertainties, of Exchange which Reform does meaning update would and obligation the in and U.S. you performance, Section unknown upon and company's to those or are as risks, of current results, are regarding achievements differ all the

that unless It's mentioned please my our call Mr. ahead. figures Finally, stated, RMB. go introduce pleasure in CEO, are Please to otherwise Yulin financial now all Wang. this note during denominated

Yulin Wang

and XXXX In joining quarter, in all for total same Nicole earnings generated you, which increase from thank call. RMBX.XX quarter we quarter the of year. third the our Thank revenues, last third was an XX% you billion

cloud quarter. services second public an of reached million Our revenues billion, over RMBX.XX increase RMBXXX the

deliver up the the we enterprise as period Our XXXX, cloud million, ongoing revenues despite a to beginning market challenges headwinds, changes last regulatory of RMBXXX continue reached rapid to same XX% evolve. to normal over everyone Since new growth the services year. continues adjust as pandemic and

in service trusted become strive As and partner our provider most we customers growth will for the largest the China, independent our digital to strategies, execute create to the to continue together. cloud cloud future

sustainable enabled expanding benefit develop thinking believe neutral nurture to with and more and growth. premium multi We in Our depth from collaboration us we further and and achieve base position of our ecosystem. will long-term customers our continued dimensional extensive an

especially premium Leveraging our diversifying customer made expanding position, deployments. and multi and off Now, the than this solutions our faster cloud. products our average me I'll bringing quarter. progress, for our verticals. base through the let industry and Despite across you market neutral portfolio, achieved customer growth we start experience, significant with cloud walk major we still our environments, performance challenging public services

our increases our customers services. growth. service cloud call, As mentioned new data contributed China's public has their in our premium customers, revenue other cloud become public last platform Together Meituan, with for local premium newly leading usage earnings to lifestyle engaged

Meituan customer among base our we top expand in internet Following companies. QX, our to success with continued

become amidst of in public cloud our the to new in will premium proud that QX. growth believe are customer our ourselves quality and engagement services. China gaming. We a the one leading with the rising and landscape. further Data suite proved engaged engage car-hailing, diversified player full clients emerging quickly beyond and regulation will have resources, Pinduoduo, high space, video new drive trend delivered e-commerce In computing of cloud customer amidst offering continue with in We level. We the announce products to to We largest move which such changes. agile platforms be Shouqi our the we been hybrid including the solutions, a We competitive has pan-internet and Big shifting at DevOps path

their to technology game The of millions leading an support bare cloud metal Database services the in support recognized excellent reports them agreement edge product a plan smooth cloud China. the the survey authoritative Distributed by at for by design such Market continue According in with product was On was monetization. Big were, demonstrates core cloud recognition edge IGGGAMES XXXX We in our storage experience to for placed internationally by September cutting front, that to according their more Cloud tens data same their servers. On industry be top architecture agency, leaders in leading platforms with This are travel with of for quadrant including Sullivan this, We including [indiscernible]. firms. & Solutions front, X. their and to investments which time, data top big and up of resulted provided gaming Along XXXX. blockbuster proprietary the Data industry, XXXX in Market command China, to products our products, recognized to once of our mobile On Frost an the also customers IDC, concurrent highly players. among Grade global signed as continue public year, we online in will solutions, our and by two in we them published performance, product our ramp and full Data services, technology, PaaS this Financial Sullivan, gaming We our competitors visionary technologies. At provide DragonBase deployments, the in the containers, quadrant was placed stable one China to of and we Clues of help game, Management Leaders Earlier research radar. XX% outstanding database again other product and its Frost the profit in Reports. processed China

During this providing storage we various storage capabilities and edge in in support province applications. quarter, nodes improved September, our for developed app Jiangsu edge strong

Cloud Moving segment. to the Enterprise

adapt has expand become to our our collaboration and many our industries financial Going customers. norms. and continue base digital sector, new with to for we deepen to services the In essential businesses client

cloud build top digital RMB. new central winning support we its data a level, and On China's our won contracts it platform and we bank to Bank bid the a bank Huaxia helped middle cooperation CITIC Bank another to commercial After migrate QX, from office the furthered with in to big cloud. China

improvement underlying and management XX% data their to efficiency data Our solution capabilities smart lead enables and their development. business the a in big of

As we part August, acquire business. to a of cloud in efforts out back announced enterprise we our service Camelot our agreed build to as

have that in joined be Now China. with the able XX officially all we hands to top Camelot, will cover banks we

We're this XXX solutions which end more making RMB new of institutions. management, We're portfolio, financial to we laundering in largest China. will our together in will public XX million. imaging with of year. Camelot's This of leading to consolidate on off that customers. value collaboration fifth progress in QX, We will especially have this project very able enable selected save image cooperation is In for data hospitals products introduced health more care such provide City expand and strengthen the to sector, medical we provinces. plan Cloud in areas, This In sector, fully medical and our services also Jiangsu than and have is the year the the a than care in contract many the first Province Shanghai. social were project we impact compliance create with Ruijin anti-money insurance progress connect largest financial already province. to we is medical more risk has our the into which product billions care provider. sharing customers, marks In offered by we health cloud. secure the steady our in projects into our been delivery in significant be proud been ability SaaS level pioneering exemplifying and branding provinces, it will case, same other hospitals the have revenues. been in put that solution the to Jiangsu cooperating we Hubei to data foundation, and and the Building kicked projects. row year. the hospital total In lighthouse each be among our provincial premium positive made Meanwhile, Hubei operation, expected to estimated including fourth Cloud us our with Once for service Hospital, also project, RMBXX resources of Big China Xour a approximately with health Data ecosystem. repeated one in project This capabilities Beijing The the services Phase to

leading successful public in province few, projects around public one With in the bid parts also city bid and to of and computing cloud all city's won cloud of from value data intelligent we data infrastructure and the face. addition, In for China, cities exclusive our a clouds for provider experience quickly which systems. and RMBXX we technologies be replicated province. an name province, Anhui facilitate to with service the Shandong leverage million, our of We urban transformation services delivery other to in the will Hubei big contract are

power to our bids further the Institute. progress our to nationwide Area data our cooperating continues from in applications. making big Despite Institute support, segment, Research big integrate with the also Cloud Big are We China and is integration strong shortages, with the underway. started data the of the Camelot backlog Bay steadily some and resources across Shenzhen, Greater also new Enterprise will policy project. increase. Shenzhen Within carrying the advancement disturbances Data of well research facilitate With pandemic We're we out and

in As cities has across we delivered mentioned China. Camelot in centers major QX, most

introduced cities have started to be initial pilot delivery. we Camelot have six engaging has integrated In nearly for project services us. to We finance sector, selected banks XX the that with cities

and will delivery these integrated directly services provide to Our team customers.

aspects. have Camelot of various with In Xiaomi, Group all working WPS ecosystem in terms started and cooperation, Kingsoft

public of our started one focus efforts integrated finance, of developing the planning services have and solutions. in health the on a with consulting and care and sectors stop will suite services We we fully hope

the of Cyberspace business have date regulations finalized In yet China paying published on our of deliver to security, for on the manage been by was including uncertain. effective terms new have be all users, as of we possess data protecting still that solid we in and policies, regulation security with companies approach progress draft But we The Administration Internet the opinion. programs. jurisdiction, and regulatory Unlike serving individual data localized ESG we millions the each to backdrop, regulations focus have public and of to close customers. operations and continue enterprise is attention emphasized, always within that data privacy,

fully have data we around addition, data and classification regulatory In requirements, complied security. with including

have for which we to financials ISO are CFO, now, in security, you. call recognized the ISO our worldwide Henry information obtained personal terms XXXXX, and successfully our So the ISO over to management third will Thank certification now and go XXXXX, systems. XXXXX I quarter. pass of and protection the data over standards

Haijian He

Thank you, Yulin.

our you the through walk financial for past performance I quarter. Now

is Revenue health representing in from There representing peers of consistently approximately the Our were billion, reached year-over-year services since XX% seventh of total a our revenue which quarter increase higher IPO. QX, the a RMBXXX.X mainland RMBX.XX than number of was quarter-over-quarter growth, major public increase China. million, the drivers. consecutive revenue in billion growth RMBX.XX

our top remain stable, First, three in existing particular. client including clients, our base

have position customers, possible Our with interest any it together grow of avoid our we potential been able with neutral conflicts our to customers. makes to and

China's public continue year, to In engage leading we our for health new conglomerate this customers Second, new premium become internet QX customers. services. with premium Meituan, has

premium to client has China choosing. continues, strategy largest new to case announce that are our gradually leading we new in one accepted by exemplify trend the one, QX. is diversify client more This customers the and market. also from related the and the vertical e-commerce the platform With cloud public grow derisk clients risk. non-video quality will contribute also, And revenue top help our these efforts incremental have base computing business Number high the customer our to concentration Pinduoduo, become Number in multiple proud cloud of growth. two,

to able dig were we of the our into deeper Lastly, needs clients.

services cloud and year-over-year seen are from edge in mentioned computing growth. demand rapid diversified Yulin a portfolio PaaS As enterprise RMBXXX.X through enterprise in including containers, and cross-selling, we earlier, approximately cloud of providing markets. XX% was more growth Revenue a solutions. We’ve representing products technology million,

more in and success cloud the in care we rapidly health customers. financial flagship build enterprise grew services, replicate sectors, public market, demand more our As service and projects to

As our a the recent in short-term, mainland China to enterprise wave base however, in affected projects our grow pandemic. cloud steadily. client was of result, In continues the by regions some deliver

Although remotely, at been deliver support to of technology due we restrictions. some datacenter tasks of unable our can projects a site our on has team client some deliver to travel own

In addition, or projects of our QX, were limits due authorities. to in shortages by delayed some local also power

common we the our in centers. whole IDC product environment implement technology public a for to cloud, practice, enterprise enterprise As cloud cloud

shortened center. team some deliver Although of saw [indiscernible] power our temporary time caused affected our certain available by for our site This public IDC disruptions customers cloud projects delays. were their on to shortages, and to private the own not

in bandwidth currently which improving to revenue. Depreciation the In resources. The increased grew last sequential to year-over-year of increased in approximately approximately representing of cost of costs largest with XX% cost top on amortization cabinets billion. RMBXXX.X XX% underlying happy basis, of line was has revenue, process. year-over-year million cost total IDC IDC and total by RMBXXX.X situation year. costs. by RMBXX.X million, grew the X.X% XX.X% costs we're storage consists billion. of a period profit However, line been component due gross same XX.X% with preemptive the million representing the compared to and to costs, of strong see the cost RMBXXX Adjusted growth, RMBX.XX a to the of RMBX.XX the million is revenue

the color the short-term last year. support period To would Our this in adjusted of lease was our this same clients the gross based quarter company in every more margin of compared bit X.X% the for business, We in year. of in and of beginning cloud to centers forecast the offer purchases X.X% like with growth market public data volatility. cloud and typically the the servers on advance demand from of general a

be previously this as However, in slower have mid year, underlying audience starting many this are in may Therefore, resources demand towards many million reason, fully made but of has not the this the utilized this the seen, year than targeted. impact of resources market growing, of been the this China internet earlier Due of quarter end our infrastructure from IT of may investment incremental not for business. forecasts from of example, to which the our in year. this short-term increase may And clients gross monetized impact fully this as beginning quarter. by year, margins RMBXXX.X IDC costs

business in our grow. cloud million, ongoing And naturally QX operating will competitiveness. and model to be mainly remain from increase Our the as robust. very the optimized demand due continue believe business our see client base a last we to investments and utilization XX.X% pattern public our we RMBXXX.X were year, Total the expenses non-GAAP representing remain

personnel We with our team competitive increased core therefore expenses. provided and compensation have

adjusted an RMBXXX.X of were representing increase expenses compensation, XX.X% year-over-year. R&D share-based million, Excluding

increased percentage selling XX.X% in QX As of it million. to this and slightly last X.X% quarter. a total year expenses from by revenue, increased to Adjusted marketing X.X% RMBXXX.X

G&A a percentage this from Adjusted last a revenues, total X.X% year quarter. QX million. little -- As in RMBXXX.X of were decrease bit expenses a X.X% to

QX in last year increased this As X.X% a quarter. from revenue, of it X.X% percentage to

decrease personnel gross peers. expenses. was A Although RMBXXX.X Adjusted expenses, the Accordingly, the increase this related quarter. with level the margin in was negative X.X% loss last transaction to our the off decrease EBITDA million. negative profit, in one-time compared and lowest quarter, the was among Camelot adjusted due in X.X% quarter-over-quarter EBITDA

loss negative net margin RMBXXX.X at adjusted XX.X%. Our million adjusted with net was

approximately XXXX, As equivalents cash of September cash sufficient XX, amounting had and billion. we of RMBX

higher During QX this disciplined will pursuit supply on have service we this year operational capital approach for very of our year. half quarter, in growth. sufficient capital [indiscernible] in last the we Since expenditures and with to advance pressure, XXXX, current efficiency, our was RMBXX.X support expenditures operation purchased make million. second of chain a the business Based

cycle service a low also In delivery in led CapEx QX. to relatively addition, payment and the

However, we at CapEx think compared the do level last with year will similar a be year. full

China. we one -- regulation unconditional have the aka shares it Camelot the regarding has such about over faster customers and submitted obtaining and Administration began as deliver evidenced delivery one improving teams. China. Anti-Monopoly projects multiple today's as timeframe, the especially In especially industry significant within Camelot October, two FX the us our transaction, the received The cloud environment. unleashed and approval by Their will among of State National hubs Camelot registration company. into key year. we market addition, in of approval In to premium for in related know-how, regulators month execution completed manufacturing, time, than consumer local which will of be a others. regulation is cities believe next teams across regular filings integration transaction future Internet, have whole enterprise services, transaction further significantly for capabilities financial was We now XXX completed synergies review from we wealth from retail the of Bureau bring great SAMR industries the endorsement directly market process of considering and

we and our This is our representing be operational billion RMBX.XX market between the are to a on change. of and RMBX.XX to views total which subject XXXX, expect conditions, billion and preliminary to fourth for based revenue XX% year-over-year Looking current quarter ahead, increase on of XX%. the

trends and diverse XX on key perspectives. year. China leaders first Bank senior Representative and discussed among clients our our executives our we including industry industry soft recent Investor Health Day Camelot share to Cuban, developments, Commission, others held our from executives from partners, Construction ecosystem National so Lastly, join clients, and IPO after accounts this event and October senior

business We to delivering bring committed to values are shareholders. our improving stakeholders to value and our our sustainable long-term transparency,

Nicole Shan

attention. This Please go our happy mandarin you. Thank first and prepared ask question. concludes ahead. We're take your your to for English, our remarks. now in if possible. both please Operator, Thanks question


your Please Your from question first Gong Citi. comes ask question. Instructions] from [Operator Brian

Brian Gong

by level go I and you. under eased, Thank will was the expect? translate enterprise regarding what our any growth cloud and taking myself. the my we to have pandemics Good understand question Thanks see evening Should given should cloud shortage enterprise I largely level projects My is largely impacted normalized seen enterprise growth the delivery? segment cloud. management. control for pandemic, power questions. next revenue shortage we to year? accelerating back we And for power

Yulin Wang


Okay, so from the out, CFO Yulin power shortage factors is Wang segments, -- there affecting the one response Mr. from curtailment. pointed the key that are CEO, as two cloud you or our industry is the which rightly

is other The the pandemic.

that. In was that the the that as you our QX And know main power of respectively, segments, factor. shortage, business in it talk in about I'll two terms

public reserve the and IDC segments, priority the because rate of and them enjoying then in relatively protection or cloud power So is backup generators. most of high have

not terms private the in So the [ph] in negatively most But enterprise -- which cases, industrial those IDCs are IDCs of affected. the customers. cloud, affected cloud of because designated who by are

have with that been has have the shortage largely generally I power to by you agree it's currently the So and by alleviated. power affected case been case shortage. situation

mid-term there. be relation to shortage that expect IDC been short-term And do able be pressure the we construction progress in enterprise IDC carbon policies case, power to to in long the term, our QX. continue in more emission and alleviated. for control cloud there any will has then the we're might in will power And to consumption. continue the in delivery -- we However, the see But

the our is causes going which cities, factor some the The stringent government Obviously, because the second still of on measures of very delivery. in delay about takes, it pandemic.

the we industry, to grow. demand remains our very see However, overall do that our in enterprise cloud strong, speaking, continue backlog

increase this local distributed While China there's we and proactively the teams, been we have find are to also delivery, proactively delivery impact across to is Camelot which solutions to One tried with efficiency. to have utilizing help delivery impact.

for of The strong some and second the the very control. But our rate cloud coming timetable we that proactively power Thank of shortage manage the demand. a was see to pandemic industry of part make the is high speaking, lost time you. demand, growth very and overall because this up to from we do try that enjoying delivery

Brian Gong

helpful. very That's you. Thank


Our Liping comes question. next question Please ask from CICC. from Zhao your

Liping Zhao

We've this Good space evening, in have management. here. a seen cool public cloud down I three year. questions

drivers is seen year's first be gross X and X question, your next achieve. to caused my has our budget our wonder is second Thank recognition. this revenue up year, margin to My so delay upfront in lastly, some company's the will far? the by do And for question and growth And going years so in do growth question with you what pressure what's and your market infrastructure opinion rates we is, And and targets CapEx? utilization organic to next what's collaboration when catch ByteDance how

Yulin Wang


reference. Just to quickly the translate for

And it's base So about was decelerated. high from question enterprise One and with that we It to Obviously, has demand the a as result cloud. public there the start we in your actually year, I year high last pandemic. public cloud cloud, reasons. the base. cloud of relation two public is was growth this prospects due our perspective, have to for in a noted a think that

to actually has that cloud a But is service factor for So great this year. for the surged shifted a obviously, not new and lot a demand extent.

that the video new applications arrangements see has clear, the technology internet like iteration happened potential coming for takes those perspective. rate Now, this think this, also that and more second We of cyclical now, in in from be more and new regulations growth new and been believe of the which to in that verticals make that has metaverse a started XG more a launching concepts at engage impact, customers and been with. been looking we And government or the do accordingly, gaming. this accelerating. already we in and the such as going But picture, some to regulations to the to is the in short-term from the reason to -- customers of we we come, also think will terms we with penetration customers regulations And need be higher in do beginning is these markets the like, a -- reasonably together in X hardware, long-term rate seeing regulate new the X volume, the technology. growth increasing this sector the as of time. is have have entertainment, do that think the see expect and actually have feasible future, years that to spaces government do we're our all a and But compliant, out the of to further new we those than large new sector, noticed, till sector. which have cycle, industries will a that become through we're even average since to come entering you into to the the industries of which actually those And have lot year,

of a the strong relationship this remain and new they base trend, for before. that also headwinds, deployment As essentially customer have whereby and the of want multi are we engaged customers, vendor. as become And whenever we to our in from we a ourselves, you company. actually the our those cloud quarter fundamental think neutrality, customers a then the volume amid robust. for that's from have of engage the new really choice amount benefiting depth market significant very believe And as in serves and And cloud [indiscernible] top we terms mentioned

that remains strong. of in is In revenue. gaining be in our this terms of to continue and verticals have demand cloud, by and our come, the demand to time expect this answered, And we that, also market elastic. long actually in we'll asked to the to remain think more customers first also demand chosen tap We the city, industry result advantages of focused I very developing as for digitalization was benign question a increasing the on, that as and of the strong cycle we

also trying situation. And we software, more and find been third with basically ByteDance, and we a question short Alien, ways -- have have recently, promote comprehensive to agreements in ways explosive the In ByteDance advantages essentially the eruption, China. includes video which authentication have umbrella, application of relationship our with ByteDance the very partnership is of of Volcano where the with working create to like partnership a signed essentially And is our very Engine, is software of called that the have capabilities software. lot nationwide Volcano tweaking Engine delivery that's a as under and starting have the win-win which actually [indiscernible] terms with in of with seen, capabilities, your -- which cooperation cooperation we to us history That identity ByteDance, that we made with where combine of cooperation long-term ByteDance them. trusted we terms to explore a from are the made to applications clips partner actually of a growth a solid the you

into There's also you WPS So, and a ecosystem look between partners. and -- beyond zoom the wider ByteDance. Kingsoft a cooperation at and out can our two companies,

across and that dimensional strong ecosystems, say with would relationships our you. I always maintained two So multi have ByteDance. we Thank

Haijian He

Thank few I you, a second Yulin. very take will on points. a question briefly,

supply you been [indiscernible] pricing the also on environment, but the stable. especially side, not this also First all, clients our of only very year, probably has

look products, or gross margin stable. very we margin, been at when contribution our major has products, our So our

which procurement QX. now in China, gross that the QX. basis, industry will means negotiated number the of if two, not you margin in [ph] Point already that XB annual in arrangement actually we're affecting that's our So be also an the on most know reason in enterprise that or right service

IT the information suppliers. are demand do accounts. and further and the do our from supply can the kind already key budgeting the the we're the collecting key we we and And we quality good and process pricing, analysis right inside a volume improving process into getting That's all of to in matching year why believe to terms, with next terms utilization. majors now So our and the the negotiate

So mitigated this on the that's by mismatch I be can think gradually side of the resource why end the year.

So for clients, also so some given further for it a be the and going mitigated. to gross new of key margin some the annual impact and be next year, supply, pricing the is key contract vendors can as of

to there's three. going a number impact. So be short-term Point

asking dollar, as year, even CapEx, quality definitely next same For will that potential into about the you're prioritize revenue high streams. for we

also the information host actually to of than believe will and we we to the converted arrangement when on in we partnering consider the And high CPUs have with a going into or rather the Investor spend if are a phase. the very vendors recent for think the when indirectly arrangement. look good with we're for own potential to GPU quality will procurement for high also that dollar, point, key Intel the into we So have the the secure next you infrastructures. also, that infrastructures. been forward. to In remember, have service, that Tianjin year, next key at recent our Investor fundamental we going partnered revenue prioritize Day CDN CPUs, direct quality and we vendors quality to events a stream with high year, end high on will the time first And continue successfully Center for last the Data closed has a actually, Day, that directly us I And the build the quarter,

plan a second for we that starting plan will cabinets, we're phase, the and clouds year another -- opportunity. next public [indiscernible] for new to for the to basically will For for revenue revenue stream adding I

row or it and think summary, IT the million mismatch mitigate business, resources I to that net the we gradually impact of are revenue cloud a margin the as the improving forward. So of see incremental to public will the gross you. naturally a Thank of in XXX second will and going


Thank you.

Your next Thomas your Please ask from question comes from Jefferies. Chong question.

Thomas Chong

management for My our is Thanks questions. taking question this my year. new for customers regarding first

have We giants. Internet and Meituan Pinduoduo, added the

Beijing margin, terms revenue next and the second of as my sense about revenue of as get their well Thank they qualitative color cloud? of want the get in enterprise be sense up contribution story, any the about assumptions between any appropriate side Kingsoft or Just the just on great. you. the Beijing about -- in years And is color a a of lot want the ramp a cost. mix the to coming question the effects, business, our given regarding And the would from over contribution different couple and that [indiscernible] long-term near-term to as

Yulin Wang

like neutral to cloud we have and the have don't unfortunately, top currently, inevitable see grow for them of on provider customers to And were growth revenue very the these think, technology question. thank but percentage Pinduoduo like and perspective choice. detailed good the revenue, as them out, very the and both Juhu, mentioned also an do or think, numbers continue We stable perspective. of they’re I been trends. Kingsoft's and And Cloud, is Meituan pointed for as and So from the from very larger a you And multi-cloud as names, much you professional internet mentioned, we stable. inevitable a and and commercial business a choice, do deployment for you as

in impact. has a been In And and uncertainty remained Now, The mentioned, think I pandemic. demand be is the larger short-term one already and briefly, to accelerate. the as space, resolved. to and of is largely split macro two is over, is power shortage, that shortage growth this the alleviated. it we the space. has I the public respectively. industry pandemic cloud impact enter enterprise factors, expect to of a business going see spaces very affecting terms cloud where it's the other been cycle, cloud power The strong. been to into do mentioned, In And going environment, once public discuss into cloud also to

Camelot's best to with this up catch teams to leveraging to are and progress our try impacts Our fight way local to the revenue. negative deliver

Now, Beijing. mentioned as on I because Beijing before, we're impact based in the locally actually,

not pandemic do impact really projects, we Thank Thank margin any So And the the due Beijing control you. Henry to measures. for you. to leave -- to in material I the answer. have questions

Haijian He

Clark. Very on the margin. you, Thank quickly Yulin. you, Thank

profile of long-term. I improving first the So we deliver same keep all, that still for to intention margin mention to want the

gross think and the year's while of about both margin, non-GAAP EBITDA margin budget. one So next priorities, we

the supply the how think when as are about think think that's next doing mentioned, we priorities are pricing These and key personnel today. year's we environment just why, demand, expenses. as So our side, we I process the optimize also about about for budgeting

will at timing. to is this have clear give as improvement guidance margin margin, why may And that's first very breakeven near-term. audience for the in moment, point. call the for this this to But intention we probably remember, So earning EBITDA a be the that did not some of delivered have we

the for is to I key our focus revenue point, second year. opportunities areas think, The high quality also next given

into opportunity looking So thorough revenue do they're for very that D&A that a and both when impact margin improvement. margin we the converted expenditures, gross about impact capital and we we did and at how analysis and the will a -- on very expenses, think how

So margin with to annual basis. we'll say and for see year, we'll see both EBITDA at margin, this we year hopefully on is, an think as on non-GAAP I improvement a want moment compared basis, annual result, gross this next an

on we think confident I remain objective. that

we and you. hopefully timing can process communicate budgeting we year. the scale of for once Thank prudent complete next that, However, the

Thomas Chong

Thank you.


We Kyna from Please will Wong your the final Credit Suisse. question from ask question. take

Kyna Wong

Thank taking my you question. for

own or public question IDC our change your the the is IDC are in capability second idea well question like path render we And on the even for cloud. enhancement company mean, and enterprise kind the about of future. from the is from policy as looking what Obviously, with first I or actually the cloud? after visibility impact may that cooperations suffers ByteDance. more the The business

thank So you.

Yulin Wang

in and for among care business. terms also leading has more percentage, in So the capability capabilities, becoming health example, of we revenue and terms services, increasing big verticals, particular tax fact, us and capabilities, to of data we of -- have And peers. our tax the have our it more actually seen financial to our margin in brought in promotion

development those to believe Now, we choose verticals increase we of to in investment focus on. continue capabilities we that and PaaS in areas, that our will those do

is However, this material in any any to cooperation don't policy, relation In really your impact cloud think changes we or we ByteDance. our the public about with think any Engine way will have to IDC policy in do IDCs. Volcano with question not conflict

we cloud to latest ourselves, been have generally IDCs and they think the public negatively we government IDCs then policies that earlier, including the guidelines, have the explained do built they're relatively to high think be As and going built not and that affected. standards, according we do

And think of you. policy policy i.e. abruptness do the impact adjust they in the the Thank power the be the future, as government, that to for In we of IDCs changes cloud customers, because the in change that mainly enterprise of terms came from shortage. will well. to any able the space


now this like the point, for back call the I would Nicole hand closing At to Shan remarks. to

Nicole Shan

joining once and Thank you, everyone thanks operator, for again today. us

have any with quarter. feel to Bye, free further you again Have nice a bye. Look to please next contact you us. questions, day. If speaking forward


Thank you. for you That does conference conclude for participating. Thank our today.

You may now disconnect. all