Beijing Kingsoft Office Software,Inc. released its performance forecast for the first quarter of 2026 on April 13th. The company anticipates revenue to reach between 1.565 billion yuan and 1.662 billion yuan, representing a year-on-year increase of 20.24% to 27.68%. This growth, driven by the company's three core strategies focused on AI, collaboration, and internationalization, was seen across all three main business lines.
A significant leap was observed on the profit side. The company forecasts its first-quarter net profit attributable to shareholders to be in the range of 2.022 billion yuan to 2.307 billion yuan, a substantial surge of 401.89% to 472.81% compared to the same period last year. After adjusting for non-recurring items, the net profit is projected to be between 1.999 billion yuan and 2.282 billion yuan, marking an increase of 412.89% to 485.36%. This profit growth rate significantly outpaces revenue growth, with the primary driver identified as a major contribution from investment activities rather than just operational leverage.
In its announcement, Kingsoft Office stated that certain external investment fund projects generated substantial investment returns during the reporting period, contributing significantly to the net profit growth. While the core business maintained steady expansion, the "excess profit" was largely amplified by these investment gains.
Operationally, growth was attributed to product iteration and improved organizational efficiency. The WPS personal business continues to upgrade its AI features, maintaining a resilient base of paying users. WPS 365, leveraging its AI capabilities for comprehensive coverage, is seeing sustained volume from major client orders. The WPS software business is benefiting from demand related to domestic IT infrastructure replacement and the implementation of customized AI solutions in government sectors.
Structural opportunities continue to emerge, characterized by stability in the personal user segment, growth elasticity in the enterprise segment, and rapid progress in the domestic IT replacement sector. The Q1 forecast, with expected revenue growth of approximately 20% to 28% from 1.301 billion yuan a year earlier, reflects the ongoing release of these opportunities, including the shift to software subscriptions, enterprise collaboration, and domestic IT substitution.
The company breaks down its growth into three main areas:
WPS Personal Business: Continuous iteration and enhancement of AI capabilities have helped maintain a resilient paying user base, driving stable revenue growth. This segment acts more like a source of steady cash flow, with growth primarily coming from increased average revenue per user and improved renewal efficiency.
WPS 365: The enterprise sector shows strong growth momentum, with major clients continuing to place large orders and AI capabilities being upgraded across the platform. This segment is more elastic, with quarterly fluctuations heavily influenced by the timing of large orders and client acquisition.
WPS Software Business: This segment is experiencing rapid growth, benefiting from the release of demand for domestic IT replacement and the rollout of customized AI solutions for government applications. This business is closely tied to government and enterprise procurement cycles, with the pace of implementation determining revenue recognition.
Regarding profits, the massive surge in reported profit is largely attributed to investment gains. With net profit and adjusted net profit both increasing more than fourfold year-on-year against a revenue base of approximately 1.6 billion yuan, the apparent net profit margin far exceeds typical levels for software businesses. The key driver was the significant investment income from external investment funds.
The company also disclosed profit figures excluding the impact of these investment gains. Net profit attributable to shareholders on this basis would be approximately 487 million yuan to 544 million yuan, up 20.99% to 35.15% year-on-year. Adjusted net profit would be around 465 million yuan to 519 million yuan, increasing 19.19% to 33.14%. Based on this calculation, the incremental contribution from investment gains to the reported net profit is estimated to be between 1.534 billion yuan and 1.763 billion yuan. This explains why, while announcing a profit "surge," the company also emphasized the uncertainty and volatility risks associated with these investment returns.
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