Shares of Kingsoft Cloud Holdings (NASDAQ: KC) slumped on Friday, two days after the company reported its second-quarter earnings results. The Chinese cloud service provider was down as much as 13.8% on the day. As of 1:27 p.m. EDT, the stock is down 5.5%.
On Wednesday, Aug. 25, Kingsoft Cloud Holdings released its Q2 earnings report. Revenue grew 41.6% to $336.7 million in the period, with its enterprise cloud segment growing a whopping 152.8% to $96.4 million in the quarter. While the top-line numbers looked good, Kingsoft Cloud Holdings has terrible gross margins. In Q2, gross margins were only 5.5%, meaning that the company only brought in $18.4 million in gross profit over the last three months. Compared to its market cap of $6.7 billion, those are not very good numbers.
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Why Kingsoft Cloud Holdings Stock Slumped on Friday