Kingsoft Office 2025 Annual Report Analysis: Deducted Non-Recurring Net Profit Increased by 15.82%, R&D Investment Increased by 23.57%

Operating Revenue: Up 15.78% Year-over-Year, WPS 365 Business Becomes Growth Engine

In 2025, Kingsoft Office achieved operating revenue of 5.93B yuan, a year-over-year increase of 15.78%, with revenue scale continuing to expand. Looking at each business segment, WPS 365 performed remarkably, generating 720 million yuan in revenue, a significant increase of 64.93% year-over-year, becoming the core driver of revenue growth, mainly benefiting from AI technology empowering product upgrades and deep penetration into government and enterprise clients; WPS Personal Business achieved revenue of 3.63B yuan, up 10.42% year-over-year, with global monthly active devices reaching 678 million, steadily expanding user base; WPS Software Business reached 1.46B yuan, an increase of 15.24%, maintaining market share leadership in the innovation and creation field.

Net Profit: Up 11.63% Year-over-Year, Profit Quality Steadily Improving

In 2025, the net profit attributable to shareholders of the listed company was 1.84B yuan, an increase of 11.63% year-over-year; non-recurring net profit was 1.8B yuan, up 15.82%, with the growth rate of non-recurring profit exceeding that of net profit, indicating the company’s core business profitability continues to strengthen, and the impact of non-operating gains and losses on profit has decreased.

Earnings Per Share: Basic EPS Up 11.52%, Shareholder Returns Improved

In 2025, basic earnings per share was 3.97 yuan/share, an increase of 11.52%; non-recurring basic EPS was 3.90 yuan/share, up 15.73%, consistent with the growth rate of non-recurring net profit, reflecting that the company’s profit growth directly boosted earnings per share for shareholders.

Expenses: Significant Overall Growth, R&D Investment Continues to Increase

In 2025, the company’s total operating expenses were 3.75B yuan, up 19.57%, mainly due to increased personnel compensation and R&D investment. The specific expense details are as follows:

• Sales Expenses: 1.14 billion yuan for the year, up 14.96%, mainly due to personnel salary increases. The company continues to increase marketing and user operation investments, supporting user scale and payment conversion rate improvements.
• Management Expenses: 474 million yuan, up 17.68%, mainly due to personnel salary growth. The company’s expansion has driven management costs higher.
• Financial Expenses: 488.9k yuan, turning positive from negative last year, mainly due to adjustments in fund management strategies and reduced interest income.
• R&D Expenses: 488.9k yuan, up 23.57%, with an R&D expense ratio of 35.34%, an increase of 2.23 percentage points from last year. The company continues to increase R&D in core areas like AI and collaboration, applying for 164 invention patents throughout the year, laying a foundation for product iteration and technological leadership.

R&D Personnel: Team Expansion and Talent Structure Optimization

As of the end of 2025, the company’s R&D team totaled 3,979 people, an increase of 14.57% year-over-year, accounting for about 65.79% of total employees. The team continues to expand to support technological R&D needs. Regarding personnel structure, 1,304 R&D staff hold master’s degrees or higher, accounting for 32.77%, indicating an increase in high-education talent and overall team quality; age-wise, 1,919 R&D personnel are aged 30-40, representing 48.23%, forming the core R&D force with a reasonable talent echelon.

Cash Flow: Steady Operating Cash Flow, Adjusted Investment and Financing Cash Flow Structure

In 2025, the company’s net cash flow showed steady operating cash flow, decreased investment outflows, and increased financing outflows:

• Net cash flow from operating activities: 2.1B yuan, up 13.93%, mainly due to increased cash inflows from sales of goods and services, reflecting strong collection ability and high profit quality.
• Net cash flow from investing activities: -2.5B yuan, compared to -1.97B yuan last year, with reduced outflows mainly due to strategic adjustments in fund management and decreased investment payments, leading to more prudent capital allocation.
• Net cash flow from financing activities: -735 million yuan, compared to -501 million yuan last year, with increased outflows mainly due to cash payments for acquiring minority shareholders’ equity.

Potential Risks

2. Technology Iteration Risk: Rapid development of AI technology means if the company cannot keep pace with technological updates, product competitiveness may decline; failures or unmet expectations in new technology R&D could increase costs and lead to market opportunities being missed.
3. Market Competition Risk: The office software industry is highly competitive, with leading companies increasing AI deployment and new entrants emerging. If the company cannot maintain technological and product leadership, market share may be squeezed.
4. Macroeconomic Environment Risk: Global economic fluctuations and international trade frictions may impact the company’s overseas expansion; domestic policy changes could also affect the innovation and creation business.
5. Management Risk: As the company continues to grow, higher demands are placed on strategic planning, organizational management, and internal controls. If management capabilities do not match business development, operational efficiency could be affected.

Executive and Senior Management Compensation: Compensation Tied to Performance

During the reporting period, Chairman Zou Tao received compensation from related parties and did not receive pre-tax remuneration directly from the company; General Manager Zhang Qingyuan received a total pre-tax remuneration of 2.0295 million yuan; Vice Presidents Bi Xiaocun, Zhuang Yong, Wang Dong, and Luo Tao received pre-tax remunerations of 2.6948 million, 2.0571 million, 1.1816 million, and 1.2798 million yuan, respectively; CFO Cui Yan received 1.8685 million yuan pre-tax. Overall, the compensation of core management aligns with company performance growth, indicating an effective incentive mechanism.

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