On the evening of March 23, Kingsoft Office (688111) released its 2021 financial report. Relying on comprehensive cloud transformation, the company achieved steady growth.
In 2021, revenue will continue to grow rapidly, with revenue of 3.280 billion yuan, a year-on-year increase of 45.07%; net profit attributable to the parent of 1.041 billion yuan, a year-on-year increase of 18.57%; non-returned net profit of 840 million yuan, a year-on-year increase of 37.32%; operating cash The flow was stable, with a year-on-year increase of 23.10% to 1.864 billion yuan.
From tools to services, from stand-alone to collaboration, since the cloud strategy was put forward in 2018, Kingsoft Office's business model has accelerated its transformation to a SaaS model and achieved remarkable results. Personal business income and institutional business income have gradually become the "double-point" of Kingsoft Office's steady growth. Engine", nearly 60% of revenue is contributed by subscription business.
In the main business, the domestic personal office service subscription business income was 1.465 billion yuan, an increase of 44.20% over the previous year.
The number of paying people continued to increase, and the trend of conversion to long-term payment was obvious; in the government and enterprise market, Kingsoft Office seized the emerging opportunities of the digital economy, the growth rate of institutional subscriptions became a bright spot, and the Xinchuang market maintained explosive growth.
Domestic institutional subscription and service business revenue was 446 million yuan, a year-on-year increase of 23.40%; domestic institutional licensing business revenue was 960 million yuan, a year-on-year increase of 107.10%.
Institutional subscriptions grow rapidly, and cloud office transformation has achieved remarkable results
With the unmet demand for digital transformation of a large number of organizations on the B side, and the further release of digital economic dividends during the "14th Five-Year Plan" period, China's enterprise-level market has ushered in a huge blue ocean.
According to the "2021 China Collaborative Office Market Research Report" released by iResearch, the scale of the collaborative office market will exceed RMB 50 billion in 2021, and will reach RMB 80.6 billion by 2023.
During the reporting period, at the "Kingshan Digital Office Conference" at the end of 2021, Kingsoft Office released a "heavyweight" TO B strategy - the company will not only be limited to a personal office platform, but also become a digital office platform that empowers various organizations, and Simultaneously launched the organization-level digital solution "Kingshan Digital Office Platform".
Relying on the strong demands of organizational customers for data asset management and cost reduction and efficiency enhancement, Kingsoft's office, government and enterprise market business performed brilliantly: Xinchuang business continued to grow explosively, and domestic institutions authorized business income of 960 million yuan, an increase of 107.10% over the same period last year %.
China's Xinchuang industry has entered a period of development. The company has a large number of orders for office software products. The products have accelerated penetration in Shanghai, Guangdong, Liaoning, Jiangxi, Guizhou and other places and among various ministries and commissions. The Xinchuang cloud platform is for Yunnan, Guizhou, Hunan, etc. The local digital government project provides enabling services, opening the era of office software and cloud integration in the field of credit innovation; in addition, Kingsoft Office also actively participates in various pilot projects of credit innovation in the financial industry, and has won clients from banks, exchanges, banks, and securities firms. unanimous approval.
Institutional subscription revenue has grown rapidly, and users' acceptance of data on the cloud has continued to increase.
Domestic institutional subscription and service business revenue was 446 million, an increase of 23.40% over the previous year.
Through measures such as improving product systems, enhancing service experience, and expanding ecological channels, Kingsoft Office continues to promote the in-depth expansion of e-commerce, retail, engineering and construction, educational institutions and other industries, making breakthroughs in Zhihu, Huawei Welink, Shanghai Airport, Lingang Group , RT-Mart and many other benchmark customers represented.
By the end of 2021, the number of registered companies in the company's public cloud market has exceeded one million.
At the same time, Kingsoft Office accelerated the conversion of authorized customers to subscription, from traditional independent office to cloud and collaborative office, and made substantial breakthroughs in finance, energy, operators, construction, metallurgy, people's livelihood and other industries, fully satisfying The digital transformation needs of large enterprise customers represented by China Southern Power Grid, China Mobile, China Unicom, Bank of Communications, China Merchants Bank, Taikang Insurance, and General Motors Group; actively carry out high-quality ecological cooperation, and continue to empower Alibaba, Baidu, Tencent, Feifei Platform-based collaborative office ecological manufacturers such as Shu, carry out in-depth cooperation with cloud manufacturers such as Cloud Guizhou, Tianyi Cloud, Huawei Cloud, and OA manufacturers such as Panwei Network, Zhiyuan Internet, and Lanling Software, and actively participate in the formulation of the new national standard UOF, and promote domestic production. Software standard optimization and implementation.
It is worth mentioning that for the first time this year, Kingsoft Office disclosed the institutional subscription part of institutional revenue separately, indicating that Kingsoft Office’s SaaS transformation has become a strategic focus.
Data shows that in 2021, Kingsoft’s total office contract liabilities will exceed 1.6 billion yuan, a year-on-year increase of more than 70%. In the long run, benefiting from the advantages of the SaaS subscription-based business model, future income stability will be further enhanced, laying a solid foundation for future income growth. foundation.
The personal subscription structure continues to be optimized, and the trend of conversion to long-term payment is obvious
As of December 31, 2021, the number of monthly active devices of Kingsoft Office's main products was 544 million, a growth rate of 14.05%, and a stable growth on a relatively large base.
Among them, the number of monthly active devices of the WPS Office PC version was 219 million, an increase of 15.87% over the same period of the previous year; the number of monthly active devices of the mobile version was 321 million, an increase of 13.83% over the same period of the previous year.
During the reporting period, on the basis of the stable growth of the number of monthly active devices of the main products, the company continued to optimize the functional experience, and the user cloudification effect was obvious. The domestic personal office subscription revenue was 1.465 billion, an increase of 44.20% over the previous year.
Since the cloud office strategy was proposed in 2018, users' stickiness in using WPS cloud services has gradually increased. The company started with cloud storage and gradually migrated personal office scenarios to online office. The synchronization of cloud documents enables documents to achieve cross-device capabilities.
As of the end of 2021, the cumulative number of annual paying individual members reached 25.37 million, a growth rate of 29.31%, and the proportion of long-term paying users increased.
The number of files uploaded to the cloud by individuals and SMEs via public cloud services has grown from 17.5 billion at the end of 2018 to about 130 billion.
During the reporting period, in order to further optimize the user experience, Kingsoft Office strategically shrank the Internet advertising business, and the revenue decreased by 3.01% compared with the same period of the previous year, which further drove the increase in the number of personal paying users.
In general, the personal subscription business still enjoys ample room for development, and the high-quality content platform Daohuer promotes users to convert to long-term payment.
During the reporting period, Kingsoft Office launched the Rice Husk Material Library, one-stop solution to users' needs for material resource search, management and use; built a high-quality library, accelerated the introduction of institutional content producers, strengthened copyright protection, and added a new business payment model. .
Up to now, the Daohuer platform has more than 100 partners, more than 4,000 contracted content creators, more than 100 million content resources, and more than 700 million annual content downloads.
R&D investment continues to increase, and long-term technical reserves are built around cloud and digitalization
The financial report data shows that Kingsoft Office has continued to increase investment in research and development.
The company will invest 1.082 billion yuan in research and development in 2021, a significant increase of 52.15% year-on-year. From 2019 to 2021, the proportion of research and development expenses to revenue will be 37.91%, 31.44%, and 32.98%, respectively. Top notch.
Up to now, the number of R&D personnel in Kingsoft Office has reached 2,811, accounting for nearly 70% of the company's total number.
During the reporting period, the company made medium and long-term technical reserves around cloud and digitalization.
Strengthen the central capability of the technology middle and platform to effectively support business needs; accelerate the integration of layout products and application scenarios, and continue to strengthen the leading position of layout software in the domestic market; enhance the moat of cloud products, improve multi-terminal integration and secondary development capabilities around scenarios; Continue to strengthen AI capabilities and maintain the leading edge in proofreading and assisted writing; at the same time, the company has carried out key construction work around data security and privacy, improved data classification and processing, and matched domestic and foreign data security compliance requirements.
During the reporting period, Kingsoft Office, as the lead unit, participated in the major scientific research projects of integrated application software sponsored by the Ministry of Industry and Information Technology of the People's Republic of China, and carried out key development for the needs of party and government document writing and user office collaboration.
In 2021, the company applied for a total of 126 invention patents, of which 122 were accepted domestically, 4 were accepted overseas, and a total of 50 invention patents were authorized. The company has acquired a total of 416 software copyrights.
From the perspective of Kingsoft Office, the above achievements are inseparable from Kingsoft Office's emphasis on the R&D environment and talent team.
During the reporting period, the company took multiple measures to promote talent introduction and incentive mechanism.
In the future, Kingsoft Office hopes to create a better engineer culture.