WPS accounts for 60% of revenue; is Kingsoft Software moving away from "game dependence"?

On March 25th, Kingsoft Software officially disclosed its annual performance report as of December 31, 2025.

In a technology industry facing dual challenges of growth and efficiency, Kingsoft Software delivered a distinctive report card: the group’s annual revenue reached 9.683 billion yuan, a slight decrease of 6% year-over-year; however, net profit attributable to the parent company surged by 29%, reaching 2.004 billion yuan.

This “revenue decline, profit increase” financial divergence cannot be simply summarized as cost reduction and efficiency gains. Analysis shows that Kingsoft Software’s internal business structure is undergoing a profound shift.

Specifically, its traditional business represented by gaming may be in a product cycle adjustment phase, while its office software and services centered around WPS have established an absolute dominant position in the group’s core business driven by AI and SaaS (Software as a Service).

Financial data indicates that in 2025, Kingsoft Software’s office software and services revenue reached 5.929 billion yuan, a steady growth of 16%. Comparing this figure with the group’s total revenue of 9.683 billion yuan, it is clear that office business now accounts for over 61% of the total.

This means that the core logic behind the 29% profit increase is primarily driven by this high-margin, high-certainty, growth-oriented core asset.

While overall revenue was dragged down by other business segments, office software not only played the role of a “ballast stone” but also became the main engine for optimizing the group’s profitability.

Examining the driving forces behind the 16% growth in office business, it is evident that Kingsoft’s strategic implementation on both the consumer (C-end) and enterprise (B-end) sides has begun to bear fruit.

First, on the individual user side, WPS AI has successfully transitioned from an eye-catching tool to a powerful driver of paid subscriptions.

In recent years, growth in personal subscriptions for office software faced concerns of market saturation. But the 2025 financial report sends a positive signal: continuous upgrades to WPS AI have successfully broken through the previous growth ceiling.

The introduction of AI features not only enhances the product’s depth of use but, more importantly, provides users with a compelling reason to upgrade to membership, directly driving the expansion of paying individual users and increasing average revenue per user (ARPPU). This indicates that users are willing to pay for AI technologies that genuinely improve productivity.

Second, on the enterprise side, WPS 365, a productivity platform for organizational clients, continues to deepen its expansion. Coupled with the demand for digital transformation in government and enterprise sectors, orders from these clients steadily increased, creating a dual-driven growth alongside the consumer business.

As digital transformation accelerates and the wave of domestic office software localization and replacement advances, Kingsoft Software’s B-end layout has entered a harvest period. WPS 365, as an organizational productivity platform, not only enhances customer stickiness through its SaaS model but also makes the revenue model healthier and more sustainable.

The mention in the financial report of “growth in enterprise orders for software business” directly reflects its deepening market expansion in the B-end segment.

Since office business grew by 16%, the 6% decline in total revenue clearly stems from another pillar—gaming and other businesses.

By reverse calculation from the financial data, in 2025, Kingsoft Software’s non-office business, mainly gaming, earned approximately 3.754 billion yuan. Compared to 2024, this segment’s revenue declined by nearly 30%, directly pulling down the overall group revenue.

Overall, Kingsoft Software’s performance in 2025 represents a high-quality contraction and expansion.

The decline in total revenue objectively reflects the company’s pain points in diversification, especially in the era of stock competition, where growth pressure on non-office businesses is becoming apparent; however, the sharp rebound in profit demonstrates management’s focus on resource allocation and commercialization efficiency.

At this point, the valuation logic of the capital market for Kingsoft Software may need to be re-anchored. It is increasingly resembling a pure “AI + SaaS” company.

Looking ahead, Kingsoft Software still needs to address several key questions.

First, after the initial wave of “trial” paid conversion benefits brought by WPS AI are exhausted, how will it maintain technological iteration to sustain long-term high retention?

Second, in the face of fierce competition from global giants like Microsoft Copilot and domestic large model vendors entering the B-end application space, how will WPS 365 defend and expand its moat in the enterprise market?

Third, how to smooth revenue fluctuations caused by non-office businesses, enabling the group to return to a healthy track of “both revenue and profit growth”?

Kingsoft’s 2025 proves that AI can indeed make money. Its 2026 will face an even more brutal efficiency race.

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