WPS accounts for sixty percent of revenue. Is Kingsoft Software breaking free from "game dependency"?

On March 25th, Kingsoft officially disclosed its annual performance report for the year ending December 31, 2025.

At a time when the tech industry faces dual challenges of growth and efficiency, Kingsoft delivered a distinctly characteristic scenario: the group’s annual revenue recorded 9.683 billion yuan, a slight year-over-year decline of 6%; but net profit attributable to parent rose against the trend by 29%, reaching 2.004 billion yuan.

This financial “scissors gap” of falling revenue and rising profit cannot be simply summarized as cost reduction and efficiency improvement. Analysis shows Kingsoft’s internal business structure is undergoing a profound shift.

Specifically, its traditional business, represented by games, may be in a period of product cycle adjustment, while its office software and services business centered around WPS has, under the drive of AI and SaaS transformation, firmly established its absolute dominant position in the group’s core operations.

Financial report data shows that in 2025, Kingsoft’s office software and services business generated 5.929 billion yuan in revenue, achieving steady growth of 16%. Comparing this figure to the group’s total revenue of 9.683 billion yuan, it’s clear that the office business now accounts for over 61% of the total pie.

This means that the core logic supporting Kingsoft’s 29% profit surge comes precisely from these high-gross-margin, high-certainty, and growth-channeled core assets.

While overall revenue is dragged down by other business segments, office software not only plays the role of “ballast stone,” but has become the main engine for optimizing the group’s profitability.

Exploring the momentum behind the 16% growth in office business, it’s clear that Kingsoft’s strategic implementation on both the consumer (C-end) and enterprise (B-end) fronts has taken effect.

First, on the personal user side, WPS AI has achieved a leap from an eye-catching tool to a tool driving paid subscriptions.

In recent years, personal subscription growth for office software once faced concerns about saturation. However, the 2025 financial report released a positive signal: the continuous upgrade of WPS AI has successfully broken through the previous growth ceiling.

The introduction of AI functionality not only enhances product usability, but more importantly, provides users a strong incentive to “upgrade membership,” directly driving the expansion of the paying user base and increase in average revenue per paying user (ARPPU). This indicates users are willing to pay for AI technology that truly boosts productivity.

Secondly, on the government and enterprise side, WPS 365’s productivity platform for organizational clients continues to deepen and expand. Coupled with the release of demand for digital transformation among government and enterprises, such orders have steadily increased, forming a dual growth engine with the personal business..

As digital transformation among governments and enterprises deepens and the replacement wave of indigenous office software advances, Kingsoft’s B-end business layout has entered a harvest period, With its SaaS-service model, WPS 365, targeted at organizations, not only enhances customer stickiness but also makes the revenue model healthier and more sustainable.

The financial report’s mention of “increase in government and enterprise orders for software business” directly reflects Kingsoft’s deep market penetration on the B-end.

Given office business soared by 16%, the gap in total revenue dropping 6% apparently stems from the other pillar suffering—online games and other businesses.

Reasoning backwards from the earnings report, Kingsoft’s non-office business (mainly games) generated about 3.754 billion yuan in revenue in 2025. Compared to 2024, this segment saw an almost 30% decline in revenue, directly pulling down the group’s overall revenue scale.

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

The drop in total revenue objectively reflects the company’s growing pains in diversified business lines, especially as pressures on non-office business growth emerge in the age of stock competition; but the sizable rebound in profit becomes evidence of management’s focus and commercialization efficiency..

At this point, the valuation logic for Kingsoft in the capital market may need to be realigned. It is becoming more like a purely “AI+SaaS” enterprise.

Looking forward, Kingsoft still needs to answer several key questions.

First, after the first wave of “early adopter” payment conversion dividends brought by WPS AI has been realized, how to maintain technological iteration to ensure long-term high retention rates;

Second, amid technical pressure from global giants such as Microsoft Copilot and fierce domestic competition as major model vendors enter B-end applications, how can WPS 365 defend and expand its moat in the government and enterprise market;

Third, how to smooth out revenue volatility caused by non-office business, so the group returns to a healthy trajectory of dual growth in revenue and profit.

Kingsoft’s 2025 proved that AI can indeed make money. Its 2026 will face an even harsher race for efficiency.

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