On the evening of August 19, Beijing Kingsoft Office Software,Inc. (SH688111, share price 247.13 yuan, market cap 114.7 billion yuan) released its semi-annual report for fiscal 2026. During the first half of the year, the company recorded revenue of 3.313 billion yuan, up 24.69% year-on-year, while net profit attributable to shareholders surged 236.94% to 2.518 billion yuan. After deducting non-recurring gains and losses, net profit attributable to shareholders reached 2.487 billion yuan, a jump of 241.99% from a year earlier. Basic earnings per share climbed to 5.44 yuan, up from 1.62 yuan in the same period last year. Compared with the more than twofold apparent increase in net profit, the growth in the company's core operating profitability was relatively moderate. The semi-annual report attributed the sharp profit rise mainly to investment income, noting that certain external investment fund projects generated substantial returns that made a significant contribution to net profit growth.

Investment gains of 1.914 billion yuan boosted profits. Looking at the main business segments, WPS personal services remained the revenue cornerstone, generating 2.014 billion yuan in the first half, up 15.20% year-on-year. WPS 365 business revenue grew 60.84% to 497 million yuan, making it the fastest-growing segment among the three major businesses. WPS software business revenue rose 33.36% to 722 million yuan. Additionally, other business revenue increased 37.30% to 80 million yuan. While the core business continued to expand, expenses also rose. Operating costs for the first half totaled 500 million yuan, up 25.83% year-on-year; selling expenses increased 24.95% to 598 million yuan; administrative expenses grew 26.65% to 277 million yuan; and R&D expenses climbed 20.17% to 1.152 billion yuan. The company said the higher operating costs primarily stemmed from increased server leasing, storage, bandwidth, and third-party service fees tied to business growth, while the R&D expense rise was mainly due to a larger headcount of research personnel. As of the end of June, R&D staff numbered 3,962, up 429 from 3,533 a year earlier, representing 64.09% of total employees. R&D investment in the first half stood at 1.152 billion yuan, accounting for 34.76% of revenue, down 1.31 percentage points year-on-year.

During the reporting period, investment income reached 1.914 billion yuan, compared with 133 million yuan in the same period last year, an increase of 1,334.29%. The semi-annual report stated this was mainly due to higher investment returns from associates and joint ventures. Specifically, long-term equity investment income under the equity method reached 1.756 billion yuan, versus a loss of 13.6532 million yuan in the prior-year period. In addition, time deposits generated investment income of 142 million yuan, while disposal of trading financial assets contributed 16.1072 million yuan. Correspondingly, the book value of long-term equity investments rose to 3.468 billion yuan by the end of the reporting period, up 103.05% from the end of last year. On the cash flow front, net cash flow from operating activities came in at 643 million yuan, down 12.96% year-on-year. The company explained that this was mainly due to increased cash outflows for employee compensation and tax payments, adding that after excluding the prepaid income tax impact from investment gains in the current period, net operating cash flow actually grew year-on-year.

AI monetization is beginning to explore usage-based billing. As of the end of the reporting period, WPS Office's global monthly active devices reached 676 million, up 3.87% year-on-year. Among these, PC monthly active devices grew 10.14% to 336 million, while mobile monthly active devices dipped 1.65% to 340 million. In China, WPS personal business revenue rose 13.19% to 1.833 billion yuan, with cumulative annual paying individual users reaching 48.25 million, up 15.44% year-on-year. Overseas business grew at a faster pace. In the first half, overseas WPS personal business revenue climbed 43.79% to 26.1013 million U.S. dollars, and overseas monthly active devices reached 244 million, with PC overseas monthly active devices rising 38.11% to 47.83 million.

On the commercialization front, Beijing Kingsoft Office Software,Inc. said it will explore business models such as "subscription plus AI usage" on top of its existing subscription model, aiming to gradually generate new revenue contributions from AI-native office products based on users' depth of engagement with complex office tasks, advanced intelligent services, and AI resource consumption. For enterprise-facing WPS 365, the company also proposed extending beyond pure subscriptions to AI usage-based pricing. The semi-annual report said the company will actively promote an upgrade of the WPS 365 business model, combining "seats plus AI usage" to better match the AI adoption depth and business needs of different enterprise clients, thereby expanding customer value and gradually building incremental revenue contributions from AI products to WPS 365 business income.