Cheetah Mobile Q2 Earnings Call Highlights

Cheetah Mobile NYSE: CMCM said its second-quarter 2026 results reflected a continued shift toward cloud and AI infrastructure services and robotics, even as changes affecting its advertising agency business weighed on profitability. Total revenue was RMB266.1 million, up 2.7% from the prior quarter and 9.9% from a year earlier, according to Director and CFO Thomas Jintao Ren. Excluding advertising agency services, revenue totaled RMB244.1 million, increasing about 10% year-over-year and 5% sequentially. The company reported an operating loss of RMB73.6 million, compared with losses of RMB28.3 million in the first quarter and RMB11.1 million a year earlier. Non-GAAP operating loss was RMB25.6 million, widening from RMB22.5 million in the prior quarter and RMB2.1 million in the second quarter of 2025.

Ren said the year-over-year increase in losses primarily reflected lower advertising agency services revenue within global enterprise services, while continuing investment in robotics commercialization also contributed to a wider sequential loss.

Services of cloud and AI infrastructure generated RMB59.1 million in second-quarter revenue, up 83.1% year-over-year and 26.2% from the first quarter. The business accounted for 22.2% of total revenue and 72.8% of global enterprise services revenue. Chairman and CEO Fu Sheng said gross billings for the business exceeded RMB500 million during the quarter, compared with about RMB200 million a year earlier and approximately RMB300 million in the first quarter. He said Cheetah Mobile expects cloud and AI infrastructure gross billings to exceed RMB2 billion in 2026, representing growth of more than 100% year-over-year, while related revenue is expected to surpass RMB200 million.

The company provides cloud infrastructure, computing power and AI model services to enterprises expanding overseas, working with providers including Amazon Web Services, Google Cloud and Microsoft Azure. Fu said Cheetah Mobile’s role extends beyond connecting customers to AI models, including deployment support, cost control and daily operations.

During the question-and-answer session, Fu said demand for AI infrastructure remains in an early stage and continues to grow. He described the company’s competitive approach as customer-focused, combining AI training, implementation support and enterprise tools with its relationships and technical familiarity with cloud providers. Fu said the company seeks to help enterprises use AI in practical applications rather than compete in the capital-intensive development of foundation models. He also said cloud and AI infrastructure services could create opportunities to sell customers additional AI agents, software tools and related services over time.

Revenue from robotics and other businesses was RMB54.5 million, up 72.5% from a year earlier and 6.4% sequentially, representing 20.5% of total revenue. ...