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High revenue and low profit ucloud financial report reflects the chronic disease of cloud computing

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The following is the High revenue and low profit ucloud financial report reflects the chronic disease of cloud computing recommended by recordtrend.com. And this article belongs to the classification: Industry information.

After ten years of development, the cloud computing track has entered a relatively smooth development cycle. The so-called “nothing new under the sun” can be used to describe the current cloud computing industry.

On January 30, ucloud released its 2020 annual performance announcement. As the first cloud computing company to land on the science and technology innovation board, its performance largely reflects the current situation of the industry. According to the announcement, ucloud expects to achieve an operating revenue of 2.4 billion yuan to 2.46 billion yuan in 2020, an increase of 885 million yuan to 945 million yuan compared with the same period last year, with a year-on-year increase of 58.42% to 62.39%.

As a comparison, during 2016-2019, ucloud’s operating revenue was 516 million yuan, 840 million yuan, 1.187 billion yuan and 1.515 billion yuan respectively. Considering the scale improvement, ucloud still achieved substantial growth, and its performance in the market is still good.

Compared with the brilliant revenue data, ucloud’s profit data is not good enough. Ucloud expects the net profit loss in 2020 to be between 320 million yuan and 360 million yuan, compared with the profit of 21.06 million yuan last year, which is a big drop. At the same time, the gross profit rate of ucloud’s main business decreased by about 20-22 percentage points compared with the same period last year, and the loss was due to the problems of the business itself.

So, why did ucloud’s revenue increase faster than expected and its gross profit rate fell instead? Ucloud also partly explains why.

First of all, ucloud’s revenue growth mainly comes from public cloud revenue.

After its listing, ucloud has given priority to expanding its business volume and scale, introduced some head customers of Internet segmentation industry, and achieved rapid growth in the revenue of key customers, accumulated scale effect, and laid a foundation for providing higher value-added cloud computing products and services, and further improving the reuse rate of the company’s products and services.

The rapid increase in the proportion of business income with low gross profit leads to the decline in the overall gross profit margin of ucloud’s main business. At the same time, the fierce competition in the cloud computing industry and the price reduction lead to the decline in the gross profit margin of its main products or services.

Ucloud’s hardware, such as servers, has also come to the cycle of batch updating. The cost growth and free cloud products introduced during the epidemic period have led to the decline of benefits.

Secondly, the human cost of technology-based companies is the largest cost. The cloud computing industry is relatively mature, and the human cost is also high. In order to attract talents, ucloud increased its salary and implemented the employee equity incentive plan, resulting in an increase of about 100 million yuan in the total labor cost and share based payment during the period compared with the same period last year.

Finally, ucloud’s net profit attributable to the owners of the parent company after deducting non recurring profit and loss decreased, mainly due to the decrease of net profit attributable to the owners of the parent company.

Compared with AWS, which has become an important source of profit for Amazon, the operating profit of AWS in 2019 is US $9.2 billion, accounting for 80% of Amazon’s total profit of US $11.6 billion. No cloud manufacturer in China is in a profitable State.

Cloud computing competition is not only about technical strength, but also capital strength, which sometimes determines how far cloud manufacturers can go. Ucloud’s listing is mainly to solve the financial problem. In the middle and long tail market of cloud computing, many manufacturers are waiting for the price to sell. When the market goes up, they can still get a premium. When the market goes down, the reshuffle period of cloud computing market will come quickly.

In the second quarter of 2020, the trade desk released the financial report, and the customer retention rate still remained more than 95%. The third quarter revenue was 1.067 billion yuan, the net loss was 43.615 million yuan 52% year on year decrease media comment: the first quarter financial report of fiscal year 2021 is released, Alibaba ushers in “shining moment” multi engine driven solid growth, Lenovo Group’s net profit in the first quarter is 213 million US dollars, up 31% year on year, China Mobile’s net profit in the first half is 55.77 billion yuan, down 0.5% year on year It is expected to make profits in the fourth quarter. The company will invest a lot in AI technology polishing algorithm recommendation engine. The R & D investment in 2020q1 will reach as high as 281 million yuan. The revenue of 1q20 will reach 1.412 billion yuan, with a year-on-year increase of 26.2%. The average monthly active users in the comprehensive quarter will reach 138 million yuan, with a year-on-year increase of 24.2%. Netqin released the financial report of the first quarter, the second quarter and the third quarter of 2017. The financial report of the second quarter: net profit of 370 million US dollars Annual report of China Merchants Bank 2020: net profit attributable to the parent increased by 4.82% to 97.342 billion yuan, non-performing loan ratio was 1.07%. The official response of Xiaopeng automobile’s Q3 financial report in 2020 was that the operating cost was flawed. Did focus media get out of the trough after six consecutive quarters of profit decline?

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