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.
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.
Cloud and AI Infrastructure Expands
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.
Smart Mobility Begins Generating Revenue
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. The year-over-year gain benefited from the contribution of UFACTORY, which Cheetah Mobile acquired in July 2025, Ren said.
The company began shipping smart mobility products during the quarter, including sales in Europe through Pride Mobility and in China through SWIP. Fu said smart mobility began contributing revenue in the period, though management did not disclose the product line’s sales revenue because it remains at an early stage.
Fu described the company’s smart wheelchair products as an application of its mobility, obstacle-avoidance and environmental-perception technology. He said the products weigh less than 16 kilograms, can be folded for transportation, are designed to support air travel and can operate for about 10 hours under specified conditions.
Cheetah Mobile developed the products with established electric mobility manufacturers and moved from project initiation to initial mass production and shipments in a little over one year, with cumulative investment in the range of several tens of millions of RMB, according to Fu. The company said its priorities are product reliability, local compliance standards and building trust with customers and partners.
The robotics and other segment posted an adjusted operating loss of RMB34 million. While that was narrower than a RMB52.7 million loss a year earlier, it widened from RMB26.9 million in the first quarter as the company invested in development and commercialization of robotics products.
Fu said some robotics products, including robotic arms, are already profitable on an individual-business basis. However, he said the company is focused on maintaining adequate product gross margins and growing market scale rather than pursuing quarterly profitability as a standalone objective.
Internet Services Improves Profitability
Internet services revenue fell 17.3% year-over-year and 3.4% sequentially to RMB130.5 million. Internet value-added services revenue rose 6.7% from a year earlier and 2.9% from the prior quarter to RMB101.2 million, accounting for 77.6% of segment revenue.
Online advertising revenue declined 53.5% year-over-year and 20.2% sequentially to RMB29.3 million. Despite the overall revenue decline, adjusted operating profit in internet services increased 14.2% from a year earlier and 67.2% from the first quarter to RMB25.4 million.
The segment’s adjusted operating margin expanded to 19.4%, from 14.1% a year earlier and 11.3% in the prior quarter. Ren attributed the improvement to the growing contribution from internet value-added services and greater operating efficiency.
Global enterprise services revenue declined 23.3% year-over-year but rose 11.5% sequentially to RMB81.1 million. Advertising agency services revenue fell 70% from a year earlier and 15% from the prior quarter to RMB22 million, which Ren attributed to review-policy changes at a major global advertising platform.
Adjusted operating profit from global enterprise services was RMB94.3 million, down 80.7% year-over-year and 32% sequentially, primarily because of the advertising agency revenue decline. The segment remained profitable on an adjusted operating basis.
As of June 30, Cheetah Mobile held RMB1.271 billion, or $187.3 million, in cash and cash equivalents. Management said the cash position provides flexibility to invest prudently in AI and robotics while the company continues to reshape its revenue mix.
About Cheetah Mobile (NYSE:CMCM)
Cheetah Mobile Inc operates as a mobile internet company primarily focused on developing and distributing utility and entertainment applications for smartphones and tablets. Its portfolio includes well-known security and optimization products such as Clean Master, Security Master and Battery Doctor, alongside consumer-oriented offerings in mobile gaming and content discovery. The company’s software solutions are designed to enhance device performance, improve privacy protection and deliver engaging digital experiences for end users.
Founded as the mobile internet division of Kingsoft in 2010, Cheetah Mobile spun off as an independent, publicly traded company in late 2014.
