Earnings call transcript Q1 2023

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Operator

Welcome, ladies and gentlemen, and thank you for your patience.

You've joined Xunlei's 2023 First Quarter Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the call over to the host, Investor Relations Manager, Ms. Luhan Tang. ahead. go Please

Luhan Tang

good XXXX and Thank for you Thank Quarter morning, Earnings Xunlei's First Conference joining you, everyone. Call.

On the Financial Chief Eric is call with Officer. me today Zhou,

release which Now our today's call. our earnings find you during press can prepared remarks IR intended is website, to supplement our on

through Relations We'd For I results Then Today's guidance and CFO, of you wrap highlight for and from our read the up website. quarter operations. remarks. will details to Investor replay with our is by call our our opening second revenue remarks the the quarter today's Chairman Li, welcome can of and financial like go management's on Eric call the agenda, you Mr. from questions will Zhou, our any recorded, after the CEO, the XXXX. our first prepared Mr. on Jinbo first

Xunlei I Before provisions are may uncertainties Litigation the risk to factors materially remind forward-looking discussion law. of that statements. no statements that based the more to description under except risks I applicable of difficult our to a assumes detailed as market to made XXXX. results. under cause conditions obligation forward-looking to statements, current to Please SEC made that in actual which Reform affect get on are safe current opportunity results contain and statements differ started, refer those update to predict, required are take from Private that the expectations this Such filings any our for may Securities you the forward-looking U.S. subject under will would today Act like management's certain of harbor

of measures. comparable note unless that both will financial non-GAAP otherwise dollars non-GAAP be our measures stated. all earnings this using can Please be A we GAAP are numbers U.S. release. in found On in to press and GAAP call, reconciliation

Limited. following statement and is by prepared Xunlei Jinbo Li, of the CEO Chairman Now the Mr.

Jinbo Li

our the million profitable in we of want call. macro for XXXX the which and by whose believe acknowledge a business we all-time $XX.X increase representing valuable consecutive Good have I kicked Difficulty]. all off volatile been quarter, environment. morning, an you first resilience [Technical with in We conference strong steadfast first the quarter Further, maintained for of despite everyone, participating thank XX.X%. to year-over-year earnings revenue our pivotal momentum contribution demonstrated has fifth commitment in achieving quarter, employees our record

have compared the of last businesses made encouraged and We're with top as all major in line we same first our quarter period the by during growth robust progress growth, of the our achieved year.

Despite the cloud competitive year-over-year services to technology in $XX.X growth quarter revenue generated the in competition shared first its our achieved of XXXX. computing and industry, cloud an leveraged scalable reliable, and edge provide in and in fierce million and to the X.X% cost-effective our clients, business

We and applications are industry in the continuously to CDN on development of Edge computing and mitigate conducting proactive pressure research compete business. pricing the effectively

computing infrastructure X already and cloud recently to construct through you and autonomous technical to OES As an improvement hardware aiming a OEC for launched product demand known, the evolves. both support may have we OneThing and controllable as the will ourselves. continue Edge grow are feedbacks of industry corporate range user broader encouraging, and scenarios that glad expect application to We're lines, clients

[Technical more pay XXXX our the This as to subscribers we last the engaging XX.X the user testament Benefiting growing of of Furthermore, XX.X%. is experience. create business. the and to year-over-year increase XXXX, Now first of the Difficulty] propensity from quarter member first a in subscriber the in evidenced delighted per subscription to increase representing from users RMB community our year. of of to quarter turning a a services, as same for demand quality average among the observe effectiveness revenue by in revenue our the with are RMB loyal compared enhanced from XX a of efforts period to

$XX.X by portfolio, revenue in with of high XX.X% our the year quarter of As value-added internationally. this our in domestically growth and of international live driver, an other the diverse in increase first services year-over-year, million streaming our products and generated driven demand both product

Our product efforts improve enhanced and to our iterate experience. and continuously refine features product functions synergies user

different potential regulatory of volatile However, development. due well geopolitical headwinds across business newly is conducting operations and our challenging and especially to during our as for one setbacks even varying of us so and developing factors course the We're mindful as policies. regions business of as always It's countries it's compliance businesses.

efficiency We environment will operating changing focusing well improving as trends, closely monitor and and operational on maintaining localized compliance. the as evolving regulatory industry while regulatory

to I'd edge our the like fuel lines top closing, striving that Xunlei, leveraging at In and constantly for and we of our say that are businesses. all our bottom synergies both business competitive across can

and successful its demonstrated consecutive solidity endeavor our Our results. the growth of

and healthy our will opportunities we innovative and our about business optimistic solid continue services to foreseeable I'm forward, products recent sheet our business test performance, sustainable record balance we'll With growth exploring new development. and track on a focus drive improve for Going and existing the future. ideas, to of

our of financial I With detail the for provide XXXX. guidance in Eric. quarter a second the that, will call turn results over will revenue Eric to and cover

Eric Zhou

joining guidance details thanks you, quarter will everyone, our of I revenue for Earnings Xunlei's Thank second financial again XXXX. up with for our Call. wrap Luhan. of and Quarter First results Conference through XXXX and the go now Hello, the

first the attributable and revenues live computing streaming, XXXX, businesses. year-over-year. our subscription revenues $XX.X increased of Difficulty] revenues from in generated [Technical cloud mainly total total quarter increase to For million, were representing was The

revenues service X.X% mainly million, sales in computing cloud for hardware from was increase an cloud were cloud year-over-year. increase The Revenues computing cloud of demand representing as of increased to as due increased $XX.X well devices. computing computing

subscriber million, the and subscriber quarter subscribers same of as subscription last the per our the were The revenue was more year-over-year. RMB compared revenues X.XX of Difficulty] The for XX.X% was revenues of March demand with X.XX from was higher with period [Technical as increase year. IVAS higher by as million XX streaming revenue million increase representing subscription capability. for monetization service our to of was March period the due compared subscribers XX, XXXX XXXX, average Revenues higher number an average with first The of mainly $XX.X same in driven mainly XXXX. compared XX.X live The enhanced XX, per of XXXX. and in RMB

were of more $XX.X the with of representing Xunlei related total XXXX. representing of revenues, million million, demand XX.X% same period increase of users million total increased revenues our our of period The $XX.X XX% costs compared revenue with in $XX.X was in total the of due cloud XX.X% The mainly XX.X% of same compared the [Technical of revenues Cost total Difficulty] our cost for consisted revenues or in revenues $XX.X computing mainly increased revenues million, The or costs the and Difficulty] was Cloud services. remaining to XXXX. of the bandwidth cost [Technical to

Operator

please continue to participants, by. stand Dear

Your Thank for be shortly. conference resumed will you your patience.

Eric Zhou

included increase and $XX.X services. the to with revenues, due Bandwidth mainly in compared of total same demand the or users representing in revenues of of Xunlei million more XX.X% cloud XXXX. period our in computing million, as costs, The $XX.X of Cloud revenues costs increased total XX.X% bandwidth for were was costs our

revenue-sharing of of remaining mainly streaming related to consisted depreciation payment live fees, and our business, costs devices and cloud the of costs handling computing of other for revenues costs servers equipment. The hardware

gross period was the margin from period the in profit XX.X% for of by margin profit the was increased quarter with decrease last XXXX businesses. streaming, of live proportion mainly profit our increase gross live revenues representing first profit margin. was has relatively same Gross profit a a total driven first and increase of The cloud quarter XXXX. revenues, due profit $XX.X to mainly XX.X% computing compared in in Gross of the was year. streaming million, in gross which same of XX.X% in increase to The gross the subscription the lower

first or in Difficulty]. of XX.X% during compared total development total period due the were representing year. of XXXX [Technical of $XX.X to million, our revenues costs quarter $XX for was the and primarily last labor increase incurred Research same XX.X% million increased our of The revenues, the with expenses

quarter total subscription representing of or was $X.X total incentives XXXX X.X% primarily of our more revenues, with streaming due for user marketing first a to our revenues million in million, and acquisition The of result held our activities increase same of the live and Sales were X.X% efforts. $X.X compared XXXX. marketing of continued businesses the period for as

headquarter in of in were $XX.X The buildings new of of of XXXX expenses the construction of representing $X.X XX.X% increase December compensation to depreciation Xunlei and finished total XXXX. the with increase quarter million, XX.X the % fourth million and revenues the relocated XXXX. due same period or share-based headquarters in total compared our revenues as primarily for we was expenses G&A

of same in compared quarter. and was $X.X compensation, income Operating period increase expenses primarily labor was XXXX. the with The million million during decrease sales-based costs operating this to $X.X in the attributable marketing income incurred in

compared was partially loss with investment first period million income, same increased the of to in due $X.X $X.X as quarter Other was The million XXXX. exchange the compared with primarily income of the increase foreign offset higher XXXX. by

income million in the Net net Non-GAAP XXXX. net non-GAAP and with in decrease attributable of XXXX, $X.X income first primarily income period was increased in this of income was same operating of the $X.X quarter $X.X and taxes same decrease $X.X million to net million income with million, The in compared XXXX. quarter. income during of the was period the compared

per approximately ADS Difficulty]. of quarter with earnings as in was XXXX Diluted compared the [Technical first $X.XX

cash, December XXXX, short-term mainly in equivalents $XXX.X bank and had cash XX, loans the XXXX. cash million to cash, on decrease buybacks. The million March share investments of As compared of as spending equivalents short-term was $XXX.X investments company due with and and of XX, repayment of

of Xunlei that next Directors the shares million XXXX, $XX up March over of Board the XX to months. repurchase In announced authorized of its

had the XXXX, on $X.X buybacks. XX, March of spent million share approximately company As

the This preliminary of represents is approximately for the as of of million change range material. represents guidance a subject management's to be revenue which XXXX, release, Xunlei second this million press our could and XX.X%. increase revenues midpoint to date $XXX to Turning total any view of the between and $XXX estimates and quarter-over-quarter be estimate change quarter

conference we prepared ready conclude take the are today. Operator, call for questions. remarks to Now we

Luhan Tang

Operator, we're questions. take ready to

Operator

question Du first comes we're our Now Excuse of cannot hear the DIT [Operator take the and Peter Instructions] from to from we me, question Peter, ADC line Limited. going you.

Unidentified Analyst

language] [Foreign hello. Okay,

Eric Zhou

question members been all to into to is the has our premium premium convert the to Peter. membership the membership. nature difference between related subscription. the and The VIP premium is goal wants Thanks, of VIP ultimate subscribers increasing he the and And this members. And whether know

resources. diverse to has better media differences. of a more members are VIP And language]. storage download other if our The Among more know quality super and [foreign membership a kindly want more streaming website, called space, meet offers also premium details, visit uptake We to needs members list membership things, and speed, our fast accessible provide the users. of official you complete options it a various premium

on. preference so others For example, may value affordability have and some [indiscernible] users and to

early to users. do services However we to trend will lately, to and products have membership members to our we Peter. VIP our provide and observed premium an Thank upgrading you, improve of continue value enhanced

Unidentified Company Representative

language] [Foreign

Unidentified Analyst

[Foreign language]

Eric Zhou

prudent Okay. to This audio are business. including I expanding needs for have question. if They our expansion approach Yes, a of is this costs growing the our is will area. for income that question area, operations. actively efficiency. handsome selling to know take team Xunlei to That we live and is, in the meet improve Thanks this your want headcount control increasing company said, hiring to noticed we in

Unidentified Company Representative

[Foreign language]

Operator

from Chen going next the take we [Operator our Asset question are Bridge line Nick Management from to comes and Limited. question of Instructions] Now Nice the

Unidentified Analyst

noticed on And second QX, quarter. question my during buybacks. know have operational is share cost My first like is I company substantially I major ratio. the efficiency. that expense all any to up expense to gone would measures related and And X if the the pretty question to items merit in implemented has improve the also

company like to the in that is share would back if year the expired, repurchase roll to future? more announced programs know buy program out now foreseeable any similar last As was the I shares

Eric Zhou

control due Xunlei for Thanks, labor in The well which the to business expenses as expansion, compensation questions. And expenditures marketing managerial the quarter. the asking increase depreciation Nick, primarily expenses -- correlated increase increased of was as our and quarter headcount, happened largely during costs, to this is first the share-based process.

We and continue operational structure and to will forward, and efficiency growth. room on improvement. And going cost our improve find our expense sustainable achieve for to we expenses review to try and optimizing focus will costs

the the capital financial announced buyback plan operations, I times company's of make buyback of factors review we we Xunlei, the program stock share will structure, does, in believe asking. action. business has to of Directors like as share share current regarding its will And announcement considering it as if last filed. Xunlei if Board outlook And well buybacks, in March price and the new decide liquidity coming. for And it is Thanks an the

Operator

just our are at to the so for like last [Operator participants give hand moment, no speakers, any moment questions. now Instructions] just over for there to further at remarks. to We'll ask I questions this And time. management would closing the all a the call Dear last

Eric Zhou

conference a website today's day. any Thank ir.xunlei.com, feel and if or you you time call. at our to Relations. good questions, to Have And Thank again have for we e-mail participation. Operator, visit your an conclude please our you. free Investor

Operator

today. That participating. conference does for you our for Thank conclude

Have day. You now all may disconnect. a nice

Xunlei Limited (XNET) 16 May 232023 Q1 Earnings call transcript