Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

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

You've joined Xunlei's 2023 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. 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. Tang. Luhan

Luhan Tang

good quarter thank earnings and Xunlei's for everyone, second XXXX conference morning, you, you and joining Thank call.

Vice On are the of [indiscernible] Eric today Finance. President Zhou, Chief call Financial Officer; with me and

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

Mr. with Chairman CFO, first our guidance Jinbo you you Investor the call to Mr. Li walk our highlight of welcome wrap For call our third will Relations prepared the the remarks up CEO, like the read today's details agenda, can replay our website on financial from and opening questions Today's quarter revenue Eric and in operations. quarter After of you recorded, our XXXX. any through results Then we'd from Q&A second the our will I ir.xunlei.com. behalf Zhou, of our remarks, at management on on and session. for is

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

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

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

Jinbo Li

our to the second $XXX.X for call, to up with your and $X thanks Good a and a despite million we our of support, XXXX XX.X% domestic income. business, compared total conference a earnings quarter quarter second revenue challenges strong morning, welcome million, last to everyone, lot automation (ph) the delivered and in ongoing net year

top line our segments, base operational three evolving well amidst ever was across an balanced demonstrating Our growth resilience environment. business

We economies to in management. evidence This also profit achieved of and the margin. gross as a improved and capitalize XX.X% serves on enhanced scale efforts of dedicated our year-over-year gross operations growth profit of

Now subscriber trend I Subscription would premium conversion of like this to among to in year-over-year segments. revenue, consistent add generated increase. the which quarter we In second in a last $XX.X from our of the all performance observed XX% three Throughout upward business each business in XX.X% million second subscribers. period, some rate, reflecting a to the XX.X% quarter paying color to the of rose quarter this year XXXX,

average RMBXX.X increased period to XXXX. compared same from the RMBXX.X Additionally, the subscriber in per to revenue

accordingly. ideas we keep And results. and secure and as yielded and gained we retention continue the of convenient, of growth to needs understanding boosted that quick providing on has new products. and our focus additional users' unwavering our that existing valuable innovating and the subscription will by team On engaging on glad through business encouraging the rates out expect carried I'm access momentum exploring initiatives I that, top testing

shared competitive its our Computing edge Despite to strong clients. reliable, and competition, utilized business effectively in scalable technology deliver to our cost effective cloud Cloud services

quarter outperformed during $XX.X of the increased in of our computing second device technology OEC growth smart revenue X.X% of generated pursuing of the million brought generation new year-over-year result, hardware product sales cloud primary to business and this XXXX. in integrating rewards under sustainable intend As users, features earlier a as we similar quarter we keep achieved conditions factor higher second a development. our and The and and version growth while to this fueling was

driver value a added Internet growth, key our contributed Live increase Streaming million. of XX.X% revenue, and a significant $XX.X As other to reaching in services

and the of challenges second its domestic quarter during encountered live by XXXX, the streaming operations. industry our audio environment However, we evolving posted for downsized business proactively

of half reallocate further to significantly and our line will the streaming resources We Computing opportunities unaffected. this second businesses adjustment. the impact that domestic will the and intend our We We quarters. upcoming of the in in the new reduce offset to business to intended the live Cloud revenue remain downsizing services anticipate this year. Whereas Subscription downsize of business explore

remarks. and is products my technological to Wrapping and our and Xunlei advancing innovation for services core top-notch delivering committed clients users. up

With keep long-term operating edge performance, legalizing firmly chain that will drive of while a emerge a endeavor create the technical We seek position of financial company. record strengths track expand we and will opportunities harnessing positioned shareholder We the proven our maintain years sustainable product experience growth. and know-how a to believe competitive growth and focused to value strong our from and and as current Xunlei future more value. managerial

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

Eric Zhou

quarter thank you and revenue results and our for Thank the Xunlei's wrap up conference you, details earnings XXXX. third our joining will the everyone, through XXXX second financial guidance for Hello, I with you, of (ph) call. quarter of Jinbo. walk again

the in during higher were devices quarter $XX.X second computing XX.X%. of Computing Cloud performance in the million, attributed enhanced for Streaming, XXXX, primarily year-on-year of of For the to Live cloud compared cloud sales last The Subscription second total of by from increase Revenues hardware revenues and quarter. an million, computing representing increase our revenues X.X% $XXX.X to business. were revenues of reached computing increase mainly quarter driven representing this of year. a The cloud increase

to was subscription increased Revenues to compared increase last period average when an solid and of were both a subscribers subscriber XX% revenue per representing million, from number year. This same $XX.X higher year-over-year. the attributed growth

up had June XX, total X.XX of from we million on subscribers, a As of million XX, June XXXX. $X.XX XXXX,

increase Live services. streaming million, other streaming were for year-over-year. premium driven In and This of period Internet each in RMBXX.X revenue IVAS cloud the significantly of than alone, the cloud more and same increase is our year. due higher users last demand quarter of IVAS revenues of XX.X% in average million, which subscriber is by was an from growth Streaming membership. Revenues services value-added or second during per $XX.X The to opted an for XXXX RMBXX.X primarily other mainly average increase higher revenue subscriber

revenues this new our release, mentioned audio mitigate this revenues our segment second total we we quarter, experience press started impact a a downsize sequentially our will opportunities. strengthen in strive we we from the services to our decline As in to and existing result, as product And domestic in live expect significant will the on streaming third to and quarter. explore lines

costs computing the our were representing $XX.X or revenues live in attributable period our streaming and revenues revenues compared cloud services increase XX.X% same higher XXXX. total million, of of of million with XX.X% of sales The primarily Cost $XX.X from total products. trough was in and subscription the the

the million cost XX.X% XXXX. XX.X% revenues The period were Bandwidth total our in of in compared $XX.X bandwidth $XX.X was million of revenues same total in of revenues with hardware increase cost costs increased representing of as computing the included mainly computing fees consisted our revenue handling driven remaining of costs live cloud devices. of by the of costs cost payment to demand cloud for and revenues The for business, a services. related mainly sharing or streaming

XX% million, $XX.X and profit the slight in XXXX, Live previous of increase for gross XXXX in in in was XX.X% XX.X% year. was in our a gross from the The the profit improvement profit expecting quarter second reached profit gross to attributable same reflecting growth a XXXX. margin to the of Subscription business. compared second Furthermore, the period gross during the of quarter primarily Streaming increase This significant

period $XX.X Research second the revenues of XXXX total of of activities $X XXXX. in $XX more Sales for same user were of total was quarter or million in representing million, the labor frequent our due The The our XXXX. to X.X% revenues period our total and XX.X% our the XX.X% costs quarter. due increase with was this revenues of during compared marketing of quarter Development resulting and million of were primarily higher compared $XX.X or ongoing of same with for million the total to incurred XX.X% revenues increase representing expenses from XXXX efforts. second expenses primarily acquisition marketing

of Xunlei's revenues was total December the the to to the for or $XX of building XX.X% our expenses construction we new of million as due of XX.X% period our of and revenues in compared in $XX.X XXXX. million second the increase the depreciation same in primarily G&A increase were headquarters or XXXX with total finished The headquarters quarter XXXX. relocated

same compared period due same years of as in reversal than due Other income $X the in of with XXXX. million certain to period million was XXXX. compared the Operating compared with million the more decrease was income $X.X less mainly was probability The $X.X other with period with same of million income in of $X.X payables XXXX. low three payment

net decrease compared of same (ph) XXXX. $X.X was primarily income XXXX. $X.X in income decreased Non-GAAP million the attributable with XXXX the million of the and in with second above. $X income net was compared in as income of same other non-GAAP net quarter million period discussed Net in The was $X to million the income period

second was approximately in the XXXX. of compared ADS with earnings same of quarter the in period Diluted $X.XX XXXX as per $X.XX

the of compared and from and The repayment cash with partially cash, primarily company the dollar. cash investments during as against XXXX, in of share buybacks XX, positive the short-term cash, XX, devaluation this Chinese quarter of and June of March loans, million cash inflows equivalents bank investments $XXX.X RMB $XXX.X increase short-term equivalents As offset million had net resulted XXXX. of of the expenditures on U.S. by

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

spent XXXX repurchase buybacks As the new approximately under the share on has June XX, of million share $X company program.

guidance. to Turning revenue our

affected. between total to as XXXX, stream and and This businesses preliminary is change increased the For our the $XX the represents quarter-over-quarter impact represents not computing in Xunlei and domestic the subject the be third of revenues decrease XX.X%. a continued estimate which of management's of the decline business of press largely of any and midpoint quarter this view million, is material. release, range cloud operations million downsizing subscription date to of are due live The could $XX of a the of the approximately change whereas estimates

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

Operator

from first question. Our your Instructions] [Operator with ahead go Jack Retail you. Please question comes (ph). Investor, Thank Lu

Unidentified Participant

Language] [Foreign

business audio like streaming business and caller for company live like revenue what's total the Thanks And and of revenue its overall asked is impact the domestic to at in the of would question. to know streaming downsizing, anticipated he'd looks percentage business the live downsizing plans [Interpreted] to to know for future whether the the he continue Xunlei And domestic also its the the that he future. revenues. the that audio,

Eric Zhou

quarter I'd domestic anticipate the we quarter, our live the of business second streaming first audio in year And IVAS second low streaming of half live the XX.X% operations. we and the unaffected. third XX.X% Cloud gross our to going steaming quarter assess for domestic remains downsize accounted to And total business approximately for margin downsizing In with business. we our Computing to said, continue mention our and in about improve started of and that will business live continue the Thankyou. the and Subscription as this to revenues declining the like business compared forward, and total to relatively that revenues a may

Unidentified Participant

Language] [Foreign

Operator

There are further time. Thank at no you. questions this

Eric So the back remarks. Zhou call I'll closing hand to for

Eric Zhou

e-mails for Well, ir.xunlei.com, thank please have today's good call. at day. again Have Operator, our visit questions, participation. a Thank and if send investor our And relations. conference conclude to your you, you. any we website you time or

Operator

This concludes for participating. today's conference call. Thank you

You may please disconnect. standby. now Speakers,

Xunlei Limited (XNET) 15 Aug 232023 Q2 Earnings call transcript