Xunlei Limited ("Xunlei" or the "Company") (NASDAQ: XNET), a
leading innovator in shared cloud computing and blockchain
technology in China, today announced its unaudited
financial results for the second quarter ended June 30,
2022.
Second Quarter 2022 Financial Highlights:
- Total revenues
were US$78.3 million, representing a decrease of 1.0% from the
previous quarter.
- Cloud computing revenues
(previously included in cloud computing and other internet value
added services revenue) were US$28.3 million, representing
a decrease of 6.2% from the previous quarter.
- Subscription
revenues were US$25.4 million, representing an increase of
0.2% from the previous quarter.
- Live streaming and other
internet value added services (“Live streaming and other IVAS”)
revenues (including online advertising revenues) were
US$24.5 million, representing an increase of 4.5% from the previous
quarter.
- Gross profit was
US$33.7 million, representing a decrease of 3.2% from the previous
quarter, and gross profit margin was 43.1% in the second quarter,
compared with 44.1% in the previous quarter.
- Net income was
US$6.0 million in the second quarter, compared with US$5.4 million
in the previous quarter.
- Non-GAAP net
income was US$9.8 million in the second quarter, compared
with US$7.2 million in the previous quarter.
- Diluted earnings per
ADS was approximately US$0.09 as compared with US$0.08 per
ADS in the previous quarter.
Mr. Jinbo Li, Chairman and Chief Executive
Officer of Xunlei, stated, "We met our revenue guidance and
delivered expected second quarter performance as our major business
lines generally demonstrated strong resilience in an evolving
environment. In particular, the number of our premium subscribers
reached a record level of 35% of total subscribers, contributing
stable cash flows to fund our growth initiatives. And our cloud
computing business has lately been recognized by several industry
associations for innovation and outstanding contributions to the
industry.""Our business remained relatively stable and delivered
total revenues of down approximately 1% due to change in foreign
exchange rate. During the second quarter, our functional currency
experienced high volatility and devaluation of Renminbi (RMB)
against the US Dollar negatively affected our reported revenue. The
impact of currency devaluation was partially offset by strong
performance of our live audio streaming business. Net income in the
second quarter of 2022 was $6.0 million, a 10.1% increase from the
previous quarter, and represented a second consecutive profitable
quarter. Behind these numbers are our unyielding efforts to enhance
our monetization capabilities and operating efficiency.""Looking
forward, we will continue our strategy of leveraging our
competitive strengths and superior research and development
capabilities to cultivate new sources of revenue to diversify and
accelerate top line growth. We are hopeful that the current
positive momentum will be carried into the second half of this
year. Further, we will closely monitor industry trend and
regulatory development and that take appropriate measures to
preserve and create value for our shareholders," concluded Mr.
Jinbo Li.
Second Quarter 2022 Financial
Results
Total Revenues
Total revenues were US$78.3 million,
representing a decrease of 1.0% from the previous quarter. The
decrease in total revenues was mainly attributable to devaluation
of RMB against US Dollar, partially offset by increased total
revenues in RMB, which was mainly attributable to revenue growths
from our live streaming and other IVAS.
Revenues from cloud computing were US$28.3
million, representing a decrease of 6.2% from the previous quarter.
The decrease of cloud computing revenues was mainly due to
devaluation of exchange rate of RMB against US Dollar as our cloud
computing revenues were denominated in RMB.
Revenues from subscription were US$25.4 million,
representing an increase of 0.2% from the previous quarter. The
number of subscribers was 4.46 million as of June 30, 2022,
compared with 4.61 million as of March 31, 2022. The average
revenue per subscriber for the second quarter was RMB37.8, compared
with RMB34.9 for the previous quarter. The higher average revenue
per subscriber was due to a larger percentage of users opted for
our premium service option.
Revenues from live streaming and other IVAS were
US$24.5 million, representing an increase of 4.5% from the previous
quarter. The increase of live streaming and other IVAS revenues was
mainly due to the increased demand for our new live audio streaming
products which we launched in 2021.
Costs of Revenues
Costs of revenues were US$44.3 million,
representing 56.6% of our total revenues, compared with US$43.9
million or 55.5% of the total revenues in the previous quarter.
Bandwidth costs as included in costs of revenues
were US$25.5 million, representing 32.6% of our total revenues,
compared with US$26.9 million or 34.0% of the total revenues in the
previous quarter.
The remaining costs of revenues mainly consisted
of costs related to the revenue-sharing costs for our live
streaming business and depreciation of servers and other
equipment.
Gross Profit and Gross Profit
Margin
Gross profit for the second quarter was US$33.7
million, representing a decrease of 3.2% from the previous quarter.
Gross profit margin was 43.1% in the second quarter, compared with
44.1% in the previous quarter. The decreases in gross profit and
gross profit margin were mainly due to the increase in payment
handling fees and other operating related costs driven by the
increases of our live streaming and other IVAS revenue and
subscription revenue, which were partially offset by optimization
of gross profit margin of live audio streaming product.
Research and Development
Expenses
Research and development expenses for the second
quarter were US$16.0 million, representing 20.4% of our total
revenues, compared with US$16.3 million or 20.6% of our total
revenues in the previous quarter.
Sales and Marketing
Expenses
Sales and marketing expenses for the second
quarter were US$5.0 million, representing 6.4% of our total
revenues, compared with US$5.3 million or 6.8% of our total
revenues in the previous quarter.
General and Administrative
Expenses
General and administrative expenses for the
second quarter were US$12.0 million, representing 15.4% of our
total revenues, compared with US$9.6 million or 12.2% of our total
revenues in the previous quarter. The increase was primarily due to
the vesting of restricted share units granted to our senior
management which led to the increase in share-based compensation
expenses during this quarter.
Operating Income
Operating income was US$0.7 million, compared
with US$3.9 million in the previous quarter. The decrease in
operating income was primarily due to increased share based
compensation expenses accrued during the second quarter as
discussed above.
Other Income, Net
Other income was US$7.0 million, compared with
other income of US$1.2 million in the previous quarter. The
increase was primarily due to foreign exchange gains and reversal
of certain payables due over three years with low payment
probability.
Net Income/(Loss) and Loss Per
ADS
Net income was US$6.0 million, compared with
US$5.4 million in the previous quarter. Non-GAAP net income was
US$9.8 million in the second quarter of 2022, compared with US$7.2
million in the previous quarter. The increase in net income and
non-GAAP net income was primarily due to the increased other income
as discussed above.
Diluted earnings per ADS in the second quarter
of 2022 was approximately US$0.09 as compared to US$0.08 in the
first quarter of 2022.
Cash Balance
As of June 30, 2022, the Company had cash, cash
equivalents and short-term investments of US$259.9 million,
compared with US$269.9 million as of March 31, 2022. The
decrease in cash and cash equivalents was mainly due to
distribution of 2021 annual employee bonuses in the second quarter
of 2022.
Share Repurchase Program
In March 2022, Xunlei announced that its Board
of Directors authorized the repurchase of up to $20 million of its
outstanding common stocks over the next 12 months. As of June 30,
2022, the aggregate value of purchased shares was approximately
US$1.74 million.
Guidance for Third Quarter of
2022
For the third quarter of 2022, Xunlei estimates
total revenues to be between US$82 million and US$87 million, and
the midpoint of the range represents a quarter-over-quarter
increase of approximately 7.9%. This estimate represents
management's preliminary view as of the date of this press release,
which is subject to change and any change could be material.
Conference Call Information
Due to the outbreak of COVID-19, operator
assisted conference calls are not available at the moment. All
participants wishing to attend the call must preregister online.
Preregistration may require a few minutes to complete. The Company
would like to apologize for any inconvenience caused by not having
an operator as a result of COVID-19.
Participant Online Registration:
https://register.vevent.com/register/BI30a6d6c1081949e994584eb74473acda
Please register to join the conference using the
link provided above and dial in 10 minutes before the call is
scheduled to begin. Once registered, the participants will receive
an email with personal PIN and dial-in information, and
participants can choose to access either via Dial-In or Call Me. A
kindly reminder that "Call Me" does not work for China number.
The Company will also broadcast a live audio
webcast of the conference call. The webcast will be available at
http://ir.xunlei.com. Following the earnings conference call, an
archive of the call will be available at
https://edge.media-server.com/mmc/p/m9e2zu44
About Xunlei
Founded in 2003, Xunlei
Limited (NASDAQ: XNET) is a leading innovator in shared
cloud computing and blockchain technology
in China. Xunlei provides a wide range of products
and services across cloud acceleration, blockchain, shared cloud
computing and digital entertainment to deliver an efficient, smart
and safe internet experience.
Safe Harbor Statement
This press release contains statements of a
forward-looking nature. These statements are made under the "safe
harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. You can identify these forward-looking statements by
terminology such as "will," "expects," "believes," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar
statements. Among other things, the management's quotations, the
"Outlook" and "Guidance" sections in this press release, as well as
the Company's strategic, operational and acquisition plans, contain
forward-looking statements. These forward-looking statements
involve known and unknown risks and uncertainties and are based on
current expectations, assumptions, estimates and projections about
the Company and the industry. Forward-looking statements involve
inherent risks and uncertainties, including but not limited to: the
Company's ability to continue to innovate and provide attractive
products and services to retain and grow its user base; the
Company's ability to keep up with technological developments and
users' changing demands in the internet industry; the Company's
ability to convert its users into subscribers of its premium
services; the Company's ability to deal with existing and potential
copyright infringement claims and other related claims; the risk
that Covid-19 or other health risks in China or globally could
adversely affect the Company's operations or financial results; the
Company’s ability to react to the governmental actions for its
scrutiny of internet content in China and the Company's ability to
compete effectively. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that its expectations will turn
out to be correct, and investors are cautioned that actual results
may differ materially from the anticipated results. Further
information regarding risks and uncertainties faced by the Company
is included in the Company's filings with the U.S. Securities and
Exchange Commission. All information provided in this press release
is as of the date of the press release, and the Company undertakes
no obligation to update any forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its
expectations, except as may be required by law.
About Non-GAAP Financial
Measures
To supplement Xunlei's consolidated financial
results presented in accordance with United States Generally
Accepted Accounting Principles ("GAAP"), Xunlei uses the following
measures defined as non-GAAP financial measures by the United
States Securities and Exchange Commission: (1) non-GAAP operating
income/(loss), (2) non-GAAP net income/(loss) from continuing
operations, (3) non-GAAP basic and diluted earnings per share for
common shares attributable to continuing operations, and (4)
non-GAAP basic and diluted earnings per ADS attributable to
continuing operations. The presentation of the non-GAAP financial
information is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP.
Xunlei believes that these non-GAAP financial
measures provide meaningful supplemental information to investors
regarding the Company's operating performance by excluding
share-based compensation expenses, which is not expected to result
in future cash payments. These non-GAAP financial measures also
facilitate management's internal comparisons to Xunlei's historical
performance and assist the Company's financial and operational
decision making. A limitation of using these non-GAAP financial
measures is that these non-GAAP measures exclude share-based
compensation charge that has been and will continue to be for the
foreseeable future a significant recurring expense in Xunlei's
results of operations. Management compensates for these limitations
by providing specific information regarding the GAAP amounts
excluded from each non-GAAP measure. The accompanying
reconciliation tables at the end of this release include details on
the reconciliations between GAAP financial measures that are most
directly comparable to the non-GAAP financial measures the Company
has presented.
|
XUNLEI
LIMITED |
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS |
(Amounts expressed
in thousands of USD, except for share, per share (or ADS)
data) |
|
|
June 30, |
December 31, |
|
2022 |
2021 |
|
US$ |
US$ |
Assets |
|
|
|
|
|
Current assets: |
|
|
Cash and
cash equivalents |
129,742 |
123,358 |
Short-term
investments |
130,166 |
115,652 |
Accounts
receivable, net |
27,196 |
26,135 |
Inventories |
604 |
1,363 |
Due from
related parties |
11,708 |
15,578 |
Prepayments
and other current assets |
6,167 |
11,842 |
Total current assets |
305,583 |
293,928 |
Non-current assets: |
|
|
Restricted
cash |
3,874 |
4,078 |
Long-term
investments |
31,013 |
31,495 |
Property and
equipment, net |
57,743 |
57,657 |
Intangible
assets, net |
7,345 |
8,299 |
Goodwill |
21,978 |
23,136 |
Due from a
related party, non-current portion |
19,311 |
19,311 |
Long-term
prepayments and other assets |
3,005 |
2,787 |
Right-of-use
assets |
15 |
27 |
Total assets |
449,867 |
440,718 |
|
|
|
Liabilities |
|
|
Current liabilities: |
|
|
Accounts
payable |
25,978 |
26,407 |
Due to
related parties |
1,777 |
1,597 |
Contract
liabilities and deferred income, current portion |
36,769 |
36,892 |
Lease
liabilities |
10 |
18 |
Income tax
payable |
4,398 |
2,531 |
Accrued
liabilities and other payables |
36,717 |
49,557 |
Bank
borrowings, non-current portion |
7,087 |
2,876 |
Total current liabilities |
112,736 |
119,878 |
|
|
|
Non-current liabilities: |
|
|
Contract
liabilities and deferred income, non-current portion |
731 |
845 |
Lease
liabilities, non-current portion |
2 |
7 |
Deferred tax
liabilities |
798 |
930 |
Bank
borrowings, non-current portion |
28,198 |
17,291 |
Total liabilities |
142,465 |
138,951 |
|
|
|
Equity |
|
|
Common
shares (US$0.00025 par value, 1,000,000,000 shares authorized,
368,877,205 shares issued and 337,257,946 shares outstanding as at
December 31, 2021; 368,877,205 issued and 340,295,846 shares
outstanding as at June 30, 2022) |
85 |
84 |
Additional
paid-in-capital |
479,935 |
476,057 |
Accumulated
other comprehensive(loss)/income |
(7,872) |
1,988 |
Statutory
reserves |
6,155 |
6,155 |
Treasury
shares (31,619,259 shares and 28,581,359 shares as at December 31,
2021 and June 30, 2022, respectively) |
7 |
8 |
Accumulated
deficits |
(169,162) |
(180,645) |
Total Xunlei Limited's shareholders' equity |
309,148 |
303,647 |
Non-controlling interests |
(1,746) |
(1,880) |
Total liabilities and shareholders' equity |
449,867 |
440,718 |
|
|
|
XUNLEI LIMITED |
Unaudited Condensed Consolidated Statements of
Income |
(Amounts expressed in thousands of USD, except for share, per share
(or ADS) data) |
|
|
Three months ended |
|
|
|
Jun 30, |
Mar 31, |
Jun 30, |
|
2022 |
2022 |
2021 |
|
US$ |
US$ |
US$ |
Revenues, net of rebates and discounts |
78,271 |
|
79,047 |
|
55,172 |
|
Business taxes and
surcharges |
(251) |
|
(280) |
|
(29) |
|
Net revenues |
78,020 |
|
78,767 |
|
55,143 |
|
Costs of revenues |
(44,282) |
|
(43,900) |
|
(26,179) |
|
Gross
profit |
33,738 |
|
34,867 |
|
28,964 |
|
|
|
|
|
Operating
expenses |
|
|
|
Research and development
expenses |
(15,978) |
|
(16,307) |
|
(15,195) |
|
Sales and marketing
expenses |
(5,032) |
|
(5,349) |
|
(6,697) |
|
General and administrative
expenses |
(12,018) |
|
(9,646) |
|
(7,708) |
|
Credit loss expenses, net of
recoveries |
26 |
|
300 |
|
(483) |
|
Total operating
expenses |
(33,002) |
|
(31,002) |
|
(30,083) |
|
|
|
|
|
Operating
income/(loss) |
736 |
|
3,865 |
|
(1,119) |
|
Interest income |
308 |
|
410 |
|
143 |
|
Interest expense |
(23) |
|
(23) |
|
(23) |
|
Other income, net |
6,979 |
|
1,194 |
|
885 |
|
Income/(loss) before
income taxes |
8,000 |
|
5,446 |
|
(114) |
|
Income tax
(expenses)/benefits |
(2,002) |
|
(16) |
|
120 |
|
Net
income |
5,998 |
|
5,430 |
|
6 |
|
Less: net loss attributable to
non-controlling interest |
(19) |
|
(36) |
|
(10) |
|
Net income
attributable to common shareholders |
6,017 |
|
5,466 |
|
16 |
|
Earnings per share for
common shares |
|
|
|
Basic |
0.0177 |
|
0.0162 |
|
0.0000 |
|
Diluted |
0.0177 |
|
0.0162 |
|
0.0000 |
|
|
|
|
|
Earnings per
ADS |
|
|
|
Basic |
0.0885 |
|
0.0810 |
|
0.0000 |
|
Diluted |
0.0885 |
|
0.0810 |
|
0.0000 |
|
|
|
|
|
Weighted average
number of common shares used in calculating: |
|
|
|
Basic |
339,514,188 |
|
337,259,835 |
|
334,656,399 |
|
Diluted |
339,624,412 |
|
337,259,835 |
|
342,804,044 |
|
|
|
|
|
Weighted average
number of ADSs used in calculating: |
|
|
|
Basic |
67,902,838 |
|
67,451,967 |
|
66,931,280 |
|
Diluted |
67,924,882 |
|
67,451,967 |
|
68,560,809 |
|
|
|
|
|
XUNLEI
LIMITED |
Reconciliation of
GAAP and Non-GAAP Results |
(Amounts expressed
in thousands of USD, except for share, per share (or ADS)
data) |
|
|
Three months ended |
|
|
|
Jun
30, |
Mar
31, |
Jun
30, |
|
2022 |
2022 |
2021 |
|
US$ |
US$ |
US$ |
|
|
|
|
GAAP
operating income/(loss) |
736 |
3,865 |
(1,119) |
Share-based
compensation expenses |
3,828 |
1,785 |
1,248 |
Non-GAAP operating income |
4,564 |
5,650 |
129 |
|
|
|
|
GAAP net
income |
5,998 |
5,430 |
6 |
Share-based
compensation expenses |
3,828 |
1,785 |
1,248 |
Non-GAAP net income |
9,826 |
7,215 |
1,254 |
|
|
|
|
GAAP
earnings per share for common shares: |
|
|
|
Basic |
0.0177 |
0.0162 |
0.0000 |
Diluted |
0.0177 |
0.0162 |
0.0000 |
|
|
|
|
GAAP
earnings per ADS: |
|
|
|
Basic |
0.0885 |
0.0810 |
0.0000 |
Diluted |
0.0885 |
0.0810 |
0.0000 |
|
|
|
|
Non-GAAP earnings per share for common
shares: |
|
|
|
Basic |
0.0290 |
0.0215 |
0.0038 |
Diluted |
0.0290 |
0.0215 |
0.0037 |
|
|
|
|
Non-GAAP earnings per ADS: |
|
|
|
Basic |
0.1450 |
0.1075 |
0.0190 |
Diluted |
0.1450 |
0.1075 |
0.0185 |
|
|
|
|
Weighted average number of common shares used in
calculating: |
|
|
|
Basic |
339,514,188 |
337,259,835 |
334,656,399 |
Diluted |
339,624,412 |
337,259,835 |
342,804,044 |
|
|
|
|
Weighted average number of ADSs used in
calculating: |
|
|
|
Basic |
67,902,838 |
67,451,967 |
66,931,280 |
Diluted |
67,924,882 |
67,451,967 |
68,560,809 |
CONTACT:Investor RelationsXunlei LimitedEmail:
ir@xunlei.comTel: +86 755 8633 8443Website:
http://ir.xunlei.com
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