- Cloud computing revenues increased by 107.8% on a
year-over-year basis.- Mobile advertising revenues increased by
41.6% on a year-over-year basis.
Xunlei Limited (“Xunlei” or the “Company”) (Nasdaq:XNET), a leading
cloud-based acceleration technology company in China, today
announced its unaudited financial results for the second quarter
ended June 30, 2017.
Mr. Lei Chen, Chief Executive Officer of Xunlei,
commented: “We are pleased to deliver solid progress in the second
quarter, particularly in cloud computing and mobile
advertising. In addition, our receipt of a value added
telecommunications services license additionally covering CDN
services issued by the Ministry of Industry and Information
Technology of the People's Republic of China is a further testimony
of the potential viability of our technology and regulatory
support. We are committed to continue our endeavor in cloud
computing technology as a cornerstone strategy to grow our
business.”
Second Quarter 2017 Financial
Highlights
- Total revenues were US$41.5 million, an 8.9%
increase from the corresponding period of last year and up 4.9%
from the previous quarter.
- Online advertising revenues (revenues primarily from
mobile advertising) were US$5.2 million, a 38.2% increase
from the corresponding period of last year and a 38.2% increase
from the previous quarter.
- Other internet value-added services (“IVAS”)
revenues were US$15.7 million, a 33.8% increase
from the corresponding period of last year and a 4.7% increase from
the previous quarter. IVAS consists of cloud computing and services
other than subscription and advertising.
Second Quarter 2017 Results
Total Revenues
Total revenues were US$41.5 million, up 8.9% on a
year-over-year basis and increase 4.9% sequentially. The increase
in total revenues on a year-over-year basis was mainly attributable
to the growths of cloud computing and mobile advertising.
Subscription: Revenues from subscriptions were
US$20.6 million, down 8.8% on a year-over-year basis and down 1.1%
sequentially. The decrease in subscription revenue was primarily
attributable to decline in the number of subscribers. The number of
subscribers1 was 4.09 million as of June 30, 2017, essentially flat
from 4.08 million as of March 31, 2017 but down from 4.55 million
as of June 30, 2016. The average revenue per subscriber for the
second quarter was RMB34.4, down from RMB35.1 as of March 31, 2017,
but up from RMB32.6 as of June 30, 2016.
Online advertising (including mobile advertising):
Revenues from online advertising were US$5.2 million, up 38.2% both
on a year-over-year basis and sequentially. Mobile advertising
revenue increased 41.6% on a year-over-year basis.
IVAS: Revenues from IVAS (including revenues from
cloud computing) were US$15.7 million, up 33.8% on a year-over-year
basis and up 4.7% sequentially. Cloud computing revenues grew by
107.8% and 11.7% on a year-over-year basis and sequentially,
respectively.
Cost of Revenues
Cost of revenues was US$24.2 million, representing
58.4% of total revenues.
Bandwidth costs: Bandwidth costs were US$18.8
million, representing 45.3% of total revenues, compared with 45.0%
in the previous quarter.
Gross Profit and Gross Margin
Gross profit for the second quarter was US$17.1
million, up 5.5% sequentially. Gross margin was 41.1%, compared
with 40.8% in the previous quarter.
Operating Expenses
Total operating expenses for the second quarter
were US$28.3 million, representing 68.2% of total revenues,
compared with 66.6% in the previous quarter.
Research and Development
Expenses
Research and development expenses for the second
quarter were US$15.4 million, representing 37.2% of total revenues,
compared with 41.6% in the previous quarter.
Sales and Marketing Expenses
Sales and marketing expenses for the second quarter
were US$4.6 million, representing 11.1% of total revenues, compared
with 6.7% in the previous quarter.
General and Administrative
Expenses
General and administrative expenses for the second
quarter were US$8.3 million, representing 19.9% of total revenues,
compared with 18.3% in the previous quarter.
Operating Loss
Operating loss was US$11.3 million, compared with
operating loss of US$10.2 million in the previous quarter. The
company continues to invest in a range of new technologies and
services, including cloud computing, which is still
loss-making.
Net Loss
and Loss Per Share
Net loss from continuing operations was US$9.7
million in the second quarter of 2017, compared with US$6.7 million
in the previous quarter. Non-GAAP net loss from continuing
operations was US$7.5 million in the second quarter of 2017,
compared with a loss of US$4.4 million in the previous quarter.
Diluted loss per ADS from continuing operations in
the second quarter of 2017 was US$0.1460. Non-GAAP diluted loss
from continuing operations per ADS in the second quarter of 2017
was US$0.1135.
Cash Balance
As of June 30, 2017, the Company had cash, cash
equivalents and short-term investments of US$364.8 million,
compared with US$381.5 million as of December 31, 2016. The decline
in the aggregate balances of cash and cash equivalents and
short-term investments was primarily due to operating loss during
the period.
Guidance for
Third Quarter
2017
For the third quarter 2017, Xunlei estimates total
revenues to be between US$41 million to US$44 million, the midpoint
of the range representing a year-over-year increase of 3.9%. This
estimate represents management’s preliminary view as of the date of
this release, which is subject to change and any change could be
material.
Conference Call Details
Xunlei's management will host a conference call at
9:00 p.m. U.S. Eastern Time on August 16, 2017 (9:00 a.m.
Beijing/Hong Kong Time on August 17, 2017), to discuss its
quarterly results and recent business activities.
To participate in the conference call, please dial
the following number five to ten minutes prior to the scheduled
conference call time:
China: |
400-120-0654 |
Hong
Kong: |
+
852-3018-6776 |
United
States: |
+1-855-500-8701 |
International: |
+65
6713-5440 |
Passcode: |
64929664 |
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 by dialing:
China: |
400-602-2065 |
Hong
Kong: |
800-963-117 |
United
States: |
+1-855-452-5696 |
International: |
+61-2-9003-4211 |
Replay
Passcode: |
64929664 |
Replay
End Date: |
August
25, 2017 |
About Xunlei
Xunlei Limited ("Xunlei") is a leading cloud-based
acceleration technology company in China. Xunlei operates a
powerful internet platform in China based on cloud computing to
provide users with quick and easy access to digital media content
through its core products and services, Xunlei Accelerator and the
cloud acceleration subscription services. Xunlei is increasingly
extending into mobile devices in part through potentially
pre-installed acceleration products in mobile phones. Benefitting
from the large user base accumulated by Xunlei Accelerator, Xunlei
has further developed various value-added services to meet a fuller
spectrum of its users' digital media content access and consumption
needs.
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
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.
___________________
1 The calculation is based on the number of users
who can assess our premium acceleration services, including
accounts temporarily suspended but excluding sub-accounts and
accounts on a trial basis. In order to promote customer loyalty, we
may elevate the VIP levels of our subscribers if they actively
engage in our services, for example, frequently participating in
reviewing and rating of our products. Once upgraded to certain
higher VIP levels, our subscribers may be offered additional
independent accounts, internally termed as sub-accounts. Such
sub-accounts allow users to access to our premium acceleration
services, at no additional charges. Average revenues per subscriber
refer to subscription revenues for the quarter divided by the
number of subscriber as of the quarter end.
|
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, |
|
2017 |
2016 |
|
US$ |
US$ |
Assets |
|
|
|
|
|
Current assets: |
|
|
Cash
and cash equivalents |
118,560 |
|
199,504 |
|
Short-term investments |
246,287 |
|
181,960 |
|
Accounts receivable, net |
23,336 |
|
14,536 |
|
Inventories |
315 |
|
374 |
|
Deferred tax assets |
- |
|
1,221 |
|
Due
from related parties |
359 |
|
1,097 |
|
Prepayments and other current assets |
13,401 |
|
13,593 |
|
Total current assets |
402,258 |
|
412,285 |
|
|
|
|
Non-current assets: |
|
|
Long-term investments |
41,342 |
|
40,792 |
|
Deferred tax assets |
5,126 |
|
3,272 |
|
Property and equipment, net |
24,081 |
|
21,016 |
|
Intangible assets, net |
10,605 |
|
10,746 |
|
Goodwill |
20,989 |
|
20,497 |
|
Other
long-term prepayments and receivables |
926 |
|
1,187 |
|
Total assets |
505,327 |
|
509,795 |
|
|
|
|
Liabilities |
|
|
Current liabilities: |
|
|
Accounts payable |
43,625 |
|
33,376 |
|
Due
to a related party |
13 |
|
45 |
|
Deferred revenue and income, current portion |
25,279 |
|
24,532 |
|
Income tax payable |
4,095 |
|
2,321 |
|
Accrued liabilities and other payables |
25,743 |
|
33,131 |
|
Total current liabilities |
98,755 |
|
93,405 |
|
|
|
|
Non-current liabilities: |
|
|
Deferred revenue and income |
4,314 |
|
4,082 |
|
Deferred tax liability, non-current portion |
- |
|
635 |
|
Due
to related parties, non-current portion |
4,637 |
|
4,537 |
|
Other
long-term payable |
905 |
|
886 |
|
Total liabilities |
108,611 |
|
103,545 |
|
|
|
|
Equity |
|
|
Common shares (USD0.00025 par value, 1,000,000,000 shares
authorized, 368,877,209 shares issued and 330,545,000 shares
outstanding as at December 31, 2016; 368,877,209 issued and
332,076,650 shares outstanding as at June 30, 2017) |
83 |
|
83 |
|
Additional paid-in-capital |
457,485 |
|
453,347 |
|
Accumulated other comprehensive loss |
(10,838 |
) |
(13,629 |
) |
Statutory reserves |
5,132 |
|
5,132 |
|
Treasury shares (38,332,209 shares and 36,800,559 shares as at
December 31, 2016 and June 30, 2017, respectively) |
9 |
|
9 |
|
Accumulated deficits |
(53,106 |
) |
(36,704 |
) |
Total Xunlei Limited's shareholders' equity |
398,765 |
|
408,238 |
|
Non-controlling interests |
(2,049 |
) |
(1,988 |
) |
Total liabilities and shareholders' equity |
505,327 |
|
509,795 |
|
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, |
Jun 30, |
Mar 31, |
|
2017 |
2016 |
2017 |
|
US$ |
US$ |
US$ |
Revenues, net of rebates and discounts |
41,519 |
|
38,113 |
|
39,597 |
|
Business taxes and surcharges |
(238 |
) |
(177 |
) |
(153 |
) |
Net
revenues |
41,281 |
|
37,936 |
|
39,444 |
|
Cost
of revenues |
(24,228 |
) |
(18,637 |
) |
(23,282 |
) |
Gross profit |
17,053 |
|
19,299 |
|
16,162 |
|
|
|
|
|
Operating expenses |
|
|
|
Research and development expenses |
(15,425 |
) |
(13,117 |
) |
(16,485 |
) |
Sales
and marketing expenses |
(4,623 |
) |
(4,999 |
) |
(2,656 |
) |
General and administrative expenses |
(8,262 |
) |
(5,969 |
) |
(7,248 |
) |
Total operating expenses |
(28,310 |
) |
(24,085 |
) |
(26,389 |
) |
|
|
|
|
Operating loss |
(11,257 |
) |
(4,786 |
) |
(10,227 |
) |
Interest income |
485 |
|
547 |
|
624 |
|
Interest expense |
(60 |
) |
(60 |
) |
(60 |
) |
Other
income, net |
1,648 |
|
1,659 |
|
3,331 |
|
Share of
income/(loss) from equity investee |
(140 |
) |
57 |
|
(93 |
) |
Loss from continuing operations before income
taxes |
(9,324 |
) |
(2,583 |
) |
(6,425 |
) |
Income tax expense |
(351 |
) |
(1,459 |
) |
(290 |
) |
Net loss from continuing operations |
(9,675 |
) |
(4,042 |
) |
(6,715 |
) |
|
|
Discontinued operations |
|
|
|
Loss
from discontinued operations before income taxes |
- |
|
(68 |
) |
- |
|
Income tax benefit |
- |
|
10 |
|
- |
|
Net loss from discontinued operations |
- |
|
(58 |
) |
- |
|
|
|
|
|
Net loss |
(9,675 |
) |
(4,100 |
) |
(6,715 |
) |
Less:
net profit/(loss) attributable to non-controlling interest |
7 |
|
(8 |
) |
5 |
|
Net loss attributable to common shareholders |
(9,682 |
) |
(4,092 |
) |
(6,720 |
) |
|
|
|
|
|
|
|
Three months ended |
|
Jun 30, |
Jun 30, |
Mar 31, |
|
2017 |
2016 |
2017 |
|
US$ |
US$ |
US$ |
Loss per share for common shares, basic |
|
|
|
Continuing operations |
(0.0292 |
) |
(0.0120 |
) |
(0.0203 |
) |
Discontinued operations |
- |
|
(0.0002 |
) |
- |
|
Total
loss per share for common shares, basic |
(0.0292 |
) |
(0.0122 |
) |
(0.0203 |
) |
|
|
|
|
Loss per share for common shares, diluted |
|
|
|
Continuing operations |
(0.0292 |
) |
(0.0120 |
) |
(0.0203 |
) |
Discontinued operations |
- |
|
(0.0002 |
) |
- |
|
Total
loss per share for common shares, diluted |
(0.0292 |
) |
(0.0122 |
) |
(0.0203 |
) |
|
|
|
|
Loss per ADS, basic |
|
|
|
Continuing operations |
(0.1460 |
) |
(0.0600 |
) |
(0.1015 |
) |
Discontinued operations |
- |
|
(0.0010 |
) |
- |
|
Total
loss per ADS, basic |
(0.1460 |
) |
(0.0610 |
) |
(0.1015 |
) |
|
|
|
|
Loss per ADS, diluted |
|
|
|
Continuing operations |
(0.1460 |
) |
(0.0600 |
) |
(0.1015 |
) |
Discontinued operations |
- |
|
(0.0010 |
) |
- |
|
Total
loss per ADS, diluted |
(0.1460 |
) |
(0.0610 |
) |
(0.1015 |
) |
|
|
|
|
Weighted average number of common shares used in
calculating continuing operations: |
|
|
|
Basic |
331,069,120 |
|
335,716,857 |
|
330,565,587 |
|
Diluted |
331,069,120 |
|
335,716,857 |
|
330,565,587 |
|
|
|
|
|
Weighted average number of ADSs used in calculating
continuing operations : |
|
|
|
Basic |
66,213,824 |
|
67,143,371 |
|
66,113,117 |
|
Diluted |
66,213,824 |
|
67,143,371 |
|
66,113,117 |
|
|
|
|
|
|
XUNLEI LIMITED |
Reconciliation of GAAP and Non-GAAP Results (Excluding
discontinued operations) |
(Amounts expressed in thousands of USD, except for
share, per share (or ADS) data) |
|
|
Three months ended |
|
Jun 30, |
Jun 30, |
Mar 31, |
|
2017 |
2016 |
2017 |
|
US$ |
US$ |
US$ |
|
|
|
|
GAAP
operating loss |
(11,257 |
) |
(4,786 |
) |
(10,227 |
) |
Share-based compensation expenses |
2,172 |
|
2,033 |
|
2,325 |
|
Non-GAAP operating loss |
(9,085 |
) |
(2,753 |
) |
(7,902 |
) |
|
|
|
|
GAAP
net loss from continuing operations |
(9,675 |
) |
(4,042 |
) |
(6,715 |
) |
Share-based compensation expenses |
2,172 |
|
2,033 |
|
2,325 |
|
Non-GAAP net loss from continuing operations |
(7,503 |
) |
(2,009 |
) |
(4,390 |
) |
|
|
|
|
GAAP loss per share for common shares attributable to
continuing operations: |
|
|
|
Basic |
(0.0292 |
) |
(0.0120 |
) |
(0.0203 |
) |
Diluted |
(0.0292 |
) |
(0.0120 |
) |
(0.0203 |
) |
|
|
|
|
GAAP loss per ADS attributable to continuing
operations: |
|
|
|
Basic |
(0.1460 |
) |
(0.0600 |
) |
(0.1015 |
) |
Diluted |
(0.1460 |
) |
(0.0600 |
) |
(0.1015 |
) |
|
|
|
|
Non-GAAP loss per share for common shares attributable to
continuing operations: |
|
|
|
Basic |
(0.0227 |
) |
(0.0060 |
) |
(0.0133 |
) |
Diluted |
(0.0227 |
) |
(0.0060 |
) |
(0.0133 |
) |
|
|
|
|
Non-GAAP loss per ADS attributable to continuing
operations: |
|
|
|
Basic |
(0.1135 |
) |
(0.0300 |
) |
(0.0665 |
) |
Diluted |
(0.1135 |
) |
(0.0300 |
) |
(0.0665 |
) |
|
|
|
|
Weighted average number of common shares used in
calculating: |
|
|
|
Basic |
331,069,120 |
|
335,716,857 |
|
330,565,587 |
|
Diluted |
330,069,120 |
|
335,716,857 |
|
330,565,587 |
|
|
|
|
|
Weighted average number of ADSs used in
calculating: |
|
|
|
Basic |
66,213,824 |
|
67,143,371 |
|
66,113,117 |
|
Diluted |
66,213,824 |
|
67,143,371 |
|
66,113,117 |
|
CONTACT: IR Contact:
Xunlei Limited
Email: ir@xunlei.com
Tel: +86 755 26035888-8893
Website: http://ir.xunlei.com
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