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 first quarter ended March 31, 2019.
First Quarter 2019 Financial
Highlights:
- Total revenues
were US$41.3 million, representing a decrease of 2.3% from the
previous quarter.
- Cloud computing and other
internet value-added services (“Cloud computing and IVAS”)
revenues were US$16.0 million, representing a decrease of
11.4% from the previous quarter. The revenues from cloud computing
and IVAS mainly represented CDN sales, cloud product revenue and
live video streaming revenue. The decrease was mainly due to a
significant drop in live video streaming revenue during the quarter
as Chinese New Year was usually a slow season for our live video
streaming business.
- Subscription
revenues were US$21.2 million, representing an increase of
16.1% from the previous quarter. The increase in subscription
revenues was mainly attributable to an increased number of
subscribers as a result of improved services towards subscribers as
well as seasonal marketing and promotion activities launched during
the quarter.
- Online advertising
revenues (consisting primarily of revenues from mobile
advertising) were US$4.1 million, representing a decrease of 30.8%
from the previous quarter. The decrease was mainly due to a
decreased demand for our online advertising primarily from the
mobile gaming industry during the quarter.
- Gross profit was
US$21.2 million, representing an increase of 13.0% from the
previous quarter. Gross margin was 51.2% in the first quarter of
2019, compared with 44.3% in the previous quarter.
- Net loss from
continuing operations was US$8.6 million in the first quarter of
2019, compared with a net loss of US$32.4 million in the previous
quarter.
- Diluted loss per
ADS from continuing operations was US$0.13 as compared
with a diluted loss of US$0.48 in the previous quarter.
Recent Developments:
- Provided StellarCloud’s IaaS
services for Youku, one of the top video websites in
China;
- Entered into a contract with an
enterprise to aggregate idle computing resources from
business-class networking devices for our shared cloud computing
services;
- Provided technical services to the
Copyright Protection Center of China to build a
blockchain-powered digital copyright identifier system,
particularly in the area of the copyright registration of fine arts
and photographic works;
- Selected by Guangdong South New
Media Co., Ltd. (Shenzhen Stock Exchange: 300770) to provide
services to a blockchain project. As a blockchain services
provider, we will provide technical support and practical
blockchain solutions in the field of digital media copyright
protection; and
- Completed a number of ThunderChain
enhancements including WebAssembly virtual machine, also known as
“Wasm,” to help application developers build large-scale and
practical blockchain applications.
Mr. Lei Chen, the Chief Executive Officer of
Xunlei, stated: “We saw progress and development in many areas
during the first quarter of 2019. For our traditional membership
subscription business, we are glad to see that the number of
membership rebounded over the past months, thanks to our improved
services towards subscribers and seasonal promotion activities. For
cloud computing and IVAS business, we signed up several major
internet customers and expect to increase bandwidth usage in the
coming periods. And we continued to make progress on our blockchain
development and unveiled several features for ThunderChain to
enhance its capability. We are optimistic about our growth
prospect against the backdrop of macroeconomic uncertainties due to
our strong research and development abilities and our enhanced
portfolio of product and service offerings.”
First Quarter
2019 Financial
Results
Total Revenues
Total revenues were US$41.3 million,
representing a decrease of 2.3% from the previous quarter.
Revenues from cloud computing and IVAS combined
were US$16.0 million, representing a decrease of 11.4% from the
previous quarter. The revenues from cloud computing and IVAS mainly
represented CDN sales, cloud product revenue and live video
streaming revenue. The decrease was mainly due to a significant
drop in live video streaming revenue during the quarter as Chinese
New Year was a slow season for our live video streaming
business.
Revenues from subscriptions were US$21.2
million, representing an increase of 16.1% from the previous
quarter. The number of subscribers was 4.57 million as of March 31,
2019, compared with 3.78 million as of December 31, 2018. The
average revenue per subscriber for the first quarter of 2019 was
RMB31.1, compared with RMB33.1 as of December 31, 2018. The
increase in subscription revenues and the number of subscribers
were mainly attributable to improved services towards subscribers
such as revamping our membership subscription program and promotion
activities launched during the quarter.
Revenues from online advertising were US$4.1
million, representing a decrease of 30.8% from the previous
quarter, mainly due to a decreased demand for our online
advertising primarily from the mobile gaming industry during the
quarter.
Cost of Revenues
Total cost of revenues was US$19.9 million,
representing 48.1% of our total revenues.
Bandwidth costs were US$10.8 million,
representing 26.0% of our total revenues, compared with US$9.3
million or 22.0% of our total revenues in the previous quarter.
The remaining cost of revenues mainly consisted
of revenue-sharing costs for our live streaming product and cloud
computing costs.
Gross Profit and Gross
Margin
Gross profit for the first quarter was US$21.2
million, representing an increase of 13.0% from the previous
quarter. Gross margin was 51.2% in the first quarter, compared with
44.3% in the previous quarter. The increase in gross profit was
mainly due to improved subscription services discussed above and a
decrease in revenue-sharing costs for our live streaming
product.
Research and Development
Expenses
Research and development expenses for the first
quarter of 2019 were US$18.8 million, representing 45.6% of our
total revenues, compared with US$21.5 million or 50.7% of our total
revenues in the previous quarter. The decrease on a sequential
basis was mainly due to the year-end staff performance incentive
for the year 2018 accrued in the previous quarter.
Sales and Marketing
Expenses
Sales and marketing expenses for the first
quarter of 2019 were US$7.6 million, representing 18.4% of our
total revenues, compared with US$9.0 million or 21.3% of our total
revenues in the previous quarter. The decrease was mainly due to
less marketing and promotion activities we conducted during the
quarter.
General and Administrative
Expenses
General and administrative expenses for the
first quarter of 2019 were US$9.4 million, representing 22.6% of
our total revenues, compared with US$11.8 million or 27.8% of our
total revenues in the previous quarter.
Impairment of Assets, Net
Impairment of assets, net for the first quarter
of 2019 was a credit of US$0.9 million, representing a net recovery
of previously impaired assets. The prior quarter debit balance of
US$6.3 million consisted mainly of the receivables written-off
after an impairment and recoverability assessment, which was
one-time in nature.
Operating Loss
Operating loss was US$13.7 million, compared
with an operating loss of US$29.8 million in the previous quarter.
The decrease was mainly due to less operating expenses incurred
during the quarter and a one-off impairment of assets, net of
US$6.3 million recorded in the previous quarter.
Net Loss
and Loss Per Share
Net loss from continuing operations was US$8.6
million in the first quarter of 2019, compared with a net loss of
US$32.4 million in the previous quarter. Non-GAAP net loss from
continuing operations was US$7.2 million in the first quarter of
2019, compared with Non-GAAP net loss of US$30.9 million in the
previous quarter.
Diluted loss per ADS from continuing operations
in the first quarter of 2019 was US$0.13, compared with a diluted
loss per ADS of US$0.48 in the previous quarter.
Cash Balance and
Short-Term Investments
As of March 31, 2019, the Company had cash, cash
equivalents and short-term investments of US$298.7 million,
compared with US$319.5 million as of December 31, 2018.
Guidance for Second
Quarter 2019
For the second quarter of 2019, Xunlei estimates
total revenues to be between US$42 million and US$46 million, and
the midpoint of the range represents a quarter-over-quarter
increase of approximately 6.5%. This estimate represents
management’s preliminary view as of the date of this release, which
is subject to change and any changes could be material.
Conference Call Details
Xunlei's management will host a conference call
at 8:00 a.m. U.S. Eastern Time on May 13, 2019 (8:00 p.m.
Beijing/Hong Kong Time), 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: |
8187885 |
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: |
8187885 |
Replay End Date: |
May 21, 2019 |
About Xunlei
Founded in 2003, Xunlei
Limited (NASDAQ: XNET) is a leading innovator in shared
cloud computing and blockchain
technology. 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
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 LIMITEDUNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts expressed in
thousands of USD, except for share, per share (or ADS) data)
|
March
31, |
December 31, |
|
2019 |
2018 |
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
Cash and
cash equivalents |
156,306 |
122,930 |
Short-term
investments |
142,439 |
196,538 |
Accounts
receivable, net |
22,521 |
19,391 |
Inventories |
14,297 |
12,667 |
Due from
related parties |
562 |
1,137 |
Prepayments
and other current assets |
11,765 |
10,236 |
|
|
|
Total current assets |
347,890 |
362,899 |
|
|
|
Non-current assets: |
|
|
Restricted
cash |
429 |
- |
Long-term
investments |
37,724 |
33,638 |
Deferred tax
assets |
5,731 |
5,690 |
Property and
equipment, net |
24,875 |
21,903 |
Intangible
assets, net |
10,136 |
9,991 |
Goodwill |
21,116 |
20,717 |
Other
long-term prepayments and receivables |
550 |
593 |
Right-of-use
assets |
10,490 |
- |
Total assets |
458,941 |
455,431 |
|
|
|
Liabilities |
|
|
Current liabilities: |
|
|
Accounts
payable |
22,562 |
22,629 |
Due to
related parties |
5,604 |
5,234 |
Contract
liabilities and deferred income, current portion |
32,793 |
30,295 |
Lease
liabilities |
5,187 |
- |
Income tax
payable |
2,815 |
2,503 |
Accrued
liabilities and other payables |
31,159 |
44,065 |
Held-for-sale liabilities |
3,995 |
3,309 |
Total current liabilities |
104,115 |
108,035 |
|
|
|
Non-current liabilities: |
|
|
Contract
liabilities and deferred income, non-current portion |
1,657 |
1,850 |
Lease
liabilities, non-current portion |
5,048 |
- |
Deferred tax
liabilities, non-current portion |
1,349 |
1,366 |
Interest-bearing bank borrowing |
7,425 |
- |
Total liabilities |
119,594 |
111,251 |
|
|
|
Equity |
|
|
Common
shares (US$0.00025 par value, 1,000,000,000 shares authorized,
368,877,209 shares issued and 333,643,560 shares outstanding as at
December 31, 2018; 368,877,205 issued and 337,190,726 shares
outstanding as at March 31, 2019) |
84 |
84 |
|
|
|
Additional
paid-in-capital |
468,052 |
466,624 |
Accumulated
other comprehensive loss |
(10,315) |
(12,748) |
Statutory
reserves |
5,132 |
5,132 |
Treasury
shares (35,233,649 shares and 31,686,479 shares as at December 31,
2018 and March 31, 2019, respectively) |
8 |
8 |
Accumulated
deficits |
(122,364) |
(113,804) |
Total Xunlei Limited's shareholders' equity |
340,597 |
345,296 |
Non-controlling interests |
(1,250) |
(1,116) |
Total liabilities and shareholders' equity |
458,941 |
455,431 |
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 |
|
Mar
31, |
Dec
31, |
Mar
31, |
|
2019 |
2018 |
2018 |
|
|
|
|
Revenues, net of rebates and discounts |
41,329 |
|
42,296 |
|
78,768 |
|
Business
taxes and surcharges |
(285) |
|
(315) |
|
(564) |
|
Net
revenues |
41,044 |
|
41,981 |
|
78,204 |
|
Cost of
revenues |
(19,863) |
|
(23,241) |
|
(40,541) |
|
Gross profit |
21,181 |
|
18,740 |
|
37,663 |
|
|
|
|
|
Operating expenses |
|
|
|
Research and
development expenses |
(18,849) |
|
(21,452) |
|
(16,451) |
|
Sales and
marketing expenses |
(7,595) |
|
(8,996) |
|
(6,781) |
|
General and
administrative expenses |
(9,357) |
|
(11,759) |
|
(7,009) |
|
Assets
impairment loss, net |
894 |
|
(6,348) |
|
- |
|
Total operating expenses |
(34,907) |
|
(48,555) |
|
(30,241) |
|
|
|
|
|
Operating
income/(loss) |
(13,726) |
|
(29,815) |
|
7,422 |
|
Interest
income |
175 |
|
88 |
|
553 |
|
Interest
expense |
(60) |
|
(60) |
|
(60) |
|
Other
income/(loss), net |
5,277 |
|
(2,840) |
|
(261) |
|
Share of
loss from equity investee |
- |
|
(228) |
|
(14) |
|
Income/(loss)
from continuing operations before income
taxes |
(8,334) |
|
(32,855) |
|
7,640 |
|
Income tax
(expenses)/benefits |
(290) |
|
487 |
|
(910) |
|
Net
income/(loss)
from continuing operations |
(8,624) |
|
(32,368) |
|
6,730 |
|
|
|
Discontinued operations |
|
|
|
Income from
discontinued operations before income taxes |
- |
|
- |
|
139 |
|
Gain on
disposal |
- |
|
- |
|
1,394 |
|
Income tax
expense |
- |
|
- |
|
(230) |
|
Net income from
discontinued operations |
- |
|
- |
|
1,303 |
|
|
|
|
|
Net
income/(loss) |
(8,624) |
|
(32,368) |
|
8,033 |
|
Less: net
profit/(loss) attributable to non-controlling interest |
(64) |
|
(191) |
|
2 |
|
Net
income/(loss)
attributable to common shareholders |
(8,560) |
|
(32,177) |
|
8,031 |
|
|
|
|
|
|
Three months ended |
|
Mar
31, |
|
Dec
31, |
|
Mar
31, |
|
|
2019 |
|
2018 |
|
2018 |
|
|
|
|
|
Earnings/(loss)
per share for common shares, basic |
|
|
|
Continuing
operations |
(0.0254) |
|
(0.0957) |
|
0.0202 |
|
Discontinued
operations |
- |
|
- |
|
0.0039 |
|
Total
earnings/(loss) per share for common shares, basic |
(0.0254) |
|
(0.0957) |
|
0.0241 |
|
|
|
|
|
Earnings/(loss)
per share for common shares, diluted |
|
|
|
Continuing
operations |
(0.0254) |
|
(0.0957) |
|
0.0198 |
|
Discontinued
operations |
- |
|
- |
|
0.0038 |
|
Total
earnings/(loss) per share for common shares, diluted |
(0.0254) |
|
(0.0957) |
|
0.0236 |
|
|
|
|
|
Earnings/(loss)
per ADS, basic |
|
|
|
Continuing
operations |
(0.1270) |
|
(0.4785) |
|
0.1010 |
|
Discontinued
operations |
- |
|
- |
|
0.0195 |
|
Total
earnings/(loss) per ADS, basic |
(0.1270) |
|
(0.4785) |
|
0.1205 |
|
|
|
|
|
Earnings/(loss)
per ADS, diluted |
|
|
|
Continuing
operations |
(0.1270) |
|
(0.4785) |
|
0.0990 |
|
Discontinued
operations |
- |
|
- |
|
0.0192 |
|
Total
earnings/(loss) per ADS, diluted |
(0.1270) |
|
(0.4785) |
|
0.1182 |
|
|
|
|
|
Weighted average number of common shares used in
calculating continuing operations: |
|
|
|
Basic |
336,530,201 |
|
336,148,900 |
|
333,660,495 |
|
Diluted |
336,530,201 |
|
336,148,900 |
|
340,311,476 |
|
|
|
|
|
Weighted average number of ADSs used in calculating
continuing operations : |
|
|
|
Basic |
67,306,040 |
|
67,229,780 |
|
66,732,099 |
|
Diluted |
67,306,040 |
|
67,229,780 |
|
68,062,295 |
|
|
|
|
|
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 |
|
Mar
31, |
|
Dec
31, |
|
Mar
31, |
|
|
2019 |
|
2018 |
|
2018 |
|
|
|
|
|
|
|
|
|
GAAP
operating income/(loss) |
(13,726) |
|
(29,815) |
|
7,422 |
|
Share-based
compensation expenses |
1,428 |
|
1,424 |
|
1,215 |
|
Non-GAAP operating
income/(loss) |
(12,298) |
|
(28,391) |
|
8,637 |
|
|
|
|
|
GAAP net
income/(loss) from continuing operations |
(8,624) |
|
(32,368) |
|
6,730 |
|
Share-based
compensation expenses |
1,428 |
|
1,424 |
|
1,215 |
|
Non-GAAP net
income/(loss)
from continuing operations |
(7,196) |
|
(30,944) |
|
7,945 |
|
|
|
|
|
GAAP
earnings/(loss)
per share for common shares attributable to continuing
operations: |
|
|
|
Basic |
(0.0254) |
|
(0.0957) |
|
0.0202 |
|
Diluted |
(0.0254) |
|
(0.0957) |
|
0.0198 |
|
|
|
|
|
GAAP
earnings/(loss)
per ADS attributable to continuing
operations: |
|
|
|
Basic |
(0.1270) |
|
(0.4785) |
|
0.1010 |
|
Diluted |
(0.1270) |
|
(0.4785) |
|
0.0990 |
|
|
|
|
|
Non-GAAP
earnings/(loss)
per share for common shares attributable to continuing
operations: |
|
|
|
Basic |
(0.0212) |
|
(0.0915) |
|
0.0238 |
|
Diluted |
(0.0212) |
|
(0.0915) |
|
0.0233 |
|
|
|
|
|
Non-GAAP
earnings/(loss)
per ADS attributable to continuing
operations: |
|
|
|
Basic |
(0.1060) |
|
(0.4575) |
|
0.1190 |
|
Diluted |
(0.1060) |
|
(0.4575) |
|
0.1165 |
|
|
|
|
|
Weighted average number of common shares used in
calculating: |
|
|
|
Basic |
336,530,201 |
|
336,148,900 |
|
333,660,495 |
|
Diluted |
336,530,201 |
|
336,148,900 |
|
340,311,476 |
|
|
|
|
|
Weighted average number of ADSs used in
calculating: |
|
|
|
Basic |
67,306,040 |
|
67,229,780 |
|
66,732,099 |
|
Diluted |
67,306,040 |
|
67,229,780 |
|
68,062,295 |
|
CONTACT: Investor RelationsXunlei LimitedEmail:
ir@xunlei.comTel: +86 755 86338443Website: http://ir.xunlei.com
Xunlei (NASDAQ:XNET)
Historical Stock Chart
From Feb 2024 to Mar 2024
Xunlei (NASDAQ:XNET)
Historical Stock Chart
From Mar 2023 to Mar 2024