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, 2018.
Second Quarter 2018
Financial Highlights:
- Total revenues were US$65.8 million,
representing an increase of 70.7% from the same period of 2017,
which was largely due to increases in revenue from cloud computing,
live streaming and mobile advertising businesses.
- Cloud computing and other internet value-added
services (“Cloud computing and IVAS”) revenues were
US$36.5 million, representing an increase of 186.9% from the same
period of 2017.
- Subscription revenues were US$21.1 million,
representing an increase of 2.5% from the same period of 2017.
- Online advertising revenues (consisting
primarily of revenues from mobile advertising) were US$8.2 million,
representing an increase of 57.2% from the same period of
2017.
- Gross margin was 52.7% in the second quarter
of 2018, compared with 37.0% in the same period of 2017.
- Gross profit was US$34.7 million, compared
with US$14.3 million in the second quarter of 2017, representing a
year-on-year increase of 143.0%.
- Net income was US$0.7 million, compared with a
net loss of US$9.7 million in the second quarter of 2017.
Recent Developments:
Within Xunlei’s ecosystem,
- ThunderChain Open Platform: The Company
attracted a large number of participants from China and overseas to
develop applications on ThunderChain Open Platform during Xunlei
Blockchain Applications Global Challenge. On that occasion, the
Company also launched the ThunderChain File System (TCFS) and three
ThunderChain Request for Comment (TRC) Smart Contract Standards to
support a broader development of consumer-side blockchain
applications;
- StellarCloud: Since the debut of the Company’s
shared computing platform StellarCloud, Xunlei’s existing Content
Delivery Network (CDN) services have been expanded to
Infrastructure as a Service (IaaS), which led to the richer product
selections and a steady growth of our enterprise level client base,
including new clients such as Quanmin TV and Yidianzixun, among
others;
- OneThing Cloud: The Company achieved strong
sales of blockchain-based personal cloud device OneThing Cloud
during the Chinese mid-year shopping festival, and cooperated with
JD.com to extend the sales into offline stores;
- ThunderX: The Company unveiled a trial version
of flagship download accelerator ThunderX, which was a desktop
application based on Electron software framework to support a wide
range of 4K high quality display solutions;
- Award & Recognition: Xunlei’s blockchain
business model was illustrated in the 2018 Chinese Blockchain
Industry Whitepaper issued by the Information Center of the
Ministry of the Information and Technology of P.R. China (“MIIT”);
ThunderChain was recognized as an Outstanding Entrepreneurship and
Innovation Project by Xinhua Net.
Mr. Lei Chen, Chief Executive Officer of Xunlei, stated: “We are
very pleased to report that we exceeded the high end of our
quarterly revenue guidance and significantly improved the bottom
line on a year-over-year basis. During the quarter, we achieved a
significant milestone for our ThunderChain and made it possible to
explore practical blockchain applications that will empower the
real economy.”
“At Xunlei, we are committed to empowering
individuals through technological innovation. Our ThunderChain
platform and shared cloud computing will help bridge today’s
divides between the emerging technology and real economy. And we
believe we are well positioned to become the first choice for
Dapps, especially those that intend to reach a great number of
users.” concluded Mr. Chen.
Second Quarter
2018 Financial
Results
Total Revenues1
Total revenues were US$65.8 million, representing
an increase of 70.7% on a year-over-year basis. The increase was
mainly attributable to the growth of our cloud computing, live
streaming and mobile advertising businesses.
Revenues from cloud computing and IVAS combined
were US$36.5 million, representing an increase of 186.9% on a
year-over-year basis. Cloud computing revenues grew by 183.5% on a
year-over-year basis.
Revenues from subscriptions were US$21.1 million,
representing an increase of 2.5% on a year-over-year basis. The
average revenue per subscriber for the second quarter of 2018 was
RMB37.0, compared with RMB 34.4 as of June 30, 2017. The number of
subscribers was 3.69 million as of June 30, 2018, compared with
4.09 million as of June 30, 2017. The increase in average revenue
per subscriber was mainly attributable to the increasing popularity
of our premium subscription packages.
Revenues from online advertising were US$8.2
million, representing an increase of 57.2% on a year-over-year
basis, mainly due to an increased demand for our mobile advertising
business.
Cost of Revenues
Total cost of revenues was US$30.7 million,
representing 46.7% of our total revenues.
Bandwidth costs were US$12.1 million, representing
18.4% of our total revenues, compared with US$18.8 million or 48.8%
of the total revenues in the same period last year. The decrease
was mainly attributable to an increase in the crowdsourced
bandwidth capacity obtained through our cloud computing
services.
The remaining cost of revenues mainly consisted of
the manufacturing costs for our OneThing Cloud smart device and the
revenue-sharing costs for our live streaming product.
Gross Profit and Gross Margin
Gross profit for the second quarter was US$34.7
million, representing a year-over-year increase of 143.0%. Gross
margin was 52.7% in the second quarter of 2018, compared with 37.0%
in the same period of 2017.
Research and Development
Expenses
Research and development expenses for the second
quarter of 2018 were US$19.2 million, representing 29.2% of our
total revenues, compared with US$14.7 million or 38.1% of our total
revenues in the same period of 2017. The decrease in the percentage
of research and development expenses in our total revenues was
mainly due to the increase in our total revenues and the measures
we have taken to manage the expenses. During the second quarter of
2018, we continued to invest in blockchain research and development
to strengthen our competitive position and expand our product and
service offerings.
Sales and Marketing Expenses
Sales and marketing expenses for the second quarter
of 2018 were US$9.5 million, representing 14.5% of our total
revenues, compared with US$4.4 million or 11.4% of our total
revenues in the same period of 2017. The increase was mainly
because we generated higher revenues from and conducted marketing
and promotion activities for our OneThing Cloud device, which was
launched in the third quarter of last year.
General and Administrative
Expenses
General and administrative expenses for the second
quarter were US$9.7 million, representing 14.8% of our total
revenues, compared with US$8.2 million or 21.4% of our total
revenues in the same period of 2017. The increase was mainly
because we paid higher benefits to our employees and professional
and consultancy fees to support and expand our business.
Operating
Income/(Loss)
Operating loss was US$3.7 million, compared with
operating loss of US$13.0 million in the same period of 2017. The
decrease in operating loss was mainly attributed to revenue growth
in our cloud computing, live streaming and mobile advertising
businesses and overall improvement of our gross margin.
Net
Income/(Loss)
and
Earning/(Loss)
Per Share
Net income from continuing operations was US$0.7
million in the second quarter of 2018, compared with a net loss of
US$11.2 million in the same period of 2017. Non-GAAP net income
from continuing operations was US$2.0 million in the second quarter
of 2018, compared with a net loss of US$9.0 million in the same
quarter of 2017.
Diluted earnings per ADS from continuing operations
in the second quarter of 2018 was US$0.01, compared with a loss of
US$0.17 in the same period last year.
Cash Balance and
Short-Term Investments
As of June 30, 2018, the Company had cash, cash
equivalents and short-term investments of US$345.0 million,
compared with US$355.6 million as of March 31, 2018. The decrease
was primarily due to an increase in accounts receivable as a result
of a larger amount of OneThing Cloud device sold in a mid-year
shopping festival in China in the second half of June 2018.
Guidance for
Third Quarter
2018
For the third quarter of 2018, Xunlei estimates
total revenues to be between US$54 million and US$60 million, and
the midpoint of the range represents a year-over-year increase of
approximately 27.2%. 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
8:00 a.m. U.S. Eastern Time on August 15, 2018 (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: |
2999714 |
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: |
2999714 |
Replay
End Date: |
August
23, 2018 |
|
|
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.
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, |
|
2018 |
|
|
2017 |
|
US$ |
|
|
US$ |
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
166,304 |
|
|
233,479 |
Short-term investments |
178,673 |
|
|
138,915 |
Accounts
receivable, net |
42,850 |
|
|
40,632 |
Inventories |
6,104 |
|
|
3,879 |
Due from
related parties |
4,094 |
|
|
6,986 |
Prepayments and other current assets |
8,611 |
|
|
6,866 |
Held-for-sale assets |
- |
|
|
26 |
Total current assets |
406,636 |
|
|
430,783 |
|
|
|
|
|
Non-current assets: |
|
|
|
|
Long-term investments |
41,560 |
|
|
42,741 |
Deferred
tax assets |
5,353 |
|
|
6,072 |
Property
and equipment, net |
22,317 |
|
|
24,685 |
Intangible assets, net |
11,078 |
|
|
5,511 |
Goodwill |
21,489 |
|
|
21,760 |
Other
long-term prepayments and receivables |
654 |
|
|
1,885 |
Total assets |
509,087 |
|
|
533,437 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts
payable |
32,790 |
|
|
49,819 |
Due to a
related party |
3 |
|
|
10 |
Deferred
revenue and income, current portion |
27,589 |
|
|
28,046 |
Income
tax payable |
2,595 |
|
|
3,128 |
Accrued
liabilities and other payables |
43,617 |
|
|
59,871 |
Held-for-sale liabilities |
- |
|
|
822 |
Total current liabilities |
106,594 |
|
|
141,696 |
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
Deferred
revenue and income |
2,410 |
|
|
3,242 |
Due to
related parties, non-current portion |
4,837 |
|
|
4,737 |
Deferred
tax liabilities |
1,503 |
|
|
- |
Other
long-term payable |
944 |
|
|
925 |
Total liabilities |
116,288 |
|
|
150,600 |
|
|
|
|
|
Equity |
|
|
|
|
Common
shares (US$0.00025 par value, 1,000,000,000 shares authorized,
368,877,209 shares issued and 333,643,560 shares outstanding as at
December 31, 2017; 368,877,209 issued and 335,351,945 shares
outstanding as at June 30, 2018) |
84 |
|
|
83 |
Additional paid-in-capital |
463,825 |
|
|
461,330 |
Accumulated other comprehensive loss |
(9,242) |
|
|
(7,031) |
Statutory reserves |
5,132 |
|
|
5,132 |
Treasury
shares (35,233,649 shares and 33,525,264 shares as at December 31,
2017 and June 30, 2018, respectively) |
8 |
|
|
9 |
Accumulated deficits |
(65,799) |
|
|
(74,526) |
Total Xunlei Limited's shareholders' equity |
394,008 |
|
|
384,997 |
Non-controlling interests |
(1,209) |
|
|
(2,160) |
Total liabilities and shareholders' equity |
509,087 |
|
|
533,437 |
XUNLEI
LIMITED |
Unaudited Condensed Consolidated Statements of
Income |
(Amounts
expressed in thousands of USD, except for share, per share (or ADS)
data) |
|
Three months ended |
|
Jun
30, |
Mar
31, |
Jun
30, |
|
2018 |
2018 |
2017 |
|
US$ |
US$ |
US$ |
Revenues, net of rebates and discounts |
65,776 |
78,768 |
38,530 |
Business
taxes and surcharges |
(385) |
(564) |
(231) |
Net
revenues |
65,391 |
78,204 |
38,299 |
Cost of
revenues |
(30,705) |
(40,541) |
(24,025) |
Gross profit |
34,686 |
37,663 |
14,274 |
|
|
|
|
Operating expenses |
|
|
|
Research
and development expenses |
(19,198) |
(16,451) |
(14,662) |
Sales
and marketing expenses |
(9,515) |
(6,781) |
(4,382) |
General
and administrative expenses |
(9,707) |
(7,009) |
(8,241) |
Total operating expenses |
(38,420) |
(30,241) |
(27,285) |
|
|
|
|
Operating
income/(loss) |
(3,734) |
7,422 |
(13,011) |
Interest
income |
327 |
553 |
485 |
Interest
expense |
(60) |
(60) |
(60) |
Other
income/(loss), net |
3,818 |
(261) |
1,648 |
Share of
loss from equity investee |
(44) |
(14) |
(140) |
Income/(loss)
from continuing operations before income
taxes |
307 |
7,640 |
(11,078) |
Income
tax (expenses)/benefits |
392 |
(910) |
(88) |
Net
income/(loss)
from continuing operations |
699 |
6,730 |
(11,166) |
|
|
Discontinued operations |
|
|
|
Income
from discontinued operations before income taxes |
- |
139 |
1,754 |
Gain on
disposal |
- |
1,394 |
- |
Income
tax expense |
- |
(230) |
(263) |
Net income from
discontinued operations |
- |
1,303 |
1,491 |
|
|
|
|
Net
income/(loss) |
699 |
8,033 |
(9,675) |
Less:
net profit/(loss) attributable to non-controlling interest |
3 |
2 |
7 |
Net
income/(loss)
attributable to common shareholders |
696 |
8,031 |
(9,682) |
|
|
|
|
|
Three months ended |
|
Jun
30, |
Mar
31, |
Jun
30, |
|
2018 |
2018 |
2017 |
|
US$ |
US$ |
US$ |
Earnings/(loss)
per share for common shares, basic |
|
|
|
Continuing operations |
0.0021 |
0.0202 |
(0.0337) |
Discontinued operations |
- |
0.0039 |
0.0045 |
Total
earnings/(loss) per share for common shares, basic |
0.0021 |
0.0241 |
(0.0292) |
|
|
|
|
Earnings/(loss)
per share for common shares, diluted |
|
|
|
Continuing operations |
0.0021 |
0.0198 |
(0.0337) |
Discontinued operations |
- |
0.0038 |
0.0045 |
Total
earnings/(loss) per share for common shares, diluted |
0.0021 |
0.0236 |
(0.0292) |
|
|
|
|
Earnings/(loss)
per ADS, basic |
|
|
|
Continuing operations |
0.0105 |
0.1010 |
(0.1685) |
Discontinued operations |
- |
0.0195 |
0.0225 |
Total
earnings/(loss) per ADS, basic |
0.0105 |
0.1205 |
(0.1460) |
|
|
|
|
Earnings/(loss)
per ADS, diluted |
|
|
|
Continuing operations |
0.0105 |
0.0990 |
(0.1685) |
Discontinued operations |
- |
0.0192 |
0.0225 |
Total
earnings/(loss) per ADS, diluted |
0.0105 |
0.1182 |
(0.1460) |
|
|
|
|
Weighted average number of common shares used in
calculating continuing operations: |
|
|
|
Basic |
334,454,484 |
333,660,495 |
331,069,120 |
Diluted |
338,706,744 |
340,311,476 |
331,069,120 |
|
|
|
|
Weighted average number of ADSs used in calculating
continuing operations : |
|
|
|
Basic |
66,890,897 |
66,732,099 |
66,213,824 |
Diluted |
67,741,349 |
68,062,295 |
66,213,824 |
|
|
|
|
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, |
Mar
31, |
Jun
30, |
|
2018 |
2018 |
2017 |
|
US$ |
US$ |
US$ |
|
|
|
|
GAAP
operating income/(loss) |
(3,734) |
7,422 |
(13,011) |
Share-based compensation expenses |
1,281 |
1,215 |
2,169 |
Non-GAAP operating
income/(loss) |
(2,453) |
8,637 |
(10,842) |
|
|
|
|
GAAP net
income/(loss) from continuing operations |
699 |
6,730 |
(11,166) |
Share-based compensation expenses |
1,281 |
1,215 |
2,169 |
Non-GAAP net
income/(loss)
from continuing operations |
1,980 |
7,945 |
(8,997) |
|
|
|
|
GAAP
earnings/(loss)
per share for common shares attributable to continuing
operations: |
|
|
|
Basic |
0.0021 |
0.0202 |
(0.0337) |
Diluted |
0.0021 |
0.0198 |
(0.0337) |
|
|
|
|
GAAP
earnings/(loss)
per ADS attributable to continuing
operations: |
|
|
|
Basic |
0.0105 |
0.1010 |
(0.1685) |
Diluted |
0.0105 |
0.0990 |
(0.1685) |
|
|
|
|
Non-GAAP
earnings/(loss)
per share for common shares attributable to continuing
operations: |
|
|
|
Basic |
0.0059 |
0.0238 |
(0.0272) |
Diluted |
0.0058 |
0.0233 |
(0.0272) |
|
|
|
|
Non-GAAP
earnings/(loss)
per ADS attributable to continuing
operations: |
|
|
|
Basic |
0.0295 |
0.1190 |
(0.1360) |
Diluted |
0.0290 |
0.1165 |
(0.1360) |
|
|
|
|
Weighted average number of common shares used in
calculating: |
|
|
|
Basic |
334,454,484 |
333,660,495 |
331,069,120 |
Diluted |
338,706,744 |
340,311,476 |
331,069,120 |
|
|
|
|
Weighted average number of ADSs used in
calculating: |
|
|
|
Basic |
66,890,897 |
66,732,099 |
66,213,824 |
Diluted |
67,741,349 |
68,062,295 |
66,213,824 |
CONTACT:
Investor RelationsXunlei LimitedEmail:
ir@xunlei.comTel: +86 755 86338443Website: http://ir.xunlei.com
1Due to the strategic shift of our operations, we entered into
agreement to sell our web game business in December
2017. According to applicable accounting standards, assets and
liabilities related to web game business, including comparatives,
are reclassified as assets/liabilities held for sale, while the
result related to web game business, including comparatives, are
reported as discontinued operations. Figures presented in this
earning release are related to continuing operations only and
exclude results from web game business unless indicated
otherwise. We believe the disposal can allow us to better
manage our internal resources, including internal traffic referral
and corporate allocation, and focus on the Company’s current
strategy. The disposal was completed in January, 2018.
Xunlei (NASDAQ:XNET)
Historical Stock Chart
From Feb 2024 to Mar 2024
Xunlei (NASDAQ:XNET)
Historical Stock Chart
From Mar 2023 to Mar 2024