• Xunlei Announces Unaudited Fourth Quarter and Full Year 2023 Financial Results

    Источник: Nasdaq GlobeNewswire / 14 мар 2024 05:00:00   America/Chicago

    SHENZHEN, China, March 14, 2024 (GLOBE NEWSWIRE) -- Xunlei Limited (“Xunlei” or the “Company”) (NASDAQ: XNET), a leading technology company providing distributed cloud services in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2023.

    Fourth Quarter 2023 Financial Highlights:

    • Total revenues were US$77.1 million, a decrease of 20.4% year-over-year.
    • Cloud computing revenues were US$30.5 million, a decrease of 4.4% year-over-year.
    • Subscription revenues were US$31.6 million, representing an increase of 26.8% year-over-year.
    • Live streaming and other internet value-added services (“Live streaming and other IVAS”) revenues were US$15.0 million, a decrease of 62.5% year-over-year.
    • Gross profit was US$40.1 million, representing an increase of 6.5% year-over-year, and gross profit margin was 51.9% in the fourth quarter, compared with 38.8% in the same period of 2022.
    • Net income was US$3.7 million in the fourth quarter, compared with US$1.6 million in the same period of 2022.
    • Non-GAAP net income was US$4.5 million in the fourth quarter, compared with US$3.5 million in the same period of 2022.
    • Diluted earnings per ADS was approximately US$0.06 in the fourth quarter, compared with US$0.02 in the same period of 2022.

    Full Year 2023 Financial Highlights:

    • Total revenues were US$364.9 million, representing an increase of 6.5% from 2022.
    • Cloud computing revenues were US$123.4 million, representing an increase of 3.2% from 2022.
    • Subscription revenues were US$119.3 million, representing an increase of 18.7% from 2022.
    • Live streaming and other IVAS revenues were US$122.2 million, representing a decrease of 0.2% from 2022.
    • Gross profit was US$163.1 million, representing an increase of 15.3% from 2022, and gross profit margin was 44.7%, compared with 41.3% in the previous year.
    • Net income was US$14.3 million, compared with US$21.3 million in the previous year.
    • Non-GAAP net income was US$23.9 million, compared with US$29.5 million in the previous year.
    • Diluted earnings per ADS was US$0.22, compared with US$0.32 in the previous year.

    “We closed out 2023 with a solid Q4 performance, beating our upper-end guidance and achieving profitability for the third consecutive year. Notably, our subscription business surpassed a significant milestone by reaching almost 6 million subscribers at the end of 2023, and delivered an impressive 26.8% increase in subscription revenues year-over-year for the fourth quarter. The results were attributed not only to our consistent provision of high-quality services tailored to meet the evolving needs of our subscribers, but also to the unwavering commitments and diligent efforts by our dedicated employees," stated Mr. Jinbo Li, Chairman and CEO of Xunlei Limited.

    “In 2024, we will aim high and proactively explore opportunities to seek breakthroughs in business developments while leveraging our outstanding research and development capabilities. We believe that our strong financial position and synergistic product and service lines will provide us with stability and flexibility to further our ongoing operations and pursue growth and innovation to create value for our shareholders. We look forward to sharing with you our progress in the near future," concluded Mr. Li. 

    Fourth Quarter 2023 Financial Results

    Total Revenues

    Total revenues were US$77.1 million, representing a decrease of 20.4% year-over-year. The decrease in total revenues was mainly attributable to the decreased revenues generated from our live streaming business as we have downsized some of our domestic audio live streaming operations since June 2023.

    Revenues from cloud computing were US$30.5 million, representing a decrease of 4.4% year-over-year. The decrease in cloud computing revenues was mainly due to the decreased revenues generated from certain of our major customers of cloud computing services.

    Revenues from subscription were US$31.6 million, representing an increase of 26.8% year-over-year. The increase in subscription revenues was mainly due to an increase in the number of subscribers and higher average revenue per subscriber for the quarter. The number of subscribers was 5.99 million as of December 31, 2023, compared with 4.99 million as of December 31, 2022. The average revenue per subscriber for the fourth quarter was RMB36.5, compared with RMB35.4 in the same period of 2022. The higher average revenue per subscriber was due to the continued increase in the proportion of the users opting for our premium membership.

    Revenues from live streaming and other IVAS were US$15.0 million, representing a decrease of 62.5% year-over-year. The decrease of live streaming and other IVAS revenues was mainly due to the downsizing of our domestic audio live streaming operations during 2023.

    Costs of Revenues

    Costs of revenues were US$36.8 million, representing 47.7% of our total revenues, compared with US$59.0 million, or 60.9% of the total revenues, in the same period of 2022. The decrease in costs of revenues was mainly attributable to the decreased revenue-sharing costs for our live streaming business, which was consistent with the decrease in live streaming revenues.

    Bandwidth costs, as included in costs of revenues, were US$26.4 million, representing 34.2% of our total revenues, compared with US$26.9 million, or 27.7% of the total revenues, in the same period of 2022.

    The remaining costs of revenues mainly consisted of costs related to the revenue-sharing costs for our live streaming business, payment handling charges, cost of inventories sold and depreciation of servers and other equipment.

    Gross Profit and Gross Profit Margin

    Gross profit for the fourth quarter of 2023 was US$40.1 million, representing an increase of 6.5% year-over-year. Gross profit margin was 51.9% in the fourth quarter, compared with 38.8% in the same period of 2022. The increase in gross profit was mainly driven by the increase in gross profit of our subscription business. The increase in gross profit margin was mainly attributable to the increased portion of subscription revenues to total revenues, which has a higher profit margin as well as the decreased portion of live streaming revenues to total revenues, which has a relatively lower gross profit margin.

    Research and Development Expenses

    Research and development expenses for the fourth quarter were US$19.5 million, representing 25.3% of our total revenues, compared with US$19.2 million, or 19.8% of our total revenues, in the same period of 2022. The increase was primarily due to the increased labor costs incurred during the quarter.

    Sales and Marketing Expenses

    Sales and marketing expenses for the fourth quarter were US$9.3 million, representing 12.1% of our total revenues, compared with US$8.7 million, or 8.9% of our total revenues, in the same period of 2022. The increase was primarily due to an increase in customer service costs and more marketing activities held for our subscription business as part of our ongoing efforts on user acquisition, partially offset by the decrease in employee bonus accrued during the quarter.

    General and Administrative Expenses

    General and administrative expenses for the fourth quarter were US$11.6 million, representing 15.1% of our total revenues, compared with US$9.8 million, or 10.1% of our total revenues, in the same period of 2022. The increase was primarily due to the increase in labor costs and depreciation of Xunlei headquarters building during the quarter, partially offset by the decrease in share-based compensation accrued during the quarter.

    Operating (Loss)/Income

    Operating loss was US$0.7 million, compared with an operating income of US$0.4 million in the same period of 2022. The decrease in operating income was primarily attributable to the increase in operating expenses during the quarter.

    Other Income, Net

    Other income, net was US$3.5 million, compared with other income, net of US$0.7 million in the same period of 2022. The increase was primarily due to the increase in foreign exchange gains and investment income from short-term investments during the quarter.

    Net Income and Earnings Per ADS

    Net income was US$3.7 million, compared with US$1.6 million in the same period of 2022. Non-GAAP net income was US$4.5 million in the fourth quarter of 2023, compared with US$3.5 million in the same period of 2022. The increase of net income and non-GAAP net income was primarily attributable to the increase in other income, net, partially offset by the decrease in operating income as discussed above.

    Diluted earnings per ADS in the fourth quarter of 2023 was approximately US$0.06 as compared to US$0.02 in the same period of 2022.

    Cash Balance

    As of December 31, 2023, the Company had cash, cash equivalents and short-term investments of US$271.9 million, compared with US$264.7 million as of September 30, 2023. The increase in cash, cash equivalents and short-term investments was mainly due to the cash inflow from operating activities and the release of certain restricted cash, partially offset by repayment of bank loans and spending on share buybacks during the quarter.

    Full Year 2023 Financial Results

    Total Revenues

    Total revenues were US$364.9 million, representing an increase of 6.5% on a year-over-year basis. The increase in total revenues was mainly attributable to the increased revenues from our subscription and cloud computing businesses.

    Revenues from cloud computing were US$123.4 million, representing an increase of 3.2% on a year-over-year basis. The increase in cloud computing was mainly attributable to the increased sale of our cloud computing hardware devices.

    Revenues from subscription were US$119.3 million, representing an increase of 18.7% on a year-over-year basis. The increase was mainly due to the growing number of subscribers, which increased from 4.99 million as of December 31, 2022 to 5.99 million as of December 31, 2023.

    Revenues from live streaming and other IVAS were US$122.2 million, representing a decrease of 0.2% on a year-over-year basis.

    Costs of Revenues

    Costs of revenues were US$200.6 million, representing 55.0% of our total revenues, compared with US$200.1 million, or 58.4% of the total revenues, in 2022.

    Bandwidth costs, a major component of costs of revenues, were US$112.5 million, representing 30.8% of our total revenues, compared with US$104.6 million, or 30.5% of the total revenues, in the previous year. The increased bandwidth costs were mainly due to the increased demand for our subscription and cloud computing services, which was consistent with the increase in subscription and cloud computing revenues.

    The remaining costs of revenues mainly consisted of costs related to the revenue-sharing costs for our live streaming business, payment handling charges, cost of inventories sold and depreciation of servers and other equipment.

    Gross Profit and Gross Profit Margin

    Gross profit for the year was US$163.1 million, representing an increase of 15.3% on the year-over-year basis. Gross profit margin was 44.7%, compared with 41.3% in the previous year. The increase in gross profit and gross profit margin was mainly driven by the increase in gross profit of our subscription business and increased portion of subscription revenues to total revenues, which has a higher gross profit margin.

    Research and Development Expenses

    Research and development expenses for the year were US$74.2 million, representing 20.3% of our total revenues, compared with US$67.7 million, or 19.8% of our total revenues, in the previous year. The increase was primarily due to the increased labor costs as a result of the increased headcount as compared with the previous year.

    Sales and Marketing Expenses

    Sales and marketing expenses for the year were US$43.5 million, representing 11.9% of our total revenues, compared with US$24.8 million, or 7.3% of our total revenues, in the previous year. The increase was primarily driven by the increase in marketing expenses for our subscription and live streaming businesses.

    General and Administrative Expenses

    General and administrative expenses for the year were US$46.9 million, representing 12.8% of our total revenues, compared with US$39.7 million, or 11.6% of our total revenues, in the previous year. The increase was primarily due to the increase in share-based compensation expenses, deprecation of Xunlei headquarters building and one-off impairment of servers and network equipment incurred during the year.

    Operating (Loss)/Income

    Operating loss was US$1.6 million in 2023, compared with an operating income of US$10.1 million in the previous year. The decrease in operating income was primarily attributable to the increase in operating expenses during the year, partially offset by the increase in gross profit of subscription business as mentioned above.

    Other Income, Net

    Other income, net was US$16.9 million in 2023, compared with US$13.5 million in the previous year. The increase was primarily due to the increase in investment income and reversal of certain payables related to a previously disposed business with low payment probability during the year.

    Net Income and Earnings Per ADS

    Net income was US$14.3 million in 2023, compared with net income of US$21.3 million in the previous year. Non-GAAP net income was US$23.9 million in 2023, compared with US$29.5 million in the previous year. The decrease in net income and non-GAAP net income was primarily driven by the decrease in operating income as discussed above.

    Diluted earnings per ADS in 2023 was approximately US$0.22 as compared with US$0.32 in the previous year.

    Cash Balance

    As of December 31, 2023, the Company had cash, cash equivalents and short-term investments of US$271.9 million, compared with US$260.8 million as of December 31, 2022. The increase in cash and cash equivalents was mainly attributed to the cash inflow from operating activities and the release of certain restricted cash, partially offset by repayment of a bank loan, settlement for the construction of Xunlei headquarters building, and spending on share buybacks.

    Share Repurchase Program

    During 2023, the Company had spent US$4.7 million on share buybacks, consisting of US$1.1 million under the share repurchase program adopted in March 2022 and US$3.6 million under the share repurchase program adopted in June 2023.

    Guidance for the First Quarter of 2024

    For the first quarter of 2024, Xunlei estimates total revenues to be between US$79 million and US$84 million, and the midpoint of the range represents a quarter-over-quarter increase of approximately 5.7%. 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.

    Xunlei's management will host a conference call at 8:00 a.m. U.S. Eastern Time on March 14, 2024 (8:00 p.m. Beijing/Hong Kong Time), to discuss the Company's quarterly and fiscal year results and recent business developments.

    Participant Online Registration: https://register.vevent.com/register/BIedd8f3b92c45485b9da1107f669ff922

    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/i7erbhna

    About Xunlei

    Founded in 2003, Xunlei Limited (NASDAQ: XNET) is a leading technology company providing distributed cloud services 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," "estimates" and similar statements. Among other things, the management's quotations and the "Guidance" section 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, (3) non-GAAP basic and diluted earnings per share for common shares, and (4) non-GAAP basic and diluted earnings per ADS. 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 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)
     
     December 31,December 31,
     2023
    		2022
     US$US$
    Assets  
       
    Current assets:  
    Cash and cash equivalents170,802 177,154 
    Short-term investments101,078 83,626 
    Accounts receivable, net31,210 29,763 
    Inventories2,219 457 
    Due from related parties12,644 32,917 
    Prepayments and other current assets9,423 8,267 
    Total current assets327,376 332,184 
       
    Non-current assets:  
    Restricted cash- 7,654 
    Long-term investments32,134 30,811 
    Deferred tax assets478 213 
    Property and equipment, net60,028 61,734 
    Intangible assets, net5,697 6,546 
    Goodwill20,826 21,179 
    Due from a related party, non-current portion19,619 - 
    Long-term prepayments and other assets1,953 2,137 
    Operating lease assets575 865 
    Total assets468,686 463,323 
       
    Liabilities  
    Current liabilities:  
    Accounts payable24,430 25,432 
    Due to related parties- 1,560 
    Contract liabilities, current portion36,375 38,967 
    Lease liabilities276 283 
    Income tax payable6,391 5,586 
    Accrued liabilities and other payables53,708 49,438 
    Bank borrowings, current portion6,906 7,024 
    Total current liabilities128,086 128,290 
       
    Non-current liabilities:  
    Contract liabilities, non-current portion846 876 
    Lease liabilities, non-current portion229 299 
    Deferred tax liabilities513 687 
    Bank borrowings, non-current portion15,539 24,750 
    Total liabilities145,213 154,902 
       
    Equity  
    Common shares (US$0.00025 par value, 1,000,000,000 shares authorized, 375,001,940 shares issued and 325,047,736 shares outstanding as at December 31, 2022; 375,001,940 issued and 323,525,556 shares outstanding as at December 31, 2023)81 81 
    Additional paid-in-capital482,484 477,495 
    Accumulated other comprehensive loss(18,913)(14,668)
    Statutory reserves8,142 7,036 
    Treasury shares (49,954,204 shares and 51,476,384 shares as at December 31, 2022 and December 31, 2023, respectively)12 12 
    Accumulated deficits(146,944)(160,063)
    Total Xunlei Limited's shareholders' equity324,862 309,893 
    Non-controlling interests(1,389)(1,472)
    Total liabilities and shareholders' equity468,686 463,323 


    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 Year ended
        
     Dec 31,Sept 30,Dec 31, Dec 31,Dec 31,
     2023
    		2023
    		2022
    		 2023
    		2022
     US$US$US$ US$US$
    Revenues, net of rebates and discounts77,143 84,235 96,963  364,911 342,564 
    Business taxes and surcharges(287)(286)(319) (1,189)(1,067)
    Net revenues76,856 83,949 96,644  363,722 341,497 
    Cost of revenues(36,785)(46,409)(59,027) (200,649)(200,054)
    Gross profit40,071 37,540 37,617  163,073 141,443 
           
    Operating expenses      
    Research and development expenses(19,497)(19,483)(19,234) (74,201)(67,680)
    Sales and marketing expenses(9,350)(9,507)(8,676) (43,509)(24,841)
    General and administrative expenses(11,618)(11,093)(9,799) (46,875)(39,701)
    Credit loss (expenses)/write back, net(293)28 496  (100)844 
    Total operating expenses(40,758)(40,055)(37,213) (164,685)(131,378)
           
    Operating (loss)/income(687)(2,515)404  (1,612)10,065 
    Interest income1,318 1,163 735  4,619 1,898 
    Interest expense(300)(361)(23) (1,514)(93)
    Other income, net3,523 7,329 703  16,904 13,545 
    Income before income taxes3,854 5,616 1,819  18,397 25,415 
    Income tax expense(137)(1,251)(247) (4,131)(4,068)
    Net income3,717 4,365 1,572  14,266 21,347 
    Less: net income/(loss) attributable to non-controlling interest12 (30)(58) 41 (116)
    Net income attributable to common shareholders3,705 4,395 1,630  14,225 21,463 
           
    Earnings per share for common shares      
    Basic0.0114 0.0134 0.0049  0.0436 0.0639 
    Diluted0.0114 0.0134 0.0049  0.0435 0.0638 
           
    Earnings per ADS      
    Basic0.0570 0.0670 0.0245  0.2180 0.3195 
    Diluted0.0570 0.0670 0.0245  0.2175 0.3190 
           
    Weighted average number of common shares used in calculating:      
    Basic325,898,568 328,229,170 330,049,995  326,390,687 336,040,378 
    Diluted326,160,722 328,738,450 330,277,252  326,849,502 336,235,501 
           
    Weighted average number of ADSs used in calculating:      
    Basic65,179,714 65,645,834 66,009,999  65,278,137 67,208,076 
    Diluted65,232,144 65,747,690 66,055,450  65,369,900 67,247,100 
           
           
        
    XUNLEI LIMITED
    Unaudited Reconciliation of GAAP and Non-GAAP Results
    (Amounts expressed in thousands of USD, except for share, per share (or ADS) data)
     
     Three months ended Year ended
        
     Dec 31,Sept 30,Dec 31, Dec 31,Dec 31,
     2023
    		2023
    		2022
    		 2023
    		2022
     US$US$US$ US$US$
           
    GAAP operating (loss)/income(687)(2,515)404  (1,612)10,065 
    Share-based compensation expenses787 1,106 1,879  9,676 8,184 
    Non-GAAP operating income/(loss)100 (1,409)2,283  8,064 18,249 
           
    GAAP net income3,717 4,365 1,572  14,266 21,347 
    Share-based compensation expenses787 1,106 1,879  9,676 8,184 
    Non-GAAP net income4,504 5,471 3,451  23,942 29,531 
           
    GAAP earnings per share for common shares:      
    Basic0.0114 0.0134 0.0049  0.0436 0.0639 
    Diluted0.0114 0.0134 0.0049  0.0435 0.0638 
           
    GAAP earnings per ADS:      
    Basic0.0570 0.0670 0.0245  0.2180 0.3195 
    Diluted0.0570 0.0670 0.0245  0.2175 0.3190 
           
    Non-GAAP earnings per share for common shares:      
    Basic0.0138 0.0168 0.0106  0.0732 0.0882 
    Diluted0.0138 0.0167 0.0106  0.0731 0.0882 
           
    Non-GAAP earnings per ADS:      
    Basic0.0690 0.0840 0.0530  0.3660 0.4410 
    Diluted0.0690 0.0835 0.0530  0.3655 0.4410 
           
    Weighted average number of common shares used in calculating:      
    Basic325,898,568 328,229,170 330,049,995  326,390,687 336,040,378 
    Diluted326,160,722 328,738,450 330,277,252  326,849,502 336,235,501 
           
    Weighted average number of ADSs used in calculating:      
    Basic65,179,714 65,645,834 66,009,999  65,278,137 67,208,076 
    Diluted65,232,144 65,747,690 66,055,450  65,369,900 67,247,100 
                

    CONTACT:
    Investor Relations
    Xunlei Limited
    Email: ir@xunlei.com
    Tel: +86 755 6111 1571
    Website: http://ir.xunlei.com


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