Xunlei(US:XNET)2019-11-14 18:21Financial Data and Key Metrics Changes - Total revenue for Q3 2019 was approximately $43.8 million, down 8.3% from the previous quarter, primarily due to lower subscription and live streaming revenues [5][23] - Subscription revenues were $19.2 million, a decrease of approximately 10% from the previous quarter, with the subscriber base declining from 4.3 million to 3.8 million [21][23] - Average revenue per subscriber increased to RMB35.1 from RMB33.9 in the previous quarter [21] - Gross profit was $19.3 million, down 13.6% from the second quarter, with a gross margin of 44.1% compared to 46.7% in the previous quarter [24] - Net loss for Q3 was approximately $24.6 million, compared to a net loss of $2 million in the previous quarter [26] Business Line Data and Key Metrics Changes - Revenues from cloud computing and other IVAS combined were $20.9 million, representing a decrease of 7.4% sequentially, mainly due to reduced promotional activities affecting live streaming revenues [23] - Revenues from online advertising were $3.7 million, down 4.4% from the previous quarter, primarily due to a decline in mobile advertising revenues [21][23] - Live streaming revenues declined due to seasonal conditions and fewer promotional activities [20] Market Data and Key Metrics Changes - Demand for cloud computing services remained strong, driven by enterprise clients such as Baidu, Youku, iQiyi, and Xiaomi [12] - The company anticipates significant growth in the IoT space and related industries, which will drive demand for edge computing [13] Company Strategy and Development Direction - The company is focusing on building its presence in the cloud computing market, which is seen as a high growth opportunity [6] - Xunlei is committed to advancing its mission of empowering individuals through technological innovation and the development of a shared cloud computing and blockchain-based ecosystem [7] - The company aims to leverage shared cloud computing and AI technologies to provide efficient and cost-effective solutions for enterprise users [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential of shared cloud computing and blockchain technology, highlighting the importance of these areas for long-term growth [11][22] - The company is aware of the challenges in the blockchain space, including the need for high performance, data protection, and regulatory compliance [16][31] - Management expects total revenues for Q4 2019 to be between $45 million and $50 million, indicating a quarter-over-quarter increase of about 8.4% [26] Other Important Information - The company successfully dismissed a securities class action complaint against it, which was filed in January 2018 [10] - The company has obtained blockchain registration numbers from the Cyberspace Administration of China for its key blockchain projects [9][18] Q&A Session Summary Question: Has the company generated any material income from blockchain-related products? - Management indicated that while blockchain technology provides potential business benefits, income from blockchain has not yet become a large portion of total revenue [30][31] Question: When does the company expect to generate material revenues from the blockchain business, and what are the major obstacles? - Management highlighted the need for government policy support and industry motivation to upgrade existing business structures as key obstacles to widespread blockchain adoption [31][32] Question: Can the company disclose the number of enterprise customers using ThunderChain? - Management mentioned several enterprise customers leveraging ThunderChain technology but did not disclose specific numbers [35]