Xunlei(US:XNET)2022-08-16 15:29Financial Data and Key Metrics Changes - Total revenues for Q2 2022 reached $78.3 million, a slight decrease of about 1% from the previous quarter due to the devaluation of RMB against the U.S. dollar [8][14] - Net profit grew to $6 million, representing a 10.1% increase from the previous quarter, marking the second consecutive profitable quarter [8][18] - Gross profit for Q2 was $33.7 million, a decrease of 3.2% from the previous quarter, with a gross profit margin of 43.1% compared to 44.1% in the previous quarter [16] Business Line Data and Key Metrics Changes - Cloud computing revenue was $28.3 million, down 6.2% from the previous quarter, primarily due to foreign exchange rate impacts [14][16] - Subscription revenue was $25.4 million, an increase of 0.2% from the previous quarter, despite a decline in total subscribers to 4.46 million from 4.61 million [10][15] - Live streaming and other Internet value-added services generated $24.5 million in revenue, an increase of 4.5% from the previous quarter, with a significant growth of 191.3% compared to Q2 2021 [11][15] Market Data and Key Metrics Changes - The bandwidth sold remained stable compared to the first quarter, indicating consistent demand in the cloud computing sector [9][15] - The live streaming business saw growth driven by new product offerings, particularly in overseas markets [11][12] Company Strategy and Development Direction - The company aims to leverage its core competitive edge and innovative capabilities to cultivate new revenue sources and accelerate top-line growth [13] - There is a focus on optimizing operations to enhance profitability while navigating challenges such as currency devaluation and industry competition [9][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining positive momentum into the second half of 2022, despite challenges from the macro environment [13] - The company is monitoring the SEC's HFCAA implications and is exploring alternatives to remain a public entity [20][21] Other Important Information - The company has authorized a stock repurchase program of up to $20 million, with approximately $1.74 million repurchased as of June 30, 2022 [18][19] - The new research and headquarters building is expected to be completed and occupied by October 2022 [19] Q&A Session Summary Question: Impact of SEC's HFCAA on Xunlei - Management acknowledged being on the SEC's watch list under HFCAA and is exploring countermeasures to avoid delisting, with no current discussions on privatization [20][21] Question: Growth Rate of Cloud Computing and Live Streaming - Management noted that while growth rates have slowed, this is a normal trend after rapid growth, and they do not expect it to be a long-term negative sign [23][24] Question: Outlook for Digital Collectibles Business - Management stated that the digital collectibles market is evolving, and while it presents risks, it also has potential, with ongoing development of new products [26][27]