Xunlei(XNET) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2021 reached $55.2 million, representing a 3.6% growth sequentially [6][13] - Net income was $5.8 million, down from $6.8 million in the previous quarter, while non-GAAP net income was $1.3 million compared to $7.4 million previously [17] - Gross profit for Q2 was $29 million, with a gross margin of 52.5%, down from 53.7% in the previous quarter [15] Business Line Data and Key Metrics Changes - Subscription business accounted for approximately 41.2% of total revenues, achieving 3% growth sequentially and 9.8% year-on-year, despite a slight decrease in the number of subscribers [7][13] - Cloud computing and other internet value-added services (IVAS) grew 5.8% sequentially, accounting for approximately 52.4% of total revenues, driven by live streaming products [8][13] - Online advertising revenue declined 8.7% sequentially, accounting for approximately 6.4% of total revenues, primarily due to reduced advertising placements and regulatory scrutiny [10][14] Market Data and Key Metrics Changes - The number of subscribers decreased from 4.05 million to 3.96 million, but the average revenue per subscriber increased from RMB 35.5 to RMB 36.9 [13] - Bandwidth costs included in cost of revenues were $18.5 million, representing 33.6% of total revenues, compared to $17.7 million or 33.2% previously [14][15] Company Strategy and Development Direction - The company is focusing on advancing decentralized networking technology and exploring blockchain-based key technologies for big data asset management [11] - Management emphasized the importance of long-term investments to improve user experience and social value in product decisions [11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about future demand for cloud computing products, particularly due to the popularity of video streaming [9] - The company anticipates continued challenges in the advertising business due to regulatory scrutiny, leading to a short-term decline [10] Other Important Information - Research and development expenses increased to $15.2 million, representing 27.5% of total revenues, due to merit salary adjustments and increased headcount [15][16] - Sales and marketing expenses rose to $6.7 million, representing 12.1% of total revenues, attributed to more promotional activities [16] Revenue Guidance - For Q3 2021, the company expects total revenues to be between $54 million and $58 million, indicating a potential increase of approximately 1.4% at the midpoint [18] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded without further inquiries [19]