Xunlei(US:XNET)2024-05-16 13:53Financial Data and Key Metrics Changes - In Q1 2024, total revenue was $80.4 million, a decrease of 19% year-over-year but an increase of 4.2% compared to the previous quarter [7][12] - Gross profit for Q1 2024 was $42.8 million, representing an increase of 8.2% year-over-year, with a gross profit margin of 53.3% compared to 39.9% in the same period of 2023 [15] - Net income was $3.6 million, up from $1.2 million in Q1 2023, while non-GAAP net income was $4.5 million compared to $5.5 million in the same period last year [18] Business Line Data and Key Metrics Changes - Subscription revenue reached $33.1 million, a year-over-year growth of 12.9, driven by an increase in subscribers to 5.76 million from 4.84 million [8][13] - Cloud computing revenue was $30.2 million, reflecting a decline of 7.8% year-over-year, attributed to pricing competition and reduced hardware sales [9][12] - Live streaming and Internet Value-Added Services generated $17.1 million, a decrease of 54.1% year-over-year due to downsizing of the domestic audio live streaming business [10][13] Market Data and Key Metrics Changes - The company noted that the impact of the domestic audio live streaming business downsizing will continue to affect revenue comparisons for a few more quarters, but expects this impact to fade in the second half of 2024 [7][10] - The company is expanding international operations to mitigate the impact of the downsized domestic business [10][23] Company Strategy and Development Direction - The company plans to embrace decentralized and AI-driven technologies to enhance operational efficiency and user experience [11] - Focus will remain on building a sustainable ecosystem, enhancing user benefits, and expanding the user base [21] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about operations in 2024 despite current market challenges, expecting resilience in business performance [7] - The company anticipates that the impact of the domestic audio live streaming business will diminish in the latter half of the year [7][23] Other Important Information - As of March 31, 2024, the company had cash, cash equivalents, and short-term investments of $272.5 million, a slight increase from $271.9 million a year earlier [19] - The company has authorized a share repurchase program of up to $20 million, with approximately $4.7 million spent on buybacks as of March 31, 2024 [19] Q&A Session Summary Question: Insights into the current strategy for the subscription business and user acquisition - Management noted that the decline in subscribers was seasonal due to the Chinese New Year, and they are implementing strategies to enhance user loyalty and acquire new users through collaborations [21] Question: Future impact of downsizing the domestic audio live streaming business - Management confirmed that the downsizing has been completed and expects minimal impact on future earnings, with no plans to resume this business [22][23]