Xunlei Ltd (XNET) 2024 Q1 法說會逐字稿

Welcome, ladies and gentlemen, and thank you for your patience. You've joined Xunlei's first quarter 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I'd now like to turn the call over to the host, Investor Relations Manager, Mr. Luhan Tang.

歡迎，女士們先生們，感謝你們的耐心等待。您已參加迅雷 2024 年第一季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。現在我想把電話轉給主持人投資者關係經理唐鹿涵先生。

Good morning, everyone, and thank you for joining Xunlei's Q1 2024 earnings conference call. With me today are Eric Zhou, CFO; and [Ya Li], VP of Finance. Our IR website has our earnings press release available to supplement our prepared remarks during the call. Today's agenda includes a prepared opening remarks from Chairman and CEO, Mr. Jinbo Li, on Q1 operations highlights. Followed by our CFO, Mr. Eric Zhou, presenting financial results, details on the revenue guidance for Q2 2024, before we open up the floor to your questions in the Q&A session. Please note that this call reported and can be replayed on our Investor Relations website at ir.xunlei.com.

大家早安，感謝您參加迅雷 2024 年第一季財報電話會議。今天和我在一起的有財務長艾瑞克‧週 (Eric Zhou)；和[Ya Li]，財務副總裁。我們的投資者關係網站上有我們的收益新聞稿，以補充我們在電話會議期間準備好的言論。今天的議程包括董事長兼首席執行官李金波先生就第一季度營運亮點發表的準備好的開場白。接下來，我們的財務長 Eric Zhou 先生介紹了財務業績以及 2024 年第二季收入指引的詳細信息，然後我們在問答環節中回答大家的問題。請注意，本次電話會議已被報導並可在我們的投資者關係網站 ir.xunlei.com 上重播。

Before we get started, I would like to take this opportunity to remind you that the discussion today will contain certain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations under current market conditions that are subject to risks and uncertainties that are difficult to predict, which may cause actual results to differ materially from those made in the forward-looking statements. Please refer to our SEC filings for more detailed descriptions of the risk factors that may affect our results.

在我們開始之前，我想藉此機會提醒您，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的某些前瞻性陳述。此類陳述是基於管理階層在當前市場條件下的當前預期，存在難以預測的風險和不確定性，可能導致實際結果與前瞻性陳述中的結果有重大差異。請參閱我們向 SEC 提交的文件，以了解可能影響我們結果的風險因素的更詳細描述。

Xunlei assumes no obligation to update any forward-looking statements except as required under applicable law. On this call, we'll be using both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP and the comparable GAAP measures can be found in our earnings press release. Please note that all numbers are in US dollars unless otherwise stated.

除適用法律要求外，迅雷不承擔更新任何前瞻性聲明的義務。在這次電話會議上，我們將使用公認會計原則和非公認會計原則財務指標。非公認會計原則和可比較公認會計原則衡量標準的調節可以在我們的收益新聞稿中找到。請注意，除非另有說明，所有數字均以美元為單位。

Now the following in the prepared statements by Mr. Jinbo Li, Chairman and CEO of Xunlei Limited.

以下是迅雷有限公司董事長兼執行長李金波先生準備的演講稿。

Good morning and good evening, everyone. Thank you all for joining us today. We have kicked off 2024 with our Q1 revenue meeting our expectations and maintaining quarterly profitability, driven by improved gross margin and increased gross profit. During the first quarter, we achieved $80.4 million in revenue, representing a growth of 4.2% compared to the previous quarter, but a decline of 19% year-over-year. As we continue to navigate the impact of the downturn of our domestic audio live streaming business. Since June 2023, we anticipate its impact on our year-over-year quarterly financial comparisons will gradually fade away in the second half of this year.

大家早安，晚上好。感謝大家今天加入我們。在毛利率改善和毛利增加的推動下，我們的 2024 年第一季營收達到了我們的預期，並保持了季度獲利能力。第一季度，我們營收 8,040 萬美元，季增 4.2%，但年減 19%。隨著我們繼續應對國內音頻直播業務低迷的影響。自 2023 年 6 月以來，我們預計其對年比季度財務比較的影響將在今年下半年逐漸消失。

Despite the evolving market conditions, we believe that our business continues to exhibit resilience and we are optimistic about operations in 2024.

儘管市場狀況不斷變化，我們相信我們的業務將繼續展現彈性，並對 2024 年的營運持樂觀態度。

Let's talk about our first quarter operations. Our subscription revenue achieved a remarkable milestone, reaching $33.1 million, which represents a year-over-year growth of 12.9%. This outstanding performance can be attributed to both an increased number of subscribers and a higher conversion rate among premium subscribers. The rise in subscriber base is primarily driven by the implementation of more effective marketing promotions as well as a seasonal impact of Chinese New Year holiday by continuously enhancing product features and collaborating with strategic partners to retain and acquire users. We generally expect continued development of our business, although we may encounter short-term fluctuations from time to time.

我們來談談第一季的營運狀況。我們的訂閱收入實現了一個顯著的里程碑，達到 3,310 萬美元，年增 12.9%。這一出色的業績可歸因於訂閱者數量的增加和優質訂閱者之間更高的轉換率。用戶數量的成長主要是由於實施更有效的行銷促銷活動以及春節假期的季節性影響，透過不斷增強產品功能並與策略合作夥伴合作來保留和獲取用戶。儘管我們可能不時遇到短期波動，但我們通常會期望業務持續發展。

In the first quarter of 2024, our cloud computing business generated a revenue of was $30.2 million, reflecting a decline of 1.2% quarter-over-quarter and 7.8% year-over-year, respectively. Primarily attributed to intensified pricing competition and reduced sales volume of hardware devices. However, we are encouraged that we had a more than sixfold quarter-over-quarter increase in sales of OEA a more affordable line of hardware device in our product portfolio. We provide safer choices of products to cater users different needs.

2024年第一季度，我們的雲端運算業務營收為3,020萬美元，季減1.2%，年減7.8%。主要是由於價格競爭加劇以及硬體設備銷售下降。然而，令我們感到鼓舞的是，OEA 的銷售額環比增長了六倍多，OEA 是我們產品組合中更實惠的硬體設備系列。我們提供更安全的產品選擇，滿足使用者不同的需求。

Now let's turn to our live streaming and internet value added services. We generated $17.1 million in revenue, representing an increase of 13.7% quarter-over-quarter and a decrease of 54.1% year-over-year, respectively. A decrease was due to the impact of downsizing our domestic audio live streaming business started last June, and we expect the impact will continue to affect our top line comparisons for a few more quarters. To mitigate its impact. We have been expanding our international operations as well as incubating new products and businesses to accelerate business development.

現在讓我們轉向我們的直播和網路增值服務。我們營收 1,710 萬美元，季增 13.7%，年減 54.1%。下降是由於去年六月開始的國內音頻直播業務規模縮減的影響，我們預計這一影響將在接下來的幾個季度繼續影響我們的營收比較。以減輕其影響。我們一直在擴大國際業務，孵化新產品和新業務，以加速業務發展。

In the second half of 2024, we intend to make bold efforts to transform our businesses and now our strategic initiatives. We will embrace decentralized and AI driven technologies and Hermes their capabilities to enhance our operational efficiency, rich user experiences and gain competitive advantages. As AI emerges as a revolutionary technology that will profoundly impact our lives. We acknowledge the challenges ahead and have confidence in making progress in our endeavor given issuance rich heritage of innovation and entrepreneurial spirit. We're in early stage of innovation and strategic execution and I look forward to providing more information and sharing with you our progress in the near future.

2024年下半年，我們打算大膽努力轉型我們的業務和現在的策略性舉措。我們將採用去中心化和人工智慧驅動的技術以及 Hermes 的能力來提高我們的營運效率、豐富的用戶體驗並獲得競爭優勢。人工智慧作為一項革命性技術出現，將深刻影響我們的生活。我們承認未來的挑戰，並有信​​心在我們的努力中取得進展，因為發行具有豐富的創新和創業精神傳統。我們正處於創新和策略執行的早期階段，我期待在不久的將來提供更多資訊並與您分享我們的進展。

With that, I'll turn the call over to Eric. Eric will cover the financial results in detail and provide our revenue guidance for the second quarter of 2024.

這樣，我會將電話轉給艾瑞克。Eric 將詳細介紹財務表現並提供我們 2024 年第二季的營收指引。

Thank you, Li, and thank you all again for participating in Xunlei's conference call to discuss the financial results of the first quarter of 2024. In the first quarter, total revenues were $80.4 million, representing a decrease of 19% year-over-year. The decrease was mainly attributable to the decreased revenue from our live streaming business as a result of that downsize of our domestic audio live streaming operations since the June 2023.

謝謝李老師，再次感謝大家參加迅雷的電話會議，討論2024年第一季的財務表現。第一季總營收為8,040萬美元，較去年同期下降19%。下降的主要原因是自2023年6月以來我們的國內音訊直播業務規模縮小，導致我們的直播業務收入下降。

Revenues from cloud computing were $30.2 million, representing a decrease of 7.8% year-over-year. The decrease was mainly due to the decreased revenues from certain of major customers of cloud computing services as well as the decreased sales revenue of our cloud computing hardware devices. Revenues from subscription were $33.1 million representing a increase of 12.9% year-over-year.

雲端運算收入為3020萬美元，年減7.8%。減少的主要原因是來自雲端運算服務的某些主要客戶的收入減少以及我們的雲端運算硬體設備的銷售收入減少。訂閱收入為 3,310 萬美元，較去年同期成長 12.9%。

The increase was mainly driven by the increase in the number of subscribers. The number of subscribers was 5.76 million as of March 31, 2024, compared with 4.84 million as of March 31, 2023. The average revenue per subscriber for the first quarter 2024 was RMB39.5 compared with RMB41 in the same period last year. The lower average revenue per subscriber was due to more promotional activities we conducted during the first quarter of 2024.

這一增長主要是由於訂戶數量的增加所致。截至2024年3月31日，訂閱人數為576萬，而截至2023年3月31日，訂閱人數為484萬。2024年第一季每位用戶的平均收入為人民幣39.5元，去年同期為人民幣41元。每位訂閱者的平均收入較低是由於我們在 2024 年第一季開展了更多促銷活動。

Revenues from large streaming and other IVAS were $17.1 million, representing a decrease of 54.1% year-over-year. The decrease of live streaming and other IVAS revenues was mainly due to the downsize of our domestic audio live streaming operations since the June 2023.

大型串流媒體及其他網路加值服務收入為1,710萬美元，較去年同期下降54.1%。直播和其他網路加值服務收入的下降主要是由於2023年6月以來我們國內音訊直播業務規模的縮減。

Cost of revenues was $37.1 million, representing 46.2% of our total revenues compared with $59.3 million of 59.8% of the total revenues in the same period of 2023. The decrease in the cost of revenues was mainly attributable to the decreased revenue sharing costs for live streaming business, which was consistent with a decrease in live streaming revenues.

收入成本為 3,710 萬美元，佔總營收的 46.2%，而 2023 年同期為 5,930 萬美元，佔總營收的 59.8%。收入成本的下降主要是因為直播業務的收入分成成本下降，這與直播收入的下降一致。

Bandwidth costs included in cost of revenues were $27.1 million, representing 33.8% of our total revenues compared with $29.1 million or 29.3% of the total revenues in the same period of 2023. The decrease was primarily due to the decreased bandwidth usage for the development of innovative products and a decrease in sales revenue of our cloud computing so this is during the quarter.

收入成本中包含的頻寬成本為 2,710 萬美元，占我們總收入的 33.8%，而 2023 年同期為 2,910 萬美元，佔總收入的 29.3%。下降的主要原因是開發創新產品的頻寬使用量減少以及我們的雲端運算銷售收入減少，因此這是本季的情況。

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

剩餘收入成本主要包括與直播業務的收入分享成本、付款手續費、銷售庫存成本以及伺服器和其他設備折舊相關的成本。

Gross profit for the first quarter of 2024 was $42.8 million, representing an increase of 8.2% year-over-year. Gross profit margin was 53.3% in the first quarter of 2024 compared with 39.9% in the same period of 2023. The increase in gross profit was mainly driven by the increase in the gross profit of our subscription business. And the increase in gross profit margin was mainly attributable to the increase of percentage of subscription revenues to total revenues, which had a higher gross profit margin as well as the decreased percentage of live streaming revenues to total revenues, which has relatively lower gross profit margin.

2024年第一季毛利為4,280萬美元，較去年同期成長8.2%。2024年第一季毛利率為53.3%，而2023年同期毛利率為39.9%。毛利的成長主要是由於我們的訂閱業務毛利的成長所致。毛利率上升的主要原因是毛利率較高的訂閱收入佔總收入的比例上升，以及毛利率相對較低的直播收入佔總收入的比例下降。

Research and development expenses for the first quarter of 2024 were $17.6 million, representing 22% of our total revenues compared with $18 million or 18.2% of total revenues in the same period of 2023. The decrease was primarily due to the decrease in employee compensation incurred during the quarter.

2024 年第一季的研發費用為 1,760 萬美元，占我們總營收的 22%，而 2023 年同期為 1,800 萬美元，佔總營收的 18.2%。減少的主要原因是本季發生的員工薪資減少。

Sales and marketing expenses for the first quarter of 2024 were $10.1 million, representing 12.5% of our total revenues compared with $9.3 million or 9.4% of total revenues in the same period of 2023. The increase was primarily due to more marketing expenses incurred during the quarter for our subscription and overseas live streaming businesses as part of our ongoing efforts on user acquisition.

2024 年第一季的銷售和行銷費用為 1,010 萬美元，佔總收入的 12.5%，而 2023 年同期為 930 萬美元，佔總收入的 9.4%。這一成長主要是由於本季我們的訂閱和海外直播業務產生了更多的行銷費用，這是我們持續努力獲取用戶的一部分。

G&A expenses for the first quarter of 2024 were $11.1 million representing 13.9% of our total revenues compared with $11.7 million or 11.8% of our total revenues in the same period of 2023. The decrease was primarily due to the decrease in share-based compensation expenses, partially offset by the increase in labor costs during the quarter.

2024 年第一季的一般管理費用為 1,110 萬美元，占我們總收入的 13.9%，而 2023 年同期為 1,170 萬美元，占我們總收入的 11.8%。這一下降主要是由於股權激勵費用的減少，但部分被本季勞動成本的增加所抵消。

Operating income was $4 million compared with an operating income of $0.7 million in the same period of 2023. The increase in operating income was primarily attributable to the increase in gross profit from our subscription business during the quarter. Other income was $0.3 million compared with other income of $1.4 million in the same period of 2023. The decrease was primarily due to one-time write-off long-term investment and a decrease in subsidy income received during the first quarter of 2024.

營業收入為 400 萬美元，而 2023 年同期營業收入為 70 萬美元。營業收入的成長主要歸因於本季訂閱業務毛利的成長。其他收入為 30 萬美元，而 2023 年同期其他收入為 140 萬美元。減少的主要原因是一次性沖銷長期投資以及2024年第一季收到的補貼收入減少。

Net income was $3.6 million compared with $1.2 million in the same period of 2023. Non-GAAP net income was $4.5 million in the first quarter of 2024 compared with $5.5 million in the same period of last year. The increase in net income was primarily attributable to the increase in the gross profit of our subscription business partially offset by the decrease in other income as discussed above.

淨利潤為 360 萬美元，而 2023 年同期為 120 萬美元。2024 年第一季非 GAAP 淨利為 450 萬美元，去年同期為 550 萬美元。淨利潤的增加主要是由於我們的訂閱業務毛利的增加部分被上述其他收入的減少所抵消。

The decrease in non-GAAP net income was primarily attributable to the increase in labor costs as compared with the same period of 2023. Diluted earnings per ADS in the first quarter of 2024 was approximately $0.06 as compared to $0.02 in the same period of 2023.

非公認會計準則淨利下降的主要原因是勞動成本較2023年同期增加。2024 年第一季每份美國存託憑證的攤薄收益約為 0.06 美元，而 2023 年同期為 0.02 美元。

As of March 31, 2024, the company had cash, cash equivalents and short-term investments of $272.5 million compared with $271.9 million as of March 31, 2023. The increase in cash, cash equivalents and short-term investments was mainly due to the net cash from operations and proceeds from bank borrowings, partially offset by repayment of bank borrowings, spending on share buybacks and a payment for long-term investment till the first quarter of 2024.

截至2024年3月31日，該公司擁有現金、現金等價物及短期投資為2.725億美元，截至2023年3月31日為2.719億美元。現金、現金等價物和短期投資的增加主要是由於經營活動產生的現金淨額和銀行借款收益，部分被償還銀行借款、股票回購支出和截至年初的長期投資付款所抵銷。

Now turning to our share repurchase program. In June 2023, Xunlei announced that is Board of Directors has authorized the repurchase of up to $20 million of its shares over the next 12 months. As of March 31, 2024, the company had spent approximately $4.7 million on share buybacks under the share repurchase program.

現在轉向我們的股票回購計劃。2023年6月，迅雷宣布董事會已授權在未來12個月內回購最多2,000萬美元的股票。截至 2024 年 3 月 31 日，該公司已根據股票回購計畫花費約 470 萬美元用於股票回購。

Finally, for our revenue guidance for the second quarter of 2024, Xunlei estimates total revenues to be between $79 million and $84 million and the midpoint of the range represents a quarter-over-quarter increase of approximately 1.4%. These estimates represent management's preliminary view as of the date of this press release, which is subject to change and any change could be material.

最後，對於我們 2024 年第二季的營收指引，迅雷預計總收入在 7,900 萬美元至 8,400 萬美元之間，該範圍的中點代表季度環比增長約 1.4%。這些估計代表了管理層截至本新聞稿發布之日的初步觀點，可能會發生變化，並且任何變化都可能是重大的。

Now we conclude our prepared remarks for the conference call. Operator, we are ready to take questions.

現在我們結束為電話會議準備的發言。接線員，我們準備好回答問題。

(Operator Instructions) [Yang Jin Ko], Ping An Insurance.

（接線生指示）[楊金高]，平安保險。

(spoken in Chinese)

(用中文說)

As you stated that the first sitting in congress on the record revenue for the subscription business and she observed a decline in the number of subscribers this quarter compared with the previous quarter. She would love to know some insights into the current strategy for subscription business. And our approach to acquire new users. And thanks for asking.

正如您所說，在國會第一次會議上討論了訂閱業務的創紀錄收入，她觀察到本季度的訂閱者數量與上一季度相比有所下降。她很想了解目前訂閱業務策略的一些見解。以及我們獲取新用戶的方法。感謝您的提問。

The declines in a number of subscribers in the first quarter of 2024 was due to the seasonal impact of the Chinese New Year holidays. Currently, we are implementing the multicast passive strategies to enhance users' loyalty and have faster collaborations with various unmanned platforms and strategic partners to acquire new users.

2024年第一季訂閱用戶數量下降是由於春節假期的季節性影響。目前，我們正在實施組播被動策略，以提高用戶的忠誠度，並與各個無人平台和策略合作夥伴更快地合作以獲取新用戶。

Generally speaking, we expect to maintain a relatively stable user base and a product revenue, although we may encounter fluctuations from time to time. Going forward, our focus will remain on building a robust and sustainable ecosystem, enhancing user benefits, iterating more features to boost the user engagement and expand user base. Thank you.

總體而言，儘管我們可能會不時遇到波動，但我們希望保持相對穩定的用戶基礎和產品收入。展望未來，我們的重點仍將是建立一個強大且可持續的生態系統，增強用戶收益，迭代更多功能以提高用戶參與度並擴大用戶群。謝謝。

(spoken in Chinese)

(用中文說)

(spoken in Chinese)

(用中文說)

The question is according to the first quarter earnings press release, you mentioned that the decrease in live streaming revenues was because she may have downsized its domestic audio live streaming business since the June 2023. I wonder how much this will continue to affect your future earnings and the accumulate plans to resume this operations in the future?

問題是，根據第一季財報新聞稿，您提到直播收入下降是因為她可能從2023年6月開始縮減了國內音訊直播業務。我想知道這會對你們未來的收入以及未來恢復這項業務的累積計劃產生多大影響？

Thanks for asking that. We have already completed some study of our domestic audio live streaming business and the impact on our future financial results will be minimal, if any, on a sequential basis. And we don't have any plans right now to resume this business instead or where folks are expanding our operations overseas to mitigate the impact of this business adjustment. Thanks again.

謝謝你這麼問。我們已經完成了對國內音頻直播業務的一些研究，按順序計算，對我們未來財務業績的影響（如果有的話）也很小。我們目前沒有任何計劃恢復這項業務，也沒有計劃將我們的業務擴展到海外，以減輕這項業務調整的影響。再次感謝。

(spoken in Chinese)

(用中文說)

(spoken in Chinese)

(用中文說)

(Operator Instructions) I'm showing no further questions. I'll now turn the conference back to the management team for closing comments.

（操作員說明）我沒有再提出任何問題。現在我將把會議轉回給管理團隊以徵求結束意見。

Thank you again for your attend and participation. If you have any questions, please feel free to visit our website at ir.xunlei.com or send us email to our Investors Relations. Have a good day. Operationally conclude today's conference call. Thank you --

再次感謝您的出席與參與。如果您有任何疑問，請隨時造訪我們的網站 ir.xunlei.com 或發送電子郵件至我們的投資者關係部門。祝你有美好的一天。從操作上結束今天的電話會議。謝謝--

Thank you. And that concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。