Xunlei Ltd (XNET) 2024 Q3 法說會逐字稿

Welcome, ladies and gentlemen, and thank you for your patience.

歡迎，女士們先生們，感謝你們的耐心等待。

You've joined Xunlei's third-quarter 2024 earnings conference call.

您已參加迅雷 2024 年第三季財報電話會議。

(Operator Instructions) Please be advised that today's conference is being recorded.

（操作員指示）請注意，今天的會議正在錄製中。

I would now like to turn the call over to the host, Investor Relations Manager, Ms. Luhan Tang.

我現在請主持人投資者關係經理唐璐菡女士發言。

Please go ahead.

請繼續。

Good morning, everyone, and thank you for joining Xunlei's Q3 2024 earning conference call.

大家早安，感謝大家參加迅雷2024年第三季財報電話會議。

With me today are Eric Zhou, CFO; and [Li Li], Vice President of Finance.

今天和我在一起的有財務長艾瑞克‧週 (Eric Zhou)；以及[李麗]，財務副總裁。

Our IR website has our earnest press release to supplement our prepared remarks during the call.

我們的投資者關係網站上有我們誠摯的新聞稿，以補充我們在電話會議期間準備好的言論。

Today's agenda includes a prepared opening remarks from Chairman and CEO, Mr. Jinbo Li, on Q3 operational highlights; followed by CFO Eric Zhou's presentation of financial results details and the revenue guidance of Q4 2024 before we open up the floor to your questions in the Q&A session.

今天的議程包括董事長兼執行長李金波先生就第三季營運亮點準備的開場致詞；接下來，財務長 Eric Zhou 將介紹財務業績詳細資訊和 2024 年第四季的收入指引，然後我們將在問答環節回答大家的問題。

Please note that this call is recorded and can be replayed on our Investor Relations website at ir.xunlei.com. 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 Security Litigation Reform Act of 1995.

請注意，本次通話將會被錄音，並可在我們的投資者關係網站 ir.xunlei.com 上重播。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 年美國私人安全訴訟改革法案的安全港條款做出的某些前瞻性陳述。

Such statements are based on our management's current expectations under existing market conditions and 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 statement.

此類陳述是基於我們管理階層在現有市場條件下的當前預期，並受到難以預測的風險和不確定性的影響，可能導致實際結果與前瞻性陳述中的結果有重大差異。

Please refer to our SEC filings for a more detailed description of the risk factors that may affect our results.

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 obligations to update any forward-looking statements, except as required under applicable laws.

迅雷不承擔更新任何前瞻性聲明的義務，除非適用法律要求。

On this call, we will be using both GAAP and non-GAAP financial measures.

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。

A reconciliation of non-GAAP to comparable GAAP measures can be found in our earnings press release.

在我們的收益新聞稿中可以找到非公認會計準則與可比較公認會計準則衡量標準的調節表。

Please note that all numbers are in US dollars unless otherwise stated.

請注意，除非另有說明，所有數字均以美元為單位。

Now, the following is a prepared statement 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的演講稿。

Good morning, and good evening, everyone.

大家早安，晚上好。

Thank you, all, for joining us today.

謝謝大家今天加入我們。

In the third-quarter 2024, we achieved continued profitability, while total revenues declined 4.9% due to the lingering impact from last year's downsizing of our domestic audio live streaming business, and reduced cloud computing sales due to the changing market landscape for our cloud computing business.

2024年第三季度，我們實現了持續盈利，但由於去年國內音頻直播業務規模縮減的持續影響，總收入下降了4.9%，以及雲端運算市場格局變化導致雲端運算銷售額減少商業。

We were able to partially mitigate the impact by expanding our overseas operations.

我們透過擴大海外業務，部分減輕了影響。

Moving forward, we intend to continue to invest in overseas projects, including live streaming business, explore new opportunities, and restructure our overall product mix to develop a more stable and growth-oriented business.

展望未來，我們打算繼續投資包括直播業務在內的海外項目，探索新的機會，並重組我們的整體產品結構，以發展更穩定和成長的業務。

Now, I'd like to review the performance of our major business segments for the third quarter of 2024.

現在，我回顧一下2024年第三季我們主要業務部門的表現。

Let me start with our subscription business.

讓我從我們的訂閱業務開始。

Our subscription business enjoyed continuous growth and generated $33.2 million in revenue, up 15.6% year over year.

我們的訂閱業務持續成長，營收達到 3,320 萬美元，年增 15.6%。

We're very pleased with the progress achieved by our talented product team.

我們對我們才華橫溢的產品團隊所取得的進步感到非常滿意。

Their efforts on product refinement and marketing strategies led to improved user engagement, loyalty, and more premium membership purchases.

他們在產品改進和行銷策略方面的努力提高了用戶參與度、忠誠度和更多高級會員購買。

During the third quarter, premium subscribers accounted for 78% of total paying users, compared to about 60% in the same period last year.

第三季度，付費用戶佔付費用戶總數的78%，而去年同期則約為60%。

Going forward, we will proactively explore synergy within our product ecosystem to pursue sustainable growth.

展望未來，我們將積極探索產品生態系統內的綜效，以追求永續成長。

For example, we will seek further collaboration with leading cellphone makers for partnerships to use pre-installed Xunlei products to support their mobile phone browsers to drive meaningful growth and expand our user base.

例如，我們將尋求與領先的手機製造商進一步合作，建立合作夥伴關係，使用預先安裝的迅雷產品來支援他們的手機瀏覽器，以推動有意義的成長並擴大我們的用戶群。

In the third quarter, our cloud computing business faced significant challenges.

第三季度，我們的雲端運算業務面臨重大挑戰。

And our revenue declined to $25.3 million, representing a 14.4% year-on-year decrease.

我們的收入下降至 2530 萬美元，年減 14.4%。

We expect the cloud business to continue to face headwinds due to intense market competition and the evolving regulatory environment.

由於激烈的市場競爭和不斷變化的監管環境，我們預期雲端業務將繼續面臨阻力。

We will evaluate options to stabilize this business and minimize impact of the revenue reduction on our total revenues as well as the bottom line.

我們將評估穩定該業務的方案，並盡量減少收入減少對我們總收入和利潤的影響。

Revenue from our live streaming and IVAS business reached $21.6 million, representing a quarter-over-quarter increase of 6.7% and a year-over-year decrease of 16.7%.

直播和網路增值業務收入達2,160萬美元，較上季成長6.7%，較去年同期下降16.7%。

The consistent quarter-over-quarter increase over the last three quarters was due to the growth of our overseas live streaming operations, which partially neutralized the impact of downsizing of our domestic audio live streaming business.

過去三個季度的持續環比增長是由於我們的海外直播業務的增長，部分抵消了我們國內音頻直播業務規模縮減的影響。

Our new product mix is well positioned to tap into both existing markets and new targeted regions.

我們的新產品組合已做好充分準備，可以進入現有市場和新的目標地區。

We are incubating a number of products to search a star product with controlled operational risks.

我們正在孵化多個產品，尋找營運風險可控的明星產品。

This approach allows us to explore different avenues while minimizing potential setbacks.

這種方法使我們能夠探索不同的途徑，同時最大限度地減少潛在的挫折。

Before I conclude, I want to emphasize our high confidence in Xunlei.

在結束之前，我想先強調我們對迅雷的高度信心。

Throughout the past decades, our dedication to innovation and market adoption has been a driving force behind our success in an ever-evolving environment.

在過去的幾十年裡，我們對創新和市場採用的奉獻一直是我們在不斷變化的環境中成功的驅動力。

In this fast-paced digital era, where technology advances at an unprecedented rate, we understand the importance of staying ahead of the curve.

在這個快節奏的數位時代，科技以前所未有的速度進步，我們了解保持領先的重要性。

And for this reason, we will continue investing in research and development of initiatives that bring about groundbreaking solutions and products and services.

基於這個原因，我們將繼續投資於帶來突破性解決方案、產品和服務的措施的研發。

Looking ahead, we are committed to pushing boundaries even further and exploring untapped potential with a relentless determination and ultimately, creating value for our shareholders.

展望未來，我們致力於進一步突破界限，以不懈的決心探索未開發的潛力，最終為股東創造價值。

With that, I will now pass the call over to Eric.

現在，我將把電話轉給埃里克。

Eric will gave a detailed review of our Q3 financial results and provide revenue guidance for the fourth quarter of 2024.

Eric 將對我們第三季的財務表現進行詳細審查，並提供 2024 年第四季的收入指引。

Thank you, Luhan, and thank you, all, again for participating in Xunlei's conference call to discuss financial results of the third quarter of 2024.

再次感謝鹿晗，也感謝大家參加迅雷的電話會議，討論 2024 年第三季的財務表現。

In the third quarter, our total revenues were $18.1 million, representing a decrease of 4.9% year over year.

第三季度，我們的總收入為1810萬美元，年減4.9%。

The decrease in total revenues was mainly attributable to the decrease in our revenues from live streaming and cloud computing business.

總收入下降主要是由於直播和雲端運算業務收入下降所致。

Revenues from cloud computing were $25.3 million, representing a decrease of 14.4% year over year.

雲端運算收入為2530萬美元，年減14.4%。

The decrease in cloud computing revenues was mainly due to the reduced sales of our cloud computing services and a decline in sales of cloud computing hardware devices as a result of heightened competition and evolving regulatory environment.

雲端運算收入下降主要是由於競爭加劇和監管環境不斷變化導致雲端運算服務銷售額減少以及雲端運算硬體設備銷售額下降。

Revenues from subscription were $33.2 million, representing an increase of 15.6% year over year.

訂閱收入為3,320萬美元，較去年同期成長15.6%。

The increase in subscription revenues was mainly driven by the increase in the number of subscribers.

訂閱收入的成長主要是由於訂閱者數量的增加所致。

The number of subscribers was 5.51 million as of September 30, 2024, compared with 5.02 million as of September 30, 2023.

截至2024年9月30日，訂閱人數為551萬，而截至2023年9月30日，訂閱人數為502萬。

The average revenue per subscriber for the third quarter was RMB40.9 compared with RMB39.9 in the same period of 2023.

第三季每位用戶的平均收入為人民幣 40.9 元，而 2023 年同期為 39.9 元。

The higher average revenue per subscriber was mainly attributable to an increase in the proportion of users who signed up for our premium membership services.

每位訂戶平均收入的增加主要歸因於註冊我們的高級會員服務的用戶比例的增加。

Revenues from live streaming and other IVAS were $21.6 million, representing a decrease of 16.7% year over year.

直播及其他網路加值服務收入為2,160萬美元，較去年同期下降16.7%。

The decrease of live streaming and other IVAS revenues was mainly due to the downsizing of our domestic audio live streaming operations since June 2023, which was partially offset by the increase in the revenues from our overseas audio live streaming business.

直播和其他網路增值服務收入的下降主要是由於我們自2023年6月以來國內音頻直播業務規模縮小，但部分被我們海外音頻直播業務收入的增長所抵消。

Cost of revenues were $39.4 million, representing 49.1% of our total revenues, compared with $46.4 million or 55.1% of our total revenues in the same period of 2023.

收入成本為 3,940 萬美元，占我們總收入的 49.1%，而 2023 年同期為 4,640 萬美元，占我們總收入的 55.1%。

The decrease in cost of revenues was mainly attributable to the decrease in bandwidth costs, as well as revenue sharing costs, for our live streaming business incurred this quarter.

收入成本的下降主要歸因於本季直播業務的頻寬成本以及收入分成成本的下降。

Bandwidth costs, as included in cost of revenues, were $24.8 million, representing 31% of our total revenues, compared with $28.1 million or 33.4% of our total revenues in the same period last year.

包含在收入成本中的頻寬成本為 2,480 萬美元，占我們總收入的 31%，而去年同期為 2,810 萬美元，占我們總收入的 33.4%。

The decrease was primarily due to the decrease in revenues from cloud computing services during the quarter.

下降的主要原因是本季雲端運算服務收入下降。

The remaining cost of revenues mainly consisted of costs related to the revenue sharing from our live streaming business, payment handling charges, and cost of inventory sold.

剩餘收入成本主要包括與直播業務收入分成相關的成本、支付手續費、銷售庫存成本。

Gross profit for the third quarter of 2024 was $40.5 million, representing an increase of 7.8% year over year.

2024年第三季毛利為4,050萬美元，較去年同期成長7.8%。

Gross profit margin was 50.5% in the third quarter, compared with 44.6% in the same period of 2023.

第三季毛利率為50.5%，而2023年同期毛利率為44.6%。

The increase in gross profit was mainly driven by the increased gross profit from our subscription business.

毛利的成長主要是由於訂閱業務毛利的成長所致。

The increase in gross profit margin was primarily due to the higher weighting of subscription revenues in our total revenue mix, which has a high gross profit margin.

毛利率的成長主要是由於訂閱收入在我們總收入組合中的權重較高，毛利率較高。

Research and development expenses for the third quarter were $17.7 million representing 22.1% of our total revenues, compared with $19.5 million or 23.1% of our total revenues in the same period of 2023.

第三季的研發費用為 1,770 萬美元，占我們總營收的 22.1%，而 2023 年同期為 1,950 萬美元，占我們總營收的 23.1%。

The decrease was primarily due to the decrease in labor costs.

減少的主要原因是勞動成本下降。

Sales and marketing expenses for the third quarter were $11.5 million, representing 14.3% of our total revenues, compared with $9.5 million or 11.3% of our total revenues in the same period of 2023.

第三季的銷售和行銷費用為 1,150 萬美元，占我們總收入的 14.3%，而 2023 年同期為 950 萬美元，占我們總收入的 11.3%。

The increase was primarily due to more marketing expenses incurred for our subscription and overseas audio live streaming businesses.

這一成長主要是由於我們的訂閱和海外音訊直播業務產生的行銷費用增加。

General and administrative expenses for the third quarter were $11.4 million, representing 14.2% of our total revenues, compared with $11.1 million or 13.2% of total revenues in the same period of last year.

第三季的一般及管理費用為 1,140 萬美元，佔總營收的 14.2%，而去年同期為 1,110 萬美元，佔總營收的 13.2%。

The increase was primarily due to the increase in labor costs, partially offset by the decrease in one-off impairment of servers and network equipment.

這一增長主要是由於勞動力成本的增加，但部分被伺服器和網路設備一次性減損的減少所抵消。

Operating loss was $0.2 million, compared with an operating loss of $2.5 million in the same period of last year.

營運虧損為20萬美元，去年同期營運虧損為250萬美元。

The decrease in operating loss was primarily attributable to the increase in gross profit of subscription businesses, partially offset by the increase in marketing expenses during the quarter.

營運虧損的減少主要歸因於訂閱業務毛利的增加，但部分被本季行銷費用的增加所抵銷。

Other income, net was $4.8 million, compared with other income net of $7.3 million in the same period of 2023.

其他淨收入為 480 萬美元，而 2023 年同期其他淨收入為 730 萬美元。

The decrease was primarily due to less reversal of payables with low payment probability as compared with the same period of 2023.

減少的主因是與2023年同期相比，支付機率較低的應付帳款轉回減少。

Net income was $4.4 million, same as in the third quarter of last year.

淨利潤為 440 萬美元，與去年第三季持平。

Non-GAAP net income was $4.9 million in the third quarter of 2024, compared with $5.5 million in the same period of 2023.

2024 年第三季非 GAAP 淨利為 490 萬美元，而 2023 年同期淨利為 550 萬美元。

Diluted earnings per ADS in the third quarter of 2024 was approximately $0.07, same as in the third quarter of 2023.

2024 年第三季每份美國存託股的攤薄收益約為 0.07 美元，與 2023 年第三季相同。

As of September 30, 2024, the company had cash, cash equivalents, and short-term investments of $272 million, compared with $263.4 million as of June 30, 2024.

截至2024年9月30日，該公司擁有現金、現金等價物及短期投資2.72億美元，截至2024年6月30日為2.634億美元。

The increase was mainly due to the net cash inflows from operating activities, partially offset by the repayment of bank loans and spending on share buybacks.

增加的主因是經營活動產生的現金流量淨流入，部分被償還銀行貸款和股票回購支出所抵銷。

Now turning to our share repurchase program, on June 4, 2024, Xunlei announced that its Board of Directors had authorized a new plan for the repurchase of up to $20 million of its ADS over the next 12 months.

現在轉向我們的股票回購計劃，2024 年 6 月 4 日，迅雷宣布其董事會已批准一項新計劃，在未來 12 個月內回購最多 2000 萬美元的 ADS。

As of September 30, 2024, the company had spent approximately $1.5 million on share buybacks under the new share repurchase program.

截至 2024 年 9 月 30 日，該公司已根據新的股票回購計畫花費約 150 萬美元用於股票回購。

During the quarter ending September 30, 2024, the company had repurchased a total of 588,025 ADSs for a total of $1 million.

在截至 2024 年 9 月 30 日的季度中，該公司總共回購了 588,025 份美國存託憑證，總金額為 100 萬美元。

And the share repurchase program is ongoing.

股票回購計劃正在進行中。

Finally, for the fourth quarter of 2024, Xunlei estimates total revenues to be between $77 million and $82 million.

最後，迅雷預計 2024 年第四季的總收入將在 7,700 萬美元至 8,200 萬美元之間。

And the midpoint of the range represents a quarter-over-quarter decrease of approximately 0.7%.

該範圍的中點代表環比下降約 0.7%。

This estimate represents management's preliminary view as of today, which is successful change, and any change could be material.

這項估計代表了管理階層截至目前的初步看法，即變革是成功的，任何變革都可能是重大的。

Now we conclude prepared remarks for the conference call.

現在我們結束為電話會議準備的發言。

Operator, we are ready to take questions.

接線員，我們準備好回答問題。

(Operator Instructions) [Yuki Chen, retail investor].

（操作員指示）[Yuki Chen，散戶投資者]。

(spoken in Chinese)

(用中文說)

The caller's question is in the [Congress] on maintaining a double-digit year-over-year growth rate in our subscription business.

來電者在[國會]提出的問題是關於我們的訂閱業務保持兩位數的同比增長率。

And the question is, can the company sustain its growth trend in the subscription business for future quarters?

問題是，公司能否在未來幾季維持訂閱業務的成長趨勢？

For the last several quarters, the sequential growth was basically flat.

過去幾個季度，環比成長基本持平。

And how can we overcome the bottleneck of reaching six million subscribers?

如何突破600萬用戶的瓶頸？

Thank you for your question.

謝謝你的提問。

Our subscription business has generally kept its growth momentum, maintaining a user base between five million and six million since the beginning of this year.

我們的訂閱業務整體保持成長勢頭，今年以來用戶規模維持在500萬至600萬之間。

We are encouraged that we observe a continuous year-over-year growth in our active paying users over the past few quarters.

令我們感到鼓舞的是，我們觀察到過去幾季的活躍付費用戶持續年增。

The portion of premium subscribers among paying users increased from about 6% in the third quarter of last year to about [7% to 8%] in the third quarter of this year.

付費用戶中付費用戶的比例從去年第三季的約6%增加到今年第三季的約[7%至8%]。

And as a result, there was an increase in the average revenue per subscriber from approximately RMB39.9 in the third quarter of last year to about RMB40.9 this quarter, which in this case, I believe, a healthy trend for our subscription business.

因此，每位訂閱者的平均收入從去年第三季的約人民幣 39.9 元增加到本季的約人民幣 40.9 元，在這種情況下，我相信這對我們的訂閱業務來說是一個健康的趨勢。

And in the coming days, we intend to further expand our marketing channels, continue to improve user benefits and experience, and conduct more promotional campaigns to acquire new users.

未來，我們打算進一步拓展行銷管道，持續提升用戶權益與體驗，並進行更多促銷活動來獲取新用戶。

And by taking these measures, we hope to achieve breakthroughs in our user base in the future.

透過採取這些措施，我們希望未來能夠在用戶基礎上取得突破。

Thank you.

謝謝。

(spoken in Chinese)

(用中文說)

(spoken in Chinese)

(用中文說)

And so the question -- in the third quarter of this year, the Chinese government implemented a series of policies to stimulate the stock market, which resulted in improved performance for many Chinese stocks.

那麼問題來了，今年第三季度，中國政府實施了一系列刺激股市的政策，導致許多中概股的表現有所改善。

And she would like to know if Xunlei has any strategies in place to enhance its share price and address the undervaluation of its stock situation.

她想知道迅雷是否有任何策略來提高股價並解決股價被低估的情況。

Yes, we have also noticed the Chinese government recently introduced a number of market favorable policies, aimed at resolving certain domestic economic issues and boosting investors' confidence.

是的，我們也注意到，中國政府近期推出了一系列市場利好政策，旨在解決國內一些經濟問題，提振投資人信心。

We will continue to prioritize business development.

我們將繼續把業務發展放在首位。

Further, our share buybacks, enhanced communications with the capital market, and actively monitor market and regulatory environment, and adopt corresponding strategies as necessary to hopefully, ultimately, generate value for our shareholders.

此外，我們也透過股票回購，加強與資本市場的溝通，積極監控市場和監管環境，並根據需要採取相應的策略，希望最終為股東創造價值。

Thank you.

謝謝。

(spoken in Chinese)

(用中文說)

Excuse me, [Yuki], any further questions?

打擾一下，[Yuki]，還有什麼問題嗎？

Thank you.

謝謝。

(Operator Instructions) Dear speakers, there are no further questions for today.

（操作員說明）尊敬的發言者，今天沒有其他問題了。

I would now like to hand the conference over to the management team for any closing remarks.

現在我想將會議交給管理團隊進行總結發言。

Thank you, again, for your time and participation.

再次感謝您的時間和參與。

And if you have any questions, please visit our website at ir.xunlei.com or send us e-mails to our Investor Relations.

如果您有任何疑問，請造訪我們的網站 ir.xunlei.com 或向我們的投資者關係部門發送電子郵件。

Have a good day.

祝你有美好的一天。

Operator, we conclude today's conference.

接線員，今天的會議我們結束了。

Thank you.

謝謝。

That does conclude our conference for today.

我們今天的會議到此結束。

Thank you for participating.

感謝您的參與。

You may now all disconnect.

你們現在可以斷開連結了。

Have a nice day.

祝你今天過得愉快。