Xunlei Limited (“Xunlei” or the “Company”) (Nasdaq: XNET), a
leading innovator in shared cloud computing and blockchain
technology in China, today announced its unaudited
financial results for the third quarter ended September 30, 2021.
Third Quarter 2021
Financial Highlights:
- Total revenues
were US$60.0 million, representing an increase of 8.8% from the
previous quarter.
- Cloud computing and other
internet value-added services (“cloud computing and other IVAS”)
revenues were US$35.2 million, representing an increase of
21.8% from the previous quarter.
- Subscription
revenues were US$22.7 million, representing a decrease of
0.2% from the previous quarter.
- Online advertising
revenues (consisting primarily of revenues from mobile
advertising) were US$2.1 million, representing a decrease of 40.5%
from the previous quarter.
- Gross profit was
US$29.3 million, representing an increase of 1.3% from the previous
quarter, and gross margin was 48.9% in the third quarter, compared
with 52.5% in the previous quarter.
- Net loss was
US$5.1 million in the third quarter, compared with a net income of
US$5.8 thousand in the previous quarter.
- Non-GAAP net loss
was US$3.1 million in the third quarter of 2021, compared with a
non-GAAP net income of US$1.3 million in the previous quarter.
- Diluted loss per
ADS was approximately US$0.08 as compared with a diluted
earnings per ADS of US$0.00005 in the previous quarter.
Mr. Jinbo Li, Chairman and Chief Executive
Officer of Xunlei, stated that “We significantly exceeded our
previously issued revenue guidance and delivered total revenues of
US$60 million for the third quarter of 2021, with significant
growth in our cloud computing and other internet value-added
services. I’m especially encouraged that we achieved growth in both
cloud computing revenues and the bandwidth capacity under very
challenging conditions.”“While the bottom line in the third quarter
was affected by increased operating expenses and reduced
advertising revenues, we intend to find ways to mitigate their
impact. For example, while maintaining the growth momentum for our
cloud-computing business, we will continue to enhance our
subscription business by improving user experience and providing
more value-added services to expand our customer base. In addition,
we will further optimize our advertising products to diverse our
customer base and increase customer loyalty. And finally, we will
continue to invest in business innovation and seize growth
opportunities through product lines expansion.”
Third Quarter 2021 Financial
Results
Total Revenues
Total revenues were US$60.0 million,
representing an increase of 8.8% from the previous quarter. The
increase in total revenues was mainly attributable to increased
revenues from cloud computing and other IVAS businesses.
Revenues from cloud computing and other IVAS
were US$35.2 million, representing an increase of 21.8% from the
previous quarter. The increase was mainly driven by increased CDN
revenue due to increased demand for our cloud computing
products.
Revenues from subscription were US$22.7 million,
a decrease of 0.2% from the previous quarter. The number of
subscribers was 4.15 million as of September 30, 2021, compared
with 3.96 million as of June 30, 2021. The average revenue per
subscriber for the third quarter of 2021 was RMB35.4, compared with
RMB36.9 for the previous quarter.
Revenues from online advertising were US$2.1
million, representing a decrease of 40.5% from the previous quarter
primarily because we limited the number of advertisements placed on
our platform to improve user experience.
Cost of Revenues
Cost of revenues was US$30.4 million,
representing 50.7% of our total revenues, compared with US$26.2
million or 47.5% of the total revenues in the previous quarter. The
increased cost of revenues was mainly attributable to increased
bandwidth cost and revenue-sharing costs of our live streaming
business.
Bandwidth costs as included in cost of revenues
were US$21.7 million, representing 36.2% of our total revenues,
compared with US$18.5 million or 33.6% of the total revenues in the
previous quarter. The increase was mainly due to increased CDN
sales.
The remaining cost of revenues mainly consisted
of costs related to the revenue-sharing costs for our live
streaming business and depreciation of servers and other
equipment.
Gross Profit and Gross
Margin
Gross profit for the third quarter was US$29.3
million, representing an increase of 1.3% from the previous
quarter. Gross margin was 48.9% in the third quarter, compared with
52.5% in the previous quarter. The decrease in gross margin was
mainly due to decreased revenue portion of subscription and online
advertising business, which had higher gross margins than other
business lines.
Research and Development
Expenses
Research and development expenses for the third
quarter were US$16.8 million, representing 28.0% of our total
revenues, compared with US$15.2 million or 27.5% of our total
revenues in the previous quarter. The increase was primarily due to
increased employee related cost.
Sales and Marketing
Expenses
Sales and marketing expenses for the third
quarter were US$6.8 million, representing 11.3% of our total
revenues, compared with US$6.7 million or 12.1% of our total
revenues in the previous quarter.
General and Administrative
Expenses
General and administrative expenses for the
third quarter were US$11.4 million, representing 19.0% of our total
revenues, compared with US$7.7 million or 14.0% of our total
revenues in the previous quarter. The increase in general and
administrative expenses was primarily due to increased legal and
consulting expenses and increased amortization costs for newly
awarded restricted shares units under the Company’s share incentive
plan.
Operating Loss
Operating loss was US$5.7 million, compared with
an operating loss of US$1.1 million in the previous quarter.
Other Income
Other income was US$0.5 million, compared with
other income of US$0.9 million in the previous quarter. The
decrease was primarily due to donation of approximately US$0.8
million to aid flood victims in central China in July 2021, which
was partially offset by other incomes in the third quarter.
Net Loss and Earnings Per
ADS
Net loss was US$5.1 million, compared with a net
income of US$5.8 thousand in the previous quarter. Non-GAAP net
loss was US$3.1 million in the third quarter of 2021, compared with
a non-GAAP net income of US$1.3 million in the previous quarter.
The decrease was primarily due to increased operating expenses as
discussed above.
Diluted loss per ADS in the third quarter of
2021 was approximately US$0.08 as compared with a diluted earnings
per ADS of US$0.00005 in the previous quarter.
Cash Balance
As of September 30, 2021, the Company had cash,
cash equivalents and short-term investments of US$228.3 million,
compared with US$245.0 million as of June 30, 2021. The
reduction of cash balance was mainly due to a term loan in the
amount of US$20 million provided to Chizz (HK) Limited, a company
controlled by Itui International Inc., our largest shareholder on
September 9, 2021.
Guidance for Fourth Quarter of
2021
For the fourth quarter of 2021, Xunlei estimates
total revenues to be between US$67 million and US$71 million, and
the midpoint of the range represents a quarter-on-quarter increase
of approximately 15.0%. This estimate represents management’s
preliminary view as of the date of this release, which is subject
to change and any change could be material.
Conference Call Preregistration
Due to the outbreak of COVID-19, operator assisted conference
calls are not available at the moment. All participants wishing to
attend the call must preregister online before they can receive the
dial-in numbers. Preregistration may require a few minutes to
complete. The Company would like to apologize for any inconvenience
caused by not having an operator as a result of COVID-19.
Please register in advance to join the conference using the link
provided below and dial in 10 minutes before the call is scheduled
to begin. Conference access information will be provided upon
registration.
Participant Online Registration:
http://apac.directeventreg.com/registration/event/8457418
Once preregistration has been completed, participants will
receive dial-in numbers, an event passcode, and a unique registrant
ID.
To join the conference, please dial the number you receive,
enter the event passcode followed by your unique registrant ID, and
you will be joined to the conference instantly.
The Company will also broadcast a live audio webcast of the
conference call. The webcast will be available at
http://ir.xunlei.com.
Following the earnings conference call, an
archive of the call will be available by dialing:
China (Mandarin): |
400-602-2065 |
Hong Kong: |
800-963-117 |
United States: |
1-855-452-5696 |
International: |
61-2-8199-0299 |
Replay Passcode: |
8457418 |
Replay End Date: |
November 19, 2021 |
About Xunlei
Founded in 2003, Xunlei
Limited (NASDAQ: XNET) is a leading innovator in shared
cloud computing and blockchain technology
in China. Xunlei provides a wide range of products
and services across cloud acceleration, blockchain, shared cloud
computing and digital entertainment to deliver an efficient, smart
and safe internet experience.
Safe Harbor Statement
This press release contains statements of a
forward-looking nature. These statements are made under the "safe
harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. You can identify these forward-looking statements by
terminology such as "will," "expects," "believes," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar
statements. Among other things, the management's quotations, the
"Outlook" and "Guidance" sections in this press release, as well as
the Company's strategic, operational and acquisition plans, contain
forward-looking statements. These forward-looking statements
involve known and unknown risks and uncertainties and are based on
current expectations, assumptions, estimates and projections about
the Company and the industry. Forward-looking statements involve
inherent risks and uncertainties, including but not limited to: the
Company's ability to continue to innovate and provide attractive
products and services to retain and grow its user base; the
Company's ability to keep up with technological developments and
users' changing demands in the internet industry; the Company's
ability to convert its users into subscribers of its premium
services; the Company's ability to deal with existing and potential
copyright infringement claims and other related claims; the risk
that Covid-19 or other health risks in China or globally could
adversely affect the Company's operations or financial results; the
Company’s ability to react to the governmental actions for its
scrutiny of internet content in China and the Company's ability to
compete effectively. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that its expectations will turn
out to be correct, and investors are cautioned that actual results
may differ materially from the anticipated results. Further
information regarding risks and uncertainties faced by the Company
is included in the Company's filings with the U.S. Securities and
Exchange Commission. All information provided in this press release
is as of the date of the press release, and the Company undertakes
no obligation to update any forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its
expectations, except as may be required by law.
About Non-GAAP Financial
Measures
To supplement Xunlei's consolidated financial
results presented in accordance with United States Generally
Accepted Accounting Principles ("GAAP"), Xunlei uses the following
measures defined as non-GAAP financial measures by the United
States Securities and Exchange Commission: (1) non-GAAP operating
income/(loss), (2) non-GAAP net income/(loss) from continuing
operations, (3) non-GAAP basic and diluted earnings per share for
common shares attributable to continuing operations, and (4)
non-GAAP basic and diluted earnings per ADS attributable to
continuing operations. The presentation of the non-GAAP financial
information is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP.
Xunlei believes that these non-GAAP financial
measures provide meaningful supplemental information to investors
regarding the Company’s operating performance by excluding
share-based compensation expenses, which is not expected to result
in future cash payments. These non-GAAP financial measures also
facilitate management's internal comparisons to Xunlei's historical
performance and assist the Company’s financial and operational
decision making. A limitation of using these non-GAAP financial
measures is that these non-GAAP measures exclude share-based
compensation charge that has been and will continue to be for the
foreseeable future a significant recurring expense in Xunlei’s
results of operations. Management compensates for these limitations
by providing specific information regarding the GAAP amounts
excluded from each non-GAAP measure. The accompanying
reconciliation tables at the end of this release include details on
the reconciliations between GAAP financial measures that are most
directly comparable to the non-GAAP financial measures the Company
has presented.
XUNLEI LIMITED |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
(Amounts expressed in thousands of USD, except for share, per share
(or ADS) data) |
|
|
September 30, |
December 31, |
|
2021 |
2020 |
|
US$ |
US$ |
Assets |
|
|
|
|
|
Current
assets: |
|
|
Cash and cash equivalents |
91,816 |
|
137,248 |
|
Short-term investments |
136,493 |
|
117,821 |
|
Accounts receivable, net |
30,091 |
|
22,983 |
|
Inventories |
573 |
|
1,726 |
|
Due from related parties |
15,100 |
|
10,970 |
|
Prepayments and other current
assets |
13,202 |
|
11,534 |
|
Total current
assets |
287,275 |
|
302,282 |
|
|
|
|
Non-current
assets: |
|
|
Restricted cash |
- |
|
1,541 |
|
Long-term investments |
27,769 |
|
26,734 |
|
Property and equipment,
net |
56,765 |
|
50,725 |
|
Intangible assets, net |
8,122 |
|
8,857 |
|
Goodwill |
22,744 |
|
22,607 |
|
Due from related party,
non-current portion |
19,404 |
|
- |
|
Other long-term prepayments
and other non-current assets |
1,015 |
|
905 |
|
Right-of-use assets |
422 |
|
1,954 |
|
Total
assets |
423,516 |
|
415,605 |
|
|
|
|
Liabilities |
|
|
Current
liabilities: |
|
|
Accounts payable |
27,288 |
|
20,644 |
|
Due to related parties |
1,622 |
|
5,389 |
|
Contract liabilities and
deferred income, current portion |
34,932 |
|
34,040 |
|
Lease liabilities, current
portion |
100 |
|
1,961 |
|
Income tax payable |
2,417 |
|
2,553 |
|
Accrued liabilities and other
payables |
40,867 |
|
38,689 |
|
Total current
liabilities |
107,226 |
|
103,276 |
|
|
|
|
Non-current
liabilities: |
|
|
Contract liabilities and
deferred income, non-current portion |
688 |
|
920 |
|
Lease liabilities, non-current
portion |
- |
|
27 |
|
Deferred tax liabilities |
959 |
|
1,085 |
|
Bank borrowings |
17,667 |
|
19,924 |
|
Total
liabilities |
126,540 |
|
125,232 |
|
|
|
|
Equity |
|
|
Common shares (US$0.00025 par
value, 1,000,000,000 shares authorized, 368,877,205 shares issued
and 334,401,981 shares outstanding as at December 31, 2020;
368,877,205 issued and 334,957,981 shares outstanding as at
September 30, 2021) |
84 |
|
84 |
|
Additional
paid-in-capital |
473,532 |
|
469,887 |
|
Accumulated other
comprehensive loss |
(1,161 |
) |
(2,145 |
) |
Statutory reserves |
5,746 |
|
5,414 |
|
Treasury shares (34,475,224
shares and 33,919,224 shares as at December 31, 2020 and September
30, 2021, respectively) |
8 |
|
9 |
|
Accumulated deficits |
(179,425 |
) |
(181,095 |
) |
Total Xunlei Limited's
shareholders' equity |
298,784 |
|
292,154 |
|
Non-controlling
interests |
(1,808 |
) |
(1,781 |
) |
Total liabilities and
shareholders' equity |
423,516 |
|
415,605 |
|
|
|
|
|
XUNLEI LIMITEDUnaudited Condensed
Consolidated Statements of Income(Amounts expressed in
thousands of USD, except for share, per share (or ADS) data) |
|
|
|
Three months ended |
|
|
|
Sep
30, |
|
|
|
Jun 30, |
|
|
|
Sep 30, |
|
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
US$ |
|
|
|
US$ |
|
|
|
US$ |
|
Revenues, net of rebates and
discounts |
|
|
60,009 |
|
|
|
55,172 |
|
|
|
43,722 |
|
Business taxes and
surcharges |
|
|
(227 |
) |
|
|
(29 |
) |
|
|
(34 |
) |
Net revenues |
|
|
59,782 |
|
|
|
55,143 |
|
|
|
43,688 |
|
Cost of revenues |
|
|
(30,437 |
) |
|
|
(26,179 |
) |
|
|
(21,004 |
) |
Gross
profit |
|
|
29,345 |
|
|
|
28,964 |
|
|
|
22,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
expenses |
|
|
(16,830 |
) |
|
|
(15,195 |
) |
|
|
(12,069 |
) |
Sales and marketing
expenses |
|
|
(6,809 |
) |
|
|
(6,697 |
) |
|
|
(4,185 |
) |
General and administrative
expenses |
|
|
(11,412 |
) |
|
|
(7,708 |
) |
|
|
(7,463 |
) |
Asset impairment loss, net of
recoveries |
|
|
2 |
|
|
|
(483 |
) |
|
|
- |
|
Total operating
expenses |
|
|
(35,049 |
) |
|
|
(30,083 |
) |
|
|
(23,717 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss |
|
|
(5,704 |
) |
|
|
(1,119 |
) |
|
|
(1,033 |
) |
Interest income |
|
|
186 |
|
|
|
143 |
|
|
|
404 |
|
Interest expense |
|
|
(23 |
) |
|
|
(23 |
) |
|
|
- |
|
Other income/(loss), net |
|
|
537 |
|
|
|
885 |
|
|
|
(335 |
) |
Loss before income
taxes |
|
|
(5,004 |
) |
|
|
(114 |
) |
|
|
(964 |
) |
Income tax
(expense)/benefit |
|
|
(122 |
) |
|
|
120 |
|
|
|
(498 |
) |
Net
(loss)/income |
|
|
(5,126 |
) |
|
|
6 |
|
|
|
(1,462 |
) |
Less: net loss attributable to
non-controlling interests |
|
|
(26 |
) |
|
|
(10 |
) |
|
|
(3 |
) |
Net (loss)/income
attributable to common shareholders |
|
|
(5,100 |
) |
|
|
16 |
|
|
|
(1,459 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
Sep
30, |
|
|
|
Jun 30, |
|
|
|
Sep 30, |
|
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
US$ |
|
|
|
US$ |
|
|
|
US$ |
|
(Loss)/earnings per
share for common shares |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.0152 |
) |
|
|
0.0000 |
|
|
|
(0.0043 |
) |
Diluted |
|
|
(0.0152 |
) |
|
|
0.0000 |
|
|
|
(0.0043 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/earnings per
ADS |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.0760 |
) |
|
|
0.0000 |
|
|
|
(0.0215 |
) |
Diluted |
|
|
(0.0760 |
) |
|
|
0.0000 |
|
|
|
(0.0215 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used in calculating continuing
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
334,779,959 |
|
|
|
334,656,399 |
|
|
|
336,371,957 |
|
Diluted |
|
|
334,779,959 |
|
|
|
342,804,044 |
|
|
|
336,371,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ADSs used in calculating continuing operations
: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
66,955,992 |
|
|
|
66,931,280 |
|
|
|
67,274,391 |
|
Diluted |
|
|
66,955,992 |
|
|
|
68,560,809 |
|
|
|
67,274,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
XUNLEI LIMITED |
Reconciliation of GAAP and Non-GAAP Results (Excluding discontinued
operations) |
(Amounts expressed in thousands of USD, except for share, per share
(or ADS) data) |
|
|
|
Three months ended |
|
|
|
Sep
30, |
|
|
|
Jun 30, |
|
|
|
Sep 30, |
|
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
US$ |
|
|
|
US$ |
|
|
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating loss |
|
|
(5,704 |
) |
|
|
(1,119 |
) |
|
|
(1,033 |
) |
Share-based compensation
expenses |
|
|
2,070 |
|
|
|
1,248 |
|
|
|
548 |
|
Non-GAAP operating
(loss)/income |
|
|
(3,634 |
) |
|
|
129 |
|
|
|
(485 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net (loss)/income |
|
|
(5,126 |
) |
|
|
6 |
|
|
|
(1,462 |
) |
Share-based compensation
expenses |
|
|
2,070 |
|
|
|
1,248 |
|
|
|
548 |
|
Non-GAAP net
(loss)/income |
|
|
(3,056 |
) |
|
|
1,254 |
|
|
|
(914 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP (loss)/earnings
per share for common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.0152 |
) |
|
|
0.0000 |
|
|
|
(0.0043 |
) |
Diluted |
|
|
(0.0152 |
) |
|
|
0.0000 |
|
|
|
(0.0043 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP (loss)/earnings
per ADS: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.0760 |
) |
|
|
0.0000 |
|
|
|
(0.0215 |
) |
Diluted |
|
|
(0.0760 |
) |
|
|
0.0000 |
|
|
|
(0.0215 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
(loss)/earnings per share for common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.0090 |
) |
|
|
0.0038 |
|
|
|
(0.0027 |
) |
Diluted |
|
|
(0.0090 |
) |
|
|
0.0037 |
|
|
|
(0.0027 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
(loss)/earnings per ADS: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.0450 |
) |
|
|
0.0190 |
|
|
|
(0.0135 |
) |
Diluted |
|
|
(0.0450 |
) |
|
|
0.0185 |
|
|
|
(0.0135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used in calculating: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
334,779,959 |
|
|
|
334,656,399 |
|
|
|
336,371,957 |
|
Diluted |
|
|
334,779,959 |
|
|
|
342,804,044 |
|
|
|
336,371,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ADSs used in calculating: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
66,955,992 |
|
|
|
66,931,280 |
|
|
|
67,274,391 |
|
Diluted |
|
|
66,955,992 |
|
|
|
68,560,809 |
|
|
|
67,274,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT:Investor Relations Xunlei Limited Email:
ir@xunlei.com Tel: +86 755 8633 8443Website:
http://ir.xunlei.com
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