Xunlei (XNET) Q2 Earnings call transcript Aug 13, 2024

Xunlei, a leading distributed cloud service provider, recently held its Q2 2024 earnings call, providing insights into the company's operational highlights and financial results. The call was led by Chairman and CEO, Jinbo Li, and CFO, Eric Zhou, who discussed the company's key achievements, challenges, and future growth prospects.

Financial Performance and Outlook

Xunlei reported a decrease in total revenues for Q2 2024, primarily due to the strategic downsizing of its domestic audio live streaming business. However, the subscription business showed impressive growth, with a year-over-year increase of 10.8% in revenue. This growth can be attributed to continuous product improvement and effective marketing strategies. Xunlei's focus on user engagement and innovation is evident in the successful launch of Xunlei Browser on major platforms, which has been widely acclaimed for its exceptional performance.

Strategic Initiatives and Challenges

The company faced challenges in its cloud computing business, with a decline in revenue of $26.4 million, representing a decrease of 13.8% year-over-year. This decline was attributed to intense pricing competition among competitors and reduced sales volume of hardware devices. To address these challenges, Xunlei is actively adapting its strategies to align with the evolving industrial landscape, focusing on leveraging its competitive edge and market position to improve financial performance.

Subscriber Base and Product Development

Xunlei's subscriber base grew by about 1 million users over the past year, reflecting the company's commitment to user-centricity and innovation. The launch of the Xunlei Browser, which has received overwhelming user feedback, demonstrates the company's ability to tap into new customer bases and diversify its revenue stream. Xunlei is also actively pursuing strategic partnerships to expand the recognition and exposure of its products, aiming to drive further growth.

Looking Ahead

Xunlei's future growth prospects are promising, with a strong operational track record and balance sheet, and continued investments in innovation and growth initiatives. The company is well-positioned to maintain its position as a leading distributed cloud service provider, meeting the evolving needs of its users and clients. Xunlei's focus on user engagement, product development, and strategic partnerships positions it for long-term success.

Investor Relations

During the Q&A session, key shareholders and investors expressed interest in the company's plans for dividends to boost investor confidence. While no concrete plans have been announced, the company will keep stakeholders updated on any potential relief measures.

In conclusion, Xunlei's Q2 2024 earnings call highlighted the company's robust performance, strategic initiatives, and challenges. With a focus on user-centricity, innovation, and collaboration, Xunlei is well-positioned for long-term growth and value creation for all shareholders.