SHENZHEN, China – Xunlei Limited (Nasdaq: XNET), a prominent technology firm specializing in distributed cloud services within China, has released its unaudited financial results for the third quarter ending September 30, 2024. The company reported total revenues of US$80.1 million, marking a 4.9% decline compared to the same period last year.
In the latest financial report, Xunlei’s cloud computing segment generated revenues of US$25.3 million, which represents a significant 14.4% decrease year-over-year. This downturn is attributed to lower sales in both cloud computing services and associated hardware devices.
Conversely, the subscription revenue segment showed resilience, achieving US$33.2 million in revenues, reflecting a robust 15.6% increase compared to the previous year. However, revenues from live streaming and other internet value-added services (IVAS) took a hit, amounting to US$21.6 million, which is a 16.7% decrease year-over-year.
Xunlei’s gross profit for the third quarter stood at US$40.5 million, indicating a 7.8% increase year-over-year. The gross profit margin improved to 50.8% from 44.6% during the same quarter of 2023, showcasing the company’s efficiency in managing costs.
The firm reported a net income of US$4.4 million, consistent with the net income reported in the third quarter of 2023. Meanwhile, the non-GAAP net income was US$4.9 million, down from US$5.5 million in the same quarter last year. Diluted earnings per American Depositary Share (ADS) remained stable at approximately US$0.07.
Mr. Jinbo Li, Chairman and CEO of Xunlei, commented on the results, stating, “We achieved continued profitability and positive operating cash flows in the third quarter of 2024, while the revenue performance from each business line was mixed. The third quarter performance was led by double-digit growth in our subscription business. While total revenues decreased year-over-year due to the downsizing of our domestic audio live streaming business last year and lower cloud computing sales, we have successfully carried out diversified measures to mitigate their impact.”
Looking ahead, Mr. Li expressed confidence in the company’s future, noting that they are actively pursuing a new share repurchase plan that was announced in June of this year. He emphasized the commitment to explore untapped potential and create value for shareholders.
As Xunlei navigates a challenging market environment, the mixed performance across its business segments highlights the need for strategic adjustments. The company is focused on enhancing its subscription services while addressing the declines in its cloud computing and live streaming sectors.
In summary, Xunlei’s third-quarter results reflect a company that is maintaining profitability amid revenue fluctuations, with a strong emphasis on its subscription services as a key growth driver. The leadership’s proactive measures and strategic focus suggest a forward-looking approach to stabilize and grow the business in the competitive tech landscape.
