xunlei’s third-quarter net loss of $24.6 million, up from $24.6 million

xunlei (Nasdaq: XNET) today released its unaudited financial results for the third quarter ended September 30, 2019. According to the results, Thunderbolt’s third-quarter revenue was $43.8 million, up 3.3 percent from $45.3 million a year earlier, and net loss was $24.6 million, compared with a net loss of $15.85 million a year earlier, based on U.S. General Accounting Standards (GAAP).

Thunderbolt's third-quarter net loss of $24.6 million, up from $24.6 million

xunlei’s third-quarter key financial data

Total revenue: xunlei’s third-quarter revenue was $43.8 million, compared with $45.3 million a year earlier, down 3.3 percent from a year earlier, and down 8.8 percent from a year earlier.

Revenue from cloud computing and other Internet value-added services was $20.9 million, down 7.4 percent month-on-month, mainly due to a lack of promotions and seasonal impact on live streaming revenue.

Subscription service revenue was $19.2 million, down 9.9 percent from a year earlier. As of September 30, 2019, there were approximately 3.8 million subscribers to the subscription service, compared with 4.3 million users as of June 30, 2019. In the third quarter of 2019, the average income per subscriber was Rmb35.1, compared with Rmb33.9 in the previous quarter. The decrease in subscription revenue was mainly due to a decrease in the subscription user base.

Online advertising revenue was $3.7 million, down 4.4 percent from a month earlier.

Net loss: Based on Us General Accounting Standards (GAAP), net loss was $24.6 million, compared with a net loss of $15.85 million a year earlier and a net loss of $2 million in the previous quarter. The diluted loss per American depositary was $0.36, compared with $0.24 a year earlier and $0.03 in the previous quarter.

Net loss, excluding Non-GAAP, was $23.11 million, compared with a net loss of $14.48 million a year earlier and a net loss of $0.7 million in the previous quarter. The diluted loss per American depositary was $0.07, compared with $0.04 a year earlier.

Revenue cost: Revenue cost of $24.5 million, or 55.8% of total revenue.

Operating loss: Operating loss was $13.2 million, compared with $11.8 million in the previous quarter.

Gross profit and gross margin: Gross profit was $19.3 million, down 13.6% from the previous quarter. Gross margin was 44.1% in the third quarter of 2019, compared with 46.7% in the previous quarter. The decrease in gross profit and gross margin was mainly due to lower subscription service revenue.

Cash and Equivalents: As of September 30, 2019, Xunlei’s total investment in cash, cash equivalents and short-term investments was $264.8 million, compared to $284.8 million as of June 30, 2019.

Executive Reviews

“Despite the weakness in xunlei’s total revenue, we are pleased to see continued growth in revenue from the company’s cloud computing business, primarily due to increased bandwidth capacity expansion and improved bandwidth utilization through technology,” said Chen Lei, CEO of xunlei. Recently, xunlei’s cloud computing business has been a major driver of revenue growth. In the past, xunlei has invested heavily in cloud computing infrastructure in the hope of achieving a return on investment in the future. ”

“Recently, the importance of blockchain in China as a core technology breakthrough in technological innovation has gained attention. We are excited about this opportunity, but we are also aware of the challenges facing this emerging industry. We will continue to complement our cloud business with blockchain technologies and applications, and intend to seize this opportunity through research and development and collaboration. Chen Lei said.

Performance Outlook

Q4, 2019: xunlei expects total fourth-quarter revenue of between $45 million and $50 million, up about 8.4 percent from the median in the revenue range. The above expectations reflect the current and preliminary view of xunlei, which is likely to change in the future.

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