Shulou(Shulou.com)11/24 Report--

On November 14, 2023, XNET released its results for the third quarter of 2023, which showed that the company's gross profit rose 6.6% year-on-year to a net profit of $4.4 million.

Thunder reported total revenue of $84.2 million and gross profit of $37.5 million in the third quarter, up 6.6 per cent from a year earlier. The gross profit margin was 44.6%, compared with 39.9% in the same period last year. The increase in gross profit is due to the increase in the proportion of income of members with higher gross profit margin and the decline in the proportion of domestic voice live broadcast revenue with lower gross profit margin. Based on general accounting standards (GAAP), net profit for the quarter was $4.4 million, compared with $8.3 million in the same period last year. Based on non-Non-GAAP, net profit for the quarter was $5.5 million, compared with $9 million in the same period last year.

"despite continuing challenges in the market environment, our total revenue in the third quarter exceeded the upper limit of the revenue guidance given in the previous quarter." Li Jinbo, chairman and chief executive of Xunlei, said: "these results prove that our unremitting efforts to reduce the impact of business adjustment are effective and further strengthen the development of our existing business. The two major businesses continued to maintain year-on-year growth momentum in this quarter."

The number of members continues to rise, and the cloud computing business is steadily rising.

In the third quarter, the number of members of Thunderbolt continued to climb, while the fee per member increased to 39.9 yuan. Revenue from membership services was $28.7 million, up 15.2 per cent from a year earlier, according to the financial report. As of September 30, 2023, the number of member users was about 5.02 million, an increase of 650000 over the same period last year. In the third quarter of 2023, the average revenue per member was 39.9 yuan, compared with 39.1 yuan in the same period last year. The increase in member business revenue is mainly due to the increase in average income per user.

Cloud computing revenue remained stable in the quarter, up 1.4 per cent from a year earlier to $29.5 million. Cloud computing revenue growth is mainly due to the increase in sales of new-generation cloud computing hardware devices. Revenue from live streaming and other Internet value-added services was US $26 million, down 24.1% from the same period last year. The decrease in revenue was mainly due to the reduction of our domestic voice live broadcast business. At the same time, revenue from other Internet value-added services increased compared with the same period in 2022.

Mr. Li Jinbo said: "driven by our user growth strategy, the number of Thunderbolt members was close to an all-time high in the third quarter."

Investment in R & D increases reserves of cash and equivalents

In the third quarter, Thunderbolt increased its share of R & D investment, to $19.5 million, or 23.1% of total revenue, compared with $16.2 million, or 18.3%, in the same period last year.

At the same time, the company has good cash reserves. In June 2023, Thunderbolt announced that its board of directors authorized to buy back up to $20 million of shares over the next 12 months. As of September 30, 2023, the company had spent about $2.6 million on share buybacks. During the same period, the company held cash, cash equivalents and short-term investments of $264.7 million.

Mr. Li Jinbo said: "with a healthy cash position and capital structure, we will invest in other businesses, explore emerging technologies and open up new growth opportunities. Looking ahead, we will continue to strengthen our financial position, pay close attention to industry trends and consumer demand, and adopt corresponding strategies. We will continue to look for growth opportunities in line with our core competencies and create sustainable value for our shareholders. As an Internet company with a history of 20 years, every action and decision of Xunlei always adheres to the core values of the enterprise and strives to provide users with safe and high-quality products and services. "

Xunlei expects total revenue in the fourth quarter of 2023 to range from $70 million to $75 million. On average, revenue fell by about 8.6% in the fourth quarter from the previous quarter. The decline is due to the reduction of our domestic voice live broadcast business, while the operation of our members and cloud computing business is not affected. This prospect only reflects the preliminary view of Xunlei at present and is likely to change in the future.

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