Home / Cloud Computing / Cloud Computing: Xunlei Restricted (XNET) Q2 2019 Earnings Call Transcript

Cloud Computing: Xunlei Restricted (XNET) Q2 2019 Earnings Call Transcript

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Xunlei Restricted (NASDAQ:XNET)

Q2 2019 Earnings Call

Aug 14, 2019, 8:00 a.m. ET

Cloud Computing: Contents:

  • Ready Remarks
  • Questions and Solutions
  • Call Participants

Cloud Computing: Ready Remarks:


Kindly morning. Thank you for standing by for Xunlei’s Second Quarter 2019 Earnings Conference Call. [Operator Instructions]

I will now turn the choice over to your host this day, our IR Manager, Ms. Charlene Lu. Please slump forward.

Charlene LuInvestor Household Manager

Thank you, Annie. Kindly morning and dazzling night and thanks all for becoming a member of us this day. Welcome to Xunlei 2nd quarter of 2019 earnings convention call. I’m Charlene Lu, Investor Household Manager at Xunlei. With me this day are Mr. Lei Chen, our CEO; and Mr. Eric Zhou, our CFO. We can be comfy to capture your questions after our presentation. Please be small to 2 questions at a time, so others can fetch their questions in as smartly. Currently’s convention call is being recorded and a replay of the choice will be on hand on our IR web jam afterwards. Our earnings press release was once dispensed earlier this day and is now additionally on hand on our IR web jam.

Earlier than we originate, please know that the discussions this day will include determined forward-making an try statements made below the True Harbor provisions of the US Deepest Securities Litigation Reform Act of 1995. Such statements are basically basically based on administration’s contemporary expectations below contemporary market prerequisites and are area to the possibility and uncertainties which would possibly well be complex to foretell, which will worth accurate outcomes to fluctuate materially from those made within the forward-making an try statements.

Please talk about over with our SEC filings for more detailed descriptions of the possibility components that will per chance accept as true with an influence on our outcomes. We end now no longer capture any tasks to update any forward-making an try statements, besides for as required below applicable legal guidelines. For the length of this call, we are in a position to talk about over with every GAAP and non-GAAP monetary measures. Reconciliation of the non-GAAP to related GAAP measures would possibly well per chance also be sigh in our earnings press release. Please know that each one numbers are in US bucks unless in any other case talked about.

With that, let me give up to our CEO, Mr. Lei Chen for ready remarks.

Lei ChenChief Govt Officer

Kindly morning and dazzling night, all people. Thank you all for becoming a member of us this day. Let me originate with our contemporary company developments and the monetary highlights of the 2nd quarter of 2019. Then Eric will provide more miniature print on the monetary outcomes and capture you thru the guidance for the zero.33 quarter of 2019. Our complete revenue was once roughly $47.8 million this quarter, which exceeded the top stay of our earnings guidance as a outcomes of revenue growth from our cloud computing and diversified web worth added companies and products.

Revenues from cloud computing and diversified web worth added companies and products mixed had been $22.5 million, representing an originate bigger of Forty.6% from the previous quarter. We are contented to see natural growth in every inquire for our share cloud computing resources and our enterprise client defective. Obtaining original customers comparable to Baidu, NetEase Video games and Qutoutiao.

For the length of the 2nd quarter, we made an equity investment in an rising IT products and companies and products provider and expanded our cloud computing network capacities thru aggregating appropriate computing resources from industry class networking devices for our shared cloud computing industry. We predict that the increased inquire for our shared cloud computing resources signifies a mammoth appreciation of our products and companies and products and this can provide our monetary efficiency at some point soon. We are deeply committed to our strategic initiatives for industry construction and transformation and would possibly well per chance presumably aloof proceed to come our mission to empower folk thru technical — technological innovation and construction of a shared cloud computing and blockchain basically basically based ecosystem.

We are optimistic about our prolonged-timeframe growth potentialities as we’re backed by our solid technology capabilities and portfolio of products and companies and products choices. Now I will like a flash highlight our momentum and innovation all over our companies. We predict shared cloud computing will be a principal market power that can’t be omitted and that will be a key driver for our prolonged-timeframe growth, in accordance with the previous quarters the inquire for our cloud computing companies and products stay solid. Pushed by our success in progressively increasing our enterprise client defective, here is reflected within the persevered growth of our StellarCloud’s IaaS sales over the final several quarters.

In this quarter, we obtained original customers comparable to Baidu, a number one Chinese language web search provider; NetEase Video games, a number one provider of self developed PC client and mobile games to worldwide customers; and Qutoutiao, a Chinese mobile teach aggregator, contributing to our cloud computing revenue growth within the 2nd quarter.

We be determined ample cloud to cloud — shared cloud computing resources for our increasing client defective. We are constantly working to develop the scale of our network skill thru product innovation and exterior operation. Shared uplink capacities, our treasured resources that we diagram to commercialize and originate basically the most of thru technological innovation. As smartly as, with the like a flash construction of 5G technology, we sigh more lustrous devices with greater computing resources to be developed. These devices would possibly well per chance presumably be the possible cloud computing nodes for our shared cloud computing network.

In essence, we’re increasing a shared computing network by encouraging millions of participants to share their idle computing resources. With this shared cloud computing networks, we provide high-quality high-quality, worth efficient cloud companies and products for company customers. StellarCloud, a principal segment of our shared computing and the blockchain ecosystem below construction offers cloud computing companies and products, including edge computing, purposeful computing and shared CDN choices to enterprises at a great lower worth than the industry moderate.

Earlier in this year, we launched a brand original product in our StellarCloud platform that improves the connectivity of IoT devices below complex network prerequisites. Our evolved applied sciences enable StellarCloud to provide its enterprise customers with the atmosphere kindly and the worth efficient entry to extremely efficient cloud computing choices and would possibly well per chance presumably assist these companies of their transition to cloud computing, including teach supply, are living streaming, files storage and man made intelligence.

As more companies slump digital, we wait for this most important growth within the IoT location and diversified related industries which will drive up inquire for edge computing and more or less lead to a diversity of purposes. Yet but again, we predict our shared cloud computing mannequin and the evolved technology will redefine cloud computing and produce more probabilities to the industry’s future developments.

We predict that now no longer appropriate are we story breaking in shared cloud computing, but we’re additionally making progress at making improvements to our blockchain infrastructure for each day use. Favorable year, we launched ThunderChain as segment of our approach in building a blockchain powered shared cloud computing ecosystem. We are devoted to exploring fair appropriate adoptions of blockchain in a different of industries and sectors and in providing tools, frameworks and guidelines for blockchain construction. We hope ThunderChain can significantly change a resolution to blockchain’s scalability pickle with its skill to similtaneously path of as much as millions of transactions per 2nd.

We are constantly making improvements to the efficiency of ThunderChain and accept as true with released the source code of the WebAssembly virtual machine module of ThunderChain with accompanying protocols and documentations for application builders to experiment and manufacture big scale and fair appropriate blockchain purposes. To this level, now we accept as true with partnered with companies in diversified industries to manufacture blockchain purposes with proper world uses. We already assisted in increasing dozens of blockchain initiatives with our excessive efficiency blockchain carrier. Our first hand industry insight and fingers-on experiences additionally contributed to a different of blockchain initiatives with home and foreign institutions. To illustrate, domestically we co-operated with the Copyright Protection Center of China to enhance the operations of their digital copyright identifier machine, which will assist the CPCC’s copyright authorization and transaction machine to significantly change more atmosphere kindly.

We additionally collaborated with Guangdong South Unique Media Company Restricted to provide technical choices in digital media copyright security. Out of the nation, we fair now no longer too prolonged ago obtained a Thailand academic blockchain mission to construct a blockchain infrastructure for the schools affiliated healthcare institutions to facilitate like minded and atmosphere kindly scientific files and records sharing, while making sure patient privateness.

Within the terminate, sufferers and healthcare providers with valid authorization will be ready to entry immutable clinical records to streamline diagnostic processes and crimson meat up medication effectivity. In mid-June [Phonetic], we launched a joint laboratory on blockchain technology with Hong Kong College of Science and Technology, a global leading study institution, leveraging HKUST’s study capabilities and our industry abilities. We predict to attain more blockchain construction initiatives. As we derive intensive blockchain related abilities in every academic and industrial discover, now we accept as true with applied for extra blockchain patents basically basically based on our contemporary blockchain initiatives accordingly.

Our are living streaming industry rebounded this quarter and accomplished dazzling quarterly revenue growth. It be mainly due to greater user numbers than the previous quarter and the simpler marketing activities figured out true thru this quarter. Our are living streaming platform, Xunlei Dwell offers every video and audio basically basically based interactive leisure experiences to our customers. Dwell streamers and viewers spend and have interaction thru bullet [Phonetic] chatting, proper-time commenting, gifting [Phonetic] etc. We intend to additional develop our are living streaming team thru the numbers of stuffed with life are living streamers and viewers and originate an engaged interactive and immersive team for our treasured customers.

Now returning to our mature industry. Revenues from subscriptions had been $21.Four million in 2nd quarter, up zero.9% from the previous quarter. Our cloud acceleration subscription companies and products began in March 2009. We earned a time-basically basically based subscription fee by providing our customers with queer companies and products comparable to entry to excessive dash on-line transmission, top rate acceleration or accessed privileges.

Over time, revenue from membership subscription has been a accurate source of cash float for us in our pursuit of growth and innovation. Our subscriber defective was once Four.3 million as of June 30 2019, down from Four.fifty seven million as of March 31, 2019. The typical revenue per subscriber for the 2nd quarter of 2019 was once RMB33.9 up from RMB31.1 as of March 31, 2019.

Cell Xunlei, a mobile application that enables customers to slump making an try, download and spend digital media teach on their mobile devices supplements our subscription industry. Many of our mobile application customers additionally grew to significantly change customers of our PC-basically basically based Xunlei Accelerator and subscribed to our membership companies and products afterwards. We diagram to instruct an atmosphere kindly, neat and high-quality web abilities via consistently upgrading our technological benefits and making improvements to our abilities.

Revenues generated from on-line promoting had been $3.9 million within the 2nd quarter of 2019, down 5.Four% from the previous quarter, mainly due to persevered softnes

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