Xunlei (XNET) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were $79.6 million, down 23.7% year-over-year, mainly due to downsizing domestic audio live streaming.

• Subscription revenues rose 10.8% year-over-year to $32.9 million, driven by product improvements, marketing, and subscriber growth to 5.71 million.

• Gross profit margin improved to 51.1% from 44.0% year-over-year, reflecting a higher share of subscription revenue.

• Net income attributable to common shareholders was $2.8 million, compared to $5 million a year ago; non-GAAP net income was $3.2 million, down from $8.4 million.

• Company remains profitable and is focused on product innovation, expanding its user base, and ecosystem growth.

Financial highlights

• Cloud computing revenue was $26.4 million, down 13.8% year-over-year; live streaming and other IVAS revenue was $20.3 million, down 53.9% year-over-year.

• Costs of revenues decreased to $38.6 million (48.5% of revenues) from $58.1 million (55.7%) year-over-year.

• Operating income was $1.0 million, up from $0.9 million a year ago.

• Diluted EPS was $0.04, compared to $0.08 in Q2 2023; non-GAAP diluted EPS was $0.053.

• Cash, cash equivalents, and short-term investments were $263.4 million as of June 30, 2024.

Outlook and guidance

• Q3 2024 revenue guidance is $81–86 million, midpoint representing a 4.9% sequential increase.

• Focus remains on product refinement, portfolio diversification, and global business growth.