Xunlei (XNET) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue rose 9.3% year-over-year to $84.3M, exceeding guidance, driven by record 6.38 million subscribers and strong subscription and live streaming growth.

• Strategic transformation included expanding partnerships and acquiring Hupu to enhance content and community offerings, with the acquisition expected to be earnings accretive after closing in H1 2025.

• Cloud computing faced significant revenue decline due to competition and regulatory pressures, leading to a full $20.7M goodwill impairment.

• Q4 net loss was $9.9M (vs. $3.7M net income YoY), impacted by the goodwill impairment; non-GAAP net income for Q4 was $11.3M (vs. $4.5M YoY).

• Full-year 2024 revenues declined 11.1% to $324.4M, mainly due to lower cloud computing and live-streaming revenues.

Financial highlights

• Q4 subscription revenue grew 9% YoY to $34.4M; live streaming revenue surged 80.7% to $27.2M; cloud computing revenue dropped 25.6% YoY to $22.7M.

• Q4 gross profit was $43.6M (up 8.7% YoY) with a gross margin of 51.7%.

• Q4 operating loss was $20.5M, mainly due to the $20.7M goodwill impairment.

• FY 2024 gross profit was $167.6M (up 2.8% YoY) with a margin of 51.7%.

• Q4 non-GAAP diluted EPS was $0.18 (vs. $0.07 YoY); full-year non-GAAP diluted EPS was $0.38 (vs. $0.37 YoY).

Outlook and guidance

• Q1 2025 revenue guidance is $85M–$89M, representing a 3.2% sequential increase at the midpoint.

• Management expects continued growth in subscription and overseas live streaming, and positive impact from the Hupu acquisition.