Xunlei released its 2022 Q1 financial report: total revenue reached US$79 million, a year-on-year increase of 48.4%

On May 17, 2022, Xunlei (NASDAQ: XNET) released its unaudited financial report for the first quarter ended March 31, 2022. According to the financial report, in the first quarter, the company's total revenue was US$79 million, an increase of 11.1% from the previous quarter and a year-on-year increase of 48.4%, which was in line with the expected revenue guidance.

Xunlei also achieved a net profit turnaround, with a net profit of US$5.4 million for the quarter based on generally accepted accounting principles (GAAP), compared with a net loss of US$0.5 million in the previous quarter. Based on Non-GAAP, the net profit for the quarter was US$7.2 million, compared to the net profit of US$1.7 million for the previous quarter. The increase in net profit was mainly due to the increase in gross profit of major businesses and the decrease in operating expenses . Gross profit was US$34.9 million, an increase of 4.9% quarter-over-quarter, and diluted earnings per ADS was US$0.08, compared to a diluted loss per ADS of US$0.01 in the previous quarter.

Li Jinbo, Chairman and Chief Executive Officer of Xunlei, said: "We have made a good start in the first quarter of 2022, with total revenue reaching US$79 million, an increase of 11.1% quarter-on-quarter. This is also our sixth consecutive quarter of revenue growth. I am very pleased Seeing that the revenue of the main business has grown rapidly, this is due to our continuous product upgrades and the increase in customer demand. At the same time, it also fully proves that our steady strategy and efficient execution are capable of providing users with competitive products and services. In the first quarter of this year, we achieved a net profit of $5.4 million, a significant improvement from the net loss of $500,000 in the previous quarter.”

Xunlei's revenue segment is divided into cloud computing business, membership business, live broadcast and other Internet value-added services (including Internet advertising). Revenue from the Cloud Computing business was $30.2 million, up 7% sequentially. The increase in the revenue of this business was mainly based on the increase in customer demand for products.

The performance of the membership business in this quarter was also very impressive, with revenue of US$25.3 million, an increase of 7% from the previous quarter. This is due to the substantial increase in the number of members this quarter.

The Xunlei member business performed strongly in the first quarter, mainly due to the strong consumption demand of users during the Spring Festival. At the same time, a large number of upgrades and optimizations were made to products and services, and member satisfaction continued to increase. In the future, we will continue to increase investment in membership services, open up family-based multi-terminal consumption, and expand more rights and interests to meet increasingly rich user needs.

The continuous improvement of product and service quality has also driven the rapid growth of super members and increased the average revenue per member. In the first quarter of 2022, the average revenue per member was 34.9 yuan, compared with 34.3 yuan in the previous quarter.

It is worth mentioning that Xunlei's live broadcast business performed well. According to the financial report, revenue from live broadcasting and other Internet value-added services (including Internet advertising revenue) was US$23.5 million, a month-on-month increase of 22.1%, which was mainly due to the increase in live broadcasting revenue.

In order to allow users to have a better experience, Xunlei's investment in business costs has also increased. Main business costs were US$43.9 million, accounting for 55.5% of total revenue; bandwidth costs increased to US$26.9 million, accounting for 34% of total revenue, compared to US$22.8 million in the previous quarter, accounting for 32.1% of total revenue.

In addition, Xunlei maintains a high level of investment in technological innovation. Research and development expenses for the quarter were $16.3 million, or 20.6% of total revenue, compared to $16.6 million, or 23.3% of total revenue, in the prior quarter.

The company held cash, cash equivalents and short-term investments of $269.9 million in the quarter, compared to $239 million in cash, cash equivalents and short-term investments as of December 31, 2021. The increase in cash was mainly due to the increase in bank loans for Xunlei Building and cash inflows from business operations.

Li Jinbo said: "Xunlei is constantly exploring and innovating emerging products and services. The excellent performance in the first quarter of 2022 has further strengthened our confidence in the company's sustainable development and good prospects. Based on the company's good financial liquidity and stable cash flow and improving business, we remain optimistic about revenue growth and near-term trends."

Xunlei expects total revenue in the second quarter of 2022 to be in the range of US$77 million to US$82 million. On average, second-quarter revenue rose about 0.6% sequentially. This outlook only reflects Xunlei's current preliminary views and may change in the future.