Xunlei (NASDAQ:XNET) Releases Quarterly Earnings Results

Xunlei (NASDAQ:XNET) announced its quarterly earnings results on Thursday. The software maker reported ($0.03) earnings per share (EPS) for the quarter, FiscalAI reports. The company had revenue of $102.11 million for the quarter. Xunlei had a return on equity of 1.47% and a net margin of 185.71%.

Here are the key takeaways from Xunlei’s conference call:

• Revenue increased 38.9% year over year to $102.7 million, driven by 22.6% growth in subscription revenue and strong expansion in overseas audio live streaming, alongside improved Hupu advertising.
• Overseas audio live streaming remained the primary growth engine, generating $58.2 million in revenue as Xunlei expanded in Southeast Asia, the Middle East, Turkey and Latin America through localized products and operations.
• Profitability weakened as the lower-margin live-streaming mix increased costs; gross margin fell to 55.8% from 63.0%, the company posted a $4.8 million operating loss, and non-GAAP net loss was $2.1 million.
• A $230.8 million net other loss, primarily from mark-to-market volatility in Xunlei’s Arashi Vision investment, drove a $218.5 million GAAP net loss from continuing operations versus $726.4 million of net income a year earlier.
• Xunlei began its newly authorized $20 million share repurchase program on July 1 and had repurchased approximately 1.07 million ADSs for $5.9 million by August 12, while preparing to potentially reduce its 7.8% Arashi Vision stake in compliance with regulatory requirements.

Xunlei Stock Performance

Xunlei stock traded up $0.18 during midday trading on Thursday, reaching $5.15. The stock had a trading volume of 286,120 shares, compared to its average volume of 277,657. Xunlei has a 12 month low of $4.52 and a 12 month high of $11.03. The firm’s 50-day moving average price is $5.37 and its 200 day moving average price is $5.78. The firm has a market capitalization of $327.80 million, a PE ratio of 0.38 and a beta of 1.15. The company has a quick ratio of 2.11, a current ratio of 2.11 and a debt-to-equity ratio of 0.03.

Xunlei announced that its Board of Directors has authorized a stock repurchase program on Friday, June 26th that permits the company to repurchase $0.00 in shares. This repurchase authorization permits the software maker to reacquire shares of its stock through open market purchases. Shares repurchase programs are often an indication that the company’s board believes its stock is undervalued.

Wall Street Analyst Weigh In

Several analysts have recently issued reports on the stock. Weiss Ratings upgraded shares of Xunlei from a “hold (c)” rating to a “hold (c+)” rating in a research note on Wednesday, June 3rd. Wall Street Zen lowered shares of Xunlei from a “buy” rating to a “hold” rating in a research report on Saturday, May 2nd. One equities research analyst has rated the stock with a Hold rating, Based on data from MarketBeat.com, Xunlei has an average rating of “Hold”.

Institutional Trading of Xunlei

Several hedge funds and other institutional investors have recently modified their holdings of the business. Schonfeld Strategic Advisors LLC boosted its holdings in Xunlei by 4.6% in the 4th quarter. Schonfeld Strategic Advisors LLC now owns 52,889 shares of the software maker’s stock worth $375,000 after buying an additional 2,313 shares during the period. Public Employees Retirement System of Ohio raised its holdings in Xunlei by 3.7% during the 4th quarter. Public Employees Retirement System of Ohio now owns 57,331 shares of the software maker’s stock valued at $406,000 after acquiring an additional 2,047 shares during the period. Russell Investments Group Ltd. raised its holdings in Xunlei by 307.6% during the 4th quarter. Russell Investments Group Ltd. now owns 65,227 shares of the software maker’s stock valued at $462,000 after acquiring an additional 49,223 shares during the period. Geode Capital Management LLC lifted its position in shares of Xunlei by 15.2% during the fourth quarter. Geode Capital Management LLC now owns 31,122 shares of the software maker’s stock worth $221,000 after acquiring an additional 4,117 shares in the last quarter. Finally, Scientech Research LLC purchased a new stake in shares of Xunlei during the third quarter worth $223,000. Institutional investors own 5.07% of the company’s stock.

Xunlei Company Profile

Xunlei Limited (NASDAQ: XNET) is a China-based technology company specializing in content acceleration and cloud services. Its core offerings include the Xunlei download manager, which integrates peer-to-peer (P2P) and cloud-based acceleration technologies to enhance file delivery speeds for large downloads. The company has expanded its suite of products to encompass cloud storage solutions, media streaming applications and mobile browsing tools, all aimed at improving digital content distribution and user experience.

Founded in 2003 and headquartered in Shenzhen, Xunlei originally gained traction by addressing bandwidth constraints in China’s burgeoning internet market.