Xunlei (NASDAQ:XNET) Announces Earnings Results

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

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 Up 3.6%

Shares of XNET traded up $0.18 during midday trading on Thursday, reaching $5.15. 286,180 shares of the stock were exchanged, compared to its average volume of 277,658. The firm has a 50 day simple moving average of $5.37 and a 200-day simple moving average of $5.78. Xunlei has a 12-month low of $4.52 and a 12-month high of $11.03. The company has a market cap of $327.80 million, a price-to-earnings 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.

Hedge Funds Weigh In On Xunlei

Several institutional investors have recently bought and sold shares of XNET. Walleye Capital LLC bought a new position in shares of Xunlei in the 2nd quarter valued at approximately $51,000. NewEdge Advisors LLC grew its position in Xunlei by 9,106.5% during the first quarter. NewEdge Advisors LLC now owns 18,413 shares of the software maker’s stock worth $83,000 after buying an additional 18,213 shares in the last quarter. Mangrove Partners IM LLC acquired a new stake in shares of Xunlei during the 4th quarter worth approximately $128,000. Russell Investments Group Ltd. acquired a new stake in Xunlei during the third quarter worth $153,000. Finally, Headlands Technologies LLC acquired a new stake in shares of Xunlei during the 4th quarter valued at about $214,000. 5.07% of the stock is currently owned by institutional investors.

Analyst Ratings Changes

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

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

About Xunlei

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.