Fast thunder (nasdaq: XNET) released unaudited results for the first quarter ending march 31,2020, on the evening of may 14, beijing time. According to the results, Q1 Thunder Group's total revenue was $48.3 million, up 0.1 percent from a month earlier, up 16.9 percent from a year earlier. Among them, revenue from cloud computing and other Internet value-added services was $21.2 million, down 14.1 percent from a month earlier, up 32.5 percent from a year earlier; revenue from member businesses was $23.4 million, up 18.1 percent from a year earlier, up 10.4 percent; and revenue from Internet advertising was $3.8 million, down 1.3 percent from a year earlier, down 7.3 percent from a year earlier.
Li Jinbo, chairman and chief executive, said:
Steady growth of main business
As of March 31,2020, the number of Thunderbolt members reached 4.6 million, compared with 4 million in the previous quarter, according to financial data. The big increase in membership users led to an increase in membership subscription service revenue of $23.4 million in the quarter, up 18.1 percent from a year earlier, up 10.4 percent. Meanwhile, Thunderbolt's sales and marketing expenses fell sharply to $6.7 million, or 13.9 per cent of total revenue, compared with $11.1 million, or 23.1 per cent, in the previous quarter. The decline in sales and marketing costs was due mainly to a reduction in marketing activities during the quarter.
According to the operation data over the years, the number of members and business income of Xunlei are greatly affected by seasonal factors and promotion operation activities. While the promotion activities are reduced, the business growth is achieved, which fully shows the compression resistance and sustainability of Xunlei member business.
Affected by the decline in revenue of cloud computing hardware products, live broadcast services and other Internet value-added services, the revenue of Xunlei cloud computing and other Internet value-added services in this quarter was US $21.2 million, down 14.1% month on month, but compared with the first quarter of 2019, the revenue capacity of cloud computing business increased by 32.5%. In addition, the cost of bandwidth announced by Xunlei rose slightly to US $18 million in the quarter, accounting for 37.1% of the total revenue, compared with us $17.8 million in the last quarter, accounting for 36.8% of the total revenue. The increase of bandwidth cost is mainly due to the increase in sales of CDN products of star cloud. The above data shows that thunderbolt cloud computing business has maintained a relatively stable development trend in the past period.
Due to the rise of live broadcast, short video, online education, AI and other industries in recent years, the digital economy has gradually flourished, and the cloud computing industry has also ushered in explosive growth. Relying on the leading technological advantages and unique product models, the future of Thunder Cloud computing business still has great imagination.
Focus on core competitiveness and expand competitive advantage
Li Jinbo in the financial report of the main business of Xunlei's future strategic development made a further explanation:
Next, we will further expand the competitive advantage around the core competitiveness of Thunderbolt. Specifically, in TO B business, we will increase profitability while expanding the size of the business; in TO C business areas, we will focus on improving overall operational efficiency to achieve sustainable business growth. I believe that the firm's sound fundamentals and adequate capital and liquidity reserves will help us implement our strategy with confidence.