Welcome, ladies and gentlemen, and thank you for your patience. You've joined Xunlei's 2022 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to turn the call over to the host, Investor Relations Manager, Ms. Luhan Tang.

Thank you, and good morning, everyone, and thank you for joining Xunlei's 2022 second quarter earnings conference call. On the call with me today are Eric Zhou, Chief Financial Officer; and [Lee Hu], Senior Vice President of Finance. Now you can find our earnings press release on our IR website which is intended to supplement our prepared remarks during today's call. For today's agenda, I will first read our prepared opening remarks by our Chairman and CEO, Mr. Jinbo Li, on highlights of our second quarter operations. Then Mr. Eric Zhou, our CFO, will go through the details of financial results and wrap up with our revenue guidance for the third quarter of 2022. We'd like to welcome any questions from you after the management's remarks. Today's call is recorded, and you can replay the call from our Investor Relations website. Before we get started, I would like to take this opportunity to remind you that the discussion today will contain certain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations on our current market conditions that are subject to risks and uncertainties that are difficult to predict, which may cause actual results to differ materially from those made in the forward-looking statements. Please refer to our SEC filings for a more detailed description of the risk factors that may affect our results. Xunlei assume no obligations to update any forward-looking statements, except as required under applicable law. On this call, we will be using both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to comparable GAAP measures can be found in earnings press release. Please note that all numbers are in U.S. dollars unless otherwise stated. Now the following is the prepared statement by Mr. Jinbo Li, Chairman and CEO of Xunlei Limited.

Good morning, everyone, and thanks for joining us today. I'm very pleased to report that we achieved good quarterly results as most of our business lines delivered expected performance in the second quarter of 2022. Before I get into the results of the quarter, I'd like to step back and share with you the highlights of our business in the second quarter. Our subscription business did a great job that our premium subscribers reached a record level of 35% of total subscribers, and our live streaming services realized top line growth for five consecutive quarters. Those exciting results are attributable to our efforts to cater to users' need as well as effective marketing campaign that led to increased demand for our products and services. Also, I'm very proud that our cloud computing subsidiary received several industry awards in the last quarter for innovation and a contribution to the industry. We achieved this inspiring result in spite of challenging macro environment dealing with COVID-19, a slowing down economy, evolving government regulations, et cetera. In the second quarter of 2022, our total revenues reached $78.3 million and this is the seventh quarter in which we reached consecutive quarterly business growth. But due to the impact of devaluation of RMB against U.S. dollar, in the second quarter, our total revenue reported in U.S. dollar exhibited a slight decrease of about 1% after currency conversion. Despite so, I'm pleased that our, net profit grew to $6 million, a 10.1% increase from the previous quarter, and it was the second consecutive profitable quarter. And I'm encouraged that our efforts to optimize our operations begin to pay off and enhance our ability to pursue high-growth opportunities. As I mentioned earlier, our cloud computing business maintained its competitiveness in the market. Among other recognition, [Shangshi Longchuang] was…

Thank you, Luhan. Hello, everyone, and thank you again for joining Xunlei's 2022 second quarter earnings conference call. I will now go through the details of our financial results and wrap up with our revenue guidance for the third quarter of 2022. Total revenues were $78.3 million, representing a decrease of 1% from the previous quarter. The decrease in total revenues was mainly attributable to devaluation of RMB against U.S. dollars, partially offset by increased revenues from our live streaming and other IVAS services. Revenues from cloud computing were $28.3 million representing a decrease of 6.2% from the previous quarter. The decrease of cloud computing revenues was mainly due to devaluation of exchange rates of RMB against the U.S. dollar as our cloud computing revenues were denominated in RMB. During the second quarter, the bandwidth sold was practically stable and we are mindful of enhanced industry competition. Revenues from subscriptions were $25.4 million, representing an increase of 0.2% from the previous quarter. The number of subscribers was 4.46 million as of June 30, 2022 compared with 4.61 million as of March 31, 2022. Historically, the number of membership fluctuated from period to period and sometimes significantly. The average revenue per subscriber for the second quarter was RMB37.8 compared with RMB34.9 for the previous quarter. The higher average revenue per subscriber was due to a larger percentage of users opting for our premium service option. Revenues from live streaming and other IVAS were $24.5 million, representing an increase of 4.5% from the previous quarter. The increase of live streaming and other IVAS revenues was mainly due to the increased demand for our new live audio streaming products, which we launched in 2021. Gross profit for the second quarter was $33.7 million, representing a decrease of 3.2% from the previous quarter. Gross…

[Operator Instructions] And your first question comes from [Lee Sang from MSL Group]. Please ask your question.

This is Lee and thank you for sharing your financial highlights of the second quarter performance. [Foreign Language]

Thanks for asking. And he asks, since Xunlei on the watch list of SEC under the Company's Accountable Act for, HFCAA. And if the acceleration bill is impacted, Xunlei will be delisted from NASDAQ as early as next year. He'd like to know if the Company has any countermeasures and where the Company consider privatization. It's a good question. Xunlei is aware that the Company has been identified by the SEC under the HFCAA in May this year. We believe such identification may be the result of its filing of its annual report on Form 20-F for the fiscal year ended December 31, 2021. Under the HFCAA, a company will be delisted from the U.S. Stock Exchange, if the Company has been identified by the SEC for three consecutive years as a result of PCAOB's inability to inspect the working paper of the Company's auditor. If this accelerated version of HFCAA is impacted, the delisting could be happening in 2023. We are monitoring the talks between China and the U.S. and will proactively study alternative solutions to remain as a public company. And regarding privatization, so far, the Board of Directors has not discussed this issue. Thanks for asking.

[Foreign Language]

Also thank you for asking the question. Yes, thank you.

Thank you. We will take our next question. And your next question comes from the line of Sara Hua who is a private investor. Please ask your question.

[Foreign Language]

Her question is that the growth rate cloud computing and live streaming business was slowing down. Will the trend continue? First of all, we don't provide any guidance for our future revenue beyond a quarter. The rapid devaluation of Chinese currency over the last quarter impacted our financial numbers. Cloud computing revenue in Chinese currency decreased by 1.6% compared to the first quarter, while it decreased by 6.2% when converted into U.S. dollars. Revenue growth of our live streaming business in RMB was 10.2%, but it was 5% in U.S. dollars. We estimate the impact of exchange rate is around 5%. Since the cloud computing and live streaming business have been growing rapidly for many quarters, we think it's normal for the growth rate to slow down to certain extent, and we don't expect this to be a long-term situation or a negative sign. At this time, again, we can't guarantee anything due to the evolving macro factors like the impact of COVID-19, the development of national economy or the impact of geopolitics, et cetera. But we will be focused on our strategy of leveraging our competitive edge and commercial capability to improve our top line growth and profitability. Thank you.

[Foreign Language]

We will take our next question. Please standby. Your next question comes from the line of Yuxi Sang who is a retail Investor. Please ask your question.

[Foreign Language]

His question, he said that since the digital results, the collectibles and the product has been off the shelf or they stopped doing so. He wants to know what's our outlook of Xunlei's the digital collectible business. First, we don't really comment on other companies' products or the outlook. For us, the digital collectible market, the business is one of our many endeavors of Xunlei is trying to exploring. And as I mentioned earlier, the market or the business is evolving quickly both in terms of technology and regulatory environment. And for the time being, we are working with several institutions in China, and we are developing -- we are continuing developing different products. And we think for the foreseeable future, it has greater potential. Of course, it's also great risks, having said it's just one of our many explorations to seek the some business, which may have great potential in the future. But of course, we realize it has also great risks and at largest emphasize we are doing strictly according to the relevant laws and regulations. Thanks for asking.

[Foreign Language]

[Foreign Language]

We have a variety of live streaming products. And right now, we still have it, but it's not a large effort by us. And as we discussed in our press release, large efforts by us -- and as we discussed in our press release, one of our focuses is to develop audio -- live audio streaming product. And so far, live audio streaming has been doing quite well for the last several quarters. That will be our future focus. Thank you for asking.

[Foreign Language]

[Operator Instructions] There seems to be no further questions from the audio at this time. Please continue.

Thank you, again, for your time and participation. If you have any questions, please visit our website at ir.xunlei.com or send e-mails to our Investors Relations. Have a great day. Operator, we conclude today's conference call. Thank you

This concludes today's conference call. Thank you all. Thank you for participating. You may disconnect.