Welcome, ladies and gentlemen, and thank you for your patience. You've joined Xunlei's Fourth Quarter and Fiscal Year 2023 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 2023 fourth quarter earnings conference call. On the call with me today are Eric Zhou, Chief Financial Officer; and [Hu Lee], Vice President of Finance. Now our earnings press release is available 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 on behalf of our Chairman and CEO, Mr. Jinbo Li, on highlight of our fourth quarter operations. Then Mr. Eric Zhou, our CFO, will walk you through the details on our financial results and wrap up with our revenue guidance for the first quarter of 2024. After the management's remarks, we would like to welcome any questions from you in our Q&A session. Today's call is recorded, and you can replay the call from our Investor Relations website at ir.xunlei.com. 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 under 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 obligation 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 our earnings press release. Please note that all numbers are in U.S. dollars unless otherwise stated. Now the following is the preparative statement by Mr. Jinbo Li, Chairman and CEO of Xunlei Limited.

Good morning, everyone. Thank you all for joining us today. we concluded 2023 with a solid fourth quarter results as our revenue exceeded the upper end of our guidance range, and we sustained profitability for the eighth consecutive quarter. Over the past year, we maintained a strong focus on enhancing our existing products and services, restructured our business operations and explore new initiatives to seek potential breakthrough in our business development. Despite more short-term impact of our business adjustments, we're encouraged by what we have done so far and I believe that we're on track to pursue future growth. I look forward to sharing with you our progress in the near future. Let me provide you with some insights into our fourth quarter operations. As announced in our earnings press release earlier today, our flagship subscription business achieved a significant milestone with nearly 6 million subscribers at the end of 2023, and over 73% of them opted for premium subscription and subscription revenue for the quarter reached [indiscernible] representing an increase year-over-year growth [indiscernible]. This can be attributed to a comprehensive marketing initiatives implemented [indiscernible] future acquisitions and retention [indiscernible] users to stay with us. For the robust subscriber page and the continuous effort [indiscernible] users to optimize future and multi-specific marketing campaign, we expect that the positive momentum will continue in the coming days. We'll continue. We're glad to see that despite the intense competition in the industry, our cloud computing business has managed to maintain its competitive edge. In the fourth quarter of 2023, our cloud completed business generated $30.5 million in revenue, reflecting a 4.4% year-over-year decline primarily due to the reduced revenue from certain major clients. However, we have observed an increase in the sales of our hardware products, namely OES, OEC and OEA, which may…

Thank you, and hello, everyone, and thank you again for joining Xunlei's 2023 fourth quarter and fiscal year earnings conference call. I will review the details of our financial results and provide a revenue guidance for the first quarter of 2024. In the fourth quarter, the total revenues were $77.1 million, representing a decrease of 20.4% year-over-year. The decrease in total revenues was mainly attributable to decreased revenues generated from our live streaming business as we've downsized some of our domestic live streaming operations since June 2023. Revenues from cloud computing were $30.5 million, representing a decrease of 4.4% year-over-year. The decrease in cloud computing revenues was mainly due to the decreased revenues from certain of our major customers of cloud consulting services. Revenues from subscriptions were $31.6 million, representing an increase of 26.8% year-over-year. The increase in subscription revenues was mainly due to the increase in the number of subscribers and higher average revenue per subscriber for the quarter. The number of subscribers was 5.99 million as of December 31, 2023, compared with 4.99 million as of December 31, 2022. The average revenue per subscriber for the fourth quarter was RMB36.5 compared with RMB35.4 in the same period of 2022. The higher average revenue per subscriber was due to the continued increase in the proportion of the users opting for our premium membership. Revenues from live streaming and other IVAS were $15 million, representing a decrease of 62.5% year-over-year. The decrease of live streaming and other IVAS revenues was mainly due to the unpausing of our domestic live streaming operations during the year. Cost of revenues were $36.8 million, representing 47.7% of our total revenues compared with $59 million or 60.5% or 60.9% of total revenues in the same period of 2022. The decrease in cost of revenues was…

[Operator Instructions] There seems to be no questions at this time.

We have a quite question in the queue.

We will take our first question. Your first question comes from the line of [Qing Wang] from Halo Asset Management. Please go ahead. Your line is open.

[Foreign Language]

[Foreign Language] Thank you [Qing] and she said, congrats on us for achieving the record-breaking membership for the subscriptions and she would like to know some details regarding the specific marketing strategies that were implemented? And she would also like to know whether these strategies are sustainable? In the fourth quarter, our subscription business experienced the significant growth, primarily due to our strategic partnerships and collaborations with some popular online social networking platforms as well as this driving commitments of our own users. We have provided attractive incentives to attract new users and effectively retain existing ones, thereby enhancing user engagement and vastly loyalty. And we expect this positive momentum to continue in the coming days as a result of our continuing and exceptional marketing and efforts. Thank you.

[Foreign Language]

And the question is from [indiscernible] that over 70% of our subscribers are premium members. Could you please if this refers to the 70% of the total number of subscribers were just paying subscribers? And additionally, plan to anticipate a further increase in the proportion of premium members. Approximately 73% of our paid subscribers are premium members. We continuously enhance the structure of our membership by offering options for both premium and expanded subscriptions as well as different duration for this membership. Further, we are continuously improving our operations, iterating our existing features and striving to convert more free users to paying customers while encouraging standard subscribers to upgrade to our premium services. As a result, we anticipate there is still some room for further growth but maybe at a decelerated pace Thank you.

[Foreign Language]

Thank you. There are no any further questions, I would like to hand back to management for closing remarks.

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

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