Welcome ladies and gentlemen, and thank you for your patience. You’ve joined Xunlei’s Third Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. Please be advised that today’s conference has been recorded. I would now like to turn the call over to the host, Investor Relations Manager, Ms. Luhan Tang. Please go ahead.

Good morning everyone, and thank you for joining Xunlei’s Q3 2024 earnings conference call. With me today are Eric Zhou, CFO; and Lee Li [ph], Vice President of Finance. Our IR website has our earnings press release to supplement our prepared remarks during the call. Today’s agenda includes a prepared opening remark from Chairman and CEO, Mr. Jinbo Li on Q3 operational highlights. Followed by CFO, Eric Zhou, presentation of financial results details and the revenue guidance of Q4 2024 before we open up the floor to your questions in the Q&A session. Please note that this call is recorded and can be replayed on 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 our management’s current expectations under existing market conditions and 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 assumes no obligation to update any forward-looking statements, except as required under applicable laws. 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 prepared statements by Mr. Jinbo Li, Chairman and CEO of Xunlei Limited.

Good morning, and good evening, everyone. Thank you all for joining us today. In the third quarter 2024, we achieved continued profitability, while total revenues declined 4.9% due to the lingering impact from last year’s downsizing of our domestic audio live streaming business and reduced cloud computing sales due to the changing market landscape for our cloud computing business. We were able to partially mitigate the impact by expanding our overseas operations. Moving forward, we intend to continue to invest in overseas projects, including live streaming business, explore new opportunities and restructure our overall product mix to develop a more stable and growth-oriented business. Now, I’d like to review the performance of our major business segments for the third quarter of 2024. Let me start with our subscription business. Our subscription business enjoyed continuous growth and generated $33.2 million in revenue, up 15.6% year-over-year. We’re very pleased with the progress achieved by our talented product team. Their efforts on product refinement and marketing strategies led to improved user engagement, loyalty and more premium membership purchases. During the third quarter, premium subscribers accounted for 78% of total paying users compared to about 60% in the same period last year. Going forward, we will proactively explore synergy within our product ecosystem to pursue sustainable growth. For example, we will seek further collaboration with a leading cell phone maker for partnerships to use pre-installed Xunlei products to support their mobile phone browsers to drive meaningful growth and expand our user base. In the third quarter, our cloud computing business faced significant challenges and our revenue declined to $25.3 million, representing a 14.4% year-on-year decrease. We expect the cloud business to continue to face headwinds due to intense market competition and evolving regulatory environment. We will evaluate options to stabilize this business and minimize…

Thank you, Luhan, and thank you all again for participating in Xunlei’s conference call to discuss financial results of the third quarter of 2024. In the third quarter, our total revenues were $80.1 million, representing a decrease of 4.9% year-over-year. The decrease in total revenues was mainly attributable to the decrease in our revenues from live streaming and cloud computing business. Revenues from cloud computing were $25.3 million, representing a decrease of 14.4% year-over-year. The decrease in cloud computing revenues was mainly due to the reduced sales of our cloud computing services and a decline in sales of cloud computing hardware devices as a result of heightened competition and evolving regulatory environment. Revenues from subscription were $33.2 million, representing an increase of 15.6% year-over-year. The increase in subscription revenues was mainly driven by the increase in the number of subscribers. The number of subscribers was 5.51 million as of September 30, 2024, compared with 5.02 million as of September 30, 2023. The average revenue per subscriber for the third quarter was RMB 40.9 compared with RMB 39.9 in the same period of 2023. The higher average revenue per subscriber was mainly attributable to an increase in the proportion of users who signed up for our premium membership services. Revenues from live streaming and other IVAS were $21.6 million, representing a decrease of 16.7% year-over-year. The decrease of live streaming and other IVAS revenues was mainly due to the downsizing of our domestic audio live streaming operations since June 2023, which was partially offset by the increase in the revenues from our overseas audio live streaming business. Cost of revenues were $39.4 million, representing 49.1% of our total revenues compared with $46.4 million or 55.1% of our total revenues in the same period of 2023. The decrease in cost of revenues…

Thank you so much. [Operator Instructions] And now we’re going to take the first question. And it comes from line of Yuki Chen [ph] from Retail Investor. Your line is open. Please ask your question

[Foreign Language] And the cores question is congrats on maintaining a double digit year-over-year growth rate in subscription business. And the question is, can the company sustain its growth trend in the subscription business for future quarters? As for the last several quarters the sequential growth was basically flat and how can we overcome the bottleneck of reaching an 6 million subscribers?

Thank you for your question. Our subscription business has generally kept its growth momentum, maintaining a user base between 5 million and 6 million since the beginning of this year. We are encouraged that we observed a continuous year-over-year growth in our active paying users over the past few quarters. The portion of premium subscribers among paying users increased from about 60% in the third quarter of last year to about 78% in the third quarter of this year. And as a result, there was an increase in the average revenue per subscriber from approximately RMB 39.9 in the third quarter of last year to about RMB 40.9 this quarter, which indicates, I believe, a healthy trend for our subscription business. And in the coming days, we intend to further expand our marketing channels continue to improve user benefits and experience and conduct more promotional campaigns to acquire new users. And by taking these measures, we hope to achieve breakthroughs in our user base in the future. Thank you.

[Foreign Language]

[Foreign Language] The questions, I noticed that in the third quarter of this year, the Chinese government implemented a series of policies to stimulate the stock market, which resulted in improved performance for many Chinese stocks. And she would like to know if Xunlei has any strategies in place to enhance its share price and address the undervaluation of its stock situation.

Yes, we have also noticed the Chinese government recently introduced a number of market favorable policies, aimed at resolving certain domestic economic issues and boosting investors’ confidence. We will continue to prioritize business development. Further, our share buybacks – enhance communications with the capital market and actively monitor market and regulatory environment and adopt corresponding strategies as necessary to hopefully ultimately generate value for our shareholders. Thank you.

[Foreign Language]

Excuse me, Yuki any further questions? Thank you. Thank you. [Operator Instructions] Dear Speakers, there are no further questions for today. I would now like to hand the conference over to the management team for any closing remarks.

Thank you, again, for your time and participation. And if you have any questions, please visit our website at ir.xunlei.com or send us e-mails to our Investor Relations. Have a good day. Operator, we conclude today’s conference. Thank you.

That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.