Good day, ladies and gentlemen. And thank you for your patience. You've joined Xunlei's First Quarter of 2020 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. We will have a Q&A session after few management remarks. I would now like to turn the call over to your host, Investor Relations Manager, Ms. Charlene Lu.

Thank you, operator. Good morning and good evening. And thank you all for joining us today. We welcome you to this conference call to discuss Xunlei's first quarters of 2020 earnings. For our agenda today, Mr. Jinbo Li, our CEO, will provide a brief overview of the key strategy and financial performance. After which, Mr. Eric Zhou, our CFO, will provide additional details on the financial conditions, wrapping up with our financial outlook for the next quarter. We will be happy to take your questions after our management's remarks. Please be limited to two questions at a time so others can get their question in as well. Today's conference call is being recorded and a replay of the call will be available on our IR website afterwards. Our earnings press release was distributed earlier today and is now also available on our IR website. Before we get started, please note that the discussions 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 the current market conditions and are subject to the 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. We do not undertake any duty to update any forward looking statements except as required under applicable laws. During this call, we will refer to both GAAP and non-GAAP financial measures. A reconciliation of the non-GAAP to the comparable GAAP measures can be found in our earnings press release. Please note that all numbers are in U.S. dollars, unless otherwise stated. And with that, let me pass to our CEO, Mr. Jinbo Li, for prepared remarks.

Good morning and good evening, everyone. Thank you for joining us for our first quarter of 2020 earnings call. I'm very happy to rejoin Xunlei to be its Chairman and CEO. I look forward to having more opportunities to talk with you in the future. We are going through an unprecedented time and I'm proud of our employees' efforts during the past quarter. Now I would like to share our business goal, recent developments, and financial highlights of the first quarter of 2020. We began the year 2020 with steady revenue despite unfavorable economic conditions as a result of the COVID-19. Our revenues remain steady at $48.3 million, up about 10.1% compared to the fourth quarter of 2019. That is an increase of 17% compared to the same period last year. Further, the net loss was significantly reduced from $18.1 million in the fourth quarter of 2019 to a loss of $5.5 million this quarter. Amongst our product line, I would like to highlight the performance of our StellarCloud's service and membership subscription service. As part of our cloud computing and IVAS service, we are pleased to see the continual growth of revenue from our StellarCloud service. During the first quarter, our relationship with our corporate clients remained strong and demand for our CDN service tracked its previous chain of growth. The overall cloud computing and IVAS revenues dropped 14.2%, compared with the previous quarter and the decline is due to the decrease in live streaming revenues, other IVAS revenues, and the lack of cloud hardware sales this quarter. Our subscriptions revenues grew 18.1% quarter-over-quarter and grew $10.4 million -- 10.4% year-over-year to $23.4 million and contributed 48.3% of our revenues this quarter. Our subscriber base also increased from approximately 4 million to about 4.6 million compared to the previous…

Thank you, Jinbo. Hello, everyone. And thank you [technical difficulty] for the previous quarter. All subscription revenues increased substantially this quarter, but this increase was offset by the decrease in live streaming and the cloud hardware sales revenue. Revenues from subscriptions were $23.4 million, up 18.1% from the previous quarter. The number of subscribers were approximately 4.6 million as of March 31, 2020, up from about 4 million as of December 31, 2019. The average revenue per subscriber for the first quarter of 2020 was RMB35.9, up from RMB35.1 for the previous quarter. Revenues from cloud computing and other IVAS combined to $21.2 million, representing a decrease of 14.1% on a sequential basis. The decrease was mainly due to decreased live streaming revenue and the reduced cloud computing hardware product sales. Revenues from online advertising were $3.8 million, representing a decrease of 1.3% from the previous quarter. Cost of revenues was $24.4 million, representing 50.4% of our total revenues, compared with $30.3 million or 62.7% of our total revenues in the previous quarter. The decrease was mainly due to a write-down of our inventory of $3.2 million in the previous quarter and the decrease cloud computing products costs and the live streaming revenue sharing costs, which was in line with the decrease of such revenues. Bandwidth cost in the first quarter of 2020 were $18 million representing 37.1% of our total revenues compared with $17.8 million or 36.8% of our total revenues in the previous quarter. The remaining cost of the revenues mainly made up of the revenue sharing costs for our live streaming business. Gross profit for the first quarter of 2020 was $23.8 million, up 33.1% from the previous quarter. Gross margin was 49.3% in the first quarter compared with 37.1% in the previous quarter. The increase in…

Thank you. [Operator Instructions]. We have a question from the line of Steve Chan from Stella Chan Group [phonetic]. Please go ahead.

[Foreign Language]

So first of all, our hope is to continue to work with our employee and our staff to continue to grow our business. And we hope that we will be able to see some growth and generate good returns for our investors for the remainder of the year. So the year has been -- there's about half-a-year to the year-end from now onwards and there are many things that we still want to do, but with such a short period of time our focus will be on our core competitive advantages. We hope to focus on this and -- while increasing our operating efficiency in order to generate revenues for our shareholders and our company. So through our focus on our core competitive advantages and our increases in efficiency, now we're hoping to achieve in the remainder of the year, we hope to work with our employees and our fellow staff to increase the profitability of the company. And to do this, we believe that for our employees we will -- we hope to see more input for them and more of an entrepreneur spirit from our fellow staff. The shareholders will continue to support the company as always and support our current business line.

Thank you. The next question please?

Thank you. The next question comes from Trista Yang of Noah Group. Please go ahead.

Hi, this is Trista from Noah, Hong Kong. I just have couple of quick questions. First, if you could tell us at what -- why Xiaomi exited from Xunlei? Will Xiaomi continue to cooperate with Xunlei in the future? And the second one is will Xunlei consider privatization or have them dual listing on Hong Kong Stock Exchange? Will the company buyback stock? Thank you.

I'll take up the question, okay. This is Eric. Regarding Xiaomi's exit price, as it was a private transaction among the shareholders, Xunlei was not involved with the details of the transaction. And we will continue to carry out our existing contracts and in cooperation with Xiaomi and at same time explore potential new opportunities. We hope to take advantage of respective strengths and expand our cooperation, as we have cooperated successfully with Xiaomi for several years and we are optimistic about continued cooperation in the future. And in terms of privatization and so far, the board of directors has not discussed this issue. Regarding the listing, it's not on our agenda. And regarding stock buybacks, we will closely monitor the development of the capital market. The company's cash position and capital need and make an informed decision in a timely fashion. Thank you for your questions.

Thank you. [Operator Instructions]. We have the questions from the line of Jang Zu [phonetic]. Please go ahead.

Okay. So the question asked that -- he stated that he is a very small shareholder of Xunlei. And because for the past several years Xunlei has been a loss position and he is wondering whether Mr. Li has anything to say to the smaller shareholders of Xunlei with regards to these losses?

So first, Mr. Li would like to thank all of the minority stockholders and their continued support of Xunlei even through our low prices and would like to thank them for their past belief of our development. As the current CEO of Xunlei and one of the initial founders of the company, he will do everything in his power in order to get -- to try to get good growth and good profitability from the company from now onwards. We will -- we hope to awaken all the entrepreneurship and -- entrepreneurship of our current staff and work together to make sure that our business will generate higher rates of return in the future. Thank you for your question.

Thank you. [Operator Instructions] At this time, there are no more questions from the line. I would like to hand the call back to the management for closing.

Okay. Thank you all for your participation today. And please contact us if you have any questions in the future. Have a good day.

Thank you, ladies and gentlemen. That concludes the conference for today. You may now disconnect your lines.