Xunlei Announces Unaudited Financial Results for the Second Quarter Ended June 30, 2025

Rhea-AI Summary

Xunlei (NASDAQ:XNET), a Chinese distributed cloud services provider, reported strong Q2 2025 financial results with total revenues of $104.0 million, up 30.6% year-over-year. The company achieved substantial growth across all core segments: subscription revenues increased 10.5% to $36.4M, live-streaming revenues grew 85.5% to $37.6M, and cloud computing revenues rose 13.6% to $30.0M.

The quarter was marked by three significant achievements: the successful acquisition of Hupu, the IPO of investee company Arashi Vision, and robust revenue growth. Notably, Xunlei recorded unrealized pre-tax gains of $720 million from its investment in Arashi Vision following its June IPO, contributing to a dramatic increase in net income to $727.4 million compared to $2.5 million in Q2 2024.

For Q3 2025, Xunlei projects revenues between $116-124 million, representing a 15.4% quarter-over-quarter increase at the midpoint.

Positive

• Total revenues increased 30.6% year-over-year to $104.0 million
• Substantial unrealized gains of $720 million from Arashi Vision IPO investment
• Live-streaming revenues surged 85.5% year-over-year to $37.6 million
• Subscriber base grew to 6.40 million from 5.71 million year-over-year
• Strong Q3 2025 guidance projecting 15.4% quarter-over-quarter growth
• Cash position remained stable at $275.6 million

Negative

• Gross profit margin declined to 49.3% from 51.1% year-over-year
• Sales and marketing expenses increased significantly to 20.8% of revenues from 13.7%
• Cloud computing business showing decreased gross profit margin
• Limited share repurchase activity with no buybacks in Q2 2025

Insights

Financial Analyst

Xunlei delivered exceptional Q2 results with 30.6% revenue growth and massive $720M investment gain from Arashi Vision's IPO.

Xunlei's Q2 2025 results demonstrate remarkable growth across all business segments. Total revenue reached $104.0 million, up 30.6% year-over-year, with subscription revenue increasing 10.5%, live-streaming services surging 85.5%, and cloud computing growing 13.6%. The company's subscriber base expanded to 6.40 million from 5.71 million a year earlier, with average revenue per subscriber also increasing.

The standout element in these results is the extraordinary $727.4 million net income (compared to just $2.5 million in Q2 2024), primarily driven by $720 million in unrealized pre-tax gains from their investment in Arashi Vision (Insta360), which completed its IPO in June. This windfall significantly strengthens Xunlei's financial position, with cash and short-term investments now at $275.6 million.

Despite the impressive revenue growth, operating margins remain slim with operating income of just $1.1 million. The cost structure shows some concerning trends - while gross profit increased 25.9% to $51.2 million, gross margin declined from 51.1% to 49.3%. Sales and marketing expenses nearly doubled to $21.6 million, representing 20.8% of revenue compared to 13.7% a year ago, indicating significant spending on user acquisition.

Management's guidance for Q3 2025 suggests continued momentum, projecting revenues between $116-124 million, representing approximately 15.4% quarter-over-quarter growth at the midpoint. The successful acquisition of Hupu (sports community platform) should continue diversifying revenue streams, particularly bolstering advertising income.

The non-GAAP net income (excluding investment gains) of $8.3 million versus $3.2 million year-over-year demonstrates improving operational fundamentals. While bandwidth costs increased in absolute terms to $31.9 million, they decreased as a percentage of revenue (30.7% vs 32.4%), showing improved efficiency in a key cost component.

SHENZHEN, China, Aug. 14, 2025 (GLOBE NEWSWIRE) -- Xunlei Limited ("Xunlei" or the "Company") (Nasdaq: XNET), a leading technology company providing distributed cloud services in China, today announced its unaudited financial results for the second quarter ended June 30, 2025.

Second Quarter 2025 Financial Highlights:

• Total revenues were US$104.0 million, representing an increase of 30.6% year-over-year. 
• Subscription revenues were US$36.4 million, representing an increase of 10.5% year-over-year. 
• Live-streaming and other services revenues were US$37.6 million, representing an increase of 85.5% year-over-year. 
• Cloud computing revenues were US$30.0 million, representing an increase of 13.6% year-over-year. 
• Gross profit was US$51.2 million, representing an increase of 25.9% year-over-year, and gross profit margin was 49.3% in the second quarter, compared with 51.1% in the same period of 2024. 
• Net income was US$727.4 million in the second quarter, compared with net income of US$2.5 million in the same period of 2024. 
• Non-GAAP net income¹ was US$8.3 million in the second quarter, compared with non-GAAP net income of US$3.2 million in the same period of 2024. 
• Diluted income per ADS was US$11.48 in the second quarter, compared with diluted earnings per ADS of US$0.04 in the same period of 2024. 
• Non-GAAP diluted earnings per ADS² were US$0.13 in the second quarter, compared with non-GAAP diluted earnings per ADS of US$0.05 in the same period of 2024.

“The second quarter of 2025 marked a significant milestone for Xunlei. The successful acquisition of Hupu, the initial public offering of one of our investee companies and a year-over-year revenue growth of 30.6% collectively underscored the company's strong performance during the quarter,” commented by Mr. Jinbo Li, Chairman and CEO of Xunlei.

“All of our core businesses demonstrated robust growth during the second quarter, primarily driven by the introduction of new functionalities and the optimization of existing products, ensuring that our offerings remain aligned with the evolving user needs. Our core businesses were further supported by refined and customized marketing campaigns that enabled us to more effectively reach a broader user base. In addition, our cloud computing business made significant progress by delivering cost-effective services while addressing ongoing challenges and transforming them into growth opportunities.”

“I’m thrilled that we booked unrealized pre-tax gains of $720 million on our investment in Arashi Vision Inc. (“Arashi Vision”, also known as Insta360) after it completed IPO in June this year. I believe future returns on this investment will lay a firm foundation for our sustained endeavor in operations enhancement and pursuing innovative growth opportunities in emerging industries. And we intend to explore all options to create long-term value for our shareholders,” Mr. Li concluded.

Second Quarter 2025 Financial Results

Total Revenues

Total revenues were US$104.0 million, representing an increase of 30.6% year-over-year. The increase in total revenues was mainly attributable to the increased revenues generated from our major business operations.

Revenues from subscription were US$36.4 million, representing an increase of 10.5% year-over-year. The increase in subscription revenues was mainly driven by the increase in the number of subscribers and the increased average revenue per subscriber. The number of subscribers was 6.40 million as of June 30, 2025, compared with 5.71 million as of June 30, 2024. The average revenue per subscriber for the second quarter was RMB40.8, compared with RMB39.5 in the same period of 2024. The higher average revenue per subscriber was due to the increased proportion of premium subscribers which have higher average revenue per subscriber.

Revenues from live-streaming and other services were US$37.6 million, representing an increase of 85.5% year-over-year. The increase was mainly due to the growth of our overseas audio live-streaming businesses as well as advertising business as a result of the acquisition of Hupu.

Revenues from cloud computing were US$30.0 million, representing an increase of 13.6% year-over-year. The increase in cloud computing revenues was mainly attributable to the increased demand from major customers for our cloud computing services.

Costs of Revenues

Costs of revenues were US$52.3 million, representing 50.3% of our total revenues, compared with US$38.6 million, or 48.5% of the total revenues, in the same period of 2024. The increase in costs of revenues was mainly attributable to the increase in bandwidth costs and revenue-sharing expenses in our overseas audio live-streaming operations, generally in line with the growth in revenues.

Bandwidth costs, as included in costs of revenues, were US$31.9 million, representing 30.7% of our total revenues, compared with US$25.8 million, or 32.4% of the total revenues, in the same period of 2024. The increase in bandwidth costs was primarily due to the increased sales of our cloud computing services and more usage of Xunlei Cloud as a result of the increased user subscriptions.

The remaining costs of revenues mainly consisted of revenue-sharing costs for our live streaming business and payment handling charges.

Gross Profit and Gross Profit Margin

Gross profit for the second quarter of 2025 was US$51.2 million, representing an increase of 25.9% year-over-year. Gross profit margin was 49.3% in the second quarter of 2025, compared with 51.1% in the same period of 2024. The increase in gross profit was mainly contributed by our overseas audio live-streaming business, subscription business and advertising business. The decrease in gross profit margin was mainly attributable to the decreased gross profit margin of our cloud computing business.

Research and Development Expenses

Research and development expenses for the second quarter of 2025 were US$18.4 million, representing 17.7% of our total revenues, compared with US$17.5 million, or 21.9% of our total revenues, in the same period of 2024. The increase was primarily due to the increased labor costs incurred during the quarter.

Sales and Marketing Expenses

Sales and marketing expenses for the second quarter of 2025 were US$21.6 million, representing 20.8% of our total revenues, compared with US$10.9 million, or 13.7% of our total revenues, in the same period of 2024. The increase was primarily due to more marketing expenses incurred during the quarter for our subscription and overseas audio live-streaming businesses as part of our ongoing efforts on user acquisition.

General and Administrative Expenses

General and administrative expenses for the second quarter of 2025 were US$9.8 million, representing 9.4% of our total revenues, compared with US$11.2 million, or 14.1% of our total revenues, in the same period of 2024. The decrease was primarily due to the decrease in provision for litigation, depreciation expenses and labor costs during the second quarter of 2025.

Operating Income

Operating income was US$1.1 million, compared with an operating income of US$1.0 million in the same period of 2024.

Other Income, Net

Other income, net was US$721.8 million, compared with other income, net of US$2.5 million in the same period of 2024. The increase was primarily attributed to changes in the fair value of our long-term investment in Arashi Vision, which completed its initial public offering in June 2025.

Net Income /Earnings Per ADS

Net income was US$727.4 million compared with net income of US$2.5 million in the same period of 2024. The increase in net income was primarily due to the increase in other income. Non-GAAP net income was US$8.3 million in the second quarter of 2025, compared with US$3.2 million in the same period of 2024. The increase in Non-GAAP net income was primarily due to the increase in operating income and income tax benefits.

Diluted income per ADS in the second quarter of 2025 was US$11.48, compared with diluted earnings per ADS of US$0.04 in the second quarter of 2024. Non-GAAP diluted earnings per ADS was US$0.13 in the second quarter of 2025, compared with non-GAAP diluted earnings per ADS of US$0.05 in the same period of 2024.

Cash Balance

As of June 30, 2025, the Company had cash, cash equivalents and short-term investments of US$275.6 million, compared with US$274.6 million as of March 31, 2025. The increase was mainly due to the increase in proceeds from bank borrowings and net cash inflow from operating activities, partially offset by the payment for acquisition of Hupu.

Share Repurchase Program

On June 4, 2024, Xunlei announced that its Board of Directors had authorized a new plan for the repurchase of up to US$20 million of its ADSs or shares over the 12 months that followed. As of June 4, 2025, the Company had spent US$6.5 million on share buybacks under this new share repurchase program. No shares were repurchased during the second quarter of 2025.

Guidance for the Third Quarter of 2025

For the third quarter of 2025, Xunlei estimates total revenues to be between US$116 million and US$124 million, and the midpoint of the range represents a quarter-over-quarter increase of approximately 15.4%. This estimate represents management's preliminary view as of the date of this press release, which is subject to change and any change could be material.

Conference Call Information.

Xunlei's management will host a conference call at 8:00 a.m. U.S. Eastern Time on August 14, 2025 (8:00 p.m. Beijing/Hong Kong Time), to discuss the Company's quarterly results and recent business developments.

Participant Online Registration: https://register-conf.media-server.com/register/BIabbd063cae6a446fb886ac0e34178df3

Please register to join the conference using the link provided above and dial in 10 minutes before the call is scheduled to begin. Once registered, the participants will receive an email with personal PIN and dial-in information, and participants can choose to access either via Dial-In or Call Me. A kindly reminder that "Call Me" does not work for China number.

The Company will also broadcast a live audio webcast of the conference call. The webcast will be available at http://ir.xunlei.com. Following the earnings conference call, an archive of the call will be available at https://edge.media-server.com/mmc/p/z5u2t3ti

About Xunlei

Founded in 2003, Xunlei Limited (Nasdaq: XNET) is a leading technology company providing distributed cloud services in China. Xunlei provides a wide range of products and services across cloud acceleration, shared cloud computing and digital entertainment to deliver an efficient, smart and safe internet experience.

Safe Harbor Statement

This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "believes," "anticipates," "future," "intends," "plans," "estimates" and similar statements. Among other things, the management's quotations and the "Guidance" section in this press release, as well as the Company's strategic, operational and acquisition plans, contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Forward-looking statements involve inherent risks and uncertainties, including but not limited to: the Company's ability to continue to innovate and provide attractive products and services to retain and grow its user base; the Company's ability to keep up with technological developments and users' changing demands in the internet industry; the Company's ability to convert its users into subscribers of its premium services; the Company's ability to deal with existing and potential copyright infringement claims and other related claims; the Company’s ability to react to the governmental actions for its scrutiny of internet content in China and the Company's ability to compete effectively. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by the Company is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of the press release, and the Company undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law.

About Non-GAAP Financial Measures

To supplement Xunlei's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Xunlei uses the following measures defined as non-GAAP financial measures by the United States Securities and Exchange Commission: (1) non-GAAP operating income/(loss), (2) non-GAAP net income, (3) non-GAAP basic and diluted earnings per share for common shares, and (4) non-GAAP basic and diluted earnings per ADS. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Xunlei believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding the Company's operating performance by excluding share-based compensation expenses, impairment loss of goodwill and fair value changes of long-term investments, which are not expected to result in future cash payments, may recur from period to period but are subject to significant market volatility, and which are not indicative of our core operating results and business outlook. These adjustments do not affect the recognition or measurement of these items under GAAP but are presented solely to supplement investors’ understanding of our operating performance.

These non-GAAP financial measures also facilitate management's internal comparisons to Xunlei's historical performance and assist the Company's financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a recurring item in Xunlei's results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying reconciliation tables at the end of this release include details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures the Company has presented.

The Company has not recast prior period non‑GAAP measures to exclude fair value changes of long‑term investments, as such amounts in prior periods were immaterial and would not affect investors’ understanding of period‑to‑period comparisons.

XUNLEI LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of USD, except for share, per share (or ADS) data)
	June 30,		Dec 31,
	2025		2024
	US$		US$
Assets
Current assets:
Cash and cash equivalents	170,734		177,329
Short-term investments	104,862		110,209
Accounts receivable, net	51,850		32,662
Inventories	947		1,255
Due from related parties	30,489		31,519
Prepayments and other current assets	14,588		10,058
Total current assets	373,470		363,032
Non-current assets:
Restricted cash	99		218
Long-term investments	751,728		30,599
Deferred tax assets	12,264		10,528
Property and equipment, net	53,916		55,430
Intangible assets, net	37,452		8,310
Goodwill	38,454		-
Long-term prepayments and other assets	5,477		5,334
Operating lease assets	2,504		450
Total assets	1,275,364		473,901
Liabilities
Current liabilities:
Accounts payable	33,477		22,964
Due to related parties, current	1,845		17
Contract liabilities, current portion	44,693		39,936
Lease liabilities	628		253
Income tax payable	5,046		9,386
Accrued liabilities and other payables	63,866		52,093
Short-term bank borrowings and current portion of long-term bank borrowings	28,153		2,087
Total current liabilities	177,708		126,736
Non-current liabilities:
Contract liabilities, non-current portion	1,105		458
Lease liabilities, non-current portion	1,721		161
Deferred tax liabilities	6,422		1,154
Bank borrowings, non-current portion	39,812		27,127
Other long-term payables	3,424		480
Total liabilities	230,192		156,116
Equity
Common shares (US$0.00025 par value, 1,000,000,000 shares authorized, 375,001,940 shares issued and 307,351,196 shares outstanding as at December 31, 2024; 375,001,940 issued and 312,793,666 shares outstanding as at June 30, 2025)	78		77
Treasury shares (67,650,744 shares and 62,208,274 shares as at December 31, 2024 and June 30, 2025, respectively)	16		16
Additional paid-in-capital	477,812		477,244
Statutory reserves	8,723		8,718
Accumulated other comprehensive loss	(21,325	)	(21,694	)
Retained earnings/(accumulated deficits)	580,480		(146,305	)
Total Xunlei Limited's shareholders' equity	1,045,784		318,056
Non-controlling interests	(612	)	(271	)
Total liabilities and shareholders' equity	1,275,364		473,901

XUNLEI LIMITED
Unaudited Condensed Consolidated Statements of Income/(Loss)
(Amounts expressed in thousands of USD, except for share, per share (or ADS) data)
	Three months ended
	June 30,		Mar 31,		June 30,
	2025		2025		2024
	US$		US$		US$
Revenues, net of rebates and discounts	103,976		88,764		79,603
Business taxes and surcharges	(431	)	(310	)	(270	)
Net revenues	103,545		88,454		79,333
Costs of revenues	(52,320	)	(44,350	)	(38,632	)
Gross profit	51,225		44,104		40,701
Operating expenses
Research and development expenses	(18,422	)	(18,743	)	(17,470	)
Sales and marketing expenses	(21,646	)	(15,522	)	(10,867	)
General and administrative expenses	(9,796	)	(11,791	)	(11,231	)
Credit loss (expenses)/write-back, net	(248	)	65		(166	)
Total operating expenses	(50,112	)	(45,991	)	(39,734	)
Operating income/(loss)	1,113		(1,887	)	967
Interest income	1,039		1,072		1,265
Interest expense	(328	)	(220	)	(182	)
Other income, net	721,767		1,234		2,535
Income before income taxes	723,591		199		4,585
Income tax expense	3,813		(1,145	)	(2,065	)
Net income/(loss)	727,404		(946	)	2,520
Less: net loss attributable to non-controlling interest	(186	)	(146	)	(235	)
Net income/(loss) attributable to common shareholders	727,590		(800	)	2,755
Earnings/(loss) per share for common shares
Basic	2.3306		(0.0026	)	0.0086
Diluted	2.2965		(0.0026	)	0.0086
Earnings/(loss) per ADS
Basic	11.6530		(0.0130	)	0.0430
Diluted	11.4825		(0.0130	)	0.0430
Weighted average number of common shares used in calculating:
Basic	312,196,048		306,082,940		320,688,429
Diluted	316,830,316		306,082,940		320,922,960
Weighted average number of ADSs used in calculating:
Basic	62,439,210		61,216,588		64,137,686
Diluted	63,366,063		61,216,588		64,184,592

XUNLEI LIMITED
Reconciliation of GAAP and Non-GAAP Results
(Amounts expressed in thousands of USD, except for share, per share (or ADS) data)
	Three months ended
	June 30,		Mar 31,		June 30,
	2025		2025		2024
	US$		US$		US$
GAAP operating income/(loss)	1,113		(1,887	)	967
Share-based compensation expenses	536		1,058		631
Non-GAAP operating income/(loss)	1,649		(829	)	1,598
GAAP net income/(loss)	727,404		(946	)	2,520
Share-based compensation expenses	536		1,058		631
Fair value changes of long-term investments	(719,688	)	-		-
Non-GAAP net income	8,252		112		3,151
GAAP earnings/(loss) per share for common shares:
Basic	2.3306		(0.0026	)	0.0086
Diluted	2.2965		(0.0026	)	0.0086
GAAP earnings/(loss) per ADS:
Basic	11.6530		(0.0130	)	0.0430
Diluted	11.4825		(0.0130	)	0.0430
Non-GAAP earnings per share for common shares:
Basic	0.0270		0.0008		0.0106
Diluted	0.0266		0.0008		0.0105
Non-GAAP earnings per ADS:
Basic	0.1350		0.0040		0.0530
Diluted	0.1330		0.0040		0.0525
Weighted average number of common shares used in calculating:
Basic	312,196,048		306,082,940		320,688,429
Diluted	316,830,316		306,082,940		320,922,960
Weighted average number of ADSs used in calculating:
Basic	62,439,210		61,216,588		64,137,686
Diluted	63,366,063		61,216,588		64,184,592

CONTACT:
Investor Relations
Xunlei Limited
Email: ir@xunlei.com
Tel: +86 755 6111 1571
Website: http://ir.xunlei.com

_________________

¹ Non-GAAP net income is a non-GAAP financial measure. For more information, please see the section of “About Non-GAAP Financial Measures” and the table captioned “Reconciliation of GAAP and Non-GAAP Results” contained in this press release.

² Non-GAAP earnings per ADS is a non-GAAP financial measure. For more information, please see the section of “About Non-GAAP Financial Measures” and the table captioned “Reconciliation of GAAP and Non-GAAP Results” contained in this press release.

FAQ

What were Xunlei's (XNET) Q2 2025 earnings highlights?

Xunlei reported total revenues of $104.0 million (up 30.6% YoY), net income of $727.4 million, and diluted earnings per ADS of $11.48. The company saw growth across all segments with subscription revenues up 10.5%, live-streaming up 85.5%, and cloud computing up 13.6%.

How much did Xunlei (XNET) benefit from the Arashi Vision IPO in Q2 2025?

Xunlei recorded unrealized pre-tax gains of $720 million from its investment in Arashi Vision (Insta360) following its IPO in June 2025, significantly boosting the company's net income.

What is Xunlei's (XNET) subscriber base and revenue per subscriber in Q2 2025?

Xunlei had 6.40 million subscribers as of June 30, 2025, up from 5.71 million year-over-year. The average revenue per subscriber increased to RMB40.8 from RMB39.5 in the same period of 2024.

What is Xunlei's (XNET) guidance for Q3 2025?

Xunlei expects Q3 2025 total revenues to be between $116 million and $124 million, representing approximately 15.4% quarter-over-quarter growth at the midpoint.

How much cash does Xunlei (XNET) have as of Q2 2025?

As of June 30, 2025, Xunlei had $275.6 million in cash, cash equivalents, and short-term investments, slightly up from $274.6 million in the previous quarter.

What is the status of Xunlei's (XNET) share repurchase program?

Under the $20 million share repurchase program announced in June 2024, Xunlei has spent $6.5 million on buybacks as of June 4, 2025, with no shares repurchased during Q2 2025.