Xunlei Limited

Q2 2026 revenue was $102.7 million, up 38.9% year over year. Subscription revenue was $44.5 million, up 22.6%, and live streaming and other services revenue was $58.2 million, up 54.8%. Gross profit was $57.3 million, up 23.1%, with gross margin of 55.8% versus 63% in the prior-year period. Operating loss was $4.8 million versus operating income of $0.3 million a year ago; net loss from continuing operations was $218.5 million versus net income of $726.4 million, and non-GAAP net loss from continuing operations was $2.1 million versus non-GAAP net income of $7.2 million. Diluted loss per ADS from continuing operations was $3.43, versus diluted EPS of $11.47 last year; non-GAAP diluted loss per ADS was $0.03 versus non-GAAP diluted earnings of $0.12. Cash, cash equivalents and short-term investments were $276.9 million at June 30, 2026, down from $303.6 million at March 31, 2026. No explicit next-quarter or full-year revenue/EPS guidance was provided on the call.

CEO Jinbo Li framed the quarter as evidence that Xunlei’s consumer-centric pivot is working, citing continued growth in both subscription services and overseas audio live streaming. He emphasized AI-powered features, localized execution, and deeper partnerships with smartphone partners as ongoing growth levers. He also stressed that despite intense overseas competition, the company will prioritize sustainable growth over near-term scale and keep a disciplined approach to capital allocation, including buybacks when appropriate.

CFO Eric Zhou walked through the numbers, highlighting $102.7 million of revenue, $57.3 million of gross profit, and 55.8% gross margin, while explaining that the margin decline was mainly due to a larger share of lower-margin live streaming revenue. He noted higher R&D at $21.4 million, sales and marketing at $27.9 million, and G&A at $12.7 million, with operating loss widening to $4.8 million. He also said the large net loss was driven by a $213.8 million net other loss from fair value changes in Arashi Vision, and cash declined to $276.9 million partly due to operating outflows, loan repayments, buybacks, and Hupu acquisition-related payments.

The main analyst questions focused on the new $20 million share repurchase program and Xunlei’s stake in Arashi Vision. Management said the buyback began on July 1 and, as of August 12, the company had repurchased about 1.07 million ADS for about $5.9 million, with more disclosure coming in the Q3 report. On Arashi Vision, management said Xunlei currently holds 7.8% of the company, is following regulatory procedures to reduce the stake, and is consulting advisers to ensure compliance with the Investment Company Act, while reiterating that Xunlei intends to remain focused on its core consumer business.