Xunlei Q1 2026 Earnings Report

Xunlei EPS Results

• Actual EPS: N/A
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Xunlei Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Xunlei Announcement Details

• Quarter: Q1 2026
• Date: 5/28/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, May 28, 2026
• Conference Call Time: 8:00AM ET

Xunlei (NASDAQ:XNET) (NASDAQ: XNET) is a China-based technology company specializing in content acceleration and cloud services. Its core offerings include the Xunlei download manager, which integrates peer-to-peer (P2P) and cloud-based acceleration technologies to enhance file delivery speeds for large downloads. The company has expanded its suite of products to encompass cloud storage solutions, media streaming applications and mobile browsing tools, all aimed at improving digital content distribution and user experience.

Founded in 2003 and headquartered in Shenzhen, Xunlei originally gained traction by addressing bandwidth constraints in China’s burgeoning internet market. The company went public on the Nasdaq in 2014, marking a milestone in its growth trajectory. Over time, Xunlei has leveraged its content delivery network (CDN) infrastructure to serve both individual consumers and enterprise clients, primarily within Mainland China, while exploring cross-border opportunities in Asia’s digital economy.

In recent years, Xunlei has ventured into blockchain-based services, developing ThunderChain, an enterprise-grade blockchain computing platform designed to support decentralized content distribution and token-based incentive models. This strategic shift underscores the company’s commitment to innovating at the intersection of cloud technology and distributed ledger systems. Headquartered in Shenzhen, Xunlei operates under a leadership team with deep expertise in internet software, cloud architecture and blockchain research, positioning it as a versatile player in China’s fast-evolving digital infrastructure landscape.

Xunlei Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q1 revenue surged 54.1% year over year to $98.6 million, driven by strong performance in both subscription services and overseas audio live streaming.
• Positive Sentiment: Subscription revenue rose 26.2% to $45.0 million, with management highlighting stronger user demand, improved premium features, and expanding distribution partnerships.
• Positive Sentiment: Overseas live streaming and other services jumped 89.3% to $53.6 million, with growth concentrated in Southeast Asia and the Middle East as Xunlei pushes harder into overseas markets.
• Neutral Sentiment: Operating income improved to $4.3 million from an operating loss a year ago, but GAAP net results were heavily affected by a $195.1 million other loss tied to fair value changes in Arashi Vision.
• Neutral Sentiment: Cash and short-term investments increased to $303.6 million from $283.5 million at year-end, supported by operating cash flow and asset-sale proceeds, while management also said it is monitoring investment holdings to address potential SEC/1940 Act concerns.

Presentation

[Operator]

Welcome, ladies and gentlemen, and thank you for your patience. You've joined Xunlei's first quarter 2026 earnings conference call. At this time, all participants are in 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. Please go ahead.

[Luhan Tang, Investor Relations Manager at Xunlei]

Good morning, everyone, thank you for joining Xunlei's Q1 2026 earnings conference call. With me today are Eric Zhou, CFO, and Li Li, 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 Q1 operational highlights, followed by CFO Eric Zhou's presentation of financial results, details of Q1, 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.

[Luhan Tang, Investor Relations Manager at Xunlei]

Such statements are based on our management's current expectations under existing 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 assumes no obligations to update any forward-looking statements except as required under applicable laws. On this call, we'll 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. The following is the prepared statement by Mr. Jinbo Li, Chairman and CEO of Xunlei Limited. Good morning and good evening, everyone. Thank you for joining us today.

[Luhan Tang, Investor Relations Manager at Xunlei]

We're excited to begin 2026 with a strong first quarter, one defined by disciplined execution, strategic clarity, and tangible progress in our business transformation. Q1 was a period of decisive action. We delivered robust revenue growth across our core segments, completed a successful corporate restructuring, and concentrated our focus on our highest potential business area after carefully balancing our resources and the business opportunities. Total revenue for Q1 2026 reached $98.6 million, that's a significant 54.1% increase year-over-year. This growth was driven by our strategic emphasis on consumer-oriented businesses, particularly our two key growth engines, subscription services and overseas audio live streaming business. Let me share with you some insights on these two vital business bottom lines. For our subscription business, it remains Xunlei's stable cornerstone, delivering consistent cash flow and steady growth. In Q1, subscription revenue reached $45 million, a solid 26.2% year-over-year increase.

[Luhan Tang, Investor Relations Manager at Xunlei]

This performance reflects our two focused efforts. Firstly, by thoughtfully enhancing the premium subscription experience, listening closely to user feedback, and refining features. We have attracted a record number of users to use our premium services. Their trust is both our motivation and our greatest reward. Secondly, through constructive long-term collaborations with leading mobile phone manufacturers and internet platform partners, we have expanded our reach naturally and inclusively, bringing our services to new communities while staying true to our mission of enriching everyday digital life. Looking ahead, we're excited to introduce new features designed to make every interaction more intuitive, joyful, and personal. With your continued support, we are confident in sustaining this purposeful growth. Our overseas live streaming business and other services have merged as a powerful growth engine, delivering results in line with our expectations.

[Luhan Tang, Investor Relations Manager at Xunlei]

In Q1, this segment generated $53.6 million in revenue, also an 89.3% year-over-year increase. This exceptional growth validates our strategic focus on overseas markets, especially high-growth emerging regions such as Southeast Asia and the Middle East. These markets benefit from supportive platform policies and growing user demand. We have leveraged our strength in product refinement, user engagement, and monetization to enhance local operations. The diverse user base, high engagement levels, and increasing willingness to pay in these regions create substantial opportunities. Our ability to adapt services to local market preference, combining geographic and cultural insights with digital entertainment consumption, is a key driver for this remarkable growth. We will continue to intensify our overseas expansion, exploring new markets, and optimizing service offerings to sustain momentum. That said, given the ever-changing competitive landscape, our rapid growth may experience a modest slowdown in future quarters.

[Luhan Tang, Investor Relations Manager at Xunlei]

In conclusion, Q1 2026 was a transformative period for Xunlei. We achieved strong financial results, executed a strategic restructuring to concentrate fully on To C operations and saw our overseas live streaming business emerge as a leading growth driver. We have demonstrated our ability to make bold strategic decisions, adapt to market dynamics, and drive growth through focus and innovation. With a clear strategic direction, robust business momentum, and optimized resource allocation, we believe we are well-positioned to capture growing opportunities in the To C market, sustain our growth trajectory, and create long-term value for our shareholders. We remain committed to executing our strategy with discipline and agility, and we're excited about the future ahead. I will now hand the call over to our CFO for a detailed review of our Q1 2026 financial results.

[Naijiang Zhou, CFO at Xunlei]

Thank you, Han, and thank you all for participating in today's conference call. I will now walk you through our financial results for the first quarter of 2026. Please note that in Q1, we restructured our cloud computing business, and it's no longer consolidated in our financial statements. The following financials exclude discontinued operations. For the first quarter of 2026, our total revenues came in at $98.6 million, up 54.1% year-over-year. This strong top-line growth was mainly driven by higher revenue from our subscription business, as well as solid gains from our overseas audio live streaming business. Breaking down our revenue performance, subscription revenues reached $45 million, representing a 26.2% year-over-year increase. This growth reflects stronger user demand for our subscription offerings. Our live streaming and other services delivered $53.6 million in revenue, jumping 89.3% year-over-year.

[Naijiang Zhou, CFO at Xunlei]

Thanks primarily to the robust expansion of our overseas audio live streaming business. Our cost of revenues were $40.4 million in the quarter, making up 41% of total revenues. For comparison, we recorded $24.1 million or 37.8% of total revenues in the same period of 2025. The higher cost of revenues aligned closely with our live streaming revenue growth, driven mainly by increased revenue share expenses for our overseas audio live streaming operations. The remaining portion of revenue costs mainly came from payment handling fees and bandwidth expenses. Moving to profitability, we generated $57.7 million in gross profit this quarter, up 45.1% year-over-year. Our gross margin stood at 38.5% compared to 61.9% in the prior year quarter. The gross profit improvement was fueled by both our overseas audio live streaming business and our subscription business. The slight margin decline was a structural mix change.

[Naijiang Zhou, CFO at Xunlei]

Live streaming, which carries a lower gross margin than subscription, now accounts for a larger share of our total revenues, which compressed our overall gross margin modestly. On the expense front, our R&D expenses were $20.2 million in Q1 2026, representing 20.4% of total revenues. This compares with $16 million or 25.1% of total revenues in the first quarter of 2025. The year-over-year increase was mainly due to higher labor costs this quarter. Sales and marketing expenses rose to $22.4 million this quarter, flat as a percentage of revenue at 22.8%, compared with $14.5 million or 22.7% of our total revenues. The higher absolute spending this year reflects increased marketing investments across our subscription and overseas audio live streaming business as we continue to prioritize user acquisition.

[Naijiang Zhou, CFO at Xunlei]

G&A expenses came in at $10.9 million, equal to 8.5% of our total revenues, versus $10 million or 15.7% of total revenues in Q1 2025. The increase was primarily driven by higher share-based compensation expenses. On an operating level, we delivered operating income of $4.3 million this quarter, improving from an operating loss of $1 million in the prior year period. This turnaround was largely driven by stronger gross profit across our core businesses. We recorded a net other loss of $195.1 million this quarter, compared with a net other income of $1.1 million in Q1 2025. This year-over-year shift was mainly attributable to the fair value changes related to our long-term investment in Arashi Vision Inc., which completed its IPO back in June 2025.

[Naijiang Zhou, CFO at Xunlei]

Turning to discontinued operations, which relates entirely to our Shenzhen Wanting business, which we reorganized in March and recognized income of $17.7 million in Q1 2026, which compressed the operating loss of $1.8 million from discontinued operations and a disposal gain of $4.3 million, as well as the income tax benefits related to the disposal of $15.2 million. Our net loss from continuing operations was $192.4 million this quarter, compared with net loss of $0.2 million in Q1 2025. The large net loss was mainly due to the net other loss we just discussed, partially offset by our improved operating performance. On a non-GAAP basis, we achieved solid growth in non-GAAP net income from continuing operations, which rose to $4.1 million, up from $0.9 million in the prior year period.

[Naijiang Zhou, CFO at Xunlei]

On a per share basis, our diluted loss per ADS from continuing operations was $3.06 for the quarter, compared with a diluted EPS of $0 in Q1 2025. Our non-GAAP diluted earnings per ADS from continuing operations increased to $0.07 versus $0.02 in the same quarter last year. Finally, on the balance sheet as of March 31st, 2026, our cash equivalents and short-term investments totaled $303.6 million, up from $283.5 million as of December 31st, 2025. The increase was primarily driven by positive operating cash flows and proceeds from the disposal of our 50% equity stake in Xinjiang. These gains were partially offset by deferred consideration payments for our Hupoo acquisition. This concludes our prepared remarks. Operators, we are now ready to take questions.

[Operator]

Thank you. We will now begin the question and answer session. One moment for the first question. You have a question from the line of George Kim, please ask your question.

[Analyst]

[Non-English content]

[Naijiang Zhou, CFO at Xunlei]

The caller's question is, he noticed from our annual report that, in November last year, Hupoo was sued for the alleged unauthorized dissemination of NBA game content and the unauthorized use of the NBA trademark. The claimed damages amounted to approximately $12.1 million in total. He would like us to provide more details regarding such copyright litigation, and he wants to know if it will have any material impact on the business. Thanks for the question. As it is an ongoing case, we can't comment on it right now. That said, we have set aside some allowances to cover any potential expenses related to this litigation, and we don't expect this case will have a significant impact on our operations. Thank you.

[Analyst]

[Non-English content]

[Naijiang Zhou, CFO at Xunlei]

The second question is, he mentioned that there's a 1940 Investment Act that requires companies to maintain the ratio of investment income to total assets below a certain threshold, and it is expected that Xunlei's equity gains will exceed that ratio. He would like to know if any measures the company would take to address this regulation by SEC. This is good question, and you are correct. We will continue to monitor our holdings of our appreciated assets in Arashi Vision Inc. We've been consulting with relevant advisors. If needed, we will gradually seek to adjust our holdings so that Xunlei will hold investment securities with a value not exceeding 45% of the company's total assets, excluding government securities and cash items.

[Naijiang Zhou, CFO at Xunlei]

In line with the company's intention to mainly engage in our core To C business, and in fact, we never intend to be an investment company. Thank you.

[Li Li, VP of Finance at Xunlei]

[Non-English content]

[Naijiang Zhou, CFO at Xunlei]

[Non-English content]

[Operator]

Thank you for the question. Once again, if you'd like to ask question, please press star one and one. At this time, no further questions from the line. Allow me to hand the call back to Eric for closing.

[Naijiang Zhou, CFO at Xunlei]

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

[Operator]

That does conclude today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Li Li, VP of Finance
• Luhan Tang, Investor Relations Manager
• Naijiang Zhou, CFO

Analysts

• Analyst