Xunlei Ltd Q2 2025 Earnings Call Highlights: Surging Revenues, Strategic Growth, and Challenges Ahead

Xunlei Ltd reported a 30.6% YoY revenue growth in Q2 2025, driven by strong performance across its key business segments. Subscription revenue rose 10.5% to $36.4mln, Live-Streaming and Other Services revenue surged 85.5%, and Cloud Computing revenue increased 13.6%. The company also booked $720mln in realized pretax capital gains from its investment in Arashi Vision Inc. However, gross profit margin decreased to 49.3% and sales and marketing expenses increased to 20.8% of total revenues. The Live-Streaming business and Cloud Computing segment are still in the investment phase and not profitable.

Xunlei Ltd, a leading technology company providing distributed cloud services in China, reported its financial results for the second quarter of 2025, highlighting a significant 30.6% year-over-year (YoY) increase in total revenues to $104 million [1][2]. This growth was primarily driven by strong performance across key business segments, including a 10.5% increase in subscription revenues, an 85.5% increase in live streaming and other services revenues, and a 13.6% increase in cloud computing revenues.

The subscription business generated $36.4 million in revenue, reflecting a 10.5% YoY growth, with 6.4 million subscribers. This growth was driven by improved features, evolving user needs, and refined marketing strategies, resulting in an increased percentage of premium subscribers [1][2].

Live streaming and other services achieved a YoY revenue growth of 85.5%, reaching $37.6 million. This growth was largely fueled by the expansion of the overseas audio live streaming business and advertising revenue from the Hupu acquisition [1][2].

The company also booked approximately $720 million in realized pretax capital gains on its investment in Arashi Vision Inc. The IPO of Arashi Vision highlighted Xunlei's strategic investment capabilities and potential for future returns in emerging industries [1][2].

However, gross profit margin decreased to 49.3%, down from 51.1% in the same period of 2024, indicating potential pressures on profitability despite revenue growth. Sales and marketing expenses increased to 20.8% of total revenues, which may also affect profitability and indicate higher operational costs [2].

The Live-Streaming business and Cloud Computing segment are still in the investment phase and not profitable. Xunlei forecasts third-quarter revenues to range between $116 million and $124 million, indicating continued growth [2].

References:

[1] https://www.ainvest.com/news/xunlei-2025-q2-call-contradictions-hupu-impact-live-streaming-growth-shareholder-2508/
[2] https://www.quiverquant.com/news/Xunlei+Limited+Reports+30.6%25+Year-over-Year+Revenue+Growth+in+Q2+2025+Financial+Results