Xunlei's Q2 2025 Earnings Call: Revenue Growth, Challenges, and Strong Guidance

Xunlei Ltd reported a 30.6% year-over-year revenue growth in Q2 2025, driven by strong performances across its key business segments. The acquisition of Hupu and IPO of Arashi Vision Inc. contributed to the company's growth. However, increased costs and a decreased gross profit margin tempered the overall optimistic sentiment. Xunlei anticipates Q3 2025 revenues to range between $116 million and $124 million, representing a quarter-over-quarter increase of approximately 15.4%. Despite revenue growth, the live streaming and cloud computing businesses continue to report losses.

Xunlei Ltd ((XNET)) reported a 30.6% year-over-year revenue growth in Q2 2025, driven by robust performances across its key business segments. The company’s earnings call highlighted significant growth in subscription, live streaming, and cloud computing revenues, as well as strategic acquisitions and investments that contributed to the positive financial outlook. However, increased costs and a decreased gross profit margin tempered the overall optimistic sentiment.

The acquisition of Hupu, a leading online community for sports enthusiasts, was a key driver of growth. This strategic move is expected to expand Xunlei’s reach into new user segments and content domains, potentially driving further growth and diversification of its user base. Additionally, the IPO of Arashi Vision Inc. resulted in approximately $720 million in unrealized pretax capital gains, underscoring Xunlei’s ability to leverage investments for substantial financial gains [1].

Revenue growth was particularly strong in the subscription business, with a 10.5% increase in revenue reaching $36.4 million. The subscriber base expanded to a record 6.4 million, indicating strong customer retention and acquisition efforts. Live streaming and other services experienced a significant year-over-year revenue growth of 85.5%, reaching $37.6 million, partly fueled by the acquisition of Hupu. Cloud computing revenue grew by 13.6% year-over-year, reaching $30 million, reflecting a recovery from previous setbacks and increased demand for cloud services [1].

Looking ahead, Xunlei anticipates Q3 2025 revenues to range between $116 million and $124 million, representing a quarter-over-quarter increase of approximately 15.4%. This forecast is driven by strong performances across its business segments. However, the company acknowledged challenges such as increased costs and ongoing losses in key segments. The cost of revenues increased to $52.3 million, representing 50.3% of total revenues, mainly due to higher bandwidth costs and revenue sharing expenses. Xunlei’s gross profit margin decreased to 49.3% from 51.1% in the same period of 2024, primarily due to decreased margins in the cloud computing business. Sales and marketing expenses rose significantly to $21.6 million, representing 20.8% of total revenues, up from $10.9 million or 13.7% in the same period of 2024 [1].

Despite these challenges, Xunlei’s forward-looking guidance for Q3 2025 remains optimistic, with expected revenues ranging between $116 million and $124 million. This forecast is supported by strong performances across its business segments, despite the challenges of increased costs and ongoing losses in certain areas [1].

In summary, Xunlei Ltd’s Q2 2025 earnings call conveyed a positive outlook with impressive revenue growth and strategic achievements, despite facing challenges such as increased costs and decreased profit margins. The company’s forward-looking guidance remains strong, suggesting continued growth and expansion in the upcoming quarter [1].

References:
[1] https://www.tipranks.com/news/company-announcements/xunlei-ltds-q2-2025-earnings-call-highlights-growth-and-challenges
[2] https://seekingalpha.com/article/4817248-xunlei-limited-wildly-discounted-bet-on-insta360-strong-buy