Xunlei (NASDAQ:XNET) executives highlighted what they described as a “transformative” fiscal 2025, pointing to double-digit growth across key operating segments, a sharp acceleration in overseas live streaming, and a strategic transaction involving its cloud computing unit during the company’s fourth-quarter and full-year earnings call.
Management touts momentum from strategic transformation
Chairman and CEO Jinbo Li said the company finished 2025 with “exceptional” fourth-quarter and full-year operating results that exceeded management’s expectations. Li attributed performance to “robust” results across core business lines, strategic transactions, and ongoing efforts to optimize the company’s business portfolio.
Subscription revenue grows double digits; partnerships cited as a driver
Li said the subscription business remained a “stable core asset and reliable growth driver.” In the fourth quarter, subscription revenue was $42.1 million, up 22.4% year-over-year. For the full year, subscription revenue totaled $154.8 million, an increase of 15.8% from 2024.
Management attributed subscription growth to two factors: a product offering that integrates browsing, high-speed downloading tools, storage, and value-added features aimed at engagement and retention, and strategic alliances with mobile manufacturers and platform partners intended to expand user reach. Li said the company plans to continue adding “advanced smart features,” optimizing the product experience, and expanding market presence.
Cloud computing rebounds; company sells 50% stake in Onething
Xunlei reported a sharp year-over-year gain in cloud computing revenue in the fourth quarter and characterized its cloud business as having achieved a turnaround in 2025. Cloud computing revenue was $46.1 million in Q4, up 102.7% year-over-year, while full-year cloud computing revenue was $137.4 million, up 31.4%.
Li said growth was driven by increased demand for the company’s “cost-effective solutions.” He also referenced a recent announcement that Xunlei had “realigned and strengthened” its strategic focus by selling 50% of its stake in Onething, the operating entity of its cloud computing business. Li said the divestiture is intended to support business optimization and leverage a partner’s expertise to advance Onething’s edge computing and CDN services.
According to management, Xunlei intends to reallocate resources to what it called core growth drivers, including subscriptions and overseas live streaming, while retaining a minority stake in Onething to potentially capture future upside. Li said the transaction is expected to have “no significant negative impact” on core operations, cash flow, or profitability, and could improve capital efficiency and strategic clarity over time.
Overseas live streaming drives growth; Hupu acquisition cited for advertising lift
Live streaming and other internet value-added services (IVAS) were described as a key growth engine in 2025. The segment generated $55.1 million in Q4 revenue, up 102.8% year-over-year. For the full year, management cited revenue of $170.2 million, describing it as a 97.5% increase from 2024.
Li said the performance validated a strategic shift made in late 2023 to exit “low-margin” and volatile domestic markets and focus on “high-growth emerging regions” such as Southeast Asia and the Middle East and North Africa. He said the company leveraged product refinement, user engagement, and monetization capabilities to drive growth in overseas audio live streaming.
Li also said the integration of Hupu, which Xunlei acquired in 2025, generated synergies and contributed to advertising revenue through what he described as Hupu’s engaged community. CFO Eric Zhou similarly attributed part of the live streaming/IVAS growth to advertising expansion following the Hupu acquisition.
Financial results: revenue up sharply; GAAP net loss impacted by investment fair value changes
CFO Eric Zhou reported total Q4 revenue of $143.3 million, up 70% year-over-year, primarily due to higher revenue from cloud computing and live streaming. For the full year, revenue was $462.4 million, an increase of 42.5% from 2024, with growth across all major segments.
Profitability metrics reflected both higher scale and shifting mix. Q4 cost of revenues rose to $80.8 million (56.4% of revenue) from $40.4 million (47.9%) a year earlier, driven by higher revenue-sharing costs in live streaming and increased bandwidth costs tied to cloud demand. Q4 gross profit was $61.7 million, up 41.5%, but gross margin fell to 43% from 51.7% due to a larger revenue contribution from lower-margin overseas audio live streaming and cloud computing.
Operating income in Q4 was $4.7 million versus an operating loss of $20.5 million a year earlier. Zhou said the improvement was primarily due to the absence of a goodwill impairment charge of approximately $20.7 million recorded in the fourth quarter of the prior year.
However, the company posted a GAAP net loss of $228.9 million in Q4, compared with a net loss of $9.9 million a year earlier. Zhou said the larger loss was primarily driven by “other losses, net” totaling $232.6 million, versus other income of $1.5 million in the prior-year quarter. He attributed the change mainly to a decrease in the fair value of Xunlei’s long-term investment in Arashi Vision following its IPO in June 2025. On a non-GAAP basis, which excludes share-based compensation and certain other items, Q4 net income was $4.8 million compared with $11.3 million in the year-ago quarter.
For the full year, Zhou reported operating income of $6.6 million, improving from an operating loss of $15.7 million in 2024, again citing higher gross profit and the absence of the prior-year goodwill impairment. He also reported GAAP net income of approximately $1.05 billion for 2025 compared with $0.7 million in 2024, attributing the increase primarily to “high gross profit and other income during the year.” Non-GAAP net income for 2025 was $18.5 million, down from $23.9 million in 2024.
On the balance sheet, Zhou said cash, cash equivalents, and short-term investments were $305.2 million as of the end of 2025, up from $287.5 million at the end of 2024. He attributed the increase mainly to net cash inflow from operating activities and proceeds from bank borrowings, partially offset by the payment related to the Hupu acquisition.
Management also provided an update on repurchases, saying the company spent about $1 million to repurchase roughly 435,000 ADS during 2025. Since the inception of its buyback program on June 4, 2024, Xunlei has spent about $6.5 million in total.
During the Q&A, Li said cash consideration from the Onething transaction would be used to develop core businesses, including technology R&D and product integration and upgrades, as well as market expansion and brand promotion, and to optimize operating capital structure and liquidity. Responding to a question about the buyer, Li said the company had evaluated potential buyers over the past two years and chose Kingsoft Cloud based on maximizing return for Xunlei and Kingsoft Cloud’s strengths in cloud infrastructure, R&D, and industry solutions that could support Onething’s competitiveness. Li also said the company would determine the pace of any future divestment related to its Arashi Vision stake based on business development and capital market conditions, and that it would evaluate options to reward shareholders, with further disclosure to come.
About Xunlei (NASDAQ:XNET)
Xunlei Limited (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.
