Xunlei Ltd (XNET) Q1 2026 Earnings Call Highlights: Surging Revenues Amid Strategic Expansion

This article first appeared on GuruFocus .

• Total Revenue:$98.6 million, a 54.1% increase year-over-year.

• Subscription Revenue:$45 million, a 26.4% increase year-over-year.

• Live Streaming and Other Services Revenue:$53.6 million, an 89.3% increase year-over-year.

• Cost of Revenues:$14.4 million, representing 41% of total revenues.

• Gross Profit:$57.7 million.

• Gross Margin:58.5%, down from 61.9% in the prior-year quarter.

• R&D Expenses:$20.2 million, 20.4% of total revenues.

• Sales and Marketing Expenses:$22.4 million, 22.8% of total revenues.

• G&A Expenses:$10.9 million, 8.5% of total revenues.

• Operating Income:$4.3 million, compared to an operating loss of $1 million in the prior year period.

• Net Other Loss:$195.1 million, compared to net other income of $1.1 million in Q1 2025.

• Net Loss from Continuing Operations:$192.4 million, compared to a net loss of $0.2 million in Q1 2025.

• Non-GAAP Net Income from Continuing Operations:$4.1 million, up from $0.9 million in the prior year period.

• Cash, Cash Equivalents, and Short-term Investments:$303.6 million as of March 31, 2026.

• Warning! GuruFocus has detected 5 Warning Signs with XNET.

• Is XNET fairly valued? Test your thesis with our free DCF calculator.

Release Date: May 28, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Xunlei Ltd ( NASDAQ:XNET ) reported a significant 54.1% year-over-year increase in total revenue for Q1 2026, reaching $98.6 million.

• The subscription business generated $45 million in revenue, marking a 26.2% year-over-year increase, driven by enhanced premium subscription experiences and strategic partnerships.

• The overseas audio live streaming business saw an 89.3% year-over-year revenue increase, reaching $53.6 million, highlighting successful expansion in emerging markets like Southeast Asia and the Middle East.

• The company achieved a gross profit of $57.7 million, reflecting strong performance in its core businesses.

• Xunlei Ltd ( NASDAQ:XNET ) reported a positive operating income of $4.3 million, a significant improvement from an operating loss in the prior year period.

Negative Points

• The gross margin declined to 58.5% from 61.9% in the prior-year quarter due to a structural mix change, with live streaming accounting for a larger share of total revenues.

• The company recorded a net other loss of $195.1 million, primarily due to fair value changes related to its long-term investment in Arashi Vision Inc.

• Net loss from continuing operations was $192.4 million, compared to a net loss of $0.2 million in Q1 2025, driven by the aforementioned net other loss.

• Sales and marketing expenses increased to $22.4 million, reflecting higher marketing investments, which could impact profitability if not managed effectively.

• The ongoing copyright litigation involving Hupu and the NBA could potentially incur expenses, although the company has set aside allowances to cover these.