Xunlei Limited (Nasdaq: XNET) reported unaudited financial results for the fourth quarter and full year ended December 31, 2025. Fourth‑quarter revenue rose 70.0% to $143.3 million, while full‑year revenue climbed 42.5% to $462.4 million. Operating income swung to $4.7 million from a $20.5 million loss in the same quarter of 2024, and the company posted a Q4 net loss of $228.9 million, largely driven by a $232.6 million other‑loss related to fair‑value changes in its investment in Arashi Vision Inc. The full‑year GAAP net income was $1,047.6 million, supported by investment gains, while non‑GAAP net income was $18.5 million.
Revenue growth was led by a 102.8% jump in the live‑streaming and other IVAS segment to $55.1 million and a 102.7% increase in cloud‑computing revenue to $46.1 million. Subscription revenue also grew 22.4% to $42.1 million, reflecting continued demand for Xunlei’s acceleration services. These gains offset a shift in the revenue mix toward lower‑margin cloud and overseas live‑streaming businesses, which contributed to margin compression.
Gross profit margin for the full year contracted to 47.0% from 51.7% in 2024, and Q4 gross margin fell to 43.0% from 51.7% a year earlier. The compression is attributed to the higher proportion of lower‑margin cloud computing and overseas live‑streaming revenue, as well as pricing pressure in those segments.
The company’s GAAP net income benefited from a $1,047.6 million gain on fair‑value changes in its Arashi Vision investment, which completed its IPO in June 2025. In contrast, the Q4 net loss was dominated by a $232.6 million other‑loss related to the same investment. Xunlei also sold a 50% stake in its cloud‑computing entity Onething to Kingsoft Cloud, a move intended to improve capital efficiency and strategic clarity.
CEO Jinbo Li said, 'We finished 2025 with strong financial performance in the fourth quarter. Q4 revenue totaled $143.3 million, exceeding the high end of our guidance and representing a remarkable 70.0% increase year over year.' He added, 'Looking ahead, we believe 2026 will be a pivotal year for Xunlei—a strategic inflection point for our future development. With a more streamlined business portfolio, Xunlei will focus on delivering internet pan‑entertainment products and services to individual consumers.'
Investors reacted positively to the results, citing the robust revenue growth and turnaround in operating income, while remaining cautious about margin compression and the impact of investment valuation changes on GAAP profitability.
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