Xunlei Limited reported total revenue of $126.4 million for the third quarter of 2025, a 57.7% year‑over‑year increase that marked the company’s most robust top‑line performance to date. The jump was driven by a 22.3% rise in subscription revenue to $40.7 million, a 127.1% surge in live‑streaming and other services to $49.1 million—largely fueled by overseas audio streaming and the recent Hupu acquisition—and a 44.9% rise in cloud‑computing revenue to $36.6 million.
Gross profit climbed to $60.5 million, up 49.6% from the prior year, but the gross‑profit margin slipped to 47.9% from 50.5% in Q3 2024. The compression reflects a shift toward lower‑margin cloud services and a higher proportion of revenue from audio‑live streaming, which carries thinner margins than subscription and core cloud offerings. Despite the margin pressure, the company’s operating income remained healthy, supported by disciplined cost management and a favorable mix of high‑margin subscription contracts.
GAAP net income surged to $550.1 million, a dramatic increase from $4.4 million in Q3 2024. The spike is almost entirely attributable to a $545.8 million fair‑value gain from Xunlei’s investment in Arashi Vision Inc., which completed its IPO in June 2025. Non‑GAAP net income rose modestly to $5.3 million from $4.9 million, indicating that core operating profitability remained stable even as the one‑time gain inflated GAAP results.
Cash, cash equivalents, and short‑term investments totaled $284.1 million as of September 30, 2025, up from $275.6 million at the end of June. The strong liquidity position provides a cushion for continued investment in high‑growth segments and potential strategic acquisitions.
Management guided Q4 2025 revenue to $131 million–$139 million, representing a 6.8% quarter‑over‑quarter increase. The guidance signals confidence in sustained demand across subscription, live‑streaming, and cloud services, while the company emphasized continued cost discipline to protect margins amid the mix shift. The outlook suggests that Xunlei expects to maintain its revenue acceleration while managing the impact of lower‑margin segments on profitability.
Overall, Xunlei’s Q3 2025 results demonstrate a powerful revenue engine driven by diversified subscription and streaming services, but the company faces margin compression from a lower‑margin mix and a one‑time gain that inflated GAAP earnings. Management’s focus on cost control and strategic investments in high‑return verticals positions the company to sustain growth while navigating the headwinds of a shifting revenue mix.
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