Xunlei (XNET) investor relations material

Executive summary

• Achieved continued top-line growth in Q2 2026, with total revenues reaching $102.7 million, up 38.9% year-over-year, driven by subscription and overseas audio live streaming businesses, validating the consumer-centric business strategy.

• Gross profit increased 23.1% year-over-year to $57.3 million, with a gross margin of 55.8%, down from 63% last year due to a higher mix of lower-margin live-streaming revenues.

• Net loss from continuing operations was $218.5 million, compared to net income of $726.4 million in Q2 2025, mainly due to fair value volatility on Arashi Vision Inc. investment.

• Non-GAAP net loss from continuing operations was $2.1 million, versus non-GAAP net income of $7.2 million a year ago.

• Strategic focus remains on consumer-centric business, international expansion, and disciplined capital management.

Financial highlights

• Subscription revenue was $44.5 million, up 22.6% year-over-year; live streaming and other services revenue was $58.2 million, up 54.8%.

• Cost of revenues was $44.8 million (43.6% of total revenues), up from $27 million (36.6%) in Q2 2025, mainly due to higher revenue-sharing expenses.

• R&D expenses: $21.4 million (20.8% of revenues), up from $16.6 million (22.4%) in Q2 2025.

• Sales and marketing expenses: $27.9 million (27.2% of revenues), up from $20.7 million (28%) in Q2 2025.

• G&A expenses: $12.7 million (12.4% of revenues), up from $8.5 million (11.6%) in Q2 2025.

Outlook and guidance

• Plans to refine member perks, expand device cooperation, and deepen market penetration in overseas markets.

• Will maintain disciplined capital allocation, prioritizing investment in core product innovation and international expansion.

• Focus on balancing growth with profitability and strict cost discipline to expand profit margins.

• Management remains committed to user-centric development and sustainable growth through enhanced product offerings.