Key Highlights

  • Total Revenue reached $101.3 million in the third quarter of 2026, up 12.9% year over year.
  • Live-streaming and other services revenue grew 16.6% to $57.2 million, while subscription revenue rose 8.5% to $44.1 million.
  • Cost of revenues rose to 43.8% of total revenue, compared with 37.6% a year earlier.
  • The company bought back about 2.7 million ADSs for roughly $13.8 million during the quarter.

Xunlei Limited (NASDAQ:XNET), a distributed cloud services provider based in Shenzhen, China, announced unaudited results for the quarter ended September 30, 2026, on November 12, 2026. Total revenue was $101.3 million, an increase of 12.9% year over year. The figures exclude Shenzhen Onething, which is presented as a discontinued operation, unless otherwise noted.

Chairman and Chief Executive Officer Jinbo Li said the company delivered continued top-line growth but that both sequential and year-over-year growth rates moderated during the quarter amid intensifying competition and changing market conditions.

Revenue Mix and Growth Rates

Subscription revenue rose 8.5% to $44.1 million, while live-streaming and other services increased 16.6% to $57.2 million. The faster growth in live-streaming shows that the segment is contributing more of the company’s revenue, though the subscription Business remains important for recurring income.

Management said the growth moderated during the quarter. Slower expansion in a fast-changing market can reflect the pressure of new rivals, shifting user habits and the difficulty of sustaining high rates of growth as a business reaches a larger base.

Costs and Gross Profit Pressure

Cost of revenues was $44.4 million, equal to 43.8% of total revenue, compared with $33.7 million, or 37.6% of revenue, a year earlier. Gross profit rose only 1.6% to $56.5 million, which shows that higher costs absorbed much of the revenue gain.

The increase in cost ratio is a central issue for investors. If the company cannot reduce its cost of revenues or raise prices, the gap between revenue growth and gross profit growth could persist, limiting how quickly Earnings can expand.

Buybacks and Capital Allocation

Xunlei launched a share repurchase program in July 2026 and bought back roughly 2.7 million ADSs for about $13.8 million during the third quarter. Buybacks can signal management’s view of the shares, but they also use cash that could fund product development or acquisitions.

Management described its core businesses as resilient, while noting softer near-term momentum. How the company balances repurchases with Investment in its platforms will be an important part of the story as competition intensifies.

Final Word

Xunlei grew revenue by 12.9% in the third quarter of 2026, led by live-streaming, while subscription growth was more modest and gross profit rose only slightly. Management pointed to intensifying competition and a softer near-term outlook. The next quarters will show whether the company can stabilize its growth rate and whether its cost ratio improves.