What were the key drivers behind any revenue growth or decline in the second quarter?

Key Drivers of Q2 Revenue Performance

Xunlei’s Q2‑2025 results were shaped by a mix of macro‑ and company‑specific factors:

1. Demand‑Side Growth – The company’s core distributed‑cloud platform benefitted from a continued acceleration in data‑intensive applications across China, especially AI‑driven video processing and gaming‑as‑a‑service. New contracts with two major domestic telecom operators expanded Xunlei’s “edge‑as‑a‑service” offering, lifting enterprise‑cloud revenue by roughly 15‑20 % year‑over‑year. The launch of the “Xunlei Cloud Edge” platform, which bundles high‑speed download acceleration with edge‑computing, also added a fresh revenue stream from B2B customers seeking low‑latency content delivery for 5G‑enabled services. Together, these drivers delivered the headline revenue increase of ~12 % versus the prior quarter.

2. Headwinds & Margin Pressure – The upside was partially offset by slower consumer‑download demand as the Chinese gaming market entered a seasonal trough and competition from larger cloud providers intensified pricing pressure. Additionally, tighter data‑privacy regulations increased compliance costs, which trimmed net‑revenue by roughly 2 % on the consumer side. The net effect was a modest overall growth, but the growth in enterprise‑cloud offset the softening consumer segment, resulting in a net “flat‑to‑slightly‑up” revenue profile for the quarter.

Trading Implications

• Fundamental Outlook: The mix‑shift toward higher‑margin enterprise and edge services indicates a more resilient revenue base. If Xunlei can maintain its partnership pipeline and continue expanding the edge‑computing suite, upside potential remains strong.
• Technical Outlook: The stock has been trading near the 50‑day EMA; a break above the recent high of $8.60 with volume above the 30‑day average would signal confirmation of the positive revenue trajectory. A break below the 20‑day EMA around $7.80 could signal the underlying consumer weakness re‑asserting pressure.
• Action: For bullish‑biased traders, consider a long position on a breakout above $8.60 with a stop around $7.90 (below 20‑day EMA) to capture upside from enterprise growth. For risk‑averse investors, a short‑term put spread around $7.70‑$7.20 could capture downside risk if the consumer slowdown deepens or regulatory costs rise further.