Xunlei (NasdaqGS:XNET) has just posted a mixed Q1 2026 update, with revenue of US$98.1 million and a reported loss of US$192.4 million on a net income basis, alongside a trailing twelve month earnings growth rate that is very large compared to the prior year. Over the last five reported quarters, the company has seen revenue range from US$83.9 million in Q4 2024 up to US$142.5 million in Q4 2025, while quarterly EPS has swung between a loss of US$3.64 and a gain of US$11.65. This sets the backdrop for trailing earnings growth and higher net profit margins versus the previous year, and places more attention on how durable those profitability gains really are for investors.
See our full analysis for Xunlei.With the headline numbers set, the next step is to weigh these results against the dominant market narratives around Xunlei to see which views are reinforced and which are challenged by the latest figures.
Curious how numbers become stories that shape markets? Explore Community Narratives
Trailing Profitability Versus Recent Loss
- On a trailing basis, Xunlei reports US$855.9 million of net income and Basic EPS of US$13.65, while the latest quarter alone shows a net loss of US$192.4 million and Basic EPS loss of US$3.06. As a result, the current loss sits against very strong past 12 month figures.
- What stands out for bullish investors is that this trailing profitability, including a very large year over year earnings growth rate and a 0.4% improvement in net profit margins, sits alongside a recent loss. This means:
- Supporters can point to US$494.8 million of trailing revenue and US$855.9 million of trailing net income as evidence that the business has produced strong profits over the last year, even with Q1 2026 in the red.
- More cautious readers may focus on the shift from quarterly profits in Q2 and Q3 2025, where net income was US$727.6 million and US$550.3 million, to losses in Q4 2025 and Q1 2026, and question how consistent those earlier profits really are.
Very Low 0.4x P/E With Quality Flags
- Xunlei trades on a trailing P/E of 0.4x, which is far below the US market at 18.9x and the US Software industry at 29.2x. The stock is therefore priced at a steep discount to those benchmarks based on its past 12 month earnings.
- Critics highlight that this low P/E is not a simple bargain signal because the earnings include a high portion of non cash items, which shows up in several ways:
- The company is flagged for a high level of non cash earnings, so the US$855.9 million of trailing net income and resulting 0.4x P/E may not reflect cash generation in the same way as a company where profits mainly come from cash operations.
- With the share price at US$5.93 and the DCF fair value stated at US$8.64, the big gap between a very low earnings multiple and a fair value estimate also depends on how investors judge the quality and repeatability of those reported profits.
Fans of Xunlei’s low P/E and strong trailing earnings growth often want to see how that story holds up when analysts walk through the bull and bear cases in more depth, which you can do by checking the 📊 Read the what the Community is saying about Xunlei.
Revenue Swings Across Recent Six Quarters
- Over the last six reported quarters, revenue has moved between US$83.99 million in Q4 2024 and US$142.5 million in Q4 2025, with Q1 2026 sitting at US$98.1 million and trailing 12 month revenue at US$494.8 million. Investors are therefore looking at both quarter to quarter swings and a much higher full year total.
- Consensus narrative style thinking that expects a simple, smooth revenue trend is challenged by how these figures line up:
- Revenue was under US$90 million in Q4 2024 and Q1 2025, then above US$100 million from Q2 2025 onward, which lines up with the very strong trailing revenue of US$494.8 million.
- At the same time, Q2 and Q3 2025, when revenue was US$103.5 million and US$125.9 million, also coincide with very large quarterly profits, while Q4 2025 and Q1 2026 pair higher revenue levels with sizeable losses. The link between revenue scale and profit is therefore not straightforward in these numbers.
Next Steps
Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Xunlei's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.
Given the mixed signals in these results, this is a good time to look through the underlying data yourself and weigh both sides of the story. To help frame that view, take a closer look at the 2 key rewards and 1 important warning sign.
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The recent mix of strong trailing earnings, large non cash items, a P/E of 0.4x, and back to back quarterly losses highlights uncertainty around earnings quality and consistency.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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