NetDragon Announces 2025 Interim Financial Results
Operating Expenses Reduced by 16% To Date, Full Impact Anticipated in H2 2025 and Beyond
Announcing Shareholder Return Program of No Less Than HKD600 Million
Embracing the New AI Era: AI Content Factory Empowering the Entire Company
HONG KONG, Aug. 28, 2025 /PRNewswire/ -- NetDragon Websoft Holdings Limited ("NetDragon" or the "Company"; Hong Kong Stock Code: 777), a global leader in building internet communities, today announced its financial results for the first half of 2025. NetDragon's management team will hold a conference call and webcast at 10:00am Hong Kong time on 29 August 2025 to discuss the results and recent business development.
Dr. Dejian Liu, Chairman of NetDragon, commented: "We maintained stable operations despite temporary challenges in the first half of 2025. The gaming business advanced its execution under the established 'Evergreen Operation Plan'. While this led to short-term revenue fluctuations, gaming performance has now stabilised, showing only a marginal HoH decline in revenue. Meanwhile, Mynd.ai business was affected by external factors including increased tariffs and softening demand in its key markets. While challenges persist, our efforts to streamline operations and enhance cost efficiency have resulted in a 15.6% YoY reduction in the Company's operating expenses with full impact anticipated in the second half of 2025 and beyond, paving the way for future profitability."
"We are confident in our long-term sustainable growth and value-creation potential. With solid results from multiple strategic investments and robust cash reserves, we are well positioned to further our commitment of enhancing shareholder returns. The Board of Directors has approved an interim dividend of HKD0.5 per ordinary share, representing an increase of 25% YoY, and a distribution of no less than HKD600 million to our shareholders over the next 12 months through a combination of dividend payments and share repurchases (Shareholder Return Program)."
"For the longer term of development, we fully embraced the new artificial intelligence (AI) era and upheld our vision of 'Infinite Growth', while further advancing the execution of our dual-focus strategy - 'AI+Gaming' and 'AI+Education'. In the gaming sector, our evergreen flagship IP Eudemons continued to elevate content quality and launched a series of crossover collaborations with cultural heritage projects and public welfare initiatives, leading to sustained growth in user engagement. Meanwhile, our Conquer IP delivered solid progress in overseas expansion and content monetisation. The 'Content+Esports' engine for Heroes Evolved IP proved to be a significant success. In the education sector, we implemented a systematic restructuring of our domestic EdTech businesses, sharpening our focus on core AI-powered projects such as country-level platforms, as well as the vocational education business. Our U.S.-listed subsidiary, Mynd.ai, successfully launched its next-generation integrated solution, ActivPanel 10® and Promethean ActivSuite® software, and reached an agreement to acquire an award-winning AI voice assistant technology, leveraging our vast user base to further enhance our SaaS offerings. In addition, we introduced Zhongke WengAI ("Wenge"), a leading AI large language model company in China, as a strategic shareholder of our Hong Kong-based subsidiary Cherrypicks to support its AI evolution. In August, Cherrypicks and Wenge jointly released three co-developed AI applications: the international version of X-Agent (AI-powered zero-code enterprise agent factory), WiSky (multilingual intelligence platform with AI-powered social listening for global decisions), and YoYa (multimodal creative studio with AI-powered all-in-one intelligent audio-video synthesis). This milestone marks the first time that China's core AI technologies have been brought to global markets under the lead of a Hong Kong enterprise. In early June, we unveiled our strategy of empowering global digital education development through AI Content Factory at the United Nations High-level Expert Group Meeting in New York, as we move forward with partners to build a global education metaverse platform."
2025 First Half Financial Highlights
Revenue was RMB2.4 billion, representing a 27.9% decrease YoY.
Revenue from the gaming and application services was RMB1.7 billion, representing 73.0% of the Company's total revenue and reflecting an 18.1% decrease YoY, but the performance has stabilised with a 4.3% decrease HoH.
Revenue from Mynd.ai business was RMB641 million, representing 26.9% of the Company's total revenue and a 45.7% decrease YoY, reflecting the extended demand adjustment caused by economic uncertainty.
Gross profit was RMB1.7 billion, representing a 24.7% decrease YoY, whereas gross profit margin increased 2.9 percentage points to 69.5% YoY.
Operating expenses decreased by 15.6% YoY to RMB1.4 billion, reflecting the early impact of our cost reduction and efficiency improvement measures, which are expected to be fully realised in the second half of 2025.
Profit attributable to owners of the Company was RMB30 million, representing a 92.5% decrease YoY, affected by an impairment loss of intangible assets as of 30 June 2025 which is expected to fully reverse in the second half of 2025 based on the current market price, as well as one-off expenses associated with the staff optimisation plan. Excluding these two items, the decrease in adjusted profit attributable to owners of the Company ...
