NetDragon Websoft (777) H1 2026 earnings summary

Executive summary

• Revenue for H1 2026 was RMB 2.1 billion, down 12.2% YoY, with gaming and application services contributing 75.8% and Mynd.ai 24.2%.

• Gaming segment achieved half-over-half growth, driven by flagship IPs, AI-powered innovation, and operational resilience.

• Mynd.ai subsidiary narrowed core segmental loss by 35.4% YoY, improved margins, and grew SaaS revenue by 30% YoY.

• AI Workforce OS and moyu AI ecosystem launched, supporting cost reduction and business transformation.

• Interim dividend of HKD 0.50 per share declared, with net cash and liquid investments at RMB 1.8 billion.

Financial highlights

• Total revenue for H1 2026 was RMB 2.1 billion, down 12.2% YoY; gaming and application services revenue was RMB 1.6 billion (down 8.8% YoY, up 3.1% HoH); Mynd.ai revenue was RMB 505 million (down 21.2% YoY).

• Gross profit was RMB 1.5 billion, down 11.7% YoY; gross margin improved to 69.9%.

• Operating profit rose 24.1% YoY to RMB 144 million; profit attributable to owners increased 20.0% YoY to RMB 36 million.

• Adjusted profit (excluding impairment and one-off items) was RMB 254 million, down 8% YoY.

• Interim dividend per share remained stable at HKD 0.5.

Outlook and guidance

• Cautiously optimistic for H2 2026, expecting continued gaming growth, cost optimization in education, and further SaaS expansion.

• AI-native games and new AI applications anticipated to drive future growth.

• Commitment to distribute at least HKD 600 million to shareholders over the next 12 months.