NetDragon Websoft Holdings Limited (Stock Code: 00777.HK) announced its 2025 interim financial results on August 29, 2025. The report shows that the company's revenue for the first half of the year was RMB 2.38 billion, down 27.9% year-on-year.

Despite the revenue decline, the company's gross profit margin improved by 2.9 percentage points year-on-year to 69.5%, while operating expenses decreased by 15.6% year-on-year.

NETDRAGON's board declared an interim dividend of HK$0.5 per ordinary share, representing a 25% increase year-on-year, and plans to provide shareholders with total distributions of no less than HK$600 million through dividends and share buybacks over the next 12 months.

**Financial Performance Under Short-term Pressure, Cash Flow Remains Stable**

In the first half of 2025, NETDRAGON's revenue decreased 27.9% year-on-year to RMB 2.38 billion. Revenue from Gaming & Applications business was RMB 1.74 billion, down 18.1% year-on-year, while Mynd.ai business revenue was RMB 640 million, down 45.7% year-on-year.

Profit attributable to owners of the company was RMB 30 million, down 92.5% year-on-year. The significant profit decline was mainly due to impairment losses on intangible assets (including approximately RMB 92 million in cryptocurrency impairment) and one-time expenses arising from workforce optimization.

Excluding these factors, the adjusted profit attributable to owners showed a significantly narrower year-on-year decline. As of June 30, 2025, the company held approximately 12,000 Ethereum tokens as part of its digital asset reserves.

The company maintains a solid financial position with net cash of approximately RMB 1.5 billion. Effective operating cash flow management provides sufficient funding support for future business development.

**Education Business Faces Challenges, Strategic Adjustments Address Market Changes**

The Mynd.ai business faced significant challenges, with revenue declining 45.7% year-on-year to RMB 640 million. This was primarily due to customer budget cuts and reduced spending caused by economic uncertainty.

To address these challenges, Mynd.ai launched next-generation integrated solutions ActivPanel 10® and Promethean ActivSuite®, focusing on enhancing customer cybersecurity and achieving "plug-and-play" experiences.

The company has signed an agreement to acquire an award-winning AI voice assistant technology, with completion expected in the third quarter. This acquisition will significantly enhance the interactive experience of the entire software and hardware ecosystem in classroom teaching scenarios.

Against the backdrop of weak performance in traditional European and American markets, the company is actively exploring emerging markets to seek new growth opportunities.

**Comprehensive AI Strategy Implementation, Technology Layout for the Future**

NETDRAGON fully embraces the AI era, practicing the corporate philosophy of "infinite growth." The company's AI deployment extends beyond business applications to extensive investments in cutting-edge technology.

NETDRAGON's Hong Kong subsidiary, Cherrypicks, successfully introduced Zhongke Wenwen, a leading domestic AI large model technology company, as a strategic shareholder. Three AI applications jointly developed by both parties - the international version of zero-code enterprise-level intelligent agent development platform X-Agent, social listening intelligent agent WiSky, and multimodal creative intelligent agent YoYa - were released in August.

This collaboration marks the first time that Chinese core AI technology has gone international under the leadership of a Hong Kong enterprise. Cherrypicks will transform into Zhongke Wenwen's exclusive overseas platform and commercialization partner for international markets.

NETDRAGON's invested AI edge device company recently successfully launched a new generation of AI glasses, marking a key breakthrough in consumer market applications.

NETDRAGON faced dual challenges in the first half of 2025 with periodic declines in gaming revenue and weak demand in the education market. However, through AI-driven cost reduction and efficiency improvements, the company's gross profit margin increased to 69.5%, and operating expenses decreased by 15.6%.

As cost optimization measures take further effect in the second half of the year, along with the launch of new games such as "Codename MY" and overseas market expansion, NETDRAGON is expected to gradually recover its performance.

The AI strategy is not only NETDRAGON's means of addressing current challenges but also a key strategic layout for capturing future technological high ground. The collaboration with Zhongke Wenwen positions it as a unique bridge for Chinese AI technology going overseas, which could open new long-term growth opportunities for NETDRAGON.

(Note: This article incorporates AI tools in its generation and does not constitute investment advice. Markets carry risks, and investment requires caution.)