Cost Optimisation Delivered Notable Results with Operating Profit Up 48% YoY in H2 2025

Final Dividend of HKD0.5 Per Share, AnnoNetDuncing New Shareholder Return Program of No Less Than HKD600 Million

HONG KONG, March 26, 2026 /PRNewswire/ -- NetDragon Websoft Holdings Limited ("NetDragon" or the "Company"; Hong Kong Stock Code: 0777), a global leader in building internet communities, announced its financial results for fiscal year 2025 today. NetDragon's management team will be hosting a conference call and webcast on March 27, 2026 at 10:00am Hong Kong time, to discuss the results and recent business developments.

Dr. Dejian Liu, Chairman of NetDragon, commented: "In 2025, following our strategy to 'Fully Embrace AI', the Company further introduced the 'AI Now' strategy to fully implement our transformation. We have made encouraging progress across our core verticals of education, gaming and AI+ strategic investments across various sectors. The Company has taken initial steps of transforming into an AI organisation, advancing toward our long-term vision of becoming a global leader in AIGC. Meanwhile, we continued our operational optimisation initiatives. Our overall operating expenses for the year decreased by 22.2% YoY, while operating profit in the second half of the year increased by 47.7% YoY. We expect the benefits of cost optimisation to be further realised in 2026, laying a solid foundation for the Company's long-term value creation."

"In education AIGC, leveraging our AI Content Factory, we achieved multiple breakthroughs in product innovation, content creation, and AI integration, building a digital education ecosystem centered on 'gamified learning' and laying a strong foundation for scalable, intelligent and immersive learning experiences. Our US-listed subsidiary, Mynd.ai has reduced the segmental operating expenses by 21.1% YoY in 2025, whilst the adjusted EBITDA loss has been reduced by 61.8% QoQ in 4Q 2025. In gaming AIGC, we are actively incubating AI-native games, expanding into new genres and exploring the next-generation gaming experiences driven by AI as the core operational logic. Our flagship IP maintained solid profitability, with the core segmental profit margin of the gaming and application services reaching 27.4%, representing an increase of 3.9 percentage points YoY, whilst the profit scale remained solid. In AI+ strategic investments, we are focusing on unlocking the potential of AI computing power and AIGC production capacity. We will continue to invest in various frontier sectors such as AI and AR ."

"We have also established several significant strategic collaborations to support our long-term development. We have entered into a partnership with Volcengine, ByteDance's cloud and AI service platform. Together, the two parties will build a deep competitive moat integrating technology, resources, and ecosystem in China's higher education and vocational education sectors. By scaling the production of next-generation AIGC educational resources, we aim to create a globally co-created and shared innovative education ecosystem. We established a long-term cooperation with Thailand's Ministry of Higher Education, Science, Research and Innovation (MHESI) to systematically advance an AI-driven 'Learn-to-Career' ecosystem in Thailand. With the support of the World Bank, we signed a cooperation agreement with Ministry of Secondary Education of Cameroon (MINESEC) to jointly promote the digital transformation of 250 schools across the country. In addition, our Hong Kong subsidiary Cherrypicks successfully secured the strategic investment from Zhongke WengAI, a leading AI enterprise in China and has repositioned as the exclusive overseas expansion platform and commercialisation partner for Zhongke WengAI in overseas markets. Supported by these strategic partners, We are well placed to accelerate our progress toward becoming a global leader in AIGC creation."

"Our ongoing efforts in key aspects of sustainable development, such as environmental protection, social responsibility, and corporate governance, have continued to receive widespread recognition. Recently, the Company's MSCI ESG rating was further upgraded from BBB to A, extending the strong momentum of positive achievements in ESG over the past five years. The company will continue to adhere to its long-term commitment to creating lasting and sustainable value for nature, society, and all stakeholders, including shareholders, customers, and employees."

"Supported by the positive outcomes of our strategic investments and solid cash position, we remained committed to enhancing shareholder returns. The Board has approved a final dividend of HKD0.5 per ordinary share, bringing total dividends for the year to HKD1.0 per ordinary share. Since announcing a shareholder return program of no less than HKD600 million on 29 August 2025, we have fulfilled our commitment through dividends and share repurchases with the inclusion of the proposed final dividend. The core segmental profit from gaming and application services for the year remained solid at RMB897 million. As of December 2025, our net cash and liquid investments position remained robust at RMB2.0 billion. Based on our confidence in the Company's long-term sustainable development, we commit to distribute a total of no less than HKD600 million to shareholders over the next 12 months through dividends and share repurchases."

Fiscal Year 2025 Financial Highlights

   -- Revenue was RMB4.5 billion, representing a 26.0% decrease YoY. 
 
   -- Revenue from gaming and application services was RMB3.3 billion, 
      representing 73.2% of the Group's total revenue and a 16.8% decrease YoY 
      primarily attributable to the optimisation of flagship IP to support its 
      long-term development and sustainability. 
 
   -- Revenue from Mynd.ai business was RMB1.2 billion, representing 26.7% of 
      the Group's total revenue and a 43.2% decrease YoY primarily due to the 
      impact of disposal of Singapore early education business in the second 
      half of 2024, and a prolonged demand adjustment cycle. Customer demand is 
      expected to recover as market conditions stabilise. 
 
   -- Gross profit was RMB3.1 billion, representing a 20.2% decrease YoY, 
      whereas gross profit margin increased by 5.1 percentage points YoY to 
      70.3% . 
 
   -- Operating expenses decreased by 22.2% YoY to RMB2.6 billion, reflecting 
      the impact of our cost reduction and efficiency improvement measures, 
      which are expected to be fully realised in 2026. 
 
   -- Core segmental profit[1] from gaming and application services was RMB897 
      million, representing a 3.0% decrease YoY, as the lower revenue was 
      partially offset by cost savings. Core segmental profit margin increased 
      by 3.9 percentage points YoY to 27.4%. 
 
   -- Core segmental loss[1] from Mynd.ai business was RMB358 million, compared 
      to a loss of RMB297 million in 2024. Core segmental loss[1] for the 
      second half of 2025 was RMB163 million, representing a 12.4% decrease 
      YoY. 
 
   -- Profit attributable to owners of the Company was RMB151 million, 
      representing a 51.4% decrease YoY, affected by an impairment loss of 
      cryptocurrencies as of 31 December 2025, as well as one-off expenses 
      associated with the staff optimisation plan. 
 
   -- The Company declared a final dividend of HKD0.50 per ordinary share 
      (2024: HKD0.50 per ordinary share), subject to approval at the coming 
      annual general meeting. 

Segmental Financial Highlights

 
                         FY2025                 FY2024                Variance 
----------------  ---------------------  ---------------------  --------------------- 
                   Gaming and             Gaming and             Gaming and 
                  application   Mynd.ai  application   Mynd.ai  application   Mynd.ai 
(RMB million)        services  business     services  business     services  business 
----------------  -----------  --------  -----------  --------  -----------  -------- 
Revenue                 3,276     1,197        3,938     2,106      -16.8 %   -43.2 % 
----------------  -----------  --------  -----------  --------  -----------  -------- 
Gross Profit            2,852       299        3,399       547      -16.1 %   -45.3 % 
----------------  -----------  --------  -----------  --------  -----------  -------- 
                                                                                 -1.0 
Gross Margin           87.1 %    25.0 %       86.3 %    26.0 %    +0.8 ppts      ppts 
----------------  -----------  --------  -----------  --------  -----------  -------- 
Core Segmental 
 Profit 
 (Loss)([1])              897     (358)          925     (297)       -3.0 %   +20.5 % 
----------------  -----------  --------  -----------  --------  -----------  -------- 
Segmental 
Operating 
Expenses([2]) 
----------------  -----------  --------  -----------  --------  -----------  -------- 
 - Research and 
    development         (820)     (193)      (1,227)     (202)      -33.2 %    -4.5 % 
----------------  -----------  --------  -----------  --------  -----------  -------- 
 - Selling and 
    marketing           (406)     (251)        (488)     (266)      -16.8 %    -5.6 % 
----------------  -----------  --------  -----------  --------  -----------  -------- 
 - 
  Administrative        (658)     (211)        (705)     (362)       -6.7 %   -41.7 % 
----------------  -----------  --------  -----------  --------  -----------  -------- 
 

Gaming and Application Services Business

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March 26, 2026 09:24 ET (13:24 GMT)