Yalla Group (YALA) shares plummeted 10.78% in after-hours trading on Monday following the release of its second-quarter earnings report and third-quarter guidance. The company's Q3 outlook and an unexpected decision regarding share repurchases appear to have disappointed investors.

For the second quarter ended June 30, Yalla Group reported adjusted earnings of $0.22 per diluted share, up from $0.19 a year earlier, and revenue of $84.6 million, surpassing the $81.2 million reported in the same period last year. While Q2 revenue exceeded analysts' expectations of $83.6 million, the company's Q3 guidance fell short. Yalla projected Q3 revenue between $78 million and $85 million, significantly below the $89.3 million forecast by analysts.

Adding to investor concerns, Yalla Group announced the cancellation of all shares repurchased in 2025. This unexpected move, combined with the weaker-than-anticipated Q3 outlook, likely contributed to the sharp after-hours sell-off. Investors may be reassessing the company's growth prospects and capital allocation strategy in light of these developments.