XD Inc. reported interim results for the six months ended 30 June 2026 showing stronger top-line momentum but softer earnings as the company accelerated investment in AI capabilities and content.

Revenue climbed 7.5% year on year to RMB 3.31 billion, powered by an 11.9% expansion in the game segment to RMB 2.32 billion (70% of total). TapTap platform income softened 1.6% to RMB 0.99 billion as domestic app usage held firm while international traffic declined.

Gross profit improved 3.4% to RMB 2.33 billion, but the group gross margin compressed to 70.3% from 73.1% a year earlier. The shift toward revenue recognized on a gross basis and higher platform commissions cut the game segment margin to 64.0% (-4 ppt), partially offset by an 85.1% margin in the TapTap business.

Operating expenses reflected the pivot to artificial-intelligence initiatives and content expansion: • Selling & marketing outlays rose 3.4% to RMB 769.50 million. • R&D expenditure increased 16.5% to RMB 639.23 million, driven by AI computing and technical-service costs. • General & administrative costs edged up 9.7% to RMB 138.21 million.

Consequently, profit for the period slipped 10.6% to RMB 724.31 million, and profit attributable to shareholders fell 5.4% to RMB 714.30 million. Basic EPS decreased to RMB 1.49 from RMB 1.57. On a non-IFRS basis, adjusted profit attributable to shareholders declined 3.0% to RMB 771.98 million.

Key operating indicators remained solid: online game MAUs climbed 10.0% to 12.55 million and MPUs gained 8.9% to 1.44 million, buoyed by the global launch of life-simulation title Heartopia and steady performance from Torchlight: Infinite. TapTap’s PRC app averaged 45.40 million MAUs (+4.1%), while TapTap International MAUs contracted 37.9% to 3.12 million.

Cash and short-term investments totaled RMB 3.90 billion at period-end, up from RMB 3.77 billion at end-2025, after generating RMB 711.93 million in operating cash flow and spending RMB 512.0 million (HKD 493.2 million) to repurchase 7.88 million shares. Net assets reached RMB 4.28 billion and the gearing ratio remained stable at 22.5%.

No interim dividend was declared.

Management highlighted ongoing deployment of AI across development and operations, including the rollout of “TapTap Maker,” an AI game-creation agent now powering over 6,000 user-generated titles, and the open-sourcing of office AI agent “Cindy.” Three self-developed online games are in the pipeline alongside additional projects in pre-production.

XD Inc. continues to leverage its dual-engine model; proprietary games fuel user growth on TapTap, while the platform’s traffic supports first- and third-party content. The company stated it will maintain disciplined investment in AI and content to sustain long-term growth.