Aug 17, 2026 earnings call — Games growth and AI in R&D
Q2 revenues were USD 82.6 million, games services USD 34.2 million, and non-GAAP net margin 41.7%.
Revenue $0.1B (est $0.1B) · EPS $0.18 · Next-quarter revenue outlook $0.1B–$0.1B
Key quotes
"For Turbo Match, our self-developed match-3 title targeting global markets, we maintained healthy user acquisition and retention trends in the second quarter."
"And we launched a proprietary AI model-based system for match-3 level generation and difficulty evaluation."
"The company repurchased 4.4 million ADS or Class A ordinary shares for USD 27.6 million in the first half of this year, of which 2.9 million shares were repurchased during the second quarter for approximately USD 18 million."
Analyst Q&A 7
new games progress and launch plan
Q (Xueqing Zhang · CICC): The analyst asked for the latest progress of core new games and the operational and go-to-market plans for the next few quarters.
A: Management said each new title is moving at its own pace. They reported Turbo Match kept healthy user acquisition and retention in the second quarter and will scale commercialization and expand to the U.S. and Europe. For the desert-themed SLG, they finished a co-promotion, will work on a major version update with richer gameplay and better monetization, and expect user acquisition may slow in Q3 before the Q4 release.
"Looking ahead to the second half of the year, we will focus on scaling up its commercialization and accelerating its global expansion, including the U.S. and Europe." — Jianfeng Xu
cash use and buyback plan
Q (Meng Wei · CICC): The analyst asked about cash flow conversion efficiency and strategic priorities for capital allocation given net cash reserves over $800 million.
A: Management said they aim to maximize shareholder value and highlighted their newly authorized 2-year share repurchase program of up to USD 150 million. They said ample cash gives strategic flexibility to pursue partnerships, investments or acquisitions of top-tier R&D teams, expand the product pipeline, and push overseas expansion while using disciplined capital allocation.
"In March, the company announced a newly authorized 2-year share repurchase program of up to USD 150 million, and we remain committed to execute -- executing our shareholder return program." — Yang Hu (CFO)
game development and partnerships growth
Q (Tianhao Liu · CITIC): The analyst asked about growth opportunities and the strategic outlook for in-house game development and expanding external partnerships.
A: Management said games services revenue grew and they will keep pairing in-house development with external distribution partnerships. They are growing their internal teams, hiring experienced product and publishing staff, building a strong match-3 team, and developing multiple new casual and hyper-casual products to support growth in 2027 and 2028. They also said they will seek high-quality global partners to bring more hardcore content to MENA.
"Looking ahead, we will continue to execute our strategy that pairs in-house game development with external distribution partnerships." — Jianfeng Xu
drivers of strong quarter
Q (Rachel Wang · Haitong International): The analyst asked what drove the company's performance to exceed the upper end of guidance in the second quarter.
A: Management said the beat was mainly driven by a rebound of flagship products, which showed strong user stickiness and resilience, while new games met expectations. They described local engagement activities around their 10th anniversary that boosted social interactions and willingness to pay, and recovery and new campaigns in Yalla Ludo that improved engagement and monetization.
"Our second quarter results beat the high end of our guidance mainly driven by the rebound of our flagship products, which validated the exceptionally strong user stickiness and sustainable resilience of our core products, while our new games contribution is in line with our expectations." — Saifi Ismail (PRESIDENT)
AI use in products and R&D
Q (Lincoln Kong · GS): The analyst asked how AI is applied in product R&D and daily operations.
A: Management said they deeply integrated AI into their tech infrastructure and development workflow, including AI-assisted coding. They launched a proprietary AI-model system for level generation and difficulty evaluation that can generate levels at scale, run automated testing to evaluate completion probabilities, shorten level design cycles, reduce R&D costs, and improve player matching and retention.
"In practice, the system can rapidly generate high-quality levels at scale and use AI-powered automated testing to accurately evaluate level completion probabilities." — Tao Yang (CEO·CHAIR)
share repurchase progress
Q (Yicheng Yuan · UBS): The analyst asked for an update on shareholder return initiatives, the progress of the share repurchase program, and future capital allocation priorities.
A: Management said they repurchased about 4.3 million shares in the first half, totaling around USD 27.6 million, and that the 2021 program expired in May 2026 after repurchasing USD 126.5 million under it. They will continue executing the new 2026 program authorized up to USD 150 million, noted they have canceled 12.7 million repurchased shares as of August 14, 2026, and reaffirmed disciplined capital allocation while investing in long-term growth.
"In the first half of this year, the company repurchased a total of approximately 4.3 million shares under our 2021 and 2026 share repurchase programs, totaling around USD 27.6 million." — Yang Hu (CFO)
H2 revenue and margin outlook
Q (Rachel Guo · Nomura): The analyst asked for guidance on revenue trend and margin outlook for the second half of 2026.
A: Management said they will keep optimizing flagship product operations and advance new games in H2. They maintained last quarter's full-year guidance, expect a slight decline in core business revenue offset by new games so that overall 2026 revenues remain broadly in line with last year, and said H2 costs should be broadly similar to H1 with full-year GAAP net margin around 30%.
"We expect the company's overall revenues in 2026 to remain broadly in line with last year." — Yang Hu (CFO)