Yalla Group (YALA) investor relations material

Executive summary

• Q2 2026 revenues were $82.6 million, with game services revenue up 11.6% year-over-year to $34.2 million, now 41.4% of total revenue.

• Net income was $29.3 million (GAAP), with non-GAAP net margin at 41.7% and GAAP net margin at 35.5%.

• Average monthly active users reached 47.6 million, up 12.3% year-over-year, though paying users declined due to regional geopolitical events.

• Doubled selling and marketing expenses to support new product launches and user acquisition.

• Flagship products rebounded, and new games contributed as expected, driven by strong user engagement and local initiatives.

Financial highlights

• Q2 2026 revenue: $82.6 million, down from $84.6 million year-over-year; cost of revenues: $26.8 million, down 4.1% year-over-year, with cost ratio at 32.4%.

• Selling and marketing expenses: $17.8 million, up 106% year-over-year, now 21.6% of revenue.

• Operating income: $19.4 million (GAAP), $24.5 million (non-GAAP), both down year-over-year.

• Net income: $29.3 million (GAAP), $34.4 million (non-GAAP), both down from Q2 2025.

• Cash and equivalents: $824.2 million as of June 30, 2026, up from $754.6 million at year-end.

Outlook and guidance

• Q3 2026 revenue expected between $78 million and $85 million.

• Full-year 2026 revenue expected broadly in line with 2025, with core business decline offset by new games.

• Focus remains on scaling monetization and global expansion for new game titles in 2H26.

• Full-year GAAP net margin expected around 30%, with potential for increased user acquisition investment if new games outperform.