iDreamSky Technology (1119) H1 2025 earnings summary

Executive summary

• Achieved a net profit turnaround in H1 2025, with net profit of RMB33.0 million, driven by a dual-engine growth strategy focusing on self-developed and overseas high-quality game publishing.

• Revenue for H1 2025 was RMB685.8 million, down 18.9% year-over-year, mainly due to the aging of key titles and reduced marketing spend.

• Adjusted profit for the period reached RMB95.1 million, up significantly from RMB3.3 million in H1 2024, reflecting improved cost control and non-recurring adjustments.

• Enhanced operational efficiency and user value, with improvements in business scale and quality despite complex market conditions.

• AI integration across R&D, user services, and operations increased efficiency and reduced costs.

Financial highlights

• Gross profit was RMB289.5 million, nearly flat year-over-year despite lower revenue.

• Cost of revenues decreased by 28.4% to RMB396.3 million, improving gross margin to 42.2% from 34.5%.

• Selling and marketing expenses rose 39.4% to RMB108.4 million, mainly due to new game launches and overseas marketing.

• R&D expenses dropped 68.2% to RMB48.7 million, reflecting project completions and AI-driven efficiency.

• EBITDA was RMB110.9 million, up from RMB11.7 million; adjusted EBITDA was RMB164.2 million, up from RMB100.1 million.

Outlook and guidance

• Multiple new overseas high-quality games in the pipeline are expected to drive future growth.

• The mobile version of Strinova is set for domestic launch in 2025, anticipated to boost self-developed business.

• Continued focus on product portfolio optimization and user value expansion for sustained growth.

• AI integration across R&D and operations is expected to further enhance efficiency and reduce costs.