Perfect World (002624) Q2 2025 earnings summary

Executive summary

• H1 2025 revenue was RMB 3.691bn, up 33.74% YoY; attributable net income was RMB 503.2m versus a RMB 176.9m loss, while adjusted net income was RMB 318.1m.

• Results benefited from the December 2024 launch of MMORPG Zhuxian World, higher film and TV revenue, esports activity and cost-control measures; gains from selling the Chengfeng studio materially lifted reported profit.

Financial highlights

• Revenue rose 33.74% YoY to RMB 3.691bn; operating costs increased 64.93% to RMB 1.599bn, and consolidated gross margin declined as lower-margin film and TV revenue gained share.

• Attributable net income was RMB 503.2m; adjusted attributable net income was RMB 318.1m, compared with adjusted loss of RMB 235.4m in H1 2024.

• Operating cash flow was RMB 502.2m versus an outflow of RMB 155.5m; cash and cash equivalents increased RMB 169.2m to RMB 3.284bn.

• Sales expense fell 34.89% YoY to RMB 329.8m and administrative expense fell 27.81% to RMB 335.6m; R&D expense was RMB 942.2m, down 0.95%.

• Non-recurring gains totaled RMB 185.1m, including RMB 171.9m from disposal of non-current assets, mainly the Chengfeng studio, and RMB 40.1m in government grants.

Outlook and guidance

• Focus remains on long-running games, concentrating development resources on higher-certainty projects, stricter project selection and smaller, faster tests for new opportunities; no numeric financial guidance was stated.

• Zhuxian 2 began domestic public testing on Aug. 7, 2025; the original open-world RPG Neverness to Everness is planned for global PC, mobile and console release, with further testing in preparation.

• Film and TV plans emphasize tighter investment control, selective long-form productions and expanded short-form drama output; completed titles remain in post-production or scheduling.