Netdragon announced its mid-term performance for 2024: EBITDA increased by 13% year-on-year, and a new round of growth is poised to take off.

Hong Kong, August 29, 2024 - NetDragon Network Holdings Limited (NetDragon or the Company; Hong Kong Stock Exchange stock code: 777), the global leading creator of internet community, announced its financial performance for the first half of 2024. The management of NetDragon will hold a performance press conference and online live broadcast on August 30, 2024, at 10:00 a.m. Hong Kong time to discuss financial performance and recent business development.

Dr. Liu Dejian, Chairman of NetDragon, said: "The performance in the first half of this year has demonstrated our strong resilience. Despite some short-term challenges, we are still focused on building products that can strengthen our core competitiveness and drive long-term growth. The domestic client game revenue increased by 2.1% year-on-year to RMB 1.36 billion, benefiting from our efforts to increase player engagement and retention. We believe that as players' consumption habits shift towards high-quality content and games with well-known IP, our iconic and irreplaceable flagship IP, as well as the business model of creating high-quality games around these IPs, will help us achieve differentiation and drive sustainable growth. Although our overseas game revenue declined by 12.9% year-on-year due to some short-term factors, leading to an overall decline in game revenue, we are confident that we will achieve better performance in the second half of the year. Our growth strategy is steadily progressing as planned, and there are many positive updates to share: our new game, "Code-Alpha," is expected to be officially launched in the second half of the year and expanded to multiple countries. Our "End of Oath - Overseas Version" has achieved good test results, and this new two-dimensional game is expected to be launched in the Japanese market within the next 6 to 9 months. In addition, our Roguelike top-down shooter game "Starbreakers" has received enthusiastic reviews from players. The game ranked second on the new product list on TapTap platform and achieved a user rating of 8.0. We expect this game to be launched globally in 2025 and has the potential to become a hit game with a high number of daily active users (DAU)."

"In terms of our education business, our overseas education subsidiary, Mynd.ai, is still in the industry transition stage where challenges and opportunities coexist. On the one hand, as the COVID-19 pandemic comes to an end, the budgets of education departments return to normal, and macro inflation has affected budget allocation decisions of schools, resulting in a continuous slowdown in hardware market shipments. On the other hand, the market is currently in the early stages of transformation, gradually shifting from hardware-dominated to integration models centered around software and services. As the market leader, Mynd.ai has an installation base of over 1 million classrooms and is facing tremendous opportunities for transformation."

In recent months, NetDragon has also made positive progress in national projects in Thailand and Saudi Arabia. With the support of the Ministry of Higher Education and Research Innovation in Thailand, we have announced a strategic initiative to develop the advanced AI-enabled education platform aom-ai. This platform combines NetDragon's advanced education technology with deep local insights and is expected to be launched within the year. In Saudi Arabia, we are closely discussing multiple exciting education technology cooperation projects with the Ministry of Education, focusing on K12 education and technology and vocational training.

Revenue was 3.3 billion yuan, a decrease of 10.3% compared to the same period last year.

Revenue from gaming and app services was 2.12 billion yuan, accounting for 64.3% of the total revenue of the group, a decrease of 0.8% compared to the same period last year.

Revenue from Mynd.ai was 1.18 billion yuan, accounting for 35.7% of the total revenue of the group, a decrease of 23.5% compared to the same period last year.

Gross profit was 2.2 billion yuan, a decrease of 3.8% compared to the same period last year.

Operating profit from gaming and app services was 0.69 billion yuan, a decrease of 11.5% compared to the same period last year.

Operating loss from Mynd.ai was 0.11 billion yuan, compared to a loss of 48 million yuan in the same period last year.

Operating profit was 0.63 billion yuan, a decrease of 9.3% year-on-year.

Non-GAAP operating profit was 0.64 billion yuan, a decrease of 7.5% year-on-year.

Profit before interest, tax, depreciation, and amortization was 1.04 billion yuan, an increase of 12.9% year-on-year.

Non-GAAP profit before interest, tax, depreciation, and amortization was 1.15 billion yuan, an increase of 33.1% year-on-year.

Net profit attributable to the owners of the company was 0.4 billion yuan, a decrease of 20.0% year-on-year.

Net profit attributable to the owners of the company under non-GAAP was 0.56 billion yuan, a decrease of 5.3% year-on-year.

The company announced a distribution of an interim dividend of HK$0.4 per ordinary share for the six months ending June 30, 2024.