According to Zhitong Finance App News, NetDragon (00777) announced its 2026 interim results, with revenue of RMB 2.09 billion, of which revenue from games and application services was RMB 1.6 billion, an increase of 3.1% over the previous month. Gross profit was RMB 1,461 billion, and gross margin increased 0.4 percentage points to 69.9% year over year. Operating expenses decreased by 17.8% year-on-year to RMB 1.1 billion. Operating profit was RMB 144 million, up 24.1% year over year. Profit attributable to company owners was RMB 36 million, an increase of 20.0% over the previous year. Earnings per share were 6.88 points, with an interim dividend of HK$0.5 per share.
In the first half of 2026, revenue from the game business grew month-on-month, showing a good upward trend. It indicates that the value resilience and sustainable growth of the company's flagship Changqing IP has been further verified under a series of strategic measures to optimize the consumption structure and deeply cultivate the user community. Furthermore, the AI employee matrix independently developed by the Group achieved organized, full-link, and systematic deployment in the game business, further reducing operating expenses in the game and application service sector, and driving a 10.3% month-on-month increase in operating classification profit. The US-based subsidiary Mynd.ai Inc.'s operating classification losses narrowed sharply by 35.4% year on year in the first half of 2026, and service and SaaS revenue increased year over year.
In the gaming sector, the operating resilience of the flagship Changqing IP has been fully demonstrated, driving revenue stabilization: in the first half of 2026, game business revenue increased 2.3% month-on-month, indicating that over the past two years, the Group has achieved positive results in core strategic initiatives such as focusing on content innovation, driving user growth, and deepening AI applications. At the same time, the Group's AI employee matrix further significantly improved overall efficiency in various aspects such as R&D, operation, and maintenance, leading to a 23.4% year-on-year decline in R&D expenses in the game and application service sector and 13.0% month-on-month in the first half of 2026.
Driven by a series of comprehensive content updates and iterative calculations, Magic Domain IP user activity continues to increase. The average number of monthly active users (MAU) has achieved month-on-month growth for five and a half years since the first half of 2024. It surpassed 3 million in the first half of 2026, increasing 24.1% year over year and 15.8% month-on-month, driving Magic Domain IP revenue growth of 3.7% month-on-month. Driven by increased development in the MMO sector and localized themed marketing in the leisure sector, Conquer IP's overseas revenue in US dollars achieved a healthy increase of 19.3% year-on-year and 6.5% month-on-month. Soul Blade IP's mobile game revenue increased 4.4% year-on-year and 2.3% month-on-month in the first half of 2026. Since the first half of 2023, it has achieved year-on-year revenue growth for 7 and a half years in a row.
In the field of application services, Meyu AI will open a new growth track for the company: the Meyu AI platform has been officially launched for testing, and the mobile version has been simultaneously tested in overseas markets. In the first half of 2026, the company focused on optimizing the Meyu AI system for AI application segmentation scenarios such as content creation and education. Among them, content creation scenarios cover directions such as story design, plot expansion, character setting, comic segmentation, and personalized image generation; educational scenarios explore requirements such as teaching design, teaching material generation, knowledge questions and answers, and teaching assistance. The company will continue to optimize platform capabilities based on test feedback and promote product iteration and application scenario expansion.
Furthermore, the strategic cooperation between the Hong Kong subsidiary Chuangsi and Zhongke Wenge has been further deepened. On the basis of AI platforms such as Zhongke Wenge X-Agent, they have begun to develop various applications such as AI administration and customer relationship management for local enterprises in the Hong Kong and Macau markets, and are cooperating to build the international version of ScienceOne (ScienceOne) and the enterprise-level security agent platform Claworks (Claworks) in the field of scientific research.