Yalla Group Ltd. Sponsored ADR Class A (YALA.US) reported first quarter revenue exceeding expectations, with a 11% decrease in the number of paying users compared to the same period last year.

Middle East and North Africa (MENA) The largest online social networking and gaming company Yalla Group Ltd. Sponsored ADR Class A (YALA.US) today announced its unaudited financial performance for the first quarter ending March 31, 2026. The data shows that first-quarter revenue reached $79 million, exceeding market average expectations, compared to $83.9 million in the same period last year. Net profit was $28.4 million, down from $36.4 million in the same period last year. The net profit margin was 35.9%. The decrease in revenue year-on-year was mainly attributed to recent political events in the region involving GEO Group Inc, which resulted in a decrease in the number of paying users. The company's Q1 non-GAAP net profit was $33.3 million, down from $39.1 million in the same period last year. The non-GAAP net profit margin was 42.1%. Basic and diluted earnings per share for Q1 were $0.19 and $0.16, respectively; compared to $0.23 and $0.20 in the same period last year. First-quarter chat service revenue was $48.1 million, and game service revenue was $30.3 million. Average monthly active users (MAUs) increased by 7.7% year-on-year, from 44.6 million in the same period last year to 48 million. The number of paying users was 10.5 million, down from 11.8 million in the same period last year. As of March 31, 2026, the company held a total of $806.7 million in cash and cash equivalents, restricted funds, time deposits, and short-term investments, compared to $754.6 million as of December 31, 2025. Looking ahead, for the second quarter of 2026, the company currently expects operating revenue to be between $75 million and $82 million. As of the time of publication, the stock fell 2.51% after hours, trading at $6.6. Yalla's founder, Chairman, and CEO, Mr. Yang Tao, said: "Despite changes in the macro environment and the impact of Ramadan, the company achieved a resilient performance in the first quarter. Through refined operations and strategic execution focused on the market, our average monthly active users grew by 7.7% year-on-year to 48 million, demonstrating a significant increase in user coverage and engagement. The core product ecology operates steadily, and the gaming business has further consolidated its position as a key growth engine for the company. We continue to increase our investment in mid-core games, and the early feedback on the SLG game launched was encouraging, while the progress of the "Turbo Match" game is also smooth. "In addition, we have further enhanced regional influence through strategic cooperation and high-level industry events. As part of a cooperation with the Saudi Esports League, the company was named the Chief Partner of the 'Yalla Saudi Women's Esports League 2026' in April this year to help promote the participation of local women in esports and explore significant growth opportunities in this strategic market. Looking ahead, we will continue to leverage the synergies of the social and gaming ecosystem, strengthen AI capabilities to enrich user experiences, extend the value of user lifecycle, and enhance operational leverage. We are confident in our resilience and ability to seize market opportunities, committed to creating sustainable value for all stakeholders." Yalla's CFO, Ms. Hu Yang, commented: "In the first quarter, we continued to focus on improving efficiency and pursuing high-quality development. Total revenue was $79 million, in line with expectations, with game service revenue increasing to $30.3 million, accounting for 38.3% of total revenue. Net profit was $28.4 million, non-GAAP net profit was $33.3 million, corresponding to a net profit margin of 42.1%. With a robust balance sheet and healthy cash flow, we will continue to create returns for shareholders while making strategic business investments to drive high-quality growth and long-term value creation."