NetDragon Announces Full-Year 2025 Results, Significant Cost Optimization Effect, Operating Profit in the Second Half Increased by 48% Year-on-Year, Final Dividend of HKD 0.5 per Share, Announces New Round

[Hong Kong, March 26, 2026] NetDragon Websoft Holdings Limited ("NetDragon" or the "Company"; Stock Code: 777), a global leader in internet community creation, today announced its full-year financial results for 2025. NetDragon's management will hold an earnings conference call and webcast at 10:00 a.m. Hong Kong Time on March 27, 2026 to discuss the financial results and recent business developments.

Dr. Dejian Liu, Chairman of NetDragon, said: "In 2025, following the 'Embrace AI Fully' strategy, the Company further proposed the 'AI Now' strategy, fully implementing strategic transformation and achieving positive progress in its two core businesses of education and gaming, as well as in numerous AI+ strategic investment areas. The Company has preliminarily realized AI-driven organizational transformation and is moving towards the ambitious goal of becoming a globally leading AIGC creative enterprise. We continued to deepen operational optimization efforts, with the Company's overall operating expenses for the full year decreasing by 22.2% year-on-year, and operating profit for the second half of the year increasing by 47.7% year-on-year. The benefits of cost optimization are expected to be further fully released in 2026, laying a solid foundation for the Company's long-term value growth."

"In the education AIGC field, leveraging the AI Production Center, the Company made several breakthrough advancements in product innovation, content creation, and AI integration, building a digital education ecosystem centered on 'gamified learning,' which laid a solid foundation for scalable, intelligent, and immersive learning experiences. The segment operating expenses of its U.S.-listed subsidiary, Mynd.ai, decreased by 21.1% year-on-year for the full year, and its adjusted EBITDA loss narrowed by 61.8% quarter-on-quarter in Q4 2025. In the gaming AIGC field, the Company is actively conducting pre-research on AI-native games, laying out new category tracks, and exploring the next generation of games with AI as the core operational logic. Our flagship IPs maintained robust profitability, with the operating segment profit margin for the gaming and application services business reaching 27.4%, an increase of 3.9 percentage points year-on-year, and the profit scale remained stable. In the AI+ strategic investment field, the Company focuses on the deep exploration of AI computing power and AIGC production capacity, and will continue to invest in outstanding enterprises in cutting-edge areas such as AI and AR."

"To prepare for future development, the Company has also reached several significant strategic collaborations. We have partnered with Volcano Engine, ByteDance's cloud and AI service platform, to jointly build deep collaboration barriers combining technology, resources, and ecosystems in domestic higher education and vocational education, mass-produce a new generation of AIGC educational resources, and create a globally co-created and shared innovative education ecosystem. We have established long-term cooperation with Thailand's Ministry of Higher Education, Science, Research and Innovation to systematically promote an AI-driven 'Learn-to-Career' ecosystem in Thailand. With the support of the World Bank, we signed a cooperation agreement with Cameroon's Ministry of Secondary Education to jointly promote the digital transformation of 250 schools nationwide in Cameroon. Our Hong Kong subsidiary, Cherrypicks, successfully introduced strategic investment from the leading domestic AI enterprise, iKno-WinSong, transforming into iKno-WinSong's exclusive overseas market platform and commercialization partner. The strong support from these strategic partners will further propel NetDragon towards its goal of becoming a globally leading AIGC creative enterprise."

"The Company's efforts in sustainable development aspects such as environmental protection, social responsibility, and corporate governance continue to receive widespread recognition from all sectors of society. Recently, the Company's MSCI ESG rating was upgraded from BBB to A, continuing the positive momentum of the Company's ESG achievements over the past five years. The Company will persistently create long-term, sustainable value for nature, society, and various stakeholders including shareholders, customers, and employees."

"Leveraging the positive results of multiple strategic investments and ample cash reserves, we continue to fulfill our commitment to enhancing shareholder returns. The Board has approved a final dividend of HK$0.5 per ordinary share, bringing the total dividend for the year to HK$1.0 per ordinary share. Since announcing the shareholder return plan with a total amount of not less than HK$600 million on August 29, 2025, including the proposed final dividend, we have fulfilled the commitment of this shareholder return plan through dividends and share repurchases. The operating segment profit of the gaming and application services business remained robust in 2025, reaching RMB 900 million. As of December 2025, our net cash and liquid investment reserves remained ample, totaling RMB 1.98 billion. Based on confidence in the Company's long-term sustainable development, we commit to continuing to provide a total distribution of not less than HK$600 million to the Company's shareholders through dividends and share repurchases in the next 12 months."