NetDragon Announces 2024 Annual Financial Results, Fully Embraces the World of Artificial Intelligence
Profit Before Tax Up 19% YoY
Final Dividend Increased by 25% YoY to HK$0.5 Per Share
HONG KONG, March 26, 2025 /PRNewswire/ -- NetDragon Websoft Holdings Limited ("NetDragon" or the "Company"; Hong Kong Stock Code: 0777), a global leader in building internet communities, announced its financial results for fiscal year 2024 today. NetDragon's management team will be hosting a conference call and webcast on March 27, 2025 at 10:00am Hong Kong time, to discuss the results and recent business developments.
Dr. Dejian Liu, Chairman of NetDragon, commented: "In 2024, global artificial intelligence (AI) technology continued to advance at a rapid pace, with developers achieving remarkable breakthroughs. As AI reshapes industries worldwide, we have proactively launched strategic initiatives to harness this wave of change. At the core of our vision is a dual-focus strategy—AI+Gaming and AI+Education—driving us toward "infinite growth"."
"In the gaming sector, we have seamlessly integrated cutting-edge AI tools to enhance production efficiency and elevate content quality, while also pioneering the development of "AI-native" games. Our flagship IP Eudemons has undergone a series of optimizations, further strengthening ecosystem balance and significantly enhancing the player experience, laying a solid foundation for its sustainable growth. In the education sector, we successfully won the tender to upgrade the "National Smart Education Platform Project" in July, reinforcing our commitment to supporting China's national strategy of "leveraging AI to transform education". On the international front, we have partnered with Thailand's Ministry of Higher Education, Science, Research and Innovation (MHESI) to develop an online AI education platform and offer professional training tailored for university students and the larger youth community. Additionally, our U.S.-listed subsidiary, Mynd.ai, took a major step forward in January 2025 with the launch of its next-generation interactive flat panel—ActivPanel 10 and software solutions ActivSuiteTM. Moving forward, we will focus on scaling SaaS revenue and solidifying Mynd.ai's position as the global leader in AI-driven classroom technology."
"This year, we leveraged advanced AI tools to establish an automated production line ("AI Content Factory") and commenced the development of interactive educational games. By prioritizing interactive experiences and learner-driven engagement, we aim to enable immersive learning, redefine traditional teaching methodologies, and ultimately build an educational metaverse platform."
"Our total revenue for 2024 decreased by 14.8% YoY to RMB6.0 billion, as Mynd.ai continued to navigate through industry-wide challenges, along with strategic adjustments in our gaming business. Nevertheless, our profit before tax increased by 19.1% YoY to RMB756 million, driven by higher investment returns, approximately RMB100 million in staff cost savings from continuing operations[1], improved operating efficiency enabled by our AI+ strategy and lower financial costs as we further enhanced our capital structure."
"Our net cash increased by 13.3% YoY to RMB2.1 billion with a stable operating cash inflow of RMB1.1 billion, which has laid a solid foundation for the continued advancement of our AI+ strategy and sustained business growth. As a return to our shareholders, the Board of Directors has approved a final dividend of HKD0.5 per ordinary share for 2024, representing a 25.0% increase YoY. We remain committed to maximizing shareholder value and return through offering sustainable dividends and maintaining a high payout ratio. Additionally, we will consider share buybacks based on market conditions to reward our long-term investors."
Fiscal Year 2024 Financial Highlights
Revenue was RMB6.0 billion, representing a 14.8% decrease YoY.
Revenue from gaming and application services was RMB3.9 billion, representing 65.1% of the Group's total revenue and a 6.0% decrease YoY.
Revenue from Mynd.ai business was RMB2.1 billion, representing 34.8% of the Group's total revenue and a 27.6% decrease YoY.
Gross profit was RMB3.9 billion, representing a 10.4% decrease YoY.
Core segmental profit[2] from the gaming and application services was RMB925 million, representing a 33.9% decrease YoY.
Core segmental loss[2] from Mynd.ai business was RMB297 million, compared to a loss of RMB93 million in 2023.
EBITDA was RMB1.4 billion, representing a 7.1% increase YoY.
Operating profit was RMB745 million, representing a 9.3% decrease YoY.
Profit before tax was RMB756 million, representing a 19.1% increase YoY.
Profit attributable to owners of the Company was RMB311 million including an one-time non-cash deferred tax expense in Mynd.ai of RMB335 million, representing a 43.5% decrease YoY from RMB550 million in 2023.
Operating cashflow was RMB1.1 billion, representing a 5.7% decrease YoY.
The Company declared a final dividend of HKD0.50 per ordinary share (2023: HKD0.40 per ordinary share), subject to approval at the coming annual general meeting.
Segmental Financial Highlights
FY2024
FY2023
Variance
(RMB million)
Gaming and application services
Mynd.ai
business
Gaming and application services
Mynd.ai
business
Gaming and application services
Mynd.ai
business
Revenue
3,938
2,106
4,189
2,910
-6.0 %
-27.6 %
Gross Profit
3,399
547
3,708
728
-8.3 %
-24.9 %
Gross Margin
86.3 %
26.0 %
88.5 %
25.0 %
-2.2 ppts
+1.0 ppts
Core Segmental Profit (Loss)[2]
925
(297)
1,399
(93)
-33.9 %
+219.4 %
Segmental Operating Expenses[3]
- Research and development
(1,227)
(202)
(1,186)
(196)
+3.5 %
+3.1 %
- Selling and marketing
(488)
(266)
(463)
(327)
+5.4 %
-18.7 %
- Administrative
(705)
(362)
(649)
(267)
+8.6 %
+35.6 %
Gaming and Application Services
In 2024, revenue from our gaming and application services amounted to RMB3.9 billion, representing a decrease of 6.0% YoY. In the second half of 2024, a series of strategic optimizations were implemented for our flagship IP Eudemons, in line with our long-term strategy of delivering consistent high-quality gaming experiences. Such optimizations significantly enhanced player experience, drove user growth and engagement, while solidified the foundation for the IP's long-term sustainability.
Throughout the year, we have continued to refine our "AI + Gaming" strategy, leveraging cutting-edge large language models such as GPT-4, Claude, Qwen, and Coze, while also developing proprietary capabilities based on DeepSeek architecture. We have also deepened the practical deployment of AI services like Midjourney and Hunyuan, integrating them into our production workflows. These efforts have culminated in the creation of an AI Agent Platform and the establishment of a comprehensive AI Content Factory tailored to our in-house development needs. By integrating AI across key areas—including art, programming, game design, testing, and customer service—we have enhanced operational efficiency, with certain game development processes achieving significant productivity gains. As a result, our gaming teams have been able to sharpen their strategic focus and optimize organizational structures, with the potential to effectively reduce our game development costs in 2025. Besides, we have launched our proprietary AI-powered cheat detection system and introduced AI companions, elevating the player experience to new heights. Beyond this, we are pushing the boundaries of AI-native gameplay and content innovation.
In 2024, our flagship IP Eudemons experienced some decline as a result of our proactive optimization measures. However, we remain committed to our high-quality content strategy, which has driven continued growth in user scale and engagement. The overall MAU for Eudemons IP increased by 10.1% YoY, with Eudemon PC-mobile Cross Platform Version seeing a 37.5% YoY surge in MAU. During the year, we also deepened collaborations with traditional Chinese cultural heritage within Eudemons PC game. This included various in-game events featuring the Tongliang Dragon Dance, Nanjing Brocade, and Chaoshan Yingge Dance, which not only enriched the cultural depth of the game but also strengthened the connection with our players. Furthermore, we partnered with Jiayu Pass, Quanzhou Cultural Tourism, and Harbin Cultural Tourism to explore new cross-industry models that blend gaming and cultural tourism. On the mobile front, we refined our marketing strategy and optimized content in alignment with our initiatives in PC games, leading Eudemons Online Pocket Version to win industry awards such as the "Players' Favorite Mobile Game" at the Golden Plume Award.
Our Heroes Evolved IP made significant strides in its long-term refined operations and eSports ecosystem. The PC version has achieved revenue growth for two consecutive years, with an 18.3% YoY increase in 2024, driven by the successful enhancement of the IP's influence through eSports tournaments. Viewership for our summer and winter tournaments increased by 71% and 88%, respectively, compared to the previous tournament, leading to a 5.3% YoY rise in APA.
For our Conquer IP, revenue performance in its core market, Egypt, was impacted by fluctuations in the Egyptian pound. However, in local currency terms, Conquer overseas version achieved an 8.8% YoY revenue growth in 2024. Moving forward, we aim to attract new player segments through casual gameplay while continuing to cater to MMO players.
In terms of pipeline, the highly-anticipated sequels to our flagship IP are progressing well. Eudemons Remake Version is set to launch in 2025, while Legend of Eudemons debuted on WeChat Mini Program in early 2025. Additionally, our new MMORPG mobile game, Miracland Saga (Code-Dragon), based on an entirely new IP, is scheduled for release in overseas markets through a publishing partner in 2025.
NetDragon recently signed a term sheet with Beijing Wenge Technology Co., Ltd. ("Wenge") to exclusively collaborate outside mainland China in promoting AI services. Wenge is an AI company incubated by the Institute of Automation at the Chinese Academy of Sciences. Subject to the signing of definite agreement, Wenge will make a strategic investment of RMB75 million in cash and AI assets into NetDragon's subsidiary Cherrypicks to support its ...
