NetDragon announced its 2023 annual results. Strong game business performance helped growth, and the spin-off and launch of Mynd.AI began a new journey

[Hong Kong, March 27, 2024] NetDragon Network Holdings Limited (“NetDragon” or the “Company”; HKEx stock code: 777), the world's leading internet community creator, announced today its financial results for the full year of 2023. NetDragon management will hold a results conference and webcast on March 28, 2024 at 10 a.m. Hong Kong time to discuss financial results and recent business developments.

Dr. Liu Dejian, Chairman of NetDragon, said, “In 2023, we rationally laid out key strategic areas and made every effort to strengthen execution, thereby promoting sustainable growth and achieving remarkable results. Our gaming business revenue rebounded strongly, achieving revenue of RMB 3.76 billion for the full year, up 9.6% year on year (down 5.8% year on year in 2022). Our game business has achieved revenue growth in nine of the past ten years, and only experienced a decline in 2022 when the domestic economic growth rate slowed due to the pandemic. Our gaming revenue has grown 3.9 times over the past decade, almost entirely due to our endogenous growth, which is driven by our focus on providing players with high-quality games. All of our core gaming IPs achieved strong performance in 2023, and we are committed to driving player engagement and consumption, providing quality content, and consolidating our market-leading position through continuous innovation and investment in artificial intelligence (AI) technology. During the year, while continuing to drive the strong growth of existing games, we also vigorously invested in the research and development of new game product lines in various categories. We believe our gaming business will have a unique competitive advantage in 2024, thanks to our excellent track record, R&D capabilities, and large player base.”

“Our education business reached an important milestone in 2023. In December, we successfully completed the spin-off of our overseas education business and listing in the US. This spin-off will not only unlock value for our shareholders, but will also lead our newly listed entity myND.AI to be more competitive in the hardware field and become a leader in the field of classroom software and hardware. Although hardware sales returned to normal levels before the pandemic in 2023, we believe that under the influence of the epidemic, the penetration rate and application rate of interactive displays have increased significantly, laying a more solid foundation for the widespread application of software in the future. We believe that Mynd.AI, as a market leader, can fully seize the opportunity and redefine the education industry landscape.”

“In 2023, we continued to make positive progress in environmental, social and governance (ESG). In December, our ESG rating was upgraded to BBB by MSCI (Ming Sheng), an authoritative international index agency, which is a significant increase from the previous rating, indicating that the company's achievements in the ESG field have been recognized by the market.”

“We are pleased to announce that the Board has decided that the final dividend for 2023 is HK$0.4 per common share. Together with the dividend announced during our interim results, the total dividend for the year reached HK$1.8 per common share.”

Revenue was RMB 7.10 billion, down 9.7% year over year.

Revenue from games and application services was RMB 4.19 billion, accounting for 59.0% of the Group's total revenue, an increase of 6.6% over the previous year.

Revenue from Mynd.ai was RMB 2.91 billion, accounting for 41.0% of the Group's total revenue, a year-on-year decrease of 25.7%.

Gross profit was RMB 4.4 billion, up 1.9% year over year.

Operating classification profit from games and application services was RMB 1.4 billion, an increase of 12.9% over the previous year.

In 2023, the operating classification loss from Mynd.ai was RMB 93 million, while in 2022, it recorded an operating classification profit of RMB 30 million.

Profit before depreciation and amortization before interest tax was RMB 1.33 billion, a year-on-year decrease of 8.7%.

Operating profit was RMB 820 million, a year-on-year decrease of 28.6%.

Non-GAAP operating profit was RMB1.15 billion, a decrease of 12.7% year over year.

Profit attributable to the Company's owners was RMB 550 million, a year-on-year decrease of 34.1%.

Profit attributable to non-GAAP owners of the Company was RMB 960 million, a year-on-year decrease of 24.9%.

Cash flow from operating activities was RMB 1.12 billion, up 4.2% year on year.

The Company announced a final dividend of HK$0.4 per common share (2022: HK$0.4 per common share), subject to approval by the upcoming Annual General Meeting of Shareholders.