Yalla Group Limited Announces Unaudited First Quarter 2025 Financial Results
- Revenue grew 6.5% YoY to US$83.9 million, exceeding guidance
- Net income increased 17.0% YoY to US$36.4 million with strong 43.4% net margin
- Average MAUs grew 17.9% to 44.6 million without increasing marketing expenses
- Share buyback program increased by US$22 million to US$50 million for 2025
- Cost of revenues as percentage of total revenues decreased to 34.8% from 36.3% YoY
- Paying users decreased 8.0% YoY to 11.8 million
- General and administrative expenses increased 30.8% YoY
- Q2 2025 revenue guidance of US$76.0-83.0 million suggests potential sequential decline
- Technology and product development expenses increased 25.0% YoY
Insights
Yalla delivered solid Q1 with 17% net income growth despite Ramadan timing, with expanding margins and aggressive share buybacks.
Yalla's Q1 results demonstrate impressive profitability momentum amid strategic execution. Revenue grew
The company's profitability metrics are particularly noteworthy. Net income jumped
User metrics present a mixed picture - average MAUs increased robustly by
Yalla's balance sheet strength continues with
Q2 guidance of
First Quarter 2025 Financial and Operating Highlights
- Revenues were
US .9 million in the first quarter of 2025, representing an increase of$83 6.5% from the first quarter of 2024.- Revenues generated from chatting services in the first quarter of 2025 were
US .$53.5 million - Revenues generated from games services in the first quarter of 2025 were
US .$30.1 million
- Revenues generated from chatting services in the first quarter of 2025 were
- Net income was
US in the first quarter of 2025, a$36.4 million 17.0% increase fromUS in the first quarter of 2024. Net margin[1] was$31.1 million 43.4% in the first quarter of 2025. - Non-GAAP net income[2] was
US in the first quarter of 2025, a$39.1 million 10.9% increase fromUS .3 million in the first quarter of 2024. Non-GAAP net margin[3] was$35 46.6% in the first quarter of 2025. - Average MAUs[4] increased by
17.9% to 44.6 million in the first quarter of 2025 from 37.8 million in the first quarter of 2024. - The number of paying users[5] on our platform decreased by
8.0% to 11.8 million in the first quarter of 2025 from 12.8 million in the first quarter of 2024.
Key Operating Data | For the three months ended | |||||
March 31, 2024 | March 31, 2025 | |||||
Average MAUs (in thousands) | 37,791 | 44,555 | ||||
Paying users (in thousands) | 12,806 | 11,787 |
[1] Net margin is net income as a percentage of revenues. |
[2] Non-GAAP net income represents net income excluding share-based compensation. Non-GAAP net income is a non-GAAP financial measure. See the sections entitled "Non-GAAP Financial Measures" and "Reconciliations of GAAP and Non-GAAP Results" for more information about the non-GAAP measures referred to in this press release. |
[3] Non-GAAP net margin is non-GAAP net income as a percentage of revenues. |
[4] "Average MAUs" refers to the average monthly active users in a given period calculated by dividing (i) the sum of active users for each month of such period, by (ii) the number of months in such period. "Active users" refers to registered users who accessed any of our main mobile applications at least once during a given period. Yalla, Yalla Ludo, Yalla Parchis, YallaChat, 101 Okey Yalla, WeMuslim and Ludo Royal were our main mobile applications for the periods presented herein. |
[5] "Paying users" refers to registered users who played a game or purchased our virtual items or upgrade services using virtual currencies on our main mobile applications at least once in a given period, except for users who received all of their virtual currencies directly or indirectly from us for free; YallaChat does not involve the usage of virtual currencies, and the metrics of "paying users" and "ARPPU" do not reflect user activities on YallaChat. "Registered users" refers to users who have registered accounts on our main mobile applications as of a given time; a registered user is not necessarily a unique user, as an individual may register multiple accounts on our main mobile applications. |
"We kicked off 2025 with a strong first quarter. Even with the impact of Ramadan, which fell entirely within the first quarter this year, our revenues reached
"Our product portfolio is thriving and primed for expansion. We completed first-round product testing on an exciting Match-3 title slated for launch in the third quarter of 2025 and boast a robust lineup of promising mid-core games in our pipeline. To deepen our commitment to returning shareholder value, we plan to further accelerate our share buyback program, raising this year's target by an additional
Ms. Karen Hu, CFO of Yalla, commented, "We are pleased to report a robust performance in the first quarter of 2025 through continued execution excellence and efficiency enhancements. Disciplined cost management and improved operating leverage propelled a
First Quarter 2025 Financial Results
Revenues
Our revenues were
In the first quarter of 2025, revenues generated from chatting services were
Costs and expenses
Our total costs and expenses were
Our cost of revenues was
Our selling and marketing expenses were
Our general and administrative expenses were
Our technology and product development expenses were
Operating income
Operating income was
Non-GAAP operating income[6]
Non-GAAP operating income in the first quarter of 2025 was
Interest income
Interest income was flat at
Income tax expense
Income tax expense was
Net income
As a result of the foregoing, our net income was
Non-GAAP net income
Non-GAAP net income in the first quarter of 2025 was
Earnings per ordinary share
Basic and diluted earnings per ordinary share were
Non-GAAP earnings per ordinary share[7]
Non-GAAP basic and diluted earnings per ordinary share were
Cash and cash equivalents, restricted cash, term deposits and short-term investments
As of March 31, 2025, we had cash and cash equivalents, restricted cash, term deposits and short-term investments of
Share repurchase program
Pursuant to the Company's share repurchase program beginning on May 21, 2021, with an extended expiration date of May 21, 2026, from January 1 through May 16, 2025, the Company repurchased 4,275,812 American depositary shares ("ADSs"), representing 4,275,812 Class A ordinary shares, from the open market with cash for an aggregate amount of approximately
Outlook
For the second quarter of 2025, Yalla currently expects revenues to be between
The above outlook is based on current market conditions and reflects the Company management's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.
[6] Non-GAAP operating income represents operating income excluding share-based compensation. Non-GAAP operating income is a non-GAAP financial measure. See the sections entitled "Non-GAAP Financial Measures" and "Reconciliations of GAAP and Non-GAAP Results" for more information about the non-GAAP measures referred to in this press release. |
[7] Non-GAAP earnings per ordinary share is non-GAAP net income attributable to Yalla Group Limited's shareholders, divided by weighted average number of basic and diluted shares outstanding. Non-GAAP net income attributable to Yalla Group Limited's shareholders represents net income attributable to Yalla Group Limited's shareholders, excluding share-based compensation. Non-GAAP earnings per ordinary share and non-GAAP net income attributable to Yalla Group Limited's shareholders are non-GAAP financial measures. See the sections entitled "Non-GAAP Financial Measures" and "Reconciliations of GAAP and Non-GAAP Results" for more information about the non-GAAP measures referred to in this press release. |
Conference Call
The Company's management will host an earnings conference call on Monday, May 19, 2025, at 8:00 PM
Dial-in details for the earnings conference call are as follows:
United States Toll Free: | +1-888-317-6003 |
International: | +1-412-317-6061 |
United Arab Emirates Toll Free: | 80-003-570-3598 |
Mainland China Toll Free: | 400-120-6115 |
800-963-976 | |
Access Code: | 7169757 |
Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at https://ir.yalla.com.
A replay of the conference call will be accessible until May 26, 2025, by dialing the following telephone numbers:
United States Toll Free: | +1-877-344-7529 |
International: | +1-412-317-0088 |
Access Code: | 1049367 |
Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with generally accepted accounting principles in
By excluding the impact of share-based compensation expenses, which are non-cash charges, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company's past performance and future prospects. Investors can better understand the Company's operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess its core operating results, as they exclude share-based compensation expenses, which are not expected to result in cash payments. The Company also believes that the non-GAAP financial measures allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.
The non-GAAP financial measure is not defined under
The Company compensates for these limitations by providing the relevant disclosure of its non-GAAP financial measures in the reconciliations to the nearest
Reconciliations of GAAP and non-GAAP results are set forth at the end of this press release.
About Yalla Group Limited
Yalla Group Limited is the largest MENA-based online social networking and gaming company, in terms of revenues in 2022. The Company operates two flagship mobile applications, Yalla, a voice-centric group chat platform, and Yalla Ludo, a casual gaming application featuring online versions of board games, popular in MENA, with in-game voice chat and localized Majlis functionality. Building on the success of Yalla and Yalla Ludo, the Company continues to add engaging new content, creating a regionally-focused, integrated ecosystem dedicated to fulfilling MENA users' evolving online social networking and gaming needs. Through its holding subsidiary, Yalla Game Limited, the Company has expanded its capabilities in mid-core and hard-core games in the MENA region, leveraging its local expertise to bring innovative gaming content to its users. In addition, the growing Yalla ecosystem includes YallaChat, an IM product tailored for Arabic users, WeMuslim, a product that supports Arabic users in observing their customs, and casual games such as Yalla Baloot and 101 Okey Yalla, developed to sustain vibrant local gaming communities in MENA. Yalla is also actively exploring outside of MENA with Yalla Parchis, a Ludo game designed for the South American markets. Yalla's mobile applications deliver a seamless experience that fosters a sense of loyalty and belonging, establishing highly devoted and engaged user communities through close attention to detail and localized appeal that profoundly resonates with users.
For more information, please visit: https://ir.yalla.com.
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the
For investor and media inquiries, please contact:
Yalla Group Limited
Investor Relations
Kerry Gao - IR Director
Tel: +86-571-8980-7962
Email: ir@yalla.com
Piacente Financial Communications
Jenny Cai
Tel: +86-10-6508-0677
Email: yalla@tpg-ir.com
In
Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
Email: yalla@tpg-ir.com
YALLA GROUP LIMITED | ||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
As of | ||||
December 31, | March 31, | |||
US$ | US$ | |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | 488,379,894 | 432,442,016 | ||
Restricted cash | 1,975,616 | 1,588,721 | ||
Term deposits | 94,983,813 | 149,053,415 | ||
Short-term investments | 70,932,713 | 107,845,724 | ||
Prepayments and other current assets | 35,429,988 | 38,413,577 | ||
Total current assets | 691,702,024 | 729,343,453 | ||
Non-current assets | ||||
Property and equipment, net | 13,962,393 | 13,953,921 | ||
Intangible asset, net | 896,005 | 833,164 | ||
Operating lease right-of-use assets | 1,370,914 | 1,347,499 | ||
Long-term investments | 93,698,924 | 80,595,446 | ||
Total non-current assets | 109,928,236 | 96,730,030 | ||
Total assets | 801,630,260 | 826,073,483 | ||
LIABILITIES | ||||
Current liabilities | ||||
Accounts payable | 957,717 | 845,583 | ||
Deferred revenue, current | 58,081,649 | 58,754,143 | ||
Operating lease liabilities, current | 1,012,481 | 622,437 | ||
Amounts due to a related party | 87,156 | 73,809 | ||
Income taxes payable | 9,117,261 | 9,231,811 | ||
Accrued expenses and other current liabilities | 32,404,872 | 19,881,768 | ||
Total current liabilities | 101,661,136 | 89,409,551 | ||
Non-current liabilities | ||||
Deferred revenue, non-current | — | 2,360,530 | ||
Operating lease liabilities, non-current | 13,495 | 162,114 | ||
Deferred tax liabilities | 2,148,022 | 2,370,679 | ||
Total non-current liabilities | 2,161,517 | 4,893,323 | ||
Total liabilities | 103,822,653 | 94,302,874 | ||
EQUITY | ||||
Shareholders' equity of Yalla Group Limited | ||||
Class A Ordinary Shares | 14,064 | 14,064 | ||
Class B Ordinary Shares | 2,473 | 2,473 | ||
Additional paid-in capital | 328,883,061 | 331,630,155 | ||
Treasury stock | (49,438,661) | (51,689,263) | ||
Accumulated other comprehensive loss | (3,016,579) | (2,950,893) | ||
Retained earnings | 427,907,766 | 462,020,332 | ||
Total shareholders' equity of Yalla Group Limited | 704,352,124 | 739,026,868 | ||
Non-controlling interests | (6,544,517) | (7,256,259) | ||
Total equity | 697,807,607 | 731,770,609 | ||
Total liabilities and equity | 801,630,260 | 826,073,483 |
YALLA GROUP LIMITED | ||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS | ||||||
OF OPERATIONS | ||||||
Three Months Ended | ||||||
March 31, | December 31, | March 31, | ||||
US$ | US$ | US$ | ||||
Revenues | 78,728,578 | 90,827,754 | 83,876,767 | |||
Costs and expenses | ||||||
Cost of revenues | (28,571,261) | (31,044,004) | (29,200,423) | |||
Selling and marketing expenses | (8,099,936) | (7,403,643) | (6,943,268) | |||
General and administrative expenses | (6,647,892) | (13,066,301) | (8,695,308) | |||
Technology and product development expenses | (6,262,254) | (9,178,864) | (7,828,137) | |||
Total costs and expenses | (49,581,343) | (60,692,812) | (52,667,136) | |||
Operating income | 29,147,235 | 30,134,942 | 31,209,631 | |||
Interest income | 6,644,884 | 7,101,823 | 6,561,180 | |||
Government grants | 67,332 | 360,194 | 63,433 | |||
Investment loss | (1,288,127) | (1,711,657) | (17,702) | |||
Income before income taxes | 34,571,324 | 35,885,302 | 37,816,542 | |||
Income tax expense | (3,483,208) | (3,354,580) | (1,437,077) | |||
Net income | 31,088,116 | 32,530,722 | 36,379,465 | |||
Net loss attributable to non-controlling interests | 505,987 | 60,763 | 711,935 | |||
Net income attributable to Yalla Group | 31,594,103 | 32,591,485 | 37,091,400 | |||
Earnings per ordinary share | ||||||
——Basic | 0.20 | 0.20 | 0.23 | |||
——Diluted | 0.17 | 0.18 | 0.20 | |||
Weighted average number of shares | ||||||
——Basic | 160,379,455 | 159,672,548 | 159,186,659 | |||
——Diluted | 183,260,168 | 182,474,460 | 182,187,686 | |||
Share-based compensation was allocated in cost of revenues, selling and marketing expenses, general and administrative expenses and | ||||||
Three Months Ended | ||||||
March 31, | December 31, | March 31, | ||||
US$ | US$ | US$ | ||||
Cost of revenues | 1,902,717 | 1,582,874 | 1,326,085 | |||
Selling and marketing expenses | 700,115 | 179,964 | 171,028 | |||
General and administrative expenses | 1,333,314 | 1,236,586 | 1,130,507 | |||
Technology and product development expenses | 262,731 | 173,063 | 119,474 | |||
Total share-based compensation expenses | 4,198,877 | 3,172,487 | 2,747,094 |
YALLA GROUP LIMITED | ||||||
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS | ||||||
Three Months Ended | ||||||
March 31, | December 31, | March 31, | ||||
US$ | US$ | US$ | ||||
Operating income | 29,147,235 | 30,134,942 | 31,209,631 | |||
Share-based compensation expenses | 4,198,877 | 3,172,487 | 2,747,094 | |||
Non-GAAP operating income | 33,346,112 | 33,307,429 | 33,956,725 | |||
Net income | 31,088,116 | 32,530,722 | 36,379,465 | |||
Share-based compensation expenses, | 4,198,877 | 3,172,487 | 2,747,094 | |||
Non-GAAP net income | 35,286,993 | 35,703,209 | 39,126,559 | |||
Net income attributable to Yalla | 31,594,103 | 32,591,485 | 37,091,400 | |||
Share-based compensation expenses, | 4,198,877 | 3,172,487 | 2,747,094 | |||
Non-GAAP net income attributable to | 35,792,980 | 35,763,972 | 39,838,494 | |||
Non-GAAP earnings per ordinary share | ||||||
——Basic | 0.22 | 0.22 | 0.25 | |||
——Diluted | 0.20 | 0.20 | 0.22 | |||
Weighted average number of shares | ||||||
——Basic | 160,379,455 | 159,672,548 | 159,186,659 | |||
——Diluted | 183,260,168 | 182,474,460 | 182,187,686 |
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SOURCE Yalla Group Limited