XD Inc. 2025 Annual Report

Key insights

6 takeaways

01
XD Inc. achieved a 15% year-over-year revenue increase to RMB 5.76 billion and an 86% surge in net profit to RMB 1.66 billion in 2025.See it on page 6
02
The company maintains a strong financial position with RMB 3.77 billion in liquidity, a 22.5% gearing ratio, and zero outstanding borrowings following the redemption of its 2021 convertible bonds.See it on page 178
03
Gross margins improved to 73.8%, driven by increased advertising efficiency and a dual-engine strategy leveraging the TapTap platform alongside self-developed titles like Ragnarok M: Classic and Etheria: Restart.See it on page 14
04
The firm manages its PRC-based consolidated affiliated entities through contractual arrangements, supported by rigorous internal audits and board oversight to address regulatory and tax risks.See it on page 129
05
Operational efficiency is bolstered by AI-driven developer tools and a workforce of 1,554 employees, with the company explicitly rejecting the '996' work culture to aid talent retention.See it on page 61
06
Corporate governance is managed via a five-tier structure and adherence to ISO 27001 standards for data security.See it on page 46

Summary

The 2025 Annual Report for XD Inc. details a year of significant financial expansion and operational maturation for the company, which operates primarily within the Chinese gaming and platform distribution sectors. The company’s primary thesis centers on the successful synergy between its self-developed game titles—such as Ragnarok M: Classic and Etheria: Restart—and the continued growth of its TapTap platform. This dual-engine strategy, bolstered by the strategic acquisition of the Torchlight IP, resulted in a 15% year-over-year revenue increase to RMB 5.76 billion and a substantial 86% rise in net profit to RMB 1.66 billion.

Financial stability remains a cornerstone of the company’s performance, characterized by a robust liquidity position of RMB 3.77 billion and a reduced gearing ratio of 22.5%. The firm maintains a healthy balance sheet with no outstanding borrowings, having successfully redeemed its 2021 convertible bonds. Profitability was further supported by an improved gross margin of 73.8%, driven by enhanced advertising efficiency and favorable revenue shifts. The company continues to utilize contractual arrangements to maintain control over its PRC-based consolidated affiliated entities, a structure it manages through rigorous internal audits and board oversight to mitigate regulatory and tax-related risks.

Corporate governance and environmental, social, and governance (ESG) standards are deeply integrated into the company’s operational framework. XD Inc. maintains a five-tier management structure and adheres to international standards like ISO 27001 for data security. The company emphasizes talent retention through share-based incentive schemes and maintains a workforce of 1,554 employees, while explicitly rejecting "996" work culture. Although the company has not established quantifiable climate targets due to the lack of high-emission assets, it continues to monitor greenhouse gas emissions and implement energy-efficient infrastructure. Overall, the report reflects a company focused on sustainable growth, technological integration—specifically through AI-driven developer tools—and strict regulatory compliance.