XD Inc. 2026 Interim Report

Key insights

7 takeaways

01
XD Inc. reported a 7.5% year-over-year revenue increase to RMB 3.31 billion for the first half of 2026, driven by an 11.9% growth in its core gaming segment.See it on page 11
02
Net profit declined 10.6% to RMB 724.3 million, primarily due to increased R&D spending on AI, higher distribution commissions, and a one-time RMB 96.7 million tax payment.See it on page 14
03
International markets have overtaken domestic operations to become the primary driver of the company's game operating income.See it on page 11
04
The company maintains a strong financial position with RMB 3.78 billion in cash and cash equivalents, total assets of RMB 5.52 billion, and a stable gearing ratio of 22.5%.See it on page 53
05
Strategic focus has shifted toward AI integration, highlighted by the development of the TapTap Maker game creation agent.See it on page 8
06
The TapTap platform continues to demonstrate stable performance while expanding its presence in the PC market.See it on page 9
07
XD Inc. supports its workforce of 1,532 employees through equity-based compensation structures, including Restricted Share Units and share option plans, to ensure talent retention.See it on page 24

Summary

XD Inc. demonstrates a period of strategic transition and financial resilience during the first half of 2026. The company achieved a 7.5% year-over-year revenue increase to RMB 3.31 billion, bolstered by an 11.9% growth in its core gaming segment. Notably, international markets have become the primary driver of game operating income, signaling a successful expansion beyond domestic borders. While the TapTap platform maintains stable performance and an expanding PC presence, the company is aggressively pivoting toward artificial intelligence integration, exemplified by the development of the TapTap Maker game creation agent.

Despite top-line growth, net profit declined by 10.6% to RMB 724.3 million. This contraction is attributed to elevated operating expenses, specifically increased research and development investment in AI, higher distribution commissions, and a one-time supplementary tax payment of RMB 96.7 million. Nevertheless, the company maintains a robust liquidity position with RMB 3.78 billion in cash and cash equivalents. Financial stability is further underscored by total assets of RMB 5.52 billion and a consistent gearing ratio of 22.5%, providing the necessary capital to sustain operations and ongoing share repurchase programs.

Corporate governance remains a priority, with the company adhering to strict regulatory standards, including PRC anti-addiction laws. To ensure long-term talent retention and alignment with shareholder interests, the company continues to utilize sophisticated equity-based compensation structures, including Restricted Share Units and share option plans. With 1,532 employees and a clear focus on technological innovation, the company is positioning itself to navigate rising operational costs while leveraging its platform ecosystem to capture future growth in the global gaming market.