XD Inc. Annual Results Announcement: 2022

Key insights

7 takeaways

01
XD Inc. reported 2022 total revenue of RMB 3.43 billion, a 26.9% increase driven by a 22% rise in game-related revenue from titles like Sausage Man, T3 Arena, and Torchlight: Infinite.See it on page 8
02
The company narrowed its net loss to RMB 574 million, representing a 37.4% improvement over the previous year through disciplined cost control and R&D optimization.See it on page 3
03
TapTap platform growth remained a key strategic pillar, with average monthly active users increasing by 31.3% during the year.See it on page 6
04
Operational streamlining led to a significant reduction in total headcount from 2,327 to 1,706 employees.See it on page 38
05
Management improved the gross margin to 53.5%, despite total expenses reaching RMB 4.04 billion due to personnel, marketing, and developer distribution costs.See it on page 11
06
The company maintains a gearing ratio of 60.3%, supported by USD 280 million in convertible bonds set to mature in 2026.See it on page 17
07
Future strategy focuses on launching new self-developed titles in China and integrating artificial intelligence and generated content technology to improve operational efficiency.See it on page 3

Summary

XD Inc. demonstrated significant operational growth throughout 2022, characterized by a 26.9 percent increase in total revenue to RMB 3.43 billion. This expansion was primarily fueled by a 22 percent rise in game-related revenue, bolstered by the performance of established titles like Sausage Man and the successful introduction of new games such as T3 Arena and Torchlight: Infinite. Simultaneously, the TapTap platform experienced a 31.3 percent increase in average monthly active users, reinforcing its role as a critical component of the company’s ecosystem.

Despite these revenue gains, the company remained in a net loss position, reporting a loss of RMB 574 million for the year. However, this figure represents a 37.4 percent improvement over the previous year, achieved through disciplined cost-control measures and the optimization of research and development investments. The company’s financial structure reflects a gearing ratio of 60.3 percent, supported by USD 280 million in convertible bonds maturing in 2026. Management successfully improved the gross margin to 53.5 percent, even as total expenses reached RMB 4.04 billion, largely driven by personnel costs, marketing expenditures, and developer distributions.

Strategic adjustments in 2022 included a reduction in total headcount from 2,327 to 1,706 employees to streamline operations. Looking forward, the company intends to prioritize the launch of new self-developed titles within the Chinese market while integrating artificial intelligence and generated content technology to drive further operational efficiency. Corporate governance remains stable, with the company maintaining compliance with standard accounting requirements and leadership structures, ensuring a consistent strategic direction as it navigates the competitive landscape of the global gaming industry.