On March 30, 2026, Hong Kong-listed gaming company IDREAMSKY (01119.HK) released its full-year 2025 financial results. The report showed the company achieved annual revenue of 1.338 billion yuan, marking a record low since its listing and representing the third consecutive year of decline.
In stark contrast to the revenue trend, the company successfully achieved a critical turnaround to profitability. It reported a net profit of 19.92 million yuan, with an adjusted net profit reaching 201 million yuan. Operating cash flow remained positive with a net inflow of 67.27 million yuan. This performance of "lowest revenue yet turning profitable" reflects the outcomes of IDREAMSKY's strategic focus and product transformation.
Revenue has declined for three consecutive years, hitting a new record low. The financial report indicates that IDREAMSKY's revenue for 2025 was 1.338 billion yuan, a decrease of approximately 20.7% year-on-year. Previously, the company's revenue had fallen continuously from around 2.4 billion yuan in 2022 to approximately 1.69 billion yuan in 2024, and in 2025, it dropped further below the 1.4 billion yuan mark.
The primary reason for the revenue decline was an active adjustment of the product portfolio. In terms of business composition, gaming operations contributed 97.5% of the company's revenue, amounting to 1.305 billion yuan. The company explained that the revenue decrease was mainly due to products like "Glory All-Star" entering the later stages of their lifecycle, leading to a significant reduction in revenue contribution. Concurrently, the company "cut the weeds and roots," proactively scaling back some non-core businesses to concentrate resources on the development and operation of its self-developed flagship product, "Kala Biu."
Notably, despite the overall revenue decline, the company's gross profit increased by 24.74% year-on-year to 532 million yuan. The gross profit margin improved from about 34.5% in the same period of 2024 to 39.8% in 2025. This significant improvement in gross margin indicates that the company has abandoned inefficient operations, and its revenue structure is shifting towards higher-margin products.
"Kala Biu" Takes the Lead: Slight MAU Growth but Soaring Revenue. The highlight of IDREAMSKY's 2025 performance was undoubtedly the entry of its self-developed flagship product, "Kala Biu," into the commercial harvest phase. This "anime-style + shooter" product, refined over six years, delivered impressive results in 2025 thanks to its unique differentiated positioning.
Data from the interim report showed that in the first half of 2025, for the PC version of "Kala Biu," while monthly active users increased by only 9.9%, revenue surged by 74.8%. The paying rate and average spending per monthly active user increased by 23.2% and 59%, respectively. This signifies a significant enhancement in users' willingness to pay within the game, effectively validating the product's commercial model.
In the second half of the year, with the official launch of the "Kala Biu" mobile version in November 2025, the product's popularity climbed further. CEO Chen Xiangyu revealed in an interview that the mobile game surpassed 1 million daily active users on its launch weekend, with 80% coming from Android devices. More notably, the mobile launch did not cannibalize the PC user base; instead, it drove PC user activity to a new annual high, with an overlap rate between PC and mobile users of only 10%-20%.
In early 2026, the PC version of "Kala Biu" saw a 40% year-on-year increase in average daily active users, a 90% year-on-year increase in monthly revenue, and a 73.8% increase in monthly ARPU. Currently, the product's official Bilibili fan count has exceeded 1 million, placing it in the top tier of domestic anime-style shooters.
Established titles maintained stable operations, with evergreen games continuing to provide steady contributions. While self-developed products gained traction, IDREAMSKY's long-standing evergreen games, operated for many years, continued to deliver stable performance, providing the company with consistent cash flow support.
"Subway Surfers," a classic title operating for over 13 years, saw its paying rate increase by nearly 30% in 2025 compared to 2024. Its original IP "Shan Shan" has accumulated a large fan base, successfully expanding monetization channels beyond the game. "Gardenscapes" experienced an average spending per monthly active user increase of over 9% year-on-year, indicating continuous enhancement of user value. "War Robots," newly introduced in 2024, firmly held a leading position in the domestic mecha-themed shooter category, with its Fanbook community user base growing 36.6% quarter-on-quarter. "Shop Titans," leveraging its creator ecosystem and collection/development gameplay, maintained an average user daily online time exceeding two hours.
Furthermore, "Delta Action," co-developed with Tencent, surpassed 20 million daily active users in July 2025, entering the top tier in China for both DAU and revenue. The success of this product not only brought substantial revenue sharing for the company but also further validated IDREAMSKY's development and operational capabilities in the shooter genre.
Profit Turns Positive: From "Burn-rate R&D" to "Value Realization." IDREAMSKY's ability to achieve profitability in 2025 stemmed primarily from significant optimization on the cost side. The company's annual R&D expenditure decreased year-on-year, mainly because "Kala Biu" had transitioned from the investment phase to the commercialization stage. Simultaneously, the company implemented refined cost control measures, leading to a year-on-year reduction in related expenses.
The deep application of AI technology became a key driver for improving quality and efficiency. The financial report indicated that the company deployed advanced large language models applied to areas such as art asset generation, multi-language localization, code assistance, and user insights. This boosted overall R&D efficiency by over 30%, with significant improvements in code quality and game quality. An AI customer service system now covers multiple platforms, and a knowledge base built in collaboration with Alibaba's Tongyi enables self-resolution for 75% of high-frequency issues, reducing manual intervention by 40% while achieving an accuracy rate of 93%.
Financially, the company's adjusted net profit for the first half of 2025 was 95.14 million yuan, a surge of 188.7% year-on-year. The full-year adjusted net profit reached 201 million yuan, indicating further enhancement of profitability in the second half. The sustained positive operating cash flow of 67.27 million yuan provides stable cash flow support for future product investments.
Future Outlook: From "PC-Mobile Synergy" to "IP Ecosystem." Looking ahead to 2026, IDREAMSKY's product pipeline and strategic layout remain points of interest. On the product front, "Kala Biu" will continue to advance integrated PC-mobile operations. The company plans major promotional campaigns towards the end of the year, timed with updates like character lounges and new character releases. The PC version of "War Robots" is scheduled for launch in the summer of 2026, and the content ecosystem for "Shop Titans" will be continuously enriched.
In terms of publishing, several overseas quality games like "Rush Heroes" and "Phantom Spirits Battle" are progressing smoothly and are expected to further diversify revenue sources. Regarding IP ecosystem development, the company continues to deepen AI applications. The original IP "Shan Shan" from "Subway Surfers" and the over twenty characters from "Kala Biu" have amassed substantial fan bases, paving the way for monetization channels beyond the games themselves.
CEO Chen Xiangyu stated in an interview that the company's mindset has shifted from past anxiety to a steady "take it slow" rhythm, noting that "the products have achieved a positive cycle, finally passing the survival test." For IDREAMSKY, record-low revenue might not necessarily be a bad thing. After a "cutting the arm to save the body" focus on its core strengths, the company is now proving its value through profitability.
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