Yalla Group (YALA.US), the largest online social networking and gaming company in the Middle East and North Africa (MENA) region, has announced its unaudited financial results for the first quarter ended March 31, 2026. Revenue for the quarter reached $79 million, surpassing market consensus, compared to $83.9 million in the same period last year. Net income was $28.4 million, down from $36.4 million a year earlier, resulting in a net profit margin of 35.9%. The year-over-year decline in revenue was primarily attributed to a reduction in the number of paying users, influenced by recent regional geopolitical events.
The company reported a Non-GAAP net income of $33.3 million for the first quarter, compared to $39.1 million in the prior-year period. The Non-GAAP net profit margin stood at 42.1%. Basic and diluted earnings per ordinary share were $0.19 and $0.16, respectively, compared to $0.23 and $0.20 in the first quarter of 2025.
First-quarter revenue from chat services amounted to $48.1 million, while game services revenue was $30.3 million. Average monthly active users (MAUs) increased by 7.7% year-over-year to 48 million, up from 44.6 million. However, the number of paying users declined to 10.5 million from 11.8 million in the same quarter last year.
As of March 31, 2026, the company held cash and cash equivalents, restricted funds, term deposits, and short-term investments totaling $806.7 million, compared to $754.6 million as of December 31, 2025.
Looking ahead, for the second quarter of 2026, the company expects revenue to be in the range of $75 million to $82 million. In after-hours trading, the stock was down 2.51% to $6.60.
Mr. Tao Yang, Founder, Chairman, and CEO of Yalla Group, commented, "Despite the impact of a changing macro environment and the Ramadan period, the company delivered a resilient performance in the first quarter. Through refined operations and focused market execution, we grew our average MAUs by 7.7% year-over-year to 48 million, demonstrating significant expansion in user reach and engagement. Our core product ecosystem remained robust, and the gaming business further solidified its role as a key growth engine. We continue to increase investment in mid-core and hardcore games. The early feedback for our officially launched SLG game has been encouraging, and progress on 'Turbo Match' is on track."
"Furthermore, we have enhanced our regional influence through strategic partnerships and high-profile industry events. As part of our collaboration with the Saudi Esports Federation, we acted as the title partner for the 'Yalla Saudi Women's Esports League 2026' in April, supporting increased female participation in esports and exploring significant growth opportunities in this strategic market. Moving forward, we will continue to leverage the synergies between our social and gaming ecosystems and strengthen our AI capabilities to enrich the user experience, extend user lifetime value, and improve operational leverage. We are confident in our resilience and ability to capture market opportunities, committed to creating sustainable value for all stakeholders."
Ms. Karen Hu, CFO of Yalla Group, added, "In the first quarter, we remained focused on enhancing efficiency and pursuing high-quality growth. Total operating revenue was $79 million, in line with expectations, with game services revenue increasing to $30.3 million, accounting for 38.3% of total revenue. Net income was $28.4 million, and Non-GAAP net income was $33.3 million, representing a net profit margin of 42.1%. Supported by a strong balance sheet and healthy cash flow, we will continue to deliver returns to shareholders while making strategic business investments to drive high-quality growth and long-term value creation."
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