Revenue for the quarter reached $89.6 million, up 0.8 % from $88.9 million a year earlier. The lift was driven by a $1.7 million increase in revenue from the company’s chatting services, which grew to $55.5 million, while its games segment added $33.8 million, a modest rise from $33.0 million in Q2. The mix shift toward higher‑margin chatting revenue helped offset a 1.4‑percentage‑point decline in the cost of revenue, which fell from 35.8 % to 31.7 % of total sales.
Net income climbed to $40.7 million, a 12.4 % year‑over‑year gain, and the net margin expanded to 45.4 % from 44.0 %. The margin growth reflects tighter cost control and a favorable product mix, but earnings per share of $0.24 fell short of the $0.25 consensus, a $0.01 miss. The shortfall is largely attributable to a $0.02 increase in selling, general and administrative expenses, driven by higher marketing spend to support new game launches and AI‑driven product enhancements.
The company’s average monthly active users reached 43.4 million, a 8.1 % increase from 40.0 million in Q2. Paying users, however, declined to 11.4 million from 12.6 million a year earlier, a 9.7 % drop. Management attributed the decline to a temporary slowdown in the monetization of its gaming portfolio, while noting that the overall user base growth provides a larger addressable market for future monetization initiatives.
Shareholder returns accelerated, with $51.9 million of share repurchases completed in 2025, exceeding the company’s $50 million annual commitment. Over 7.7 million ADS were repurchased and 6.2 million shares were cancelled, leaving 1.5 million ADS outstanding. The accelerated buyback signals management’s confidence in the company’s cash‑flow generation and a desire to enhance shareholder value.
For Q4, Yalla guided revenue to $78.0 million–$85.0 million, a sequential decline from Q3 but still within the company’s prior guidance range. CFO Karen Hu emphasized that the outlook reflects a cautious view of seasonal demand while maintaining confidence in cost discipline and margin expansion. CEO Tao Yang highlighted the company’s “continued operational efficiency” and the strategic importance of its AI‑driven platform, which underpins both its social and gaming ecosystems.
The quarter also marked the launch of Turbo Match, a match‑3 title that began soft‑launching on Android, and the announcement of a new roguelike and an SLG game in partnership with a leading studio. These moves reinforce Yalla’s strategy to broaden its gaming pipeline into mid‑core and hard‑core segments, positioning the company to capture higher‑margin revenue streams while leveraging its strong social user base.
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