Yalla Group Limited Announces Unaudited Second Quarter 2026 Financial Results

    0
    9

    DUBAI, UAE, Aug. 18, 2026 /PRNewswire/ — Yalla Group Limited (“Yalla” or the “Company”) (NYSE: YALA), the largest Middle East and North Africa (MENA)-based online social networking and gaming company, today announced its unaudited financial results for the second quarter ended June 30, 2026.

    Second Quarter 2026 Financial and Operating Highlights

    • Revenues were US$82.6 million in the second quarter of 2026, compared with US$84.6 million in the second quarter of 2025.
      • Revenues generated from chatting services in the second quarter of 2026 were US$47.4 million.
      • Revenues generated from games services in the second quarter of 2026 were US$34.2 million.
    • Net income was US$29.3 million in the second quarter of 2026, compared with US$36.5 million in the second quarter of 2025. Net margin[1] was 35.5% in the second quarter of 2026.
    • Non-GAAP net income[2] was US$34.4 million in the second quarter of 2026, compared with US$39.4 million in the second quarter of 2025. Non-GAAP net margin[3] was 41.7% in the second quarter of 2026.
    • Average MAUs[4] increased by 12.3% to 47.6 million in the second quarter of 2026, compared with 42.4 million in the second quarter of 2025.
    • The number of paying users[5] was 10.9 million in the second quarter of 2026, compared with 11.2 million in the second quarter of 2025.

    Key Operating Data

    For the three months ended

    June 30, 2025

    June 30, 2026

    Average MAUs (in thousands)

    42,421

    47,625

    Paying users (in thousands)

    11,186

    10,861

    [1] Net margin is net income as a percentage of revenues.

    [2] Non-GAAP net income represents net income excluding share-based compensation. Non-GAAP net income is a non-GAAP financial measure. See the sections titled “Non-GAAP Financial Measures” and “Reconciliations of GAAP and Non-GAAP Results” for more information about the non-GAAP measures referred to in this press release.

    [3] Non-GAAP net margin is non-GAAP net income as a percentage of revenues.

    [4] “Average MAUs” refers to the average monthly active users in a given period, calculated by dividing (i) the sum of active users for each month of such period by (ii) the number of months in such period. “Active users” refers to registered users who accessed any of our main mobile applications at least once during a given period; main mobile applications are mobile applications that have exceeded the 0.5 million average MAUs threshold at least once.

    [5] “Paying users” refers to registered users who played a game or purchased our virtual items or upgraded services using virtual currencies on our main mobile applications at least once in a given period, except for users who received all of their virtual currencies directly or indirectly from us for free. “Registered users” refers to users who have registered accounts on our main mobile applications as of a given time; a registered user is not necessarily a unique user, as an individual may register multiple accounts on our main mobile applications.

    “We delivered solid results across our flagship products and growing momentum in our gaming business in the second quarter of 2026,” said Mr. Tao Yang, Founder, Chairman and CEO of Yalla. “Our revenues exceeded the upper end of our guidance, driven by an 11.6% year-over-year increase in revenues from games services. Meanwhile, our core products continued to build momentum, with refined operations and targeted marketing driving a sequential rebound in paying users for Yalla Ludo and a 12.3% year-over-year increase in overall average MAUs to 47.6 million.

    “Beyond the sustained strength of our flagship products, we made progress in expanding our gaming ecosystem. Our new games, including our first self-developed match-3 title and desert-themed SLG title, continued to advance smoothly with a clear roadmap taking shape for the next stage of development. We also continued to strengthen our pipeline of self-developed products, spanning casual games, hyper-casual games, social products and AI applications, designed to maximize the synergy between our social and gaming ecosystems. Building on years of deep-rooted expertise in MENA, we will continue to unlock local opportunities and broaden our reach globally through strategic partnerships to deliver sustainable growth for our shareholders.”

    Ms. Karen Hu, CFO of Yalla, commented, “In the second quarter of 2026, we continued to pursue high-quality development while maintaining solid profitability. Total revenues were US$82.6 million, with revenues from games services growing to US$34.2 million, increasing the segment’s contribution to 41.4%. While doubling our selling and marketing expenses year over year to support the promotion of new products, we maintained a healthy non-GAAP net margin of 41.7% through increased efficiency. Our balance sheet and cash flow remain ample to support our investments in business expansion as well as consistent shareholder returns. Going forward, we will continue to invest in long-term growth while driving value creation.”

    Second Quarter 2026 Financial Results

    Revenues

    Revenues were US$82.6 million in the second quarter of 2026, compared with US$84.6 million in the second quarter of 2025, primarily due to a decrease in paying users attributable to the impact of recent geopolitical events in the broader region, partially offset by an increase in revenues from games services.

    In the second quarter of 2026, revenues generated from chatting services were US$47.4 million, and revenues from games services were US$34.2 million.

    Costs and expenses

    Total costs and expenses were US$63.2 million in the second quarter of 2026, compared with US$53.9 million in the second quarter of 2025.

    Cost of revenues was US$26.8 million in the second quarter of 2026, a 4.1% decrease from US$27.9 million in the second quarter of 2025, primarily due to lower commission fees paid to third-party payment platforms. Cost of revenues as a percentage of total revenues decreased to 32.4% in the second quarter of 2026 from 33.0% in the second quarter of 2025.

    Selling and marketing expenses were US$17.8 million in the second quarter of 2026, a 106.0% increase from US$8.7 million in the second quarter of 2025, primarily due to higher advertising and market promotion expenses attributable to the Company’s continued user acquisition efforts and support for new games. Selling and marketing expenses as a percentage of total revenues increased to 21.6% in the second quarter of 2026 from 10.2% in the second quarter of 2025.

    General and administrative expenses were US$8.6 million in the second quarter of 2026, a 4.0% decrease from US$9.0 million in the second quarter of 2025, primarily due to a decrease in incentive compensation, partially offset by an increase in foreign exchange loss. General and administrative expenses as a percentage of total revenues slightly decreased to 10.5% in the second quarter of 2026 from 10.6% in the second quarter of 2025.

    Technology and product development expenses were US$9.9 million in the second quarter of 2026, an 18.9% increase from US$8.3 million in the second quarter of 2025, primarily due to an increase in salaries and benefits for our technology and product development staff, driven by an increase in headcount to support the development of new businesses and our product portfolio expansion. Technology and product development expenses as a percentage of total revenues increased to 12.0% in the second quarter of 2026 from 9.9% in the second quarter of 2025.

    Operating income

    Operating income was US$19.4 million in the second quarter of 2026, compared with US$30.6 million in the second quarter of 2025.

    Non-GAAP operating income[6]

    Non-GAAP operating income in the second quarter of 2026 was US$24.5 million, compared with US$33.5 million in the second quarter of 2025.

    Interest income

    Interest income was US$5.4 million in the second quarter of 2026, compared with US$6.8 million in the second quarter of 2025.

    Investment income

    Investment income was US$5.1 million in the second quarter of 2026, compared with US$0.02 million in the second quarter of 2025, primarily due to changes in the fair value of wealth management products.

    Income tax expense

    Income tax expense was US$0.6 million in the second quarter of 2026, compared with US$1.5 million in the second quarter of 2025.

    Net income

    Net income was US$29.3 million in the second quarter of 2026, compared with US$36.5 million in the second quarter of 2025.

    Non-GAAP net income

    Non-GAAP net income in the second quarter of 2026 was US$34.4 million, compared with US$39.4 million in the second quarter of 2025.

    Earnings per ordinary share

    Basic and diluted earnings per ordinary share were US$0.21 and US$0.18, respectively, in the second quarter of 2026, while basic and diluted earnings per ordinary share were US$0.24 and US$0.20, respectively, in the second quarter of 2025.

    Non-GAAP earnings per ordinary share[7]

    Non-GAAP basic and diluted earnings per ordinary share were US$0.24 and US$0.21, respectively, in the second quarter of 2026, compared with US$0.25 and US$0.22, respectively, in the second quarter of 2025.

    Cash and cash equivalents, restricted cash, term deposits and short-term investments

    As of June 30, 2026, the Company had cash and cash equivalents, restricted cash, term deposits and short-term investments of US$824.2 million, compared with US$754.6 million as of December 31, 2025.

    [6] Non-GAAP operating income represents operating income excluding share-based compensation. Non-GAAP operating income is a non-GAAP financial measure. See the sections titled “Non-GAAP Financial Measures” and “Reconciliations of GAAP and Non-GAAP Results” for more information about the non-GAAP measures referred to in this press release.             

    [7] Non-GAAP earnings per ordinary share is non-GAAP net income attributable to Yalla Group Limited’s shareholders, divided by the weighted average number of basic and diluted shares outstanding. Non-GAAP net income attributable to Yalla Group Limited’s shareholders represents net income attributable to Yalla Group Limited’s shareholders, excluding share-based compensation. Non-GAAP earnings per ordinary share and non-GAAP net income attributable to Yalla Group Limited’s shareholders are non-GAAP financial measures. See the sections titled “Non-GAAP Financial Measures” and “Reconciliations of GAAP and Non-GAAP Results” for more information about the non-GAAP measures referred to in this press release.

    Share Repurchase Program

    Under the Company’s two share repurchase programs launched in 2021 and 2026 (the “2021 Program” and the “2026 Program”), the Company repurchased 4,357,024 American depositary shares (“ADSs”), representing 4,357,024 Class A ordinary shares, for an aggregate amount of approximately US$27.6 million in the first half of 2026. Of this number, 2,896,035 ADSs, representing 2,896,035 Class A ordinary shares, were repurchased during the second quarter of 2026, for an aggregate amount of approximately US$18.0 million.

    The 2021 Program expired on May 21, 2026. Under the 2021 Program, the Company was authorized to repurchase up to US$150 million worth of its outstanding ADSs and/or Class A ordinary shares, and the Company repurchased a cumulative total of 18,762,758 ADSs, representing 18,762,758 Class A ordinary shares, from the open market with cash for an aggregate amount of approximately US$126.5 million.

    In addition, the Company had cancelled 12,734,059 ADSs, representing 12,734,059 Class A ordinary shares, as of August 14, 2026. The Company will continue executing its 2026 Program, under which the Company may repurchase up to US$150 million worth of its outstanding ADSs and/or Class A ordinary shares over the 24 months starting from March 9, 2026.

    Outlook

    For the third quarter of 2026, Yalla currently expects revenues to be between US$78.0 million and US$85.0 million.

    The above outlook is based on current market conditions and reflects the Company management’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

    Conference Call

    Yalla Group Limited will hold a conference call on Monday, August 17, 2026, at 8:00 PM Eastern Time, 4:00 AM Dubai Time on Tuesday, August 18, 2026, or 8:00 AM Beijing Time on Tuesday, August 18, 2026, to discuss the financial results.

    Participants should complete online registration using the link provided below before the scheduled start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, a personal PIN and an e-mail with detailed instructions to join the conference call.

    Event Title:               Yalla Group Ltd. Second Quarter 2026 Earnings Conference Call
    Registration Link:     https://register-conf.media-server.com/register/BIa9b95130104d40aa9a598586197e750b

    Additionally, a live webcast of the conference call will be available on the Company’s investor relations website at https://ir.yalla.com, and a replay of the webcast will be available following the session.

    Non-GAAP Financial Measures

    To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States, or GAAP, this press release presents non-GAAP financial measures, namely non-GAAP operating income, non-GAAP net income, non-GAAP net margin and non-GAAP basic and diluted earnings per ordinary share, as supplemental measures to review and assess the Company’s operating performance. The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define non-GAAP operating income as operating income excluding share-based compensation. We define non-GAAP net income as net income excluding share-based compensation. We define non-GAAP net margin as non-GAAP net income as a percentage of revenues. We define non-GAAP net income attributable to Yalla Group Limited’s shareholders as net income attributable to Yalla Group Limited’s shareholders, excluding share-based compensation. We define non-GAAP earnings per ordinary share as non-GAAP net income attributable to Yalla Group Limited’s shareholders, divided by the weighted average number of basic and diluted shares outstanding.

    By excluding the impact of share-based compensation expenses, which are non-cash charges, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company’s past performance and future prospects. Investors can better understand the Company’s operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess its core operating results, as they exclude share-based compensation expenses, which are not expected to result in cash payments. The Company also believes that the non-GAAP financial measures allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.

    The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using the non-GAAP financial measures is that they do not reflect all items of income and expense that affect the Company’s operations. Share-based compensation has been and may continue to be incurred in the Company’s business and is not reflected in the presentation of non-GAAP financial measures. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

    The Company compensates for these limitations by providing the relevant disclosure of its non-GAAP financial measures in the reconciliations to the nearest U.S. GAAP performance measures, all of which should be considered when evaluating its performance. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

    Reconciliations of GAAP and non-GAAP results are set forth at the end of this press release.

    About Yalla Group Limited

    Yalla Group Limited is the largest MENA-based online social networking and gaming company, in terms of revenues in 2022. The Company operates two flagship mobile applications, Yalla, a voice-centric group chat platform, and Yalla Ludo, a casual gaming application featuring online versions of board games, popular in MENA, with in-game voice chat and localized Majlis functionality. Building on the success of Yalla and Yalla Ludo, the Company continues to add engaging new content, creating a regionally-focused, integrated ecosystem dedicated to fulfilling MENA users’ evolving online social networking and gaming needs. Through its holding subsidiary, Yalla Game Limited, the Company has expanded its capabilities in mid-core and hard-core games in the MENA region, leveraging its local expertise to bring innovative gaming content to its users. In addition, the growing Yalla ecosystem includes YallaChat, an IM product tailored for Arabic users, and casual games such as Yalla Baloot and 101 Okey Yalla, developed to sustain vibrant local gaming communities in MENA. Yalla is also actively exploring outside of MENA with Yalla Parchis, a Ludo game designed for the South American markets. Yalla’s mobile applications deliver a seamless experience that fosters a sense of loyalty and belonging, establishing highly devoted and engaged user communities through close attention to detail and localized appeal that profoundly resonates with users.

    For more information, please visit: https://ir.yalla.com.

    Safe Harbor Statement

    This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to” and similar statements. Statements that are not historical facts, including statements about Yalla Group Limited’s beliefs, plans and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in Yalla Group Limited’s filings with the SEC. All information provided in this press release is as of the date of this press release, and Yalla Group Limited does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

    For investor and media inquiries, please contact:

    Yalla Group Limited
    Investor Relations
    Kerry Gao – IR Director
    Tel: +86-571-8980-7962
    Email: ir@yalla.com

    Piacente Financial Communications
    Jenny Cai
    Tel: +86-10-6508-0677
    Email: yalla@tpg-ir.com

    In the United States:

    Piacente Financial Communications
    Brandi Piacente
    Tel: +1-212-481-2050
    Email: yalla@tpg-ir.com

    YALLA GROUP LIMITED

    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

    As of

    December 31,
    2025

    June 30,
    2026

    US$

    US$

    ASSETS

    Current assets

    Cash and cash equivalents

    526,972,019

    268,371,117

    Restricted cash

    1,625,525

    1,797,132

    Term deposits

    84,800,000

    217,427,135

    Short-term investments

    141,251,128

    336,596,144

    Prepayments and other current assets

    41,659,226

    31,167,184

    Total current assets

    796,307,898

    855,358,712

    Non-current assets

    Property and equipment, net

    14,976,818

    15,146,724

    Intangible asset, net

    728,348

    663,976

    Operating lease right-of-use assets

    1,902,655

    4,840,602

    Long-term investments

    82,053,772

    57,821,227

    Other assets

    250,000

    858,516

    Total non-current assets

    99,911,593

    79,331,045

    Total assets

    896,219,491

    934,689,757

    LIABILITIES

    Current liabilities

    Accounts payable

    1,066,625

    1,059,103

    Deferred revenue, current

    55,178,093

    52,493,495

    Operating lease liabilities, current

    357,525

    1,781,737

    Amounts due to a related party

    44,177

    15,264

    Income taxes payable

    1,319,111

    2,325,945

    Accrued expenses and other current liabilities

    30,350,120

    25,363,411

    Total current liabilities

    88,315,651

    83,038,955

    Non-current liabilities

    Deferred revenue, non-current

    1,837,543

    1,453,259

    Operating lease liabilities, non-current

    1,095,245

    2,686,922

    Deferred tax liabilities

    2,924,137

    2,885,096

    Total non-current liabilities

    5,856,925

    7,025,277

    Total liabilities

    94,172,576

    90,064,232

    EQUITY

    Shareholders’ equity of Yalla Group Limited

    Class A Ordinary Shares

    13,441

    13,441

    Class B Ordinary Shares

    2,473

    2,473

    Additional paid-in capital

    339,199,644

    349,196,164

    Treasury stock

    (42,497,929)

    (66,242,824)

    Accumulated other comprehensive (loss) income

    (1,636,586)

    668,175

    Retained earnings

    515,197,658

    572,215,132

    Total shareholders’ equity of Yalla Group Limited

    810,278,701

    855,852,561

    Non-controlling interests

    (8,231,786)

    (11,227,036)

    Total equity

    802,046,915

    844,625,525

    Total liabilities and equity

    896,219,491

    934,689,757

    YALLA GROUP LIMITED

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS

    OF OPERATIONS

    Three Months Ended

    Six Months Ended

    June 30,
    2025

    March 31,
    2026

    June 30,
    2026

    June 30,
    2025

    June 30,
    2026

    US$

    US$

    US$

    US$

    US$

    Revenues

    84,564,086

    79,006,789

    82,608,696

    168,440,853

    161,615,485

    Costs and expenses

    Cost of revenues

    (27,944,596)

    (26,473,813)

    (26,802,984)

    (57,145,019)

    (53,276,797)

    Selling and marketing expenses

    (8,661,573)

    (9,722,665)

    (17,841,216)

    (15,604,841)

    (27,563,881)

    General and administrative expenses

    (9,002,347)

    (10,251,576)

    (8,642,276)

    (17,697,655)

    (18,893,852)

    Technology and product development expenses

    (8,338,195)

    (9,097,323)

    (9,915,355)

    (16,166,332)

    (19,012,678)

    Total costs and expenses

    (53,946,711)

    (55,545,377)

    (63,201,831)

    (106,613,847)

    (118,747,208)

    Operating income

    30,617,375

    23,461,412

    19,406,865

    61,827,006

    42,868,277

    Interest income

    6,791,492

    5,884,059

    5,446,054

    13,352,672

    11,330,113

    Government grants

    603,115

    67,165

    4,699

    666,548

    71,864

    Investment income (loss)

    21,758

    (432,522)

    5,090,505

    4,056

    4,657,983

    Income before income taxes

    38,033,740

    28,980,114

    29,948,123

    75,850,282

    58,928,237

    Income tax expense

    (1,531,310)

    (620,089)

    (619,210)

    (2,968,387)

    (1,239,299)

    Net income

    36,502,430

    28,360,025

    29,328,913

    72,881,895

    57,688,938

    Net loss attributable to non-controlling interests

    269,782

    575,459

    2,434,355

    981,717

    3,009,814

    Net income attributable to Yalla Group
    Limited’s shareholders

    36,772,212

    28,935,484

    31,763,268

    73,863,612

    60,698,752

    Earnings per ordinary share

    ——Basic

    0.24

    0.19

    0.21

    0.47

    0.40

    ——Diluted

    0.20

    0.16

    0.18

    0.41

    0.34

    Weighted average number of shares
    outstanding used in computing earnings per
    ordinary share

    ——Basic

    155,958,658

    152,975,006

    150,945,883

    157,604,992

    151,954,839

    ——Diluted

    180,765,359

    177,171,652

    175,048,711

    181,508,856

    176,104,576

    Share-based compensation was allocated in cost of revenues, selling and marketing expenses, general and administrative expenses and
    technology and product development expenses as follows:

    Three Months Ended

    Six Months Ended

    June 30,
    2025

    March 31,
    2026

    June 30,
    2026

    June 30,
    2025

    June 30,
    2026

    US$

    US$

    US$

    US$

    US$

    Cost of revenues

    1,328,152

    2,150,971

    2,391,819

    2,654,237

    4,542,790

    Selling and marketing expenses

    170,304

    440,566

    425,808

    341,332

    866,374

    General and administrative expenses

    1,328,931

    2,161,700

    2,097,097

    2,459,438

    4,258,797

    Technology and product development expenses

    20,670

    146,087

    182,472

    140,144

    328,559

    Total share-based compensation expenses

    2,848,057

    4,899,324

    5,097,196

    5,595,151

    9,996,520

    YALLA GROUP LIMITED

    RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

    Three Months Ended

    Six Months Ended

    June 30,
    2025

    March 31,
    2026

    June 30,
    2026

    June 30,
    2025

    June 30,
    2026

    US$

    US$

    US$

    US$

    US$

    Operating income

    30,617,375

    23,461,412

    19,406,865

    61,827,006

    42,868,277

    Share-based compensation expenses

    2,848,057

    4,899,324

    5,097,196

    5,595,151

    9,996,520

    Non-GAAP operating income

    33,465,432

    28,360,736

    24,504,061

    67,422,157

    52,864,797

    Net income

    36,502,430

    28,360,025

    29,328,913

    72,881,895

    57,688,938

    Share-based compensation expenses,
    net of tax effect of nil

    2,848,057

    4,899,324

    5,097,196

    5,595,151

    9,996,520

    Non-GAAP net income

    39,350,487

    33,259,349

    34,426,109

    78,477,046

    67,685,458

    Net income attributable to Yalla Group
    Limited’s shareholders

    36,772,212

    28,935,484

    31,763,268

    73,863,612

    60,698,752

    Share-based compensation expenses, net of
    tax effect of nil

    2,848,057

    4,899,324

    5,097,196

    5,595,151

    9,996,520

    Non-GAAP net income attributable to
    Yalla Group Limited’s shareholders

    39,620,269

    33,834,808

    36,860,464

    79,458,763

    70,695,272

    Non-GAAP earnings per ordinary share

    ——Basic

    0.25

    0.22

    0.24

    0.50

    0.47

    ——Diluted

    0.22

    0.19

    0.21

    0.44

    0.40

    Weighted average number of shares
    outstanding used in computing earnings
    per ordinary share

    ——Basic

    155,958,658

    152,975,006

    150,945,883

    157,604,992

    151,954,839

    ——Diluted

    180,765,359

    177,171,652

    175,048,711

    181,508,856

    176,104,576