Gamehaus Q2 FY2026 Earnings Call - Profitability Rebound While Topline Is Tactically Trimmed for Higher-Quality Growth

Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to Gamehaus second quarter of fiscal year 2026 earnings conference call. Currently, all participants are in listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we are recording today’s call. If you have any objections, you may disconnect at this time. I will now turn the call over to today’s Speaker Host, Miss Ally Wang. Ally, please proceed.

Ally Wang, Moderator/IR Lead, Gamehaus: Thank you, operator. Hello, everyone. Thank you all for joining us on today’s conference call to discuss the financial results of Gamehaus for the second quarter of fiscal year 2026. We released our earnings results earlier today. The press release is available on the company’s website as well as from newswire services. On the call with me today are Mr. Brian Xie Feng, Chairman of the Board, Mr. Carl Yimin Cai, Chief Executive Officer, and Mr. Sean Zhang, Head of Capital Markets and Investor Relations. Brian will review business operations and company highlights, followed by Sean, who will discuss detailed financial results. They will all be available to answer your questions during the Q&A session.

Before we proceed, I would like to remind you that this call may contain forward-looking statements which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our filings with the SEC. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, I would like to introduce our chairman, Feng Xie. Feng Xie will deliver his remarks in Chinese, and I will follow up with corresponding English translations. Please go ahead, Feng Xie. Good day everyone, and thank you for joining Gamehaus Earnings Conference Call for the second quarter of fiscal year 2026. This quarter marks a milestone for Gamehaus.

We have demonstrated to the market that the company is successfully navigating through its development cycle and completing the transition toward a sustainable growth model centered on efficiency and profitability. During the quarter, total revenue reached approximately $26.3 million, solidly at the upper end of our revenue forecast for the second quarter. What’s more encouraging is the significant improvement in our profitability. Net income grew approximately 151% year-over-year to about $0.9 million. Meanwhile, operating margin expanded significantly from 0.8% in the year ago period to 3.3%. This reflects our disciplined execution in optimizing our cost structure, refining user acquisition strategies, and focusing our product portfolio. On the expense side, we remain firmly focused on efficiency.

Selling and marketing expenses decreased approximately 18.4% year-over-year, including a roughly $2.1 million reduction in advertising spend. Facing the intensely competitive year-end promotional season, we avoided aggressively pursuing user volume and instead directed resources precisely toward activating and retaining high-value players through refined operations. This strategic decision delivered immediate results. Although overall user base pulled back in line with our adjusted spending, average revenue per daily active user, or ARPDAU, increased significantly year-over-year to $0.566, and our daily payer conversion rate rose from 2.1% to 2.5%. This demonstrates that we are unlocking significantly greater value from each active user.

Brian Xie Feng, Chairman of the Board, Gamehaus: 而在开源方面，我们在DTC渠道的突破正在重塑我们的利润模型。从去年下半年开始推进以来，我们在摆脱单一平台依赖、提升支付自主权上取得了长足进展。截至十二月底，整个公司的DTC收入贡献已达到约10%，核心头部产品GCS更是突破了30%的大关。这不仅意味着我们能以更灵活的方式服务玩家，更直接、可观的平台分成，化作了实打实的净利润。随着未来谷歌等巨头在更多区域开放第三方支付授权，DTC将成为我们利用率持续释放的强劲引擎。

Ally Wang, Moderator/IR Lead, Gamehaus: On the revenue side, our breakthroughs in the DTC channel are reshaping our margin profile. Since we began this initiative in the second half of last year, we have made substantial progress in reducing our reliance on a single platform and strengthening our control over payment channels. As of the end of December, DTC accounted for approximately 10% of our total revenue, while our flagship title GCS surpassed 30%. This not only means we can serve players with greater flexibility, but also translates directly into meaningful platform commission savings, which improve our bottom line. As major players like Google extend DTC access to additional markets, DTC will become a powerful engine for ongoing margin improvement.

Brian Xie Feng, Chairman of the Board, Gamehaus: 除了夯实当下的盈利底盘，我们也在积极构筑未来的增长阶梯。目前我们的产品Pipeline正在从RPG和Puzzle两大品类双轨并进。在RPG品类，我们坚持走向高up的市场，近期签约了一款千万美元级的重量级产品，预估生命周期为一两年，将率先从港澳台及亚洲其他高净值地区启动发行。同时，两款体量可观的定制开发项目以及一款调优产品也锁定，将在未来几个季度蓄势待发。在去年发行RPG产品的过程中，我们根据在早期表现遇到的挑战进行了内部的及时复盘，以及这些宝贵的经验迅速转化为后续项目的避坑指南和优化的基石。

Ally Wang, Moderator/IR Lead, Gamehaus: Beyond strengthening our current profitability foundation, we are also actively building a pipeline for future growth. Our pipeline is advancing in parallel across both RPG and puzzle runners. In RPG, we recently signed a new title with a project scope of approximately $10 million and an expected life cycle of 1-2 years. This title will initially launch in Hong Kong, Macau, Taiwan, and other parts of Asia, reflecting our strategy to expand into high ARPU Asian markets with the RPG within the RPG category. We also secured 2 additional sizable custom development projects and a further title currently in the optimization phase, which we expect to bring online over the coming quarters. In response to challenges we encountered in the early operations of RPG titles launched last year, we completed a thorough post-launch review, and the insights gained are being applied to our upcoming projects.

Brian Xie Feng, Chairman of the Board, Gamehaus: 在Puzzle品类，我们已经刨通了与小步快跑敏捷迭代的合作模式。目前私家核心外部研发工作室每月可稳定输出三至四个原型产品进行测试。作为长生命周期以广告变现为主的稳定现金流业务，我们力争在2026年年底前将四至五款优质的Puzzle新血脉推向市场。

Ally Wang, Moderator/IR Lead, Gamehaus: In the puzzle category, we have successfully established a collaboration model built on rapid prototyping and agile iteration. We currently work with 4 core external partners who supply 3-4 prototype games per month for testing. Puzzle games are primarily monetized through advertising and tend to have longer life cycles, providing a steady, long-duration revenue stream. Our goal is to bring 4-5 high-quality new puzzle titles to market by the end of calendar year 2026.

Brian Xie Feng, Chairman of the Board, Gamehaus: 同时，我们深知未来游戏行业之争是技术效率之争，我们以AI为中长期的战略的底层基础设施。

Ally Wang, Moderator/IR Lead, Gamehaus: At the same time, we are keenly aware that technological efficiency will be critical to gaining a competitive edge in the future gaming industry. We continue to view AI as a foundational infrastructure to our mid- to long-term platform strategy.

Brian Xie Feng, Chairman of the Board, Gamehaus: 本季度，我们的浩瀚内部AI创作平台已全面投入实战。短短三个月内，内部定制团队的调用次数已接近三万次，极大地缩短了美术和视频素材产出周期。我们预计本财年第三季度末，调用量将翻番，突破六万次。虽然AI的布局在短期内还未能显著体现出财务风险，但它在深刻地重塑我们的生产工作流程，并作为未来规模化扩张提前铺好了高速公路。

Ally Wang, Moderator/IR Lead, Gamehaus: This quarter, our Haohan internal AI creative platform was fully deployed. In just three months, the platform processed nearly 30,000 requests, significantly reducing production cycle times for art and video assets. We expect platform usage to double and exceed 60,000 requests by the end of the quarter ending March 31st. While these AI initiatives have limited near-term financial impact, they are already profoundly reshaping our production workflows and laying the groundwork for future scalable expansion.

Brian Xie Feng, Chairman of the Board, Gamehaus: 最后，我想向大家强调管理层对公司长期价值的坚定信心。为切实回报股东，我们在本财年启动了上限为500万美元的股票回购计划。截至十二月三十一日，我们已经完成了约37万股A类普通股的回购。在复杂多变的市场环境下，为促进公司价值回归提供了重要的压舱石。

Ally Wang, Moderator/IR Lead, Gamehaus: Lastly, I want to reiterate that management remains confident in the company’s long-term value. To return value to shareholders, we initiated a share repurchase program with the total authorization of up to $5 million. As of December thirty-first, we had completed the repurchase of approximately 370,000 Class A ordinary shares, supporting our share price in a complex and volatile market environment.

Brian Xie Feng, Chairman of the Board, Gamehaus: 整体而言，我们对公司的中期发展轨迹保持信心。过去几个季度，我们已经完成了运营效率第一阶段转型，盈利能力得到了实质性证明。接下来，我们将带着更健康的利润表、更充沛的现金流和更丰富的产品线，迎接新一轮的高质量增长。

Ally Wang, Moderator/IR Lead, Gamehaus: In summary, we remain confident in the company’s medium-term trajectory. Over the past several quarters, we have completed the first phase of our operational efficiency transformation, and our improved profitability is now clearly demonstrated in the results. Going forward, we are well-positioned to enter the next phase of high-quality growth, equipped with a healthier income statement, more robust cash flows, and a stronger product pipeline.

Brian Xie Feng, Chairman of the Board, Gamehaus: 展望下一个季度，基于对当前产品节奏和市场环境的审慎评估，我们将截至2026年3月31日的2026财年第三季度营业收入指定为在$2,400万至$2,600万美元之间。

Ally Wang, Moderator/IR Lead, Gamehaus: Looking ahead, based on a prudent assessment of our current product launch timing and market conditions, we are setting our revenue guidance for the third quarter of fiscal year 2026, ending March 31, 2026, at a range of $24 million-$26 million.

Brian Xie Feng, Chairman of the Board, Gamehaus: 接下来请Sean继续详细介绍我们的财务表现。

Ally Wang, Moderator/IR Lead, Gamehaus: With that, I will now turn the call over to Sean, who will walk you through our financial results in more detail.

Sean Zhang, Head of Capital Markets and Investor Relations, Gamehaus: Thank you, Brian, and hello everyone. I will now walk through our financial results in more detail for the second quarter fiscal year 2026, which ended December 31, 2025. Please note that all figures are in US dollars, and all comparisons are made on a year-over-year basis, unless otherwise stated. As Brian noted, total revenue for the quarter was $26.3 million, a decrease of 7.8% from $28.5 million in the year-ago period. Advertising costs declined 18.9% year-over-year, which drove the lower traffic and user acquisition that Brian discussed. That said, revenue came in near the upper end of our forecast for the second quarter, and the trajectory is in line with our long-term growth strategies.

Breaking down our revenue, in-app purchase revenue was $23.9 million, compared with $25.5 million a year ago, a decrease of 6.4%. Advertising revenue was $2.4 million, down from $3.0 million in the same period last year. As we highlighted before, transition improvements we are seeing in ARPDAU and payer conversion helped partially offset the impact of lower user acquisition volumes. Turning to expenses, total operating costs and expenses were $25.4 million, down 10.1% from $28.3 million a year ago, reflecting continued progress in our cost discipline efforts. More specifically, cost of revenue decreased 10.2% to $12.2 million, primarily driven by lower platform fees and reduced profit-sharing payments to game developers.

Research and development expenses increased 7.5% to $2.1 million, reflecting our ongoing collaborations with multiple developers across the development and testing phases as we build out our future game pipeline. Selling and marketing expenses decreased 18.4% to $9.7 million. The $2.1 million reduction in advertising costs was the primary driver, consistent with the efficiency focused approach Brian described. General and administrative expenses were $1.4 million, up 65.5% from $0.9 million a year ago. This was primarily due to higher salary expenses associated with our efforts to improve corporate governance, financial reporting, and investor relations capabilities, as well as strategic hiring to support business expansion. Going to profitability, operating income improved significantly to $0.9 million from $0.2 million in the year-ago period.

Operating margin expanded to 3.3% from 0.8%, which we believe validates the operational adjustments we have been making. Other income net was approximately $0.1 million, compared to $0.2 million in the year-ago period. Net income for the quarter was $0.9 million, compared with $0.4 million a year ago. We ended the quarter with $17.4 million in cash and cash equivalents, compared with $15.2 million as of June 30, 2025. We believe this provides sufficient liquidity to meet our working capital needs for the next twelve months. On capital allocation, as a reminder, our board authorized a 5 million share repurchase program in August 2025, with a one-year authorization period, through August 18, 2026.

As of December 31, we have repurchased approximately 370,000 Class A ordinary shares for approximately $459,000. We will continue to evaluate repurchase activity based on market conditions, share price, and our broader capital priorities. Lastly, as Brian mentioned, for the third quarter of fiscal year 2026, ending March 31, 2026, we expect total revenue in the range of approximately $24 million-$26 million. To wrap up, we are pleased with the quarter’s results. Costs declined more than 10%, while revenue landed near the top of our forecast for the quarter, producing meaningful margin expansion. Our balance sheet is healthy and our cash position strengthened. Going forward, our priority remains clear, disciplined investment in high-potential titles, continuous strengthening of our platform and publishing infrastructure, and a balanced approach to growth, profitability, and shareholder returns.

With that, we are happy to take your questions. Operator, please proceed.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone. If you would like to remove yourself from queue, please press star then two. Once again, that is star then one if you have a question. Additionally, when asking a question, please state your questions in Chinese first, and then immediately translate them into English for the convenience of everyone on the call. Today’s first question comes from Tina Wong at SDIC Securities International. Please go ahead.

Tina Wong, Analyst, SDIC Securities International: 好的，谢谢管理层接受我的提问。我这边有两个问题，是关于我们的这个财务展望的。首先第一个问题是，那公司的这个收入在过去几个季度都有下滑，那想请管理层帮我们解答一下，我们的这个收入增长预计是会在什么时候恢复，以及它背后的催化剂是什么？那第二个问题是关于利润的。我们看到这个季度净利润率是提升到了3.3%，想请管理层帮我们分析一下，就是未来的这个利润率趋势，尤其是在我们的这个新产品上线之后，这个营销投入加大以后，我们的这个净利润率会是怎么样的一个表现？我自己翻译一下。Thanks, management, for taking my questions.

I have two questions regarding financial outlook. The first one is, we noticed that the revenue has been declined for a few consecutive quarters. How should we think about future revenue trends? When do you expect revenue growth to resume, and what is the catalyst behind? My second question is: how should we think about future OP margin trend, especially when you wrap up marketing campaign for new products? Thanks.

Sean Zhang, Head of Capital Markets and Investor Relations, Gamehaus: Thank you, Tina. I am Sean. I will answer your first question.

首先感谢Tina对公司的持续关注。在26财年的第二个季度里，我们总共录得了营收大概是$2,630万。相较去年同期以及这个财年的第一个季度来讲，略有一些下降。这样的变动主要来自于公司综合了市场情况、目前的产品结构，以及我们后续管线项目的情况之后，主动进行的一个结构性的调整。从我们财务的结构上来看，我们营收的下降直接关联于我们销售与营销费用的主动缩减。我们这个财年的Q1、Q2，销售和营销费用同比下降了13.6%和18.4%。

调整既有对我们现在老产品运营策略的一个优化，也有根据全球，这个年底全球主要市场的节假日期间投放成本比较高企的一个季度性的调整。那么从结果上来看，虽然营收端短期有一些这个压力，但是我们的盈利结构呢，是得到了比较显著的优化。当然是可以看到，就是我们在Q2的营业利润率从去年的同期的0.8%是大幅提升到了3.3%，这个也跟稍后可能请Carl来回答您的这个第二个问题相关。那么我们这个净利润超过了去年同期的两倍，那这就说明我们在新的运营策略底下，我们这个现有主力产品的核心用户的盘子依然非常稳固，而且变现的效率呢，也得到了比较明显的提升。那么刚刚Brian在前面有提到，就是说我们目前产品pipeline正在从这个RPG和Puzzle这两大品类呢双轨并进。那其中的RPG我们有几款产品将在接下来几个季度陆续推出来，那么当中呢，有很多款这个体量，都是相当可观的。Puzzle品类的话呢，我们也是力争在2025年年底前，推出四到五款新的作品。那么未来呢，这条内生的增长线将会是公司最稳最确的一条路。有关的这个进展呢，将会在接下来几个季度的业绩发布中，跟各位继续陆续的报告。除此以外，我们一直在讲另外一个重点是这个AI技术对于这个内容产业的一个赋能。那之前我们讲的更多呢，可能是怎么去提高我们的工作效率和降低成本。那么下一步呢，我们期望它能够在营收端也能做出一些贡献。那这条路上呢，我们现在也在做一些比较有意思的尝试，那么希望在未来几个季度当中，我们有机会可以跟各位来分享。这个是我对您第一个问题的回答。I will give the English translation for myself.

Thank you, Tina, for your question and for your continuing interest in our company. In the second quarter of fiscal year 2026, we recorded total revenue of approximately $26.3 billion, while this represents a slight decline compared to the same period last year and the first quarter of fiscal 2026. This shift is primarily the result of proactive structural adjustment made by the company. These decisions were based on a comprehensive evaluation of current market conditions, our existing product mix, and our upcoming pipeline. From a financial perspective, the decline in revenue is directly correlated to our strategic reduction in selling and marketing expenses. In Q1 and Q2, our S&M expenses decreased by 13.6% and 18.4% year-over-year respectively. This adjustment serves two purposes.

First, to optimize the operational strategy for our mature legacy titles. Second, to account for a seasonal surge in user acquisition costs typically seen across major global markets during the year-end holiday season. As a result, although the top line has faced short-term pressure, our profitability structure has significantly improved. You can see that our operating margin in the second quarter rose sharply to 3.3% from 0.8% in the same period last year. Our net income more than doubled. This demonstrates that, under our refined operational strategy, the core user base of our flagship products remains resilient and our monetization efficiency has been notably enhanced. Also, as Brian mentioned earlier, our product pipeline is moving forward on a dual-track strategy focusing on RPG and puzzle genres.

For RPG, we have several titles slated for release over the upcoming quarters, many of which are quite substantial in scope. In the puzzle category, we are aiming to launch 4-5 new titles by the end of calendar year 2026. This organic growth engine will be the company’s most stable and certain path forward, and we will continue to provide updates on our progress in future earnings reports. Beyond this, we remain focused on the empowerment of the content industry through AI technology. While our previous efforts were primarily directly toward improving operational efficiency and cost reduction, our next objective is for AI to contribute directly to revenue generation. We are currently conducting some very promising experiments in the area and look forward to share those development with you in the upcoming quarters.

That will conclude my answer to your question, and I will give you the second question to Carl, our CEO.

Carl Yimin Cai, Chief Executive Officer, Gamehaus: 好的，谢谢Tina的提问。您问到本期营业利润率的增长的情况，实际上本期营业利润率的改善呢，主要是得益于公司对现有产品组合持续推进精细化运营和效率优化的结果。一方面我们在现有项目上坚持相对稳健的经营策略，更加注重收入质量和利润质量的平衡。另一方面，我们也在持续通过更细致的运营手段，提升变现效能和用户价值，包括对核心运营活动的优化，围绕不同用户分层开展更有针对性的内容和付费设计，以及持续推进个性化商业化调优，提升整体转化和生命周期价值。此外，刚刚Brian也提到，DTC也是我们提升盈利能力的重要抓手之一。那随着DTC的持续推进，我们在部分产品的渠道结构和用户经营效率有进一步的改善空间，这不仅有助于提升利润率，也能够增强我们对用户关系和长期价值的掌控力。基于这些举措，在新品进入大规模投入之前，我们会维持稳定利润率水平，公司也会继续以稳健经营为前提，保障收入和利润保持在相对健康的状态。不过从产品生命周期的角度来看，利润率未来的表现不会是一种单边扩张的趋势。新产品进入上线和重点推广阶段时，我们通常会加大市场投放和发行资源的投入，以争取更好的用户规模和更长周期的收入贡献。在过程中，短期营业利润率可能会受到一定的压力，这种压力更多是公司基于增长机会进行的主动投入，而不是业务盈利能力的削弱。我们之所以对这类投入有相对谨慎的信心，和公司也已经建立了比较强的数据分析、投放评估和动态优化体系。我们会持续跟踪获客成本、付费转化、LTV和回收周期等关键指标，并据此动态调整预算和投放计划，尽量确保推广投入在可回收、可验证、风险可控的框架下推进。经过一定的回收周期之后，利润水平通常也会逐步修复并回升。所以整体上我们会继续在利润稳定、投入纪律和长期增长之间做出平衡。

Carl Yimin Cai, Chief Executive Officer, Gamehaus: Okay, I will translate my answer to English. Thank you for the question. The improvement in operating margin this period primarily driven by continued refinement of operations and efficiency gains in our existing portfolio. On one hand, we have maintained a relatively disciplined operating strategy for our current titles with a strong focus on balancing revenue quality and profitability. On the other hand, we have been improving monetization efficiency and user value through a range of more granularly operating initiatives, including optimization of live ops events, more targeted content, and offer design based on user segmentation and continued enhancement of personalized monetization strategies to improve conversion and lifetime value. In addition, DTC remains an important lever for improving profitability. As we continue to expand our DTC efforts, we see further room to optimize channel mix and improve user economics in selected titles.

This not only supports margin improvement, but also strengthens our direct relationship with users and ability to capture long term value. Based on these initiatives, before new products enter a heavy investment cycle, we will keep their stable margin level, and we will continue to prioritize stable execution to maintain healthy revenue and profitability. That said, from a product cycle perspective, we do not expect margins to expand in a straight line. When new titles move into launch and scaled marketing phases, we typically increase user acquisition and publishing investment in order to capture larger audience potential and build long term revenue contribution. During that period, operating margin may come under short term pressure. Importantly, we would view this as a deliberate investment behind future growth opportunities, rather than a weakening of our profitability of the existing business.

We remain disciplined but confident in managing this process because we have built a strong, data-driven framework for marketing evaluation and optimization. We closely monitor key metrics such as CPI, retention, LTV, and payback period, and dynamically adjust budgets accordingly. This helps ensure the growth investment remains recoverable, measurable, and within a controlled risk framework. After a reasonable payback period, profitability would typically recover and improve. Overall, our approach is to balance margin stability, disciplined investment, and long-term growth.

Tina Wong, Analyst, SDIC Securities International: Thanks. That helps a lot.

Operator: Thank you.

Carl Yimin Cai, Chief Executive Officer, Gamehaus: Thank you, Tina.

Operator: Our next question today comes from Zheng Hui Chen with Hegel Capital. Please go ahead.

Zheng Hui Chen, Analyst, Hegel Capital: 好，感谢管理层。我这边有两个问题，第一个问题是本财年D2C的目标是多少？在整个产品组合中，D2C的渗透率的现实天花板在哪里？第二个问题是关注到在$500万的回购授权中，目前公司披露的已回购金额只有$45.9万，不到授权额度的10%，但是授权期已经过半了。请问一下，这个是在为产品管线投资保留现金吗？下面的话我就翻译一下。Thanks for managers.

Here are my two questions. First one is what is your D2C targets for the full fiscal year? What’s the realistic ceiling for the D2C penetration across your portfolio?

The second is you’ve repurchased only $459,000 of the $5 million authorized buyback program. That’s less than 10% of the authorization with roughly half the time expired. Are you preserving cash for pipeline investment? Thanks.

Carl Yimin Cai, Chief Executive Officer, Gamehaus: 哎，好的，我是Tao，由我来回答您关于DTC的第一个问题。首先感谢您的提问。刚刚也提到了，DTC也是公司在用户经营、变现效率和利润结构优化方面非常重要的战略方向之一。那基于当前的推进节奏和产品适配情况，我们预计到本财年末，DTC在整体收入中的占比有望达到15%以上。从目前发展阶段来看，我们认为DTC的渗透率还远未达到天花板。一方面，随着更多国家和地区在相关政策环境逐步放开，行业在用户触达、支付链路和运营方式上都在获得更大的灵活性。另外一方面，随着公司的DTC基础设施、用户触达能力以及支付体验运营方法论等体系的持续完善，我们认为DTC在现有的产品组合中的渗透空间仍具一定的进步潜力。当然，我们对于DTC的推进始终保持着审慎和长期主义的态度，公司一贯坚持严格遵循各个平台和应用商店的政策，同时高度重视用户体验，确保DTC相关的触达、转化和服务流程是合规、顺畅且可持续的。我们更关注的是在合规的前提下逐步提升DTC的运营效率和用户接受度，而不是追求短期激进的提升。从组合层面来看，不同产品、不同地区以及不同用户群体对DTC的适配并不完全一致，因此DTC的渗透率的提升会是一个渐进式结构化优化的过程，而不是所有产品同步快速提升。未来我们会继续围绕高产品和高价值用户群体，稳步推进DTC渗透率的提升，并在保障合规和用户体验的前提下，持续释放部分经营利润和经营效率。总体来，对DTC的中长期发展保持积极的判断，认为它仍然会是公司未来提升盈利能力和强化用户直连能力的重要增长抓手。DTC remains one of our strategic priorities in improving user engagement, monetization, efficiency, and overall profit structure.

Based on our current execution pace and product-market fit, we expect DTC to account for more than 15% of total revenue by the end of this fiscal year. At this stage, we believe DTC penetration is still far from reaching its limit. On one hand, as regulatory and policy environment continue to evolve more favorably across a number of countries and regions, the industry is gaining great flexibility in user reach, payment flows and operating models. On the other hand, we can, as we continue to strengthen our DTC infrastructure, our touch points, payment experience, operating know-how and data capability. We believe there is still meaningful room to further increase DTC penetration across our existing portfolio. That said, we are approaching DTC with a disciplined and long-term mindset. We remain firmly committed to complying with platform and app store policies, while also placing strong emphasis on user experience.

Our goal is to ensure that all DTC-related user journey, conversion flows and service processes remain compliant, smooth and sustainable. We are focused on steadily improving efficiency and user adoption over time, rather than pursuing aggressive short-term expansion. At the portfolio level, DTC suitability varies by title, region, and user cohort, so we expect penetration gains to be gradual and structurally driven rather than uniform across all products. Going forward, we will continue to prioritize those titles and user segments where DTC has the strongest fit, and we believe that under a compliant and user-friendly framework, there is still substantial opportunity to unlock further margin and operating efficiency benefits. Overall, we remain positive on the medium to long-term potential of our DTC and see it as an important level for enhancing both profitability and our direct relationship with users.

Sean Zhang, Head of Capital Markets and Investor Relations, Gamehaus: Okay, I will pass the next question to Sean. Thank you, Zheng Hui. I will answer your second question about our share repurchase program.

Carl Yimin Cai, Chief Executive Officer, Gamehaus: 首先，跟长期关注和支持公司发展的投资人一样，公司也是一直非常关注公司价值的公允程度，同时也是坚定地致力于维护公司价值和广大股东的权益。自从去年八月份推出我们首个回购计划以来，截止2025年12月31日，公司已经回购了大约37万股的A类普通股。实际上，我们目前现金流的健康状况是完全有能力同时支撑新游戏的研发、宣发，与我们已有的股东回报计划的。目前回购计划用了不到10%左右的额度，您刚才有提到过，我觉得主要核心原因还是在于严格的合规要求，以及当前股票市场流动性现状的客观制约。

Sean Zhang, Head of Capital Markets and Investor Relations, Gamehaus: Okay, thank you for your question and much like the other investors who have long followed and supported our development, the company is deeply focused on the fair valuation of our business and remains steadfastly committed to protecting company value and shareholder interests. Since the launch of our first repurchase program in August last year, we have repurchased approximately 370,000 Class A ordinary shares as of December 31st, 2025. I would like to clarify that our current cash flow and financial health are more than sufficient to support our R&D and promotional efforts for the new games, while fulfilling our shareholder return programs at the same time. The primary reason for the utilization being below 10% is not a lack of capital, but rather the objective constraints induced by strict compliance requirements and current market liquidity. At the execution level, we must strictly adhere to SEC regulations. These rules impose very specific limits on the manner and volume of open market repurchases. One of the essential constraints is under the Rule 10b-18 safe harbor that our daily repurchase volume typically cannot exceed 25% of ADTV of our shares over the preceding four weeks. Consequently, given the current liquidity levels, we must be extremely prudent in executing the program within this regulatory framework. Our operational strategy is to find the optimal balance between mitigating irrational price volatility, preserving secondary market liquidity, and ensuring full regulatory compliance. While you noted that the program’s term is halfway through, I believe that management will continue to advance the repurchase plan flexibly and steadily as long as market conditions and compliance allow. Furthermore, the company is working to enhance investor outreach and market accessibility by consistently delivering robust operational performance, we aim to drive increased market attention and liquidity, which will in turn create a more favorable environment for the efficient execution of our repurchase program. That will be my answer to your second question. Thank you, Zheng Hui Chen.

Operator: Thank you. That concludes our question and answer session, as there are no additional questions at this time. I will now hand back to the management team for closing remarks.

Sean Zhang, Head of Capital Markets and Investor Relations, Gamehaus: Okay, thank you operator and thank you all for participating on today’s call and thank you for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress.

Operator: Thank you. That concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.