Gamehaus Holdings Inc. Q2 FY2026 earnings call

• The quarter marked a milestone as the company navigated its development cycle and transitioned to a sustainable growth model centered on efficiency and profitability.
• Total revenue was at the upper end of the forecast. Net profit grew 151% year-over-year, operating margin expanded from 0.8% to 3.3%.
• Sales and market costs fell 18.4%, with advertising investment reduced by $2.1 million. RPAU increased to $0.566 and daily payer conversion rate rose to 2.5%.
• DTC channel contribution reached 10% by end of December, core head product GCS broke through 30%.
• In RPG, a new title with $10 million project scope and 1-2 year lifecycle was signed, and aim to push 4-5 high-quality RPG titles by end of year. In puzzle category, work with 4 core external partners to get 3-4 prototype games per month for testing, aim to bring 4-5 high-quality new puzzle titles to market by end of 2026.
• Internal AI creation platform was fully deployed, processed nearly 30,000 requests in 3 months, expect over 60,000 by end of third quarter.
• Implemented $5 million stock return plan, repurchased approximately 370,000 Class A ordinary shares by December 31.

Total revenue for the second quarter was $26.3 million. Net profit was about $0.9 million, a year-over-year increase of approximately 151%. Operating profit rate rose from 0.8% last year to 3.3%. Sales and market costs fell by about 18.4%, with advertising investment reduced by about $2.1 million. Average revenue per daily active user (RPAU) was $0.566, and daily payer conversion rate rose from 2.1% to 2.5%. DTC channel contribution reached about 10% by the end of December, with core head product GCS breaking through 30%. In-app purchase revenue was $23.9 million, down 6.4% year-over-year. Advertising revenue was $2.4 million, down from $3.0 million in the same period last year. Cost of revenue decreased 10.2% to $12.2 million. Research and development expenses increased 7.5% to $2.1 million. Selling and market expenses decreased 18.4% to $9.7 million. General and administrative expenses were $1.4 million, up 65.5% from $0.9 million a year ago.

For the third quarter of fiscal year 2026, ending March 31, 2026, total revenue is expected to be in the range of $24 million to $26 million.

Q: The revenue has been declined for a few consecutive quarters. When do you expect revenue growth to resume growth, and what is the catalyst behind?

A: The decline is due to proactive structural adjustment. The current product pipeline from RPG and Puzzle categories, with RPG products to be released in next few seasons and puzzle category to launch 4-5 new projects by end of year, and AI technology for content industry attempts to make profits at revenue end will be catalysts.

Q: What is your D2C target for the full fiscal year? And what's the realistic ceiling for D2C penetration across your portfolio?

A: Expect DTC to account for more than 15% of total revenue by end of this fiscal year. DTC penetration is not yet at ceiling, as regulatory and policy environments are evolving, and company is strengthening DTC infrastructure, with penetration gains to be gradual and structurally driven.

Q: You've repurchased only $459,000 of the $5 million authorized buyback program. Are you preserving cash for pipeline investment?

A: Current cash flow can support both development and share repurchase plan. The low utilization is due to strict compliance requirements and current market liquidity constraints, and management will continue to advance the repurchase plan flexibly as market conditions allow