YALA

• Core Product and New Game Progress

  • Q2 2026 average monthly active users (MAUs) reached 47.6 million, up 12.3% year-over-year, with sequential moderation from Q1 2026's Ramadan-fueled peak, in line with historical seasonal trends; sequential MAU growth is expected to resume in Q3 2026.
  • Flagship title Yalla Ludo delivered a strong sequential recovery in Q2 2026, extending the success of its Carnival Season 6 campaign; the new long-term Yalla Season Series operational campaign launched to boost user engagement through innovative sub-events.
  • Yalla, the company's core social product, celebrated its 10th anniversary with culturally tailored local engagement campaigns that drove significant interaction and willingness to spend among high-value loyal users.
  • Self-developed Match 3 title TurboMatch expanded its user base beyond MENA to the US and Europe, earned an Apple App Store feature in MENA markets, and maintained healthy user retention.
  • The desert-themed SLG new title completed a paced early launch and successful co-promotion with Yalla Ludo; a major content and UI update is in development to deepen user engagement and improve monetization, with user acquisition on hold ahead of the update launch.

• Technology and AI Integration

  • AI has been integrated into core R&D workflows, including AI-assisted programming and a proprietary AI model for Match 3 level generation and difficulty evaluation. This has reduced level design and iteration timelines, cut R&D costs, and improved user experience by matching levels to player skill levels.
  • The company will continue investing in AI to boost development efficiency across its entire product ecosystem.

• Regional Expansion and Brand Building

  • YALA served as an official partner for the 2026 Saudi E-League and women's tournament, operating an on-site activation zone at the championship finals to strengthen brand connections with younger local users and reinforce its regional market leadership.
  • Localized interactive soccer-themed campaigns tied to the global World Cup drove higher community engagement and improved monetization in Q2 2026.

• Shareholder Returns and Capital Allocation

  • In the first half of 2026, the company repurchased 4.4 million ADS for $27.6 million USD, with 2.9 million shares ($18 million USD) repurchased in Q2 2026.
  • The 2021 share repurchase program expired in May 2026, with a total of $126.5 million USD repurchased under the program; 12.7 million repurchased shares were canceled as of August 14, 2026.
  • The newly authorized 2026 $150 million USD share repurchase program will continue execution over 20 months from March 2026.

• For Q3 2026, YALA expects total revenue to be between $78 million USD and $85 million USD.
• For full year 2026, management maintains prior guidance: overall full-year revenue is expected to be broadly in line with 2025 levels, as a slight decline in core business revenue will be offset by contributions from new games. Management will update guidance if new game performance outperforms current expectations in the coming quarter.
• Full-year 2026 non-GAAP net margin is expected to be around 30%, with second half 2026 costs and expenses expected to be broadly similar to the first half of 2026. If new products receive exceptionally strong market demand, the company may increase user acquisition investment to capture greater market share.

YALA Groups Limited reported total Q2 2026 revenue of $82.6 million USD, a decrease from $84.6 million USD in Q2 2025. The only reported product segment is Games Services, which generated $34.2 million USD in revenue, representing an 11.6% year-over-year increase. Games Services contributed 41.4% of total company revenue in the quarter. The remaining 58.6% of revenue comes from the company's legacy social entertainment ecosystem, anchored by flagship products Yalla and Yalla Ludo.

• The total year-over-year revenue decline in Q2 2026 was primarily driven by a decrease in paying users attributable to the impact of ongoing geopolitical events in the MENA region.
• All forward-looking guidance and statements are based on current market conditions, and actual future results may differ materially from current estimates due to inherent uncertainties in market and operating conditions.

Q: What is the latest progress and go-to-market plan for the company's core new games over the next few quarters?

A: The two core new games are progressing on separate timelines. For global Match 3 title TurboMatch, healthy user acquisition and retention have been achieved in Q2, and the company will focus on scaling commercialization and accelerating expansion into the U.S. and Europe in the second half of 2026. For the desert-themed SLG, co-promotion with Yalla Ludo completed early initial user acquisition in Q2, and development is underway on a major version update with richer content and UI improvements. User acquisition will slow in Q3 to prepare for a large-scale launch campaign after the update releases in Q4.

Q: With net cash reserves exceeding $800 million USD, what are the company's strategic capital allocation priorities going forward?

A: The company remains committed to maximizing shareholder value, starting with execution of the newly authorized $150 million USD 2026 share repurchase program. Strong cash reserves also provide strategic flexibility: the company is evaluating strategic partnership opportunities, potential investments or acquisitions of top-tier R&D teams to expand the product pipeline and accelerate penetration into new global markets, maintaining disciplined allocation to balance growth and shareholder value.

Q: What is the strategic outlook for in-house development and external partnerships for the gaming business?

A: The company will continue its paired strategy of in-house development and external distribution partnerships. It is growing its experienced in-house development team, has multiple new casual and hyper-casual games in development to lay groundwork for 2027 and 2028 growth, and is strengthening its position in the Match 3 category. For external partnerships, the company continues to seek global high-quality partners to bring more top-tier hardcore gaming content to the MENA region, with updates to be shared when appropriate.

Q: How is AI currently applied to the company's R&D and product operations, and what are the future plans?

A: AI has been deeply integrated into the company's core technology infrastructure in Q2 2026, including AI-assisted coding integrated into development workflows. The company also launched a proprietary AI system for Match 3 level generation and difficulty evaluation that can rapidly generate high-quality levels at scale, automatically test and evaluate difficulty, which cuts development cycle time, reduces R&D costs, and improves user experience and retention by matching level difficulty to player skill. The company will increase AI investment to boost productivity and improve user experience across the entire product ecosystem to strengthen long-term competitiveness.