XD Inc. FY2025 Q4 Earnings Release

– 1 –
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reliance upon the whole or any part of the contents of this announcement.\

XD Inc .
ÐECÞ”®!
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 2400)
ANNUAL RESULTS ANNOUNCEMENT
FOR THE YEAR ENDED DECEMBER 31, 2025
ANNUAL RESULTS
The Board is pleased to announce the audited consolidated results of the\
Group for the
year ended December 31, 2025 (the “Reporting Period”). The results have been audited
by the Auditor in accordance with International Standards on Auditing, a\
nd have also been
reviewed by the Audit Committee.
FINANCIAL PERFORMANCE HIGHLIGHTS
For the year ended December 31, 2025 2024Change
RMB’000 RMB’000 %
Revenues 5,763,7395,012,107 15.0
Gross profit 4,254,5553,478,530 22.3
Profit for the year 1,656,509890,491 86.0
Profit attributable to equity holders of the Company 1,535,274811,530 89.2
Adjusted profit for the year* 1,756,925956,685 83.6
Adjusted profit attributable to equity holders of the Company* 1,628,563 876,846 85.7
* To supplement our consolidated financial statements which are presented in accordance with IFRS
Accounting Standards, we also use adjusted profit for the year and adjusted profit attributable to equity
holders of the Company as an additional financial measure to evaluate our financial performance
by eliminating the impact of fair value changes on long-term investments measured at fair value
through profit or loss, and share-based compensation expenses. See “Non-IFRS Accounting Standards
Measures” for details.

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KEY OPERATING INFORMATION
For the year ended December 31,2025 2024Change
(in thousands) (in thousands) %
Online Games
Average MAUs
(1) 11,347 14,247 -20.4
Average MPUs
(2) 1,284 1,609 -20.2
TapTap
Average App MAUs in TapTap PRC 44,97444,046 2.1
Average App MAUs in TapTap International 4,3255,032 -14.1
(1) Our average MAUs for online games are calculated by dividing the aggregate of the total MAUs of
each online game for the respective period by the number of months of that period.
(2) Our average MPUs for online games are calculated by dividing the aggregate of the total MPUs of
each online game for the respective period by the number of months of that period.

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MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS REVIEW AND OUTLOOK
In 2025, we achieved continued year-on-year growth in both revenue and p\
rofit. Meanwhile,
by further integrating AI technology and acquiring the IP rights of Torc\
hlight series games,
we have laid a solid foundation for the long-term growth of our business\
.
In our game segment, the strong performance of Ragnarok M: Classic ( ¤
­M:‹
Ð), Heartopia (Ð
ƒD), and Torchlight: Infinite (拘ˆjÌ”) drove a 10.5%
year-on-year increase in our gaming revenue, both Heartopia (Ð
ƒD) and Torchlight:
Infinite (拘ˆjÌ”) have the potential to become evergreen games. We plan to
continuously invest in R&D and support them to nurture an increasingly b\
road player base.
In our platform segment, improvements to advertising algorithms and enha\
ncements in user
engagement led to a 24.7% year-on-year growth in the revenue of TapTap. \
We launched the
PC version of TapTap, creating synergies with the mobile app to provide \
more convenient
services for both players and developers. Furthermore, in early 2026, we\
initiated the
invitation test for TapTap Maker, with the vision of creating a zero-bar\
rier AI game-creation
agent for game enthusiasts.
Below is an overview of our core products and services:
Our Games
As of December 31, 2025, our portfolio consisted of 22 online games and \
45 premium
games.
Online Games
During 2025, the average MAUs of our online games decreased by 20.4% yea\
r-on-year,
while the average MPUs decreased by 20.2% year-on-year. This decrease wa\
s primarily
attributable to the declines in number of users of Heartopia (Ð
ƒD) and Sausage Man
( 0Ñ|Á) as compared with 2024. For the year ended December 31, 2025, Heartopia
( Ð
ƒD), GoGo Muffin (ïKå), Torchlight: Infinite (拘ˆjÌ”), Ragnarok
M (¤
­M), and Etheria: Restart (z~) were our top five games in terms of their
revenue contribution. An overview of our major games at present is as fo\
llows:
— Heartopia (Ð
ƒD): This self-developed life simulation game was launched in July
2024 in Chinese Mainland and was enthusiastically received by players, topping the
App Store’s game download rankings multiple times. In 2025, while the number of
users for the game experienced a moderation compared to its initial laun\
ch period, we
strategically expanded the development team, enhanced our production capacity, and

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released several well-received content updates, enabling the game to ach\
ieve sustained
success. In January 2026, we successfully launched the game in multiple \
countries and
regions globally.
— GoGo Muffin (ïKå): This self-developed idle role-playing game was
launched in Hong Kong, Macau and Taiwan in January 2024, and subsequentl\
y
launched in Chinese Mainland and various overseas markets. In 2025, the \
user base
and revenue of this game experienced significant year-on-year declines c\
ompared to
2024.
— Torchlight: Infinite ( 拘ˆjÌ”): This self-developed loot-based ARPG was
launched in overseas markets outside China in October 2022 and launched \
in domestic
market in Chinese Mainland in May 2023. Through several successful seaso\
nal
updates, the game has gained continuous recognition among players, and e\
xpanded the
player community. At the end of 2025, we acquired the IP rights of Torch\
light series
games and related intangible assets. In the future, we hope the game wil\
l continue to
attract more gamers through more attractive seasonal updates.
— Ragnarok M (¤
­M): This co-developed MMORPG was launched in domestic
market in Chinese Mainland in January 2017, and was subsequently release\
d in various
countries and regions worldwide. The game is currently at its maturity s\
tage. Ragnarok
M: Classic, a special version of Ragnarok M, was released and launched in domestic
market in Chinese Mainland in April 2024, launched in the Southeast Asia\
market in
February 2025, launched in Hong Kong, Macau and Taiwan markets in April \
2025,
and launched in several other overseas markets in August 2025. Since its launch, this
special version of the game has performed well and gained popularity amo\
ng gamers.
— Etheria: Restart (z~): This self-developed turn-based role-playing game was
initially launched in multiple overseas countries and regions in June 20\
25, and
launched in the domestic market in China and East Asia markets in Septem\
ber 2025.
Currently the game has completed its launch in major global markets and \
is overall at
the maturity stage of its lifecycle.
Games in Development
We regard our self-developed games as one of the cornerstones of our gro\
wth, and we have
made large scale investments in research and development of games. As at December 31,
2025, we had 788 employees engaged in game development, representing an \
increase of
64 employees from December 31, 2024. Since 2024, our game research and d\
evelopment
business experienced stable growth upon the release and the success of s\
ome self-
developed games as well as the establishment of new projects. As of December 31, 2025,
we had two online games in development. Furthermore, we have several new\
games in the
pre-development stage, which may advance in the future depending on proj\
ect progress.

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Premium Games
Premium games constitute our special business component that meets the d\
emand of mobile
game users for high quality, pay-to-play games and adds diversity to the\
TapTap platform
ecosystem. In 2025, our premium game revenue increased by 15.6% compared\
to 2024.
Titles such as Volcano Princess (æ†Y~E) and the mobile version of Totally Accurate
Battle Simulator (Œ&+C+C·F|Ýœ) were successively launched, bringing certain
revenue contributions to the business and increasing platform discussion\
s. We continuously
advanced our cross-platform publishing strategy for premium games on PC \
and mobile,
relying on accumulated experience in pay-to-play publishing to gradually\
enrich the TapTap
PC product ecosystem. Subsequent titles such as the mobile version of Da\
ve the Diver (‘
åpÖÃ) have also gained high attention on social media. In 2026, we will con\
tinue to
introduce more high-quality games on PC and mobile to further expand our\
premium game
product line.
TapTap
TapTap is our key competitiveness and one of the cornerstones of our growth. We rely on
game development and publishing to provide TapTap with high-quality excl\
usive content,
which drives TapTap’s user growth. In the meantime, TapTap’s own p\
roduct and operation
advantages will help retain users and generate revenue, which will then \
feed the content
creation of both first-party and third-party developers through TapTap a\
nd in turn generate
more quality content and continue to drive the further growth of TapTap.\
TapTap PRC
For the year ended December 31, 2025, the average App MAUs of TapTap PRC\
was 45.0
million, representing an increase of 2.1% on a year-on-year basis. While\
the MAU remained
broadly stable, user engagement improved as compared to the correspondin\
g period last
year. Meanwhile, we have improved the effectiveness of advertising on th\
e platform by
upgrading the basic model of our advertising system, driving continued g\
rowth in the
revenue of TapTap.
In 2025, we promoted more games to integrate TapSDK and ecosystem servic\
es, enabling
accounts-game-data linkage and circulation. Currently, we have added AI \
assistant modules
in both the TapTap user interface and the developer center interface, de\
dicating ourselves
to providing the best service for gamers and game developers with frontier technology.
In April 2025, we officially released the PC version of TapTap, where PC\
games can be
downloaded and launched. We aim to align with the current industry trend\
of cross-platform
compatibility for large-scale games, leveraging the coordination between\
the mobile and
PC versions of TapTap to better serve both players and developers. In Ju\
ly 2025, we also
officially released TapTap mini-games. In January 2026, we started the i\
nvitation test for
TapTap Maker, with the vision of creating a zero-barrier AI game-creatio\
n agent for game
enthusiasts.

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In the second and third quarters of 2025, we hosted the Annual TapTap Pr\
esents, the
TapTap Developers Workshops (TDW 2025), and a series of “Spotlight \
Game Jam” game
development competitions. In January 2026, we hosted the 2025 TapTap Gam\
e Awards.
Those events received positive feedback from both players and developers\
.
TapTap International
For the year ended December 31, 2025, the average App MAUs of TapTap Int\
ernational
was 4.3 million, representing a decrease of 14.1% on a year-on-year basi\
s. We have not
yet monetized TapTap International and our international team is current\
ly exploring
opportunities for long-term growth with limited resource allocation.

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FINANCIAL REVIEW
Revenue
Our revenue is mainly derived from (i) games, the principal operating \
business where we
generate revenue primarily from sales of in-game virtual items in online games and sales
of premium games through third-party and our proprietary distribution pl\
atforms; and (ii)
TapTap platform, where we generate revenue primarily from providing online marketing
services on TapTap. The following table sets forth our revenue by line o\
f business for the
years ended December 31, 2024 and 2025.
For the year ended December 31, 2025 2024
Amount % of
revenue Amount % of
revenue
(RMB in thousands, except for percentages)
Games 3,796,06765.93,434,061 68.5
Game operating 3,724,41964.63,427,520 68.4
Online games 3,596,40062.43,316,789 66.2
Premium games 128,0192.2110,731 2.2
Others 71,6481.36,541 0.1
TapTap platform 1,967,67234.11,578,046 31.5

Total revenue 5,763,739100.05,012,107 100.0
Games
Our revenue from game business increased by 10.5% to RMB3,796.1 million for the year
ended December 31, 2025 on a year-on-year basis. In particular,
— Our revenue from online games increased by 8.4% to RMB3,596.4 million fo\
r the year
ended December 31, 2025 on a year-on-year basis, primarily due to the increases in
revenue from our self-developed games Ragnarok M: Classic (¤
­M j‹Ð
), Heartopia (Ð
ƒD) and Torchlight: Infinite (拘ˆjÌ”), coupled with the
new launch of Etheria: Restart (z~) in June 2025. This increase was partially offset
by the decrease in revenue from certain of our existing games.
— Our revenue from premium games increased by 15.6% to RMB128.0 million fo\
r the
year ended December 31, 2025 on a year-on-year basis, primarily due to t\
he increases
in revenue from Hero’s Adventure (}ªm›
Â), Volcano Princess (æ†Y~E
) and other newly launched premium games. This increase was partially o\
ffset by the
decrease in revenue from certain of our existing premium games.

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The following table sets forth a breakdown of our game operating revenue\
by revenue
recognition method for the years ended December 31, 2024 and 2025.
For the year ended December 31, 2025 2024
Amount %Amount %
(RMB in thousands, except for percentages)
Revenue recognized on a gross basis 3,219,76286.53,280,128 95.7
Revenue recognized on a net basis 504,65713.5147,392 4.3

Total game operating revenue 3,724,419100.03,427,520 100.0
Our game operating revenue recognized on a gross basis slightly decrease\
d by 1.8% to
RMB3,219.8 million for the year ended December 31, 2025 on a year-on-yea\
r basis,
primarily due to the decrease in revenue from certain existing games, su\
ch as GoGo Muffin
(ïKå) and Sword of Convallaria (U†˜). This decrease was partially offset by
the increases in revenue from Heartopia (Ð
ƒD), Torchlight: Infinite (拘ˆjÌ”)
and Etheria: Restart (z~). Our game operating revenue recognized on a net basis increased
by 242.4% to RMB504.7 million for the year ended December 31, 2025 on a \
year-on-year
basis, primarily due to the robust performance of Ragnarok M: Classic (\
¤
­Mj‹Ð
) in overseas markets.
TapTap Platform
Our revenue from TapTap platform business increased by 24.7% to RMB1,967\
.7 million
for the year ended December 31, 2025 on a year-on-year basis. This incre\
ase in revenue
is mainly attributable to the refinement of our advertising algorithms a\
nd uplift in user
engagement.
We have not yet monetized TapTap International.

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Cost of Revenues
Our cost of revenues slightly decreased by 1.6% to RMB1,509.2 million fo\
r the year ended
December 31, 2025 on a year-on-year basis. The following table sets forth our cost of
revenues by line of business for the years ended December 31, 2024 and 2\
025.
For the year ended December 31,2025 2024
Amount % of
segment revenue Amount % of
segment revenue
(RMB in thousands, except for percentages)
Games 1,237,14732.61,285,876 37.4
TapTap platform 272,03713.8247,701 15.7

Total 1,509,18426.21,533,577 30.6
Our cost of revenues for game business primarily consists of commissions\
charged by
distribution platforms and payment channels where we act as a principal,\
sharing of
proceeds to game developers, cloud service, bandwidth and server custody\
fee and employee
benefits expenses. Our cost of revenues for TapTap platform business pri\
marily consists of
cloud service, bandwidth and server custody fee and employee benefits ex\
penses.
Our cost of revenues for game business slightly decreased by 3.8% to RMB\
1,237.1 million
for the year ended December 31, 2025 on a year-on-year basis, primarily \
attributable to (i)
lower distribution platform and payment channel commissions from the ove\
rseas operations
of GoGo Muffin (ïKå) and Sword of Convallaria (U†˜); and (ii) reduced
revenue-sharing costs associated with Sausage Man (0Ñ|Á), Ulala (”~Y “ÖÖ) and
other licensed games. Those decreases were partially offset by (i) the\
higher distribution
platform and payment channel commissions from the domestic operations of\
Heartopia (Ð

ƒD), Torchlight: Infinite (拘ˆjÌ”) and Etheria: Restart (z~); and (ii) the
increases in cloud service, bandwidth and server custody fee and profess\
ional and technical
service fee.
Our cost of revenues for TapTap platform business increased by 9.8% to R\
MB272.0 million
for the year ended December 31, 2025 on a year-on-year basis, primarily \
attributable to the
increase in cloud service, bandwidth and server custody fee related to our advertising
algorithms system.

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Gross Profit and Gross Margin
As a result of the foregoing, our gross profit increased by 22.3% to RMB\
4,254.6 million for
the year ended December 31, 2025 on a year-on-year basis. Overall gross \
margin improved
to 73.8%, up from 69.4% in 2024. This increase was primarily due to (i)\
an improvement in
the gross margin of game segment from 62.6% in 2024 to 67.4% in 2025, mainly fueled by
the robust overseas performance of Ragnarok M: Classic (¤
­M j‹Ð), which
increased the proportion of game operating revenue recognized on a net basis (from 4.3% in
2024 to 13.5% in 2025); (ii) an improvement in gross margin of TapTap\
platform segment
from 84.3% in 2024 to 86.2% in 2025; and (iii) a favorable shift in revenue mix, with the
higher-margin TapTap platform segment contributing 34.1% of total revenue in 2025,
compared to 31.5% in 2024.
Selling and Marketing Expenses
Our selling and marketing expenses primarily consist of (i) promotion \
and advertising
expenses paid to external advertising agencies and professional informat\
ion dissemination
companies; and (ii) employee benefit expenses relating to our selling and marketing
personnel.
Our selling and marketing expenses increased by 2.8% to RMB1,435.9 milli\
on for the year
ended December 31, 2025 on a year-on-year basis. This was primarily attributable to (i)
higher performance-based compensation for our selling and marketing personnel, in line
with our profit growth; and (ii) an increase in professional and techn\
ical services fees. This
increase was partially offset by the decrease in promotion and advertisi\
ng expenses.
Research and Development Expenses
Our research and development (R&D) expenses primarily consist of (i)\
employee benefits
expenses relating to our R&D employees; and (ii) professional and tech\
nical services fees
including art design and technical support for our games.
Our R&D expenses increased by 6.7% to RMB981.4 million for the year ende\
d December
31, 2025 on a year-on-year basis. This was primarily due to (i) higher\
performance-based
compensation for our research and development staff, in line with our pr\
ofit growth; and (ii)
an increase in game production outsourcing expenses. The number of our R&D personnel
increased from 993 as at December 31, 2024 to 1,106 as at December 31, 2\
025.

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General and Administrative Expenses
Our general and administrative (G&A) expenses primarily consist of (i\
) employee benefits
expenses relating to our administrative employees; (ii) professional a\
nd technical services
fees, such as fees paid to auditors and law firms; (iii) office expenses incurred in the
ordinary course of business; and (iv) depreciation of property, plant and equipment and
right-of-use assets in connection with our office space in Shanghai.
Our G&A expenses decreased by 20.3% to RMB212.6 million for the year end\
ed December
31, 2025 on a year-on-year basis. This was primarily due to lower employ\
ee compensations
and share-based payments related to certain members of our management.
Other Gains/(Losses), Net
Our other gains/(losses), net primarily consist of net foreign exchang\
e gains/(losses) and net
gain on repurchase of convertible bonds.
We recorded other gains, net, of RMB12.6 million for the year ended Dece\
mber 31, 2025,
compared to other losses, net, of RMB9.8 million for the corresponding p\
eriod in 2024. Our
net foreign exchange gains were RMB15.6 million for the year ended Decem\
ber 31, 2025,
compared to foreign exchange net losses of RMB19.7 million for the year \
ended December
31, 2024. We did not record any gain on repurchase of convertible bonds \
for the year ended
December 31, 2025, compared to a net gain on repurchase of convertible b\
onds of RMB5.0
million for the corresponding period of 2024.
Income Tax Expenses
We recorded income tax expenses of RMB62.4 million for the year ended December 31,
2025, compared to income tax expenses of RMB44.9 million for the corresp\
onding period
in 2024. Among which, we recorded a current income tax expense of RMB64.\
1 million and
a deferred income tax credit of RMB1.7 million in relation to the moveme\
nt of deferred tax
liability we recognized in previous years.
Profit for the Year
Our net profit for the year was RMB1,656.5 million for the year ended De\
cember 31, 2025,
compared with a net profit of RMB890.5 million for the year ended Decemb\
er 31, 2024.
Profit for the Year Attributable to Equity Holders of the Company
Our net profit for the year attributable to equity holders of the Compan\
y was RMB1,535.3
million for the year ended December 31, 2025, compared to RMB811.5 milli\
on for the
corresponding period of 2024.

– 12 –
Our net profit for the year attributable to non-controlling interests was primarily derived
from the non-controlling interests in those entities operating our TapTa\
p platform and
AI-driven marketing platform.
Other Financial Information
The following table reconciles our operating profit to our EBITDA and adjusted EBITDA
for the periods presented:
For the year ended December 31,2025 2024
RMB’000 RMB’000
Operating profit 1,679,908914,789
Adjustments:
Other income (49,722)(28,574)
Other (gains)/losses, net (12,615)9,774
Depreciation of property, plant and equipment 15,35921,768
Depreciation of right-of-use assets 38,21139,558
Amortization of intangible assets 24,25239,893

EBITDA 1,695,393997,208
Share-based compensation expenses 92,48359,235

Adjusted EBITDA 1,787,8761,056,443

– 13 –
Non-IFRS Accounting Standards Measures
To supplement our consolidated financial information which is presented \
in accordance with
IFRS Accounting Standards, we set forth below our adjusted profit for th\
e year and adjusted
profit attributable to equity holders of the Company as an additional fi\
nancial measure
which is not presented in accordance with IFRS Accounting Standards. We believe these
non-IFRS Accounting Standards financial measures provide investors with \
useful
supplementary information to assess the performance of the Group’s co\
re operations by
excluding certain items, namely (i) fair value changes on long-term in\
vestments measured at
fair value through profit or loss; and (ii) share-based compensation expenses. The following
table reconciles our adjusted profit for the year and adjusted profit at\
tributable to equity
holders of the Company indicated to the most directly comparable financi\
al measure
calculated and presented in accordance with IFRS Accounting Standards:
For the year ended December 31,2025 2024
RMB’000 RMB’000
Profit for the year 1,656,509890,491
Add: Fair value changes on long-term investments measured at fair value through profit or loss 7,9337,963
Share-based compensation expenses 92,48359,235
Less: Income tax effects —(1,004)

Adjusted profit for the year 1,756,925 956,685

– 14 –
For the year ended December 31,2025 2024
RMB’000 RMB’000
Profit attributable to equity holders of the Company 1,535,274811,530
Add: Fair value changes on long-term investments measured at fair value through profit or loss 7,9337,310
Share-based compensation expenses 85,356 58,847
Less: Income tax effects —(841)

Adjusted profit attributable to equity holders of
the Company 1,628,563 876,846

These unaudited non-IFRS Accounting Standards financial measures should \
be considered
in addition to, not as a substitute for, measures of the Group’s financial performance
prepared in accordance with IFRS Accounting Standards. In addition, these non-IFRS
Accounting Standards financial measures may be defined differently from \
similar terms
used by other companies.
Liquidity and Capital Resources
Our cash positions and short-term investments as at December 31, 2025 an\
d December 31,
2024 are as follows:
As at
December 31, As at
December 31,
2025 2024
RMB’000 RMB’000
Cash and cash equivalents 3,689,3752,781,173
Short-term investments — Term deposits with initial terms over three months —50,000
— Wealth management products 81,03378,984

3,770,4082,910,157

– 15 –
As at December 31, 2025, our short-term investments consisted of wealth \
management
products issued by large reputable commercial banks. These wealth management products
invest principally in low-risk and liquid fixed-income instruments that \
are quoted on the
interbank market or exchanges in China. The returns of such wealth management products
are not guaranteed or protected by the issuing banks.
The increase of our cash positions was primarily due to the net cash flo\
ws generated from
operating activities of RMB1,712.6 million for the year ended December 3\
1, 2025, and
partially offset by cash payments for (i) purchase of the IP rights of\
Torchlight series games
and other intangible assets of RMB311.9 million; (ii) dividend for the\
year ended December
31, 2024 paid to shareholders of RMB179.4 million; (iii) acquisition of additional non-
controlling interests in subsidiaries of RMB143.3 million; (iv) repurc\
hase of shares for the
purpose of the 2024 RSU Scheme at the aggregate consideration of RMB105.\
1 million and
(v) long-term investments of RMB104.4 million.
As of December 31, 2025, we did not have any borrowings or unutilized ba\
nking facilities.
Gearing Ratio
Our gearing ratio was 22.5% as at December 31, 2025, compared to a geari\
ng ratio of 30.8%
as at December 31, 2024. This ratio was calculated as total liabilities \
divided by total assets.
Material Acquisitions and Disposals of Subsidiaries, Associates and Join\
t Ventures
Reference is made to the announcements of the Company dated November 26,\
2025,
December 29, 2025 and January 16, 2026 (collectively, the “Announcements”).
On November 26, 2025, the Group entered into a facilities agreement (th\
e “Facilities
Agreement”) with Project Golden Arc, Inc. (the “Golden Arc”), pursuant to which the
Group agreed to provide and has provided term loan facilities of USD40,0\
00,000 in
aggregate to Golden Arc. On December 29, 2025, the Group entered into an\
asset transfer
agreement with Runic Games Inc. and Arc Games, Inc. (together the “Sellers”) and Golden
Arc (the parent company of the Sellers), pursuant to which the Group a\
cquired from the
Sellers all right, title and interest in and to the assigned assets, inc\
luding the Torchlight
series games, technology, documentation, IP and etc. with total consider\
ation
USD37,180,000. The consideration was satisfied in full by way of credit \
and set-off against
the Group’s rights as lender under the Facilities Agreement in respec\
t of the corresponding
amount (i.e. USD37,180,000) of outstanding loan and accrued but unpaid\
interest
thereunder. Please refer to the Announcements for further details.
Save for the acquisition mentioned above, for the year ended December 31\
, 2025, the
Company had no material acquisition and disposal of subsidiaries, associated companies and
joint ventures.

– 16 –
Pledge of Assets
As of December 31, 2025, we did not pledge any of our assets.
Future Plans for Material Investments or Capital Assets
As of December 31, 2025, we did not have any future plans for material investments or
capital assets.
Foreign Exchange Risk Management
We generate revenue from overseas markets in relation to our internation\
al business, and
therefore, we are exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the US dollars and Hong Kong dollars. We also \
pay licensing fees
for foreign game developers and intellectual property providers, which a\
re primarily in US
dollars. We currently do not adopt any long-term contracts, currency bor\
rowings or other
means to hedge our foreign currency exposure.
Contingent Liabilities
As of December 31, 2025, we did not have any material contingent liabili\
ties.

– 17 –
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended December 31, 2025Year ended December 31,2025 2024
Notes RMB’000 RMB’000
Revenues 35,763,739 5,012,107
Cost of revenues 3, 4(1,509,184) (1,533,577)

Gross profit 4,254,5553,478,530
Selling and marketing expenses 4(1,435,931) (1,397,251)
Research and development expenses 4(981,400) (919,446)
General and administrative expenses 4(212,639) (266,917)
Net impairment (losses)/reversal on financial assets 4(7,014) 1,073
Other income 549,722 28,574
Other gains/(losses), net 612,615 (9,774)

Operating profit 1,679,908914,789
Finance income 46,66838,219
Finance costs (7,823)(24,084)

Finance income, net 738,845 14,135
Share of results of investments accounted for using equity method 1636,458

Profit before income tax 1,718,916935,382
Income tax expenses 8(62,407) (44,891)

Profit for the year 1,656,509890,491
Other comprehensive (loss)/income:
Items that may be reclassified to profit or loss — Currency translation differences (13,259)1,646
Items that may not be reclassified to profit or loss — Currency translation differences (51,048)27,413

Total comprehensive income for the year 1,592,202919,550

– 18 –
Year ended December 31,2025 2024
Notes RMB’000 RMB’000
Profit for the year attributable to:
Equity holders of the Company 1,535,274811,530
Non-controlling interests 121,23578,961

1,656,509 890,491
Total comprehensive income for the year
attributable to:
Equity holders of the Company 1,472,200840,986
Non-controlling interests 120,00278,564

1,592,202 919,550
Earnings per share for profit for the year
attributable to the equity holders of the
Company
Basic earnings per share (RMB) 93.19 1.71
Diluted earnings per share (RMB) 93.07 1.69

– 19 –
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at December 31, 2025As at December 31,2025 2024
Notes RMB’000 RMB’000
ASSETS
Non-current assets
Property, plant and equipment 19,66124,987
Right-of-use assets 104,865143,793
Intangible assets 511,588228,113
Deferred tax assets 31,30132,795
Investments accounted for using the equity method 91,891111,039
Long-term investments measured at fair value through profit or loss 107,34610,879
Prepayments, deposits and other assets 40,16524,916

906,817576,522
Current assets
Trade receivables 10411,198 333,413
Prepayments, deposits and other assets 131,214103,109
Short-term investments 81,033128,984
Cash and cash equivalents 3,689,3752,781,173

4,312,8203,346,679
Total assets 5,219,6373,923,201

– 20 –
As at December 31,2025 2024
Notes RMB’000 RMB’000
EQUITY
Share capital 11339336
Share premium 117,341,217 7,217,458
Treasury shares 11(153,682) (48,561)
Other reserves (4,756,466)(4,699,016)
Retained earnings 1,379,81343,602

Equity attributable to equity holders of the
Company 3,811,2212,513,819
Non-controlling interests 234,834200,800

Total equity 4,046,0552,714,619
LIABILITIES
Non-current liabilities
Lease liabilities 77,606115,419
Deferred tax liabilities 10,64113,755

88,247129,174
Current liabilities
Trade payables 12194,382 186,340
Advance from customers 58,92748,165
Other payables and accruals 423,330382,501
Contract liabilities 248,156321,872
Current income tax liabilities 115,76896,777
Lease liabilities 44,77243,753

1,085,3351,079,408
Total liabilities 1,173,5821,208,582
Total equity and liabilities 5,219,6373,923,201

– 21 –
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 General information
XD Inc. (the “Company”) is an exempted company with limited liability incorporated
under the laws of the Cayman Islands on January 25, 2019 and was listed \
on the Stock
Exchange of Hong Kong Limited on December 12, 2019.
The Company is an investment holding company. The Company and its subsid\
iaries,
including structured entities (collectively, the “Group”) are principally engaged in the
development, operation, publishing and distribution of mobile and web ga\
mes and
operation of TapTap, a game community and platform, in the People’s R\
epublic of
China (the “PRC”) and other countries and regions.
2 Basis of preparation
The consolidated financial statements have been prepared in accordance w\
ith
International Financial Reporting Standards as issued by the IASB (“\
IFRS Accounting
Standards”). The consolidated financial statements have been prepared under t\
he
historical cost convention, as modified by the revaluation of financial assets at fair
value through profit or loss, which are carried at fair value.
The preparation of the consolidated financial statements in conformity w\
ith IFRS
Accounting Standards requires the use of certain critical accounting est\
imates. It also
requires management to exercise its judgment in the process of applying \
the Group’s
accounting policies.

– 22 –
(a) Amended standard adopted by the Group
The following amendment has been adopted by the Group for the first time\
for
the financial year beginning on January 1, 2025:
Amendments to IAS 21 Lack of exchangeability
The adoption of the amended standard does not have material impact on th\
e
consolidated financial statements of the Group.
(b) New standards and amendments not yet adopted by the management of the
Group
The following new standards and amendments to standards have not come into
effect for the financial year beginning January 1, 2025 and have not bee\
n early
adopted by the Group in preparing these consolidated financial statement\
s. None
of these new standards and amendments to standards is expected to have a\

significant effect on the consolidated financial statements of the Group\
.
Effective for
accounting year
beginning on or after
Amendments to IFRS 9 and IFRS 7 Amendments to the classification and
measurement of financial instruments January 1, 2026
Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent
Electricity January 1, 2026
Annual Improvements to IFRS Accounting Standards —

Volume 11 IFRS 1 First-time Adoption of
International Financial Reporting
Standards;
IFRS 7 Financial Instruments: Disclosures and its accompanying
Guidance on implementing IFRS 7;
IFRS 9 Financial Instruments;
IFRS 10 Consolidated Financial Statements; and
IAS 7 Statement of Cash Flows January 1, 2026
IFRS 18 Presentation and disclosure in financial
statements January 1, 2027
Amendment to IAS 21 Translation to a Hyperinflationary
Presentation Currency January 1, 2027
IFRS 19 Subsidiaries without Public
Accountability: Disclosures January 1, 2027

– 23 –
Effective for
accounting year
beginning on or after
Amendments to IAS 28 and

IFRS 10 Sale or contribution of assets between an
investor and its associate or joint
venture To be determined
Amendments to Illustrative Examples on IFRS 7, IFRS 18,
IAS 1, IAS 8, IAS 36 and IAS 37 Disclosures about Uncertainties in the
Financial Statements To be determined
The Group is commencing an assessment of the impact of these new or amen\
ded
standards and interpretations, certain of which are relevant to the Grou\
p’s
operations. The adoption of IFRS 18 mainly has impacts on presentation a\
nd
disclosure of income and expenses and adds new disclosure requirements o\
n
management-defined performance measures within the consolidated financia\
l
statements. According to the preliminary assessment made by the Group, e\
xcept
for IFRS 18, none of these is expected to have significant effect on the\

consolidated financial statements of the Group.
3 Segment information and revenue
The Group’s business activities, for which discrete financial informa\
tion is available,
are regularly reviewed and evaluated by the CODM. The CODM, who is responsible
for allocating resources and assessing performance of the operating segm\
ents, has been
identified as the executive directors of the Company that make strategic\
decisions. As
a result of this evaluation, the Group determined that it has operating \
segments as
follows:
Game segment
The game segment offers game publishing and operating services on its ow\
n and via
other Distribution Channels. Revenues from the game segment are primarily derived
from game publishing and operating services.
TapTap platform segment
The TapTap platform segment offers online marketing services to game dev\
elopers,
game publishers or their agents through the Group’s self-developed le\
ading game
community and platform. Revenues from the TapTap platform segment are pr\
imarily
derived from performance-based online marketing services.

– 24 –
The CODM assesses the performance of the operating segments mainly based on
segment revenues and cost of revenues of each operating segment. Thus, s\
egment
result would present revenues, cost of revenues and gross profit for eac\
h segment,
which is in line with CODM’s performance review.
The Group’s cost of revenues for the game segment primarily consists \
of (a)
commission paid to Payment Channels and Distribution Channels; (b) sharing of
proceeds to game developers; (c) cloud service, bandwidth and server c\
ustody fees; (d)
amortization of intangible assets; and (e) employee benefit expenses.
The Group’s cost of revenues for the TapTap platform segment primaril\
y consists of
(a) cloud service, bandwidth and server custody fees; (b) employee b\
enefits expenses;
and (c) amortization of intangible assets.
There were no separate segment assets and segment liabilities informatio\
n provided to
the CODM, as CODM does not use this information to allocate resources to\
or evaluate
the performance of the operating segments.
As at December 31, 2024 and 2025, substantially all of the non-current a\
ssets of the
Group were located in the PRC.
The reconciliation of gross profit to profit before income tax is shown in the
consolidated statement of comprehensive income.

– 25 –
The segment information provided to the Group’s CODM for the reportab\
le segments
is as follows:
Year ended December 31, 2025Game
segment TapTap
platform segment Total
RMB’000 RMB’000RMB’000
Game operating revenues
— Online Games (free-to-play) 3,596,400—3,596,400
— Premium Games (pay-to-play) 128,019—128,019

Subtotal 3,724,419—3,724,419
Online marketing service revenue —1,910,806 1,910,806
Others 71,64856,866128,514

Total revenues 3,796,0671,967,6725,763,739
Cost of revenues (1,237,147)(272,037)(1,509,184)
Gross profit 2,558,9201,695,6354,254,555
Gross margin 67%86%74%
Amortization of intangible assets (16,799)(2,618)(19,417)
Depreciation of right-of-use assets (338)(5,816) (6,154)
Depreciation of property, plant and equipment (205)(3,080) (3,285)

– 26 –
Year ended December 31, 2024Game
segment TapTap
platform segment Total
RMB’000 RMB’000RMB’000
Game operating revenues
— Online Games (free-to-play) 3,316,789—3,316,789
— Premium Games (pay-to-play) 110,731—110,731

Subtotal 3,427,520—3,427,520
Online marketing service revenue —1,527,168 1,527,168
Others 6,54150,878 57,419

Total revenues 3,434,0611,578,0465,012,107
Cost of revenues (1,285,876)(247,701)(1,533,577)
Gross profit 2,148,1851,330,3453,478,530
Gross margin 63%84%69%
Amortization of intangible assets (31,073)(4,756)(35,829)
Depreciation of right-of-use assets (753)(4,993) (5,746)
Depreciation of property, plant and equipment (117)(2,268) (2,385)
Revenues of approximately RMB1,522 million and RMB2,311 million for the \
years
ended December 31, 2024 and 2025, respectively, were from five largest single
external customers.

– 27 –
The following table summarizes the percentage of revenue from a single c\
ustomer
individually exceeding 10% of the Group’s revenue during the year end\
ed December
31, 2024 and 2025, respectively.
Year ended December 31,2025 2024
Online marketing service revenue
Customer A 18%14%

The table below sets forth a breakdown of the Group’s revenue by timi\
ng of
recognition for the years ended December 31, 2024 and 2025, respectively\
:
Year ended December 31,2025 2024
RMB’000 RMB’000
Over time 2,676,1342,485,719
At a point of time 3,087,6052,526,388

5,763,7395,012,107
The table below sets forth a breakdown of the Group’s revenue by geog\
raphical areas
for the years ended December 31, 2024 and 2025, respectively:
Year ended December 31,2025 2024
RMB’000 RMB’000
Game operating revenues
Chinese mainland 1,965,4102,134,300
Other areas (Note a) 1,759,0091,293,220

Total 3,724,4193,427,520
Online marketing service revenue
Chinese mainland 1,910,8061,527,168

(a) Other areas revenue mainly include game revenue from local versions operated in Southeast
Asia, Hong Kong, Macao, Taiwan, North America, Japan and South Korea.

– 28 –
4 Expenses by nature
Year ended December 31,2025 2024
RMB’000 RMB’000
Promotion and advertising expenses 1,237,1721,265,727
Employee benefits expenses 1,225,6091,195,894
Commissions charged by Payment Channels and Distribution Channels 606,259668,947
Cloud service, bandwidth and server custody fee 299,643249,765
Sharing of proceeds to game developers 283,738329,216
Professional and technical services fee 257,616193,625
Tax surcharges 65,66539,713
Office expenses 45,81538,729
Depreciation of right-of-use assets 38,21139,558
Amortization of intangible assets 24,25239,893
Depreciation of property, plant and equipment 15,35921,768
Net impairment losses/(reversal) on financial assets 7,014(1,073)
Impairment of non-financial assets 5,8956,816
Auditor’s remuneration — Audit service 3,5003,520
— Non-audit service 2,190870
Others 28,23023,150

Total 4,146,1684,116,118

– 29 –
5 Other income
Year ended December 31,2025 2024
RMB’000 RMB’000
Government subsidies 48,04228,574
Interest income from loan receivable 1,355—
Interest income from term deposits above three months 325—

Total 49,72228,574
There are no unfilled conditions or contingencies related to the above g\
overnment
subsidies.
6 Other gains/(losses), net
Year ended December 31,2025 2024
RMB’000 RMB’000
Net foreign exchange gains/(losses) 15,611(19,662)
Fair value changes of wealth management products issued by commercial banks 1,9474,767
Net gain on disposal of non-current assets 1,6742,686
Gains on disposal of investments accounted for using the equity method 1,300—
Net gain on repurchase of convertible bonds —4,975
Fair value changes of long-term investments measured at fair value through profit or loss (7,933)(7,963)
Others 165,423

Total 12,615(9,774)

– 30 –
7 Finance income, net
Year ended December 31,2025 2024
RMB’000 RMB’000
Finance income
Interest income from bank deposits 46,66838,219
Finance costs
Interest expenses on lease liabilities (6,711)(8,505)
Bank charges (1,112)(5,360)
Interest expenses on convertible bonds —(8,701)
Interest expenses on borrowing —(1,518)

Finance income, net 38,84514,135
8 Income tax
Cayman Islands
Under the current laws of the Cayman Islands, the Company and its subsid\
iaries
incorporated in the Cayman Islands are not subject to tax on income or c\
apital gain.
Additionally, the Cayman Islands does not impose a withholding tax on payments of
dividends to shareholders.
British Virgin Islands
Under the current laws of the British Virgin Islands, entities incorporated in British
Virgin Islands are not subject to tax on their income or capital gains.
Hong Kong
Hong Kong profits tax rate is 8.25% for the first HKD2 million assessabl\
e profits, and
16.5% for assessable profits in excess of HKD2 million.
Singapore
Singapore profits tax rate is 17%.

– 31 –
PRC corporate income tax (“CIT”)
CIT provision was made on the estimated assessable profits of entities w\
ithin the
Group incorporated in the PRC and was calculated in accordance with the \
relevant
regulations of the PRC after considering the available tax benefits from\
refunds and
allowances. The general PRC CIT rate is 25% during the years ended Decem\
ber 31,
2024 and 2025.
Certain subsidiaries of the Group in the PRC, accordingly, are qualified\
as “high and
new technology enterprise” and entitled to a preferential income tax \
rate of 15% during
the years ended December 31, 2024 and 2025.
Certain subsidiaries are accredited as “software enterprises” under the relevant PRC
laws and regulations. They are exempt from CIT for two years, followed by a 50%
reduction in the applicable tax rates for the next three years, commenci\
ng from the first
year of profitable operation after offsetting tax losses generating from prior years (the \
“tax holiday”).
According to the relevant laws and regulations promulgated by the State \
Tax Bureau
of the PRC that were effective from 2018 onwards, enterprises engaged in\
research and
development activities are entitled to claim 175% of their research and development
expenses so incurred as tax deductible expenses when determining their assessable
profits for that year (“Super Deduction”). According to the relevant laws and
regulations that was effective from 2022, the tax deductible ratio was increased to
200%. The Group has made its best estimate for the Super Deduction to be\
claimed for
the Group’s entities in ascertaining their assessable profits during \
all the years
presented.
PRC Withholding Tax (“WHT”)
According to the applicable PRC tax regulations, dividends distributed b\
y a company
established in the PRC to a foreign investor with respect to profits derived after
January 1, 2008 are generally subject to a 10% WHT. The withholding tax \
rate may be
lowered to a minimum of 5% if there is a tax arrangement between China a\
nd the
jurisdiction of the foreign investors.

– 32 –
Year ended December 31,2025 2024
RMB’000 RMB’000
Current income tax 64,06314,959
Deferred income tax (1,656)29,932

Total income tax expenses 62,40744,891
The tax on the Group’s profit before income tax differs from the theo\
retical amount
that would arise using the tax rate of 25% for the years ended December 31, 2024 and
2025, being the tax rate of the major subsidiaries of the Group.
9 Earnings per share
Basic earnings per share is calculated by dividing the earnings attribut\
able to equity
holders of the Company by the weighted average number of shares in issue\
during the
respective years.
Year ended December 31,2025 2024
Earnings attributable to equity holders of the Company (RMB’000) 1,535,274811,530
Weighted average number of shares in issue (thousands) 480,865474,249

Basic earnings per share (in RMB) 3.191.71
Diluted earnings per share is calculated by adjusting the weighted avera\
ge number of
ordinary shares outstanding to assume conversion of all dilutive potenti\
al ordinary
shares.
For the year ended December 31, 2024, the Group had potential dilutive ordinary
shares arising from convertible bonds, share options and restricted shar\
e units.

– 33 –
For the year ended December 31, 2025, the Group had potential dilutive ordinary
shares arising from share options and restricted share units.
Year ended
December 31, 2025 Year ended

December 31, 2024
Profit attributable to equity holders of the Company (RMB’000) 1,535,274811,530
Interest cost savings on convertible bonds (RMB’000) —3,756

Profit attributable to equity holders of the Company
for the calculation of diluted earnings per share
(RMB’000) 1,535,274815,286
Weighted average number of shares in issue (thousands) 480,865474,249
Adjustments for convertible bonds (thousands) —5,744
Adjustments for share options and restricted share units (thousands) 18,9083,237

Weighted average number of ordinary shares used as
the denominator in calculating diluted earnings per
share (thousands) 499,773483,230

Diluted earnings per share (in RMB) 3.071.69
10 Trade receivables
As at December 31,2025 2024
RMB’000 RMB’000
Distribution Channels and game publishers 212,701214,598
Online marketing service customers 205,366120,283
Others —21

418,067334,902
Less: allowance for impairment (6,869)(1,489)

411,198333,413

– 34 –
(a) Distribution Channels and game publishers and online marketing service
customers usually settle the amounts within 30–120 days. Related part\
ies are
granted with a credit period of 90 days. Aging analysis of trade receiva\
bles based
on the recognition date of the gross trade receivables at the respective\
reporting
dates are as follows:
As at December 31,2025 2024
RMB’000 RMB’000
Within 3 months 384,905291,499
3 months to 6 months 28,34141,300
6 months to 1 year 4,2261,992
1 to 2 years 489106
Over 2 years 1065

418,067 334,902

11 Share capital, share premium and shares held for share award schemes
Number of
shares Nominal
value of shares Equivalent
nominal value of shares Share
premium shares held
for share award
schemes
(a)
’000 USD’000 RMB’000 RMB’000RMB’000
Authorized
Ordinary shar