iDreamSky Technology Holdings Limited (IDREAMSKY, SEHK: 01119) released its unaudited results for the six months ended 30 June 2026, revealing a mixed performance as advertising gains offset a sharp downturn in game income but failed to prevent a profit slide.

Financial Performance • Revenue rose 4.7% year-on-year to RMB 718.27 million, driven by a surge in information-service revenue, which grew to RMB 234.18 million from RMB 13.59 million a year earlier. • Game revenue fell 27.7% to RMB 483.64 million after the company closed low-margin titles and legacy games matured. Games now represent 67.3% of total revenue, down from 97.5% in 1H 2025. • Gross profit declined 30.5% to RMB 201.17 million as the gross margin compressed to 28.0% from 42.2%, reflecting a 30.5% rise in cost of revenues to RMB 517.10 million. • Profit for the period decreased 35.7% to RMB 21.20 million; adjusted profit contracted 69.7% to RMB 28.21 million. • EBITDA slipped 4.9% to RMB 105.39 million, while adjusted EBITDA fell 41.7% to RMB 94.60 million.

Cost Structure and Efficiency • Selling & marketing costs fell 19.4% to RMB 87.44 million, reducing their revenue share to 12.2% (1H 2025: 15.8%) on improved customer-acquisition efficiency. • R&D spending declined 21.1% to RMB 38.39 million, reflecting the maturing of self-developed title “Strinova” and wider use of AI to streamline development. • General & administrative expenses were trimmed 8.7% to RMB 43.02 million through tighter cost controls.

Balance-Sheet Movements • Cash and cash equivalents fell 42.2% to RMB 108.66 million. • Total borrowings rose 38.3% to RMB 1.40 billion, lifting the gearing ratio to 74.7% (31 Dec 2025: 62.1%). • Current ratio eased to 0.94 (31 Dec 2025: 0.96) and debt ratio increased to 56.8%. • No interim dividend was declared.

Operational Highlights • Evergreen titles “Subway Surfers,” “Gardenscapes,” “War Robots,” “Homescapes,” and “Shop Titans” continued to underpin revenue. A WeChat Mini-Game version of “Subway Surfers” contributed 15% of the title’s first-half billings. • Self-developed shooter “Strinova” posted a 41% year-on-year rise in monthly ARPU and a 30% increase in daily active users, supported by seven major updates and new gameplay modes. • A pipeline of multi-platform releases— including “Hustle Castle,” “Weapon Toss,” “Furry Balls,” “War Masters,” “Furry Road,” and “Pixel Gun 3D”— is scheduled for 2H 2026. • AI deployment accelerated: monthly token consumption surpassed 500 billion, and proprietary AI platforms “Camena” (content production) and “Metis” (game-ops analytics) are fully operational. Character-based AI agents debuted in “Subway Surfers” and “Strinova,” with wider rollout planned.

Strategic Outlook Management targets continued portfolio diversification, further commercialization of self-developed IP, and deeper AI integration across R&D, operations, and in-game experiences to mitigate industry cyclicality and bolster long-term competitiveness.

Regulatory & Governance Notes • The company remains in compliance with Hong Kong’s Corporate Governance Code, though Chairman and CEO roles continue to be held by founder Mr. Chen Xiangyu. • No material acquisitions or disposals occurred during the period, and no significant subsequent events were reported up to 27 August 2026.