Q2 2026 The9 Ltd Earnings Call Transcript
Key Points
- The9 Ltd (NCTY) reported a net income of USD32 million in Q2 2026, a 39% increase from the previous quarter, and the strongest half-year net income since its 2004 IPO at USD55 million.
- The9Bit platform surpassed 8 million registered users and over 110,000 games created since its launch in August 2025, demonstrating strong initial adoption and creator activity.
- The9Bit is set to support in-game purchase mid-core games within one to two months, with plans to resolve payment channels for fiat and crypto, which is expected to drive strong revenue growth in the second half of 2026.
- The9Bit has signed 41 brand partners with 127 potential partners in the pipeline, indicating growing commercial adoption and an expanding offline-to-online partnership model.
- The9's investment in MYB, an AI-driven drug discovery company, is progressing with RFAI shareholders' approval of the business combination, potentially valuing MYB at around $7.7 billion and contributing significant investment income to The9's P&L.
- The9Bit's AI-native operating system uses multiple foundation models and an orchestration engine, creating a competitive advantage that improves with production scale, making it increasingly difficult to replicate.
- The9Bit's current revenue scale is still small, as the majority of games on the platform are casual games relying on advertising revenue.
- The9Bit token price is volatile, and the company acknowledges that token price is not a measure of operating performance, indicating potential risk for investors.
- The9Bit's expansion into markets like the US and Europe is expected to face higher competition and customer acquisition costs, requiring deliberate evaluation and adaptation.
- The9Bit's CEO's reputation has been questioned within the industry, and there is a lack of a clear public track record, raising concerns about leadership and execution.
- The9's reliance on fair value recognition of 9Bit tokens for net income may not be sustainable, as digital asset prices can be volatile and may not reflect underlying operational performance.
- The9Bit's token economy is designed for utility, but the actual demand and circulation depend on sustained creator and player engagement, which may not be guaranteed.
Ladies and gentlemen, thank you for standing by and welcome to The9 Limited second-quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Jojo Sue, Investor Relations Specialist. Please go ahead, ma'am.
Thank you, operator. Good evening and good morning, everyone. Welcome to our second quarter 2026 earnings conference call. Joining me today are Mr. George Lai, CEO of The9 Limited, Mrs. Nora Lam, COO of The9bit; and Mr. Gary Gao, COO of The9 Limited. During today's call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned
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