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Investing.com -- Yalla Group Limited (NYSE:YALA), the largest Middle East and North Africa-based online social networking and gaming company, reported first-quarter earnings that beat expectations but saw its shares tumble 13.7% due to weak guidance for the second quarter.
The company posted adjusted earnings per share of $0.20 for Q1 2025, up from $0.17 in the same period last year. Revenue rose 6.5% YoY to $83.9 million, slightly above the analyst consensus of $83.3 million. However, Yalla’s outlook for Q2 2025 revenue of $76-83 million fell short of the $86.9 million analysts were expecting.
Despite the Ramadan holiday falling entirely within Q1 this year, Yalla managed to grow its average monthly active users by 17.9% to 44.6 million. The company attributed this growth to its refined user acquisition strategy and AI-driven traffic optimization.
"We kicked off 2025 with a strong first quarter," said Yang Tao, Founder, Chairman and CEO of Yalla. "Even with the impact of Ramadan, which fell entirely within the first quarter this year, our revenues reached US$83.9 million, up 6.5% year over year and beating the upper end of our guidance."
The company’s net income increased 17% YoY to $36.4 million, with a net margin of 43.4%. Non-GAAP net income rose 10.9% to $39.1 million.
Yalla also announced plans to accelerate its share buyback program, increasing this year’s target by an additional $22 million to a total of $50 million for 2025.
Despite the positive Q1 results, investors appeared to focus on the weaker-than-expected Q2 guidance, sending the stock down sharply in after-hours trading.
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