IGG Inc.: IGG Inc (IGGGF) (Q4 2024) Earnings Call Highlights: Revenue Growth and Strategic Game Releases

In This Article: Release Date: March 27, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript . Positive Points IGG Inc ( IGGGF ) reported a significant increase in annual revenue, reaching 5.74 billion Hong Kong dollars, marking a 9% worldwide increase. The company's APP business saw substantial growth, with annual revenue surpassing 1 billion and a net profit margin increase from 5% to 9%. IGG Inc ( IGGGF ) plans to release three heavyweight new games in 2025, including 'Frozen War' and 'Tycoon Master', which show promising early-stage data. The company has a strong cash position with cash and cash equivalents of 2.25 billion Hong Kong dollars, supporting future growth and development. IGG Inc ( IGGGF ) is actively exploring AI applications in games to enhance user experience and reduce costs, leveraging declining AI token prices. Negative Points Despite the growth, the company faces skepticism from some investors regarding the authenticity of its APP business, prompting the need for increased transparency. The company's profitability is not yet comparable to past levels, indicating room for improvement in financial performance. IGG Inc ( IGGGF ) has decided to retain more cash for business expansion, resulting in no special dividend for the year, which may disappoint some shareholders. The company acknowledges challenges in entering the Chinese market due to cultural and regulatory barriers, limiting potential revenue growth from this significant market. Marketing expenses for new games will be cautiously managed, potentially limiting aggressive growth strategies in the short term. Q & A Highlights Q : What is IGG's strategy for R&D and sales expenditure in 2025? A : The company plans to maintain R&D expenses at the same level as last year. Sales expenses will be adjusted dynamically based on game performance. The focus is on ensuring profitability and growth, especially given the current economic climate. Marketing efforts will be gradual, with increased investment contingent on game performance. (Respondent: CEO Mr. Xu) Q : Can you provide growth and profitability targets for the APP business in 2025? A : The APP business aims to increase its net profit margin from 9% to between 12% and 15%. The focus will be on maintaining growth while ensuring profitability, with a steady increase in revenue expected. (Respondent: CFO Mr. Shen Jielei) Q : How is IGG incorporating AI into its games, and what are the future plans? A : IGG is actively exploring AI applications in games, such as smart NPCs and game assistants, to enhance user experience. With declining AI costs, the company plans to integrate AI more extensively into medium-level DAU games. (Respondent: CEO Mr. Xu) Q : What is the revenue outlook for IGG in 2025, and which new game is expected to perform best? A : IGG expects a conservative revenue increase of 5-10% even if new games are not successful. Among the new games, PSS is expected to perform best, followed by Tycoon Master and Frozen War. (Respondent: CEO Mr. Xu) Q : What is the dividend policy for 2025, and why is there no special dividend? A : IGG will allocate 30% of its profit as dividends, consistent with past practices. There is no special dividend this year as the company is focusing on retaining cash to support the launch of three new heavyweight games and to drive business expansion. (Respondent: CFO Mr. Shen Jielei) For the complete transcript of the earnings call, please refer to the full earnings call transcript . This article first appeared on GuruFocus .