VNG announces financial report for the first 6 months of 2024

(HCMC, August 29, 2024) VNG Corporation (VNG) has just announced its financial report for the first 6 months of 2024 (FS) with net revenue reaching VND 4,314 billion. The company determined to promote the "Go Global" strategy, and at the same time expected two new spearheads - AI and B2B - to create breakthrough revenue in the second half of 2024.

*VNG Campus Headquarters in District 7, Ho Chi Minh City*

Notable business indicators in the first half of 2024

	1H23	1H24	YOY(%)
Online games
Total bookings (billion VND) ( 1)	3,743	3,613	(3%)
Bookings from international markets (billion VND)	831	1,026	23%
Quarterly Active Users (QAU - millions) ( 2)	76	77	1%
Zalo
Monthly Active Users (MAU - million) ( 3)	75	77	2%
Number of messages sent per day (million) (4)	1,786	1,918	7%

- In the first half of 2024, the company's net revenue reached VND 4,314 billion. Gross profit from sales and services reached VND 1,511 billion; adjusted net loss from business activities (5) was VND 400 million.

- Total bookings of the Online Games segment reached VND 3,613 billion, down slightly by 3% compared to 2023. However, total bookings from the international market increased by 23% over the same period in 2023 (YoY), accounting for 28% of the booking structure of the Online Games segment.

- As of the end of June 2024, Zalo continued to record 77 million monthly active users (MAU), up 2% year-on-year, and 1.9 billion messages sent per day, up 7% YoY.

- VNG DB's monthly recurring revenue from external customers (excluding internal revenue) grew 79% in the first half of 2024.

- Zalopay grew 42% in total payment volume, while optimizing marketing costs. Revenue from financial services grew 190% year-on-year.

Despite the unfavorable market context, VNG 's core business segments are still on track and completing challenging projects: Zalo's revenue growth with corporate customers, VNGGames and Zingplay Game Studios continuously "exploring" foreign markets, AI Cloud segment successfully commercialized after only 6 months of implementation, Zalopay repositioned its brand to become an open payment platform.

Sharing about the business results of the first 6 months of the year, Mr. Le Hong Minh - Founder and General Director emphasized: "It will be a huge challenge for the VNG team in the last 6 months of the year when having to simultaneously balance financial goals with business growth goals. However, I believe that with capacity, experience and determination, the VNG team will continue to conquer the challenge for a memorable 20-year-old VNG year." Positive impression from the B2B business segment In the first 6 months of the year, the core business segment Zalo continued to upgrade products serving the group of business customers, with the goal of becoming the No. 1 user-business interaction platform in Vietnam. By the end of June 2024, Zalo had cooperated with many banks to integrate the money transfer feature right in the application, recording a growth of more than 80% in monthly users (MAU) compared to the same period in 2023. Zalo OA continues to be an effective connection channel between users and businesses, with a 25% increase in the number of businesses paying monthly compared to 2023. Also in the first 6 months of the year, VNG Digital Business (VNG DB)'s revenue grew positively, continuously cooperating with prestigious global technology partners such as NVIDIA, ST Telemedia Global Data Centers, Vast Data, .. In the Security segment, Bshield (6) is currently the first application security solution in Vietnam to participate in data protection for the national application VNeID. The trueID biometric solution also became the first unit in Vietnam to pass the iBeta Level 2 test on anti-fake face (7) , providing services to more than 35 domestic banks and financial institutions. Last June, VNG Cloud successfully deployed the first inter-regional cloud computing infrastructure in Vietnam with a bandwidth of 50 Gbps, along with a roadmap to provide high-quality cloud solutions that meet the standards of international cloud service providers. VNG's revenue in foreign markets grew positively. The core business of Online Games also continued to record positive revenue from the global market. In the first half of 2024, total bookings from the international market increased by 23% over the same period, reaching VND 1,026 billion. VNGGames was also honored as “Best Game Publisher” at the Vietnam Game Festival 2024 hosted by the Ministry of Information and Communications and the “Mobile Gaming Excellence Award” from AppsFlyer (8). ZingPlay Game Studios (ZPS) has confirmed that its international revenue from Card & Board exceeds its domestic revenue for the first time. Continuing with this success, in the last 6 months of 2024, ZPS will release more than 10 local & casual games (folk games and simple entertainment) suitable for each country's culture. ZPS also aims to become an "AI-first studio", originating from the idea of launching a game studio using AI, providing the necessary tools for users to create their own games.

*Online Games Bookings from International Market (billion VND)*

Last June, VNG DB's AI Cloud division - GreenNode (9) officially opened the AI Cloud Data Center in Bangkok, Thailand, becoming the first large-scale AI Cloud service provider in Southeast Asia after only nearly 6 months of implementation. This project has simultaneously achieved its goals in terms of deployment speed as well as commercialization capability, with tens of millions of USD in revenue from international customers. VNG currently has a total of 14 offices located in 11 major cities across Asia, including Shanghai, Beijing, Taipei, Bangkok, Singapore, etc.

*GreenNode's Large-Scale GPU Cloud Infrastructure in Bangkok, Thailand*

Affirming its position in the personal user segment, Zalo, as the No. 1 messaging application in Vietnam, continues to promote research and launch AI solutions with the potential for effective commercialization. In the first and second quarters of 2024, Zalo recorded 15 million users experiencing AI services, an increase of 45% over the same period. During Tet 2024, Zalo also cooperated with many FMCG brands to design AI Avatars, actively supporting the branding campaigns of these brands. In terms of revenue, AI Avatar grew by 140% compared to the set target, and is also a successful pioneer in commercializing AI.

*Zalo AI Avatar attracts millions of users*

On August 22, Adtima (the advertising platform of the Zalo ecosystem) and Zalo AI Lab presented a new AI application marketing solution for the advertising and marketing industry, initially transforming into a provider of comprehensive AI solutions, focusing on 4 areas: advertising, creativity, data analysis and customer care. In addition, the Vietnamese assistant Kiki continued to reach the milestone of 820,000 installed cars, accounting for nearly 20% of the market share of cars on the road in Vietnam, up 97% over the same period in 2023. In early July, Zalopay - VNG's electronic payment division converted from a pure e-wallet to an open payment application, accepting many payment methods including e-wallets, bank transfers, cards, Apple Pay and Zalopay's own financial services such as Buy Now Pay Later. This transformation has helped Zalopay payment revenue grow strongly and annual financial services revenue recorded an increase of up to 190% compared to the same period in 2023. In addition, Zalopay also launched a Loyalty Membership program that allows users to accumulate reward points from spending via the multi-function Zalopay QR code and introduced a financial center to support users to explore Zalopay's investment and lending products. With continuous innovation efforts, Zalopay has been certified as a typical Fintech Company in 2024 (10) , and the multi-function Zalopay QR code was honored as "Top 10 Good Vietnamese Products - For Consumer Rights in 2024" (11) . ---

( 1 ) Bookings is a non-GAAP performance indicator used by VNG to evaluate the performance of its Online Games segment. This indicator reflects the amount of money users spent during the period used for calculation. ( 2 ) Quarterly active users, calculated by taking the average of QAUs over the quarters in the calculation period. ( 3 ) Monthly active users, determined by the number of active users in the last 30 days of the calculation period. ( 4 ) Average daily number over the last 30 days of the calculation period (5) Adjusted operating loss is a non-GAAP financial indicator calculated by removing the effects of changes in deferred revenue and related expenses, and non-operating items from the reported operating loss. (6) Mobile application security solution developed by VNG DB team. To date, Bshield has enhanced protection for more than 50 million mobile devices in the Vietnamese market. (7) Certified by the US National Institute of Standards and Technology (NIST). (8) AppsFlyer is a professional marketing analytics platform for mobile applications headquartered in San Francisco, California. (9) GreenNode is a pioneer in providing AI Cloud platform and developing Generative Artificial Intelligence (GenAI) applications developed and operated by VNG DB team. (10) The 2024 Outstanding Vietnamese Fintech Company Award category is part of the Vietnam Outstanding Banking Awards, organized by the International Data Group (IDG) Vietnam in conjunction with the Vietnam Retail Banking Forum event series in collaboration with the Vietnam Banking Association. (11) By the Institute of Economic and Cultural Human Resources Development in collaboration with the Vietnam Consumer Protection Center.