Gamehaus Q3 Earnings Call Highlights

Posted by Brian Himes on Jun 8th, 2026

Gamehaus (NASDAQ:GMHS) reported third-quarter fiscal 2026 revenue above its prior guidance range while management emphasized improving profitability, tighter marketing discipline and growing use of direct-to-consumer payments and artificial intelligence across the business.

On the company’s earnings call, Chairman Brian Xie Feng said Gamehaus continued to execute an “efficiency-first profitability focus strategy” during what he described as a seasonally softer quarter across key markets. Total revenue for the quarter ended March 31, 2026, was $26.2 million, down 9.1% from $28.8 million a year earlier, but above the upper end of the company’s previous forecast.

Shawn Zhang, head of capital markets and investor relations, said in-app purchase revenue fell 9.9% year-over-year to $23.4 million, while advertising revenue was $2.8 million, slightly below $2.9 million in the prior-year period. Zhang said the decline reflected lower traffic and user acquisition, but added that improvements in monetization helped offset some of the impact.

Profitability Improves Despite Revenue Decline

Gamehaus posted net income of $0.5 million for the quarter, compared with $0.4 million a year earlier. Operating income rose to $0.5 million from $0.3 million, and operating margin expanded to 2.1% from 1%.

For the first nine months of fiscal 2026, cumulative net income rose approximately 40% year-over-year to about $3.2 million, according to management. Brian said the improvement was not tied to a single quarter, but reflected work across product mix, marketing, cost structure and payment channels over several quarters.

Total operating costs and expenses declined 10.1% year-over-year to $25.7 million. Cost of revenue decreased 12.7% to $12 million, which Zhang attributed mainly to lower platform commission expenses as direct-to-consumer, or DTC, adoption increased, as well as reduced profit-sharing payments to game developers for mature titles.

Selling and marketing expenses fell 15.5% to $10.3 million, driven largely by a $2 million reduction in advertising spend. Research and development expenses rose 24.1% to $1.6 million, reflecting collaborations with developers across development and testing phases. General and administrative expenses increased 33.1% to $1.8 million, which Zhang said was due to higher salary expenses tied to corporate governance, financial reporting, investor relations and strategic hiring.

Higher Monetization Comes With Smaller User Base

Management said Gamehaus’ average revenue per daily active user, or ARPDAU, reached $0.55, up approximately 13% year-over-year. Daily payer conversion improved from 2.2% to 2.4%.

Brian attributed those gains to the company’s player segmentation system, which uses behavioral data to tailor in-game events and content for different player groups. He said the company is continuing to iterate on content formats and presentation to drive stronger engagement and higher willingness to spend.

At the same time, management acknowledged that monthly active users and daily active users declined year-over-year. Brian said the decline was “a direct result” of the company’s decision to pull back on lower-return user acquisition and focus on higher-value players. He described the shift as a deliberate trade-off toward a higher-quality revenue mix.

Management said it expects the user base to return to growth as multiple new titles launch through fiscal 2027.

DTC Revenue Mix Continues to Rise

Gamehaus said its companywide DTC revenue mix reached approximately 13.9% by the end of March, up from roughly 10% in the prior quarter. For its flagship title GCS, DTC penetration reached approximately 36.7%. The company also completed the DTC rollout across its full Social Casino portfolio during the quarter.

Brian said the company expects companywide DTC penetration to reach 15% to 20% by the end of fiscal 2026. He described DTC as more than a payment optimization tool, saying it helps Gamehaus build direct relationships with players.

During the question-and-answer session, Jinyu Asset analyst Hua Rong asked what was preventing faster DTC adoption, noting that most revenue still flows through platforms that charge commissions. Chief Executive Officer Carl Cai Yimin said the company must balance compliance, user experience, payment conversion and platform ecosystem considerations.

Carl said the U.S. is currently the primary market where Gamehaus has broad latitude to present third-party payment options in-game. He also said app store payments remain the simplest and most trusted method for many users, and pushing DTC too aggressively could hurt overall conversion. The company’s goal, he said, is to maximize total net revenue rather than simply maximize DTC penetration.

Pipeline Includes RPG and Puzzle Titles

Brian said Gamehaus made progress in both RPG and Puzzle games during the quarter. One RPG signed last quarter is now in commercial testing and is expected to go live around the end of the second calendar quarter of 2026, initially in Hong Kong, Macau and Taiwan, before expanding to Japan, Korea, North America, Europe and other regions.

A second custom-developed RPG remains on track for launch around September, and Gamehaus signed an additional RPG title for global distribution with a targeted August-to-September launch window.

In response to a question from Sanhye Capital analyst Zhenhui Gang about potential cannibalization among multiple RPG launches, Carl said Gamehaus plans to stagger releases by roughly three to four weeks. He said marketing budgets will be allocated dynamically based on testing results, payback periods and return on investment, rather than supporting all three titles with heavy spending at the same time.

In Puzzle, Gamehaus tested seven to eight prototypes during the quarter, with two moving into extended development. Brian said an already-live, moderately scaled Puzzle title is providing operational and monetization data to refine the company’s approach in the category.

AI Becomes Broader Strategic Focus

Management also highlighted artificial intelligence as a growing part of Gamehaus’ operations. Brian said AI has moved beyond standalone tools and is being integrated into R&D systems, business workflows and the company’s GBS platform.

The company said its HaoHan AI creative platform processed nearly 70,000 requests during the quarter, exceeding a prior target of 60,000. Gamehaus’ centralized AI gateway handled approximately 240,000 large language model calls, with use cases including customer service automation, market scanning, operational Q&A and early-stage AI agent workflows.

Brian said the near-term financial impact remains modest, but argued that AI capabilities are becoming part of the company’s medium- and long-term competitive advantage. Carl added during the Q&A session that Gamehaus is working to connect AI-driven content generation with its global distribution capabilities, including AI-generated game content. He said potential applications beyond games remain exploratory.

Gamehaus ended the quarter with $18.3 million in cash and cash equivalents, compared with $15.3 million as of June 30, 2025. The company said it has sufficient liquidity for working capital needs over the next 12 months.

As of March 31, Gamehaus had repurchased approximately 392,000 Class A ordinary shares for about $482,000 under a $5 million share repurchase program authorized in August 2025 and running through August 18, 2026.

For the fourth quarter of fiscal 2026, ending June 30, 2026, Gamehaus guided for total revenue of $23 million to $26 million. Management said the outlook reflects the current pace of product launches, pre-launch marketing investment and the reallocation of operating resources from later-lifecycle titles to new products.