Earnings Call Transcript - GMM Q4 2025

Operator, Operator

Good day, and thank you for standing by. Welcome to the Global Mofy AI Limited Fiscal Year 2025 Financial Results Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Celine Meng. Please go ahead.

Celine Meng, Securities Affairs Representative

Thank you, operator. Welcome, everyone, to Global Mofy's Fiscal 2025 Financial Results Conference Call, covering the period between September 30, 2024, and September 30, 2025. I appreciate you all joining us on such short notice. My name is Celine, and I serve as the company's Securities Affairs representative. Today, I will present our prepared comments, followed by a Q&A session with our CTO, Ms. Wenjun Jiang, and CFO, Mr. Chen Chen. Fiscal year 2025 marks a pivotal year of strategic transformation for Global Mofy. This year not only showcases strong financial performance but also signifies our transition from AI-driven tools to AI-native production workflows, establishing a foundation for scalable, defensible, and margin-accretive growth. We will review our financial results, strategic milestones, core technologies, and growth outlook during this call. Please note that today's discussion contains forward-looking statements that involve risks and uncertainties, which may lead to actual results differing materially from those indicated. We urge you to review our Form 20-F and other SEC filings for additional details. Today's conference call is being recorded, with a replay available on the company's website. The fiscal year 2025 yielded record financial performance while also marking a strategic inflection point for Global Mofy. Notable highlights include total revenue of $55.9 million, a 35.3% year-over-year growth, and a gross profit of $22.5 million. We entered into a digital cultural tourism cooperation framework with Lianyungang’s Haizhou High-Tech District, completed $10.3 million in strategic private placement financings, established Gauss AI Lab and an end-to-end AI-powered content framework, and expanded our global AI data and training capabilities through Eaglepoint AI Inc. These milestones reflect a fundamental transformation in how digital content is produced rather than mere incremental optimization. For those unfamiliar with Global Mofy, we are an AI-driven technology solutions provider specializing in virtual content production and 3D digital asset development for partners across the digital content value chain. Through advanced AI and 3D reconstruction technologies, we create high-precision digital representations of characters, scenes, and props for deployment across film, television, gaming, XR, and emerging AI-native workflows. Operating in Beijing and Zhejiang, China, we have continued scaling our technology platform and asset base since our NASDAQ listing on October 10, 2023, under the ticker GMM.US. According to a Frost & Sullivan report, Global Mofy is now recognized as one of China's leading digital asset banks, boasting over 150,000 high-precision 3D digital assets. Our evolution from a traditional digital content provider to an AI-native production platform is highlighted by key milestones such as early leadership in virtual production, strategic partnerships with Alibaba DAMO Academy and other industry leaders, our NASDAQ listing in 2023, and the establishment of our Zhejiang headquarters. We've launched our flagship AIGC platform based on NVIDIA Omniverse and expanded into global AI training and data engineering through Eaglepoint AI. Our roadmap outlines a deliberate multiyear transition towards AI-native infrastructure rather than short-term experimentation. Our commitment to technology and innovation is evidenced by our National High-tech Enterprise designation, several most valuable investment awards, and our roles in MIIT, Metaverse, and digital economy organizations, which enhance our credibility with enterprise customers, government partners, and institutional investors. Innovation is at the core of Global Mofy's long-term strategy. In FY 2025, our R&D spending reached $7.5 million, or 14.1% of revenue, significantly exceeding the industry average. We hold 45 independent intellectual properties, adding over 10 new IPs annually. Starting in fiscal year 2025, we intensified the development of generative AI production tools, AI-native workflows, and AI agent-driven data governance frameworks. Our scale advantage in 3D digital assets, along with deep production expertise, positions us distinctly for the next generation of AI-driven content creation. Our mission focuses on empowering creativity through the innovative application of AI and digital technology, which drives us to push boundaries and redefine possibilities in the digital content industry. Our vision is clear: to promote technological advancements while nurturing a culturally rich corporate environment. We value innovation by encouraging groundbreaking ideas and solutions, prioritize exceeding customer expectations, and aspire to create the world's leading digital asset bank for AI-native content industries. The Gausspeed platform serves as our flagship AIGC platform for industrial-grade cinematic production, built on NVIDIA Omniverse to facilitate professional-grade visual generation. Gausspeed produces stunning, realistic visuals with advanced AI technology, ensuring high-quality results for virtual projects. Our storyboard and shot design tools allow creators to visualize and plan themes precisely, cutting down on costly revisions. Gausspeed aids in accurate preproduction planning and allows for flexibility and adaptability through editable assets. We are confident in Gausspeed's potential to revolutionize the filmmaking industry by providing an AI-driven tool that enhances creativity and efficiency. Our extensive library of over 150,000 high-precision 4K 3D digital assets supports various production needs, while Mofy Lab consolidates over 40 proprietary software systems into an integrated content generation platform, offering systematic and scalable production outcomes. Key milestones in Global Mofy's recent history include our NASDAQ listing which increased global visibility, the opening of our Zhenjiang headquarters, entry into the AIGC field through strategic partnerships, and the completion of a major strategic transformation. Our management team, led by CEO Mr. Haogang Yang and supported by CFO Mr. Chen Chen, CTO Ms. WenJun Jiang, and CMO Mr. Nan Zhang, executes our strategy with discipline and a long-term focus. Now, let’s review our financial performance for the fiscal year ending September 30, 2025. As of that date, our total assets grew to $78 million from $59.2 million a year earlier, reflecting a 31.9% year-over-year increase. This growth mainly results from our continued investment in intangible assets linked to 3D digital assets and AI technologies, reinforcing our long-term technological foundation and supporting the shift to AI-native production workflows. Our revenue for FY 2025 rose to $55.9 million, a 35.3% increase from $41.4 million in the previous year, fueled by robust demand for virtual content production and 3D digital asset licensing across multiple markets, including film, television, advertising, gaming, and digital tourism. Demand remained consistent throughout the year, mirroring both the recovery of content production activity and the growing adoption of digital and AI-enhanced production solutions. Furthermore, during FY 2025, we strategically engaged in the expanding short-form drama market through an innovative cooperation model, which is anticipated to diversify our revenue sources and support incremental revenue growth alongside our core virtual technology services. Our gross profit for FY 2025 was $22.5 million, compared to $20.8 million in FY 2024, resulting in a gross margin of 40.2% for the year. This margin profile reflects a period of strategic investment as we scale our AI-native production infrastructure, enhance R&D initiatives, and deploy AI agent-based workflows intended for long-term efficiency. While these investments have modestly impacted near-term margins, we believe they are essential for unlocking future structural margin improvements as AI workflows mature and production efficiency advances. Research and development expenses for FY 2025 totaled around $7.9 million, up 6.7% from $7.4 million the previous year. These investments primarily supported expanding our 3D digital asset library to meet the rising demand for AI applications, advancing generative AI tools, and initiating AI-native production workflow research via the Gauss AI Lab. Global Mofy is transitioning toward embedding AI inherently across production, data, and workflows. Our growth strategy emphasizes international market expansion. In June 2025, we made a strategic investment in Wetruck AI, a digital freight platform in Ethiopia, marking our first entry into the African market and underscoring our intent to leverage our AI capabilities beyond digital content into real-world infrastructure and logistics in emerging markets. Building on this foundation, we established Eaglepoint AI, Inc. in January 2026, a Delaware-based AI infrastructure company, primarily owned by our wholly-owned U.S. subsidiary, GMM Discovery, LLC. Eaglepoint AI focuses on AI data engineering, data governance, and AI model training support, forming a crucial aspect of our global AI infrastructure strategy. Our additional growth strategies incorporate strategic partnerships and selective acquisitions, positioning our brand as an AI-native content infrastructure provider, ongoing R&D investment in AIGC and asset expansion, and an improved customer experience through intelligent workflows. These strategies collectively underpin our long-term margin enhancement and scalability. Thank you for your attention. Before we proceed to questions, I would like to mention that the management team will respond in Chinese. Should there be any discrepancies between the translated responses and the original answers, the original responses will be deemed accurate. Please feel free to ask any questions regarding our financial performance, strategic initiatives, or market outlook.

Operator, Operator

We going to proceed with our first question. Question comes from the line of an Analyst from Red Dragon.

Unknown Analyst, Analyst

Okay. Here's my first question. Could you explain how the company maintains a stable and strong revenue growth trajectory?

Chen Chen, CFO

In fiscal year 2025, the company achieved a revenue of USD 55.94 million, representing a 35.3% year-over-year increase and marking a record high in our history. This growth was primarily driven by three factors: First, continued demand growth for 3D digital assets and models across multiple application areas, including film, advertising, and virtual cultural tourism. Second, the overall expansion of the film, TV, and short drama market increased demand for high-quality virtual content production services. Third, in response to the rapidly growing short drama market, the company adopted innovative cooperation models to enter short drama investments and production, further diversifying our revenue sources. We believe the continued development of the short drama business will provide additional revenue support and diversification going forward.

Unknown Analyst, Analyst

I have the second question, can you provide an outlook of future performance?

Chen Chen, CFO

Thank you for your question. Building on the stable growth of our existing core business lines, the company expanded into short drama production in fiscal year 2025 as part of our virtual technology services and continues to advance our strategic planning in the AI agent space, which together strengthen our growth foundation. Looking ahead to fiscal year 2026, we expect to maintain strong growth momentum and further expand our market presence across key application areas through ongoing technological innovation, supporting sustainable and steady revenue growth over the long term.

Operator, Operator

I am showing no further questions. So I'll now turn back to Celine Meng for closing remarks.

Unknown Analyst, Analyst

Operator, can you repeat one more time the directions to join the call.

Operator, Operator

The next questions come from the line of Jason Liu from an undisclosed source.

Unknown Analyst, Analyst

Can you hear me?

Operator, Operator

Yes, we can hear you.

Unknown Analyst, Analyst

I've got two questions. And the first one is over the next 3 to 5 years, will the company prioritize technical or ecosystem expansion? And how will resources be allocated?

Wenjun Jiang, CTO

I believe the technological depth and ecosystem expansion are complementary rather than conflicting. Deepening our technology enables us to respond effectively to evolving market dynamics. While ecosystem expansion allows us to leverage existing technological strengths to attract more digital content, cultural tourism, and entertainment projects. Our resource allocation philosophy can be summarized as technology first and service-driven. Our technology priority includes continued investment in AIGC and 3D reconstruction technologies, both of which form our core competitive advantages, along with service expansion, including leveraging these technologies to broaden application scenarios and deliver more comprehensive solutions to clients. Global Mofy will remain technology-driven while steadily expanding its ecosystem to achieve balanced growth and innovation. Thank you. We hope we have answered your question.

Unknown Analyst, Analyst

Yes. I got one more question. The second one is, is short drama investment a long-term strategy or a short-term monetization approach?

Wenjun Jiang, CTO

First of all, short drama investment is not merely a short-term monetization tool, but rather an integral part of the company's long-term strategic planning. Driven by technology ecosystem expansion, as mentioned before and user experience optimization, short dramas enhance brand visibility while serving as a strategic entry point for a broader market and technology application. We build the segment as a platform for aligning technical capabilities with sustainable commercial value. Thank you. We hope that we have answered your questions.

Operator, Operator

I am showing no further questions at this time. So I'll turn the call back to management for closing remarks.

Celine Meng, Securities Affairs Representative

Thank you. Thank you all for your insightful questions and for joining us today. On behalf of the entire Global Mofy team, we thank you for your continued support and interest in our journey. We look forward to reconnecting with you again soon. If you have any further questions, please do not hesitate to reach out to our Investor Relations team through email. Have a great day.

Operator, Operator

This does conclude the program. You may now disconnect.