Vietnam tech unicorn VNG reports loss for 7th straight quarter

VNG Corporation, Vietnam’s first tech unicorn, recorded a post-tax loss of VND15 billion ($577,723) in Q1, marking the seventh consecutive quarterly loss, according to its Snapshot Q1/2025.

On a positive note, this loss was half that of the same period last year and significantly lower than previous peak quarters where the figure exceeded VND400 billion ($15.4 million).

VNG (UpCoM:VNZ) posted revenue of over VND2.23 trillion ($85.9 million) in Q1. Although revenue from online games declined nearly 20% year-on-year, this segment remained the company’s largest contributor, accounting for nearly VND1.4 trillion ($53.9 million).

Other income streams included online advertising, value-added internet services, ringtones, and music licensing.

The company’s gross profit for the period was over VND790 billion ($30.42 million), reflecting a gross margin of more than 35%.

According to the leadership, effective cost control helped reduce losses. They attributed the ongoing losses over seven consecutive quarters to increased advertising for new products and strategic initiatives.

Last year, VNG posted a post-tax loss of VND1.18 trillion ($45.45 million), despite setting a profit target of VND150 billion ($5.77 million). However, there were signs of improvement as the loss was halved and revenue posted double-digit growth, driven by its core segments - online gaming, advertising, and fintech.

The gaming segment continued to play a leading role at VNG, with bookings - a key performance metric used by the company - reaching VND1.67 trillion ($64.3 million), of which 20% came from international markets.

During this quarter, VNGGames launched four new titles, with The Play of Genesis generating significant buzz in the Taiwanese market.

In Vietnam, PUBG Mobile posted a 71% year-on-year increase in revenue. According to VNG, user engagement across platforms surpassed 500 million interactions, with 7 million followers on TikTok, making it the most-followed account globally for the game.

MU Luc Dia attracted 100,000 players within the first 24 hours of its release. VNGGames also partnered with VTVCab and ON Live Esports to broadcast the Vietnam Championship Series (VCS) - the nation’s premier League of Legends competition - on television for the first time.

Beyond gaming, artificial intelligence (AI) has emerged as a new growth driver. Zalo AI successfully trained a large language model (LLM) named KiLM-13b-v24.7.1, which scored 66.07 on the VMLU benchmark, ranking second only to Meta’s LLaMA-3-70B.

According to VNG, Vietnam is now among the first three Southeast Asian countries to develop its own LLM. Around 20% of Zalo users now use AI features monthly, including speech-to-text and text-to-speech conversion, translation, and chatbots.

VNG’s AI cloud division, GreenNode, released a dataset named GN-TRVN, designed to improve Vietnamese-language data table processing. The team also collaborated with U.S. tech giant Nvidia to host a series of AI-focused workshops for the financial services sector, which it has identified as a key target market moving forward.

Zalo remained the most widely used messaging app in Vietnam, with nearly 78 million monthly active users and over 2 billion messages sent per day, marking a 5% increase. In Q1, the number of mini-apps on Zalo rose to over 5,300, up 302% year-over-year.

Zalo is increasingly becoming a platform for public services, with the Ministry of Public Security launching an official Zalo account. Hanoi’s traffic police received nearly 8,000 violation reports via Zalo, and a Mini App by the Thai Binh provincial Police registered over 10,000 visits in just one month, according to VNG.

Zalopay, VNG’s digital payment platform, also saw strong momentum, with transaction volume up 60% and financial service revenue growing 152% compared to the same period last year.

Zalopay partnered with the RAR Center under the Ministry of Public Security to implement eKYC via VNeID and has fully rolled out international QR code scanning across Singapore.

In VNG’s 2024 annual report, chairman Le Hong Minh described the past three years as a “truly challenging” period due to a global slowdown in gaming growth and cautious advertising spending in Vietnam. Meanwhile, new ventures in fintech, cloud computing, and AI are still in the early stages of proving their financial viability.

According to him, while growth has recently slowed, these new directions are expected to accelerate over the next decade. The company is currently balancing sustainable growth in its core areas with prudent innovation.

VNG has 11 subsidiaries and 37 affiliated companies (both direct and indirect) operating in key business sectors including online gaming, electronic payments, digital transformation, and AI.

As of the end of Q1/2025, the company’s total assets stood at VND9.15 trillion ($352.3 million), with nearly VND2.54 trillion in bank deposits.

On the Unlisted Public Companies Market (UPCoM), VNZ closed Wednesday at around VND340,000 ($13.1), with a market capitalization of nearly VND9.5 trillion ($365.8 million).