VNG Corp records narrower net loss, stronger cash flow

VNG Corp (HoSE: VNZ) continued to post an accounting loss in 2025 but showed marked improvement in operating cash flow, underpinned by a restructuring of its investment portfolio and a shift toward a holding-company model, with online gaming remaining the group’s main cash-generating business.

According to VNG’s consolidated financial statements for 2025, the company presented a mixed picture, with losses narrowing significantly while cash flow significantly strengthened.

Net revenue rose 17.5% year-on-year to VND10.89 trillion ($419.13 million), from over VND9.27 trillion in 2024. Net operating profit turned positive at VND111 billion ($4.27 million), compared with a loss of VND286 billion a year earlier.

However, higher-than-expected other losses and expenses kept VNG in the red, with a net loss after tax of VND231 billion ($8.89 million) in 2025, although this was a sharp improvement from a loss of VND1.18 trillion ($45.41 million) in 2024.

By business segment, all major units recorded revenue growth. Online gaming remained the largest contributor, generating nearly VND6.94 trillion ($266.95 million), up 8% year-on-year.

Telecommunications and internet value-added services posted the fastest growth, rising 82% to over VND1.69 trillion ($65.15 million), while fintech services revenue increased 47% to VND1.11 trillion ($42.72 million).

The performance points to a more balanced revenue structure, reducing the group’s reliance on gaming compared with previous years.

Despite continued accounting losses, VNG’s cash position improved significantly. Net cash flow and cash equivalents stood at a positive nearly VND2.07 trillion ($79.51 million) in 2025, compared with a negative VND1.1 trillion in 2024.

The improvement was largely driven by a sharp reduction in investment spending and cash inflows from the restructuring of long-term investments. Cash outflows for investment activities fell to VND218 billion ($8.39 million), down from nearly VND2.46 trillion a year earlier.

Shift to a holding-company structure

In 2025, VNG accelerated its restructuring into a group-based governance model. Its online gaming operations were spun off into a new entity, VNGGames Co Ltd, with charter capital of VND50 billion ($1.92 million), aimed at improving operational efficiency in its core business.

At the same time, Zalo Platforms Co Ltd was established with charter capital of VND50 billion, while VNG Online Vietnam Co Ltd saw its capital increased 40-fold. The moves reflect a strategy to clarify legal structures and separate core business lines.

On the investment front, VNG injected an additional VND400 billion ($15.39 million) into Zion, bringing total investment value to VND5.96 trillion ($229.33 million). However, the investment has yet to meet expectations, prompting the parent company to make sizable provisions.

Conversely, VNG scaled back its long-term investment portfolio, cutting its ownership in Verichains Vietnam and Verichains Singapore from 100% to 40%, and divesting its entire stake in Ecotruck Technology JSC.

The company also said it is in the process of dissolving Telio (Singapore), and has written off several underperforming long-term investments, including Cloudverse, Rocketeer, Wildseed Game, and Tiki Global.

While challenges remain, provisions related to Zion have largely been completed, and non-core investments are being actively unwound. Supported by stable cash flow from its gaming business, VNG is expected to gradually improve its financial performance in the coming years.

In a more optimistic scenario, a meaningful turnaround at Zion that delivers profitability commensurate with its investment scale could significantly lift VNG’s earnings in the years ahead.

On the unlisted public companies market (UPCoM), VNZ shares closed Wednesday at VND358,000 ($13.78 million) apiece.