Gamehaus Revenue Drops 11.4% in FY 2026 as AI Shift Accelerates

Gamehaus Holdings Inc. (GMHS) reported fiscal 2026 results marked by a $104.7 million revenue decline to $104.7 million, down 11.4% year-over-year from $118 million, as the company accelerated its transition toward AI-centric game production. The shift came amid challenges in sustaining growth in traditional in-app purchase and advertising revenue, which fell 11.2% and 12.8% respectively, to $94.5 million and $10.2 million. Despite a modest 2.6% increase in net income to $3.9 million, the company’s operating margins contracted from 2.9% in FY 2025 to just 1.3%, reflecting higher costs in research and development and general and administrative expenses, which rose 36.5% to $6.4 million. Fourth-quarter revenue dropped 20.8% to $24.3 million, within the previously announced range of $23 million–$26 million, as both daily active users (DAUs) and monthly active users (MAUs) declined year-over-year. The company’s average revenue per daily active user (ARPDAU) rose 11.6%, to $0.577, though direct-to-consumer revenue remained at 16.2% of total revenue, below its December 2026 target of exceeding 20%. Meanwhile, cash reserves grew to $17.6 million as of June 30, 2026, supporting a $5 million share repurchase program extended through August 2027. The company’s AI pivot, including the launch of its Gamehaus AI Agent system in June 2026 and a 70% employee adoption rate, has accelerated investment in AI game generation. Management validated an end-to-end pipeline capable of producing a simple casual game in one week, and it has made a minority investment in an early-stage AI game studio. For Q1 FY 2027, guidance calls for revenue between $20 million and $23 million. Chairman Brian Xie Feng framed FY 2026 as the last full year under the company’s previous business model, emphasizing a structural shift in user acquisition economics amid weakened platform targeting capabilities. CEO Carl Cai Yimin highlighted that while AI-driven game production offers rapid prototyping, commercial success hinges on ensuring games remain fun, a prerequisite for monetization. The stock, which traded at $0.74 in premarket trading, fell 7.3% from its previous close of $0.82, reflecting broader uncertainty in the gaming sector amid evolving consumer behavior and competitive pressures.