Sound Group Shares Soar on Profit Turnaround and Dividend News
The audio entertainment company's stock experienced extreme volatility after announcing strong first-half 2025 results, a special dividend, and an expanded buyback program.
Shares of Sound Group Inc. (NASDAQ: SOGP) surged dramatically after the company reported a significant financial turnaround for the first half of 2025, swinging to a profit from a loss in the previous year. The company's announcement of a special cash dividend and an expanded share repurchase program further fueled investor optimism, leading to a volatile trading session that saw the stock price climb over 200%.
For the six months ending June 30, 2025, the audio-centric social and entertainment company posted net revenues of $189.5 million, a 47% increase year-over-year. Sound Group reported a net income of $9.4 million, a stark reversal from the net loss of $36.5 million in the first half of 2024. This improved profitability was attributed to the expansion of its audio entertainment business and new AI initiatives, which also helped boost its gross margin to 29% from 27%.
In a move to return value to shareholders, the company's Board of Directors approved a special cash dividend of $1.00 per American Depositary Share (ADS) and authorized a $4 million expansion of its share repurchase program. "The dividend shows confidence in the company’s financial strength and strategy of balancing growth with shareholder returns," said Jinnan (Marco) Lai, Founder and CEO of Sound Group.
The market's reaction to the news was immediate and pronounced. Sound Group's shares experienced extreme volatility, being halted multiple times on circuit breakers after initially jumping nearly 200%. The stock's dramatic rise reflects investor confidence in the company's new strategy, which appears to be focused on profitability over user growth. Notably, the company's average total mobile monthly active users (MAUs) decreased to 30.4 million from 35.7 million year-over-year, suggesting a successful shift towards monetizing its existing user base.
Acting CFO Chengfang Lu stated that the dividend and buyback "highlight the scalability of the business while keeping resources for future investment," signaling a positive outlook for the company's future performance.