Global Mofy AI Limited (Nasdaq: GMM) announced that its visual‑effects division, Mofy VFX, has been awarded a 16‑episode VFX production contract for the crime drama Justice in the Shadows, produced by iQIYI and co‑produced by Yuewen Pictures, New Classics Media and Inverse Mapping. The series, adapted from Lei Mi’s novel Old Boy and directed by Teng Huatao, premiered on iQIYI’s Mist Theatre on February 23, 2026. According to iQIYI’s launch performance report, the show achieved an in‑platform popularity score exceeding 7,705 on its first day and attracted approximately 1.59 million pre‑release reservations, topping multiple iQIYI charts and securing a Top 1 spot across overall and crime‑genre rankings.
Mofy VFX highlighted its role in delivering atmospheric enhancement, environmental realism and narrative rhythm reinforcement for the complex, multi‑location production. The partnership underscores GMM’s growing presence in China’s premium streaming market and expands its portfolio of high‑profile, multi‑episode projects, positioning the company for further growth in the virtual‑content sector.
GMM’s FY2025 financials show revenue of $56 million with a 40.2% gross margin, but an operating margin of 5.4%—down from 16.5% the prior year—and a negative return on equity of –36.88%. The company’s debt‑to‑equity ratio remains low at 0.06, yet the operating margin compression signals pricing pressure and higher cost inputs. Revenue grew 35.3% year‑over‑year, reflecting strong demand for its generative‑AI‑driven virtual‑content solutions, but the margin squeeze indicates that the business is still balancing growth with cost discipline.
The new VFX contract for Justice in the Shadows provides a tangible revenue stream that can help offset the margin compression GMM is experiencing. By securing a high‑profile project on a leading Chinese streaming platform, GMM can leverage its AI‑powered VFX capabilities to capture additional market share in the premium content segment. However, the company must continue to manage production costs and maintain pricing power to preserve profitability as it scales its virtual‑content offerings.
The contract demonstrates GMM’s expanding footprint in China’s premium streaming ecosystem, but the company’s financial metrics reveal ongoing challenges. While revenue growth remains robust, margin compression and a negative return on equity highlight the need for disciplined cost management and strategic investment in high‑margin AI technologies to sustain long‑term profitability.
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