Menu Search

Company Announcements

NetEase Inc, Youdao Inc, Netease Cloud Music Inc

NetEase Announces Second Quarter 2025 Unaudited Financial Results

HANGZHOU, China , Aug. 14, 2025 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced its unaudited financial results for the second quarter ended June 30, 2025.

Second Quarter  202 5  Financial Highlights

  • Net revenues were RMB27.9 billion (US$3.9 billion), an increase of 9.4% compared with the same quarter of 2024.
    • Games and related value-added services net revenues were RMB22.8 billion (US$3.2 billion), an increase of 13.7% compared with the same quarter of 2024.
    • Youdao net revenues were RMB1.4 billion (US$197.9 million), an increase of 7.2% compared with the same quarter of 2024.
    • NetEase Cloud Music net revenues were RMB2.0 billion (US$274.8 million), a decrease of 3.5% compared with the same quarter of 2024.
    • Innovative businesses and others net revenues were RMB1.7 billion (US$237.2 million), a decrease of 17.8% compared with the same quarter of 2024.
  • Gross profit was RMB18.1 billion (US$2.5 billion), an increase of 12.5% compared with the same quarter of 2024.
  • Total operating expenses were RMB9.0 billion (US$1.3 billion), a decrease of 0.6% compared with the same quarter of 2024.
  • Net income attributable to the Company's shareholders was RMB8.6 billion (US$1.2 billion). Non-GAAP net income attributable to the Company's shareholders was RMB9.5 billion (US$1.3 billion).[1]
  • Basic net income per share was US$0.38 (US$1.88 per ADS). Non-GAAP basic net income per share was US$0.42 (US$2.09 per ADS).[1]

[1] As used in this announcement, non-GAAP net income attributable to the Company's shareholders and non-GAAP basic and diluted net income per share and per ADS are defined to exclude share-based compensation expenses. See the unaudited reconciliation of GAAP and non-GAAP results at the end of this announcement.

Second Quarter 2025 and Recent Operational Highlights

  • Extended global traction with new launches across regions:
    • FragPunk ranked No. 2 on PlayStation's North America free-to-play download chart in May, following its April 29 global launch on Xbox Series X|S and PlayStation 5.
    • Dunk City Dynasty gained substantial momentum with its May 22 global launch, topping iOS download charts in multiple regions and reaching No. 2 in the U.S.
    • MARVEL Mystic Mayhem's June 25 launch propelled the game to No. 1 on iOS download charts across multiple regions and No. 2 in the U.S.
  • Sustained player momentum and operating strength across established franchises:
    • Sword of Justice (previously Justice mobile game) hit No. 3 on China's iOS top-grossing chart shortly after its second anniversary update on June 30.
    • Once Human reached No. 4 on Steam's global top sellers chart following its anniversary update on July 3.
    • Identity V ranked No. 6 on the iOS top-grossing chart in China following its seasonal update on July 10.
    • Naraka: Bladepoint mobile game celebrated its first anniversary with the launch of a new version on July 10, propelling it to No. 6 on China's iOS top-grossing chart.
    • Eggy Party reached No. 5 on China's iOS top-grossing chart on July 11 after a series of third-anniversary events.
    • Marvel Rivals ranked No. 2 on Steam's global top-sellers chart and No. 1 in the U.S with its Summer Party Event unveiled on July 17.
    • Fantasy Westward Journey Online reached a new all-time high with over 2.93 million peak concurrent players in August.
  • Further captivated players in China with Blizzard titles. Hearthstone ranked No. 5 on China's iOS top-grossing chart on July 9, fueled by the launch of The Lost City of Un'Goro expansion pack, while World of Warcraft's 20th anniversary celebration in China sparked strong community engagement with the announcement of a new China-exclusive server set to launch in November.
  • Enriched global pipeline with exciting new titles underway, including NetEase's original ocean adventure RPG Sea of Remnants and story-driven action-adventure game Blood Message, along with plans to bring Sword of Justice and Where Winds Meet to the global market.

"In the second quarter, we grew our player community with thrilling new content that reinforces our position as a creator of high-impact, genre-defining games," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "At the core of our expansion is product innovation, disciplined execution and deep community engagement, all capabilities we have honed over many years and powered by our strong technological foundation. We will continue to push the boundaries of player experiences, scaling original IP to build lasting franchises and growing alongside our collaborative global partners.

"Beyond games, we remain focused on innovation, refining our products and content to deliver long-term value for our users, partners and shareholders," Mr. Ding concluded.

Second  Quarter 202 5  Financial Results

Net Revenues

Net revenues for the second quarter of 2025 were RMB27.9 billion (US$3.9 billion), compared with RMB28.8 billion and RMB25.5 billion for the preceding quarter and the same quarter of 2024, respectively.

Net revenues from games and related value-added services were RMB22.8 billion (US$3.2 billion) for the second quarter of 2025, compared with RMB24.0 billion and RMB20.1 billion for the preceding quarter and the same quarter of 2024, respectively. Net revenues from the operation of online games accounted for approximately 97.1% of the segment's net revenues for the second quarter of 2025, compared with 97.5% and 96.1% for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter decrease in online games net revenues was due to certain self-developed and licensed games. The year-over-year increase was attributable to higher net revenues from Identity V, our newly launched games Where Winds Meet and Marvel Rivals and certain licensed games.

Net revenues from Youdao were RMB1.4 billion (US$197.9 million) for the second quarter of 2025, compared with RMB1.3 billion each for the preceding quarter and the same quarter of 2024. Net revenues from its online marketing services and learning services increased quarter-over-quarter and year-over-year, while net revenues from its smart devices decreased quarter-over-quarter and year-over-year.

Net revenues from NetEase Cloud Music were RMB2.0 billion (US$274.8 million) for the second quarter of 2025, compared with RMB1.9 billion and RMB2.0 billion for the preceding quarter and the same quarter of 2024, respectively. Net revenues from its online music services increased both quarter-over-quarter and year-over-year, while net revenues from its social entertainment services and others increased quarter-over-quarter but decreased year-over-year.

Net revenues from innovative businesses and others were RMB1.7 billion (US$237.2 million) for the second quarter of 2025, compared with RMB1.6 billion and RMB2.1 billion for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter increase was led by increased net revenues from Yanxuan. The year-over-year decrease was due to decreased net revenues from Yanxuan, advertising services and certain other businesses in this segment.

Cost of Revenues

Cost of revenues for the second quarter of 2025 was RMB9.8 billion (US$1.4 billion), compared with RMB10.3 billion and RMB9.4 billion for the preceding quarter and the same quarter of 2024, respectively, with revenue sharing costs related to platforms and royalties for licensed games decreasing quarter-over-quarter, while royalties for licensed games increased year-over-year.

Gross Profit

Gross profit for the second quarter of 2025 was RMB18.1 billion (US$2.5 billion), compared with RMB18.5 billion and RMB16.0 billion for the preceding quarter and the same quarter of 2024, respectively.

Operating Expenses

Total operating expenses for the second quarter of 2025 were RMB9.0 billion (US$1.3 billion), compared with RMB8.0 billion and RMB9.0 billion for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter increase was primarily due to increased marketing expenditures related to games and related value-added services.

Other Income/(Expenses)

Other income/(expenses) consisted of investment income, interest income, net exchange losses/(gains) and others. The quarter-over-quarter decrease was mainly due to fair value changes of equity security investments, and the year-over-year increase was primarily due to net exchange gains in the second quarter of 2025, compared with net exchange losses recorded in the same quarter of 2024.

Income Tax

The Company recorded a net income tax charge of RMB1.6 billion (US$217.9 million) for the second quarter of 2025, compared with RMB1.9 billion and RMB1.3 billion for the preceding quarter and the same quarter of 2024, respectively. The effective tax rate for the second quarter of 2025 was 14.7%, compared with 15.3% and 16.0% for the preceding quarter and the same quarter of 2024, respectively. The effective tax rate represents certain estimates by the Company as to the tax obligations and benefits applicable to it in each quarter.

Net Income and Non-GAAP Net Income

Net income attributable to the Company's shareholders totaled RMB8.6 billion (US$1.2 billion) for the second quarter of 2025, compared with RMB10.3 billion and RMB6.8 billion for the preceding quarter and the same quarter of 2024, respectively.

Basic net income was US$0.38 per share (US$1.88 per ADS) for the second quarter of 2025, compared with US$0.45 per share (US$2.27 per ADS) and US$0.29 per share (US$1.47 per ADS) for the preceding quarter and the same quarter of 2024, respectively.

Non-GAAP net income attributable to the Company's shareholders totaled RMB9.5 billion (US$1.3 billion) for the second quarter of 2025, compared with RMB11.2 billion and RMB7.8 billion for the preceding quarter and the same quarter of 2024, respectively.

Non-GAAP basic net income was US$0.42 per share (US$2.09 per ADS) for the second quarter of 2025, compared with US$0.49 per share (US$2.47 per ADS) and US$0.34 per share (US$1.70 per ADS) for the preceding quarter and the same quarter of 2024, respectively.

Other Financial Information

As of June 30, 2025, the Company's net cash (total cash and cash equivalents, current and non-current time deposits and restricted cash, as well as short-term investments balance, minus short-term and long-term loans) totaled RMB142.1 billion (US$19.8 billion), compared with RMB131.5 billion as of December 31, 2024. Net cash provided by operating activities was RMB10.9 billion (US$1.5 billion) for the second quarter of 2025, compared with RMB12.1 billion and RMB6.5 billion for the preceding quarter and the second quarter of 2024, respectively.

Quarterly Dividend

The board of directors approved a dividend of US$0.1140 per share (US$0.5700 per ADS) for the second quarter of 2025 to holders of ordinary shares and holders of ADSs as of the close of business on August 28, 2025, Beijing/Hong Kong Time and New York Time, respectively, payable in U.S. dollars. For holders of ordinary shares, in order to qualify for the dividend, all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on August 28, 2025 (Beijing/Hong Kong Time). The payment date is expected to be September 8, 2025 for holders of ordinary shares and on or around September 11, 2025, for holders of ADSs.

NetEase paid a dividend of US$0.1350 per share (US$0.6750 per ADS) for the first quarter of 2025 in June 2025.

Under the Company's current dividend policy, the determination to make dividend distributions and the amount of such distribution in any particular quarter will be made at the discretion of its board of directors and will be based upon the Company's operations and earnings, cash flow, financial condition and other relevant factors.

Share Repurchase Program

On November 17, 2022, the Company announced that its board of directors had approved a share repurchase program of up to US$5.0 billion of the Company's ADSs and ordinary shares in open market transactions. This share repurchase program commenced on January 10, 2023, and will be in effect for a period not to exceed 36 months from such date. As of June 30, 2025, approximately 22.1 million ADSs had been repurchased under this program for a total cost of US$2.0 billion.

The extent to which NetEase repurchases its ADSs and its ordinary shares depends upon a variety of factors, including market conditions. These programs may be suspended or discontinued at any time.

** The United States dollar (US$) amounts disclosed in this announcement are presented solely for the convenience of the reader. The percentages stated are calculated based on RMB. 

Conference Call

NetEase's management team will host a teleconference call with a simultaneous webcast at 8:00 a.m. Eastern Time on Thursday, August 14, 2025 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, August 14, 2025). NetEase's management will be on the call to discuss the quarterly results and answer questions.

Interested parties may participate in the conference call by dialing 1-914-202-3258 and providing conference ID: 10049137, 15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-855-883-1031 and entering PIN: 10049137. The replay will be available through August 21, 2025.

This call will be webcast live and the replay will be available for 12 months. Both will be available on NetEase's Investor Relations website at http://ir.netease.com/.

About NetEase, Inc.

NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase") is a leading internet and game services provider centered around premium content. With extensive offerings across its expanding gaming ecosystem, the Company develops and operates some of the most popular and longest-running mobile and PC games available in China and globally.

Powered by one of the largest in-house game R&D teams focused on mobile, PC and console, NetEase creates superior gaming experiences, inspires players, and passionately delivers value for its thriving community worldwide. By infusing play with culture, and education with technology, NetEase transforms gaming into a meaningful vehicle to build a more entertaining and enlightened world.

Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning and advertising solutions provider, and NetEaseCloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well as Yanxuan, NetEase's private label consumer lifestyle brand.

For more information, please visit: http://ir.netease.com/.

Forward Looking Statements

This announcement contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions. In addition, statements that are not historical facts, including statements about NetEase's strategies and business plans, its expectations regarding the growth of its business and its revenue and the quotations from management in this announcement are or contain forward-looking statements. NetEase may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the online games market will not continue to grow or that NetEase will not be able to maintain its position in that market in China or globally; risks associated with NetEase's business and operating strategies and its ability to implement such strategies; NetEase's ability to develop and manage its operations and business; competition for, among other things, capital, technology and skilled personnel; potential changes in regulation environment in the markets where NetEase operates; the risk that NetEase may not be able to continuously develop new and creative online services or that NetEase will not be able to set, or follow in a timely manner, trends in the market; risks related to evolving economic cycles and geopolitical tensions, including the direct or indirect impacts of national trade, investment, protectionist, tax or other laws or policies as well as export controls and economic or trade sanctions; risks related to the expansion of NetEase's businesses and operations internationally; risks associated with cybersecurity threats or incidents; and fluctuations in foreign currency exchange rates that could adversely affect NetEase's business and financial results. Further information regarding these and other risks is included in NetEase's filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. NetEase does not undertake any obligation to update this forward-looking information, except as required under applicable law.

Non-GAAP Financial Measures 

NetEase considers and uses non-GAAP financial measures, such as non-GAAP net income attributable to the Company's shareholders and non-GAAP basic and diluted net income per ADS and per share, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

NetEase defines non-GAAP net income attributable to the Company's shareholders as net income attributable to the Company's shareholders excluding share-based compensation expenses. Non-GAAP net income attributable to the Company's shareholders enables NetEase's management to assess its operating results without considering the impact of share-based compensation expenses. NetEase believes that this non-GAAP financial measure provides useful information to investors in understanding and evaluating the Company's current operating performance and prospects in the same manner as management does, if they so choose. NetEase also believes that the use of this non-GAAP financial measure facilitates investors' assessment of its operating performance.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP net income attributable to the Company's shareholders is that it does not reflect all items of expense/ income that affect our operations. Share-based compensation expenses have been and may continue to be incurred in NetEase's business and are not reflected in the presentation of non-GAAP net income attributable to the Company's shareholders. In addition, the non-GAAP financial measures NetEase uses may differ from the non-GAAP measures used by other companies, including peer companies, and therefore their comparability may be limited.

NetEase compensates for these limitations by reconciling non-GAAP net income attributable to the Company's shareholders to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance. See the unaudited reconciliation of GAAP and non-GAAP results at the end of this announcement. NetEase encourages you to review its financial information in its entirety and not rely on a single financial measure.

Contact for Media and Investors:
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

NETEASE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)


 December 31,  


 June 30,  


 June 30,  


2024


2025


2025


 RMB  


 RMB  


 USD (Note 1) 

Assets






Current assets:






   Cash and cash equivalents

51,383,310


54,430,728


7,598,237

   Time deposits

75,441,355


75,277,705


10,508,362

   Restricted cash

3,086,405


3,731,100


520,841

   Accounts receivable, net

5,669,027


5,776,412


806,356

   Inventories

571,548


591,756


82,606

   Prepayments and other current assets, net

6,416,868


6,161,982


860,179

   Short-term investments

10,756,143


16,980,429


2,370,376

Total current assets

153,324,656


162,950,112


22,746,957







Non-current assets:






   Property, equipment and software, net 

8,520,101


8,447,022


1,179,159

   Land use rights, net

4,172,465


4,111,093


573,886

   Deferred tax assets 

1,113,435


2,190,156


305,734

   Time deposits

3,025,000


2,935,000


409,710

   Restricted cash

5,208


5,266


735

   Other long-term assets

25,830,685


27,860,004


3,889,107

Total non-current assets

42,666,894


45,548,541


6,358,331

Total assets 

195,991,550


208,498,653


29,105,288







Liabilities, Redeemable Noncontrolling Interests
    and Shareholders' Equity






Current liabilities:






   Accounts payable 

720,549


695,414


97,076

   Salary and welfare payables

4,683,009


3,560,061


496,965

   Taxes payable

2,759,185


3,796,135


529,920

   Short-term loans

11,805,051


11,276,303


1,574,111

   Contract liabilities

15,299,222


16,966,562


2,368,441

   Accrued liabilities and other payables

14,400,641


14,157,432


1,976,301

Total current liabilities

49,667,657


50,451,907


7,042,814







Non-current liabilities:






   Deferred tax liabilities

2,173,117


2,724,485


380,323

   Long-term loans

427,997


-


-

   Other long-term liabilities

1,228,641


1,218,109


170,041

Total non-current liabilities

3,829,755


3,942,594


550,364

Total liabilities

53,497,412


54,394,501


7,593,178







Redeemable noncontrolling interests 

84,272


87,741


12,248







NetEase, Inc.'s shareholders' equity

138,685,606


149,587,316


20,881,584

Noncontrolling interests

3,724,260


4,429,095


618,278

Total equity

142,409,866


154,016,411


21,499,862







Total liabilities, redeemable noncontrolling 
    interests and shareholders' equity    

195,991,550


208,498,653


29,105,288


The accompanying notes are an integral part of this announcement.

 

 

NETEASE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data or per ADS data)




Three Months Ended


Six Months Ended




June 30, 



March 31,


June 30, 


 June 30,  


 June 30,  


June 30, 


June 30, 




2024



2025


2025


2025


2024


2025


2025




 RMB 



 RMB 


 RMB 


 USD (Note 1) 


RMB


RMB


USD (Note 1)


















Net revenues



25,485,805



28,828,545


27,891,664


3,893,526


52,337,546


56,720,209


7,917,836

Cost of revenues



(9,443,587)



(10,349,139)


(9,839,182)


(1,373,497)


(19,279,408)


(20,188,321)


(2,818,181)

Gross profit



16,042,218



18,479,406


18,052,482


2,520,029


33,058,138


36,531,888


5,099,655


















Operating expenses:

















Selling and marketing expenses 



(3,501,737)



(2,695,597)


(3,578,174)


(499,494)


(7,523,941)


(6,273,771)


(875,785)

General and administrative expenses



(1,091,441)



(956,337)


(1,056,578)


(147,493)


(2,287,916)


(2,012,915)


(280,992)

Research and development expenses 



(4,455,717)



(4,386,313)


(4,356,646)


(608,164)


(8,630,475)


(8,742,959)


(1,220,470)

Total operating expenses



(9,048,895)



(8,038,247)


(8,991,398)


(1,255,151)


(18,442,332)


(17,029,645)


(2,377,247)

Operating profit



6,993,323



10,441,159


9,061,084


1,264,878


14,615,806


19,502,243


2,722,408


















Other income/(expenses):

















Investment income, net



103,674



692,751


328,444


45,849


282,965


1,021,195


142,553

Interest income, net



1,186,219



1,060,886


953,490


133,102


2,463,816


2,014,376


281,196

Exchange (losses)/gains, net



(239,375)



1,803


114,037


15,919


(224,364)


115,840


16,171

Other, net



85,694



255,315


192,167


26,825


279,582


447,482


62,466

Income before tax



8,129,535



12,451,914


10,649,222


1,486,573


17,417,805


23,101,136


3,224,794

Income tax



(1,300,939)



(1,905,143)


(1,560,757)


(217,873)


(2,786,849)


(3,465,900)


(483,821)

Net income



6,828,596



10,546,771


9,088,465


1,268,700


14,630,956


19,635,236


2,740,973


















Accretion of redeemable noncontrolling
    interests



(960)



(1,049)


(1,051)


(147)


(1,918)


(2,100)


(293)

Net income attributable to noncontrolling
    interests and redeemable noncontrolling
    interests



(68,887)



(244,565)


(486,404)


(67,899)


(236,343)


(730,969)


(102,039)

Net income attributable to the
    Company's shareholders



6,758,749



10,301,157


8,601,010


1,200,654


14,392,695


18,902,167


2,638,641


















Net income per share *

















Basic



2.10



3.25


2.70


0.38


4.48


5.94


0.83

Diluted



2.08



3.21


2.67


0.37


4.43


5.88


0.82


















Net income per ADS *

















Basic



10.50



16.23


13.49


1.88


22.39


29.71


4.15

Diluted



10.42



16.06


13.36


1.87


22.17


29.41


4.11


















Weighted average number of ordinary
    shares used in calculating net income
    per share *

















Basic



3,217,699



3,173,899


3,188,634


3,188,634


3,214,682


3,181,307


3,181,307

Diluted



3,243,056



3,206,362


3,214,681


3,214,681


3,246,254


3,210,563


3,210,563


*  Each ADS represents five ordinary shares.

The accompanying notes are an integral part of this announcement.

 

 

NETEASE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



 Three Months Ended 


Six Months Ended



 June 30,  


 March 31, 


 June 30,  


 June 30,  


 June 30,  


 June 30,  


 June 30,  



2024


2025


2025


2025


2024


2025


2025



 RMB  


 RMB  


 RMB  


 USD (Note 1) 


 RMB  


 RMB  


 USD (Note 1) 

Cash flows from operating activities:















    Net income 


6,828,596


10,546,771


9,088,465


1,268,700


14,630,956


19,635,236


2,740,973

    Adjustments to reconcile net income to net cash provided
        by operating activities:















    Depreciation and amortization


631,957


480,761


428,427


59,806


1,199,880


909,188


126,918

    Fair value changes of equity security and other investments 


(7,887)


(558,499)


55,715


7,778


(376,145)


(502,784)


(70,186)

    Impairment losses on investments


210,741


89,071


161,463


22,539


339,158


250,534


34,973

    Fair value changes of short-term investments


(128,295)


(201,609)


(344,604)


(48,105)


(189,105)


(546,213)


(76,248)

    Share-based compensation cost


1,079,056


951,872


946,395


132,112


1,973,356


1,898,267


264,988

    Allowance for expected credit losses


9,281


16,771


153,179


21,383


20,881


169,950


23,724

    (Gains)/losses on disposal of property, equipment and software 


(326)


20,293


(30,920)


(4,316)


1,806


(10,627)


(1,484)

    Unrealized exchange gains


(209,311)


(28,453)


(165,662)


(23,126)


(226,820)


(194,115)


(27,097)

    (Gains)/losses on disposal of long-term investments,
        business and subsidiaries


(141,114)


11,675


(141,078)


(19,694)


(154,601)


(129,403)


(18,064)

    Deferred income taxes


(1,280,076)


328,272


(853,764)


(119,181)


(795,022)


(525,492)


(73,356)

    Share of results on equity method investees 


39,200


(18,668)


13,479


1,882


203,471


(5,189)


(724)

    Changes in operating assets and liabilities: 















        Accounts receivable


1,410,478


(1,088,960)


953,295


133,075


51,767


(135,665)


(18,938)

        Inventories


29,552


53,773


(73,944)


(10,322)


120,930


(20,171)


(2,816)

        Prepayments and other assets


530,856


(295,178)


583,484


81,451


856,996


288,306


40,246

        Accounts payable


(126,862)


(148,076)


119,644


16,702


(133,863)


(28,432)


(3,969)

        Salary and welfare payables


879,058


(2,085,111)


920,662


128,520


(1,299,550)


(1,164,449)


(162,551)

        Taxes payable


(1,462,700)


1,796,123


(764,372)


(106,702)


(190,878)


1,031,751


144,027

        Contract liabilities


(1,270,324)


2,526,198


(718,719)


(100,329)


303,762


1,807,479


252,314

        Accrued liabilities and other payables


(490,048)


(290,374)


530,718


74,085


(247,978)


240,344


33,551

    Net cash provided by operating activities


6,531,832


12,106,652


10,861,863


1,516,258


16,089,001


22,968,515


3,206,281
















Cash flows from investing activities:















    Purchase of property, equipment and software


(168,880)


(454,071)


(189,842)


(26,501)


(583,898)


(643,913)


(89,887)

    Proceeds from sale of property, equipment and software


660


1,336


21,499


3,001


4,166


22,835


3,188

    Purchase of intangible assets, content and licensed copyrights


(399,533)


(298,771)


(313,349)


(43,742)


(588,354)


(612,120)


(85,449)

    Net changes of short-term investments with terms of three months or less


(8,194,289)


(6,138,556)


776,428


108,385


(5,792,640)


(5,362,128)


(748,524)

    Purchase of short-term investments with terms over three months


-


(2,970,000)


(5,800,000)


(809,649)


-


(8,770,000)


(1,224,245)

    Proceeds from maturities of short-term investments with terms over three months


-


2,708,601


5,745,454


802,034


-


8,454,055


1,180,141

    Investment in long-term investments and acquisition of subsidiaries


(193,450)


(90,966)


(2,741,641)


(382,718)


(675,254)


(2,832,607)


(395,417)

    Proceeds from disposal of long-term investments, businesses,
        subsidiaries and other financial instruments


840,649


77,428


784,855


109,562


926,105


862,283


120,370

    Placement/rollover of matured time deposits


(61,775,606)


(49,601,807)


(27,980,605)


(3,905,942)


(96,334,442)


(77,582,412)


(10,830,087)

    Proceeds from maturities of time deposits


55,211,839


43,926,482


33,617,510


4,692,823


101,260,221


77,543,992


10,824,724

    Change in other long-term assets


(172,543)


(678)


(27,367)


(3,820)


(207,168)


(28,045)


(3,915)

    Net cash (used in)/provided by investing activities


(14,851,153)


(12,841,002)


3,892,942


543,433


(1,991,264)


(8,948,060)


(1,249,101)
















Cash flows from financing activities:















    Net changes from loans with terms of three months or less  


(2,085,053)


(2,254,415)


2,017,570


281,642


(2,484,779)


(236,845)


(33,062)

    Proceeds of loans with terms over three months


1,069,020


2,747,550


1,231,000


171,841


8,067,270


3,978,550


555,384

    Payment of loans with terms over three months


(10,681,827)


(2,935,677)


(1,804,730)


(251,930)


(11,638,827)


(4,740,407)


(661,735)

    Net amounts received related to capital contribution from
        of noncontrolling interests shareholders


50,572


42,517


42,400


5,919


92,786


84,917


11,854

    Cash paid for repurchase of NetEase's ADSs/purchase of
        subsidiaries' ADSs and shares      


(2,007,030)


(303,601)


(355,563)


(49,635)


(3,240,810)


(659,164)


(92,016)

    Dividends paid to NetEase's shareholders


(2,264,799)


(5,584,532)


(3,082,122)


(430,248)


(7,209,815)


(8,666,654)


(1,209,818)

    Net cash used in financing activities


(15,919,117)


(8,288,158)


(1,951,445)


(272,411)


(16,414,175)


(10,239,603)


(1,429,393)
















    Effect of exchange rate changes on cash, cash equivalents and
        restricted cash held in foreign currencies


8,234


(56,932)


(31,749)


(4,432)


(34,904)


(88,681)


(12,380)

Net(decrease)/ increase in cash, cash equivalents and restricted cash               


(24,230,204)


(9,079,440)


12,771,611


1,782,848


(2,351,342)


3,692,171


515,407

Cash, cash equivalents and restricted cash, at the beginning of the period


46,085,520


54,474,923


45,395,483


6,336,965


24,206,658


54,474,923


7,604,406

Cash, cash equivalents and restricted cash, at end of the period


21,855,316


45,395,483


58,167,094


8,119,813


21,855,316


58,167,094


8,119,813
















Supplemental disclosures of cash flow information:















    Cash paid for income taxes, net


2,848,493


1,206,555


2,184,556


304,952


4,031,204


3,391,111


473,381

    Cash paid for interest expenses


152,943


97,424


64,366


8,985


299,398


161,790


22,585


The accompanying notes are an integral part of this announcement.

 

 

NETEASE, INC.

UNAUDITED SEGMENT INFORMATION

(in thousands)




 Three Months Ended 


Six Months Ended



 June 30,  


 March 31, 


 June 30,  


 June 30,  


 June 30,  


June 30, 


June 30, 



2024


2025


2025


2025


2024


2025


2025



RMB


RMB


RMB


USD (Note 1)


RMB


RMB


USD (Note 1)

Net revenues:















Games and related value-added services 


20,055,819


24,048,007


22,806,459


3,183,659


41,516,197


46,854,466


6,540,631

Youdao


1,321,721


1,298,262


1,417,541


197,881


2,713,580


2,715,803


379,111

NetEase Cloud Music


2,040,952


1,858,388


1,968,729


274,824


4,070,493


3,827,117


534,245

Innovative businesses and others


2,067,313


1,623,888


1,698,935


237,162


4,037,276


3,322,823


463,849

Total net revenues


25,485,805


28,828,545


27,891,664


3,893,526


52,337,546


56,720,209


7,917,836
















Cost of revenues:















Games and related value-added services 


(6,008,604)


(7,495,262)


(6,792,240)


(948,161)


(12,563,915)


(14,287,502)


(1,994,458)

Youdao


(684,942)


(684,035)


(808,181)


(112,817)


(1,395,298)


(1,492,216)


(208,305)

NetEase Cloud Music


(1,385,756)


(1,175,777)


(1,258,855)


(175,729)


(2,644,762)


(2,434,632)


(339,862)

Innovative businesses and others


(1,364,285)


(994,065)


(979,906)


(136,790)


(2,675,433)


(1,973,971)


(275,556)

Total cost of revenues


(9,443,587)


(10,349,139)


(9,839,182)


(1,373,497)


(19,279,408)


(20,188,321)


(2,818,181)
















Gross profit:















Games and related value-added services 


14,047,215


16,552,745


16,014,219


2,235,498


28,952,282


32,566,964


4,546,173

Youdao


636,779


614,227


609,360


85,064


1,318,282


1,223,587


170,806

NetEase Cloud Music


655,196


682,611


709,874


99,095


1,425,731


1,392,485


194,383

Innovative businesses and others


703,028


629,823


719,029


100,372


1,361,843


1,348,852


188,293

Total gross profit


16,042,218


18,479,406


18,052,482


2,520,029


33,058,138


36,531,888


5,099,655


The accompanying notes are an integral part of this announcement.

NETEASE, INC.

NOTES TO UNAUDITED FINANCIAL INFORMATION

Note 1: The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00 = RMB7.1636 on the last trading day of June 2025 (June 30, 2025) as set forth in the H.10 statistical release of the U.S.Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on June 30, 2025, or at any other certain date.

Note 2: Share-based compensation cost reported in the Company's unaudited condensed consolidated statements of comprehensive income is set out as follows in RMB and USD (in thousands):

 Three Months Ended 


Six Months Ended



June 30, 



March 31,


June 30, 


June 30, 


June 30, 


June 30, 


June 30, 



2024



2025


2025


2025


2024


2025


2025



RMB



RMB


RMB


USD (Note 1)


RMB


RMB


USD (Note 1)

Share-based compensation cost included in:
















Cost of revenues


319,949



233,711


291,326


40,668


574,884


525,037


73,292

Operating expenses
















  Selling and marketing expenses


42,865



32,578


37,300


5,207


60,734


69,878


9,755

  General and administrative expenses


286,350



261,259


207,202


28,924


575,986


468,461


65,395

  Research and development expenses


429,892



424,324


410,567


57,313


761,752


834,891


116,546


The accompanying notes are an integral part of this announcement.

Note 3: The financial information prepared and presented in this announcement might be different from those published and to be published by NetEase's listed subsidiary to meet the disclosure requirements under different accounting standards requirements.

Note 4: The unaudited reconciliation of GAAP and non-GAAP results is set out as follows in RMB and USD (in thousands, except per share data or per ADS data):

Three Months Ended


Six Months Ended



 June 30,  


 March 31, 


 June 30,  


 June 30,  


 June 30,  


June 30, 


June 30, 



2024


2025


2025


2025


2024


2025


2025



RMB


RMB


RMB


USD (Note 1)


RMB


RMB


USD (Note 1)

Net income attributable to the Company's shareholders


6,758,749


10,301,157


8,601,010


1,200,654


14,392,695


18,902,167


2,638,641

Add: Share-based compensation


1,059,939


935,570


930,921


129,952


1,936,837


1,866,491


260,552

Non-GAAP net income attributable to the Company's shareholders


7,818,688


11,236,727


9,531,931


1,330,606


16,329,532


20,768,658


2,899,193
















Non-GAAP net income per share *















Basic


2.43


3.54


2.99


0.42


5.08


6.53


0.91

Diluted


2.41


3.50


2.96


0.41


5.03


6.46


0.90
















Non-GAAP net income per ADS *















Basic


12.15


17.70


14.95


2.09


25.40


32.64


4.56

Diluted


12.05


17.51


14.81


2.07


25.15


32.32


4.51


*  Each ADS represents five ordinary shares.

The accompanying notes are an integral part of this announcement.

Note 5: Reconciliation between U.S. GAAP and IFRS Accounting Standards

The unaudited condensed consolidated financial information is prepared in accordance with U.S. GAAP, which differ in certain respects from IFRS Accounting Standards. The effects of material differences between the unaudited condensed consolidated financial information prepared under U.S. GAAP and IFRS Accounting Standards ("Reconciliation Statement") are as follows in RMB (in thousands).

PricewaterhouseCoopers, the auditor of the Company in Hong Kong, has performed a limited assurance engagement on the Reconciliation Statement in accordance with International Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information".

Reconciliation of unaudited condensed consolidated statements of income (Extract):

For the Six Months Ended June 30, 2024



Amounts as reported
under U.S. GAAP

Investments measured at fair
value

Redeemable
noncontrolling interests

Amounts as
reported under
IFRS Accounting
Standards


(Note (a))

(Note (b))

Fair value changes of redeemable noncontrolling interests

-

-

(571)

(571)

Investment income, net

282,965

(108,548)

-

174,417

Income before tax

17,417,805

(108,548)

(571)

17,308,686

Income tax

(2,786,849)

7,127

-

(2,779,722)

Net income

14,630,956

(101,421)

(571)

14,528,964

Accretion of redeemable noncontrolling interests

(1,918)

-

1,918

-

Net income attributable to noncontrolling interests and
  redeemable noncontrolling interests

(236,343)

-

571

(235,772)

Net income attributable to the Company's shareholders

14,392,695

(101,421)

1,918

14,293,192








For the Six Months Ended June 30, 2025



Amounts as reported
under U.S. GAAP

Investments measured at fair
value

Redeemable
noncontrolling interests

Amounts as
reported under
IFRS Accounting
Standards


(Note (a))

(Note (b))

Investment income, net

1,021,195

(167,094)

-

854,101

Income before tax

23,101,136

(167,094)

-

22,934,042

Income tax

(3,465,900)

7,924

-

(3,457,976)

Net income

19,635,236

(159,170)

-

19,476,066

Accretion of redeemable noncontrolling interests

(2,100)

-

2,100

-

Net income attributable to noncontrolling interests and
  redeemable noncontrolling interests

(730,969)

-

-

(730,969)

Net income attributable to the Company's shareholders

18,902,167

(159,170)

2,100

18,745,097

Reconciliation of unaudited condensed consolidated balance sheets (Extract):

As of December 31, 2024



Amounts as reported
under U.S. GAAP

Investments measured at fair
value

Redeemable
noncontrolling interests

Amounts as
reported under
IFRS Accounting
Standards


(Note (a))

(Note (b))

Other long-term assets

25,830,685

(13,800,189)

-

12,030,496

Financial assets at fair value through profit or loss

-

15,682,924

-

15,682,924

Total Assets

195,991,550

1,882,735

-

197,874,285

Deferred tax liabilities

2,173,117

26,600

-

2,199,717

Total Liabilities

53,497,412

26,600

-

53,524,012

Redeemable noncontrolling interests

84,272

-

(84,272)

-

Total equity

142,409,866

1,856,135

84,272

144,350,273

Total liabilities, redeemable noncontrolling interests  
  and shareholders' equity

195,991,550

1,882,735

-

197,874,285








As of June 30, 2025



Amounts as reported
under U.S. GAAP

Investments measured at fair
value

Redeemable
noncontrolling interests

Amounts as
reported under
IFRS Accounting
Standards


(Note (a))

(Note (b))

Other long-term assets

27,860,004

(15,990,681)

-

11,869,323

Financial assets at fair value through profit or loss

-

17,706,322

-

17,706,322

Total Assets

208,498,653

1,715,641

-

210,214,294

Deferred tax liabilities

2,724,485

18,676

-

2,743,161

Total Liabilities

54,394,501

18,676

-

54,413,177

Redeemable noncontrolling interests

87,741

-

(87,741)

-

Total equity

154,016,411

1,696,965

87,741

155,801,117

Total liabilities, redeemable noncontrolling interests 
  and shareholders' equity

208,498,653

1,715,641

-

210,214,294

Notes:

Basis of Preparation

The Company is responsible for preparation of the Reconciliation Statement in accordance with the relevant requirements of the Hong Kong Listing Rules and relevant guidance in HKEX-GL111-22. The Reconciliation Statement was prepared based on the Company's unaudited condensed consolidated financial information for the six months ended June 30, 2025 prepared under U.S. GAAP, with material adjustments made (if any) thereto in arriving at the unaudited financial information of the Company prepared under IFRS Accounting Standards. The adjustments reflect the material differences between the Company's accounting policies under U.S. GAAP and IFRS Accounting Standards.

Note a. Investments measured at fair value

Under U.S. GAAP, NetEase applied the measurement alternative to record the investments in equity securities (including preferred shares and ordinary shares without significant influence) without readily determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for observable price changes recognized in the consolidated income statements.

Under IFRS Accounting Standards, these investments were classified as financial assets at fair value through profit or loss and measured at fair value with changes in fair value recognized through profit or loss.

Note b. Redeemable noncontrolling interests

Under U.S. GAAP, SEC guidance provides for mezzanine-equity (temporary equity) category in addition to the financial liability and permanent equity categories. The purpose of this "in-between" category is to indicate that a security whose redemption is outside the control of the issuer may not be classified as a permanent part of equity. NetEase classified the redeemable preferred shares issued by certain subsidiaries as redeemable noncontrolling interests in the condensed consolidated balance sheets and recorded them initially at fair value, net of issuance costs. NetEase recognized accretion to the respective redemption value of the redeemable preferred shares over the period starting from issuance date to the earliest redemption date.

Under IFRS Accounting Standards, there is no concept of mezzanine or temporary equity classification. NetEase designated the redeemable preferred shares as financial liabilities at fair value through profit or loss which are measured at fair value. Subsequent to initial recognition, the amounts of changes in fair value that were attributed to changes in credit risk of the issuer were recognized in other comprehensive income, and the remaining amounts of changes in fair value were recognized in the profit or loss.

Cision View original content:https://www.prnewswire.com/news-releases/netease-announces-second-quarter-2025-unaudited-financial-results-302529931.html

SOURCE NetEase, Inc.