NetEase Announces Third Quarter 2024 Unaudited Financial Results
NetEase (NTES) reported Q3 2024 financial results with net revenues of RMB26.2 billion (US$3.7 billion), showing a 3.9% year-over-year decrease. The company's gaming segment revenue declined 4.2% to RMB20.9 billion, while Youdao and NetEase Cloud Music saw modest growth of 2.2% and 1.3% respectively. Net income attributable to shareholders was RMB6.5 billion (US$931.7 million), with non-GAAP earnings of US$0.33 per share. The company declared a quarterly dividend of US$0.0870 per share and continued its share repurchase program, having bought back US$1.6 billion worth of ADSs.
NetEase (NTES) ha riportato i risultati finanziari del terzo trimestre 2024, con ricavi netti di 26,2 miliardi di RMB (3,7 miliardi di dollari USA), mostrando una diminuzione del 3,9% rispetto all'anno precedente. I ricavi del segmento gaming della compagnia sono diminuiti del 4,2% a 20,9 miliardi di RMB, mentre Youdao e NetEase Cloud Music hanno registrato una crescita moderata del 2,2% e dell'1,3% rispettivamente. Il reddito netto attribuibile agli azionisti è stato di 6,5 miliardi di RMB (931,7 milioni di dollari USA), con utili non-GAAP di 0,33 dollari per azione. L'azienda ha dichiarato un dividendo trimestrale di 0,0870 dollari per azione e ha proseguito il suo programma di riacquisto di azioni, avendo riacquistato ADS per un valore di 1,6 miliardi di dollari.
NetEase (NTES) reportó los resultados financieros del tercer trimestre de 2024, con ingresos netos de 26,2 mil millones de RMB (3,7 mil millones de dólares estadounidenses), lo que representa una disminución del 3,9% en comparación con el año anterior. Los ingresos del segmento de juegos de la compañía cayeron un 4,2% a 20,9 mil millones de RMB, mientras que Youdao y NetEase Cloud Music vieron un crecimiento modesto del 2,2% y el 1,3% respectivamente. Las ganancias netas atribuibles a los accionistas fueron de 6,5 mil millones de RMB (931,7 millones de dólares), con ganancias no-GAAP de 0,33 dólares por acción. La empresa declaró un dividendo trimestral de 0,0870 dólares por acción y continuó su programa de recompra de acciones, habiendo recomprado ADS por un valor de 1,6 mil millones de dólares.
NetEase (NTES)는 2024년 3분기 재무 결과를 보고하며 순수익이 262억 위안(37억 달러)에 달했다고 발표했습니다. 이는 지난해 대비 3.9% 감소한 수치입니다. 회사의 게임 부문 매출은 4.2% 감소한 209억 위안에 이르렀으며, Youdao와 NetEase Cloud Music은 각각 2.2% 및 1.3%의 미미한 성장을 기록했습니다. 주주에게 귀속되는 순이익은 65억 위안(9억 3천 170만 달러)으로, 비-GAAP 주당 순이익은 0.33달러였습니다. 회사는 분기 배당금으로 주당 0.0870달러를 선언했으며, 주식 매입 프로그램을 계속 진행하여 16억 달러 규모의 ADS를 매입했습니다.
NetEase (NTES) a annoncé les résultats financiers du troisième trimestre 2024, avec un chiffre d'affaires net de 26,2 milliards de RMB (3,7 milliards de dollars US), enregistrant une baisse de 3,9 % par rapport à l'année précédente. Les revenus du segment de jeux de la société ont diminué de 4,2 % pour atteindre 20,9 milliards de RMB, tandis que Youdao et NetEase Cloud Music ont connu une croissance modeste de 2,2 % et 1,3 % respectivement. Le bénéfice net attribuable aux actionnaires s'est élevé à 6,5 milliards de RMB (931,7 millions de dollars US), avec un bénéfice non-GAAP de 0,33 dollar par action. La société a déclaré un dividende trimestriel de 0,0870 dollar par action et a poursuivi son programme de rachat d'actions, ayant racheté pour 1,6 milliard de dollars d'ADS.
NetEase (NTES) berichtete über die Finanzergebnisse des dritten Quartals 2024 mit Nettoumsätzen von 26,2 Milliarden RMB (3,7 Milliarden US-Dollar), was einem Rückgang von 3,9% im Vergleich zum Vorjahr entspricht. Der Umsatz im Gaming-Segment des Unternehmens sank um 4,2% auf 20,9 Milliarden RMB, während Youdao und NetEase Cloud Music ein moderates Wachstum von 2,2% bzw. 1,3% verzeichneten. Der Nettogewinn, der den Aktionären zuzurechnen ist, betrug 6,5 Milliarden RMB (931,7 Millionen US-Dollar), mit Non-GAAP-Ergebnissen von 0,33 US-Dollar pro Aktie. Das Unternehmen erklärte eine vierteljährliche Dividende von 0,0870 US-Dollar pro Aktie und setzte sein Aktienrückkaufprogramm fort, indem es ADS im Wert von 1,6 Milliarden US-Dollar zurückkaufte.
- World of Warcraft saw a 50% increase in daily active players post-relaunch in China
- Youdao achieved its first-ever third-quarter operating profit
- NetEase Cloud Music improved gross profit margin to 32.8% from 27.2% year-over-year
- Strong cash position with net cash of RMB120.0 billion (US$17.1 billion)
- Overall net revenues decreased 3.9% year-over-year to RMB26.2 billion
- Games and related services revenue declined 4.2% year-over-year
- Innovative businesses segment revenue dropped 10.3% year-over-year
- Net income decreased from RMB7.8 billion in Q3 2023 to RMB6.5 billion
Insights
NetEase's Q3 2024 results reveal mixed performance with some concerning trends.
Key Positives:
- Strong cash position of
RMB120.0 billion (US$17.1 billion ) - Healthy operating cash flow of
RMB10.6 billion - World of Warcraft relaunch drove
50% increase in daily active users - Youdao achieved first-ever Q3 operating profit
Key Concerns:
- Mobile games revenue contribution dropped to
70.8% from77.6% YoY - Operating expenses remained elevated at
RMB9.3 billion - Net income declined to
RMB6.5 billion fromRMB7.8 billion YoY
The gaming division's performance shows a strategic pivot in progress. While mobile revenue share declined, successful PC game relaunches and new titles demonstrate portfolio diversification. Naraka: Bladepoint mobile's success and Racing Master's strong Japanese launch indicate growing international market penetration.
The
Third Quarter 2024 Financial Highlights
- Net revenues were
RMB26.2 billion (US ), a decrease of$3.7 billion 3.9% compared with the same quarter of 2023.- Games and related value-added services net revenues were
RMB20.9 billion (US ), a decrease of$3.0 billion 4.2% compared with the same quarter of 2023. - Youdao net revenues were
RMB1 .6 billion (US .1 million), an increase of$224 2.2% compared with the same quarter of 2023. - NetEase Cloud Music net revenues were
RMB2.0 billion (US .9 million), an increase of$284 1.3% compared with the same quarter of 2023. - Innovative businesses and others net revenues were
RMB1.8 billion (US ), a decrease of$252.8 million 10.3% compared with the same quarter of 2023.
- Games and related value-added services net revenues were
- Gross profit was
RMB16.5 billion (US ), a decrease of$2.3 billion 2.9% compared with the same quarter of 2023. - Total operating expenses were
RMB9.3 billion (US ), a decrease of$1.3 billion 0.8% compared with the same quarter of 2023. - Net income attributable to the Company's shareholders was
RMB6.5 billion (US ). Non-GAAP net income attributable to the Company's shareholders was$931.7 million RMB7.5 billion (US ).[1]$1.1 billion - Basic net income per share was
US ($0.29 US per ADS). Non-GAAP basic net income per share was$1.46 US ($0.33 US per ADS).[1]$1.67
[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. |
Third Quarter 2024 and Recent Operational Highlights
- Launched popular new titles and expanded established games in new regions, strengthening NetEase's competitive edge across more markets in diversified genres.
- Naraka: Bladepoint mobile game gained significant popularity since its launch in July, reaching No. 4 on the iOS grossing chart with its September seasonal update, effectively catering to growing player demand for action-based PvP games.
- Racing Master topped the App Store and Google Play free-to-play charts in
Japan following its launch in August. - World of Warcraft and Hearthstone's return to
China reignited historic level of player community enthusiasm. Following their relaunch, World of Warcraft saw a50% increase in daily active players as compared to levels before the shutdown, while Hearthstone achieved over150% growth.
- Generated continued popularity of hit games Identity V and Naraka: Bladepoint, showcasing NetEase's long-term operation capabilities for online games.
- Strengthened diversified portfolio, announcing more exciting titles in the making, including Destiny: Rising and MARVEL Mystic Mayhem, and new games, such as Marvel Rivals and Where Winds Meet, set for launch in December.
- Youdao significantly improved its profitability in the third quarter, achieving its first-ever third-quarter operating profit and a record-high quarterly operating profit, compared with a loss in the same period last year.
- NetEase Cloud Music continued to drive quality development across its music-centric ecosystem, further expanding its subscriber base and sustaining healthy revenue growth momentum in its online music services.
"To further diversify our game portfolio across genres and expand globally, we launched a variety of new games to captivate players worldwide and achieved breakthrough milestones," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "Throughout our development journey over the past two decades, players have remained at the core of our creations and operations, ensuring the long-lasting popularity of our games. As we expand, we will continue to prioritize player demand and propel innovation, bringing more exciting NetEase gaming experiences to players domestically and around the world.
"NetEase Cloud Music and Youdao are both positioned for steady growth alongside our games. Across the NetEase family, we focus on creating unique, engaging and impactful experiences for our community that fuel our ongoing success," Mr. Ding concluded.
Third Quarter 2024 Financial Results
Net Revenues
Net revenues for the third quarter of 2024 were
Net revenues from games and related value-added services were
Net revenues from Youdao were
Net revenues from NetEase Cloud Music were
Net revenues from innovative businesses and others were
Gross Profit
Gross profit for the third quarter of 2024 was
The quarter-over-quarter increase in games and related value-added services' gross profit was primarily due to higher net revenues from PC games. The year-over-year decrease was primarily due to decreased net revenues from mobile games.
The quarter-over-quarter increase in Youdao's gross profit was primarily due to higher net revenues from sales of smart devices and learning services. The year-over-year decrease was primarily due to decreased net revenues from its learning services.
The year-over-year increase in NetEase Cloud Music's gross profit was primarily due to increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.
The quarter-over-quarter decrease in innovative businesses and others' gross profit was primarily due to decreased e-commerce gross profit from Yanxuan. The year-over-year increase was primarily due to increased gross profit from several businesses included within the segment.
Gross Profit Margin
Gross profit margin for games and related value-added services for the third quarter of 2024 was
Gross profit margin for Youdao for the third quarter of 2024 was
Gross profit margin for NetEase Cloud Music for the third quarter of 2024 was
Gross profit margin for innovative businesses and others for the third quarter of 2024 was
Operating Expenses
Total operating expenses for the third quarter of 2024 were
Other Income/(Expenses)
Other income/(expenses) consisted of investment income, interest income, exchange (losses)/gains and others. The quarter-over-quarter and year-over-year decreases were mainly due to higher net exchange losses in the third quarter of 2024.
Income Tax
The Company recorded a net income tax charge of
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders totaled
NetEase reported basic net income of
Non-GAAP net income attributable to the Company's shareholders totaled
NetEase reported non-GAAP basic net income of
Other Financial Information
As of September 30, 2024, 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
Quarterly Dividend
The board of directors approved a dividend of
NetEase paid a dividend of
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
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.
**
Conference Call
NetEase's management team will host a teleconference call with a simultaneous webcast at 7:00 a.m. New York Time on Thursday, November 14, 2024 (
Interested parties may participate in the conference call by dialing 1-914-202-3258 and providing conference ID: 10042941, 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: 10042941. The replay will be available through November 21, 2024.
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
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 company with industry-leading technology, and NetEase Cloud 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
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
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 provide 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
NetEase compensates for these limitations by reconciling non-GAAP net income attributable to the Company's shareholders to the nearest
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, | September 30, | September 30, | ||||
2023 | 2024 | 2024 | ||||
RMB | RMB | USD (Note 1) | ||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | 21,428,902 | 20,184,013 | 2,876,199 | |||
Time deposits | 100,856,034 | 91,195,431 | 12,995,245 | |||
Restricted cash | 2,777,206 | 2,994,096 | 426,655 | |||
Accounts receivable, net | 6,422,417 | 6,173,077 | 879,656 | |||
Inventories | 695,374 | 613,685 | 87,449 | |||
Prepayments and other current assets, net | 6,076,595 | 6,811,171 | 970,584 | |||
Short-term investments | 4,436,057 | 12,607,188 | 1,796,510 | |||
Total current assets | 142,692,585 | 140,578,661 | 20,032,298 | |||
Non-current assets: | ||||||
Property, equipment and software, net | 8,075,044 | 8,200,464 | 1,168,557 | |||
Land use rights, net | 4,075,143 | 4,204,865 | 599,188 | |||
Deferred tax assets | 1,560,088 | 1,173,270 | 167,190 | |||
Time deposits | 1,050,000 | 4,025,000 | 573,558 | |||
Restricted cash | 550 | 5,277 | 752 | |||
Other long-term assets | 28,471,568 | 26,708,737 | 3,805,965 | |||
Total non-current assets | 43,232,393 | 44,317,613 | 6,315,210 | |||
Total assets | 185,924,978 | 184,896,274 | 26,347,508 | |||
Liabilities, Redeemable Noncontrolling Interests | ||||||
Current liabilities: | ||||||
Accounts payable | 881,016 | 755,372 | 107,640 | |||
Salary and welfare payables | 4,857,206 | 2,941,618 | 419,177 | |||
Taxes payable | 2,571,534 | 2,606,842 | 371,472 | |||
Short-term loans | 19,240,163 | 10,594,342 | 1,509,682 | |||
Contract liabilities | 13,362,166 | 15,543,023 | 2,214,863 | |||
Accrued liabilities and other payables | 12,930,399 | 13,270,811 | 1,891,075 | |||
Total current liabilities | 53,842,484 | 45,712,008 | 6,513,909 | |||
Non-current liabilities: | ||||||
Deferred tax liabilities | 2,299,303 | 1,828,869 | 260,612 | |||
Long-term loans | 427,997 | 427,997 | 60,989 | |||
Other long-term liabilities | 1,271,113 | 1,199,075 | 170,867 | |||
Total non-current liabilities | 3,998,413 | 3,455,941 | 492,468 | |||
Total liabilities | 57,840,897 | 49,167,949 | 7,006,377 | |||
Redeemable noncontrolling interests | 115,759 | 122,494 | 17,455 | |||
NetEase, Inc.'s shareholders' equity | 124,285,776 | 132,150,155 | 18,831,246 | |||
Noncontrolling interests | 3,682,546 | 3,455,676 | 492,430 | |||
Total equity | 127,968,322 | 135,605,831 | 19,323,676 | |||
Total liabilities, redeemable noncontrolling | 185,924,978 | 184,896,274 | 26,347,508 | |||
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 | Nine Months Ended | ||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||
2023 | 2024 | 2024 | 2024 | 2023 | 2024 | 2024 | |||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | |||||||||
Net revenues | 27,270,406 | 25,485,805 | 26,209,879 | 3,734,878 | 76,327,994 | 78,547,425 | 11,192,919 | ||||||||
Cost of revenues | (10,304,106) | (9,443,587) | (9,733,274) | (1,386,980) | (30,089,735) | (29,012,682) | (4,134,274) | ||||||||
Gross profit | 16,966,300 | 16,042,218 | 16,476,605 | 2,347,898 | 46,238,259 | 49,534,743 | 7,058,645 | ||||||||
Operating expenses: | |||||||||||||||
Selling and marketing expenses | (3,567,153) | (3,501,737) | (3,805,071) | (542,218) | (9,743,904) | (11,329,012) | (1,614,371) | ||||||||
General and administrative expenses | (1,494,186) | (1,091,441) | (1,100,328) | (156,795) | (3,648,011) | (3,388,244) | (482,821) | ||||||||
Research and development expenses | (4,347,052) | (4,455,717) | (4,424,469) | (630,482) | (12,005,691) | (13,054,944) | (1,860,315) | ||||||||
Total operating expenses | (9,408,391) | (9,048,895) | (9,329,868) | (1,329,495) | (25,397,606) | (27,772,200) | (3,957,507) | ||||||||
Operating profit | 7,557,909 | 6,993,323 | 7,146,737 | 1,018,403 | 20,840,653 | 21,762,543 | 3,101,138 | ||||||||
Other income/(expenses): | |||||||||||||||
Investment income, net | 556,603 | 103,674 | 578,398 | 82,421 | 1,315,662 | 861,363 | 122,743 | ||||||||
Interest income, net | 1,147,227 | 1,186,219 | 1,282,766 | 182,793 | 2,858,835 | 3,746,582 | 533,884 | ||||||||
Exchange (losses)/gains, net | (400,483) | (239,375) | (1,055,518) | (150,410) | 677,905 | (1,279,882) | (182,382) | ||||||||
Other, net | 240,024 | 85,694 | 43,600 | 6,213 | 618,883 | 323,182 | 46,053 | ||||||||
Income before tax | 9,101,280 | 8,129,535 | 7,995,983 | 1,139,420 | 26,311,938 | 25,413,788 | 3,621,436 | ||||||||
Income tax | (1,290,398) | (1,300,939) | (1,289,545) | (183,759) | (3,631,047) | (4,076,394) | (580,881) | ||||||||
Net income | 7,810,882 | 6,828,596 | 6,706,438 | 955,661 | 22,680,891 | 21,337,394 | 3,040,555 | ||||||||
Accretion of redeemable noncontrolling | (895) | (960) | (962) | (137) | (2,623) | (2,880) | (410) | ||||||||
Net loss/(income) attributable to noncontrolling | 26,901 | (68,887) | (167,041) | (23,803) | 156,021 | (403,384) | (57,482) | ||||||||
Net income attributable to the | 7,836,888 | 6,758,749 | 6,538,435 | 931,721 | 22,834,289 | 20,931,130 | 2,982,663 | ||||||||
Net income per share * | |||||||||||||||
Basic | 2.44 | 2.10 | 2.04 | 0.29 | 7.10 | 6.52 | 0.93 | ||||||||
Diluted | 2.41 | 2.08 | 2.03 | 0.29 | 7.02 | 6.46 | 0.92 | ||||||||
Net income per ADS * | |||||||||||||||
Basic | 12.19 | 10.50 | 10.22 | 1.46 | 35.48 | 32.61 | 4.65 | ||||||||
Diluted | 12.06 | 10.42 | 10.14 | 1.44 | 35.11 | 32.30 | 4.60 | ||||||||
Weighted average number of ordinary | |||||||||||||||
Basic | 3,213,834 | 3,217,699 | 3,198,646 | 3,198,646 | 3,217,873 | 3,209,298 | 3,209,298 | ||||||||
Diluted | 3,249,649 | 3,243,056 | 3,224,110 | 3,224,110 | 3,251,666 | 3,238,834 | 3,238,834 | ||||||||
* 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 | Nine Months Ended | |||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | September 30, | September 30, | ||||||||
2023 | 2024 | 2024 | 2024 | 2023 | 2024 | 2024 | ||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | 7,810,882 | 6,828,596 | 6,706,438 | 955,661 | 22,680,891 | 21,337,394 | 3,040,555 | |||||||
Adjustments to reconcile net income to net cash provided | ||||||||||||||
Depreciation and amortization | 651,856 | 631,957 | 520,567 | 74,180 | 2,395,488 | 1,720,447 | 245,162 | |||||||
Fair value changes of equity security, other investments | (382,132) | (7,887) | (824,608) | (117,506) | (686,887) | (1,200,753) | (171,106) | |||||||
Impairment losses on investments | 280,641 | 210,741 | 529,668 | 75,477 | 328,511 | 868,826 | 123,807 | |||||||
Fair value changes of short-term investments | (72,875) | (128,295) | (100,071) | (14,260) | (307,675) | (289,176) | (41,207) | |||||||
Share-based compensation cost | 819,548 | 1,079,056 | 978,139 | 139,384 | 2,429,823 | 2,951,495 | 420,584 | |||||||
Allowance for expected credit losses | 22,386 | 9,281 | 36,022 | 5,133 | 51,646 | 56,903 | 8,109 | |||||||
Losses/(gains) on disposal of property, equipment and software | 2,649 | (326) | (2,920) | (416) | 2,291 | (1,114) | (159) | |||||||
Unrealized exchange losses/(gains) | 362,213 | (209,311) | 1,050,644 | 149,715 | (718,121) | 823,824 | 117,394 | |||||||
Gains on disposal of long-term investments, business and | (3,197) | (141,114) | (118,046) | (16,821) | (25,347) | (272,647) | (38,852) | |||||||
Deferred income taxes | (305,703) | (1,280,076) | 711,639 | 101,408 | (62,417) | (83,383) | (11,882) | |||||||
Share of results on equity method investees | (160,042) | 39,200 | (28,466) | (4,057) | (385,142) | 175,005 | 24,938 | |||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | (1,177,732) | 1,410,478 | 146,758 | 20,913 | (1,523,463) | 198,525 | 28,289 | |||||||
Inventories | 84,970 | 29,552 | (39,285) | (5,598) | 271,710 | 81,645 | 11,634 | |||||||
Prepayments and other assets | (573,631) | 530,856 | (1,234,390) | (175,899) | (455,037) | (377,394) | (53,778) | |||||||
Accounts payable | 150,868 | (126,862) | 6,316 | 900 | (577,862) | (127,547) | (18,175) | |||||||
Salary and welfare payables | (588,217) | 879,058 | (670,750) | (95,581) | (2,055,848) | (1,970,300) | (280,766) | |||||||
Taxes payable | 515,087 | (1,462,700) | 224,015 | 31,922 | 255,911 | 33,137 | 4,722 | |||||||
Contract liabilities | 1,560,628 | (1,270,324) | 1,928,060 | 274,746 | 2,009,423 | 2,231,822 | 318,032 | |||||||
Accrued liabilities and other payables | 845,721 | (490,048) | 755,882 | 107,712 | (104,899) | 507,904 | 72,376 | |||||||
Net cash provided by operating activities | 9,843,920 | 6,531,832 | 10,575,612 | 1,507,013 | 23,522,996 | 26,664,613 | 3,799,677 | |||||||
Cash flows from investing activities: | ||||||||||||||
Purchase of property, equipment and software | (643,144) | (168,880) | (379,520) | (54,081) | (1,816,627) | (963,418) | (137,286) | |||||||
Proceeds from sale of property, equipment and software | 3,101 | 660 | 1,072 | 153 | 9,897 | 5,238 | 746 | |||||||
Purchase of intangible assets, content and licensed copyrights | (742,523) | (399,533) | (222,247) | (31,670) | (1,852,526) | (810,601) | (115,510) | |||||||
Net changes of short-term investments with terms of three | (1,993,921) | (8,194,289) | 1,585,395 | 225,917 | (1,087,059) | (4,207,245) | (599,528) | |||||||
Purchase of short-term investments with terms over three | - | - | (3,675,000) | (523,683) | - | (3,675,000) | (523,683) | |||||||
Proceeds from maturities of short-term investments with terms | 376,950 | - | - | - | 481,219 | - | - | |||||||
Investment in long-term investments and acquisition of | (417,448) | (193,450) | (226,086) | (32,217) | (1,916,724) | (901,340) | (128,440) | |||||||
Proceeds from disposal of long-term investments, businesses, | 20,898 | 840,649 | 1,541,338 | 219,639 | 78,709 | 2,467,443 | 351,608 | |||||||
Placement/rollover of matured time deposits | (30,831,994) | (61,775,606) | (36,766,094) | (5,239,127) | (78,026,928) | (133,100,536) | (18,966,675) | |||||||
Proceeds from maturities of time deposits | 33,893,436 | 55,211,839 | 37,546,192 | 5,350,289 | 78,144,576 | 138,806,413 | 19,779,756 | |||||||
Change in other long-term assets | (181,263) | (172,543) | (125,911) | (17,942) | (333,293) | (333,079) | (47,463) | |||||||
Net cash used in investing activities | (515,908) | (14,851,153) | (720,861) | (102,722) | (6,318,756) | (2,712,125) | (386,475) | |||||||
Cash flows from financing activities: | ||||||||||||||
Net changes from loans with terms of three months or less | (7,501,788) | (2,085,053) | (4,778,301) | (680,902) | (19,834,683) | (7,263,080) | (1,034,981) | |||||||
Proceeds of loans with terms over three months | 7,607,060 | 1,069,020 | 5,395,810 | 768,897 | 11,058,160 | 13,463,080 | 1,918,473 | |||||||
Payment of loans with terms over three months | (4,250,550) | (10,681,827) | (3,100,520) | (441,821) | (7,524,472) | (14,739,347) | (2,100,340) | |||||||
Net amounts received/(paid) related to capital contribution from | 11,573 | 50,572 | (8,394) | (1,196) | 58,150 | 84,392 | 12,026 | |||||||
Cash paid for repurchase of NetEase's ADSs/purchase of | (296,495) | (2,007,030) | (3,994,212) | (569,171) | (4,608,462) | (7,235,022) | (1,030,982) | |||||||
Dividends paid to NetEase's shareholders | (2,423,355) | (2,264,799) | (1,972,928) | (281,140) | (5,755,011) | (9,182,743) | (1,308,530) | |||||||
Net cash used in financing activities | (6,853,555) | (15,919,117) | (8,458,545) | (1,205,333) | (26,606,318) | (24,872,720) | (3,544,334) | |||||||
Effect of exchange rate changes on cash, cash equivalents and | 4,197 | 8,234 | (68,136) | (9,710) | (28,181) | (103,040) | (14,683) | |||||||
Net increase/(decrease) in cash, cash equivalents and restricted cash 2,478,654 | (24,230,204) | 1,328,070 | 189,248 | (9,430,259) | (1,023,272) | (145,815) | ||||||||
Cash, cash equivalents and restricted cash, at the beginning | 15,679,412 | 46,085,520 | 21,855,316 | 3,114,358 | 27,588,325 | 24,206,658 | 3,449,421 | |||||||
Cash, cash equivalents and restricted cash, at end of the period | 18,158,066 | 21,855,316 | 23,183,386 | 3,303,606 | 18,158,066 | 23,183,386 | 3,303,606 | |||||||
Supplemental disclosures of cash flow information: | ||||||||||||||
Cash paid for income taxes, net | 1,165,196 | 2,848,493 | 554,867 | 79,068 | 3,864,820 | 4,586,071 | 653,510 | |||||||
Cash paid for interest expenses | 105,665 | 152,943 | 165,881 | 23,638 | 708,025 | 465,279 | 66,302 | |||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||||
NETEASE, INC. | ||||||||||||||||||||||||||
UNAUDITED SEGMENT INFORMATION | ||||||||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||
2023 | 2024 | 2024 | 2024 | 2023 | 2024 | 2024 | ||||||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||||
Games and related value-added services | 21,779,851 | 20,055,819 | 20,864,036 | 2,973,102 | 60,644,094 | 62,380,233 | 8,889,113 | |||||||||||||||||||
Youdao | 1,538,783 | 1,321,721 | 1,572,541 | 224,085 | 3,908,687 | 4,286,121 | 610,767 | |||||||||||||||||||
NetEase Cloud Music | 1,973,064 | 2,040,952 | 1,999,163 | 284,878 | 5,881,444 | 6,069,656 | 864,919 | |||||||||||||||||||
Innovative businesses and others | 1,978,708 | 2,067,313 | 1,774,139 | 252,813 | 5,893,769 | 5,811,415 | 828,120 | |||||||||||||||||||
Total net revenues | 27,270,406 | 25,485,805 | 26,209,879 | 3,734,878 | 76,327,994 | 78,547,425 | 11,192,919 | |||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||
Games and related value-added services | (6,749,507) | (6,008,604) | (6,503,146) | (926,691) | (19,555,391) | (19,067,061) | (2,717,034) | |||||||||||||||||||
Youdao | (679,147) | (684,942) | (783,085) | (111,588) | (1,880,026) | (2,178,383) | (310,417) | |||||||||||||||||||
NetEase Cloud Music | (1,436,552) | (1,385,756) | (1,343,921) | (191,507) | (4,379,785) | (3,988,683) | (568,383) | |||||||||||||||||||
Innovative businesses and others | (1,438,900) | (1,364,285) | (1,103,122) | (157,194) | (4,274,533) | (3,778,555) | (538,440) | |||||||||||||||||||
Total cost of revenues | (10,304,106) | (9,443,587) | (9,733,274) | (1,386,980) | (30,089,735) | (29,012,682) | (4,134,274) | |||||||||||||||||||
Gross profit: | ||||||||||||||||||||||||||
Games and related value-added services | 15,030,344 | 14,047,215 | 14,360,890 | 2,046,411 | 41,088,703 | 43,313,172 | 6,172,079 | |||||||||||||||||||
Youdao | 859,636 | 636,779 | 789,456 | 112,497 | 2,028,661 | 2,107,738 | 300,350 | |||||||||||||||||||
NetEase Cloud Music | 536,512 | 655,196 | 655,242 | 93,371 | 1,501,659 | 2,080,973 | 296,536 | |||||||||||||||||||
Innovative businesses and others | 539,808 | 703,028 | 671,017 | 95,619 | 1,619,236 | 2,032,860 | 289,680 | |||||||||||||||||||
Total gross profit | 16,966,300 | 16,042,218 | 16,476,605 | 2,347,898 | 46,238,259 | 49,534,743 | 7,058,645 | |||||||||||||||||||
Gross profit margin: | ||||||||||||||||||||||||||
Games and related value-added services | 69.0 % | 70.0 % | 68.8 % | 68.8 % | 67.8 % | 69.4 % | 69.4 % | |||||||||||||||||||
Youdao | 55.9 % | 48.2 % | 50.2 % | 50.2 % | 51.9 % | 49.2 % | 49.2 % | |||||||||||||||||||
NetEase Cloud Music | 27.2 % | 32.1 % | 32.8 % | 32.8 % | 25.5 % | 34.3 % | 34.3 % | |||||||||||||||||||
Innovative businesses and others | 27.3 % | 34.0 % | 37.8 % | 37.8 % | 27.5 % | 35.0 % | 35.0 % | |||||||||||||||||||
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
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 | Nine Months Ended | |||||||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||
2023 | 2024 | 2024 | 2024 | 2023 | 2024 | 2024 | ||||||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||||||||||||||
Share-based compensation cost included in: | ||||||||||||||||||||||||||
Cost of revenues | 210,533 | 319,949 | 306,283 | 43,645 | 607,048 | 881,167 | 125,565 | |||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||
Selling and marketing expenses | 33,804 | 42,865 | 36,365 | 5,182 | 97,226 | 97,099 | 13,836 | |||||||||||||||||||
General and administrative expenses | 280,581 | 286,350 | 247,440 | 35,260 | 856,188 | 823,426 | 117,337 | |||||||||||||||||||
Research and development expenses | 294,630 | 429,892 | 388,051 | 55,297 | 869,361 | 1,149,803 | 163,846 | |||||||||||||||||||
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 | Nine Months Ended | |||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | September 30, | September 30, | ||||||||
2023 | 2024 | 2024 | 2024 | 2023 | 2024 | 2024 | ||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||
Net income attributable to the Company's shareholders | 7,836,888 | 6,758,749 | 6,538,435 | 931,721 | 22,834,289 | 20,931,130 | 2,982,663 | |||||||
Add: Share-based compensation | 808,276 | 1,059,939 | 960,706 | 136,900 | 2,394,559 | 2,897,543 | 412,897 | |||||||
Non-GAAP net income attributable to the Company's shareholders | 8,645,164 | 7,818,688 | 7,499,141 | 1,068,621 | 25,228,848 | 23,828,673 | 3,395,560 | |||||||
Non-GAAP net income per share * | ||||||||||||||
Basic | 2.69 | 2.43 | 2.34 | 0.33 | 7.84 | 7.42 | 1.06 | |||||||
Diluted | 2.66 | 2.41 | 2.33 | 0.33 | 7.76 | 7.35 | 1.05 | |||||||
Non-GAAP net income per ADS * | ||||||||||||||
Basic | 13.45 | 12.15 | 11.72 | 1.67 | 39.20 | 37.12 | 5.29 | |||||||
Diluted | 13.30 | 12.05 | 11.63 | 1.66 | 38.79 | 36.77 | 5.24 | |||||||
* Each ADS represents five ordinary shares. | ||||||||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||||
View original content:https://www.prnewswire.com/news-releases/netease-announces-third-quarter-2024-unaudited-financial-results-302305327.html
SOURCE NetEase, Inc.
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