NetEase Announces Fourth Quarter and Fiscal Year 2022 Unaudited Financial Results
NetEase reported Q4 2022 net revenues of RMB25.4 billion (US$3.7 billion), reflecting a 4.0% increase year-over-year. Key highlights include:
- Games and related services generated RMB19.1 billion (US$2.8 billion), up 1.6% from Q4 2021.
- Youdao revenues rose 9.0% to RMB1.5 billion (US$210.8 million).
- Cloud Music net revenues increased 25.8% to RMB2.4 billion (US$344.5 million).
- Operating expenses grew to RMB8.8 billion (US$1.3 billion), marking a 6.0% rise.
- Net income attributable to shareholders was RMB4 billion (US$573.1 million).
NetEase aims to enhance product quality and expand global reach in 2023.
- Net revenues for fiscal year 2022 increased to RMB96.5 billion (US$14.0 billion) from RMB87.6 billion in 2021.
- Cloud Music's net revenues grew significantly by 28.5% year-over-year.
- Non-GAAP net income from continuing operations rose to RMB22.8 billion (US$3.3 billion) for 2022.
- Net income attributable to shareholders decreased to RMB4.0 billion (US$573.1 million) in Q4 2022 from RMB6.7 billion the previous quarter.
- Gross profit margin for games and services declined to 59.1% from 65.0% in the previous quarter.
Fourth Quarter 2022 Financial Highlights
- Net revenues were
RMB25.4 billion (US ), an increase of$3.7 billion 4.0% compared with the fourth quarter of 2021.
- Games and related value-added services net revenues were
-
-
- Innovative businesses and others net revenues were
- Gross profit was
RMB13.2 billion (US ), an increase of$1.9 billion 2.5% compared with the fourth quarter of 2021. - Total operating expenses were
RMB8.8 billion (US ), an increase of$1.3 billion 6.0% compared with the fourth quarter of 2021. - Net income attributable to the Company's shareholders was
RMB4.0 billion (US ). Non-GAAP net income from continuing operations attributable to the Company's shareholders was$573.1 million RMB4.8 billion (US ).[1]$697.6 million - Basic net income per share was
US ($0.18 US per ADS). Non-GAAP basic net income from continuing operations per share was$0.88 US ($0.22 US per ADS).[1]$1.08
[1] As used in this announcement, non-GAAP net income from continuing operations attributable to the Company's shareholders and non-GAAP basic and diluted net income from continuing operations per share and per ADS are defined to exclude share-based compensation expenses. See "Unaudited Reconciliation of GAAP and Non-GAAP Results" at the end of this announcement. |
Fourth Quarter 2022 and Early 2023 Operational Highlights
- Extended the popularity of leading franchise titles including both the Fantasy Westward Journey and Westward Journey Online series, as well as other hit titles such as Sky, Invincible and the mobile version of New Ghost.
- Drove strong revenue and user growth of
Eggy Party , a casual party mobile game initially launched in the Chinese mainland, accumulating the highest daily active users of any game in the history of NetEase Games. - Advanced the development of multiple games in the pipeline including Westward Journey Returns, Justice mobile game, Badlanders, Racing Master and Naraka: Bladepoint mobile game, as well as
Harry Potter : Magic Awakened for the international markets. - Continued to grow
Cloud Music's net revenues and improved margins. Broadened its music scope by signing multiple licensing agreements with major labels such as B'in Music andPony Canyon , renewing its cooperation with Avex, and achieved impressive digital album sales by renowned artists such asChenyu Hua and (G)I-DLE. - Achieved first-ever quarterly income from operations for
Youdao , supported by healthy sales expansion of new products and services along with an optimized cost structure, despite a challenging macro environment.
"We experienced solid growth in 2022. Primarily as a result of the ongoing popularity of our leading games and the expansion of our range of products and services, we ended the year with total net revenues reaching
"Our other business lines, including
Fourth Quarter 2022 Financial Results
Net Revenues
Net revenues for the fourth quarter of 2022 were
Net revenues from games and related value-added services, which include both the operation of online games as well as other related or ancillary services to the games, were
Net revenues from
Net revenues from
Net revenues from innovative businesses and others were
Gross Profit
Gross profit for the fourth quarter of 2022 was
The quarter-over-quarter and year-over-year decreases in games and related value-added services' gross profit were primarily due to the one-off recognition of royalty fees related to certain licensed games.
The quarter-over-quarter and year-over-year increases in
The quarter-over-quarter and year-over-year increases in
The quarter-over-quarter and year-over-year increases in innovative businesses and others' gross profit were primarily due to increased gross profit contribution from Yanxuan.
Gross Profit Margin
Gross profit margin for games and related value-added services for the fourth quarter of 2022 was
Gross profit margin for
Gross profit margin for
Gross profit margin for innovative businesses and others for the fourth quarter of 2022 was
Operating Expenses
Total operating expenses for the fourth quarter of 2022 were
Other Income/ (Expenses)
Other income/ (expenses) consisted of investment income/ (loss), interest income, exchange (losses)/ gains and others. The quarter-over-quarter and year-over-year decreases in other income were mainly due to lower investment income from equity investments and higher unrealized net exchange losses from the Company's
Income Taxes
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
Non-GAAP net income from continuing operations attributable to the Company's shareholders totaled
Fiscal Year 2022 Financial Results
Net Revenues
Net revenues for fiscal year 2022 were
Net revenues from games and related value-added services were
Net revenues from
Net revenues from
Net revenues from innovative businesses and others were
Gross Profit
Gross profit for fiscal year 2022 was
The year-over-year increase in games and related value-added services gross profit was primarily due to increased net revenues from the operation of online games, including PC games such as Fantasy Westward Journey Online and Naraka: Bladepoint and mobile games such as certain newly launched games and existing hit titles like Infinite Lagrange.
The year-over-year decrease in
The year-over-year increase in
The slight year-over-year decrease in innovative businesses and others gross profit was primarily due to decreased gross profit from the Company's advertising business, which was partially offset by increased gross profits from Yanxuan.
Operating Expenses
Total operating expenses for fiscal year 2022 were
Other Income/ (Expenses)
The slight year-over-year decrease was mainly due to higher investment loss arising from fair value changes of equity investments with readily determinable fair value, which was partially offset by higher unrealized net exchange gains, interest income and others.
Income Taxes
The Company recorded a net income tax charge of
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders for fiscal year 2022 totaled
Non-GAAP net income from continuing operations attributable to the Company's shareholders for fiscal year 2022 totaled
Quarterly Dividend
The board of directors has approved 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.
Other Information
As of
Share Repurchase/ Purchase Program
On
On
On
The extent to which
**
Conference Call
Interested parties may participate in the conference call by dialing 1-914-202-3258 and providing conference ID: 10028543, 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: 10028543. The replay will be available through
This call will be webcast live and the replay will be available for 12 months. Both will be available on
About
As a leading internet technology company based in
Beyond games,
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
Non-GAAP financial measures are not defined under
Contact for Media and Investors:
Margaret Shi
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||
2021 | 2022 | 2022 | |||||||||||||||||||||||||
RMB | RMB | USD (Note 1) | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||
Cash and cash equivalents | 14,498,157 | 24,889,000 | 3,608,566 | ||||||||||||||||||||||||
Time deposits | 70,754,846 | 84,947,679 | 12,316,256 | ||||||||||||||||||||||||
Restricted cash | 2,876,628 | 2,699,055 | 391,326 | ||||||||||||||||||||||||
Accounts receivable, net | 5,507,988 | 5,002,872 | 725,348 | ||||||||||||||||||||||||
Inventories, net | 964,733 | 993,636 | 144,064 | ||||||||||||||||||||||||
Prepayments and other current assets, net | 6,235,857 | 5,448,284 | 789,927 | ||||||||||||||||||||||||
Short-term investments | 12,281,548 | 7,622,673 | 1,105,184 | ||||||||||||||||||||||||
Assets held for sale | 497 | - | - | ||||||||||||||||||||||||
Total current assets | 113,120,254 | 131,603,199 | 19,080,671 | ||||||||||||||||||||||||
Non-current assets: | |||||||||||||||||||||||||||
Property, equipment and software, net | 5,433,858 | 6,342,330 | 919,551 | ||||||||||||||||||||||||
Land use rights, net | 4,108,090 | 4,121,767 | 597,600 | ||||||||||||||||||||||||
Deferred tax assets | 1,297,954 | 1,480,789 | 214,694 | ||||||||||||||||||||||||
Time deposits | 5,823,840 | 2,973,840 | 431,166 | ||||||||||||||||||||||||
Restricted cash | 1,330 | 270 | 39 | ||||||||||||||||||||||||
Other long-term assets, net | 23,857,510 | 26,238,790 | 3,804,268 | ||||||||||||||||||||||||
Assets held for sale | 1,088 | - | - | ||||||||||||||||||||||||
Total non-current assets | 40,523,670 | 41,157,786 | 5,967,318 | ||||||||||||||||||||||||
Total assets | 153,643,924 | 172,760,985 | 25,047,989 | ||||||||||||||||||||||||
Liabilities, Redeemable Noncontrolling Interests | |||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||
Accounts payable | 985,059 | 1,507,141 | 218,515 | ||||||||||||||||||||||||
Salary and welfare payables | 4,133,254 | 4,732,941 | 686,212 | ||||||||||||||||||||||||
Taxes payable | 4,537,050 | 2,813,096 | 407,861 | ||||||||||||||||||||||||
Short-term loans | 19,352,313 | 23,875,704 | 3,461,652 | ||||||||||||||||||||||||
Contract liabilities | 12,132,743 | 12,518,890 | 1,815,068 | ||||||||||||||||||||||||
Accrued liabilities and other payables | 9,360,907 | 11,381,075 | 1,650,101 | ||||||||||||||||||||||||
Total current liabilities | 50,501,326 | 56,828,847 | 8,239,409 | ||||||||||||||||||||||||
Non-current liabilities: | |||||||||||||||||||||||||||
Deferred tax liabilities | 1,345,874 | 2,126,120 | 308,258 | ||||||||||||||||||||||||
Long-term loans | 1,275,140 | 3,654,964 | 529,920 | ||||||||||||||||||||||||
Other long-term liabilities | 1,097,708 | 1,277,574 | 185,231 | ||||||||||||||||||||||||
Total non-current liabilities | 3,718,722 | 7,058,658 | 1,023,409 | ||||||||||||||||||||||||
Total liabilities | 54,220,048 | 63,887,505 | 9,262,818 | ||||||||||||||||||||||||
Redeemable noncontrolling interests | 145,238 | 136,440 | 19,782 | ||||||||||||||||||||||||
95,328,080 | 104,731,317 | 15,184,614 | |||||||||||||||||||||||||
Noncontrolling interests | 3,950,558 | 4,005,723 | 580,775 | ||||||||||||||||||||||||
Total shareholders' equity | 99,278,638 | 108,737,040 | 15,765,389 | ||||||||||||||||||||||||
Total liabilities, redeemable noncontrolling | 153,643,924 | 172,760,985 | 25,047,989 | ||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||||||||||
(in thousands, except per share data or per ADS data) | ||||||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | 2022 | ||||||||||||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||||||||||||||||||||
Net revenues | 24,373,565 | 24,426,760 | 25,354,129 | 3,676,003 | 87,606,026 | 96,495,809 | 13,990,577 | |||||||||||||||||||||||||
Cost of revenues | (11,455,785) | (10,682,868) | (12,109,765) | (1,755,751) | (40,635,225) | (43,729,683) | (6,340,208) | |||||||||||||||||||||||||
Gross profit | 12,917,780 | 13,743,892 | 13,244,364 | 1,920,252 | 46,970,801 | 52,766,126 | 7,650,369 | |||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Selling and marketing expenses | (3,300,032) | (3,768,618) | (3,417,909) | (495,550) | (12,214,191) | (13,402,721) | (1,943,212) | |||||||||||||||||||||||||
General and administrative expenses | (1,161,876) | (1,264,342) | (1,302,932) | (188,907) | (4,263,549) | (4,695,798) | (680,827) | |||||||||||||||||||||||||
Research and development expenses | (3,847,704) | (3,969,156) | (4,090,076) | (593,005) | (14,075,991) | (15,039,014) | (2,180,452) | |||||||||||||||||||||||||
Total operating expenses | (8,309,612) | (9,002,116) | (8,810,917) | (1,277,462) | (30,553,731) | (33,137,533) | (4,804,491) | |||||||||||||||||||||||||
Operating profit | 4,608,168 | 4,741,776 | 4,433,447 | 642,790 | 16,417,070 | 19,628,593 | 2,845,878 | |||||||||||||||||||||||||
Other income/ (expenses): | ||||||||||||||||||||||||||||||||
Investment income/ (loss), net | 1,627,642 | 1,347,269 | (37,102) | (5,379) | 2,947,721 | 53,976 | 7,826 | |||||||||||||||||||||||||
Interest income, net | 395,029 | 556,148 | 629,290 | 91,238 | 1,519,714 | 2,149,673 | 311,673 | |||||||||||||||||||||||||
Exchange (losses)/ gains, net | (331,390) | 1,398,045 | (594,241) | (86,157) | (490,481) | 1,571,207 | 227,804 | |||||||||||||||||||||||||
Other, net | 297,244 | 164,435 | 344,875 | 50,002 | 710,435 | 846,815 | 122,777 | |||||||||||||||||||||||||
Income before tax | 6,596,693 | 8,207,673 | 4,776,269 | 692,494 | 21,104,459 | 24,250,264 | 3,515,958 | |||||||||||||||||||||||||
Income tax | (933,985) | (1,586,673) | (966,574) | (140,140) | (4,128,269) | (5,031,838) | (729,548) | |||||||||||||||||||||||||
Net income from continuing operations | 5,662,708 | 6,621,000 | 3,809,695 | 552,354 | 16,976,190 | 19,218,426 | 2,786,410 | |||||||||||||||||||||||||
Net income from discontinued operations | - | - | - | - | - | 624,864 | 90,597 | |||||||||||||||||||||||||
Net income | 5,662,708 | 6,621,000 | 3,809,695 | 552,354 | 16,976,190 | 19,843,290 | 2,877,007 | |||||||||||||||||||||||||
Accretion of redeemable noncontrolling | (99,914) | (781) | (710) | (103) | (536,981) | (2,978) | (432) | |||||||||||||||||||||||||
Net loss attributable to noncontrolling | 131,360 | 79,145 | 143,752 | 20,842 | 417,633 | 497,288 | 72,100 | |||||||||||||||||||||||||
Net income attributable to the | 5,694,154 | 6,699,364 | 3,952,737 | 573,093 | 16,856,842 | 20,337,600 | 2,948,675 | |||||||||||||||||||||||||
Including: | ||||||||||||||||||||||||||||||||
-Net income from continuing operations | 5,694,154 | 6,699,364 | 3,952,737 | 573,093 | 16,856,842 | 19,712,736 | 2,858,078 | |||||||||||||||||||||||||
-Net income from discontinued operations | - | - | - | - | - | 624,864 | 90,597 | |||||||||||||||||||||||||
Basic net income per share * | 1.74 | 2.05 | 1.22 | 0.18 | 5.07 | 6.23 | 0.90 | |||||||||||||||||||||||||
-Continuing operations | 1.74 | 2.05 | 1.22 | 0.18 | 5.07 | 6.04 | 0.87 | |||||||||||||||||||||||||
-Discontinued operations | - | - | - | - | - | 0.19 | 0.03 | |||||||||||||||||||||||||
Basic net income per ADS * | 8.68 | 10.27 | 6.10 | 0.88 | 25.34 | 31.16 | 4.52 | |||||||||||||||||||||||||
-Continuing operations | 8.68 | 10.27 | 6.10 | 0.88 | 25.34 | 30.20 | 4.38 | |||||||||||||||||||||||||
-Discontinued operations | - | - | - | - | - | 0.96 | 0.14 | |||||||||||||||||||||||||
Diluted net income per share * | 1.71 | 2.03 | 1.21 | 0.18 | 5.01 | 6.17 | 0.89 | |||||||||||||||||||||||||
-Continuing operations | 1.71 | 2.03 | 1.21 | 0.18 | 5.01 | 5.98 | 0.86 | |||||||||||||||||||||||||
-Discontinued operations | - | - | - | - | - | 0.19 | 0.03 | |||||||||||||||||||||||||
Diluted net income per ADS * | 8.57 | 10.17 | 6.05 | 0.88 | 25.03 | 30.85 | 4.47 | |||||||||||||||||||||||||
-Continuing operations | 8.57 | 10.17 | 6.05 | 0.88 | 25.03 | 29.90 | 4.33 | |||||||||||||||||||||||||
-Discontinued operations | - | - | - | - | - | 0.95 | 0.14 | |||||||||||||||||||||||||
Weighted average number of ordinary | ||||||||||||||||||||||||||||||||
Basic | 3,281,172 | 3,262,989 | 3,239,282 | 3,239,282 | 3,325,864 | 3,263,455 | 3,263,455 | |||||||||||||||||||||||||
Diluted | 3,323,004 | 3,293,766 | 3,269,082 | 3,269,082 | 3,367,478 | 3,296,014 | 3,296,014 | |||||||||||||||||||||||||
* Each ADS represents five ordinary shares. | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | 2022 | ||||||||||||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||||||||
Net income | 5,662,708 | 6,621,000 | 3,809,695 | 552,354 | 16,976,190 | 19,843,290 | 2,877,007 | |||||||||||||||||||||||||
Net income from discontinued operations | - | - | - | - | - | (624,864) | (90,597) | |||||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 836,042 | 713,852 | 769,141 | 111,515 | 3,275,727 | 2,858,209 | 414,401 | |||||||||||||||||||||||||
Fair value changes of equity security investments | (984,901) | 680,019 | 148,156 | 21,481 | (471,880) | 3,104,336 | 450,086 | |||||||||||||||||||||||||
Impairment losses of investments and other long-term assets | 69,572 | 6,763 | 45,401 | 6,583 | 100,424 | 300,249 | 43,532 | |||||||||||||||||||||||||
Fair value changes of short-term investments | (166,513) | (119,620) | (23,364) | (3,388) | (639,757) | (342,642) | (49,678) | |||||||||||||||||||||||||
Share-based compensation cost | 1,002,899 | 786,999 | 876,560 | 127,089 | 3,041,492 | 3,174,160 | 460,211 | |||||||||||||||||||||||||
Allowance for expected credit losses | 12,932 | 44,126 | 6,615 | 959 | 265,930 | 61,393 | 8,901 | |||||||||||||||||||||||||
Losses on disposal of property, equipment and software | 48,779 | 528 | 1,166 | 169 | 54,052 | 3,620 | 525 | |||||||||||||||||||||||||
Unrealized exchange losses/ (gains) | 347,235 | (1,401,893) | 589,665 | 85,493 | 488,604 | (1,604,260) | (232,596) | |||||||||||||||||||||||||
Gains on disposal of long-term investments, business and | (13,091) | (1,724,433) | (62,922) | (9,123) | (186,920) | (1,791,355) | (259,722) | |||||||||||||||||||||||||
Deferred income taxes | (431,015) | (234,336) | 578,317 | 83,848 | 407,948 | 489,670 | 70,995 | |||||||||||||||||||||||||
Share of results on equity method investees and revaluation | (448,053) | (159,128) | (54,746) | (7,937) | (1,573,068) | (1,259,941) | (182,674) | |||||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||||||
Accounts receivable | (97,064) | 35,786 | 224,197 | 32,506 | (1,186,586) | 554,340 | 80,372 | |||||||||||||||||||||||||
Inventories | 73,588 | (88,300) | (60,695) | (8,800) | (343,587) | (27,613) | (4,004) | |||||||||||||||||||||||||
Prepayments and other assets | 870,684 | 368,673 | 1,095,882 | 158,888 | 640,349 | 731,100 | 106,000 | |||||||||||||||||||||||||
Accounts payable | (89,207) | (84,434) | 576,021 | 83,515 | (155,262) | 447,666 | 64,905 | |||||||||||||||||||||||||
Salary and welfare payables | 1,521,743 | (567,676) | 1,965,624 | 284,989 | 505,334 | 424,513 | 61,549 | |||||||||||||||||||||||||
Taxes payable | 528,725 | 475,245 | (928,071) | (134,558) | 255,060 | (917,614) | (133,042) | |||||||||||||||||||||||||
Contract liabilities | (1,162,982) | 1,580,450 | (1,396,523) | (202,477) | 1,351,261 | 385,396 | 55,877 | |||||||||||||||||||||||||
Accrued liabilities and other payables | 786,517 | 552,688 | 849,094 | 123,106 | 2,121,416 | 1,899,580 | 275,413 | |||||||||||||||||||||||||
Net cash provided by operating activities | 8,368,598 | 7,486,309 | 9,009,213 | 1,306,212 | 24,926,727 | 27,709,233 | 4,017,461 | |||||||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||||||
Purchase of property, equipment and software | (442,524) | (557,028) | (348,821) | (50,574) | (1,601,830) | (2,100,264) | (304,510) | |||||||||||||||||||||||||
Proceeds from sale of property, equipment and software | 56,517 | 3,307 | 2,257 | 327 | 71,524 | 41,467 | 6,012 | |||||||||||||||||||||||||
Purchase of intangible assets, content and licensed copyrights | (297,142) | (152,276) | (161,987) | (23,486) | (1,508,179) | (543,220) | (78,759) | |||||||||||||||||||||||||
Net change in short-term investments with terms of three | (1,474,371) | 156,475 | (931,790) | (135,097) | 3,694,890 | 776,357 | 112,561 | |||||||||||||||||||||||||
Purchase of short-term investments with terms over three | (4,300,000) | - | (4,700,000) | (681,436) | (15,285,000) | (5,950,000) | (862,669) | |||||||||||||||||||||||||
Proceeds from maturities of short-term investments with terms | 3,313,543 | 1,195,475 | 6,966,682 | 1,010,074 | 13,235,845 | 10,175,160 | 1,475,260 | |||||||||||||||||||||||||
Investment in long-term investments and acquisition of | (2,020,029) | (844,513) | (1,694,928) | (245,741) | (6,541,567) | (5,129,680) | (743,734) | |||||||||||||||||||||||||
Proceeds from disposal of long-term investments, businesses | 616,542 | 2,277,625 | 92,795 | 13,454 | 1,115,457 | 2,411,070 | 349,572 | |||||||||||||||||||||||||
Placement/ rollover of matured time deposits | (26,628,133) | (18,830,844) | (22,975,014) | (3,331,064) | (81,298,080) | (98,973,884) | (14,349,864) | |||||||||||||||||||||||||
Proceeds from maturities of time deposits | 15,707,821 | 17,770,581 | 27,676,529 | 4,012,719 | 81,307,297 | 92,247,046 | 13,374,564 | |||||||||||||||||||||||||
Change in other long-term assets | (99,692) | (31,782) | (61,552) | (8,924) | (268,651) | (323,779) | (46,944) | |||||||||||||||||||||||||
Net cash (used in)/ provided by investing activities | (15,567,468) | 987,020 | 3,864,171 | 560,252 | (7,078,294) | (7,369,727) | (1,068,511) | |||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | ||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | 2022 | ||||||||||||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||||||
Net changes from loans with terms of three months or less | 425,020 | (3,645,232) | (3,753,493) | (544,205) | (442,207) | (1,274,043) | (184,719) | |||||||||||||||||||||||||
Proceed of loans with terms over three months | 2,277,171 | 70,691 | 2,765,086 | 400,900 | 4,447,586 | 6,392,695 | 926,854 | |||||||||||||||||||||||||
Payment of loans with terms over three months | (1,311,823) | (50,208) | (191,158) | (27,715) | (2,297,135) | (273,639) | (39,674) | |||||||||||||||||||||||||
Amounts paid for | - | - | - | - | (13,800) | - | - | |||||||||||||||||||||||||
Net Amounts received/ (paid) related to capital contribution from | 1,320,122 | 14,305 | 23,616 | 3,424 | 2,870,147 | (30,921) | (4,483) | |||||||||||||||||||||||||
Cash paid for repurchase of | (2,112,256) | (1,956,829) | (3,007,765) | (436,085) | (12,910,533) | (8,328,124) | (1,207,464) | |||||||||||||||||||||||||
Dividends paid to noncontrolling interest shareholders | (731,250) | - | - | - | (731,250) | - | - | |||||||||||||||||||||||||
Dividends paid to | (940,540) | (1,617,574) | (2,018,984) | (292,725) | (3,508,377) | (6,723,667) | (974,840) | |||||||||||||||||||||||||
Net cash used in by financing activities | (1,073,556) | (7,184,847) | (6,182,698) | (896,406) | (12,585,569) | (10,237,699) | (1,484,326) | |||||||||||||||||||||||||
Effect of exchange rate changes on cash, cash equivalents and | (80,670) | 3,470 | 53,237 | 7,719 | (55,354) | 110,403 | 16,007 | |||||||||||||||||||||||||
Net increase in cash, cash equivalents and restricted cash | (8,353,096) | 1,291,952 | 6,743,923 | 977,777 | 5,207,510 | 10,212,210 | 1,480,631 | |||||||||||||||||||||||||
Cash, cash equivalents and restricted cash, at the beginning | 25,729,211 | 19,552,450 | 20,844,402 | 3,022,154 | 12,168,605 | 17,376,115 | 2,519,300 | |||||||||||||||||||||||||
Cash, cash equivalents and restricted cash, at end of the period | 17,376,115 | 20,844,402 | 27,588,325 | 3,999,931 | 17,376,115 | 27,588,325 | 3,999,931 | |||||||||||||||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||||||||||||||||||
Cash paid for income tax, net | 858,304 | 1,550,748 | 971,217 | 140,813 | 3,547,299 | 5,092,391 | 738,327 | |||||||||||||||||||||||||
Cash paid for interest expense | 42,879 | 193,329 | 264,232 | 38,310 | 187,628 | 588,381 | 85,307 | |||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
UNAUDITED SEGMENT INFORMATION | ||||||||||||||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | 2022 | ||||||||||||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||||||||||
Games and related value-added services | 18,791,991 | 18,699,106 | 19,085,708 | 2,767,168 | 67,819,288 | 74,566,471 | 10,811,122 | |||||||||||||||||||||||||
1,333,791 | 1,402,434 | 1,453,982 | 210,808 | 5,354,357 | 5,013,182 | 726,843 | ||||||||||||||||||||||||||
1,889,265 | 2,357,248 | 2,376,257 | 344,525 | 6,997,622 | 8,992,221 | 1,303,749 | ||||||||||||||||||||||||||
Innovative businesses and others | 2,358,518 | 1,967,972 | 2,438,182 | 353,502 | 7,434,759 | 7,923,935 | 1,148,863 | |||||||||||||||||||||||||
Total net revenues | 24,373,565 | 24,426,760 | 25,354,129 | 3,676,003 | 87,606,026 | 96,495,809 | 13,990,577 | |||||||||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||||||||
Games and related value-added services | (7,347,120) | (6,551,193) | (7,805,578) | (1,131,702) | (26,007,412) | (27,784,419) | (4,028,362) | |||||||||||||||||||||||||
(657,329) | (642,254) | (679,295) | (98,489) | (2,448,146) | (2,430,738) | (352,424) | ||||||||||||||||||||||||||
(1,812,036) | (2,023,600) | (1,953,900) | (283,289) | (6,854,948) | (7,699,103) | (1,116,265) | ||||||||||||||||||||||||||
Innovative businesses and others | (1,639,300) | (1,465,821) | (1,670,992) | (242,271) | (5,324,719) | (5,815,423) | (843,157) | |||||||||||||||||||||||||
Total cost of revenues | (11,455,785) | (10,682,868) | (12,109,765) | (1,755,751) | (40,635,225) | (43,729,683) | (6,340,208) | |||||||||||||||||||||||||
Gross profit: | ||||||||||||||||||||||||||||||||
Games and related value-added services | 11,444,871 | 12,147,913 | 11,280,130 | 1,635,466 | 41,811,876 | 46,782,052 | 6,782,760 | |||||||||||||||||||||||||
676,462 | 760,180 | 774,687 | 112,319 | 2,906,211 | 2,582,444 | 374,419 | ||||||||||||||||||||||||||
77,229 | 333,648 | 422,357 | 61,236 | 142,674 | 1,293,118 | 187,484 | ||||||||||||||||||||||||||
Innovative businesses and others | 719,218 | 502,151 | 767,190 | 111,231 | 2,110,040 | 2,108,512 | 305,706 | |||||||||||||||||||||||||
Total gross profit | 12,917,780 | 13,743,892 | 13,244,364 | 1,920,252 | 46,970,801 | 52,766,126 | 7,650,369 | |||||||||||||||||||||||||
Gross profit margin: | ||||||||||||||||||||||||||||||||
Games and related value-added services | 60.9 % | 65.0 % | 59.1 % | 59.1 % | 61.7 % | 62.7 % | 62.7 % | |||||||||||||||||||||||||
50.7 % | 54.2 % | 53.3 % | 53.3 % | 54.3 % | 51.5 % | 51.5 % | ||||||||||||||||||||||||||
4.1 % | 14.2 % | 17.8 % | 17.8 % | 2.0 % | 14.4 % | 14.4 % | ||||||||||||||||||||||||||
Innovative businesses and others | 30.5 % | 25.5 % | 31.5 % | 31.5 % | 28.4 % | 26.6 % | 26.6 % | |||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
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 | Year Ended | |||||||||||||||||||||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | 2022 | ||||||||||||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||||||||||||||||||||
Share-based compensation cost included in: | ||||||||||||||||||||||||||||||||
Cost of revenues | 267,424 | 190,645 | 195,793 | 28,387 | 833,389 | 758,413 | 109,960 | |||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||
Selling and marketing expenses | 38,657 | 24,980 | 33,001 | 4,785 | 118,611 | 120,171 | 17,423 | |||||||||||||||||||||||||
General and administrative expenses | 358,595 | 288,598 | 349,444 | 50,664 | 1,105,547 | 1,214,995 | 176,158 | |||||||||||||||||||||||||
Research and development expenses | 338,223 | 282,776 | 298,322 | 43,253 | 983,945 | 1,080,581 | 156,670 | |||||||||||||||||||||||||
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
Note 4: The unaudited reconciliation on 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 | Year Ended | |||||||||||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | 2022 | ||||||||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | RMB | RMB | USD (Note 1) | ||||||||||||||||||||||
Net income from continuing operations attributable to the | 5,694,154 | 6,699,364 | 3,952,737 | 573,093 | 16,856,842 | 19,712,736 | 2,858,078 | |||||||||||||||||||||
Add: Share-based compensation | 901,421 | 770,255 | 858,637 | 124,491 | 2,905,065 | 3,095,693 | 448,833 | |||||||||||||||||||||
Non-GAAP net income from continuing operations | 6,595,575 | 7,469,619 | 4,811,374 | 697,584 | 19,761,907 | 22,808,429 | 3,306,911 | |||||||||||||||||||||
Non-GAAP basic net income from continuing | 2.01 | 2.29 | 1.49 | 0.22 | 5.94 | 6.99 | 1.01 | |||||||||||||||||||||
Non-GAAP basic net income from continuing | 10.05 | 11.45 | 7.43 | 1.08 | 29.71 | 34.95 | 5.07 | |||||||||||||||||||||
Non-GAAP diluted net income from continuing | 1.98 | 2.27 | 1.47 | 0.21 | 5.87 | 6.92 | 1.00 | |||||||||||||||||||||
Non-GAAP diluted net income from continuing | 9.92 | 11.34 | 7.36 | 1.07 | 29.34 | 34.60 | 5.02 | |||||||||||||||||||||
* Each ADS represents five ordinary shares. | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
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