NetEase Reports First Quarter 2021 Unaudited Financial Results
NetEase reported its Q1 2021 financial results, showing net revenues of RMB20.5 billion (US$3.1 billion), marking a 20.2% year-over-year increase. Online game services generated RMB15.0 billion (US$2.3 billion), a 10.8% increase, while Youdao net revenues surged 147.5% to RMB1.3 billion (US$204.5 million). Gross profit rose to RMB11.1 billion (US$1.7 billion), up 17.9%. However, total operating expenses climbed 38.6% to RMB6.8 billion (US$1.0 billion). Net income attributable to shareholders was RMB4.4 billion (US$677.5 million). The company also declared a dividend of US$0.0600 per share.
- Net revenues increased by 20.2%, reaching RMB20.5 billion.
- Youdao's net revenues surged by 147.5%, totaling RMB1.3 billion.
- Gross profit rose by 17.9%, reaching RMB11.1 billion.
- Basic net income per share increased to US$0.20.
- Total operating expenses rose by 38.6% to RMB6.8 billion.
- Gross profit margin for innovative businesses decreased to 14.4%.
BEIJING, May 18, 2021 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), one of China's leading internet and online game services providers, today announced its unaudited financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Financial Highlights
- Net revenues were RMB20.5 billion (US
$3.1 billion ), an increase of20.2% compared with the first quarter of 2020. - Online game services net revenues were RMB15.0 billion (US
$2.3 billion ), an increase of10.8% compared with the first quarter of 2020. - Youdao net revenues were RMB1.3 billion (US
$204.5 million ), an increase of147.5% compared with the first quarter of 2020. - Innovative businesses and others net revenues were RMB4.2 billion (US
$640.4 million ), an increase of39.7% compared with the first quarter of 2020. - Gross profit was RMB11.1 billion (US
$1.7 billion ), an increase of17.9% compared with the first quarter of 2020. - Total operating expenses were RMB6.8 billion (US
$1.0 billion ), an increase of38.6% compared with the first quarter of 2020. - Net income attributable to the Company's shareholders was RMB4.4 billion (US
$677.5 million ). Non-GAAP net income attributable to the Company's shareholders was RMB5.1 billion (US$775.5 million ). [1] - Basic net income per share was US
$0.20 (US$1.01 per ADS). Non-GAAP basic net income per share was US$0.23 (US$1.16 per ADS). [1]
First Quarter 2021 and Recent Operational Highlights
- Attracted new users and expanded portfolio with new game introductions including:
- Revelation mobile game, Yu-Gi-Oh! Duel Links, Elysium of Legends and Pokémon Quest, all of which were well received after their launches.
- Infinite Lagrange in European markets in late April, with plans for additional market introductions in the near-term.
- Delivered strong performances from longstanding flagship titles including the Fantasy Westward Journey and Westward Journey Online series, and maintained popularity of other hit titles including Life-After, Invincible and Onmyoji.
- Progressed strong game pipeline with thrilling titles planned for launch in the coming months including Harry Potter: Magic Awakened, The Lord of the Rings: Rise to War, Nightmare Breaker, Diablo® Immortal™ and Ghost World Chronicle.
- Advanced Youdao's learning services and learning products, increasing Youdao's net revenues by
147.5% year-over-year to RMB1.3 billion (US$204.5 million ), and drove operating efficiency with total gross profit margin reaching57.3% in the first quarter of 2021, the highest level since Youdao's IPO in October 2019.
"2021 is off to a strong start with our total net revenues climbing to RMB20.5 billion, up approximately
[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 "Unaudited Reconciliation of GAAP and Non-GAAP Results" at the end of this announcement. |
First Quarter 2021 Financial Results
Net Revenues
Net revenues were RMB20,517.2 million (US
Net revenues from online game services were RMB14,981.8 million (US
Net revenues from Youdao were RMB1,339.9 million (US
Net revenues from innovative businesses and others were RMB4,195.6 million (US
Gross Profit
Gross profit was RMB11,052.6 million (US
The quarter-over-quarter and year-over-year increases in online game services gross profit were mainly due to increased net revenues from both mobile and PC games, including the newly launched Revelation mobile game and other existing games.
The quarter-over-quarter and year-over-year increases in Youdao gross profit were primarily attributable to the significant increase in net revenues, improved economies of scale, and faculty compensation structure optimization for its learning services.
The quarter-over-quarter decrease in innovative businesses and others gross profit was primarily due to a decrease in gross profit from advertising services due to seasonality. The year-over-year increase was primarily due to the improved performance of NetEase Cloud Music.
Gross Profit Margin
Gross profit margin for online game services was
Gross profit margin for Youdao was
Gross profit margin for innovative businesses and others was
Operating Expenses
Total operating expenses were RMB6,777.1 million (US
Other Income/ (Expenses)
Other income/ (expenses) consisted of investment (losses)/ income, interest income, exchange gains/ (losses) and others. The quarter-over-quarter increase was mainly due to unrealized exchange gains arising from the Company's U.S. dollar-denominated bank deposits and short-term loan balances as the exchange rate of the U.S. dollar against the RMB fluctuated over the periods, as well as investment income arising from fair value changes of equity investments with readily determinable fair value. The year-over-year increase was mainly due to investment income arising from fair value changes of equity investments with readily determinable fair value.
Income Taxes
The Company recorded a net income tax charge of RMB1,273.4 million (US
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders totaled RMB4,439.2 million (US
Non-GAAP net income attributable to the Company's shareholders for the first quarter of 2021 totaled RMB5,080.7 million (US
NetEase reported basic net income of US
NetEase reported non-GAAP basic net income of US
Quarterly Dividend
The board of directors has approved a dividend of US
NetEase paid a dividend of US
The Company's policy is to set quarterly dividends at an amount equivalent to approximately
Other Information
As of March 31, 2021, the Company's total cash and cash equivalents, current and non-current time deposits and short-term investments balance totaled RMB106,249.6 million (US
Share Repurchase Program
On February 26, 2020, the Company announced that its board of directors had approved a share repurchase program of up to US
On February 25, 2021, the Company announced that its board of directors had approved a new share repurchase program of up to US
** The United States dollar (US$) amounts disclosed in this announcement are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the noon buying rate of US
Conference Call
NetEase's management team will host a teleconference call with simultaneous webcast at 8:00 a.m. New York Time on May 18, 2021 (Beijing/Hong Kong Time: 8:00 p.m., May 18, 2021). 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 1-646-828-8193 and providing conference ID: 4996242, 15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-719-457-0820 and entering passcode 4996242#. The replay will be available through May 31, 2021.
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.
As a leading internet technology company based in China, NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase") is dedicated to providing premium online services centered around innovative and diverse content, community, communication and commerce. NetEase develops and operates some of China's most popular mobile and PC games. In more recent years, NetEase has expanded into international markets including Japan and North America. In addition to its self-developed game content, NetEase partners with other leading game developers, such as Blizzard Entertainment and Mojang AB (a Microsoft subsidiary), to operate globally renowned games in China. NetEase's other innovative service offerings include the intelligent learning services of its majority-controlled subsidiary, Youdao (NYSE: DAO); music streaming through its leading NetEase Cloud Music business; and its private label e-commerce platform, Yanxuan. 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 statements. 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 game market will not continue to grow or that NetEase will not be able to maintain its position in that market in China or globally; the risk that COVID-19 or other health risks in China or globally could adversely affect the Company's operations or financial results; 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 government regulation that could adversely affect the industry and geographical markets in which 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; competition in NetEase's existing and potential markets; and the risk that fluctuations in the value of the Renminbi with respect to other currencies 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 the 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, which are non-cash charges. NetEase believes that these non-GAAP financial measures 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 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 "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:
Margaret Shi
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378
Twitter: https://twitter.com/NetEase_Global
NETEASE, INC. | ||||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
December 31, | March 31, | March 31, | ||||||||||||||||||||||
2020 | 2021 | 2021 | ||||||||||||||||||||||
RMB | RMB | USD (Note 1) | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | 9,117,219 | 8,790,990 | 1,341,767 | |||||||||||||||||||||
Time deposits | 71,079,327 | 75,612,492 | 11,540,720 | |||||||||||||||||||||
Restricted cash | 3,051,386 | 3,236,255 | 493,949 | |||||||||||||||||||||
Accounts receivable, net | 4,576,445 | 5,056,686 | 771,801 | |||||||||||||||||||||
Inventories, net | 621,207 | 874,702 | 133,506 | |||||||||||||||||||||
Prepayments and other current assets, net | 6,112,433 | 6,851,353 | 1,045,721 | |||||||||||||||||||||
Short-term investments | 13,273,026 | 15,106,079 | 2,305,638 | |||||||||||||||||||||
Total current assets | 107,831,043 | 115,528,557 | 17,633,102 | |||||||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||
Property, equipment and software, net | 4,555,406 | 4,651,507 | 709,959 | |||||||||||||||||||||
Land use right, net | 4,178,257 | 4,156,448 | 634,398 | |||||||||||||||||||||
Deferred tax assets | 1,086,759 | 1,042,468 | 159,112 | |||||||||||||||||||||
Time deposits | 6,630,000 | 6,740,000 | 1,028,725 | |||||||||||||||||||||
Other long-term assets, net | 17,593,117 | 18,384,896 | 2,806,082 | |||||||||||||||||||||
Total non-current assets | 34,043,539 | 34,975,319 | 5,338,276 | |||||||||||||||||||||
Total assets | 141,874,582 | 150,503,876 | 22,971,378 | |||||||||||||||||||||
Liabilities, Redeemable Noncontrolling Interests | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | 1,134,413 | 1,070,965 | 163,461 | |||||||||||||||||||||
Salary and welfare payables | 3,538,732 | 2,328,788 | 355,442 | |||||||||||||||||||||
Taxes payable | 4,282,835 | 5,841,401 | 891,572 | |||||||||||||||||||||
Short-term loans | 19,504,696 | 21,827,017 | 3,331,453 | |||||||||||||||||||||
Deferred revenue | 10,945,143 | 11,686,081 | 1,783,644 | |||||||||||||||||||||
Accrued liabilities and other payables | 7,337,672 | 7,893,542 | 1,204,790 | |||||||||||||||||||||
Total current liabilities | 46,743,491 | 50,647,794 | 7,730,362 | |||||||||||||||||||||
Non-current liabilities: | ||||||||||||||||||||||||
Deferred tax liabilities | 713,439 | 997,222 | 152,206 | |||||||||||||||||||||
Other long-term payable | 623,728 | 737,929 | 112,630 | |||||||||||||||||||||
Total non-current liabilities | 1,337,167 | 1,735,151 | 264,836 | |||||||||||||||||||||
Total liabilities | 48,080,658 | 52,382,945 | 7,995,198 | |||||||||||||||||||||
Redeemable noncontrolling interests | 10,796,120 | 10,942,787 | 1,670,196 | |||||||||||||||||||||
NetEase, Inc.'s shareholders' equity | 82,126,798 | 85,706,495 | 13,081,366 | |||||||||||||||||||||
Noncontrolling interests | 871,006 | 1,471,649 | 224,618 | |||||||||||||||||||||
Total shareholders' equity | 82,997,804 | 87,178,144 | 13,305,984 | |||||||||||||||||||||
Total liabilities, redeemable noncontrolling | 141,874,582 | 150,503,876 | 22,971,378 | |||||||||||||||||||||
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 | ||||||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||||||
2020 | 2020 | 2021 | 2021 | |||||||||||
RMB | RMB | RMB | USD (Note 1) | |||||||||||
Net revenues | 17,062,367 | 19,761,738 | 20,517,211 | 3,131,538 | ||||||||||
Cost of revenues | (7,684,745) | (9,833,976) | (9,464,572) | (1,444,576) | ||||||||||
Gross profit | 9,377,622 | 9,927,762 | 11,052,639 | 1,686,962 | ||||||||||
Operating expenses: | ||||||||||||||
Selling and marketing expenses | (1,863,071) | (3,076,499) | (2,766,682) | (422,278) | ||||||||||
General and administrative expenses | (885,434) | (809,956) | (950,194) | (145,028) | ||||||||||
Research and development expenses | (2,142,649) | (3,029,376) | (3,060,189) | (467,076) | ||||||||||
Total operating expenses | (4,891,154) | (6,915,831) | (6,777,065) | (1,034,382) | ||||||||||
Operating profit | 4,486,468 | 3,011,931 | 4,275,574 | 652,580 | ||||||||||
Other income/ (expenses): | ||||||||||||||
Investment (losses)/ income, net | (109,731) | (271,866) | 695,298 | 106,123 | ||||||||||
Interest income, net | 345,184 | 410,001 | 388,928 | 59,362 | ||||||||||
Exchange gains/ (losses), net | 244,057 | (1,801,891) | 279,319 | 42,632 | ||||||||||
Other, net | 66,708 | 139,321 | 147,967 | 22,584 | ||||||||||
Income before tax | 5,032,686 | 1,487,496 | 5,787,086 | 883,281 | ||||||||||
Income tax | (1,082,033) | (552,661) | (1,273,408) | (194,360) | ||||||||||
Net income | 3,950,653 | 934,835 | 4,513,678 | 688,921 | ||||||||||
Accretion and deemed dividends in connection with | (386,019) | (131,604) | (143,827) | (21,952) | ||||||||||
Net (income)/ loss attributable to noncontrolling interests | (13,628) | 172,471 | 69,301 | 10,577 | ||||||||||
Net income attributable to the Company's shareholders | 3,551,006 | 975,702 | 4,439,152 | 677,546 | ||||||||||
Net income per share * | ||||||||||||||
Basic | 1.10 | 0.29 | 1.33 | 0.20 | ||||||||||
Diluted | 1.08 | 0.29 | 1.31 | 0.20 | ||||||||||
Net income per ADS * | ||||||||||||||
Basic | 5.49 | 1.45 | 6.63 | 1.01 | ||||||||||
Diluted | 5.42 | 1.43 | 6.53 | 1.00 | ||||||||||
Weighted average number of ordinary shares used in | ||||||||||||||
Basic | 3,231,395 | 3,362,793 | 3,349,638 | 3,349,638 | ||||||||||
Diluted | 3,273,999 | 3,411,169 | 3,399,981 | 3,399,981 | ||||||||||
* 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 | ||||||||
March 31, | December 31, | March 31, | March 31, | |||||
2020 | 2020 | 2021 | 2021 | |||||
RMB | RMB | RMB | USD (Note 1) | |||||
Cash flows from operating activities: | ||||||||
Net income | 3,950,653 | 934,835 | 4,513,678 | 688,921 | ||||
Adjustments to reconcile net income to net cash provided | ||||||||
Depreciation and amortization | 690,057 | 962,526 | 819,830 | 125,131 | ||||
Fair value changes of equity security investments | 327,040 | 559,104 | (477,597) | (72,896) | ||||
Impairment losses of investments and other intangible | 6,600 | 51,795 | - | - | ||||
Fair value changes of short-term investments | (153,106) | (118,945) | (118,004) | (18,011) | ||||
Share-based compensation cost | 665,814 | 628,979 | 650,253 | 99,247 | ||||
Allowance for/ (reversal of) expected credit losses | 49,939 | (5,888) | 13,604 | 2,076 | ||||
Losses/ (gains) on disposal of property, equipment and software | 37 | 2,730 | (159) | (24) | ||||
Unrealized exchange (gains) / losses | (242,508) | 1,796,532 | (274,047) | (41,828) | ||||
(Gains)/ losses on disposal of long-term investments, | (15,433) | 178 | (7,323) | (1,118) | ||||
Deferred income taxes | 212,848 | (74,041) | 328,075 | 50,074 | ||||
Share of results on equity method investees and revaluation | (46,211) | (216,528) | (51,892) | (7,920) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (430,535) | 355,495 | (484,343) | (73,925) | ||||
Inventories | 88,440 | (96,499) | (253,495) | (38,691) | ||||
Prepayments and other assets | (1,103,798) | 791,254 | (785,224) | (119,848) | ||||
Accounts payable | (98,679) | 136,213 | (60,654) | (9,257) | ||||
Salary and welfare payables | (537,907) | 1,382,442 | (1,226,155) | (187,148) | ||||
Taxes payable | 1,234,078 | 220,244 | 1,558,618 | 237,892 | ||||
Deferred revenue | 1,379,126 | 568,704 | 740,938 | 113,089 | ||||
Accrued liabilities and other payables | 524,194 | 335,117 | 656,564 | 100,211 | ||||
Net cash provided by operating activities | 6,500,649 | 8,214,247 | 5,542,667 | 845,975 | ||||
Cash flows from investing activities: | ||||||||
Purchase of property, equipment and software | (164,320) | (303,347) | (329,746) | (50,329) | ||||
Proceeds from sale of property, equipment and software | 772 | 7,895 | 1,519 | 232 | ||||
Purchase of intangible assets, content and licensed | (306,835) | (333,507) | (426,133) | (65,041) | ||||
Net change in short-term investments with terms of three | (780,535) | (2,257,404) | 3,332,610 | 508,656 | ||||
Purchase of short-term investments | (10,070,000) | (2,200,000) | (7,905,000) | (1,206,539) | ||||
Proceeds from maturities of short-term investments | 6,887,976 | 3,597,659 | 2,857,341 | 436,115 | ||||
Investment in long-term investments and acquisition of | (205,005) | (1,034,392) | (558,441) | (85,235) | ||||
Proceeds from disposal of long-term investments, | 196,952 | 93,926 | 198,900 | 30,358 | ||||
Placement/rollover of matured time deposits | (11,667,487) | (14,720,632) | (15,722,749) | (2,399,760) | ||||
Proceeds from maturities of time deposits | 13,640,617 | 18,246,875 | 11,481,135 | 1,752,364 | ||||
Change in other long-term assets | (10,522) | (52,092) | (54,653) | (8,342) | ||||
Net cash (used in)/ provided by investing activities | (2,478,387) | 1,044,981 | (7,125,217) | (1,087,521) | ||||
The accompanying notes are an integral part of this announcement. | ||||||||
NETEASE, INC. | ||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | ||||||||||||
(in thousands) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||||
2020 | 2020 | 2021 | 2021 | |||||||||
RMB | RMB | RMB | USD (Note 1) | |||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds of short-term loans | 100,000 | 607,043 | 236,916 | 36,160 | ||||||||
Payment of short-term loans | (98,395) | (361,973) | (167,700) | (25,596) | ||||||||
Net changes in short-term loans with terms of three months | 2,539,570 | (2,152,677) | 2,122,041 | 323,887 | ||||||||
Net amounts paid for issuance of shares in Hong Kong | - | (171,440) | (13,800) | (2,106) | ||||||||
(Repurchase of) / capital injection from noncontrolling interests | (447,632) | 10,609 | 1,507,049 | 230,021 | ||||||||
Cash paid for repurchase of NetEase's/ purchase of Youdao's | (2,560,897) | (3,445,930) | (2,018,467) | (308,078) | ||||||||
Dividends paid to shareholders | (926,545) | (861,211) | (260,842) | (39,812) | ||||||||
Net cash (used in) / provided by financing activities | (1,393,899) | (6,375,579) | 1,405,197 | 214,476 | ||||||||
Effect of exchange rate changes on cash, cash equivalents | ||||||||||||
and restricted cash held in foreign currencies | 74,100 | (67,229) | 35,993 | 5,494 | ||||||||
Net increase / (decrease) in cash, cash equivalents and restricted | 2,702,463 | 2,816,420 | (141,360) | (21,576) | ||||||||
Cash, cash equivalents and restricted cash, at the beginning | 6,397,860 | 9,352,185 | 12,168,605 | 1,857,292 | ||||||||
Cash, cash equivalents and restricted cash, at end of the | 9,100,323 | 12,168,605 | 12,027,245 | 1,835,716 | ||||||||
Less: Cash, cash equivalents and restricted cash of held for sale | 371 | - | - | - | ||||||||
Cash, cash equivalents and restricted cash at end of the period | 9,099,952 | 12,168,605 | 12,027,245 | 1,835,716 | ||||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid for income tax, net | 202,044 | 347,389 | 550,191 | 83,976 | ||||||||
Cash paid for interest expense | 96,711 | 46,177 | 43,902 | 6,701 | ||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||
NETEASE, INC. | ||||||||||||||
UNAUDITED SEGMENT INFORMATION | ||||||||||||||
(in thousands, except percentages) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||||||
2020 | 2020 | 2021 | 2021 | |||||||||||
RMB | RMB | RMB | USD (Note 1) | |||||||||||
Net revenues: | ||||||||||||||
Online game services | 13,518,244 | 13,400,182 | 14,981,784 | 2,286,667 | ||||||||||
Youdao | 541,388 | 1,106,796 | 1,339,867 | 204,503 | ||||||||||
Innovative businesses and others | 3,002,735 | 5,254,760 | 4,195,560 | 640,368 | ||||||||||
Total net revenues | 17,062,367 | 19,761,738 | 20,517,211 | 3,131,538 | ||||||||||
Cost of revenues: | ||||||||||||||
Online game services | (4,851,831) | (4,942,484) | (5,302,713) | (809,352) | ||||||||||
Youdao | (305,663) | (581,327) | (572,415) | (87,367) | ||||||||||
Innovative businesses and others | (2,527,251) | (4,310,165) | (3,589,444) | (547,857) | ||||||||||
Total cost of revenues | (7,684,745) | (9,833,976) | (9,464,572) | (1,444,576) | ||||||||||
Gross profit: | ||||||||||||||
Online game services | 8,666,413 | 8,457,698 | 9,679,071 | 1,477,315 | ||||||||||
Youdao | 235,725 | 525,469 | 767,452 | 117,136 | ||||||||||
Innovative businesses and others | 475,484 | 944,595 | 606,116 | 92,511 | ||||||||||
Total gross profit | 9,377,622 | 9,927,762 | 11,052,639 | 1,686,962 | ||||||||||
Gross profit margin: | ||||||||||||||
Online game services | ||||||||||||||
Youdao | ||||||||||||||
Innovative businesses and others | ||||||||||||||
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 = RMB6.5518 on the last trading day of March 2021 (March 31, 2021) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
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 | ||||||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||||||
2020 | 2020 | 2021 | 2021 | |||||||||||
RMB | RMB | RMB | USD (Note 1) | |||||||||||
Share-based compensation cost included in: | ||||||||||||||
Cost of revenues | 207,915 | 181,871 | 187,926 | 28,683 | ||||||||||
Operating expenses | ||||||||||||||
- Selling and marketing expenses | 24,811 | 24,892 | 24,231 | 3,698 | ||||||||||
- General and administrative expenses | 230,371 | 214,730 | 229,603 | 35,044 | ||||||||||
- Research and development expenses | 202,717 | 207,486 | 208,493 | 31,822 | ||||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||||
NETEASE, INC. | ||||||||||
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS | ||||||||||
(in thousands, except per share data or per ADS data) | ||||||||||
Three Months Ended | ||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||
2020 | 2020 | 2021 | 2021 | |||||||
RMB | RMB | RMB | USD (Note 1) | |||||||
Net income attributable to the Company's shareholders | 3,551,006 | 975,702 | 4,439,152 | 677,546 | ||||||
Add: Share-based compensation | 661,871 | 622,185 | 641,534 | 97,917 | ||||||
Non-GAAP net income attributable to the Company's | 4,212,877 | 1,597,887 | 5,080,686 | 775,463 | ||||||
Non-GAAP net income per share * | ||||||||||
Basic | 1.30 | 0.48 | 1.52 | 0.23 | ||||||
Diluted | 1.29 | 0.47 | 1.49 | 0.23 | ||||||
Non-GAAP net income per ADS * | ||||||||||
Basic | 6.52 | 2.38 | 7.58 | 1.16 | ||||||
Diluted | 6.43 | 2.34 | 7.47 | 1.14 | ||||||
* Each ADS represents five ordinary shares. | ||||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||
View original content:http://www.prnewswire.com/news-releases/netease-reports-first-quarter-2021-unaudited-financial-results-301293308.html
SOURCE NetEase, Inc.
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