Financial Data and Key Metrics Changes - Total net revenue for Q2 2025 was RMB 27.9 billion (approximately USD 3.9 billion), representing a 9.4% year-over-year increase [33] - Gross profit for Q2 2025 was RMB 18.1 billion, up 13% year-over-year, with a total gross profit margin of 64.7% [35] - Non-GAAP net income attributable to shareholders for Q2 totaled RMB 9.5 billion (approximately USD 1.3 billion), up 22% year-over-year [38] Business Line Data and Key Metrics Changes - Revenue from games and related VAS rose 14% year-over-year, with net revenues from online games at RMB 22.1 billion, a year-over-year increase of 15% [33] - Net revenue from Youdao was RMB 1.4 billion, up 7% year-over-year, driven by enhanced utilization of AI technology [34] - Net revenue from NetEase Cloud Music was RMB 2 billion, up 6% from the previous quarter but down 4% year-over-year [34] Market Data and Key Metrics Changes - The player base for the newly launched game "Mystery and Mayhem" surpassed 1 million, ranking number two in the US iOS download chart [7] - "Once Human" reached number four on Steam's global top seller chart following a major content update [10] - "Fantasy Westward Journey Online" achieved a new all-time high peak in concurrent players, surpassing 2,930,000 [15] Company Strategy and Development Direction - The company is focused on expanding its gaming portfolio with innovative titles and enhancing existing franchises to maintain player engagement [27] - There is a commitment to leveraging AI technology across various business lines, including learning services and online marketing [28] - The company aims to strengthen its global presence by publishing games in different regions and adapting to local market preferences [77] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term performance of "Where Wings Meet," indicating stable growth and a promising monetization cycle [44] - The company acknowledged challenges in sustaining growth for "Mystery and Mayhem" but is actively working on strategies to enhance its long-term viability [82] - Management highlighted the potential for Blizzard titles in the Chinese market, emphasizing ongoing improvements to attract new players [51] Other Important Information - The company approved a dividend of USD 0.11 per share and repurchased approximately 22.1 million ADS for a total cost of approximately USD 2 billion under its share repurchase program [39] - The effective tax rate for Q2 was 14.7%, reflecting the company's operational strategies and tax policies [38] Q&A Session Summary Question: Monetization success of "Where Wings Meet" and potential of "Once Human" - Management indicated that "Where Wings Meet" exceeded initial expectations in both active players and monetization, showing potential for sustainable success [42][43] - For "Once Human," significant updates contributed to a rebound in performance, with a balanced user distribution between China and international markets [46] Question: Performance of Blizzard titles and future growth - Management noted that Blizzard titles have surpassed pre-shutdown metrics, with ongoing efforts to attract new players and engage those who have not returned [51] Question: Competitive landscape for shooting games - The company acknowledged the high expectations for quality in the shooting game genre and committed to continued investment to remain competitive [54] Question: Effectiveness of Marvel Rivals' new strategy - Management observed an upward trend in daily active users and revenue following the launch of new seasonal content, indicating the effectiveness of their strategy [58] Question: Updates on "Sea of Remnants" - Management expressed high confidence in "Sea of Remnants" becoming a top-tier game, with further details to be shared closer to its launch [59] Question: Status of "Anata" and competition - "Anata" is in the mass production stage, with a focus on creating superior gaming quality to differentiate from competitors [67]

Core Viewpoint - The company's second-quarter performance was slightly below market expectations, primarily due to a slowdown in its gaming business, which remains its core revenue driver [3][6][8]. Financial Performance - Total revenue for Q2 was 27.9 billion RMB, a year-on-year increase of 9.4%, but below the expected 28.4 billion RMB [6]. - Gross profit reached 18.1 billion RMB, a year-on-year growth of 12.5%, maintaining a high gross margin of 64.9% [6][14]. - Net profit was 8.6 billion RMB, up 27.25% year-on-year, but down 16.5% quarter-on-quarter, influenced by fluctuations in investment income and increased operating expenses [6][15]. - The company announced a dividend of 0.57 USD per ADS and has executed a share buyback plan worth 2 billion USD [6]. Core Business - Online gaming revenue was 22.8 billion RMB, a year-on-year increase of 13.7%, but a quarter-on-quarter decline of 5%, indicating a slowdown in growth momentum [6][8]. - The gaming business's gross profit was 16.01 billion RMB, slightly exceeding expectations, highlighting ongoing cost control pressures [9]. - Notable product performance included "Dream of Dreams" achieving a peak concurrent player count of over 2.93 million, showcasing the enduring appeal of long-standing IPs [10]. Non-Gaming Business - Net revenue from NetEase Cloud Music was 2 billion RMB, a slight year-on-year decline of 3.5%, reflecting structural changes in user payment habits [11]. - Youdao's performance was relatively stable, with net revenue of 1.4 billion RMB, a year-on-year increase of 7.2% [12]. - Revenue from innovation and other businesses fell sharply by 17.8% to 1.7 billion RMB, primarily due to declines in NetEase Yanxuan and advertising services [13]. Cash Position and Profitability - The company maintained a strong cash position with net cash of 142.1 billion RMB, an 8.1% increase from the beginning of the year [16]. - Operating cash flow was 10.9 billion RMB, although it decreased by 10% quarter-on-quarter, still indicating a healthy cash flow situation [16]. Future Outlook - The CEO emphasized the importance of exploring new player experiences and expanding self-developed IP products, with upcoming titles like "Forgotten Sea" and "Return to Tang" being critical for assessing the company's innovation and international strategy [17]. - The ongoing expansion of Blizzard games in the Chinese market, including new content for "Hearthstone" and "World of Warcraft," is expected to provide new growth opportunities [17].

Financial Performance - Net revenue for Q2 was 27.9 billion RMB, a year-on-year increase of 9.4%, but below the expected 28.4 billion RMB [4] - Gross profit was 18.1 billion RMB, a year-on-year increase of 12.5%, but also below expectations [4] - Net profit reached 8.6 billion RMB, a year-on-year increase of 27.25%, but a significant quarter-on-quarter decline of 16.5% [6] - The company maintained a high gross margin of 64.9% [6] - Cash position remains strong with net cash of 142.1 billion RMB, an 8.1% increase from the beginning of the year [6] Core Business Performance - The gaming and related services segment generated net revenue of 22.8 billion RMB, a year-on-year increase of 13.7%, but a quarter-on-quarter decline of 5% [2][4] - The gross profit from the gaming business was 16.01 billion RMB, slightly exceeding expectations, indicating ongoing cost control pressures [3] - The online music segment reported net revenue of 2 billion RMB, a slight year-on-year decline of 3.5% [5] - The innovative and other businesses segment saw a significant decline in revenue, down 17.8% year-on-year, primarily due to drops in revenue from various services [5] Product and Market Dynamics - Notable new product launches in overseas markets include "Out of Bounds" and "Marvel's Secret Wars," which achieved high download rankings but have not yet translated into significant revenue [3] - The classic IP "Fantasy Westward Journey" reached a peak of 2.93 million concurrent players, showcasing the enduring appeal of the brand [3] - Upcoming titles such as "Forgotten Sea" and "Return to Tang" are expected to test the company's innovation and international strategy [7] Cost and Expense Management - Total operating expenses amounted to 9 billion RMB, a quarter-on-quarter increase of 12.5%, driven by higher marketing expenditures in the gaming sector [6] - The company faces pressure on profitability due to increased operating costs and fluctuating investment income [6]

Financial Performance - NetEase's market capitalization was $854 billion as of August 13, 2025[9] - Net revenues for 2Q25 reached $39 billion[9] - Net income attributable to the company's shareholders for 2Q25 was $12 billion[9] - Basic net income per ADS (GAAP) for 2Q25 was $188[9] - Net cash as of June 30, 2025, amounted to $198 billion[9] Revenue Breakdown (2Q25) - Games and related value-added services generated $3184 million in net revenues[12] - Youdao's net revenues were $198 million[20] - NetEase Cloud Music's net revenues reached $275 million[23] - Innovative businesses and others contributed $237 million in net revenues[26] Games Performance - Online games accounted for 97% of games and related value-added services revenue in 2Q25[12] - Fantasy Westward Journey Online reached over 293 million peak concurrent players in August[18] ESG Ratings - NetEase received an AA rating from MSCI[9, 40] - NetEase's Sustainalytics rating indicates a low-risk company[40]

Core Insights - NetEase reported Q2 2025 net revenue of 27.9 billion yuan and a non-GAAP net profit attributable to shareholders of 9.5 billion yuan, with R&D investment of 4.4 billion yuan, representing an R&D intensity of 15.6% [1] - The company continues to focus on product quality and global expansion, driving long-term stable growth [1] Group 1: Gaming Performance - NetEase's gaming and related value-added services net revenue reached 22.8 billion yuan, with classic IP "Fantasy Westward Journey" achieving a record high in simultaneous online users [1][4] - New game releases such as "Yanyun Sixteen Sounds" and "Seven Days World" have shown strong performance, while the upcoming titles like "Forgotten Sea" and "Return to Tang" are generating significant market interest [3][4] - The company’s long-term IPs continue to perform well, with "Fantasy Westward Journey" and "Identity V" maintaining high rankings on iOS charts [4][5] Group 2: Innovation and R&D - NetEase invested 4.4 billion yuan in R&D, focusing on technological innovation across various sectors including gaming, music, and education [6][7] - The launch of the world's first engineering machinery embodied intelligent model "Lingjue" demonstrates the company's commitment to technological advancement [6] - NetEase Youdao's AI-driven services have improved user retention rates and sales, showcasing the effectiveness of AI in enhancing core business competitiveness [7] Group 3: E-commerce and Media - NetEase's e-commerce segment, particularly NetEase Yanxuan, saw a net revenue increase to 1.7 billion yuan, with popular products leading sales [2] - The media division has enhanced user engagement through AI-native creative assistance, resulting in a 25% increase in daily active creators on the news platform [2] Group 4: Social Responsibility and Safety Measures - The company has initiated a "Summer Minor Protection Special Action" to create a safer online environment for minors, implementing measures to limit high-age user account creation [8][9] - NetEase has actively participated in developing safety guidelines for AI services aimed at minors, contributing to industry-wide safety management efforts [9]

网易发布2025年第二季度财报。财报显示，第二季度游戏及相关增值服务净收入为人民币228亿元，同 比增加13.7%。 ...

Financial Performance - Net revenue for Q2 2025 reached 27.9 billion yuan, with a non-GAAP net profit attributable to shareholders of 9.5 billion yuan [1] - R&D investment amounted to 4.4 billion yuan, resulting in an R&D intensity of 15.6% [1][4] Gaming Achievements - Multiple new games achieved significant success in the North American market, with "Out of Bounds" ranking second on PlayStation's free download chart in May [2] - "All-Star Streetball Party" and "Marvel's Secret Wars" topped the iOS download charts in the U.S., both reaching the top 2 [2] - "Seven Days World" 2.0 version ranked fourth on Steam's global bestseller list, while "Marvel's Showdown" secured the first and second positions on Steam's U.S. and global bestseller lists, respectively [2] Upcoming Game Releases - Anticipated new games include the original ocean adventure RPG "Forgotten Sea," narrative-driven action-adventure game "Return to Tang," and mobile adaptations of "Nirvana in Fire" and "Yanyun Sixteen Sounds" [2] - "Nirvana in Fire" mobile game has opened global pre-registration, while "Yanyun Sixteen Sounds" completed its latest overseas testing [2] - "Destiny: Stars" mobile game is set for overseas release on August 28 [2] Blizzard Game Performance - Blizzard's games under the company's agency performed well, with "Hearthstone" ranking fifth on China's iOS bestseller list after the launch of the "Journey to Un'Goro" expansion [3] - The 20th anniversary of "World of Warcraft" will see the launch of a new exclusive server in November, generating positive community feedback [3] - "Diablo III" has officially returned to the Chinese market, exceeding expectations in various metrics [3] AI Innovations - The company maintained a strong R&D investment, with 4.4 billion yuan allocated to AI applications across various sectors, including gaming, music, and education [4] - The launch of the world's first embodied intelligent model "Lingjue" for engineering machinery showcased its capabilities in remote operation and efficiency in harsh environments [4] - AI-driven features in Youdao, such as AI essay grading and college application assistance, have significantly improved user retention rates to over 75% [4]

Financial Performance - Net revenue for Q2 2025 reached RMB 27.9 billion (USD 3.9 billion), a year-on-year increase of 9.4% [1] - Gross profit was RMB 18.1 billion (USD 2.5 billion), reflecting a year-on-year growth of 12.5% [1] - Net profit attributable to shareholders was RMB 8.6 billion (USD 1.2 billion), up 27.26% year-on-year; basic earnings per share were USD 0.38 [1] - For the first half of 2025, net revenue totaled RMB 56.72 billion, a year-on-year increase of 8.37% [1] - Gross profit for the first half was approximately RMB 36.53 billion, growing 10.51% year-on-year [1] - Net profit attributable to shareholders for the first half was RMB 18.90 billion, a 31.33% increase year-on-year [1] Business Segments - Revenue from games and related value-added services was RMB 22.8 billion (USD 3.2 billion), a year-on-year increase of 13.7% [1] - Youdao's revenue was RMB 1.4 billion (USD 0.198 billion), reflecting a 7.2% year-on-year increase [1] - Net revenue from NetEase Cloud Music was RMB 2 billion, while revenue from innovation and other businesses was RMB 1.7 billion [1] Strategic Initiatives - The company launched various new content offerings to expand its player community, reinforcing its position as an innovator in the gaming industry [2] - The CEO emphasized the importance of innovative product design, systematic execution, and deep community interaction as core drivers of business progress [2] - The company aims to continuously explore new player experiences, develop self-owned IP products, and create enduring games while growing alongside global partners [2]

Financial Performance - Net revenue for Q2 2025 reached 27.9 billion yuan, representing a year-on-year growth of 9.4% [1] - Net profit attributable to shareholders under non-GAAP was 9.5 billion yuan, showing a year-on-year increase of 21.8% [1] Gaming Segment - The gaming sector remains the core business for the company, with net revenue from games and related value-added services amounting to 22.8 billion yuan in Q2 [1] - The game "Yan Yun Shi Liu Sheng" has seen sustained popularity, with over 40 million cumulative users by the end of July [1] - The classic IP "Dream of the Red Chamber" achieved a new high in simultaneous online users, while mobile game revenue also reached a new record [1] Other Business Segments - NetEase Youdao reported Q2 net revenue of 1.4 billion yuan, achieving sustainable profitability for the fourth consecutive quarter under its "AI-native" strategy [1] - NetEase Cloud Music's Q2 net revenue was 2 billion yuan, remaining stable year-on-year [1] - Net revenue from NetEase Yanxuan increased quarter-on-quarter, contributing 1.7 billion yuan in Q2 [1] North American Market Expansion - Several new games from NetEase have successfully penetrated the North American market, with "Out of Bounds" ranking second on the PlayStation May free download chart in North America [2] - "All-Star Streetball Party" and "Marvel's Secret War" topped the iOS download charts in multiple regions after their overseas releases, both entering the top 2 in the US download rankings [2] - "Seven Days World" 2.0 version reached fourth place on the Steam global bestseller list, while "Marvel Showdown" secured first and second places on the Steam US and global bestseller lists, respectively [2]

Core Insights - NetEase reported Q2 2025 net revenue of 27.9 billion yuan and a net profit of 9.5 billion yuan under non-GAAP standards, with R&D investment of 4.4 billion yuan, representing an R&D intensity of 15.6% [1] - The company continues to focus on a strategy of product quality and global expansion, enhancing its diverse product matrix to drive long-term growth [1] Financial Performance - Q2 net revenue reached 27.9 billion yuan, with a net profit of 9.5 billion yuan [1] - R&D investment was 4.4 billion yuan, with an R&D intensity of 15.6% [1][6] - NetEase Youdao achieved Q2 net revenue of 1.4 billion yuan, marking its fourth consecutive quarter of sustainable profitability [1] Gaming Sector - Net revenue from games and related services was 22.8 billion yuan, with classic IPs like "Dream of Dreams" achieving record online player numbers [1] - New game releases such as "Yanyun Sixteen Sounds" and "Seven Days World" performed strongly, with "Dream of Dreams" PC version reaching 2.93 million concurrent users [4][3] - The company’s games have seen significant success in North America, with multiple titles ranking high on download charts [3] Innovation and Technology - NetEase's R&D investment supports innovation across various sectors, including gaming, music, and education [6] - The launch of the "Lingjue" intelligent model for engineering machinery showcases the company's commitment to technological advancement [6] - NetEase Youdao's AI-driven features have improved user retention rates to over 75% [7] Social Responsibility - The company has initiated measures to protect minors online, including AI patrols and account restrictions for older users [8] - NetEase is actively participating in the development of safety guidelines for AI services aimed at minors [9]