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]

Core Insights - Net revenue for NetEase-S (09999) in Q2 2025 reached RMB 27.9 billion (USD 3.9 billion), representing a year-on-year increase of 9.4% [1] - Gross profit was RMB 18.1 billion (USD 2.5 billion), up 12.5% year-on-year [1] - Net profit attributable to shareholders was RMB 8.6 billion (USD 1.2 billion), showing a growth of 27.26% year-on-year [1] - Basic earnings per share were USD 0.38, with a quarterly dividend of USD 0.1140 per share [1] Revenue Breakdown - 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 198 million), up 7.2% year-on-year [1] - NetEase Cloud Music generated revenue of RMB 2 billion, while innovative and other businesses contributed RMB 1.7 billion [1] Half-Year Performance - For the first half of 2025, net revenue totaled RMB 56.72 billion, reflecting an 8.37% year-on-year growth [1] - Gross profit for the same period was approximately RMB 36.53 billion, an increase of 10.51% year-on-year [1] - Net profit attributable to shareholders for the first half was RMB 18.90 billion, up 31.33% year-on-year [1] - Basic earnings per share for the first half were RMB 5.94 [1] Strategic Focus - The CEO of NetEase emphasized the company's commitment to innovation in product design and community engagement, which are seen as core capabilities developed over years [2] - The company aims to explore new player experiences and expand self-developed IP products while collaborating with global partners for growth [2] - Beyond gaming, the company is focused on optimizing products and content to provide long-term value to users, partners, and shareholders [2]

[Company Information & Highlights](index=1&type=section&id=Company%20Information%20%26%20Highlights) This section provides an overview of NetEase's Q2 2025 financial and operational performance, including key announcements and CEO statements. [Announcement Details](index=1&type=section&id=1.1%20Announcement%20Details) NetEase, Inc. announced its unaudited second quarter 2025 financial results on August 14, 2025. - Company Name: **NetEase, Inc.** (NASDAQ: NTES and HKEX: 9999)[1](index=1&type=chunk) - Announcement Date: **August 14, 2025**[1](index=1&type=chunk) - Reporting Period: Second quarter ended **June 30, 2025**[1](index=1&type=chunk) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=1.2%20Second%20Quarter%202025%20Financial%20Highlights) In Q2 2025, NetEase's total net revenues grew 9.4% year-over-year to RMB 27.9 billion, with gaming net revenues up 13.7% and non-GAAP net income at RMB 9.5 billion. 2025 Second Quarter Key Financial Data | Indicator | Amount (RMB) | Amount (US$) | Year-over-Year Growth (YoY) | | :----------------------------------- | :----------- | :----------- | :--------------- | | **Net Revenues** | 27.9 billion | 3.9 billion | 9.4% | | Net revenues from games and related value-added services | 22.8 billion | 3.2 billion | 13.7% | | Net revenues from Youdao | 1.4 billion | 197.9 million | 7.2% | | Net revenues from NetEase Cloud Music | 2.0 billion | 274.8 million | -3.5% | | Net revenues from innovative businesses and others | 1.7 billion | 237.2 million | -17.8% | | **Gross Profit** | 18.1 billion | 2.5 billion | 12.5% | | **Total Operating Expenses** | 9.0 billion | 1.3 billion | -0.6% | | **Net Income Attributable to the Company's Shareholders** | 8.6 billion | 1.2 billion | - | | **Non-GAAP Net Income Attributable to the Company's Shareholders** | 9.5 billion | 1.3 billion | - | | **Basic Net Income per ADS** | - | 1.88 | - | | **Non-GAAP Basic Net Income per ADS** | - | 2.09 | - | [Second Quarter 2025 Operational Highlights](index=2&type=section&id=1.3%20Second%20Quarter%202025%20Operational%20Highlights) This quarter, NetEase expanded its player base with successful global new game launches and maintained strong performance of existing popular titles, while enriching its future game pipeline. - Global new game launches achieved success: * **FragPunk** ranked second on PlayStation's North America free download chart in May after its global launch on Xbox Series X|S and PlayStation 5[5](index=5&type=chunk) * **Dunk City Dynasty** topped iOS download charts in multiple regions and ranked second in the U.S. after its global launch on May 22[5](index=5&type=chunk) * **MARVEL Mystic Mayhem** topped iOS download charts in multiple regions and ranked second in the U.S. after its launch on June 25[5](index=5&type=chunk) - Existing popular games maintained strong momentum: * **Justice Mobile** ranked third on China's iOS best-selling chart after its second-anniversary update on June 30[5](index=5&type=chunk) * **Once Human** ranked fourth on Steam's global best-selling chart after its anniversary update on July 3[5](index=5&type=chunk) * **Identity V** ranked sixth on China's iOS best-selling chart after its season update on July 10[5](index=5&type=chunk) * **Naraka: Bladepoint Mobile** ranked sixth on China's iOS best-selling chart after its first-anniversary new version release on July 10[5](index=5&type=chunk) * **Eggy Party** ranked fifth on China's iOS best-selling chart after its third-anniversary event series on July 11[5](index=5&type=chunk) * **Marvel Rivals** ranked second on Steam's global best-selling chart and first in the U.S. after its Summer Party event on July 17[5](index=5&type=chunk) * **Fantasy Westward Journey Online** reached a new historical high of **2.93 million peak concurrent players** in August[5](index=5&type=chunk) - Blizzard games performed strongly in the China market: * **Hearthstone** ranked fifth on China's iOS best-selling chart after its new expansion pack release on July 9[5](index=5&type=chunk) * **World of Warcraft** announced a China-exclusive new server for its 20th-anniversary celebration in November, generating strong community response[5](index=5&type=chunk) - Rich future game pipeline: * Includes original ocean adventure RPG **Sea of Remnants** and story-driven action-adventure game **Blood Message**[5](index=5&type=chunk) * Plans to launch **Justice Mobile** and **Where Winds Meet** globally[5](index=5&type=chunk) [CEO Statement](index=3&type=section&id=1.4%20CEO%20Statement) CEO William Ding emphasized expanding the player community through innovative content, solidifying NetEase's leading position in gaming, and focusing on product innovation and community engagement. - Core growth strategies: **product innovation, rigorous execution, and deep community engagement**[6](index=6&type=chunk) - Future development direction: **pushing player experience boundaries, expanding original IPs into lasting franchises, and growing with global partners**[6](index=6&type=chunk) - Non-gaming business focus: **continuous innovation, optimizing products and content to deliver long-term value for users, partners, and shareholders**[7](index=7&type=chunk) [Detailed Financial Results (Q2 2025)](index=3&type=section&id=Detailed%20Financial%20Results%20(Q2%202025)) This section provides a detailed breakdown of NetEase's financial performance for the second quarter of 2025, covering revenues, costs, profits, and expenses by segment. [Net Revenues](index=3&type=section&id=2.1%20Net%20Revenues) Total net revenues were RMB 27.9 billion in Q2 2025, down 3.2% quarter-over-quarter but up 9.4% year-over-year, primarily driven by games and related value-added services. Net Revenues Overview (RMB billion) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----------------------- | :------- | :------- | :------- | :------ | :------ | | **Total Net Revenues** | 25.5 | 28.8 | 27.9 | -3.2% | 9.4% | [Games and Related Value-Added Services](index=3&type=section&id=2.1.1%20Games%20and%20Related%20Value-Added%20Services) Net revenues from games and related value-added services were RMB 22.8 billion, down 5.0% quarter-over-quarter but up 13.7% year-over-year, with online games accounting for 97.1%. Games and Related Value-Added Services Net Revenues (RMB billion) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----------------------- | :------- | :------- | :------- | :------ | :------ | | Net Revenues | 20.1 | 24.0 | 22.8 | -5.0% | 13.7% | | Online Games Revenue Share | 96.1% | 97.5% | 97.1% | -0.4pp | +1.0pp | - Quarter-over-quarter decrease primarily due to certain self-developed and licensed games[9](index=9&type=chunk) - Year-over-year increase primarily driven by **Identity V**, newly launched **Where Winds Meet** and **Marvel Rivals**, and certain licensed games[9](index=9&type=chunk) [Youdao](index=3&type=section&id=2.1.2%20Youdao) Youdao's net revenues were RMB 1.4 billion, up 7.7% quarter-over-quarter and 7.7% year-over-year, with growth in online marketing and learning services. Youdao Net Revenues (RMB billion) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----- | :------- | :------- | :------- | :------ | :------ | | Net Revenues | 1.3 | 1.3 | 1.4 | 7.7% | 7.7% | - Net revenues from online marketing services and learning services **increased both quarter-over-quarter and year-over-year**[10](index=10&type=chunk) - Net revenues from smart devices **decreased both quarter-over-quarter and year-over-year**[10](index=10&type=chunk) [NetEase Cloud Music](index=3&type=section&id=2.1.3%20NetEase%20Cloud%20Music) NetEase Cloud Music's net revenues were RMB 2.0 billion, up 5.3% quarter-over-quarter but down 3.5% year-over-year, driven by online music services growth. NetEase Cloud Music Net Revenues (RMB billion) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----- | :------- | :------- | :------- | :------ | :------ | | Net Revenues | 2.0 | 1.9 | 2.0 | 5.3% | -3.5% | - Net revenues from online music services **increased both quarter-over-quarter and year-over-year**[11](index=11&type=chunk) - Net revenues from social entertainment services and others **increased quarter-over-quarter but decreased year-over-year**[11](index=11&type=chunk) [Innovative Businesses and Others](index=4&type=section&id=2.1.4%20Innovative%20Businesses%20and%20Others) Net revenues from innovative businesses and others were RMB 1.7 billion, up 6.3% quarter-over-quarter but down 17.8% year-over-year, primarily due to Yanxuan business. Innovative Businesses and Others Net Revenues (RMB billion) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----- | :------- | :------- | :------- | :------ | :------ | | Net Revenues | 2.1 | 1.6 | 1.7 | 6.3% | -17.8% | - Quarter-over-quarter increase primarily driven by **increased net revenues from Yanxuan business**[12](index=12&type=chunk) - Year-over-year decrease primarily due to **reduced net revenues from Yanxuan, advertising services, and other businesses** in this segment[12](index=12&type=chunk) [Cost of Revenues](index=4&type=section&id=2.2%20Cost%20of%20Revenues) Cost of revenues was RMB 9.8 billion in Q2 2025, down 4.8% quarter-over-quarter but up 4.2% year-over-year, influenced by platform sharing and licensed game royalties. Cost of Revenues (RMB billion) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----- | :------- | :------- | :------- | :------ | :------ | | Cost of Revenues | 9.4 | 10.3 | 9.8 | -4.8% | 4.2% | - Quarter-over-quarter decrease primarily due to **reduced platform sharing costs and licensed game royalties**[13](index=13&type=chunk) - Year-over-year increase primarily due to **increased licensed game royalties**[13](index=13&type=chunk) [Gross Profit](index=4&type=section&id=2.3%20Gross%20Profit) Gross profit was RMB 18.1 billion in Q2 2025, down 2.4% quarter-over-quarter but up 12.5% year-over-year. Gross Profit (RMB billion) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----- | :------- | :------- | :------- | :------ | :------ | | Gross Profit | 16.0 | 18.5 | 18.1 | -2.4% | 12.5% | [Operating Expenses](index=4&type=section&id=2.4%20Operating%20Expenses) Total operating expenses were RMB 9.0 billion in Q2 2025, up 12.5% quarter-over-quarter but down 0.6% year-over-year, mainly due to increased marketing for games. Operating Expenses (RMB billion) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----- | :------- | :------- | :------- | :------ | :------ | | Operating Expenses | 9.0 | 8.0 | 9.0 | 12.5% | -0.6% | - Quarter-over-quarter increase primarily due to **increased marketing expenditures for games and related value-added services**[15](index=15&type=chunk) [Other Income/(Expenses)](index=4&type=section&id=2.5%20Other%20Income%2F(Expenses)) Other income/(expenses) decreased quarter-over-quarter due to fair value changes in equity securities investments but increased year-over-year due to net foreign exchange gains. - Quarter-over-quarter decrease primarily due to **changes in the fair value of equity securities investments**[16](index=16&type=chunk) - Year-over-year increase primarily due to **net foreign exchange gains recorded in Q2 2025**, compared to net foreign exchange losses in the same period of 2024[16](index=16&type=chunk) [Income Tax](index=4&type=section&id=2.6%20Income%20Tax) Income tax expense was RMB 1.6 billion in Q2 2025, with an effective tax rate of 14.7%, lower than the previous quarter and the prior year period. Income Tax Expense and Effective Tax Rate | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | | :------- | :------- | :------- | :------- | | Income Tax Expense (RMB billion) | 1.3 | 1.9 | 1.6 | | Effective Tax Rate | 16.0% | 15.3% | 14.7% | [Net Income and Non-GAAP Net Income](index=5&type=section&id=2.7%20Net%20Income%20and%20Non-GAAP%20Net%20Income) Net income attributable to the company's shareholders was RMB 8.6 billion, and non-GAAP net income was RMB 9.5 billion in Q2 2025, with both GAAP and non-GAAP basic EPS decreasing QoQ but increasing YoY. Net Income and Net Income per ADS | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----------------------------------- | :------- | :------- | :------- | :------ | :------ | | **Net Income Attributable to the Company's Shareholders (RMB billion)** | 6.8 | 10.3 | 8.6 | -16.5% | 26.5% | | **Non-GAAP Net Income Attributable to the Company's Shareholders (RMB billion)** | 7.8 | 11.2 | 9.5 | -15.0% | 21.8% | | **Basic Net Income per ADS** | 1.47 | 2.27 | 1.88 | -17.2% | 28.0% | | **Non-GAAP Basic Net Income per ADS** | 1.70 | 2.47 | 2.09 | -15.4% | 22.9% | [Capital Management & Shareholder Returns](index=5&type=section&id=Capital%20Management%20%26%20Shareholder%20Returns) This section details NetEase's capital structure, including net cash position, operating cash flow, quarterly dividends, and ongoing share repurchase program. [Net Cash and Operating Cash Flow](index=5&type=section&id=3.1%20Net%20Cash%20and%20Operating%20Cash%20Flow) As of June 30, 2025, the company's total net cash was RMB 142.1 billion, an increase from year-end 2024, with Q2 operating cash flow at RMB 10.9 billion, a significant YoY growth. Net Cash and Net Cash Generated from Operating Activities (RMB billion) | Indicator | December 31, 2024 | June 30, 2025 | Change | | :----------------------- | :------------- | :------------- | :--- | | Net Cash | 131.5 | 142.1 | +10.6 | | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | QoQ Change | YoY Change | | :----------------------- | :------- | :------- | :------- | :------ | :------ | | Net Cash Generated from Operating Activities | 6.5 | 12.1 | 10.9 | -9.9% | 67.7% | [Quarterly Dividend](index=5&type=section&id=3.2%20Quarterly%20Dividend) The board approved a Q2 2025 dividend of US$0.1140 per share (US$0.5700 per ADS), payable in September, based on the company's dividend policy. Quarterly Dividend (per share/per ADS) | Quarter | Dividend per Share (US$) | Dividend per ADS (US$) | | :----- | :------------- | :-------------- | | 2025 Q2 | 0.1140 | 0.5700 | | 2025 Q1 | 0.1350 | 0.6750 | - The payment date for the Q2 2025 dividend is expected to be around **September 8 for ordinary shareholders** and **September 11 for ADS holders**[22](index=22&type=chunk) - The company's dividend policy and amounts are at the discretion of the board, considering operations, profitability, cash flow, financial condition, and other relevant factors[24](index=24&type=chunk) [Share Repurchase Program](index=6&type=section&id=3.3%20Share%20Repurchase%20Program) The company is executing a US$5 billion share repurchase program, having repurchased approximately 22.1 million ADSs for US$2 billion as of June 30, 2025. - The repurchase program commenced on **January 10, 2023**, with a validity period not exceeding 36 months[25](index=25&type=chunk) - As of June 30, 2025, approximately **22.1 million ADSs** have been repurchased at a total cost of **US$2 billion**[25](index=25&type=chunk) - The extent of repurchases depends on market conditions, and the program may be suspended or terminated at any time[26](index=26&type=chunk) [Corporate Information & Disclosures](index=6&type=section&id=Corporate%20Information%20%26%20Disclosures) This section provides details on NetEase's conference call, company overview, forward-looking statements, and explanations of non-GAAP financial measures. [Conference Call Details](index=6&type=section&id=4.1%20Conference%20Call%20Details) NetEase management will host a conference call and webcast on August 14, 2025, to discuss quarterly results and answer questions. - Conference call time: **Thursday, August 14, 2025, at 8:00 AM Eastern Time** (8:00 PM Beijing/Hong Kong Time)[27](index=27&type=chunk) - Dial-in information: Dial **1-914-202-3258** and provide conference ID: **10049137**[28](index=28&type=chunk) - Webcast and replay: Available on NetEase's investor relations website at **http://ir.netease.com/**[28](index=28&type=chunk) [About NetEase, Inc.](index=6&type=section&id=4.2%20About%20NetEase%2C%20Inc.) NetEase is a leading internet and game service provider, focused on quality content, with a broad gaming ecosystem and a commitment to meaningful entertainment and education experiences. - Core business: A **leading internet and game service provider, focused on premium content**[29](index=29&type=chunk) - Gaming business: Possesses a **large in-house game development team**, developing and operating some of China's and the world's most popular and long-running mobile and PC games[30](index=30&type=chunk) - Other services: Include **Youdao** (smart learning and advertising solutions), **NetEase Cloud Music** (online music platform), and **Yanxuan** (private label consumer lifestyle brand)[31](index=31&type=chunk) [Forward-Looking Statements](index=7&type=section&id=4.3%20Forward-Looking%20Statements) This announcement contains forward-looking statements protected by the U.S. Private Securities Litigation Reform Act of 1995, subject to various business risks and uncertainties. - Statement nature: Contains **forward-looking information**, protected by the safe harbor provisions of the U.S. Private Securities Litigation Reform Act[33](index=33&type=chunk) - Identification: Identified by words such as "**will**, **expects**, **anticipates**, **future**, **intends**, **plans**, **believes**, **estimates**," and similar expressions[33](index=33&type=chunk) - Major risks: Include **online game market growth, company market position, business strategy implementation, competition, regulatory changes, new service development capabilities, economic cycles and geopolitical tensions, international business expansion, cybersecurity threats, and exchange rate fluctuations**[33](index=33&type=chunk) [Non-GAAP Financial Measures Explanation](index=8&type=section&id=4.4%20Non-GAAP%20Financial%20Measures%20Explanation) NetEase uses non-GAAP financial measures, excluding share-based compensation, to assess operating performance and provide investors with a clearer view of the company's results. - Definition: Non-GAAP net income attributable to the company's shareholders **excludes share-based compensation expenses**[35](index=35&type=chunk) - Purpose: To **assist management in evaluating operating performance** and provide useful information to investors for understanding the company's current performance and prospects[35](index=35&type=chunk) - Limitations: Non-GAAP measures are **not defined by GAAP** and cannot substitute GAAP financial information; they **do not reflect all expense/income items** affecting operations (e.g., share-based compensation); and they may **differ from non-GAAP measures used by other companies**, limiting comparability[36](index=36&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of income, cash flows, and segment information. [Balance Sheets](index=9&type=section&id=5.1%20Balance%20Sheets) As of June 30, 2025, total assets were RMB 208.5 billion, total liabilities were RMB 54.4 billion, and shareholders' equity was RMB 149.6 billion. Condensed Consolidated Balance Sheets Summary (RMB thousands) | Indicator | December 31, 2024 | June 30, 2025 | | :----------------------------------- | :------------- | :------------- | | **Assets** | | | | Total Current Assets | 153,324,656 | 162,950,112 | | Total Non-Current Assets | 42,666,894 | 45,548,541 | | **Total Assets** | **195,991,550** | **208,498,653** | | **Liabilities** | | | | Total Current Liabilities | 49,667,657 | 50,451,907 | | Total Non-Current Liabilities | 3,829,755 | 3,942,594 | | **Total Liabilities** | **53,497,412** | **54,394,501** | | **Shareholders' Equity** | | | | Equity Attributable to the Company's Shareholders | 138,685,606 | 149,587,316 | | Non-Controlling Interests | 3,724,260 | 4,429,095 | | **Total Equity** | **142,409,866** | **154,016,411** | [Statements of Income](index=10&type=section&id=5.2%20Statements%20of%20Income) In Q2 2025, net revenues were RMB 27.9 billion, gross profit was RMB 18.1 billion, operating profit was RMB 9.1 billion, and net income attributable to shareholders was RMB 8.6 billion. Condensed Consolidated Statements of Income Summary (RMB thousands) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | | :----------------------------------- | :------- | :------- | :------- | | Net Revenues | 25,485,805 | 28,828,545 | 27,891,664 | | Cost of Revenues | (9,443,587) | (10,349,139) | (9,839,182) | | **Gross Profit** | **16,042,218** | **18,479,406** | **18,052,482** | | Total Operating Expenses | (9,048,895) | (8,038,247) | (8,991,398) | | **Operating Profit** | **6,993,323** | **10,441,159** | **9,061,084** | | Income Before Income Tax | 8,129,535 | 12,451,914 | 10,649,222 | | Income Tax | (1,300,939) | (1,905,143) | (1,560,757) | | **Net Income** | **6,828,596** | **10,546,771** | **9,088,465** | | **Net Income Attributable to the Company's Shareholders** | **6,758,749** | **10,301,157** | **8,601,010** | | Basic Net Income per Share (RMB) | 2.10 | 3.25 | 2.70 | | Basic Net Income per ADS (RMB) | 10.50 | 16.23 | 13.49 | [Statements of Cash Flows](index=11&type=section&id=5.3%20Statements%20of%20Cash%20Flows) In Q2 2025, net cash from operating activities was RMB 10.9 billion, from investing activities was RMB 3.9 billion, and used in financing activities was RMB 2.0 billion. Condensed Consolidated Statements of Cash Flows Summary (RMB thousands) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | | :----------------------------------- | :------- | :------- | :------- | | Net Cash Generated from Operating Activities | 6,531,832 | 12,106,652 | 10,861,863 | | Net Cash (Used in)/Generated from Investing Activities | (14,851,153) | (12,841,002) | 3,892,942 | | Net Cash Used in Financing Activities | (15,919,117) | (8,288,158) | (1,951,445) | | Cash, Cash Equivalents and Restricted Cash at End of Period | 21,855,316 | 45,395,483 | 58,167,094 | [Segment Information](index=12&type=section&id=5.4%20Segment%20Information) In Q2 2025, games and related value-added services were the largest source of revenue and gross profit, followed by NetEase Cloud Music, Youdao, and innovative businesses. Segment Net Revenues (RMB thousands) | Segment | 2024 Q2 | 2025 Q1 | 2025 Q2 | | :----------------------- | :------- | :------- | :------- | | Games and Related Value-Added Services | 20,055,819 | 24,048,007 | 22,806,459 | | Youdao | 1,321,721 | 1,298,262 | 1,417,541 | | NetEase Cloud Music | 2,040,952 | 1,858,388 | 1,968,729 | | Innovative Businesses and Others | 2,067,313 | 1,623,888 | 1,698,935 | | **Total Net Revenues** | **25,485,805** | **28,828,545** | **27,891,664** | Segment Gross Profit (RMB thousands) | Segment | 2024 Q2 | 2025 Q1 | 2025 Q2 | | :----------------------- | :------- | :------- | :------- | | Games and Related Value-Added Services | 14,047,215 | 16,552,745 | 16,014,219 | | Youdao | 636,779 | 614,227 | 609,360 | | NetEase Cloud Music | 655,196 | 682,611 | 709,874 | | Innovative Businesses and Others | 703,028 | 629,823 | 719,029 | | **Total Gross Profit** | **16,042,218** | **18,479,406** | **18,052,482** | [Notes to Unaudited Financial Information](index=13&type=section&id=Notes%20to%20Unaudited%20Financial%20Information) This section provides supplementary information to the unaudited financial statements, including USD conversion rates, share-based compensation details, and GAAP to non-GAAP reconciliations. [USD Conversion Rate](index=13&type=section&id=6.1%20USD%20Conversion%20Rate) The RMB to USD exchange rate used in this announcement is 1.00 USD = 7.1636 RMB, based on the Federal Reserve H.10 statistical release as of June 30, 2025. - Conversion rate: **1.00 US dollar = 7.1636 RMB**[43](index=43&type=chunk) - Exchange rate date: **June 30, 2025**[43](index=43&type=chunk) [Share-Based Compensation Cost](index=13&type=section&id=6.2%20Share-Based%20Compensation%20Cost) Total share-based compensation cost was RMB 931 million in Q2 2025, primarily allocated across R&D expenses, cost of revenues, and general and administrative expenses. Share-Based Compensation Cost (RMB thousands) | Expense Category | 2024 Q2 | 2025 Q1 | 2025 Q2 | | :----------------------- | :------- | :------- | :------- | | Cost of Revenues | 319,949 | 233,711 | 291,326 | | Sales and Marketing Expenses | 42,865 | 32,578 | 37,300 | | General and Administrative Expenses | 286,350 | 261,259 | 207,202 | | Research and Development Expenses | 429,892 | 424,324 | 410,567 | [Reconciliation of GAAP and Non-GAAP Results](index=13&type=section&id=6.3%20Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Results) This section provides a reconciliation of GAAP to non-GAAP net income and EPS, with the primary difference being the exclusion of share-based compensation expenses. GAAP to Non-GAAP Reconciliation (RMB thousands) | Indicator | 2024 Q2 | 2025 Q1 | 2025 Q2 | | :----------------------------------- | :------- | :------- | :------- | | Net Income Attributable to the Company's Shareholders (GAAP) | 6,758,749 | 10,301,157 | 8,601,010 | | Add: Share-based compensation expenses | 1,059,939 | 935,570 | 930,921 | | **Non-GAAP Net Income Attributable to the Company's Shareholders** | **7,818,688** | **11,236,727** | **9,531,931** | | Non-GAAP Basic Net Income per Share (RMB) | 2.43 | 3.54 | 2.99 | | Non-GAAP Basic Net Income per ADS (RMB) | 12.15 | 17.70 | 14.95 | [Reconciliation between U.S. GAAP and IFRS Accounting Standards](index=13&type=section&id=6.4%20Reconciliation%20between%20U.S.%20GAAP%20and%20IFRS%20Accounting%20Standards) This section reconciles financial information differences between U.S. GAAP and IFRS, mainly concerning fair value measurement of investments and classification of redeemable non-controlling interests. - Preparation basis: The reconciliation is prepared in accordance with **Hong Kong Listing Rules and HKEX-GL111-22**, reflecting significant accounting policy differences between U.S. GAAP and IFRS[50](index=50&type=chunk) - Investment fair value measurement differences: * U.S. GAAP: Equity securities investments without readily determinable fair values are measured at **cost less impairment, adjusted for observable price changes**[51](index=51&type=chunk)[52](index=52&type=chunk) * IFRS: These investments are classified as **financial assets measured at fair value through profit or loss**[51](index=51&type=chunk)[52](index=52&type=chunk) - Redeemable non-controlling interests differences: * U.S. GAAP: Certain redeemable preferred shares issued by subsidiaries are classified as **redeemable non-controlling interests (mezzanine equity)** on the balance sheet and accreted to their redemption value[52](index=52&type=chunk)[53](index=53&type=chunk) * IFRS: There is **no concept of mezzanine or temporary equity classification**, and redeemable preferred shares are designated as financial liabilities measured at fair value through profit or loss[52](index=52&type=chunk)[53](index=53&type=chunk)

网易-S(09999)发布公告，将于2025年9月8日派发2025年6月30日止第二季度股息每股0.114美元。 ...

智通财经APP讯，网易-S(09999)发布公告，将于2025年9月8日派发2025年6月30日止第二季度股息每股 0.114美元。 ...

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 a strategy of product quality and global expansion, driving long-term stable growth [1] Gaming Performance - NetEase's gaming and related value-added services generated net revenue of 22.8 billion yuan in Q2, with classic IP "Fantasy Westward Journey" achieving a record high in concurrent users [1][4] - New game releases such as "Yanyun Sixteen Sounds," "Seven Days World," and "Outsider Madness" have shown strong performance, while the upcoming titles like "Forgotten Sea" and "Return to Tang" have generated significant market interest [3][4] Innovation and Technology - The company invested 4.4 billion yuan in R&D, focusing on technological innovation across various sectors including gaming, music, and education [6] - NetEase Youdao achieved a net revenue of 1.4 billion yuan in Q2, marking its fourth consecutive quarter of sustainable profitability under its "AI-native" strategy [1][7] E-commerce and Media - NetEase's innovative and other businesses reported a net revenue of 1.7 billion yuan, with significant sales growth in NetEase Yanxuan products [2] - The media division has seen a 25% increase in daily active creators on the news app, with a 28% rise in average reading volume [2] Social Responsibility - The company has implemented four major initiatives to protect minors online, including AI patrol technology and restrictions on high-age user account creation [8][9] - NetEase has actively participated in developing safety guidelines for AI services aimed at minors, contributing to industry self-regulation [9]

Core Insights - NetEase reported Q2 2025 revenue of 27.89 billion yuan, a year-on-year increase of 9.4%, but below market expectations of 28.4 billion yuan [1] - The net profit attributable to shareholders was 8.6 billion yuan, while the adjusted net profit attributable to shareholders was 9.5 billion yuan [1] - Adjusted earnings per ADS from continuing operations were 14.81 yuan, slightly lower than the expected 15.03 yuan [1] Revenue Breakdown - Online gaming services net revenue for Q2 was 22.81 billion yuan, which fell short of the forecasted 23.37 billion yuan [1]

#网易Q2营收279亿元#【网易：2025年Q2营收279亿元 预估284亿元】8月14日，网易发布2025年第二季 度财报。财报显示，网易Q2净收入279亿元，预估284亿元；经调整每股ADS持续经营净收益14.81元， 预估15.03元。非公认会计准则下归属于公司股东的净利润为95亿元；研发投入44亿元，研发投入强度 15.6%。（每经） ...

Core Viewpoint - NetEase Cloud Music Inc. reported its financial results for the first half of 2025, showing a mixed performance with a decrease in overall revenue but significant growth in operating profit and net profit, driven by a focus on core music services and subscription-based revenue growth. Financial Performance - Revenue for the first half of 2025 was RMB3.83 billion, a decrease of 6.0% compared to RMB4.07 billion in the same period of 2024 [5] - Gross profit was RMB1.39 billion, a slight decrease of 2.3% from RMB1.43 billion in the same period of 2024, but gross margin improved to 36.4% from 35.0% [5][11] - Operating profit increased by 40.8% to RMB844.5 million from RMB599.9 million in the same period of 2024 [5] - Profit for the period reached RMB1.88 billion, compared to RMB809.9 million in the same period of 2024 [12] - Adjusted operating profit was RMB905.4 million, an increase of 35.0% compared to RMB670.9 million in the same period of 2024 [12] - Adjusted net profit reached RMB1.95 billion, compared to RMB880.7 million in the same period of 2024 [12] Revenue Breakdown - Revenue from online music services was RMB3.0 billion, an increase of 15.9% compared to RMB2.6 billion for the same period of 2024 [4] - Revenue from membership subscriptions increased to RMB2.5 billion from RMB2.1 billion for the same period of 2024 [4] - Revenue from social entertainment services decreased to RMB859.8 million from RMB1,510.8 million for the same period of 2024, attributed to a more prudent operational approach [5] User Engagement and Community - Total monthly active users (MAUs) showed steady growth, with a daily active user/monthly active user (DAU/MAU) ratio consistently exceeding 30% [7] - Users spent more time listening to music on the mobile app, indicating higher engagement [7] - The platform had over 819,000 registered independent artists contributing 4.8 million music tracks by June 2025 [17] Content and Product Innovation - The company expanded its music label catalogue, securing partnerships with popular K-Pop labels and renowned Chinese artists [19] - Enhanced product features, such as the "Magic Light Player," improved the music listening experience [9][27] - The introduction of new roles for music creators, such as AI Musician and Trainee Musician, aims to nurture emerging talent [20] Strategic Focus - The company plans to deepen collaborations with copyright holders and enhance its differentiated content offerings [13][15] - Future initiatives include optimizing the music listening experience and improving profitability through cost optimization and enhanced operating efficiency [18]

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