Financial Performance - NetEase reported Q2 2023 net revenue of RMB 24.01 billion (USD 3.31 billion), a year-over-year increase of 3.7%[4] - Revenue from games and related value-added services reached RMB 18.80 billion (USD 2.59 billion), up 3.6% year-over-year[4] - Youdao's net revenue was RMB 1.21 billion (USD 166.4 million), reflecting a strong year-over-year growth of 26.2%[4] - Cloud Music's net revenue decreased to RMB 1.95 billion (USD 268.7 million), down 11.1% year-over-year[4] - Gross profit for Q2 2023 was RMB 14.40 billion (USD 2.00 billion), representing an 11.1% increase year-over-year[4] - Operating expenses totaled RMB 8.30 billion (USD 1.10 billion), an increase of 4.0% compared to the previous year[4] - Net profit attributable to shareholders was RMB 8.20 billion (USD 1.10 billion), with non-GAAP net profit from continuing operations at RMB 9.00 billion (USD 1.20 billion)[5] - Basic earnings per share were USD 0.35, with non-GAAP basic earnings per share from continuing operations at USD 0.39[5] Game Development and Strategy - The company launched several popular new games in June, enhancing its international presence and expanding its game portfolio[6] - NetEase is a leading internet and gaming service provider, continuously expanding its gaming ecosystem with a rich product matrix[19] - The company has a strong in-house R&D team focused on mobile, PC, and console games, contributing to an exceptional gaming experience[19] - The company aims to integrate cultural and educational elements into its games, enhancing their value and engagement[19] Profitability and Margins - The gross margin for online games and related value-added services in Q2 2023 was 67.4%, up from 66.7% in the previous quarter and 64.9% year-over-year[9] - The gross margin for Youdao in Q2 2023 was 47.0%, down from 51.7% in the previous quarter but up from 42.8% year-over-year[9] - The gross margin for Cloud Music in Q2 2023 was 27.0%, an increase from 22.4% in the previous quarter and 13.0% year-over-year, driven by increased subscription revenue and cost control improvements[9] Cash Flow and Financial Position - As of June 30, 2023, the net cash and cash equivalents, after deducting short-term and long-term borrowings, amounted to RMB 99.6 billion (USD 13.7 billion), an increase from RMB 95.6 billion at the end of 2022[15] - The company declared a quarterly dividend of USD 0.1050 per share (USD 0.5250 per American Depositary Share) for Q2 2023, compared to USD 0.0930 per share in Q1 2023[16] - The company has a share repurchase plan approved for up to USD 5 billion, with approximately 6.1 million American Depositary Shares repurchased for about USD 536.4 million as of June 30, 2023[17] Tax and Regulatory Environment - The effective tax rate for Q2 2023 was 8.0%, significantly lower than 19.5% in the previous quarter and 22.0% year-over-year, primarily due to the recognition of tax incentives[12] Assets and Liabilities - As of June 30, 2023, the total assets of NetEase amounted to RMB 172.76 billion, a decrease from RMB 167.91 billion as of December 31, 2022, representing a decline of approximately 5.1%[23] - The total liabilities increased significantly to RMB 63.89 billion as of June 30, 2023, compared to RMB 49.64 billion at the end of 2022, marking an increase of about 28.7%[23] - Cash and cash equivalents decreased to RMB 12.77 billion from RMB 24.89 billion, reflecting a decline of approximately 48.7%[23] - The total current liabilities rose to RMB 56.83 billion, up from RMB 42.34 billion, indicating an increase of approximately 34.3%[23] - The company's equity attributable to shareholders decreased to RMB 104.73 billion from RMB 114.26 billion, a decline of about 8.3%[23] Future Outlook and Risks - Forward-looking statements indicate potential risks, including market growth stagnation and challenges in maintaining market position[21] - NetEase's global expansion efforts may face risks related to economic uncertainty and currency fluctuations[21] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[24] Research and Development - Research and development expenses for the six months ended June 30, 2023, totaled RMB 2,153,825 thousand, slightly up from RMB 2,128,524 thousand in the same period last year[24] - Research and development expenses for the company were RMB 282,466 for the three months ended June 30, 2023, compared to RMB 260,899 for the same period in 2022, reflecting an increase of 8.5%[28] Non-GAAP Financial Metrics - Non-GAAP financial metrics are used to assess operational performance, excluding stock-based compensation expenses[22] - The non-GAAP net profit attributable to shareholders is defined as net profit excluding stock-based compensation expenses[22] - The company emphasizes the importance of considering all financial indicators rather than relying on a single metric[22]

香港交易及結算所有限公司及香港聯合交易所有限公司（「香港聯交所」）對本公告 的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不會就本公 告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 NetEase, Inc. （於開曼群島註冊成立的有限責任公司） （股份代號：9999） 2023年 3月 31日止第一季度業績公告及第一季度股息公告 網易股份有限公司（「公司」）在此公佈 2023 年第一季度的季度股息及業績公告，其 中包含截至2023年3月31日的三個月未經審計的財務業績。本業績公告可於香港聯交 所網站www.hkexnews.hk及公司網站http://ir.netease.com閱覽。 承董事會命 NetEase, Inc. 丁磊 董事 中國杭州，2023年5月25日 於本公告日期，本公司董事會包括董事丁磊先生；以及獨立董事唐徽女士、鄭玉芬女 士、唐子期先生及梁民傑先生。 媒體和投資者請聯繫: Margaret Shi 郵箱：ir@service.netease.com ...

Financial Performance - Net revenue increased from RMB 87.61 billion in 2021 to RMB 96.50 billion in 2022, representing a growth of approximately 10.1%[6] - Gross profit rose from RMB 46.97 billion in 2021 to RMB 52.77 billion in 2022, an increase of about 12.3%[6] - Net profit attributable to the company's shareholders grew from RMB 16.86 billion in 2021 to RMB 20.34 billion in 2022, a rise of approximately 20.6%[6] - Net revenue increased from RMB 73.67 billion in 2020 to RMB 96.50 billion in 2022, representing a growth of 31.0% over two years[22] - Gross profit rose from RMB 38.98 billion in 2020 to RMB 52.77 billion in 2022, a 35.4% increase over two years[22] - Operating profit grew from RMB 14.54 billion in 2020 to RMB 19.63 billion in 2022, a 35.0% increase over two years[22] - Net profit attributable to the company's shareholders increased from RMB 12.06 billion in 2020 to RMB 20.34 billion in 2022, a 68.7% growth over two years[22] - Net profit for 2022 reached RMB 19,843,290 thousand, a significant increase from RMB 12,330,235 thousand in 2020[25] - Net profit attributable to the company's shareholders in 2022 was RMB 20,724,629,000, reflecting a significant increase compared to previous years[172] - Total net revenue for the company increased from RMB 73,667,133 thousand in 2020 to RMB 96,495,809 thousand in 2022, reflecting a 31% growth[159] - Total gross profit for the company grew from RMB 38,983,402 thousand in 2020 to RMB 52,766,126 thousand in 2022, a 35% increase[159] Assets and Liabilities - Total assets increased from RMB 153.64 billion in 2021 to RMB 172.26 billion in 2022, reflecting a growth of about 12.1%[6] - Total liabilities rose from RMB 54.22 billion in 2021 to RMB 63.89 billion in 2022, an increase of approximately 17.8%[6] - The company's total equity increased from RMB 99.28 billion in 2021 to RMB 108.74 billion in 2022, a growth of approximately 9.5%[6] - Total assets grew by 12.4% from RMB 153,643,924 thousand in 2021 to RMB 172,760,985 thousand in 2022[19] - Total liabilities increased by 17.8% from RMB 54,220,048 thousand in 2021 to RMB 63,887,505 thousand in 2022[20] - Shareholders' equity rose by 9.5% from RMB 99,278,638 thousand in 2021 to RMB 108,737,040 thousand in 2022[21] - Total assets as of December 31, 2022, amounted to RMB 156,385,005,000, indicating growth from RMB 153,643,924,000 in 2021[174] - Total liabilities as of December 31, 2022, were RMB 54,415,183,000, slightly higher than RMB 54,220,048,000 in 2021[174] - The company's total equity as of December 31, 2022, was RMB 101,969,822,000, up from RMB 99,278,638,000 in 2021[174] Revenue Breakdown - The company recognized RMB 74.6 billion in revenue from games and related value-added services for the year ended December 31, 2022[12] - The company's revenue is primarily derived from online game services, educational services, smart hardware sales, online music services, live streaming, advertising, e-commerce, and other paid value-added services[43] - Net revenue for the Games and Related Value-Added Services segment increased from RMB 58,719,895 thousand in 2020 to RMB 74,566,471 thousand in 2022, representing a growth of 27% over the two-year period[159] - Net revenue for the Youdao segment grew from RMB 3,167,515 thousand in 2020 to RMB 5,013,182 thousand in 2022, with a peak of RMB 5,354,357 thousand in 2021[159] - Net revenue for the Cloud Music segment rose from RMB 4,895,731 thousand in 2020 to RMB 8,992,221 thousand in 2022, marking an 84% increase over the two years[159] Investments and Impairments - Equity method investments and long-term equity investments without readily determinable fair values amounted to RMB 5,239.2 million and RMB 10,463.3 million respectively as of December 31, 2022[13] - Impairment provisions of RMB 197.7 million and RMB 85.2 million were recognized for equity method investments and long-term equity investments without readily determinable fair values respectively for the year ended December 31, 2022[13] - The impairment assessment for equity method investments and long-term equity investments without readily determinable fair values involves significant judgment and is considered a significant risk due to high estimation uncertainty[13] - Long-term investments under the equity method increased from RMB 3,776.2 million in 2021 to RMB 5,239.2 million in 2022[109] - Equity method investment income for 2020, 2021, and 2022 was RMB 172.5 million, RMB 1,575.5 million, and RMB 1,259.9 million, respectively[110] - The company fully impaired its investment in Yixin (formerly Hangzhou Yixin Technology Co., Ltd.) due to underperformance, amounting to RMB 197.7 million in 2022[110] - Fair value losses on equity investments with readily determinable fair values were RMB 3,414.7 million in 2022, compared to gains of RMB 720.6 million in 2020 and RMB 91.1 million in 2021[111] - Gains from the sale of equity securities without readily determinable fair values were RMB 36.1 million, RMB 172.5 million, and RMB 1,784.9 million in 2020, 2021, and 2022, respectively[112] - Impairment provisions for certain equity investments were RMB 55.6 million, RMB 19.2 million, and RMB 85.2 million in 2020, 2021, and 2022, respectively[112] Cash Flow and Liquidity - Cash and cash equivalents increased by 71.7% from RMB 14,498,157 thousand in 2021 to RMB 24,889,000 thousand in 2022[19] - Net cash inflow from operating activities rose to RMB 27,709,233 thousand in 2022, up from RMB 24,888,171 thousand in 2020[25] - Cash, cash equivalents, and restricted cash increased to RMB 27,588,325 thousand at the end of 2022, up from RMB 17,376,115 thousand at the end of 2021[27] - Cash and cash equivalents increased from RMB 1,541,763 thousand in 2021 to RMB 2,303,280 thousand in 2022, a growth of 49.4%[31] - Operating cash flow decreased from RMB 1,548,858 thousand in 2021 to RMB 788,498 thousand in 2022, a drop of 49.1%[33] Tax and Regulatory Matters - Certain Chinese subsidiaries qualified as high-tech enterprises, enjoying a preferential tax rate of 15% in 2020, 2021, and 2022[118] - Total tax exemptions and rate reductions increased from RMB 1,969,414 thousand in 2020 to RMB 2,631,764 thousand in 2022[120] - Basic earnings per share impact from tax benefits rose from RMB 0.60 in 2020 to RMB 0.81 in 2022[120] - Total income tax expense grew from RMB 3,041,849 thousand in 2020 to RMB 5,031,838 thousand in 2022[121] - Effective tax rate increased from 19.8% in 2020 to 20.7% in 2022[122] - Net operating tax loss carryforwards amounted to RMB 15,124,930 thousand as of December 31, 2022[123] - Deferred tax assets increased from RMB 1,297,954 thousand in 2021 to RMB 1,480,789 thousand in 2022[126] - Deferred tax liabilities rose from RMB 1,345,874 thousand in 2021 to RMB 2,126,120 thousand in 2022[126] - Withholding tax liabilities increased from RMB 1,056.9 million in 2020 to RMB 2,144.4 million in 2022[129] - Total taxes payable decreased from RMB 4,537,050 thousand in 2021 to RMB 2,813,096 thousand in 2022[130] VIE Arrangements and Risks - The company has a series of agreements with VIE entities, granting it the right to determine significant economic activities and enjoy economic benefits, consolidating VIE entities in financial statements[37] - The company believes its VIE arrangements comply with Chinese law, but uncertainties in the legal system could limit enforcement and impact business operations[39] - Potential risks include government actions such as revoking business licenses, restricting operations, or requiring restructuring, which could severely disrupt the company's business[39] - VIE entities accounted for 84.4%, 85.9%, and 86.4% of NetEase's total net revenue in 2020, 2021, and 2022, respectively[192] - VIE entities' total assets (excluding receivables from other NetEase Group companies) represented 8.5% and 7.1% of NetEase's consolidated total assets as of December 31, 2021, and December 31, 2022, respectively[192] - NetEase's operations in China rely on contractual arrangements with VIE entities to comply with foreign investment restrictions and regulations[192] - Contractual arrangements with VIE entities include voting rights agreements, loan agreements, operating agreements, and equity pledge agreements[193] - NetEase faces significant uncertainties regarding the enforceability of VIE contractual arrangements under current and future Chinese laws and regulations[193] - The Foreign Investment Law in China does not explicitly classify contractual arrangements as a form of foreign investment, creating potential regulatory risks[194] - A significant portion of NetEase's revenue is generated by VIE entities, which hold licenses for key businesses such as online gaming, music streaming, and online education[194] - If VIE entities are deemed non-compliant with Chinese laws or regulations, NetEase may face severe penalties or be forced to relinquish control over these entities[194] - The dissolution of VIE entities could severely impact NetEase's operations and lead to a significant decline in the value of its securities[194] - NetEase's ability to consolidate VIE entities' financial results into its consolidated financial statements may be affected by future regulatory actions in China[194] Regulatory and Legal Risks - The company faces risks related to VIE arrangements, including potential regulatory actions that could impact its ability to consolidate VIE entities[40] - The company believes the likelihood of losing control over VIE entities due to regulatory actions is low, and such actions would not lead to liquidation[40] - The company's financial performance could be significantly impacted if it loses control over its subsidiaries and VIEs in China, potentially leading to an inability to repay debts and a decline in the value of its ADS or ordinary shares[195] - Chinese government regulations, including those related to offshore securities issuance, antitrust investigations, and data privacy compliance, pose risks to the company's operations and stock value[195] - The company may face regulatory actions or sanctions if it fails to obtain necessary approvals from Chinese authorities for overseas securities issuance or maintaining its ADS trading status[195] - The Foreign Company Accountability Act (HFCAA) could result in the company's ADS being delisted if PCAOB is unable to inspect its auditors for two consecutive years[197] - The company was identified as a "Commission-Identified Issuer" under HFCAA in 2022 but expects to avoid this designation after the PCAOB's updated decision in December 2022[197] - Future PCAOB determinations on the ability to inspect auditors in China and Hong Kong could impact the company's compliance with HFCAA and its trading status in the U.S.[197] - Risks related to increased restrictions on online gaming imposed by the Chinese government[200] - Risks associated with the uncertainty of obtaining approvals for new games[200] - Risks related to legal, regulatory policies, and guidelines affecting the live streaming and online entertainment industry[200] - Risks associated with the international operation of the company's online games[200] - Risks related to third-party platforms for distributing mobile games and collecting payments[200] - Risks associated with maintaining existing game copyrights or intellectual property rights[200] - Risks related to illegal game servers, player cheating, and the trading of game accounts and virtual items on third-party auction sites[200] - Risks related to changes in the business strategy and service content of Youdao[200] - Risks related to compliance with the "Opinions on Further Reducing the Burden of Homework and Off-campus Training for Students in Compulsory Education" and its implementation rules[200] - Risks related to the company's ability to attract and retain users for its music streaming services and obtain necessary music content licenses[200] Earnings Per Share and Shareholder Equity - Basic earnings per share grew from RMB 3.65 in 2020 to RMB 6.23 in 2022, a 70.7% increase over two years[23] - Basic earnings per ADS increased from RMB 18.25 in 2020 to RMB 31.16 in 2022, a 70.7% growth over two years[23] - Total comprehensive income attributable to the company's shareholders rose from RMB 12.27 billion in 2020 to RMB 21.60 billion in 2022, a 76.0% increase over two years[23] - Total equity attributable to shareholders increased to RMB 108,737,040 thousand in 2022, up from RMB 82,997,804 thousand in 2020[24] - Retained earnings grew by 17.5% from RMB 77,494,475 thousand in 2021 to RMB 91,074,675 thousand in 2022[21] - Retained earnings increased to RMB 91,074,675 thousand in 2022, up from RMB 64,162,689 thousand in 2020[24] - Basic earnings per share (EPS) attributable to shareholders for 2020, 2021, and 2022 were RMB 3.65, RMB 5.07, and RMB 6.23, respectively[149] - Diluted EPS attributable to shareholders for 2020, 2021, and 2022 were RMB 3.60, RMB 5.01, and RMB 6.17, respectively[149] - The weighted average number of shares outstanding (basic) for 2020, 2021, and 2022 were 3,305,448 thousand, 3,325,864 thousand, and 3,263,455 thousand, respectively[149] - The weighted average number of shares outstanding (diluted) for 2020, 2021, and 2022 were 3,349,759 thousand, 3,367,478 thousand, and 3,296,014 thousand, respectively[149] - The total number of restricted share units with anti-dilutive effects excluded from diluted EPS calculations for 2020, 2021, and 2022 were approximately 6.0 million, 6.7 million, and 11.3 million shares, respectively[149] Revenue Recognition and Accounting Policies - The company's key audit matters included estimating the average playtime of paying players to confirm revenue related to in-game virtual items[11] - The company's financial statements were prepared in accordance with U.S. GAAP and were audited by PricewaterhouseCoopers[8] - The company's revenue from mobile games is generated through the sale of in-game virtual items, with revenue recognized proportionally over the estimated average playtime of paying players[45] - For PC games, the company uses two revenue models: time-based and item-based. Time-based revenue is recognized proportionally based on playtime, while item-based revenue is recognized based on usage or expiration time[46] - The company's revenue recognition for in-game items depends on their usage type: one-time use, limited use, or unlimited use. Unlimited use items are recognized over the estimated average playtime of paying players[46] - The company estimates the average playtime of paying players based on historical player churn rates, average playtime, and other behavioral patterns, with adjustments made quarterly[46] - The company's financial statements are prepared under US GAAP, and management makes estimates and assumptions that affect reported revenue and expenses, including estimates for in-game virtual item revenue[42] - The company's tutoring services, including online live courses, digital learning content, and customized learning plans, are recognized as revenue proportionally over the estimated average learning period[47] - Smart hardware revenue, such as dictionary pens and translation devices, is recognized when the goods are transferred to customers, typically upon delivery to end customers or distributors[48] - Online music service revenue, including subscription fees and digital album sales, is recognized over the subscription period or upon transfer of control to customers[49] - Live streaming service revenue from virtual gifts is recognized either upon consumption or proportionally over the usable period of time-based virtual items[50] - Advertising service revenue is recognized over the display period, with performance-based arrangements tied to impressions or actions (e.g., clicks)[51] - E-commerce revenue from NetEase Yanxuan is recognized when control of goods is transferred to customers, typically upon delivery, with discounts treated as reductions in revenue[52] - Paid value-added services revenue, such as online reading and email services, is recognized over the subscription period or upon service provision[53] Investments and Fair Value Measurements - Short-term investments decreased by 37.9% from RMB 12,281,548 thousand in 2021 to RMB 7,622,673 thousand in 2022[19] - Short-term investments are measured at fair value, with changes reflected in "Other Income/(Expenses)" in the consolidated financial statements[64] - Long-term

香港交易及結算所有限公司及香港聯合交易所有限公司（「香港聯交所」）對本公告 的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不會就本公 告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 NetEase, Inc. （於開曼群島註冊成立的有限責任公司） （股份代號：9999） 2022 年 9 月 30 日止第三季度 未經審計的財務業績公告及第三季度股息公告 網易股份有限公司（「公司」）在此公佈 2022 年第三季度的季度股息及業績公告，其 中包含截至 2022 年 9月 30 日的三個月未經審計的財務業績。本業績公告可於香港聯交 所網站 www.hkexnews.hk 及公司網站 http://ir.netease.com 閱覽。 承董事會命 NetEase, Inc. 丁磊 董事 中國杭州，2022 年 11 月 17 日 於本公告日期，本公司董事會包括董事丁磊先生；以及獨立董事唐徽女士、鄭玉芬女 士、唐子期先生、馮侖先生及梁民傑先生。 網易 NETEASE 媒體和投資者請聯繫: Margaret Shi 郵箱：ir@service.netease.com 電話：(+ ...

Financial Performance - NetEase's net revenue for Q2 2022 was RMB 23.2 billion (USD 3.5 billion), representing a year-over-year increase of 12.8%[4] - Revenue from games and related value-added services reached RMB 18.1 billion (USD 2.7 billion), up 15.0% year-over-year[4] - Youdao's net revenue was RMB 956.2 million (USD 142.8 million), a decrease of 26.1% year-over-year[4] - Cloud Music's net revenue increased to RMB 2.2 billion (USD 327.2 million), reflecting a year-over-year growth of 29.5%[4] - Gross profit for Q2 2022 was RMB 12.9 billion (USD 1.9 billion), a 15.7% increase compared to the previous year[4] - The company reported a net profit attributable to shareholders from continuing operations of RMB 4.7 billion (USD 696.7 million)[5] - Net revenue for the six months ended June 30, 2022, was RMB 46,714,920, representing an increase from RMB 41,041,712 for the same period in 2021, a growth of approximately 13.5%[32] - Gross profit for the six months ended June 30, 2022, was RMB 25,777,870, up from RMB 22,242,253 in the previous year, indicating a growth of about 15.4%[32] - Net profit attributable to shareholders for the six months ended June 30, 2022, was RMB 9,685,499, an increase from RMB 7,980,906 in the same period of 2021, representing a growth of around 21.3%[32] - Basic earnings per share for the six months ended June 30, 2022, was RMB 2.96, compared to RMB 2.38 for the same period in 2021, an increase of approximately 24.4%[32] Operating Expenses and Margins - Total operating expenses in Q2 2022 amounted to RMB 7,995.2 million (USD 1,193.6 million), an increase from RMB 7,329.3 million in the previous quarter and RMB 7,431.5 million year-over-year, mainly due to higher marketing expenses for games and increased personnel and R&D costs[12] - The gross margin for online education was 42.8%, down from 53.1% in the previous quarter and 52.3% year-over-year, primarily due to the cessation of subject-based extracurricular training services[11] - The gross margin for cloud music improved to 13.0% in Q2 2022, compared to 12.2% in the previous quarter and 4.1% year-over-year, driven by increased revenue from membership subscriptions and social entertainment services[11] - The total operating costs for the six months ended June 30, 2022, were RMB 20,937,050, an increase from RMB 18,799,459 in the same period of 2021, representing a rise of about 11.4%[34] - The gross profit margin for online games and related value-added services was 64.9% for the six months ended June 30, 2022, compared to 63.5% for the same period in 2021[34] Cash Flow and Investments - The net cash inflow from operating activities in Q2 2022 was RMB 6.6 billion (USD 990.0 million), compared to RMB 4.6 billion in the previous quarter and RMB 4.7 billion year-over-year[19] - The company reported a net cash outflow from investing activities of RMB 5,543,230 for the six months ended June 30, 2022, compared to RMB 11,037,737 in the same period of 2021, showing a significant reduction in cash outflow[33] - The net cash inflow from financing activities for the six months ended June 30, 2022, was RMB 1,977,256, an increase from RMB 2,288,974 in the previous year, reflecting a decrease of approximately 13.6%[33] - The company experienced a decrease in cash and cash equivalents at the end of the period, with a balance of RMB 17,376,115 compared to RMB 19,552,450 at the end of the previous year, representing a decline of about 11.1%[33] Shareholder Returns - The company approved a quarterly dividend of USD 0.0720 per share (USD 0.3600 per American Depositary Share) for Q2 2022, with payment expected on September 13, 2022[17] - The company repurchased approximately 23.6 million American Depositary Shares for a total of about USD 2.3 billion under its buyback plan as of June 30, 2022[22] Game Development and Updates - The popular game "Naraka: Bladepoint" received significant updates and launched its Xbox version in June 2022[5] - The game "Diablo® Immortal™," co-developed with Blizzard Entertainment, topped iOS download charts in multiple regions[5] - NetEase plans to expand its game development pipeline with upcoming titles including mobile versions of "Naraka: Bladepoint" and "Harry Potter: Magic Awakened" for overseas markets[5] Company Overview and Strategy - NetEase is a leading internet technology company in China, focusing on content innovation and a rich product matrix in the gaming ecosystem[24] - The company has developed and operated several popular mobile and PC games in China, leveraging its strong internal R&D capabilities[25] - NetEase's other businesses include Youdao, which provides intelligent learning services, and Cloud Music, a leading online music service in China[25] - The company has received an A rating from MSCI for its ESG performance, highlighting its commitment to environmental, social, and governance standards[25] Risks and Future Outlook - Forward-looking statements indicate potential risks, including market growth stagnation and regulatory changes affecting operations[26] - Non-GAAP financial metrics are used to assess operational performance, excluding stock-based compensation expenses[28] - NetEase defines non-GAAP net profit attributable to shareholders as net profit excluding stock-based compensation expenses[28] - The company emphasizes the importance of considering all financial indicators rather than relying solely on non-GAAP metrics[29] Conference Call Information - The earnings conference call is scheduled for August 18, 2022, to discuss quarterly performance and answer questions[23] - The conference call will be available for replay until August 31, 2022, providing further insights into the company's performance[23] Balance Sheet Highlights - Total assets increased from RMB 153.64 billion to RMB 168.18 billion, representing a growth of 9.99%[31] - Current assets rose from RMB 113.12 billion to RMB 128.01 billion, an increase of 13.12%[31] - Cash and cash equivalents increased from RMB 14.50 billion to RMB 16.46 billion, a growth of 13.54%[31] - Total liabilities increased from RMB 54.22 billion to RMB 63.27 billion, reflecting a rise of 16.93%[31] - Short-term borrowings increased significantly from RMB 19.35 billion to RMB 28.03 billion, a jump of 44.73%[31] - Shareholders' equity rose from RMB 99.28 billion to RMB 104.76 billion, an increase of 5.00%[31] - Inventory decreased from RMB 964.73 million to RMB 843.77 million, a decline of 12.52%[31] - Non-current assets totaled RMB 40.52 billion, slightly down from RMB 40.17 billion, a decrease of 0.86%[31] - Accounts receivable net value decreased from RMB 5.51 billion to RMB 5.21 billion, a decline of 5.45%[31] - The company reported a total of RMB 12.13 billion in contract liabilities, a slight increase from RMB 12.32 billion, reflecting a growth of 1.64%[31]

香港交易及結算所有限公司及香港聯合交易所有限公司（「香港聯交所」）對本公告 的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不會就本公 告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 NetEase, Inc. （於開曼群島註冊成立的有限責任公司） （股份代號：9999） 2022 年 3 月 31 日止第一季度業績公告及第一季度股息公告 網易股份有限公司（"公司"）在此公佈 2022 年第一季度的季度股息及業績公告，其 中包含截至 2022 年 3月 31 日的三個月未經審計的財務業績。本業績公告可於香港聯交 所網站 www.hkexnews.hk 及公司網站 http://ir.netease.com 閱覽。 | --- | |-------| | | | | | | | | | | | | | | | | | | | | 中國杭州，2022 年 5 月 24 日 於本公告日期，本公司董事會包括董事丁磊先生；以及獨立董事鄭玉芬女士、李廷斌 先生、唐子期先生、馮侖先生及梁民傑先生。 網易 netease 媒體和投資者請聯繫: Margaret Shi 郵箱：ir@s ...

Financial Performance - NetEase's net revenue increased from RMB 73.67 billion in 2020 to RMB 87.61 billion in 2021, representing a growth of 18.9%[3] - Gross profit rose from RMB 38.98 billion in 2020 to RMB 46.97 billion in 2021, an increase of 20.5%[3] - Net profit attributable to NetEase, Inc. shareholders grew from RMB 12.06 billion in 2020 to RMB 16.86 billion in 2021, a 39.8% increase[3] - Net revenue for 2021 reached RMB 87,606,026 thousand (USD 13,747,297 thousand), a significant increase from RMB 73,667,133 thousand in 2020[24] - Gross profit for 2021 was RMB 46,970,801 thousand (USD 7,370,744 thousand), up from RMB 38,983,402 thousand in 2020[24] - Operating profit for 2021 stood at RMB 16,417,070 thousand (USD 2,576,197 thousand), compared to RMB 14,538,405 thousand in 2020[24] - Net profit attributable to NetEase, Inc. shareholders in 2021 was RMB 16,856,842 thousand (USD 2,645,206 thousand), up from RMB 12,062,754 thousand in 2020[24] - Net profit for 2021 was RMB 16,976,190 thousand (USD 2,663,935 thousand), a significant increase from RMB 12,330,235 thousand in 2020[29] - NetEase's total net revenue for 2021 was RMB 75,215.169 million, with third-party revenue contributing RMB 74,406.521 million and intra-group revenue contributing RMB 808.648 million[40] - NetEase's net profit for 2021 was RMB 624.299 million, a decrease from RMB 712.015 million in 2020[40] - Total operating costs and expenses for 2021 were RMB 74,643.007 million, with third-party operating costs and expenses accounting for RMB 17,651.675 million[40] - Net revenue for online game services increased from RMB 46.42 billion in 2019 to RMB 62.81 billion in 2021, representing a growth of 35.3% over two years[185] - Net revenue for Youdao surged from RMB 1.30 billion in 2019 to RMB 5.35 billion in 2021, marking a 310.3% increase over two years[185] - Cloud Music's net revenue grew from RMB 2.32 billion in 2019 to RMB 7.00 billion in 2021, a 201.8% increase over two years[185] - Total net revenue across all segments rose from RMB 59.24 billion in 2019 to RMB 87.61 billion in 2021, a 47.9% increase over two years[185] - Gross profit for online game services increased from RMB 29.45 billion in 2019 to RMB 40.71 billion in 2021, a 38.2% growth over two years[185] - Cloud Music turned a gross loss of RMB 1.06 billion in 2019 into a gross profit of RMB 142.67 million in 2021[185] Assets and Liabilities - Total assets increased from RMB 141.87 billion in 2020 to RMB 153.64 billion in 2021, up by 8.3%[4] - Total liabilities rose from RMB 48.08 billion in 2020 to RMB 54.22 billion in 2021, an increase of 12.8%[4] - Shareholders' equity increased from RMB 83.00 billion in 2020 to RMB 99.28 billion in 2021, up by 19.6%[4] - Cash and cash equivalents increased to RMB 14,498,157 thousand (USD 2,275,077 thousand) in 2021 from RMB 9,117,219 thousand in 2020[19] - Total current assets rose to RMB 113,120,254 thousand (USD 17,751,036 thousand) in 2021 compared to RMB 107,831,043 thousand in 2020[19] - Total assets grew to RMB 153,643,924 thousand (USD 24,110,084 thousand) in 2021 from RMB 141,874,582 thousand in 2020[19] - Total current liabilities increased to RMB 50,501,326 thousand (USD 7,924,760 thousand) in 2021 from RMB 46,743,491 thousand in 2020[21] - Total liabilities rose to RMB 54,220,048 thousand (USD 8,508,308 thousand) in 2021 compared to RMB 48,080,658 thousand in 2020[21] - Long-term investments increased significantly to RMB 18,804,902 thousand (USD 2,950,899 thousand) in 2021 from RMB 11,711,259 thousand in 2020[19] - Property, plant, and equipment (net) grew to RMB 5,433,858 thousand (USD 852,691 thousand) in 2021 from RMB 4,549,943 thousand in 2020[19] - Deferred revenue increased to RMB 12,132,743 thousand (USD 1,903,892 thousand) in 2021 from RMB 10,398,872 thousand in 2020[21] - Accounts receivable (net) rose to RMB 5,507,988 thousand (USD 864,324 thousand) in 2021 from RMB 4,576,445 thousand in 2020[19] - Inventory (net) increased to RMB 964,733 thousand (USD 151,388 thousand) in 2021 from RMB 591,508 thousand in 2020[19] - Total equity attributable to NetEase, Inc. shareholders increased to RMB 95,328,080 thousand (USD 14,959,056 thousand) in 2021 from RMB 82,126,798 thousand in 2020[23] - Total liabilities, redeemable non-controlling interests, and equity amounted to RMB 153,643,924 thousand (USD 24,110,084 thousand) in 2021, up from RMB 141,874,582 thousand in 2020[23] - Total shareholders' equity decreased by RMB 46,025,845[28] - Minority interests decreased by RMB 794,209[28] - Retained earnings increased by RMB 21,509,059[28] - Accumulated other comprehensive loss decreased by RMB 650,457[28] - Statutory reserves increased by RMB 1,228,448[28] - Treasury stock decreased by 96,976 shares[28] - Capital reserve increased by RMB 27,829,431[28] - Ordinary shares increased by 3,446,311 shares[28] - NetEase's total assets as of December 31, 2021, were RMB 20,683.180 million, with current assets totaling RMB 19,189.678 million and non-current assets totaling RMB 1,493.502 million[38] - Total liabilities as of December 31, 2021, were RMB 18,708.525 million, with current liabilities amounting to RMB 18,416.574 million and non-current liabilities amounting to RMB 291.951 million[38] - NetEase's cash and cash equivalents decreased from RMB 2,455.313 million in 2020 to RMB 1,541.763 million in 2021[38] - Restricted cash increased significantly from RMB 1,727.000 million in 2020 to RMB 2,846.372 million in 2021[38] - NetEase's deferred revenue increased from RMB 9,304.037 million in 2020 to RMB 10,751.917 million in 2021[38] - NetEase's total equity attributable to shareholders as of December 31, 2021, was RMB 1,974.655 million[38] - Restricted net assets of the company's Chinese subsidiaries and VIE entities amounted to approximately RMB 13.3 billion as of December 31, 2021, representing 13% of the company's total consolidated net assets[190] Revenue Recognition and Business Segments - Online game service revenue for the year ended December 31, 2021, was RMB 62.8 billion[10] - Revenue from mobile game virtual items and PC game unlimited-use virtual items was recognized proportionally based on the estimated average playtime of paying players[10] - The estimated average playtime of paying players is subject to high estimation uncertainty and involves significant judgment, including historical player churn rates and similarities to existing games[10] - Revenue from prepaid points for PC games is initially recorded as deferred revenue and recognized as players use the points for gameplay or in-game purchases[60] - Advertising revenue is primarily generated from short-term online advertising contracts, typically lasting three months or less, with revenue recognized during the ad display period[64] - Revenue from advertising services in exchange for non-cash consideration was not significant for the years ended December 31, 2019, 2020, and 2021[65] - E-commerce revenue mainly comes from the Yanxuan platform, with revenue recognized when control of goods is transferred to customers, typically upon delivery[66] - Paid value-added services revenue is primarily from live streaming, online reading, and other innovative services, with revenue recognized on a straight-line basis over the subscription period[67] - Virtual items sold on live streaming platforms generate revenue, with income recognized upon delivery and consumption of consumable items or proportionally over the usable period for time-based items[68] - Contract assets as of December 31, 2020, and 2021 were not significant[69] - Contract liabilities, presented as deferred revenue, represent the obligation to transfer goods or services to customers after receiving or being entitled to receive consideration[70] - The company's mobile game revenue is generated through in-game virtual item sales, including items, avatars, skills, and consumables, with revenue recognized over the estimated playtime of paying players[59] - For PC games, revenue is recognized based on either playtime (time-based model) or the usage/expiration of in-game items (item-based model), with infinite-use items recognized over the estimated average playtime of paying players[60][61] - The company's tutoring services revenue is recognized proportionally over the estimated average learning time of students, considering general course durations and learning behavior patterns[62] - Cloud Music's subscription revenue is recognized over the subscription period, while revenue from digital album and song sales is recognized immediately upon purchase[63] - Content licensing revenue from Cloud Music is recognized over the licensing period, typically ranging from one to three years[63] - The company's revenue recognition involves significant management judgment, including estimates of virtual item lifespans, unredeemed game points, and sales returns[57] - Revenue is primarily derived from online game services, Youdao's tutoring services, Cloud Music's online music services, advertising, e-commerce, and other paid value-added services[57] - The company operates as the principal for all games, controlling pricing, sales, marketing, and customer service, with payments to developers and distribution channels classified as operating costs[58] Investments and Equity - Equity method investments and long-term equity investments without readily determinable fair values totaled RMB 3.7762 billion and RMB 8.803 billion, respectively, as of December 31, 2021[11] - Impairment provisions of RMB 2.0 million and RMB 19.2 million were recognized for equity method investments and long-term equity investments without readily determinable fair values, respectively, for the year ended December 31, 2021[11] - The impairment assessment for equity method investments and long-term equity investments without readily determinable fair values involves significant judgment, including identifying impairment indicators, selecting valuation methods, and determining key assumptions[11] - Long-term investments under the equity method increased to RMB 3,776,245 thousand as of December 31, 2021, from RMB 1,621,327 thousand in 2020[135] - Equity earnings under the equity method were RMB 1,575.5 million in 2021, up significantly from RMB 172.5 million in 2020 and RMB 4.3 million in 2019[136] - The company made equity investments in three limited partnership companies with a cumulative cash consideration of RMB 897.2 million as of December 31, 2020, and further injected RMB 54.2 million, RMB 42.5 million, and RMB 310.0 million into these companies in 2021. Additionally, the company invested RMB 211.8 million and RMB 127.6 million in two other limited partnership companies for online gaming business investments[137] - As of December 31, 2021, the company's equity investments with readily determinable fair values included RMB 2,111.4 million in AppLovin Corporation, RMB 1,356.7 million in Alibaba, RMB 618.7 million in Devolver Digital, Inc., RMB 559.0 million in Shenzhen Transsion Holdings Co., Ltd., RMB 534.8 million in Embracer Group AB, RMB 498.4 million in Huatai Securities Co., Ltd., and RMB 208.0 million in tinyBuild Inc. The company recorded fair value gains of RMB 763.2 million, RMB 720.6 million, and RMB 91.1 million for these investments in 2019, 2020, and 2021, respectively[138] - The company received cash dividends of RMB 12.7 million, RMB 12.7 million, and RMB 18.9 million from Huatai Securities Co., Ltd. in 2019, 2020, and 2021, respectively[138] - The company's equity investments without readily determinable fair values had a book value adjustment of RMB 380.8 million in 2021, compared to zero in 2019 and 2020. The company recognized gains of RMB 86.1 million, RMB 36.1 million, and RMB 172.5 million from the sale of these investments in 2019, 2020, and 2021, respectively[139] - The company recognized impairment provisions of RMB 168.4 million, RMB 55.6 million, and RMB 19.2 million related to certain equity investments in 2019, 2020, and 2021, respectively[139] - The company's goodwill increased from RMB 318.9 million in 2020 to RMB 595.3 million in 2021, with no impairment recognized during the year[141] - The fair value of equity investments with readily determinable fair values increased from RMB 3.74 billion in 2020 to RMB 5.89 billion in 2021, a 57.3% increase[188][189] Cash Flow and Financing - Net cash inflow from operating activities in 2021 was RMB 24,926,727 thousand (USD 3,911,547 thousand), maintaining a strong cash flow position[29] - Net cash outflow from investing activities in 2021 was RMB 7,078,294 thousand (USD 1,110,739 thousand), a significant reduction from RMB 29,192,407 thousand in 2020[31] - Net cash outflow from financing activities in 2021 was RMB 12,585,569 thousand (USD 1,974,950 thousand), compared to a net inflow of RMB 9,913,087 thousand in 2020[31] - Cash, cash equivalents, and restricted cash at the end of 2021 were RMB 17,376,115 thousand (USD 2,726,692 thousand), up from RMB 12,168,605 thousand in 2020[32] - Short-term investments net change in 2021 showed a significant increase, with a net inflow of RMB 3,694,890 thousand (USD 579,809 thousand)[31] - Equity incentive expenses in 2021 were RMB 3,041,492 thousand (USD 477,276 thousand), reflecting continued investment in employee retention and motivation[29] - Deferred revenue in 2021 was RMB 1,351,261 thousand (USD 212,042 thousand), indicating strong future revenue recognition potential[29] - The company's cash flow from operations remained robust, with a net inflow of RMB 24,926,727 thousand (USD 3,911,547 thousand) in 2021[29] - Net cash inflow from third-party transactions increased from RMB 37.63 million in 2019 to RMB 61.27 million in 2021[42] - Net cash outflow from intra-group technical consulting and services decreased from RMB 37.55 million in 2019 to RMB 59.44 million in 2021[42] - Net cash outflow from investment activities decreased significantly from RMB 495,160 in 2019 to RMB 39,430 in 2021[42] - Net cash outflow from financing activities increased from RMB 26,520 in 2019 to RMB 1.30 million in 2021[42] - VIE entities' registered capital increased from RMB 512.4 million in 2020 to RMB 519.7 million in 2021[42] - The company had unused credit facilities of USD 1,503.9 million as of December 31, 2021, under various uncommitted credit agreements with financial institutions[156] - The company's subsidiaries secured multiple credit facilities totaling $1,730.0 million in 2021, with $621.7 million remaining unused as of December 31, 2021[157] - A five-year term loan and revolving credit facility agreement was signed on June 2, 2021, with a total commitment of $1.0 billion, and $200.0 million remained outstanding as of December 31, 2021[160] - Cloud Music repurchased redeemable minority interests for $66.3 million in 2020, and the excess over the carrying amount was recognized as deemed dividends to preferred shareholders[161] - Youdao issued preferred shares with a total cash consideration of $70.0 million in 2018, which were later converted into Class A ordinary shares upon its IPO in 2019[162] Expenses and Costs - Research and development expenses increased to RMB 14,075,991 thousand (USD 2,208,830 thousand) in 2021 from RMB 10,369,382 thousand in 2020[24] - Depreciation and amortization expenses in 2021 were RMB 3,275,727 thousand (USD 514,033 thousand), slightly lower than RMB 3,457,782 thousand in 2020[29] - Advertising expenses for the years 2019, 2020, and

| --- | --- | |--------------------------------------------------------------------------|-------| | | | | | | | 香港交易及結算所有限公司及香港聯合交易所有限公司（「香港聯交所」）對本公 | | | 告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不會就 | | | 本公告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 | | | 任。 | | NetEase, Inc. （於開曼群島註冊成立的有限責任公司） （股份代號：9999） 2021 年 6 月 30 日止第二季度 未經審計的財務業績公告、第二季度股息公告及中期報告 網易股份有限公司（"公司"）在此公佈 2021 年第二季度的季度股息及業績公告，其 中包含截至 2021 年 6月 30 日的三個月和六個月的未經審計財務業績。根據上市規則第 13.48(1)條，本業績公告也將作為 2021 年的中期報告提供給股東。本業績公告可於香 港聯交所網站 www.hkexnews.hk 及公司網站 http://i ...

NetEase, Inc. （於開曼群島註冊成立的有限責任公司） 股份代號 : 9999 年報 2020 目錄 | --- | |--------------------------| | | | 公司資料 | | 財務摘要 | | 獨立核數師報告 | | 合併資產負債表 | | 合併經營業績及綜合收益表 | | 合併股東權益變動表 | | 合併現金流量表 | | 合併財務報表附註 | | 20-F 表格 | | 其他資料 | 2 3 4 11 14 16 17 20 79 80 網易股份有限公司 年報2020 1 公司資料 | --- | --- | |------------------------------------------------------------------|-----------------------------------| | | | | 董事會 | 香港股份過戶登記處 | | 董事 | 香港中央證券登記有限公司 香港灣仔 | | 丁磊， 首席執行官 | 皇后大道東 183 號 | | 獨立董事 | 合和中心 | | 鄭玉芬 | 17 樓 1712 至 1716 號舖 | ...