| --- | --- | --- | --- | |------------------------------------------------------------------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | N e t Ea se | | | | | | | | | | | | | | | 3Q24 Investor Presentation Investor Relations November 14, 2024 | | | | SAFE HARBOR STATEMENT This announcement contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identif ...

Financial Data and Key Metrics - Total net revenue for Q3 2024 was RMB 26.2 billion ($3.7 billion), a 3% increase quarter-over-quarter [40] - Online games net revenue reached RMB 20.2 billion, up 5% quarter-over-quarter, driven by PC games like World of Warcraft and Naraka: Bladepoint, as well as mobile games like Identity V [41] - PC games revenue accounted for 29.2% of total online game revenue, with a 30% quarter-over-quarter and 29% year-over-year increase [41] - Net revenue from games and VAS declined by 4% year-over-year, mainly due to adjustments in PC live streaming services [42] - Youdao's net revenue was RMB 1.6 billion, a 2% year-over-year increase, driven by online marketing services and smart device sales [43] - NetEase Cloud Music's net revenue was RMB 2 billion, a 1% year-over-year increase, primarily due to higher membership subscriptions [44] - Gross profit margin for Q3 2024 was 62.9%, compared to 62.2% in Q3 2023 [45] Business Line Performance - Gaming division achieved total online games net revenue of RMB 20 billion, with PC games growing 29% year-over-year and 30% quarter-over-quarter [8] - Identity V reached record high revenues for the third consecutive quarter, with unprecedented DAUs and global concurrent online players [11] - Naraka: Bladepoint Mobile launched in July, ranking 3 on the iOS top working chart and achieving record high revenue in Q3 [14] - Justice Mobile celebrated its first anniversary, with over 8 million intelligence entities and strong player engagement [15] - Racing Master expanded to Japan, topping the App Store and Google Play free charts [18] Market Performance - NetEase Cloud Music expanded its K-Pop library through partnerships with Kakao Entertainment and JYP Entertainment, enhancing its content ecosystem [34] - Yanxuan achieved double-digit year-over-year growth in pet products and household cleaning items, strengthening its position in the fast-growing fast food sector [37] Strategic Direction and Industry Competition - NetEase is diversifying its portfolio across various genres and expanding its games internationally, with plans to release several highly anticipated titles in the coming months [19] - The company is focusing on high-quality growth and innovation, with a strong commitment to R&D and content creation [49] - NetEase is leveraging its partnership with Blizzard to rekindle loyalty among long-time fans and attract new players, with World of Warcraft and Hearthstone showing strong engagement post-relaunch [25] Management Commentary on Operating Environment and Future Outlook - Management emphasized the importance of innovation and long-term game operations, highlighting the success of established titles like Fantasy Westward Journey and Westward Journey Online [9][10] - The company is optimistic about the future of its gaming pipeline, with upcoming releases like Where Winds Meet and Marvel Rivals expected to drive growth [20][21] - NetEase is committed to expanding its global reach, with a focus on both domestic and international markets [25] Other Important Information - NetEase repurchased shares worth $543 million in Q3 2024, marking a 98% increase from the previous quarter [52] - The company declared a dividend of $0.87 per share or $0.435 per ADS for Q3 2024 [51] Q&A Session Summary Question: Launch schedule and monetization strategy for Where Winds Meet - Where Winds Meet PC is slated for launch by the end of December 2024, with the mobile version following shortly after [56] - The game will focus on tier-based cosmetic offerings and lighter monetization models to create a healthier social ecosystem [58] Question: Operational strategy for Justice Mobile and Eggy Party - Justice Mobile is focusing on balancing commercialization and user experience, with plans to enrich content and explore innovative monetization strategies [62] - Eggy Party is investing in long-term content creation, with confidence in its unique market position and future commercialization opportunities [64] Question: Globalization strategy and performance of Once Human - NetEase is leveraging both overseas first-party studios and domestic studios to produce games for global markets, with Once Human performing well since its release [67] - Upcoming global releases include Marvel Rivals and FragPunk, with high expectations for their performance [68] Question: Performance of Naraka: Bladepoint Mobile - Naraka: Bladepoint Mobile has accumulated 50 million new users since its launch in July 2024, with differentiated content for mobile and PC players [89] - The game is in a healthy and stable status, with long-term confidence in its performance [90]

京东三季度利润率改善，但经营活动现金流净流出。 三季度，京东集团收入加速增长至 2604 亿元，归母净利润在确认被投公司收益后，同比增长 47.8%、达到 117 亿元。但是因为今年三季度和去年三季度的工作日数量差异导致的应付账款跨季 度支付，以及为确保足够的库存以支持以旧换新计划而即时支付的款项，三季度京东经营活动现金 流为净流出 62 亿元，去年同期是净流入 150 亿元。受此影响，京东季度自由现金流亦净流出 138 亿元。 网易三季度收入、利润双降。 今年 7 月到 9 月间，网易营收为 262 亿元，同比减少 3.9%。最核心的游戏及相关增值服务净收入 为 209 亿元，同比减少 4.2%。因此，尽管网易有效控制了销售费用的增长（季度销售费用 93，同 比减少 1%），季度净利润降至 65 亿元，同比减少 14%。 紫金矿业回应超 3 吨黄金被掠夺，称对整体业绩影响较小。 有媒体报道称，紫金矿业（601899.SH）在哥伦比亚的一处金矿遭到贩毒集团掠夺，损失 3.2 吨黄 金，价值 2 亿美元。紫金矿业回应称，盗采在 2020 年紫金矿业进入该矿山前就已经存在，但实际 数量难以统计，对整体业绩影响较小 ...

Financial Performance - Net revenues for Q3 2024 were RMB26.2 billion (US$3.7 billion), a decrease of 3.9% year-over-year[3] - Net income attributable to shareholders was RMB6.5 billion (US$931.7 million), down from RMB6.8 billion in the previous quarter[25] - Non-GAAP net income attributable to shareholders was RMB7.5 billion (US$1.1 billion), a decrease of 13.5% year-over-year[27] - Games and related value-added services net revenues were RMB20.9 billion (US$3.0 billion), a decrease of 4.2% compared to Q3 2023[3] - Youdao achieved net revenues of RMB1.6 billion (US$224.1 million), an increase of 2.2% year-over-year[11] - NetEase Cloud Music generated net revenues of RMB2.0 billion (US$284.9 million), maintaining the same level as the previous quarter[11] - The company reported net revenues of RMB 27,270,406 for the three months ended September 30, 2023, representing an increase from RMB 25,485,805 in the previous quarter[48] - Net income attributable to the Company's shareholders for the three months ended September 30, 2023, was RMB 7,836,888, a decrease from RMB 6,758,749 in the previous quarter[48] - Total net revenues for the three months ended September 30, 2024, were RMB 26,209,879, representing a 3.4% increase from RMB 25,485,805 in the previous quarter[52] - Net income attributable to the Company's shareholders for the three months ended September 30, 2024, was RMB 6,538,435, a decrease of 3.3% from RMB 6,758,749 in the previous quarter[56] Profitability Metrics - Gross profit margin for games and related services was 68.8%, down from 70.0% in the previous quarter[17] - The gross profit for the same period was RMB 16,966,300, with a gross margin of approximately 62.2%[48] - Gross profit for the three months ended September 30, 2024, was RMB 16,476,605, with a gross profit margin of 62.8%[52] - Non-GAAP net income attributable to shareholders was RMB 7,836,888 for the three months ended September 30, 2023, which excludes share-based compensation expenses[44] - Non-GAAP net income attributable to the Company's shareholders for the three months ended September 30, 2024, was RMB 7,499,141, reflecting a 7.5% decrease from RMB 7,818,688 in the previous quarter[56] Cash Flow and Assets - As of September 30, 2024, net cash totaled RMB120.0 billion (US$17.1 billion), an increase from RMB110.9 billion at the end of 2023[29] - The total current assets as of September 30, 2024, were RMB 142,692,585, slightly up from RMB 140,578,661 in the previous quarter[47] - Cash and cash equivalents stood at RMB 21,428,902 as of September 30, 2024, compared to RMB 20,184,013 in the previous quarter[47] - The company generated net cash provided by operating activities of RMB 9,843,920 thousand for the three months ended September 30, 2023, compared to RMB 6,531,832 thousand in the previous quarter[51] - Cash and cash equivalents at the end of the period stood at RMB 18,158,066 thousand, up from RMB 15,679,412 thousand at the beginning of the period[51] Expenses and Liabilities - Total liabilities increased to RMB 57,840,897 as of September 30, 2024, compared to RMB 49,167,949 in the previous quarter, reflecting a rise of approximately 17%[47] - Research and development expenses for the three months ended September 30, 2023, were RMB 4,347,052, showing a slight increase from RMB 4,455,717 in the previous quarter[48] - Depreciation and amortization expenses were RMB 651,856 thousand for the three months ended September 30, 2023, an increase from RMB 520,567 thousand in the same period last year[51] - The company reported cash paid for income taxes of RMB 1,165,196 thousand for the three months ended September 30, 2023[51] Business Segments - The Games and related value-added services segment generated net revenues of RMB 20,864,036 for the three months ended September 30, 2024, accounting for 79.7% of total net revenues[52] - Youdao's net revenues for the three months ended September 30, 2024, were RMB 1,572,541, showing a 19.0% increase compared to RMB 1,321,721 in the previous quarter[52] - NetEase Cloud Music reported net revenues of RMB 1,999,163 for the three months ended September 30, 2024, with a gross profit margin of 32.8%[52] - Innovative businesses and others segment achieved net revenues of RMB 1,774,139 for the three months ended September 30, 2024, with a gross profit margin of 37.8%[52] Future Outlook - The company expects continued growth in its online services and gaming segments, despite potential market risks and uncertainties[41] - The Company expects continued growth in net revenues and profitability driven by new product launches and market expansion initiatives[56] - The company launched new titles like Naraka: Bladepoint and Racing Master, expanding its market presence[6]

Financial Performance - Net revenues for Q3 2024 were RMB26.2 billion (US$3.7 billion), a decrease of 3.9% year-over-year[2] - Net income attributable to shareholders was RMB6.5 billion (US$931.7 million), down from RMB7.8 billion in Q3 2023[25] - Youdao achieved net revenues of RMB1.6 billion (US$224.1 million), an increase of 2.2% compared to Q3 2023[2] - Gross profit for Q3 2024 was RMB16.5 billion (US$2.3 billion), a decrease of 2.9% year-over-year[3] - Net revenues for the three months ended September 30, 2023, were RMB 27,270,406, representing an increase from RMB 25,485,805 in the previous quarter[47] - Gross profit for the three months ended September 30, 2023, was RMB 16,966,300, compared to RMB 16,042,218 for the previous quarter, indicating a growth of 5.8%[47] - Operating profit for the three months ended September 30, 2023, was RMB 7,557,909, up from RMB 6,993,323 in the previous quarter, reflecting an increase of 8.1%[47] - Net income attributable to the Company's shareholders for the three months ended September 30, 2023, was RMB 7,836,888, compared to RMB 6,758,749 in the previous quarter, marking a rise of 15.9%[47] - Total operating expenses for the three months ended September 30, 2023, were RMB 9,408,391, compared to RMB 9,048,895 in the previous quarter, reflecting a rise of 4.0%[47] - Non-GAAP net income attributable to the company's shareholders for the nine months ended September 30, 2024, was RMB 20,931,130 thousand, up from RMB 22,834,289 thousand in the previous year[53] Cash and Assets - As of September 30, 2024, net cash totaled RMB120.0 billion (US$17.1 billion), an increase from RMB110.9 billion at the end of 2023[29] - The company's cash and cash equivalents were RMB 20.2 billion, down from RMB 21.4 billion at the end of 2023, indicating a decrease of approximately 5.6%[46] - NetEase's total assets as of September 30, 2024, amounted to RMB 184.9 billion, a slight decrease from RMB 185.9 billion as of December 31, 2023[46] - Total current liabilities decreased to RMB 45.7 billion from RMB 53.8 billion, reflecting a reduction of about 15%[46] - NetEase's total liabilities decreased to RMB 49.2 billion from RMB 57.8 billion, a reduction of around 15%[46] - NetEase's shareholders' equity increased to RMB 132.2 billion, up from RMB 124.3 billion, representing a growth of approximately 6.9%[46] Dividends and Shareholder Returns - The board approved a dividend of US$0.0870 per share for Q3 2024, payable on December 10, 2024[30] - The company paid dividends totaling RMB 2,423,355 for the three months ended September 30, 2024, compared to RMB 2,264,799 for the same period last year, indicating a year-over-year increase of approximately 7.0%[49] Gaming and Services Performance - The gross profit margin for games and related services was 68.8%, down from 70.0% in the previous quarter[19] - Naraka: Bladepoint mobile game reached No. 4 on the iOS grossing chart following its September update, indicating strong player demand[6] - World of Warcraft saw a 50% increase in daily active players post-relaunch, while Hearthstone achieved over 150% growth[7] - NetEase Cloud Music's net revenues were RMB2.0 billion (US$284.9 million), maintaining the same level as the previous quarter[14] - Youdao's net revenues for the three months ended September 30, 2024, were RMB 1,572,541 thousand, showing a slight increase from RMB 1,321,721 thousand in the previous quarter[50] - NetEase Cloud Music generated net revenues of RMB 1,999,163 thousand for the three months ended September 30, 2024, compared to RMB 2,040,952 thousand in the previous quarter[50] - The company has a significant focus on expanding its gaming and online services, leveraging its in-house R&D capabilities[37] - NetEase's subsidiaries, including Youdao and NetEase Cloud Music, contribute to its diversified service offerings beyond gaming[38] Operational Insights - The company reported non-GAAP net income attributable to shareholders, which excludes share-based compensation expenses, to provide a clearer view of operational performance[41][42] - NetEase emphasizes the importance of non-GAAP financial measures to provide investors with a better understanding of its operational performance[41][42] - The company is actively monitoring market trends and potential risks, including competition and regulatory changes, to maintain its market position[40] Investment and Cash Flow - Operating cash flow for the nine months ended September 30, 2024, was RMB 26,664,613, compared to RMB 23,522,996 for the same period last year, reflecting a growth of approximately 9.1%[49] - The company reported a net cash used in investing activities of RMB 720,861 for the three months ended September 30, 2024, compared to RMB 6,318,756 for the same period last year, indicating a significant reduction in investment outflows[49] - Cash and cash equivalents at the end of the period increased to RMB 23,183,386 from RMB 21,855,316 at the beginning of the period, representing a growth of approximately 6.0%[49] - The company experienced unrealized exchange gains of RMB 1,050,644 for the three months ended September 30, 2024, compared to unrealized exchange losses of RMB 718,121 for the same period last year[49] Depreciation and Amortization - Total depreciation and amortization for the nine months ended September 30, 2024, was RMB 2,395,488, up from RMB 1,720,447 for the same period last year, reflecting an increase of approximately 39.2%[49] Other Financial Metrics - The company recorded a loss on disposal of property, equipment, and software of RMB 2,920 for the three months ended September 30, 2024, compared to a gain of RMB 2,291 for the same period last year[49] - The company’s cash paid for income taxes for the three months ended September 30, 2024, was RMB 1,165,196, compared to RMB 3,864,820 for the same period last year, showing a decrease of approximately 69.8%[49] - The company reported a significant increase in contract liabilities, reaching RMB 1,928,060 for the three months ended September 30, 2024, compared to RMB 2,009,423 for the same period last year[49]

Financial Performance - NetEase's net revenue for Q3 2024 was RMB 26.2 billion (USD 3.7 billion), a decrease of 3.9% year-over-year[4] - Revenue from games and related value-added services was RMB 20.9 billion (USD 3.0 billion), down 4.2% year-over-year[4] - Youdao's revenue increased to RMB 1.6 billion (USD 224.1 million), up 2.2% year-over-year[4] - NetEase Cloud Music's revenue remained stable at RMB 2.0 billion (USD 284.9 million) compared to the previous quarter[4] - Gross profit for Q3 2024 was RMB 16.5 billion (USD 2.3 billion), a decrease of 2.9% year-over-year[4] - The net profit attributable to shareholders for Q3 2024 was RMB 6.5 billion (USD 931.7 million), compared to RMB 6.8 billion in the previous quarter and RMB 7.8 billion year-over-year[13] - The basic earnings per share for Q3 2024 was USD 0.29, down from USD 0.30 in the previous quarter and USD 0.35 year-over-year[13] - Net profit attributable to shareholders under non-GAAP measures is defined as net profit excluding stock-based compensation expenses, providing a clearer view of operational performance[23] - Net income attributable to shareholders under non-GAAP was RMB 8,645,164, representing a 3.4% decrease from RMB 8,918,000 in the same period last year[33] - The total gross profit margin for the company was 62.2%, compared to 63.2% in the previous quarter[31] Operating Expenses - The total operating expenses for Q3 2024 amounted to RMB 9.3 billion (USD 1.3 billion), an increase from RMB 9.0 billion in the previous quarter and a decrease from RMB 9.4 billion year-over-year[12] - The total operating costs increased to RMB 10,304,106, up from RMB 9,443,587 in the previous quarter[31] - Research and development expenses for Q3 2024 totaled RMB 4,347,052 thousand, slightly down from RMB 4,455,717 thousand in Q2 2024[27] - Research and development expenses amounted to RMB 294,630, reflecting a 10.5% increase from RMB 266,000 in the previous quarter[32] Cash Flow and Assets - As of September 30, 2024, the company's net cash balance was RMB 120 billion (USD 17.1 billion), an increase from RMB 110.9 billion at the end of 2023[15] - Net cash inflow from operating activities for Q3 2024 was RMB 10.6 billion (USD 1.5 billion), compared to RMB 6.5 billion in the previous quarter and RMB 9.8 billion year-over-year[15] - Cash and cash equivalents decreased to RMB 20.18 billion from RMB 21.43 billion, reflecting a decline of approximately 5.9%[26] - The company reported a net cash outflow from investing activities of RMB 515,908 for the three months ended September 30, 2023, compared to RMB 6,318,756 for the same period last year, indicating a significant reduction in investment expenditures[30] - Cash and cash equivalents at the end of the period were RMB 18,158,066, down from RMB 27,588,325 at the beginning of the period, representing a decrease of approximately 34.4%[30] Market and Product Developments - The mobile game "Naraka: Bladepoint" has seen a stable increase in popularity since its launch in July, reaching the fourth position on the iOS bestseller list[6] - "World of Warcraft" and "Hearthstone" have returned to the Chinese market, with daily active users increasing by over 50% and 150% respectively compared to pre-suspension levels[5] - New games such as "Destiny: Rising" and "Marvel's Secret Wars" are set to launch in December, expanding the game product matrix[6] - The company plans to continue expanding its market presence and invest in new technologies and products to drive future growth[31] Shareholder Returns - The company approved a quarterly dividend of USD 0.0870 per share, with payment expected on December 10, 2024[16] - As of September 30, 2024, the company had repurchased approximately 18.2 million American Depositary Shares for a total of about USD 1.6 billion under its buyback plan[18] Risks and Strategic Focus - The company faces various risks, including market growth stagnation and regulatory changes that could adversely affect operations[22] - The company has a commitment to developing innovative online services to keep pace with market trends and demands[22] - The company emphasizes the importance of non-GAAP financial metrics for investors to assess current operational performance and outlook[24] Tax and Liabilities - The effective tax rate for Q3 2024 was 16.1%, slightly up from 16.0% in the previous quarter and 14.2% year-over-year[13] - Total liabilities decreased to RMB 49.17 billion from RMB 57.84 billion, representing a reduction of about 15%[26] - The company experienced a net cash outflow from financing activities of RMB 2,423,355 for the three months ended September 30, 2023, compared to RMB 4,608,462 for the same period last year, indicating a reduction in financing costs[30]

Core Viewpoint - NetEase reported a decline in net revenues and net income for the third quarter of 2024 compared to the same period in 2023, while showing growth in specific segments like Youdao and NetEase Cloud Music [2][4][7]. Financial Highlights - Net revenues for Q3 2024 were RMB26.2 billion (US$3.7 billion), a decrease of 3.9% year-over-year [2][4]. - Net revenues from games and related value-added services were RMB20.9 billion (US$3.0 billion), down 4.2% compared to Q3 2023 [2][4]. - Youdao's net revenues increased by 2.2% to RMB1.6 billion (US$224.1 million) [2][4]. - NetEase Cloud Music's net revenues rose by 1.3% to RMB2.0 billion (US$284.9 million) [2][4]. - Gross profit was RMB16.5 billion (US$2.3 billion), a decrease of 2.9% year-over-year [2][4]. - Net income attributable to shareholders was RMB6.5 billion (US$931.7 million), down from RMB7.8 billion in Q3 2023 [7][4]. Operational Highlights - The company launched new titles and expanded existing games, enhancing its competitive position [3]. - The mobile game "Naraka: Bladepoint" reached No. 4 on the iOS grossing chart following its September update [3]. - "World of Warcraft" and "Hearthstone" saw significant increases in daily active players after their relaunch in China, with "World of Warcraft" up 50% and "Hearthstone" over 150% [3]. - Youdao achieved its first-ever operating profit in Q3 2024, marking a significant turnaround [3]. Gross Profit and Margins - Gross profit margin for games and related services was 68.8%, down from 70.0% in the previous quarter [5]. - Youdao's gross profit margin improved to 50.2%, while NetEase Cloud Music's margin increased to 32.8% [6][5]. Operating Expenses - Total operating expenses were RMB9.3 billion (US$1.3 billion), a slight decrease of 0.8% year-over-year [2][4]. - Increased marketing expenditures contributed to the quarter-over-quarter rise in operating expenses [6]. Income Tax and Net Income - The effective tax rate for Q3 2024 was 16.1%, slightly up from 14.2% in Q3 2023 [7]. - Non-GAAP net income attributable to shareholders was RMB7.5 billion (US$1.1 billion), down from RMB8.6 billion in Q3 2023 [7]. Cash Position and Dividends - As of September 30, 2024, the company's net cash totaled RMB120.0 billion (US$17.1 billion), an increase from RMB110.9 billion at the end of 2023 [8]. - A dividend of US$0.0870 per share was approved for Q3 2024, payable in December 2024 [9]. Share Repurchase Program - The company has repurchased approximately 18.2 million ADSs for a total cost of US$1.6 billion under its share repurchase program [10].

Group 1 - NetEase is recognized for developing and launching one of the most-played and highest-grossing franchises in the gaming industry [1] - The company has a significant presence in the stock market, attracting attention from investors seeking long-term opportunities [1] - The author emphasizes the importance of informed and disciplined investing to potentially outperform the S&P 500 over time [1]

Core Viewpoint - NetEase, Inc. is set to report its financial results for the third quarter of 2024 on November 14, 2024, before the U.S. markets open [1]. Group 1: Financial Reporting - The earnings teleconference call will occur at 7:00 a.m. Eastern Time on November 14, 2024, with management discussing quarterly results and answering questions [2]. - Interested parties can participate in the conference call by dialing 1-914-202-3258 and providing conference ID: 10042941, 15 minutes prior to the call [3]. - A replay of the call will be available until November 21, 2024, and will also be webcast live for 12 months on NetEase's Investor Relations website [3]. Group 2: Company Overview - NetEase, Inc. is a leading internet and game services provider, known for its premium content and extensive gaming ecosystem [4]. - The company operates some of the most popular mobile and PC games in China and globally, supported by one of the largest in-house game R&D teams [5]. - Beyond gaming, NetEase's services include Youdao, an intelligent learning company, Cloud Music, an online music platform, and Yanxuan, a private label consumer lifestyle brand [6].

HANGZHOU, China, Oct. 23, 2024 /PRNewswire/ -- NetEase Cloud Music, a leading online music platform in China, has joined forces with Kakao Entertainment, a prominent South Korean entertainment company, to premiere new K-POP songs in China. Starting October 24, 2024, NetEase Cloud Music will exclusively feature Kakao Entertainment's latest music releases for the first 30 days concurrent with their global launch. Kakao Entertainment boasts a broad portfolio that spans music, online fiction and comics, film, a ...