NTES-网易-S(09999) - 2024 - 中期财报

Financial Performance - NetEase's net revenue for Q2 2024 was RMB 25.5 billion ( $3.5 billion), representing a year-over-year increase of 6.1%[3] - Revenue from games and related value-added services reached RMB 20.1 billion ($ 2.8 billion), up 6.7% year-over-year[3] - Youdao's revenue was RMB 1.3 billion ( $181.9 million), reflecting a 9.5% year-over-year increase[3] - Cloud Music generated RMB 2 billion ($ 280.8 million) in revenue, a 4.7% increase year-over-year[3] - Gross profit for Q2 2024 was RMB 16 billion ( $2.2 billion), marking an 11.6% year-over-year increase[3] - Net profit attributable to shareholders was RMB 6.8 billion ($ 930 million), with a non-GAAP net profit of RMB 7.8 billion ( $1.1 billion)[4] - Basic earnings per share were$ 0.29, with a non-GAAP basic earnings per share of $0.33[4] - In Q2 2024, net profit attributable to shareholders was RMB 6.8 billion (USD 930 million), down from RMB 7.6 billion in the previous quarter and RMB 8.2 billion year-over-year[14] - Non-GAAP net profit attributable to shareholders in Q2 2024 was RMB 7.8 billion (USD 1.1 billion), down from RMB 8.5 billion in the previous quarter and RMB 9.0 billion year-over-year[15] - The net profit attributable to shareholders was RMB 8,242,767 thousand, a decrease of 1.5% from RMB 8,350,000 thousand year-over-year[31] - The net profit for the six months ended June 30, 2024, was$ 14,630,956, compared to $14,528,964 in the previous year, indicating a slight increase[35] Operating Metrics - In Q2 2024, the gross margin for games and related value-added services was 70.0%, up from 69.5% in the previous quarter and 67.4% year-over-year[9] - In Q2 2024, Youdao's gross margin was 48.2%, down from 49.0% in the previous quarter but up from 47.0% year-over-year, primarily due to a decline in learning services revenue contribution[9] - In Q2 2024, gross margin for Cloud Music was 32.1%, down from 38.0% in the previous quarter and up from 27.0% year-over-year, affected by a one-time adjustment in copyright fees[9] - The total gross profit margin for the company was 59.9%, compared to 59.5% in the same period last year[27] - The gross profit for the cloud music segment was RMB 525,684 thousand, with a gross margin of 27.0%, compared to 24.7% in the same period last year[27] Expenses and Costs - Total operating expenses in Q2 2024 were RMB 9 billion (USD 1.2 billion), down from RMB 9.4 billion in the previous quarter but up from RMB 8.3 billion year-over-year[11] - The company reported a total operating cost of RMB 9,635,888 thousand, which is a slight increase from RMB 9,443,587 thousand year-over-year[27] - Research and development expenses for the six months ended June 30, 2023, totaled RMB 7,658,639, compared to RMB 8,630,475 for the same period in 2022, a decrease of about 11.3%[25] - R&D expenses increased to RMB 429,892 thousand for the three months ended June 30, 2024, reflecting a 52.3% increase from RMB 282,466 thousand in the same period last year[29] Cash Flow and Investments - As of June 30, 2024, the company had a net cash balance of RMB 116.1 billion (USD 16 billion), up from RMB 110.9 billion at the end of 2023[16] - The company reported a net cash inflow from investing activities of RMB 11,589,514 thousand for the three months ended June 30, 2024, compared to RMB 12,859,889 thousand in the same period of 2023, indicating a decrease of 9.9%[26] - The company’s net cash inflow from operating activities for the three months ended June 30, 2024, was RMB 7,678,405 thousand, compared to RMB 9,557,169 thousand in the same period of 2023, a decrease of 19.6%[26] Shareholder Returns - The company declared a quarterly dividend of USD 0.0870 per share, payable on September 17, 2024, to shareholders of record as of September 6, 2024[17] - The company has repurchased approximately 11.9 million ADS under its buyback plan, totaling about USD 1.1 billion as of June 30, 2024[18] Financial Position - As of June 30, 2024, total assets amounted to RMB 183.34 billion, a decrease from RMB 185.92 billion as of December 31, 2023[24] - Cash and cash equivalents were reported at RMB 18.98 billion, down from RMB 21.43 billion as of December 31, 2023[24] - Total liabilities decreased to RMB 48.99 billion from RMB 57.84 billion as of December 31, 2023, indicating improved financial health[24] - The company’s equity attributable to shareholders increased to RMB 130.91 billion from RMB 124.29 billion, reflecting a growth of approximately 5.3%[24] - Short-term investments rose significantly to RMB 10.42 billion from RMB 4.44 billion, indicating a strategic shift towards liquid assets[24] - The company reported a total current liabilities of RMB 45.93 billion, down from RMB 53.84 billion, showing effective management of short-term obligations[24] - The deferred tax liabilities decreased to RMB 1.45 billion from RMB 2.30 billion, suggesting a positive adjustment in tax planning[24] - The total non-current assets increased to RMB 45.19 billion from RMB 43.23 billion, indicating ongoing investment in long-term growth[24] Tax and Regulatory - The effective tax rate for Q2 2024 was 16.0%, consistent with the previous quarter and up from 8.0% year-over-year[13] - The income tax expense for the six months ended June 30, 2023, was$ (2,340,649), slightly lower than $(2,325,360) in the previous year[34] Market Strategy - The launch of new games, such as "Firefly Assault" and "World of Survival," has significantly boosted user engagement and downloads[5] - Youdao continues to see growth in digital content services and AI subscription services, achieving record operating cash inflow[6] - Cloud Music is enhancing its music ecosystem, focusing on high-quality user experiences and community engagement[6] - The company plans to continue expanding its market presence and investing in new technologies and products to drive future growth[27] Accounting and Reporting - The company emphasized the importance of non-GAAP financial metrics for investors to better understand operational performance and future prospects[23] - The company has made significant adjustments in its financial reporting between US GAAP and IFRS, reflecting important differences in accounting policies[38]