网易云音乐(09899) - 2025 - 中期业绩

Performance Summary Key Financial Indicators In H1 2025, total revenue decreased by 6.0% to RMB 3.83 billion, while operating profit rose 40.8% to RMB 840 million and profit for the period surged 132.4% to RMB 1.88 billion, primarily due to a deferred tax credit, with adjusted net profit increasing 121.0% to RMB 1.95 billion Financial Summary for the Six Months Ended June 30, 2025 | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,827,117 | 4,070,493 | -6.0% | | Gross Profit | 1,392,485 | 1,425,731 | -2.3% | | Operating Profit | 844,506 | 599,933 | +40.8% | | Profit for the Period | 1,882,142 | 809,949 | +132.4% | | Adjusted Net Profit | 1,946,353 | 880,749 | +121.0% | - The significant increase in profit for the period was primarily due to the recognition of a deferred income tax credit of RMB 849 million, arising from a wholly-owned subsidiary's tax losses carried forward[3][22] Non-IFRS Measures Explanation The company utilizes adjusted operating profit and adjusted net profit as supplementary financial measures to exclude non-cash items, aiming to better reflect core operating performance and enable comparative analysis, with a reminder that these metrics should not replace IFRS-reported results - The company uses non-IFRS measures, such as adjusted operating profit and adjusted net profit, to eliminate the impact of certain non-cash items like share-based compensation expenses, providing a clearer view of operating performance[4] Management Discussion and Analysis Business Review and Outlook In H1 2025, the company focused on high-quality development of its core music ecosystem, enhancing user stickiness with DAU/MAU ratio stable above 30%, while member subscription revenue grew 15.2%, boosting gross margin to 36.4%, with future strategies centered on deepening content, product innovation, and community building to improve user monetization and profitability - User engagement metrics improved, with the daily active users to monthly active users ratio stable above 30%, and increased listening time on mobile devices[6] - Member subscription revenue increased by 15.2% year-over-year, primarily driven by the expansion of the subscriber base[8] - Gross margin improved from 35.0% in the prior period to 36.4%, benefiting from business scale expansion, strong monetization, and cost optimization[8][22] - Future strategic priorities include expanding differentiated content, optimizing user experience, fostering community ecosystems, enhancing user monetization, and continuously optimizing costs[9][11] Detailed Core Strategies The company made significant progress in core strategy execution, expanding its copyrighted music library through collaborations with Korean labels and Chinese artists, fostering an independent musician ecosystem with over 819,000 registered artists, and enhancing user experience through product innovations like 'Shenguang Player' and extending services to multi-terminal scenarios including in-car systems - Expanded copyrighted content through collaborations with Korean labels RBW and StarShip Entertainment, and renowned Chinese musicians such as Li Jian and Lay Zhang[10] - As of June 2025, the platform had over 819,000 registered independent musicians who uploaded approximately 4.8 million music tracks[12] - Self-produced rap tracks like 'Dilemma' and 'Mochouxiang' gained market popularity, demonstrating the company's strength in unique content creation[15] - Enhanced user experience through product innovations, such as launching the 'Shenguang Player' to improve audio-visual enjoyment, and expanding music consumption scenarios to in-car systems of brands like Jetour and Lynk & Co[20][21] Financial Review Financial Performance Overview During the reporting period, total revenue was RMB 3.83 billion, gross profit was RMB 1.39 billion, and gross margin expanded from 35.0% to 36.4%, with operating profit increasing to RMB 840 million primarily due to reduced promotion and advertising expenses, while net profit reached RMB 1.88 billion, up 132.4%, including RMB 849 million in deferred tax credits, and adjusted net profit was RMB 1.95 billion, up 121.0% - Gross margin expanded from 35.0% in the prior period to 36.4%, primarily due to increased online music service revenue and improved operational efficiency[22] - Operating profit increased from RMB 600 million to RMB 840 million, mainly due to a more prudent promotion strategy resulting in reduced promotion and advertising expenses[22] - Net profit significantly increased from RMB 810 million to RMB 1.88 billion, primarily due to the recognition of RMB 849 million in deferred income tax assets[22] Revenue Analysis Total revenue decreased by 6.0% year-over-year, primarily due to a significant 43.1% decline in social entertainment services and other revenue resulting from a prudent operating strategy, while core online music service revenue showed strong performance, growing 15.9% to RMB 2.97 billion, with member subscription services being a key driver, reflecting healthy core business growth Revenue Composition (For the Six Months Ended June 30) | Revenue Category | 2025 (RMB millions) | 2024 (RMB millions) | YoY Change | | :--- | :--- | :--- | :--- | | Online Music Services | 2,967.3 | 2,559.7 | +15.9% | | Social Entertainment Services and Others | 859.8 | 1,510.8 | -43.1% | | Total | 3,827.1 | 4,070.5 | -6.0% | - Member subscription service revenue within online music services increased from RMB 2.14 billion to RMB 2.47 billion, serving as the primary driver for online music service growth[23] Cost and Expense Analysis The company achieved significant cost control, with operating costs decreasing by 7.9% year-over-year, primarily due to reduced revenue sharing fees from lower social entertainment revenue, while sales and marketing expenses sharply declined by 55.8% reflecting a more prudent promotion strategy, and R&D expenses slightly decreased by 4.2%, indicating improved operational efficiency - Operating costs decreased by 7.9% year-over-year to RMB 2.43 billion, primarily due to reduced revenue sharing fees as social entertainment service revenue declined[24] - Sales and marketing expenses significantly decreased by 55.8% year-over-year to RMB 163 million, mainly due to reduced promotion and advertising expenses[26] - Research and development expenses decreased by 4.2% year-over-year to RMB 379 million, primarily due to improved operational efficiency from enhanced utilization of technological resources[28] Non-IFRS Measures Reconciliation During the reporting period, adjusted operating profit was RMB 905 million, up 35.0% year-over-year, and adjusted net profit was RMB 1.946 billion, up 121.0%, with these adjustments primarily excluding the impact of approximately RMB 60.85 million in share-based compensation expenses (non-cash items) Reconciliation of Operating Profit and Net Profit to Adjusted Measures (For the Six Months Ended June 30) | Indicator (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Operating Profit | 844,506 | 599,933 | | Add: Share-based compensation expenses | 60,854 | 70,917 | | Adjusted Operating Profit | 905,360 | 670,850 | | Profit for the period attributable to equity holders of the Company | 1,885,499 | 809,832 | | Add: Share-based compensation expenses | 60,854 | 70,917 | | Adjusted Net Profit | 1,946,353 | 880,749 | Unaudited Consolidated Financial Statements Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the company reported revenue of RMB 3.83 billion, gross profit of RMB 1.39 billion, operating profit of RMB 840 million, and profit for the period of RMB 1.88 billion, with basic earnings per share attributable to equity holders of the company at RMB 8.96 and diluted earnings per share at RMB 8.85, representing significant growth from the prior period Key Data from Consolidated Statement of Comprehensive Income (For the Six Months Ended June 30) | Indicator (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 3,827,117 | 4,070,493 | | Gross Profit | 1,392,485 | 1,425,731 | | Operating Profit | 844,506 | 599,933 | | Profit for the Period | 1,882,142 | 809,949 | | Basic Earnings Per Share (RMB) | 8.96 | 3.88 | | Diluted Earnings Per Share (RMB) | 8.85 | 3.84 | Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets increased to RMB 15.29 billion, total liabilities decreased to RMB 3.17 billion, and total equity rose to RMB 12.12 billion, indicating a robust financial position, with asset growth primarily driven by the recognition of RMB 849 million in deferred income tax assets and increased bank deposits, and cash and cash equivalents at RMB 2.08 billion Summary of Consolidated Statement of Financial Position | Indicator (RMB thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current Assets | 2,475,532 | 1,630,064 | | Current Assets | 12,811,898 | 11,952,185 | | Total Assets | 15,287,430 | 13,582,249 | | Current Liabilities | 3,068,883 | 3,312,085 | | Total Liabilities | 3,170,808 | 3,400,736 | | Total Equity | 12,116,622 | 10,181,513 | - Non-current assets significantly increased, primarily due to the addition of RMB 849 million in deferred income tax assets[39] Notes to Financial Statements Revenue and Segment Information The company's revenue primarily derives from online music services and social entertainment services and others, with online music service revenue at RMB 2.97 billion and social entertainment services and other revenue at RMB 860 million during the reporting period, operating as a single segment with most revenue and non-current assets from China, and having one major customer A contributing over 10% of total revenue - The company's business is operated and managed as a single segment, thus no separate segment information is presented[47] - In H1 2025, customer A contributed RMB 501 million in revenue, accounting for 13.1% of total revenue, becoming a major customer[49] Taxation During the reporting period, the company recorded an income tax credit of RMB 814 million, compared to an expense of RMB 3.63 million in the prior period, primarily due to the recognition of RMB 849 million in deferred tax assets for a wholly-owned subsidiary's accumulated tax losses, and also recognized a top-up tax expense of RMB 30.7 million under OECD Pillar Two rules - The company recorded a total income tax credit of RMB 814 million, primarily from the recognition of RMB 849 million in deferred income tax assets[51][56] - Due to the implementation of Pillar Two rules in Hong Kong, the Group recognized a top-up tax expense of RMB 30.7 million to ensure the effective tax rate is not lower than the 15% global minimum tax rate[55] Earnings Per Share Earnings per share significantly improved due to substantial net profit growth, with basic earnings per share at RMB 8.96 for the six months ended June 30, 2025, a significant increase from RMB 3.88 in the prior period, and diluted earnings per share at RMB 8.85, higher than RMB 3.84 in the prior period Earnings Per Share Calculation | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic Earnings Per Share (RMB) | 8.96 | 3.88 | | Diluted Earnings Per Share (RMB) | 8.85 | 3.84 | Corporate Governance and Other Information Compliance with Corporate Governance Code The company complied with all applicable provisions of the Corporate Governance Code during the reporting period, with one deviation: Mr. Ding Lei holds both Chairman and CEO roles, which the Board believes ensures consistent leadership and efficient strategic planning, with all major decisions made in consultation with the Board, including independent non-executive directors, without compromising power balance - The company deviates from Code Provision C.2.1 of the Corporate Governance Code, as the roles of Chairman and Chief Executive Officer are held by the same individual, Mr. Ding Lei[65] - The Board believes that Mr. Ding Lei's dual role ensures leadership stability and decision-making efficiency, with power balance safeguarded through collective Board decisions[65] Use of Proceeds and Dividends As of June 30, 2025, approximately HKD 3.16 billion in net proceeds from the company's December 2021 global offering remained unutilized, held as short-term bank deposits, and are expected to be deployed within the next 18 months, while the Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - Approximately HKD 3.16 billion in net proceeds from the 2021 global offering remained unutilized as of the end of the reporting period, expected to be deployed within the next 18 months[68] - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[69]