2024-08-22 09:15Financial Performance - Net revenues for Q2 2024 were RMB25.5 billion (US$3.5 billion), a 6.1% increase compared to Q2 2023[1]. - Net revenues from games and related value-added services were RMB20.1 billion (US$2.8 billion), a 6.7% increase year-over-year[26]. - Net income attributable to shareholders was RMB6.8 billion (US$930.0 million), down from RMB7.6 billion in the previous quarter[46]. - Non-GAAP net income attributable to shareholders was RMB7.8 billion (US$1.1 billion), compared to RMB8.5 billion in the previous quarter[47]. - NetEase's total net revenues for the three months ended June 30, 2024, were RMB 25,485,805, representing a decrease of 2.0% compared to RMB 24,011,301 for the same period in 2023[94]. - Net income attributable to the Company's shareholders for the three months ended June 30, 2024, was RMB 6,758,749, down 11.5% from RMB 7,633,946 in the previous quarter[111]. - The company reported a net income of RMB 14,630,956 for the six months ended June 30, 2024, compared to RMB 14,870,009 for the same period last year, indicating a decrease of 1.6%[103]. Revenue Breakdown - Cloud Music net revenues were RMB2.0 billion (US$280.8 million), a 4.7% increase compared to the same quarter of 2023[27]. - Youdao's net revenues were RMB1.3 billion (US$181.9 million), a 9.5% increase year-over-year[2]. - The gaming segment generated RMB 20,055,819 in revenues for the three months ended June 30, 2024, compared to RMB 18,798,646 for the same period in 2023, indicating a growth of 6.7%[94]. - Youdao's revenues for the three months ended June 30, 2024, were RMB 1,321,721, a decrease from RMB 1,206,634 in June 2023[94]. - Cloud Music's revenues increased to RMB 2,040,952 for the three months ended June 30, 2024, compared to RMB 1,948,539 for the same period in 2023, reflecting a growth of 4.7%[94]. Profitability Metrics - Gross profit for Q2 2024 was RMB16.0 billion (US$2.2 billion), an 11.6% increase year-over-year[28]. - The gross profit margin for games and related services was 70.0%, up from 67.4% in Q2 2023[42]. - The gross profit for the same period was RMB 16,042,218, with a gross profit margin of 70.0%, up from 67.4% in June 2023[94]. - Operating profit for the three months ended June 30, 2024, was RMB 6,993,323, reflecting a decrease of 8.2% from RMB 7,622,483 in the previous quarter[103]. - Non-GAAP net income attributable to the Company's shareholders for the three months ended June 30, 2024, was RMB 7,818,638, a decrease of 8.1% compared to RMB 8,510,844 in the previous quarter[111]. Cash Flow and Dividends - The company’s cash flows from operating activities for the six months ended June 30, 2024, were RMB 14,870,009 thousand, compared to RMB 14,630,956 thousand for the same period in 2023, indicating a slight increase[64]. - As of June 30, 2024, approximately 11.9 million ADSs had been repurchased under the share repurchase program, costing a total of US$1.1 billion[78]. - The company paid a dividend of US$0.0990 per share (US$0.4950 per ADS) for Q1 2024 in June 2024[76]. - The board approved a dividend of US$0.0870 per share for Q2 2024, payable on September 17, 2024[49]. Assets and Liabilities - Total assets as of June 30, 2024, were RMB 183,342,621, a slight decrease from RMB 185,924,978 as of December 31, 2023[89]. - Current liabilities decreased to RMB 45,927,895 as of June 30, 2024, compared to RMB 53,842,484 as of December 31, 2023, reflecting a reduction of approximately 14.7%[89]. - NetEase's shareholders' equity increased to RMB 130,909,906 as of June 30, 2024, up from RMB 124,285,776 as of December 31, 2023[89]. - Cash and cash equivalents decreased to RMB 18,982,239 as of June 30, 2024, down from RMB 21,428,902 as of December 31, 2023[89]. - Net cash provided by operating activities for the six months ended June 30, 2024, was RMB 16,089,000 thousand, compared to RMB 13,679,076 thousand for the same period in 2023, showing an increase[64]. Research and Development - Research and development expenses for the three months ended June 30, 2024, were RMB 4,455,717, an increase of 6.4% from RMB 4,174,758 in the previous quarter[103]. - Total operating expenses for the three months ended June 30, 2024, were RMB 9,048,895, an increase of 7% compared to RMB 9,393,437 in the previous quarter[103]. Market Outlook - The company anticipates continued growth in its gaming ecosystem and plans to expand its international operations despite potential market risks[83].