Core Viewpoint - GDEV Inc. reported a decline in revenue for Q3 2025, primarily due to reduced consumer spending, while achieving a significant increase in profit and adjusted EBITDA compared to the same period in 2024 [3][9]. Financial Performance Summary - Revenue for Q3 2025 was $98 million, a decrease of 12% from $111 million in Q3 2024 [2][9]. - Platform commissions fell by $3 million (13%) to $21 million in Q3 2025 compared to Q3 2024 [4]. - Game operation costs remained stable at $14 million in Q3 2025, slightly up from $13 million in Q3 2024 [4]. - Selling and marketing expenses decreased significantly by 43% to $30 million in Q3 2025 from $52 million in Q3 2024 [5][9]. - General and administrative expenses were stable at $8 million in Q3 2025, compared to $7 million in Q3 2024 [6]. - Profit for the period, net of tax, increased to $24 million in Q3 2025 from $15 million in Q3 2024, marking a 66% increase [7][9]. - Adjusted EBITDA rose to $26 million in Q3 2025, up from $17 million in Q3 2024, representing a 50% increase [7][9]. - Cash flows from operating activities were positive at $15 million in Q3 2025, compared to $12 million in Q3 2024, reflecting a 24% increase [8]. Operational Performance Summary - Total bookings in Q3 2025 were $90 million, down 4% from $93 million in Q3 2024 [10]. - Bookings from in-app purchases decreased by 3% to $85 million in Q3 2025, while bookings from advertising fell by 18% to $5 million [10]. - Monthly paying users (MPU) decreased by 16% to 263,000 in Q3 2025 compared to 314,000 in Q3 2024 [10]. - Average Booking Per Paying User (ABPPU) increased by 16% to $107 in Q3 2025 from $92 in Q3 2024 [10]. - The share of advertising as a percentage of total bookings decreased to 6.0% in Q3 2025 from 7.1% in Q3 2024 [11]. - The split of bookings by platform showed a decrease in mobile share to 59% and an increase in PC share to 41% in Q3 2025 compared to the same period in 2024 [12]. - Geographically, the share of bookings from the US decreased to 32%, while Europe increased to 34% in Q3 2025 compared to Q3 2024 [13].

Core Viewpoint - In Q3 2025, NetEase's net revenue was 28.4 billion yuan, representing a year-over-year increase of 8.2%, but falling short of Bloomberg's consensus estimate of 29.2 billion yuan [1] Group 1: Financial Performance - Game and related value-added services net revenue was 23.3 billion yuan, up 11.8% year-over-year, but below the expected 23.9 billion yuan [1] - Youdao's net revenue reached 1.6 billion yuan, reflecting a year-over-year increase of 3.6% [1] - NetEase Cloud Music's net revenue was 2 billion yuan, down 1.8% year-over-year [1] - Innovative and other businesses generated net revenue of 1.4 billion yuan, a decline of 18.9% year-over-year [1] - Gross profit for Q3 was 18.2 billion yuan, up 10.3% year-over-year [1] - GaaP net profit was 8.6 billion yuan, with adjusted net profit at 9.5 billion yuan, aligning with consensus expectations [1] Group 2: Game Performance - The performance of games remained robust, with a strong pipeline for future development [2] - The peak concurrent player count for "Fantasy Westward Journey" PC version reached 3.58 million, setting a new record [2] - New games such as "Destiny: Stars," "Infinite," and "Yuan Yun Sixteen Sounds" have been launched, enriching the global product matrix [2] - The upcoming game "Forgotten Sea" is expected to launch in 2026, with preparations underway [2] Group 3: Youdao and Cloud Music - Youdao's profitability improved, with net revenue growth driven by increases in smart hardware and online marketing services [2] - NetEase Cloud Music continues to focus on high-quality development of its music-centric ecosystem, despite a slight revenue decline [2] Group 4: Innovation and Other Businesses - The innovative and other businesses segment saw a significant revenue decline, primarily due to reduced income from NetEase Yanxuan and increased internal transaction offsets [2]

Group 1: Performance Overview - The company maintained a "Buy" rating, reporting a robust Q3 performance with revenue of 28.4 billion yuan (up 8.2% YoY, up 1.7% QoQ) and net profit of 8.6 billion yuan (up 31.8% YoY, up 0.2% QoQ) [1] - Gross margin for Q3 was 64.1% (up 1.2 percentage points YoY), and net margin was 31.0% (up 5.4 percentage points YoY), driven by gains from stock investments and lower foreign exchange losses [1] - The company expects net profit for 2025-2027 to be 35.7 billion, 38.3 billion, and 42.9 billion yuan respectively, with current PE ratios of 16.6, 15.5, and 13.8 times [1] Group 2: Gaming and New Releases - Revenue from games and related services reached 23.3 billion yuan (up 11.8% YoY, up 2.3% QoQ), with growth attributed to titles like "Dream of the Red Chamber" and new releases [1] - The peak concurrent online users for "Dream of the Red Chamber" reached 3.58 million, showcasing the company's long-term operational strength [1] - The overseas product lineup is expanding, with "Fate: Stars" topping iOS download charts in multiple regions and "Yanyun Sixteen Sounds" achieving over 2 million players in 24 hours [1] Group 3: AI and Revenue Growth - Cloud Music reported Q3 revenue of 1.96 billion yuan, with a gross margin increase of 2.6 percentage points to 35.4%, driven by the launch of "AI Tuning Master" [2] - Youdao's revenue for Q3 was 1.63 billion yuan, primarily from online marketing services, with a YoY growth exceeding 40% [2] - AI-driven subscription service revenue reached approximately 100 million yuan, marking a historical high with over 40% YoY growth [2]

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Core Insights - NetEase's Q3 revenue growth is primarily driven by its gaming segment, with a net income of 28.4 billion yuan, representing an 8.2% year-over-year increase [1] - The company's net profit attributable to shareholders reached 8.6 billion yuan, up 32% year-over-year, while the non-GAAP net profit was 9.5 billion yuan, reflecting a 26.7% increase [1] Revenue Breakdown - The gaming and related value-added services segment generated 23.3 billion yuan in revenue, marking an 11.8% year-over-year increase [1] - Online gaming revenue accounted for approximately 97.6% of this segment's total revenue, indicating strong performance in this area [1] Game Performance - Key contributors to the online gaming revenue growth include classic IPs such as "Fantasy Westward Journey" and "Party of Eggs," as well as newly launched self-developed games like "Yanyun Sixteen Sounds" and "Marvel Showdown" [3] - The peak concurrent users for "Fantasy Westward Journey" reached 3.58 million on November 2, marking the fourth record high since the launch of the smooth play server in July [3] Management Changes - Recent high-level executive departures have raised concerns, but management asserts that these changes are part of normal organizational adjustments and do not impact daily operations [3] - The departure of key figures, such as the head of the tenth division of NetEase Interactive Entertainment, has been attributed to personal career development plans [3] Strategic Focus - NetEase is shifting its focus towards existing successful products rather than spreading resources thin on uncertain new projects, as indicated by management's response to inquiries about the reduced number of game releases [5] - The company is enhancing its capabilities in creating blockbuster games, suggesting a reduced reliance on foreign talent [6] Competitive Landscape - Both NetEase and Tencent are expanding in overseas markets to avoid intense competition in the domestic market, with Tencent reporting a 43% year-over-year growth in international game revenue, which now accounts for 33% of its total gaming revenue [5][8] - The internal competition within NetEase is expected to lead to a natural selection process, reflecting the company's desire for new blockbuster game categories [10]

Core Insights - NetEase-S reported a net income of RMB 28.4 billion (USD 4 billion) for Q3 2025, representing an 8.2% year-on-year increase [1] - Gross profit reached RMB 18.2 billion (USD 2.6 billion), up 10.3% year-on-year [1] - Net profit attributable to shareholders was approximately RMB 8.616 billion (USD 1.2 billion), reflecting a 31.77% year-on-year growth [1] Revenue Breakdown - Revenue from games and related value-added services for Q3 2025 was RMB 23.3 billion (USD 3.3 billion), compared to RMB 22.8 billion in the previous quarter and RMB 20.9 billion in the same quarter last year [1] - Online games accounted for approximately 97.6% of the segment's net revenue, showing a slight increase from 97.1% in the previous quarter and 96.8% year-on-year [1] - The growth in online game revenue was driven by self-developed games such as "Dream of the Red Chamber" PC and "Nirvana in Fire" mobile, as well as several agency games [1] Product Performance - The performance of "Dream of the Red Chamber" PC and mobile games, along with "Party of Eggs," was strong during the summer, showcasing the company's long-standing game operation capabilities [2] - The company plans to allocate more resources to evergreen projects and provide opportunities for innovative teams [2] - Upcoming new games include "Forgotten Sea," set to launch in 2026, with additional titles like "Infinite" and "Return to Tang" in the pipeline [2]

Investment Rating - The investment rating for Kingnet is "Buy" with a target price of Rmb31, indicating an expected share price return of 47.1% and a total expected return of 48.5% [3][8]. Core Insights - Kingnet's monetization potential through the 996 Game Center is significant, with a current daily active user (DAU) count of 450K and a target of 500K DAU by year-end. The company plans to diversify revenue streams through partnerships with larger publishers and new monetization methods such as live-streaming and cloud gaming services [2][3]. - The company is actively pursuing AI initiatives, with the EVE tool set to launch its second testing phase soon, and the AI game development tool Soon showing early customer adoption. Kingnet aims to position itself as a comprehensive game publisher and service platform [5][6]. - Kingnet's game pipeline includes innovative genres and partnerships with well-known IPs, focusing on both domestic and international markets. The company is selective in licensing new IPs to enhance market share [6][7]. Summary by Sections 1. Monetization Potential - Kingnet's 996 Game Center is expected to expand its market share and revenue through various monetization strategies, including ads, live-streaming, and secondary item trading. The management anticipates improved margins due to user base expansion and diversified revenue streams [2][3]. 2. AI Initiatives - The EVE AI tool is on track for a launch by year-end, with ongoing testing focused on technical optimizations. Kingnet's AI game development tool, Soon, is gaining traction among long-tail developers, indicating a positive outlook for future AI products [5][6]. 3. Game Pipeline - Kingnet is set to beta test new games based on popular IPs and is focusing on developing Wuxia RPGs from renowned authors. The company is strategically licensing innovative IPs to strengthen its market position [6][7].

Summary of the Conference Call for NetEase Company Overview - **Company**: NetEase - **Industry**: Online Gaming and Entertainment Key Points and Arguments Financial Performance - In Q3 2025, NetEase reported total revenue of **RMB 28.4 billion**, a year-on-year increase of **8%** [3][14] - Online gaming revenue reached **RMB 22.8 billion**, growing by **13%** year-on-year [3][14] - Gross margin improved to **64.1%**, reflecting a strong performance in PC gaming [14] New Game Launches and Market Performance - NetEase launched several new games in Q3, including a free mobile sci-fi RPG that topped the iOS download charts in the US and other major Western markets [2][4] - The game "Marvel Rivals" ranked **3rd** on the Steam global sales chart after its update [4] - "Tianyi" achieved a peak concurrent user count of **190,000** on Steam within two days of launch [5] Innovation and Product Development - NetEase is enhancing its product lineup through innovation and collaboration, such as new scenes and PVP reforms in "Humanity" and AI-driven NPCs in "Justice" [2][6] - The company continues to revitalize its flagship title "Fantasy Westward Journey Online" with new features like unlimited servers, leading to record high concurrent player accounts [7][15] Community Engagement and Events - Significant community engagement was noted, with collaborations like the one with the Palace Museum and anniversary events for games like "Eggie Party," which saw daily active users surpass **30 million** [8] - The anniversary event for "All-My-Ogi" entered the top ten in iOS revenue in China [8] Future Strategies - NetEase plans to focus on innovation, international market expansion, and community engagement, with intentions to showcase new titles at major international events [9][16] - The company aims to optimize existing products and develop new projects to provide unique experiences for global players [9][16] Competitive Landscape and Market Trends - The company is leveraging AI technology in game development and operations, aiming to enhance user experience and stand out in rapidly growing genres like shooting games [22][23] - NetEase is reducing the number of new game launches annually, focusing instead on refining successful products [21] Upcoming Projects - The game "Ananta" was showcased at the Tokyo Game Show and received recognition as a promising upcoming title [19] - "Forgotten Sea," a new game, is in development with a unique commercial strategy aimed at differentiating it in the market [24] Additional Important Insights - The company has extended its share repurchase program of up to **$5 billion** until January 9, 2029, with approximately **22.1 million** American Depositary Shares repurchased at a cost of about **$2 billion** as of September [14] - The competitive landscape in China is evolving, with NetEase adapting its strategies to maintain its market position and respond to user demands [18]

Core Viewpoint - NetEase-S reported a strong performance in Q3 2025, with significant year-on-year growth in net income and net profit, driven primarily by its gaming segment [1][2] Financial Performance - Net income for Q3 2025 reached RMB 28.4 billion (USD 4 billion), an increase of 8.2% year-on-year [1] - Gross profit was RMB 18.2 billion (USD 2.6 billion), reflecting a year-on-year growth of 10.3% [1] - Net profit attributable to shareholders was approximately RMB 8.616 billion (USD 1.2 billion), marking a year-on-year increase of 31.77% [1] - Basic earnings per share stood at USD 0.38, with a quarterly dividend of USD 0.1140 per share [1] Gaming Segment Performance - Net income from gaming and related value-added services was RMB 23.3 billion (USD 3.3 billion), compared to RMB 22.8 billion in the previous quarter and RMB 20.9 billion in the same quarter last year [1] - Online gaming revenue accounted for approximately 97.6% of the gaming segment's net income, up from 97.1% in the previous quarter and 96.8% year-on-year [1] - Growth in online gaming revenue was driven by self-developed games such as "Dream of Jianghu" PC and "Nirvana in Fire" mobile games, as well as several licensed games [1] Future Outlook - The company plans to allocate more resources to evergreen projects and provide opportunities for innovative teams [2] - Upcoming game "Forgotten Sea" is set to launch in 2026, with additional titles like "Infinite" and "Return to Tang" in the pipeline [2] - Focus on enhancing the global capabilities of local teams and monitoring the progress of key new games [2]

Group 1: Game Releases and Updates - MiHoYo and HoYoverse have unveiled a 31-minute gameplay demonstration of their flagship new title "Varsapura," showcasing its immersive experience and unique design [1] - The action mobile game "Bleach: Immortal Souls" developed by ACG has officially launched on all platforms, emphasizing the original storyline and 3D combat [3] - The highly anticipated hardcore shooter "Escape from Tarkov" has received negative reviews post-launch on Steam, with a current positive rating of only 8% in the simplified Chinese region due to performance issues and server problems [5][7] Group 2: Industry Developments - Beijing's Haidian District has released measures to promote high-quality development in the gaming and esports industries, offering up to 20 million yuan in rewards for outstanding game projects [10] - Unity and Epic Games have announced a historic collaboration, allowing Unity editors to directly publish game projects to Epic's "Fortnite" platform, enhancing cross-platform capabilities [11] - Tencent has completed a strategic investment of 1.16 billion euros in Ubisoft Nova SAS, valuing the studio at 3.8 billion euros, which oversees major game franchises like "Assassin's Creed" and "Rainbow Six" [12]