Core Insights - NetEase reported Q2 2025 revenue of 27.89 billion yuan, a year-on-year increase of 9.4%, but below market expectations of 28.4 billion yuan [1] - The net profit attributable to shareholders was 8.6 billion yuan, while the adjusted net profit attributable to shareholders was 9.5 billion yuan [1] - Adjusted earnings per ADS from continuing operations were 14.81 yuan, slightly lower than the expected 15.03 yuan [1] Revenue Breakdown - Online gaming services net revenue for Q2 was 22.81 billion yuan, which fell short of the forecasted 23.37 billion yuan [1]

Core Viewpoint - NetEase (NTES.US) experienced a pre-market drop of over 10% following its Q2 earnings report, which showed a net revenue of 27.9 billion yuan, slightly below expectations [1] Financial Performance - Q2 net revenue was 27.9 billion yuan, compared to the forecast of 28.4 billion yuan, representing a year-on-year growth of 9.4% [1] - Net profit attributable to shareholders was 8.6 billion yuan, with adjusted net profit at 9.5 billion yuan [1] - Basic earnings per share were $0.38, while non-GAAP basic earnings per share were $0.42 [1] Segment Performance - Online gaming services generated net revenue of 22.81 billion yuan, falling short of the expected 23.37 billion yuan [1] - Net revenue from NetEase Cloud Music was 2 billion yuan (approximately $274.8 million), marking a decline of 3.5% compared to the same period in 2024 [1]

Summary of Key Points Core Viewpoint - NetEase reported strong financial results for the first quarter, exceeding market expectations in several key metrics, which led to a pre-market stock price increase of over 3% [4]. Financial Performance - Adjusted earnings per ADS for continuing operations were 17.51 RMB, surpassing the estimate of 13.73 RMB [1]. - Online gaming services generated net revenue of 240.5 billion RMB, exceeding the forecast of 230.8 billion RMB [1]. - Gross profit for the quarter was 184.8 billion RMB, higher than the expected 175.7 billion RMB [3]. - The gross profit from online gaming services was 165.5 billion RMB, compared to the estimated 156.1 billion RMB [3]. Other Business Segments - Revenue from innovation and other businesses was reported at 16.2 billion RMB, falling short of the anticipated 18.7 billion RMB [2].