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NETEASE INC(9999.HK):2Q25 MIXED; SUCCESSFUL SUMMER CAMPAIGNS
Ge Long Hui· 2025-08-16 10:46
Core Insights - The company reported a 9% YoY growth in total revenue to RMB27.9 billion, which was 2% below consensus expectations [3] - Operating profit increased by 30% YoY to RMB9.1 billion, also missing consensus by 1% [1] - Cash revenue reached RMB21.2 billion, reflecting a 20% YoY increase and beating forecasts by 3%, indicating successful summer campaigns [1] Financial Performance - Core online game revenue grew 15% YoY to RMB22.1 billion, slightly below consensus estimates [3] - Gross profit margin expanded to 64.7%, exceeding the consensus of 63.4% [3] - The company has a deferred revenue of RMB16.1 billion, which is a 28% YoY increase [3] Strategic Initiatives - The company is focusing on rejuvenating existing game portfolios and improving operational efficiency, prioritizing quality over quantity in game development [1] - Successful summer campaigns for key franchises such as Marvel Rivals and Where Winds Meet were highlighted, supported by strong operational capabilities [1] - Upcoming game launches include Destiny Rising and Diablo II, with a focus on cross-terminal global launches [1] Operational Adjustments - The company has streamlined its game development and marketing operations, leading to improved efficiency [1] - Significant increases in operating expenses (opex) by 6-8% were noted, particularly in sales and marketing (S&M) estimates, which were raised by 10-14% [2] Valuation and Outlook - The target price has been uplifted to US$153/HK$240 based on adjusted earnings per share and net cash [3] - The company has repurchased approximately 0.5 million shares and has a remaining buyback quota of US$3.0 billion until January 2026 [3]
NTES(NTES) - 2025 Q2 - Earnings Call Presentation
2025-08-14 12:00
Financial Performance - NetEase's market capitalization was $854 billion as of August 13, 2025[9] - Net revenues for 2Q25 reached $39 billion[9] - Net income attributable to the company's shareholders for 2Q25 was $12 billion[9] - Basic net income per ADS (GAAP) for 2Q25 was $188[9] - Net cash as of June 30, 2025, amounted to $198 billion[9] Revenue Breakdown (2Q25) - Games and related value-added services generated $3184 million in net revenues[12] - Youdao's net revenues were $198 million[20] - NetEase Cloud Music's net revenues reached $275 million[23] - Innovative businesses and others contributed $237 million in net revenues[26] Games Performance - Online games accounted for 97% of games and related value-added services revenue in 2Q25[12] - Fantasy Westward Journey Online reached over 293 million peak concurrent players in August[18] ESG Ratings - NetEase received an AA rating from MSCI[9, 40] - NetEase's Sustainalytics rating indicates a low-risk company[40]
NetEase Announces Second Quarter 2025 Unaudited Financial Results
Prnewswire· 2025-08-14 08:30
Core Viewpoint - NetEase, Inc. reported its unaudited financial results for the second quarter of 2025, highlighting a slight decrease in net revenues compared to the previous quarter, but a year-over-year increase, driven primarily by growth in its gaming segment and new game launches [1][2]. Financial Highlights - Net revenues for Q2 2025 were RMB27.9 billion (US$3.9 billion), a decrease of 3.1% from RMB28.8 billion in Q1 2025 but an increase of 9.4% from RMB25.5 billion in Q2 2024 [7][14]. - Net revenues from games and related services were RMB22.8 billion (US$3.2 billion), down 5.0% from RMB24.0 billion in Q1 2025 but up 13.7% from RMB20.1 billion in Q2 2024 [8][14]. - Net income attributable to shareholders was RMB8.6 billion (US$1.2 billion), down from RMB10.3 billion in Q1 2025 but up from RMB6.8 billion in Q2 2024 [17][18]. - Non-GAAP net income attributable to shareholders was RMB9.5 billion (US$1.3 billion), compared to RMB11.2 billion in Q1 2025 and RMB7.8 billion in Q2 2024 [18][19]. Operational Highlights - The company emphasized its commitment to product innovation and community engagement, which are seen as key drivers for future growth [5][6]. - New game launches, including "FragPunk," "Dunk City Dynasty," and "MARVEL Mystic Mayhem," achieved significant rankings in download charts across various platforms [14]. - Established franchises like "Sword of Justice" and "Identity V" maintained strong player engagement, contributing to the overall performance [14]. Segment Performance - Youdao's net revenues were RMB1.4 billion (US$197.9 million), showing a slight increase from both the previous quarter and the same quarter last year [9]. - NetEase Cloud Music generated RMB2.0 billion (US$274.8 million), remaining stable compared to Q1 2025 but slightly down from Q2 2024 [10]. - Innovative businesses and others reported RMB1.7 billion (US$237.2 million), reflecting a quarter-over-quarter increase but a year-over-year decrease [11]. Cost and Profitability - Cost of revenues for Q2 2025 was RMB9.8 billion (US$1.4 billion), a decrease from RMB10.3 billion in Q1 2025 [12]. - Gross profit was RMB18.1 billion (US$2.5 billion), an increase of 12.5% compared to Q2 2024 [13]. - Total operating expenses were RMB9.0 billion (US$1.3 billion), showing a slight decrease from the same quarter last year [14]. Cash Flow and Financial Position - As of June 30, 2025, the company's net cash totaled RMB142.1 billion (US$19.8 billion), an increase from RMB131.5 billion at the end of 2024 [20]. - Net cash provided by operating activities was RMB10.9 billion (US$1.5 billion) for Q2 2025, down from RMB12.1 billion in Q1 2025 [20]. Dividend and Share Repurchase - The board approved a dividend of US$0.1140 per share for Q2 2025, payable in September 2025 [21]. - The company has repurchased approximately 22.1 million ADSs for a total cost of US$2.0 billion under its share repurchase program [23].
NTES Set to Report Q2 Earnings: What's in Store for the Stock?
ZACKS· 2025-08-12 16:46
Core Insights - NetEase (NTES) is set to announce its second-quarter 2025 results on August 14, with revenue expectations of $3.86 billion, reflecting a 10.02% year-over-year growth [1] - The consensus estimate for earnings per share (EPS) is $2.04, an increase of 2 cents over the past month, compared to $1.66 in the same quarter last year [1][9] - NTES has exceeded earnings expectations in three of the last four quarters, with an average surprise of 9.17% [2] Revenue Drivers - The anticipated growth in Q2 2025 is attributed to strong gaming revenues and successful global launches, building on the momentum from Q1 [3] - Key titles such as Marvel Rivals, FragPunk, and Once Human are expected to contribute significantly to revenue, with Marvel Rivals maintaining high engagement after its Season 2 update [4][9] - Established titles like Where Winds Meet and Identity V are also projected to provide stable contributions, supported by ongoing content releases and regional expansions [5] Challenges - Despite the positive outlook, certain segments are expected to face challenges, particularly Youdao's learning services and NetEase Cloud Music, which may continue to struggle with revenue pressures [6] - The innovative businesses segment, including the Yanxuan e-commerce platform, is likely to experience intensified competition, impacting revenue growth [6] Earnings Expectations - The Zacks model indicates that NTES currently has an Earnings ESP of -0.25% and a Zacks Rank of 2 (Buy), suggesting a lower likelihood of an earnings beat compared to previous quarters [7]
网易:2025 年第一季度业绩速览 —— 第一季度表现出色,游戏收入和利润率超预期
2025-05-18 14:09
Summary of NetEase Q1 2025 Earnings Call Company Overview - **Company**: NetEase - **Industry**: Internet Services, specifically online gaming and related services in China - **Market Cap**: US$68.7 billion as of 14 May 2025 - **12-month Rating**: Buy with a price target of US$133.00 Key Financial Highlights - **Q1 2025 Revenue**: - Total revenues reached Rmb 28,829 million, a 7.4% year-over-year (YoY) growth, exceeding UBS estimates by 1.8% and consensus by 1.1% [2][10] - Core game revenue grew 15% YoY, significantly up from 5% YoY in Q4 2024, beating estimates by 5% [2][10] - **Gross Profit Margin (GPM)**: - GPM was 64.1%, surpassing estimates by 340 basis points (bps) [10] - Game-related services GPM was 68.8%, indicating strong performance in this segment [10] - **Operating Income**: - GAAP operating income was Rmb 10,441 million, a 35% increase YoY, with an operating margin of 36.2% [10] - Non-GAAP operating income was Rmb 11,377 million, a 30% increase YoY, with a margin of 39.5% [10] - **Net Income**: - GAAP net income was Rmb 10,301 million, a 35.6% increase YoY, with a net margin of 35.7% [10] - Non-GAAP net income was Rmb 11,237 million, a 30.4% increase YoY, with a net margin of 39.0% [10] Strategic Insights - **Deferred Revenue**: - Deferred revenue grew 19% YoY, indicating potential for further growth in game revenue [3] - **Upcoming Titles**: - New game pipeline includes MARVEL Mystic Mayhem, Destiny: Rising, and Ananta, with Ananta expected to have the highest commercial potential [3] - **Shareholder Returns**: - The company maintained a dividend payout ratio of approximately 30% of GAAP net profit, but no buybacks were executed in Q1, which may disappoint some investors [3] Market Outlook - **Guidance**: - Strong Q1 results are expected to lead to upward revisions in consensus estimates [4] - **Investor Sentiment**: - Initial positive reactions are anticipated from investors following the strong Q1 performance [5] Risks and Challenges - **Industry Risks**: - Regulatory and product risks, particularly the unpredictable nature of new game launches [13] - **Company-Specific Risks**: - Maturity of key game titles and limited diversification in revenue sources, particularly from MMORPGs [14] Valuation Metrics - **Forecast Stock Return**: - Expected price appreciation of 24.2% and a dividend yield of 2.4%, leading to a total forecast stock return of 26.6% [11] Conclusion NetEase's Q1 2025 results demonstrate strong growth in gaming revenue and profitability, supported by a solid pipeline of upcoming titles. However, the company faces industry-specific risks and challenges related to regulatory environments and product performance. The outlook remains positive, with expectations for upward revisions in earnings estimates.
网易(NTES):买入热门游戏表现出色
Hui Feng Yin Hang· 2025-05-16 05:45
Investment Rating - The report maintains a "Buy" rating for NetEase, with a target price increase to USD 130 from USD 120, implying a 21.4% upside from the current share price of USD 107.11 [6][11][100] Core Insights - NetEase's recent earnings report showed a 25% beat in earnings, a 5% beat in game revenue, and an 11% beat in deferred revenue, leading to a revision of EPS growth to +18% year-on-year in 2025 [2][11] - The strong deferred revenue growth of 19% year-on-year indicates potential for accelerating game revenue growth in the upcoming quarters [2][97] - Upcoming game launches, including Marvel Mystic Mayhem and Destiny Rising, are anticipated to be key focus areas following the annual product launch event [2][11] Financial Performance - In Q1 2025, NetEase reported total revenue of RMB 28,829 million, reflecting a year-on-year growth of 7% [91] - Online game revenue grew by 15% year-on-year, driven by strong performances from titles such as Identity V, Where Winds Meet, and Marvel Rivals [94] - The gross profit margin (GPM) for games and related value-added services (VAS) was reported at 67%, with a non-GAAP operating profit of RMB 11,393 million, representing a 34% year-on-year increase [91][94] Game Highlights - Mobile game revenue only fell by 4% year-on-year, outperforming consensus expectations of a 6% decline, thanks to strong performances from Identity V and Where Winds Meet [3][94] - PC game revenue saw an impressive growth of 85% year-on-year, significantly above the consensus estimate of 67%, driven by contributions from WWM PC and Blizzard titles [3][94] - The launch of Once Human mobile resulted in 6 million new users in its first week, boosting the PC version's revenue by 500% [3][94] Margin Discussions - The report notes an increase in games and related VAS gross profit margin quarter-on-quarter, attributed to a reduced focus on non-game businesses and a shift towards profitability [4][94] - The report anticipates that it will take a few quarters for sales and marketing expenses as a percentage of revenue to normalize [4] Valuation Metrics - The report provides estimates for future financial performance, projecting revenue of RMB 116,721 million for 2025, with a year-on-year growth of 11% [98] - The estimated price-to-earnings (PE) ratio for 2025 is 12.6, indicating a favorable valuation compared to historical averages [7][14] Pipeline and Future Outlook - The report highlights key upcoming titles such as Ananta, expected to launch in 2026, which could significantly contribute to future revenue streams [2][90] - The successful return of Overwatch in China has set new records for peak concurrent users, indicating strong market demand for NetEase's offerings [94]
网易(NTES):网易来之不易的胜利
Ubs Securities· 2025-05-16 05:45
Investment Rating - 12-month rating: Buy [5] - 12-month price target: US$152.00, up from US$133.00 [5][10] Core Insights - NetEase reported a strong Q1 2025 with significant bottom line beats, driven by mobile and PC game revenue growth [2][4] - PC game revenue grew 85% YoY, primarily due to the successful launch of Marvel Rivals and strong performance from existing titles [3] - Mobile game revenue decline narrowed to 4% YoY, with expectations for further improvement [3] - Management indicated a more prudent marketing strategy, resulting in lower selling and marketing expenses [3] - Despite a strong Q1, the company may enter a quieter period until the next major title launch [4] Financial Performance - Q1 2025 total revenues: Rmb28,829 million, a 7.4% YoY growth [11] - Net income (GAAP) for Q1 2025: Rmb10,301 million, a 35.6% increase YoY [11] - Gross margin improved to 64.1% in Q1 2025, up from 60.7% [11] - Expected revenues for FY 2025: Rmb113,876 million, with net earnings projected at Rmb40,226 million [8][11] Valuation Metrics - Current trading at 14x 2025E PE, below the 5-year mean of 15x [4] - DCF derived price target reflects a reasonable valuation compared to global gaming companies averaging 31x 2025 PE [4][10] - Forecast stock return of 27.6%, with a price appreciation of 25.1% and a dividend yield of 2.5% [13] Game Pipeline and Future Outlook - New game pipeline for 2025 includes MARVEL Mystic Mayhem and Destiny: Rising, with limited expectations [3] - Anticipated PC game growth of 46% in 2025, contingent on user engagement and updates for Marvel Rivals [3] - Management maintains a conservative outlook on sustaining current low marketing expenses in the near term [3]
NTES(NTES) - 2025 Q1 - Earnings Call Presentation
2025-05-15 11:09
Financial Performance - NetEase's total net revenues for 1Q25 were $3.973 billion, a 7.4% increase year-over-year[39] - Games and related value-added services contributed $3.314 billion in net revenues for 1Q25, up 12.1% year-over-year[39] - Net income attributable to the company's shareholders for 1Q25 was $1.42 billion, a 34.9% increase year-over-year[39] - Basic net income per ADS (GAAP) for 1Q25 was $2.24[9] - The company's net cash position as of March 31, 2025, was $18.9 billion[9] Business Segments - Youdao's net revenues for 1Q25 were $179 million, a 6.8% decrease year-over-year[39] - NetEase Cloud Music's net revenues for 1Q25 were $256 million, reflecting an 8.5% decrease year-over-year[39] - Innovative businesses and others generated $224 million in net revenues for 1Q25, a 17.5% decrease year-over-year[39] Games Highlights - Online games accounted for 98% of games and related value-added services net revenues in 1Q25[12] - Where Winds Meet surpassed 30 million registered players as of March 2025[18] - Once Human mobile game quickly claimed the No1 position on the iOS download charts in more than 160 regions upon its April 2025 launch[18]
NetEase Announces First Quarter 2025 Unaudited Financial Results
Prnewswire· 2025-05-15 08:30
Core Viewpoint - NetEase, Inc. reported strong financial results for the first quarter of 2025, driven by robust performance in its gaming segment and ongoing innovation across its business lines [1][5][10]. Financial Highlights - Net revenues for Q1 2025 were RMB 28.8 billion (US$ 4.0 billion), a 7.4% increase year-over-year [7][10]. - Net revenues from games and related value-added services reached RMB 24.0 billion (US$ 3.3 billion), marking a 12.1% increase compared to the same quarter of 2024 [8][10]. - Gross profit for the quarter was RMB 18.5 billion (US$ 2.5 billion), an increase of 8.6% year-over-year [13][10]. - Net income attributable to shareholders was RMB 10.3 billion (US$ 1.4 billion), up from RMB 7.6 billion in Q1 2024 [17][10]. - Non-GAAP net income attributable to shareholders was RMB 11.2 billion (US$ 1.5 billion), reflecting a significant increase from RMB 8.5 billion in the same quarter of the previous year [18][10]. Operational Highlights - The company launched several successful titles, including "Marvel Rivals" and "Where Winds Meet," which contributed to increased engagement and revenue [10][8]. - Youdao's net revenues were RMB 1.3 billion (US$ 178.9 million), consistent with the previous quarter but down 6.7% year-over-year due to a focus on core services [9][10]. - NetEase Cloud Music reported revenues of RMB 1.9 billion (US$ 256.1 million), a decrease of 8.4% compared to the same quarter of 2024 [11][10]. - Innovative businesses and others generated RMB 1.6 billion (US$ 223.8 million), down 17.6% year-over-year, primarily due to reduced revenues from advertising services [12][10]. Cash Flow and Dividend - As of March 31, 2025, the company's net cash totaled RMB 137.0 billion (US$ 18.9 billion), an increase from RMB 131.5 billion at the end of 2024 [20][10]. - The board approved a dividend of US$ 0.1350 per share for Q1 2025, payable in June 2025 [21][10]. Share Repurchase Program - The company has repurchased approximately 21.6 million ADSs for a total cost of US$ 1.9 billion under its ongoing share repurchase program [24][10].