Core Insights - The company reported a strong performance in Q4 2025, with net revenues of RMB 1.6 billion, reflecting a year-over-year increase of 16.8% and marking the sixth consecutive quarter of operating profitability [4][7] - Learning services net revenues grew 17.7% year over year to RMB 727.2 million, attributed to a return to growth following strategic restructuring [1][6] - Online marketing revenue surged 37.2% in Q4 to RMB 660.9 million, driven by demand from various sectors including gaming and AI applications [5][11] Financial Performance - For the full year 2025, total net revenues rose 5% year over year to RMB 5.9 billion, with operating profit increasing by 48.7% to RMB 221.3 million [3] - The company achieved its first annual positive operating cash flow of RMB 55.2 million in 2025, a significant improvement from cash used in 2024 [3][4] - Q4 net cash provided by operating activities was RMB 184.2 million, up 16.4% from the prior year [4][7] Growth Drivers - AI-driven subscription services were a key growth driver, with Q4 sales exceeding RMB 100 million, up more than 80% year over year [8] - The company plans to enhance its learning services with continued product innovation and expects to achieve "around double-digit" year-over-year growth in 2026 [9] - The launch of new AI tools, such as ScholarAI, contributed to significant sales growth, with fourth-quarter sales doubling quarter over quarter [9] Segment Performance - The smart devices segment saw a decline, with net revenues of RMB 176.5 million in Q4, down 26.6% year over year [16] - Despite the decline in smart devices, the Youdao Dictionary Pen remained a top-selling product during major shopping events [16][17] - The company highlighted the performance of Youdao Lingshi, which saw revenue growth of over 40% year over year and improved retention rates [7] Strategic Focus - Management emphasized a balanced approach to expenditures, focusing on strategic investments while maintaining cost discipline [2] - The company plans to continue investing in AI applications, gaming, and international KOL business as growth areas for 2026 [15][19] - The commitment to an "AI-native" strategy includes ongoing investment in vertical large language models and AI agents across various business lines [19]

NetEase 4Q25 Investor Presentation Investor Relations February 11, 2026 SAFE HARBOR STATEMENT This announcement contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions. In addition, statements that are not histo ...

Financial Data and Key Metrics Changes - In Q4 2025, net revenues reached RMB 1.6 billion, a 16.8% year-over-year increase, driven by growth in learning services and online marketing services [4][15] - Operating profit for Q4 was RMB 60.2 million, marking a 113% quarter-over-quarter increase but a 28.5% decrease year-over-year [4] - For the full year 2025, total net revenues were RMB 5.9 billion, a 5% increase year-over-year, with operating profit growing to RMB 221.3 million, up 48.7% year-over-year [5][20] - Net cash flow from operating activities for 2025 was RMB 55.2 million, a significant improvement from a net outflow of RMB 67.9 million in 2024 [6][20] Business Line Performance Changes - Learning services in Q4 generated net revenues of RMB 727.2 million, a 17.7% year-over-year increase, with digital content services contributing RMB 436.1 million, up 12.2% year-over-year [6][15] - Online marketing services saw Q4 net revenues of RMB 660.9 million, a 37.2% increase year-over-year, driven by demand from the NetEase Group and overseas markets [9][16] - Smart devices segment reported Q4 net revenues of RMB 176.5 million, down 26.6% year-over-year, primarily due to decreased demand for smart learning devices [11][16] Market Data and Key Metrics Changes - The online marketing segment's gross margin was 27.8% in Q4, reflecting a 2 percentage point sequential improvement despite a year-over-year decline [11] - International KOL revenues increased by over 50% year-over-year in Q4, with successful campaigns executed in over 50 countries [10] Company Strategy and Development Direction - The company aims to continue its AI-native strategy, focusing on innovative product development and competitive positioning in learning services and advertising [13][24] - Plans for 2026 include leveraging AI capabilities to enhance online marketing services and learning services, with expectations of double-digit growth in learning services [25][26] - The company is committed to improving the operational health of its smart devices segment while focusing on key products like the dictionary pen and tutoring pen [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sustainable growth through AI-driven innovations and strategic investments [48][49] - The company anticipates strong momentum in its core business units, particularly in AI-driven subscription services and advertising [48] Other Important Information - Youdao Lingshi's revenue surged over 40% year-over-year, with retention rates exceeding 75% [7] - The company plans to introduce new AI applications and agents to enhance user engagement and expand service offerings [28][56] Q&A Session Summary Question: 2026 outlook across different business lines - Management aims to grow sustainably while enhancing innovative product offerings, supported by the AI-native strategy [24] Question: Plans for Youdao Lingshi in 2026 - Management is confident in Youdao Lingshi's growth, focusing on product refinement and efficient customer acquisition [33][34] Question: Outlook for overseas advertisement growth in 2026 - The company plans to deepen its international KOL business and explore overseas programmatic advertising to drive growth [41][42] Question: Goal for total cash flow in 2026 - The focus will be on improving operating cash flow while maintaining a balanced approach to strategic investments [49][50] Question: Deployment of AI agents in Youdao's business - AI agents will be applied in advertising and learning applications, enhancing user experience and operational efficiency [55][56]

Financial Data and Key Metrics Changes - In Q4 2025, net revenues reached RMB 1.6 billion, a 16.8% year-over-year increase, driven by growth in learning services and online marketing services [4][15] - Full year 2025 total net revenues were RMB 5.9 billion, a 5% increase year-over-year, with operating profit growing to RMB 221.3 million, up 48.7% year-over-year [5][20] - Net cash flow from operating activities for Q4 was RMB 184.2 million, up 16.4% year-over-year, marking the first full year of net cash inflow from operating activities at RMB 55.2 million [4][5][20] Business Line Performance Changes - Learning services in Q4 generated net revenues of RMB 727.2 million, a 17.7% year-over-year increase, with digital content services contributing RMB 436.1 million, up 12.2% year-over-year [6][15] - Online marketing services saw Q4 net revenues of RMB 660.9 million, a 37.2% increase year-over-year, driven by demand from the NetEase Group and overseas markets [9][16] - Smart devices segment reported Q4 net revenues of RMB 176.5 million, down 26.6% year-over-year, primarily due to decreased demand for smart learning devices [11][16] Market Data and Key Metrics Changes - The online marketing segment's gross margin was 27.8% in Q4, reflecting a 2 percentage point sequential improvement despite a year-over-year decline [11][17] - International KOL revenues increased by over 50% year-over-year in Q4, with successful campaigns executed in over 50 countries [10] Company Strategy and Development Direction - The company aims to continue its AI-native strategy, focusing on innovative product development and competitive positioning in learning services and advertising [13][24] - Plans for 2026 include leveraging AI capabilities to enhance online marketing services and learning services, with expectations of double-digit growth in learning services [25][27] - The company is committed to improving operational health in the smart devices segment while enhancing user engagement through AI-driven features [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sustainable growth through innovation and competitive products, with a focus on AI-driven solutions [24][29] - The company anticipates strong momentum in marketing demands across sectors such as AI applications and gaming, aiming to improve targeting precision and conversion efficiency [25][26] Other Important Information - The company launched new AI applications, including ScholarAI and Youdao AnyDub, which contributed to record high revenue in AI-driven subscription services [8][28] - The Youdao Lingshi business is expected to continue its growth trajectory, with plans for product refinement and efficient customer acquisition strategies [33][34] Q&A Session Summary Question: What are the management's thoughts on the 2026 outlook across different business lines? - Management aims to grow sustainably while enhancing innovative product offerings, supported by their AI-native strategy [24] Question: What is the plan for the Youdao Lingshi business in 2026? - The strategy includes product refinement and efficient customer acquisition, with confidence in future growth due to improved AI features [33][34] Question: How does management view the outlook for overseas advertisement growth in 2026? - The company plans to deepen its international KOL business and explore programmatic advertising to drive long-term growth [41][42] Question: Is the goal for 2026 to achieve a net inflow for total cash flow? - The focus will remain on enhancing operating cash flow while balancing strategic investments and cost discipline [49][50] Question: In what areas will AI agents be deployed, and what is the potential impact? - AI agents will be applied in advertising and learning applications, with significant potential to enhance user experience and operational efficiency [55][56]

網易 NETEASE 4025 Investor Presentation SAFE HARBOR STATEMENT This presentation contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ mat ...