NetEase Announces First Quarter 2026 Unaudited Financial Results
Rhea-AI Summary
NetEase (NASDAQ:NTES, HKEX:9999; NYSE:DAO) reported unaudited Q1 2026 results with net revenues of RMB30.6 billion, up 6.1% year over year. Games revenues rose to RMB25.7 billion, gross profit reached RMB21.2 billion (+14.8%), and net income attributable to shareholders was RMB10.7 billion.
Net cash stood at RMB167.5 billion, with operating cash flow of RMB13.7 billion. The board declared a Q1 2026 dividend of US$0.144 per share (US$0.720 per ADS) and continued its up to US$5.0 billion share repurchase program.
AI-generated analysis. Not financial advice.
Positive
- Net revenues rose 6.1% year over year to RMB30.6 billion
- Games segment net revenues grew 6.9% year over year to RMB25.7 billion
- Gross profit increased 14.8% year over year to RMB21.2 billion
- Q1 2026 net income attributable to shareholders was RMB10.7 billion
- Operating cash flow reached RMB13.7 billion in Q1 2026
- Net cash position improved to RMB167.5 billion at March 31, 2026
- Board declared Q1 2026 dividend of US$0.144 per share
- US$5.0 billion share repurchase program extended to January 9, 2029; US$2.1 billion executed
Negative
- Youdao revenues fell quarter over quarter from RMB1.6 billion to RMB1.3 billion
- Innovative businesses and others revenues declined to RMB1.5 billion, down from RMB2.0 billion prior quarter
- Total operating expenses increased 6.5% year over year to RMB8.6 billion
- Effective tax rate rose to 18.9% from 15.3% a year earlier
- Dividend per share decreased versus Q4 2025 (US$0.144 vs US$0.232)
News Market Reaction – DAO
On the day this news was published, DAO declined 6.94%, reflecting a notable negative market reaction. Argus tracked a peak move of +12.6% during that session. Argus tracked a trough of -13.8% from its starting point during tracking. Our momentum scanner triggered 23 alerts that day, indicating elevated trading interest and price volatility. This price movement removed approximately $118M from the company's valuation, bringing the market cap to $1.58B at that time. Trading volume was very high at 3.3x the daily average, suggesting heavy selling pressure.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
DAO was up 3.33% while key education peers were mostly down (e.g., UDMY -6.84%, GOTU -1.05%, KLC -2.14%, APEI -1.12%). This points to stock-specific strength rather than a sector-wide move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 11 | Q4/FY 2025 earnings | Negative | -3.6% | Youdao reported revenue growth but weaker margins and reduced operating income. |
| Feb 11 | Q4/FY 2025 earnings | Positive | -3.6% | NetEase posted strong FY revenues, non-GAAP income, cash, dividends and buybacks. |
| Nov 20 | Q3 2025 earnings | Negative | -8.1% | Youdao Q3 revenue growth but sharp gross margin and operating income deterioration. |
| Nov 20 | Q3 2025 earnings | Positive | -8.1% | NetEase Q3 revenue and games growth with higher gross profit and continued buybacks. |
| Aug 14 | Q2 2025 earnings | Positive | +9.9% | Youdao delivered revenue growth and first profitable Q2 aided by AI strategy. |
Earnings-related headlines for NetEase/Youdao have often led to downside moves, even when topline and cash metrics improved, suggesting a history of cautious market reactions to this group’s results.
Recent history for NetEase/Youdao shows multiple earnings releases across 2025–2026 with growing revenues but mixed profitability and margin trends. NetEase’s Q3 and FY 2025 results highlighted strong gaming growth, rising net cash, dividends and a US$5.0B repurchase program, yet shares fell post‑earnings. Youdao’s reports showed revenue growth and a turn to operating profitability but pressured gross margins and dependence on NetEase support. Today’s Q1 2026 NetEase results fit into this pattern of operational strength within a historically cautious trading backdrop.
Historical Comparison
Past earnings-related news for NetEase/Youdao produced an average move of -2.68%, showing that the market has often reacted cautiously to this group’s results.
Series of quarterly and annual earnings from 2025 into early 2026 for both NetEase and Youdao, showing rising revenues, evolving profitability and active capital returns.
Market Pulse Summary
The stock moved -6.9% in the session following this news. A negative reaction despite these Q1 2026 results would fit prior patterns where NetEase/Youdao earnings sometimes saw declines even with revenue and cash growth. Investors may focus on segment shifts, past margin pressures or broader sentiment toward China tech. With net revenues at RMB30.6B and net cash of RMB167.5B, a sharp pullback could reflect de‑risking rather than a simple read on fundamentals.
Key Terms
non-gaap financial
ads financial
AI-generated analysis. Not financial advice.
First Quarter 2026 Financial Highlights
- Net revenues were
RMB30.6 billion (US ), an increase of$4.4 billion 6.1% compared with the same quarter of 2025.- Games and related value-added services net revenues were
RMB25.7 billion (US ), an increase of$3.7 billion 6.9% compared with the same quarter of 2025. - Youdao net revenues were
RMB1.3 billion (US ), an increase of$195.4 million 3.8% compared with the same quarter of 2025. - NetEase Cloud Music net revenues were
RMB2.0 billion (US ), an increase of$287.2 million 6.6% compared with the same quarter of 2025. - Innovative businesses and others net revenues were
RMB1.5 billion (US ), a decrease of$224.6 million 4.6% compared with the same quarter of 2025.
- Games and related value-added services net revenues were
- Gross profit was
RMB21.2 billion (US ), an increase of$3.1 billion 14.8% compared with the same quarter of 2025. - Total operating expenses were
RMB8.6 billion (US ), an increase of$1.2 billion 6.5% compared with the same quarter of 2025. - Net income attributable to the Company's shareholders was
RMB10.7 billion (US ). Non-GAAP net income attributable to the Company's shareholders was$1.5 billion RMB11.3 billion (US ).[1]$1.6 billion - Basic net income per share was
US ($0.48 US per ADS). Non-GAAP basic net income per share was$2.42 US ($0.51 US per ADS).[1]$2.56
[1] As used in this announcement, non-GAAP net income attributable to the Company's shareholders and non-GAAP basic and diluted net income per share and per ADS are defined to exclude share-based compensation expenses. See the unaudited reconciliation of GAAP and non-GAAP results at the end of this announcement. |
First Quarter 2026 and Recent Operational Highlights
- Sustained strong engagement and revenue performance across established titles, including the Fantasy Westward Journey franchise, Identity V, Eggy Party, Sword of Justice and Where Winds Meet, supported by high-cadence content updates and gameplay innovation.
- Advanced global expansion through key titles, such as Where Winds Meet and Marvel Rivals, amplifying their international reach and deepening player engagement.
- Blizzard titles maintained stable operations in
China with a steady rollout of localized content.
"For the first quarter of 2026, we delivered another solid quarter across our established gaming portfolio, while continuing to make steady progress advancing our pipeline of new titles," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "Our recent global launches have demonstrated strong cross-market appeal, supporting the continued execution of our international expansion strategy.
"Looking ahead, we will continue to strengthen our technological capabilities and focus on innovation across both content and development. By combining evolving technologies with our deep operating expertise, we aim to create exceptional content and experiences that exceed players' expectations and reach an even broader global audience," Mr. Ding concluded.
First Quarter 2026 Financial Results
Net Revenues
Net revenues for the first quarter of 2026 were
Net revenues from games and related value-added services were
Net revenues from Youdao were
Net revenues from NetEase Cloud Music were
Net revenues from innovative businesses and others were
Cost of Revenues
Cost of revenues for the first quarter of 2026 was
Gross Profit
Gross profit for the first quarter of 2026 was
Operating Expenses
Total operating expenses for the first quarter of 2026 were
Other Income/(Expenses)
Other income/(expenses) consisted of investment income/(loss), interest income, net exchange gains/(losses) and others. The quarter-over-quarter increase was mainly attributable to the gain from the disposal of certain long-term investments and lower investment impairment provisions in the first quarter of 2026. The year-over-year decrease was primarily due to fair value changes of equity security investments and higher foreign exchange losses recognized in the first quarter of 2026.
Income Tax
The Company recorded a net income tax charge of
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders totaled
Basic net income was
Non-GAAP net income attributable to the Company's shareholders totaled
Non-GAAP basic net income was
Other Financial Information
As of March 31, 2026, the Company's net cash (total cash and cash equivalents, current and non-current time deposits and restricted cash, as well as short-term investments balance, minus short-term and long-term loans) totaled
Quarterly Dividend
The board of directors approved a dividend of
NetEase paid a dividend of
Under the Company's current dividend policy, the determination to make dividend distributions and the amount of such distribution in any particular quarter will be made at the discretion of its board of directors and will be based upon the Company's operations and earnings, cash flow, financial condition and other relevant factors.
Share Repurchase Program
On November 20, 2025, the Company announced the extension of its previously approved share repurchase program of up to
The extent to which NetEase repurchases its ADSs and its ordinary shares depends upon a variety of factors, including market conditions. These programs may be suspended or discontinued at any time.
**
Conference Call
NetEase's management team will host a teleconference call with a simultaneous webcast at 8:00 a.m. Eastern Time on Thursday, May 21, 2026 (
Interested parties may participate in the conference call by dialing 1-914-202-3258 and providing conference ID: 10054538, 15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-855-883-1031 and entering PIN: 10054538. The replay will be available through May 28, 2026.
This call will be webcast live, and the replay will be available for 12 months. Both will be available on NetEase's Investor Relations website at http://ir.netease.com/.
About NetEase, Inc.
NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase") is a leading internet and game services provider centered around premium content. With extensive offerings across its expanding gaming ecosystem, the Company develops and operates some of the most popular and longest-running mobile and PC games available in
Powered by one of the largest in-house game R&D teams focused on mobile, PC and console, NetEase creates superior gaming experiences, inspires players, and passionately delivers value for its thriving community worldwide. By infusing play with culture, and education with technology, NetEase transforms gaming into a meaningful vehicle to build a more entertaining and enlightened world.
Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning and advertising solutions provider, and NetEase Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well as Yanxuan, NetEase's private-label consumer lifestyle brand.
For more information, please visit: http://ir.netease.com/.
Forward Looking Statements
This announcement contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the
Non-GAAP Financial Measures
NetEase considers and uses non-GAAP financial measures, such as non-GAAP net income attributable to the Company's shareholders and non-GAAP basic and diluted net income per ADS and per share, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in
NetEase defines non-GAAP net income attributable to the Company's shareholders as net income attributable to the Company's shareholders excluding share-based compensation expenses. Non-GAAP net income attributable to the Company's shareholders enables NetEase's management to assess its operating results without considering the impact of share-based compensation expenses. NetEase believes that this non-GAAP financial measure provides useful information to investors in understanding and evaluating the Company's current operating performance and prospects in the same manner as management does, if they so choose. NetEase also believes that the use of this non-GAAP financial measure facilitates investors' assessment of its operating performance.
Non-GAAP financial measures are not defined under
NetEase compensates for these limitations by reconciling non-GAAP net income attributable to the Company's shareholders to the nearest
Contact for Media and Investors:
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378
NETEASE, INC. | ||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
December 31, | March 31, | March 31, | ||||||||||||||||||
2025 | 2026 | 2026 | ||||||||||||||||||
RMB | RMB | USD (Note 1) | ||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | 47,167,904 | 50,815,211 | 7,366,659 | |||||||||||||||||
Time deposits | 92,639,378 | 80,109,903 | 11,613,497 | |||||||||||||||||
Restricted cash | 4,319,344 | 4,502,968 | 652,793 | |||||||||||||||||
Accounts receivable, net | 5,337,819 | 6,492,901 | 941,273 | |||||||||||||||||
Inventories | 689,183 | 546,030 | 79,158 | |||||||||||||||||
Prepayments and other current assets, net | 7,658,346 | 6,212,901 | 900,682 | |||||||||||||||||
Short-term investments | 22,803,503 | 39,978,723 | 5,795,698 | |||||||||||||||||
Total current assets | 180,615,477 | 188,658,637 | 27,349,760 | |||||||||||||||||
Non-current assets: | ||||||||||||||||||||
Property, equipment and software, net | 8,425,327 | 8,311,363 | 1,204,895 | |||||||||||||||||
Land use rights, net | 4,047,355 | 4,014,831 | 582,028 | |||||||||||||||||
Deferred tax assets | 2,831,423 | 2,894,530 | 419,619 | |||||||||||||||||
Time deposits | 2,995,000 | 3,045,000 | 441,432 | |||||||||||||||||
Restricted cash | 3,893 | 3,344 | 485 | |||||||||||||||||
Other long-term assets | 22,496,585 | 24,469,340 | 3,547,309 | |||||||||||||||||
Total non-current assets | 40,799,583 | 42,738,408 | 6,195,768 | |||||||||||||||||
Total assets | 221,415,060 | 231,397,045 | 33,545,528 | |||||||||||||||||
Liabilities, Redeemable Noncontrolling Interests | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | 643,164 | 780,921 | 113,210 | |||||||||||||||||
Salary and welfare payables | 4,889,708 | 2,642,579 | 383,094 | |||||||||||||||||
Taxes payable | 3,874,143 | 5,765,891 | 835,878 | |||||||||||||||||
Short-term loans | 6,384,417 | 10,955,460 | 1,588,208 | |||||||||||||||||
Contract liabilities | 20,514,540 | 21,811,530 | 3,162,008 | |||||||||||||||||
Accrued liabilities and other payables | 16,062,984 | 15,480,778 | 2,244,242 | |||||||||||||||||
Total current liabilities | 52,368,956 | 57,437,159 | 8,326,640 | |||||||||||||||||
Non-current liabilities: | ||||||||||||||||||||
Deferred tax liabilities | 2,637,258 | 3,232,494 | 468,613 | |||||||||||||||||
Other long-term liabilities | 1,304,837 | 1,377,929 | 199,758 | |||||||||||||||||
Total non-current liabilities | 3,942,095 | 4,610,423 | 668,371 | |||||||||||||||||
Total liabilities | 56,311,051 | 62,047,582 | 8,995,011 | |||||||||||||||||
Redeemable noncontrolling interests | 91,319 | 93,143 | 13,503 | |||||||||||||||||
NetEase, Inc.'s shareholders' equity | 160,296,119 | 164,722,217 | 23,879,707 | |||||||||||||||||
Noncontrolling interests | 4,716,571 | 4,534,103 | 657,307 | |||||||||||||||||
Total equity | 165,012,690 | 169,256,320 | 24,537,014 | |||||||||||||||||
Total liabilities, redeemable noncontrolling | 221,415,060 | 231,397,045 | 33,545,528 | |||||||||||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||||||||||
NETEASE, INC. | ||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
(in thousands, except per share data or per ADS data) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||||||||||||
2025 | 2025 | 2026 | 2026 | |||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | |||||||||||||||||
Net revenues | 28,828,545 | 27,546,973 | 30,591,281 | 4,434,804 | ||||||||||||||||
Cost of revenues | (10,349,139) | (9,854,598) | (9,374,209) | (1,358,975) | ||||||||||||||||
Gross profit | 18,479,406 | 17,692,375 | 21,217,072 | 3,075,829 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and marketing expenses | (2,695,597) | (3,888,256) | (3,441,485) | (498,911) | ||||||||||||||||
General and administrative expenses | (956,337) | (1,050,701) | (636,597) | (92,287) | ||||||||||||||||
Research and development expenses | (4,386,313) | (4,434,260) | (4,482,157) | (649,776) | ||||||||||||||||
Total operating expenses | (8,038,247) | (9,373,217) | (8,560,239) | (1,240,974) | ||||||||||||||||
Operating profit | 10,441,159 | 8,319,158 | 12,656,833 | 1,834,855 | ||||||||||||||||
Other income/(expenses): | ||||||||||||||||||||
Investment income/(loss), net | 692,751 | (1,669,086) | 5,472 | 793 | ||||||||||||||||
Interest income, net | 1,060,886 | 1,002,404 | 890,267 | 129,062 | ||||||||||||||||
Exchange gains/(losses), net | 1,803 | (517,965) | (622,108) | (90,187) | ||||||||||||||||
Other, net | 255,315 | 485,863 | 438,978 | 63,638 | ||||||||||||||||
Income before tax | 12,451,914 | 7,620,374 | 13,369,442 | 1,938,161 | ||||||||||||||||
Income tax | (1,905,143) | (1,250,430) | (2,523,838) | (365,880) | ||||||||||||||||
Net income | 10,546,771 | 6,369,944 | 10,845,604 | 1,572,281 | ||||||||||||||||
Accretion of redeemable noncontrolling | (1,049) | (1,122) | (1,104) | (160) | ||||||||||||||||
Net income attributable to noncontrolling | (244,565) | (126,866) | (170,394) | (24,702) | ||||||||||||||||
Net income attributable to the | 10,301,157 | 6,241,956 | 10,674,106 | 1,547,419 | ||||||||||||||||
Net income per share * | ||||||||||||||||||||
Basic | 3.25 | 1.96 | 3.34 | 0.48 | ||||||||||||||||
Diluted | 3.21 | 1.93 | 3.31 | 0.48 | ||||||||||||||||
Net income per ADS * | ||||||||||||||||||||
Basic | 16.23 | 9.78 | 16.69 | 2.42 | ||||||||||||||||
Diluted | 16.06 | 9.66 | 16.53 | 2.40 | ||||||||||||||||
Weighted average number of ordinary | ||||||||||||||||||||
Basic | 3,173,899 | 3,191,805 | 3,198,123 | 3,198,123 | ||||||||||||||||
Diluted | 3,206,362 | 3,227,907 | 3,227,325 | 3,227,325 | ||||||||||||||||
* Each ADS represents five ordinary shares. | ||||||||||||||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||||||||||
NETEASE, INC. | ||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||||||||
2025 | 2025 | 2026 | 2026 | |||||||||||||
RMB | RMB | RMB | USD (Note 1) | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | 10,546,771 | 6,369,944 | 10,845,604 | 1,572,281 | ||||||||||||
Adjustments to reconcile net income to net cash provided | ||||||||||||||||
Depreciation and amortization | 480,761 | 720,367 | 430,583 | 62,421 | ||||||||||||
Fair value changes of equity security, other investments and | (558,499) | 1,308,861 | 1,117,717 | 162,035 | ||||||||||||
Impairment losses on investments | 89,071 | 857,796 | 344,871 | 49,996 | ||||||||||||
Fair value changes of short-term investments | (201,609) | (283,560) | (385,395) | (55,871) | ||||||||||||
Share-based compensation cost | 951,872 | 847,194 | 616,180 | 89,329 | ||||||||||||
Allowance for expected credit losses | 16,771 | 17,478 | 6,719 | 974 | ||||||||||||
Losses/(gains) on disposal of property, equipment and software | 20,293 | (20,063) | (565) | (82) | ||||||||||||
Unrealized exchange (gains)/losses | (28,453) | 514,469 | 643,942 | 93,352 | ||||||||||||
Losses/(gains) on disposal of long-term investments and subsidiaries | 11,675 | (273,438) | (1,071,442) | (155,326) | ||||||||||||
Deferred income taxes | 328,272 | 204,920 | 532,257 | 77,161 | ||||||||||||
Share of results on equity method investees | (18,668) | 153,645 | 442,575 | 64,160 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (1,088,960) | 594,561 | (1,188,837) | (172,345) | ||||||||||||
Inventories | 53,773 | (51,881) | 143,099 | 20,745 | ||||||||||||
Prepayments and other assets | (295,178) | 701,921 | 116,152 | 16,839 | ||||||||||||
Accounts payable | (148,076) | (59,225) | 134,445 | 19,490 | ||||||||||||
Salary and welfare payables | (2,085,111) | 1,859,384 | (2,253,559) | (326,698) | ||||||||||||
Taxes payable | 1,796,123 | (436,268) | 1,895,324 | 274,764 | ||||||||||||
Contract liabilities | 2,526,198 | 1,048,151 | 1,384,445 | 200,702 | ||||||||||||
Accrued liabilities and other payables | (290,374) | 749,075 | (21,044) | (3,051) | ||||||||||||
Net cash provided by operating activities | 12,106,652 | 14,823,331 | 13,733,071 | 1,990,876 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property, equipment and software | (454,071) | (137,818) | (312,148) | (45,252) | ||||||||||||
Proceeds from sale of property, equipment and software | 1,336 | 21,790 | 1,673 | 243 | ||||||||||||
Purchase of intangible assets, content and licensed copyrights | (298,771) | (183,986) | (290,019) | (42,044) | ||||||||||||
Net changes of short-term investments with terms of three months or less | (6,138,556) | (400,836) | (15,766,308) | (2,285,635) | ||||||||||||
Purchase of short-term investments with terms over three months | (2,970,000) | (5,600,000) | (5,885,000) | (853,146) | ||||||||||||
Proceeds from maturities of short-term investments with terms over three months | 2,708,601 | 7,695,328 | 4,861,483 | 704,767 | ||||||||||||
Investment/prepayment for investment in long-term investments and | (90,966) | (1,617,947) | (3,204,395) | (464,540) | ||||||||||||
Proceeds from disposal of long-term investments and subsidiaries | 77,428 | 624,662 | 1,353,947 | 196,281 | ||||||||||||
Placement/rollover of matured time deposits | (49,601,807) | (39,787,587) | (30,608,133) | (4,437,247) | ||||||||||||
Proceeds from maturities of time deposits | 43,926,482 | 39,781,381 | 42,018,869 | 6,091,457 | ||||||||||||
Change in other long-term assets | (678) | (7,658) | 65,909 | 9,555 | ||||||||||||
Net cash (used in)/provided by investing activities | (12,841,002) | 387,329 | (7,764,122) | (1,125,561) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net changes from loans with terms of three months or less | (2,254,415) | (56,405) | 1,182,383 | 171,410 | ||||||||||||
Proceeds of loans with terms over three months | 2,747,550 | 92,700 | 6,134,520 | 889,319 | ||||||||||||
Payment of loans with terms over three months | (2,935,677) | (975,000) | (2,620,900) | (379,951) | ||||||||||||
Net amounts received/(paid) related to capital contribution from or repurchase of | 42,517 | 819 | (23,418) | (3,395) | ||||||||||||
Net amounts paid related to repurchase of NetEase's ADSs/purchase of | (303,601) | (15,398) | (1,314,003) | (190,490) | ||||||||||||
Dividends paid to NetEase's shareholders | (5,584,532) | (2,575,287) | (5,156,320) | (747,509) | ||||||||||||
Net cash used in financing activities | (8,288,158) | (3,528,571) | (1,797,738) | (260,616) | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and | (56,932) | (175,895) | (340,829) | (49,410) | ||||||||||||
Net (decrease)/increase in cash, cash equivalents and restricted cash | (9,079,440) | 11,506,194 | 3,830,382 | 555,289 | ||||||||||||
Cash, cash equivalents and restricted cash, at the beginning of the period | 54,474,923 | 39,984,947 | 51,491,141 | 7,464,648 | ||||||||||||
Cash, cash equivalents and restricted cash, at the end of the period | 45,395,483 | 51,491,141 | 55,321,523 | 8,019,937 | ||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid for income taxes, net | 1,206,555 | 1,068,868 | 1,464,650 | 212,330 | ||||||||||||
Cash paid for interest expenses | 97,424 | 18,313 | 78,326 | 11,355 | ||||||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||||||
NETEASE, INC. | ||||||||||||||||||||
UNAUDITED SEGMENT INFORMATION | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||||||||||||
2025 | 2025 | 2026 | 2026 | |||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | |||||||||||||||||
Net revenues: | ||||||||||||||||||||
Games and related value-added services | 24,048,007 | 21,966,634 | 25,712,975 | 3,727,598 | ||||||||||||||||
Youdao | 1,298,262 | 1,564,692 | 1,348,022 | 195,422 | ||||||||||||||||
NetEase Cloud Music | 1,858,388 | 1,968,270 | 1,981,234 | 287,219 | ||||||||||||||||
Innovative businesses and others | 1,623,888 | 2,047,377 | 1,549,050 | 224,565 | ||||||||||||||||
Total net revenues | 28,828,545 | 27,546,973 | 30,591,281 | 4,434,804 | ||||||||||||||||
Cost of revenues: | ||||||||||||||||||||
Games and related value-added services | (7,495,262) | (6,472,229) | (6,482,431) | (939,755) | ||||||||||||||||
Youdao | (684,035) | (859,314) | (745,729) | (108,108) | ||||||||||||||||
NetEase Cloud Music | (1,175,777) | (1,285,937) | (1,247,066) | (180,787) | ||||||||||||||||
Innovative businesses and others | (994,065) | (1,237,118) | (898,983) | (130,325) | ||||||||||||||||
Total cost of revenues | (10,349,139) | (9,854,598) | (9,374,209) | (1,358,975) | ||||||||||||||||
Gross profit: | ||||||||||||||||||||
Games and related value-added services | 16,552,745 | 15,494,405 | 19,230,544 | 2,787,843 | ||||||||||||||||
Youdao | 614,227 | 705,378 | 602,293 | 87,314 | ||||||||||||||||
NetEase Cloud Music | 682,611 | 682,333 | 734,168 | 106,432 | ||||||||||||||||
Innovative businesses and others | 629,823 | 810,259 | 650,067 | 94,240 | ||||||||||||||||
Total gross profit | 18,479,406 | 17,692,375 | 21,217,072 | 3,075,829 | ||||||||||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||||||||||
NETEASE, INC.
NOTES TO UNAUDITED FINANCIAL INFORMATION
Note 1: The conversion of Renminbi (RMB) into
Note 2: Share-based compensation cost reported in the Company's unaudited condensed consolidated statements of comprehensive income is set out as follows in RMB and USD (in thousands):
Three Months Ended | ||||||||||||||||||||
March 31, | December 31, | March 31, | March 31, | |||||||||||||||||
2025 | 2025 | 2026 | 2026 | |||||||||||||||||
RMB | RMB | RMB | USD (Note 1) | |||||||||||||||||
Share-based compensation cost included in: | ||||||||||||||||||||
Cost of revenues | 233,711 | 212,072 | 269,336 | 39,046 | ||||||||||||||||
Operating expenses | 718,161 | 635,122 | 346,844 | 50,283 | ||||||||||||||||
The accompanying notes are an integral part of this announcement. | ||||||||||||||||||||
Note 3: The financial information prepared and presented in this announcement might be different from those published and to be published by NetEase's listed subsidiary to meet the disclosure requirements under different accounting standards requirements.
Note 4: The unaudited reconciliation of GAAP and non-GAAP results is set out as follows in RMB and USD (in thousands, except per share data or per ADS data):
Three Months Ended | |||||||
March 31, | December 31, | March 31, | March 31, | ||||
2025 | 2025 | 2026 | 2026 | ||||
RMB | RMB | RMB | USD (Note 1) | ||||
Net income attributable to the Company's shareholders | 10,301,157 | 6,241,956 | 10,674,106 | 1,547,419 | |||
Add: Share-based compensation | 935,570 | 831,031 | 600,718 | 87,086 | |||
Non-GAAP net income attributable to the Company's shareholders | 11,236,727 | 7,072,987 | 11,274,824 | 1,634,505 | |||
Non-GAAP net income per share * | |||||||
Basic | 3.54 | 2.22 | 3.53 | 0.51 | |||
Diluted | 3.50 | 2.19 | 3.49 | 0.51 | |||
Non-GAAP net income per ADS * | |||||||
Basic | 17.70 | 11.08 | 17.63 | 2.56 | |||
Diluted | 17.51 | 10.95 | 17.46 | 2.53 | |||
* Each ADS represents five ordinary shares. | |||||||
The accompanying notes are an integral part of this announcement. | |||||||
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SOURCE NetEase, Inc.