NetEase Announces First Quarter 2025 Unaudited Financial Results

Rhea-AI Summary

NetEase (NTES) reported strong Q1 2025 financial results with net revenues of RMB28.8 billion (US$4.0 billion), up 7.4% year-over-year. The company's gaming division led growth with revenues of RMB24.0 billion (US$3.3 billion), increasing 12.1% YoY. Net income reached RMB10.3 billion (US$1.4 billion), with non-GAAP earnings of US$0.49 per share. Notable gaming successes included Marvel Rivals topping Steam's charts, Where Winds Meet surpassing 30 million players, and FragPunk's successful launch. The company declared a quarterly dividend of US$0.1350 per share. However, Youdao, Cloud Music, and innovative businesses segments showed revenue declines. Operating expenses decreased 14.4% YoY to RMB8.0 billion, while the company maintained a strong net cash position of RMB137.0 billion.

Positive

• Gaming revenue increased 12.1% YoY to RMB24.0 billion, showing strong growth in core business
• Net income grew significantly to RMB10.3 billion, up from RMB7.6 billion in Q1 2024
• Operating expenses decreased 14.4% YoY, showing improved operational efficiency
• Strong game launches with Marvel Rivals, Where Winds Meet, and FragPunk performing well globally
• Net cash position strengthened to RMB137.0 billion from RMB131.5 billion in previous quarter

Negative

• Youdao revenue declined 6.7% YoY to RMB1.3 billion
• NetEase Cloud Music revenue decreased 8.4% YoY to RMB1.9 billion
• Innovative businesses segment showed significant decline of 17.6% YoY
• Effective tax rate increased to 15.3% from 13.4% in the previous quarter

Insights

Financial Analyst

NetEase delivered strong Q1 2025 results with 7.4% revenue growth and 35.8% net margin, driven primarily by its gaming division.

NetEase has posted solid financial results for Q1 2025, achieving RMB28.8 billion in revenue, representing a 7.4% year-over-year growth. The company's performance was primarily driven by its gaming segment, which grew an impressive 12.1% YoY to RMB24.0 billion, accounting for approximately 83% of total revenue.

Profitability metrics show remarkable strength. Gross profit increased by 8.6% YoY to RMB18.5 billion, yielding a healthy gross margin of 64.2%. Net income attributable to shareholders jumped to RMB10.3 billion, translating to a robust net profit margin of 35.8%. On a non-GAAP basis, which excludes share-based compensation, net income reached RMB11.2 billion.

Operational efficiency improved substantially, with total operating expenses decreasing by 14.4% YoY to RMB8.0 billion. This reduction stemmed mainly from decreased marketing expenditures related to games, indicating more efficient customer acquisition strategies and mature product lifecycles.

The company's balance sheet remains exceptionally strong, with net cash position expanding to RMB137.0 billion ($18.9 billion) as of March 31, 2025, up from RMB131.5 billion at the end of 2024. Operating cash flow generation was robust at RMB12.1 billion, demonstrating excellent cash conversion.

While the gaming segment thrived, other business units faced challenges. Youdao (education) revenues declined 6.7% YoY, NetEase Cloud Music dropped 8.4% YoY, and innovative businesses decreased by 17.6% YoY. However, Youdao achieved record-high Q1 operating profit despite revenue decline, suggesting improved operational efficiency and cost structure.

The company continues to reward shareholders through its quarterly dividend program, declaring a dividend of $0.6750 per ADS for Q1 2025. Additionally, NetEase has repurchased approximately 21.6 million ADSs for $1.9 billion under its current $5.0 billion share repurchase program.

The success of recently launched titles like Marvel Rivals, Where Winds Meet, FragPunk, and Once Human, combined with the sustained performance of established franchises, positions NetEase well for continued growth in its core gaming business.

Gaming Industry Specialist

NetEase's gaming portfolio diversification and global expansion strategy is yielding impressive results with multiple successful new game launches.

NetEase's Q1 2025 results reveal an exceptionally strong gaming performance, with its core games segment growing 12.1% year-over-year to RMB24.0 billion. What's particularly notable is that online games now account for 97.5% of this segment's revenue, up from 95.2% in Q1 2024, indicating increased monetization efficiency.

The company's recent title launches demonstrate a successful multi-genre global expansion strategy. Marvel Rivals topped Steam's global top sellers chart shortly after its Season 2 update, while Where Winds Meet has accumulated over 30 million registered players since its December 2024 debut. FragPunk launched strongly in March 2025, ranking 6th on Steam's global charts with 110,000 peak concurrent players in just three days. Most impressively, Once Human mobile game claimed the #1 spot on iOS download charts in over 160 regions upon its April 2025 release.

NetEase's partnership with Blizzard continues to deliver results, with World of Warcraft and Hearthstone maintaining momentum through localized events. Overwatch's return has set new concurrent player records in China, and Diablo 3 is on track for its Chinese return with technical testing initiated in April 2025.

The company's strength in long-term game operations is evident in the sustained performance of established franchises like Fantasy Westward Journey, Identity V, Eggy Party, Naraka: Bladepoint, and Justice. This operational expertise allows NetEase to maintain revenue streams from older titles while launching new ones.

The future pipeline looks robust with upcoming titles including MARVEL Mystic Mayhem, Destiny: Rising, and Ananta, further diversifying the portfolio. This combination of successful recent launches, sustained performance from established franchises, and a promising development pipeline positions NetEase as an increasingly formidable global gaming competitor with strengthening market position outside China.

HANGZHOU, China, May 15, 2025 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced its unaudited financial results for the first quarter ended March 31, 2025.

First Quarter 2025 Financial Highlights

• Net revenues were RMB28.8 billion (US$4.0 billion), an increase of 7.4% compared with the same quarter of 2024.
  • Games and related value-added services net revenues were RMB24.0 billion (US$3.3 billion), an increase of 12.1% compared with the same quarter of 2024.
  • Youdao net revenues were RMB1.3 billion (US$178.9 million), a decrease of 6.7% compared with the same quarter of 2024.
  • NetEase Cloud Music net revenues were RMB1.9 billion (US$256.1 million), a decrease of 8.4% compared with the same quarter of 2024.
  • Innovative businesses and others net revenues were RMB1.6 billion (US$223.8 million), a decrease of 17.6% compared with the same quarter of 2024.
• Gross profit was RMB18.5 billion (US$2.5 billion), an increase of 8.6% compared with the same quarter of 2024.
• Total operating expenses were RMB8.0 billion (US$1.1 billion), a decrease of 14.4% compared with the same quarter of 2024.
• Net income attributable to the Company's shareholders was RMB10.3 billion (US$1.4 billion). Non-GAAP net income attributable to the Company's shareholders was RMB11.2 billion (US$1.5 billion).^[1]
• Basic net income per share was US$0.45 (US$2.24 per ADS). Non-GAAP basic net income per share was US$0.49 (US$2.44 per ADS).^[1]

[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 2025 and Recent Operational Highlights

• Success of recently released titles drove increased traction in the global game market and further diversified our portfolio across genres.
  • Marvel Rivals topped Steam's global top sellers chart shortly after its Season 2 update in April 2025.
  • Where Winds Meet has maintained strong popularity since its December 2024 launch, surpassing 30 million registered players as of March 2025.
  • FragPunk's March 2025 launch ignited player enthusiasm, ranking No. 6 on Steam's global top sellers chart and amassing over 110,000 peak concurrent players in three days.
  • Once Human mobile game quickly claimed the No.1 position on the iOS download charts in more than 160 regions upon its April 2025 launch, garnering significant global attention.
• Blizzard titles sustained robust momentum, with World of Warcraft and Hearthstone engaging local communities through customized regional events in China. Additionally, the return of Overwatch pushed its regional peak concurrent players in China to a new record high. With technical testing initiated on April 16, 2025, Diablo 3 is also on track for its return to China.
• Increased the popularity of established titles through targeted events and crossover synergies, including Fantasy Westward Journey Online and mobile game, Infinite Borders, Identity V, Eggy Party, Naraka: Bladepoint franchises and Justice franchises, highlighting NetEase's strength in long-term game operations.
• Strengthened global game pipeline with multiple new titles under development, including MARVEL Mystic Mayhem, Destiny: Rising and Ananta.
• Youdao remained committed to technology-driven innovation and profitability enhancement, achieving record-high first-quarter operating profit, maintaining the profitability momentum in previous quarters.

"We entered 2025 with solid momentum, fueled by our ongoing innovation and new titles that strengthen our reach across genres and resonate with players around the world," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "In addition to the strong performance of our latest games, our long-standing franchises continue to thrive, powered by outstanding content updates and continuous gameplay enhancements that bring fresh takes to player experiences. As we reimagine new gaming possibilities, we remain rooted in innovation and long-term operations, partnering with top talent and strategic collaborators to deliver engaging experiences to players everywhere.

"Alongside our games, Youdao and our other businesses continued their healthy development in the first quarter, driven by the same commitment to high-quality, technology-driven innovation. We remain focused on deepening engagement and creating lasting value by finding ways to connect, entertain and serve our users both domestically and worldwide," Mr. Ding concluded.

First Quarter 2025 Financial Results

Net Revenues

Net revenues for the first quarter of 2025 were RMB28.8 billion (US$4.0 billion), compared with RMB26.7 billion and RMB26.9 billion for the preceding quarter and the same quarter of 2024, respectively.

Net revenues from games and related value-added services were RMB24.0 billion (US$3.3 billion) for the first quarter of 2025, compared with RMB21.2 billion and RMB21.5 billion for the preceding quarter and the same quarter of 2024, respectively. Net revenues from the operation of online games accounted for approximately 97.5% of the segment's net revenues for the first quarter of 2025, compared with 96.7% and 95.2% for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter increase was primarily due to increased online games net revenues, such as Identity V and certain newly launched titles including Where Winds Meet and Marvel Rivals. The year-over-year increase was primarily due to increased net revenues from Identity V, several newly launched titles, as well as certain licensed games.

Net revenues from Youdao were RMB1.3 billion (US$178.9 million) for the first quarter of 2025, compared with RMB1.3 billion and RMB1.4 billion for the preceding quarter and the same quarter of 2024, respectively. The year-over-year decrease was primarily due to a decrease in net revenues from its learning services as it continued to prioritize core services with strong long-term potential.

Net revenues from NetEase Cloud Music were RMB1.9 billion (US$256.1 million) for the first quarter of 2025, compared with RMB1.9 billion and RMB2.0 billion for the preceding quarter and the same quarter of 2024, respectively. The year-over-year decrease was primarily due to decreased net revenues from its social entertainment services.

Net revenues from innovative businesses and others were RMB1.6 billion (US$223.8 million) for the first quarter of 2025, compared with RMB2.3 billion and RMB2.0 billion for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter and year-over-year decreases were primarily due to decreased net revenues from Yanxuan, advertising services and certain other businesses in this segment.

Gross Profit

Gross profit for the first quarter of 2025 was RMB18.5 billion (US$2.5 billion), compared with RMB16.3 billion and RMB17.0 billion for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter and year-over-year increases were primarily due to increased net revenues from online games as mentioned above.

Operating Expenses

Total operating expenses for the first quarter of 2025 were RMB8.0 billion (US$1.1 billion), compared with RMB8.5 billion and RMB9.4 billion for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter decrease was mainly due to decreased research and development investments related to games and related value-added services and marketing expenditures related to innovative businesses and others. The year-over-year decrease was mainly due to decreased marketing expenditures related to games and related value-added services.

Other Income/(Expenses)

Other income/(expenses) consisted of investment income/(loss), interest income, net exchange gains and others. The quarter-over-quarter decrease was mainly due to decreased net exchange gains. The year-over-year increase was mainly due to lower investment impairment provisions incurred in the first quarter of 2025.

Income Tax

The Company recorded a net income tax charge of RMB1.9 billion (US$262.5 million) for the first quarter of 2025, compared with RMB1.4 billion and RMB1.5 billion for the preceding quarter and the same quarter of 2024, respectively. The effective tax rate for the first quarter of 2025 was 15.3%, compared with 13.4% and 16.0% for the preceding quarter and the same quarter of 2024, respectively. The effective tax rate represents certain estimates by the Company as to the tax obligations and benefits applicable to it in each quarter.

Net Income and Non-GAAP Net Income

Net income attributable to the Company's shareholders totaled RMB10.3 billion (US$1.4 billion) for the first quarter of 2025, compared with RMB8.8 billion and RMB7.6 billion for the preceding quarter and the same quarter of 2024, respectively.

Basic net income was US$0.45 per share (US$2.24 per ADS) for the first quarter of 2025, compared with US$0.38 per share (US$1.90 per ADS) and US$0.33 per share (US$1.64 per ADS) for the preceding quarter and the same quarter of 2024, respectively. 

Non-GAAP net income attributable to the Company's shareholders totaled RMB11.2 billion (US$1.5 billion) for the first quarter of 2025, compared with RMB9.7 billion and RMB8.5 billion for the preceding quarter and the same quarter of 2024, respectively.

Non-GAAP basic net income was US$0.49 per share (US$2.44 per ADS) for the first quarter of 2025, compared with US$0.42 per share (US$2.10 per ADS) and US$0.37 per share (US$1.83 per ADS) for the preceding quarter and the same quarter of 2024, respectively.

Other Financial Information

As of March 31, 2025, 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 RMB137.0 billion (US$18.9 billion), compared with RMB131.5 billion as of December 31, 2024. Net cash provided by operating activities was RMB12.1 billion (US$1.7 billion) for the first quarter of 2025, compared with RMB13.0 billion and RMB9.6 billion for the preceding quarter and the first quarter of 2024, respectively.

Quarterly Dividend

The board of directors approved a dividend of US$0.1350 per share (US$0.6750 per ADS) for the first quarter of 2025 to holders of ordinary shares and holders of ADSs as of the close of business on May 30, 2025, Beijing/Hong Kong Time and New York Time, respectively, payable in U.S. dollars. For holders of ordinary shares, in order to qualify for the dividend, all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17^th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on May 30, 2025 (Beijing/Hong Kong Time). The payment date is expected to be June 10, 2025, for holders of ordinary shares and on or around June 13, 2025, for holders of ADSs.

NetEase paid a dividend of US$0.24405 per share (US$1.22025 per ADS) for the fourth quarter of 2024 in March 2025.

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 17, 2022, the Company announced that its board of directors had approved a share repurchase program of up to US$5.0 billion of the Company's ADSs and ordinary shares in open market transactions. This share repurchase program commenced on January 10, 2023 and will be in effect for a period not to exceed 36 months from such date. As of March 31, 2025, approximately 21.6 million ADSs had been repurchased under this program for a total cost of US$1.9 billion.

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.

** The United States dollar (US$) amounts disclosed in this announcement are presented solely for the convenience of the reader. The percentages stated are calculated based on RMB. 

Conference Call

NetEase's management team will host a teleconference call with a simultaneous webcast at 8:00 a.m. New York Time on Thursday, May 15, 2025 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, May 15, 2025). NetEase's management will be on the call to discuss the quarterly results and answer questions.

Interested parties may participate in the conference call by dialing 1-914-202-3258 and providing conference ID: 10046898, 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: 10046898. The replay will be available through May 22, 2025.

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 China and globally.

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 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 historical facts, including statements about NetEase's strategies and business plans, its expectations regarding the growth of its business and its revenue and the quotations from management in this announcement are or contain forward-looking statements. NetEase may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the online games market will not continue to grow or that NetEase will not be able to maintain its position in that market in China or globally; risks associated with NetEase's business and operating strategies and its ability to implement such strategies; NetEase's ability to develop and manage its operations and business; competition for, among other things, capital, technology and skilled personnel; potential changes in regulation environment in the markets where NetEase operates; the risk that NetEase may not be able to continuously develop new and creative online services or that NetEase will not be able to set, or follow in a timely manner, trends in the market; risks related to evolving economic cycles and geopolitical tensions, including the direct or indirect impacts of national trade, investment, protectionist, tax or other laws or policies as well as export controls and economic or trade sanctions; risks related to the expansion of NetEase's businesses and operations internationally; risks associated with cybersecurity threats or incidents; and fluctuations in foreign currency exchange rates that could adversely affect NetEase's business and financial results. Further information regarding these and other risks is included in NetEase's filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. NetEase does not undertake any obligation to update this forward-looking information, except as required under applicable law.

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 the United States of America ("U.S. GAAP").

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 U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP net income attributable to the Company's shareholders is that it does not reflect all items of expense/ income that affect our operations. Share-based compensation expenses have been and may continue to be incurred in NetEase's business and are not reflected in the presentation of non-GAAP net income attributable to the Company's shareholders. In addition, the non-GAAP financial measures NetEase uses may differ from the non-GAAP measures used by other companies, including peer companies, and therefore their comparability may be limited.

NetEase compensates for these limitations by reconciling non-GAAP net income attributable to the Company's shareholders to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance. See the unaudited reconciliation of GAAP and non-GAAP results at the end of this announcement. NetEase encourages you to review its financial information in its entirety and not rely on a single financial measure.

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,
	2024		2025		2025
	RMB		RMB		USD (Note 1)
Assets
Current assets:
Cash and cash equivalents	51,383,310		41,748,614		5,753,113
Time deposits	75,441,355		81,008,298		11,163,242
Restricted cash	3,086,405		3,641,643		501,832
Accounts receivable, net	5,669,027		6,742,202		929,100
Inventories	571,548		517,787		71,353
Prepayments and other current assets, net	6,416,868		6,654,459		917,009
Short-term investments	10,756,143		17,357,707		2,391,956
Total current assets	153,324,656		157,670,710		21,727,605
Non-current assets:
Property, equipment and software, net	8,520,101		8,454,460		1,165,056
Land use rights, net	4,172,465		4,140,969		570,641
Deferred tax assets	1,113,435		1,283,673		176,895
Time deposits	3,025,000		3,025,000		416,856
Restricted cash	5,208		5,226		720
Other long-term assets	25,830,685		26,278,094		3,621,218
Total non-current assets	42,666,894		43,187,422		5,951,386
Total assets	195,991,550		200,858,132		27,678,991
Liabilities, Redeemable Noncontrolling Interests     and Shareholders' Equity
Current liabilities:
Accounts payable	720,549		565,140		77,878
Salary and welfare payables	4,683,009		2,614,923		360,346
Taxes payable	2,759,185		4,557,696		628,067
Short-term loans	11,805,051		9,824,016		1,353,786
Contract liabilities	15,299,222		17,748,602		2,445,823
Accrued liabilities and other payables	14,400,641		13,827,806		1,905,523
Total current liabilities	49,667,657		49,138,183		6,771,423
Non-current liabilities:
Deferred tax liabilities	2,173,117		2,671,570		368,152
Long-term loans	427,997		-		-
Other long-term liabilities	1,228,641		1,179,135		162,489
Total non-current liabilities	3,829,755		3,850,705		530,641
Total liabilities	53,497,412		52,988,888		7,302,064
Redeemable noncontrolling interests	84,272		86,005		11,852
NetEase, Inc.'s shareholders' equity	138,685,606		143,834,194		19,820,882
Noncontrolling interests	3,724,260		3,949,045		544,193
Total equity	142,409,866		147,783,239		20,365,075
Total liabilities, redeemable noncontrolling      interests and shareholders' equity	195,991,550		200,858,132		27,678,991
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,
		2024		2024		2025		2025
		RMB		RMB		RMB		USD (Note 1)
Net revenues		26,851,741		26,747,811		28,828,545		3,972,680
Cost of revenues		(9,835,821)		(10,475,470)		(10,349,139)		(1,426,149)
Gross profit		17,015,920		16,272,341		18,479,406		2,546,531
Operating expenses:
Selling and marketing expenses		(4,022,204)		(2,818,645)		(2,695,597)		(371,463)
General and administrative expenses		(1,196,475)		(1,162,381)		(956,337)		(131,787)
Research and development expenses		(4,174,758)		(4,469,868)		(4,386,313)		(604,450)
Total operating expenses		(9,393,437)		(8,450,894)		(8,038,247)		(1,107,700)
Operating profit		7,622,483		7,821,447		10,441,159		1,438,831
Other income/(expenses):
Investment income/(loss), net		179,291		(506,077)		692,751		95,464
Interest income, net		1,277,597		1,174,333		1,060,886		146,194
Exchange gains, net		15,011		1,535,312		1,803		248
Other, net		193,888		278,952		255,315		35,183
Income before tax		9,288,270		10,303,967		12,451,914		1,715,920
Income tax		(1,485,910)		(1,385,014)		(1,905,143)		(262,536)
Net income		7,802,360		8,918,953		10,546,771		1,453,384
Accretion of redeemable noncontrolling     interests		(958)		(1,039)		(1,049)		(145)
Net income attributable to noncontrolling     interests and redeemable noncontrolling     interests		(167,456)		(151,435)		(244,565)		(33,702)
Net income attributable to the     Company's shareholders		7,633,946		8,766,479		10,301,157		1,419,537
Net income per share *
Basic		2.38		2.76		3.25		0.45
Diluted		2.35		2.73		3.21		0.44
Net income per ADS *
Basic		11.88		13.81		16.23		2.24
Diluted		11.75		13.67		16.06		2.21
Weighted average number of ordinary     shares used in calculating net income     per share *
Basic		3,211,665		3,174,113		3,173,899		3,173,899
Diluted		3,249,452		3,206,100		3,206,362		3,206,362
*  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,
		2024		2024		2025		2025
		RMB		RMB		RMB		USD (Note 1)
Cash flows from operating activities:
Net income		7,802,360		8,918,953		10,546,771		1,453,384
Adjustments to reconcile net income to net cash provided         by operating activities:
Depreciation and amortization		567,923		697,447		480,761		66,251
Fair value changes of equity security and other investments		(368,258)		358,852		(558,499)		(76,963)
Impairment losses on investments		128,417		422,801		89,071		12,274
Fair value changes of short-term investments		(60,810)		(241,431)		(201,609)		(27,782)
Share-based compensation cost		894,300		931,444		951,872		131,170
Allowance for expected credit losses		11,600		12,031		16,771		2,311
Losses/(gains) on disposal of property, equipment and software		2,132		(3,644)		20,293		2,797
Unrealized exchange gains		(17,509)		(1,542,986)		(28,453)		(3,921)
(Gains)/losses on disposal of long-term investments,         business and subsidiaries		(13,487)		232		11,675		1,609
Deferred income taxes		485,054		404,109		328,272		45,237
Share of results on equity method investees and revaluation         results from previously held equity interest		164,271		(19,437)		(18,668)		(2,572)
Changes in operating assets and liabilities:
Accounts receivable		(1,358,711)		517,850		(1,088,960)		(150,063)
Inventories		91,378		42,135		53,773		7,410
Prepayments and other assets		326,140		(432,196)		(295,178)		(40,676)
Accounts payable		(7,001)		218,689		(148,076)		(20,405)
Salary and welfare payables		(2,178,608)		1,759,382		(2,085,111)		(287,336)
Taxes payable		1,271,822		154,651		1,796,123		247,512
Contract liabilities		1,574,086		(209,626)		2,526,198		348,119
Accrued liabilities and other payables		242,070		1,022,944		(290,374)		(40,015)
Net cash provided by operating activities		9,557,169		13,012,200		12,106,652		1,668,341
Cash flows from investing activities:
Purchase of property, equipment and software		(415,018)		(311,982)		(454,071)		(62,573)
Proceeds from sale of property, equipment and software		3,506		9,295		1,336		184
Purchase of intangible assets, content and licensed copyrights		(188,821)		(120,387)		(298,771)		(41,172)
Net changes of short-term investments with terms of three months or less		2,401,649		3,798,989		(6,138,556)		(845,916)
Purchase of short-term investments with terms over three months		-		(4,560,000)		(2,970,000)		(409,277)
Proceeds from maturities of short-term investments with terms over three months		-		2,853,778		2,708,601		373,255
Investment in long-term investments and acquisition of subsidiaries		(481,804)		(201,686)		(90,966)		(12,535)
Proceeds from disposal of long-term investments, businesses,         subsidiaries and other financial instruments		85,456		355,142		77,428		10,670
Placement/rollover of matured time deposits		(34,558,836)		(21,691,769)		(49,601,807)		(6,835,312)
Proceeds from maturities of time deposits		46,048,382		40,570,700		43,926,482		6,053,231
Change in other long-term assets		(34,625)		(73,553)		(678)		(93)
Net cash provided by/(used in) investing activities		12,859,889		20,628,527		(12,841,002)		(1,769,538)
Cash flows from financing activities:
Net changes from loans with terms of three months or less		(399,726)		606,092		(2,254,415)		(310,667)
Proceeds of loans with terms over three months		6,998,250		457,000		2,747,550		378,623
Payment of loans with terms over three months		(957,000)		-		(2,935,677)		(404,547)
Net amounts received related to capital contribution from        or repurchase of noncontrolling interests shareholders		42,214		51,614		42,517		5,859
Cash paid for repurchase of NetEase's ADSs/purchase of         subsidiaries' ADSs and shares		(1,233,780)		(1,595,093)		(303,601)		(41,837)
Dividends paid to NetEase's shareholders		(4,945,016)		(1,982,595)		(5,584,532)		(769,569)
Net cash used in by financing activities		(495,058)		(2,462,982)		(8,288,158)		(1,142,138)
Effect of exchange rate changes on cash, cash equivalents and         restricted cash held in foreign currencies		(43,138)		113,792		(56,932)		(7,845)
Net increase/(decrease) in cash, cash equivalents and restricted cash		21,878,862		31,291,537		(9,079,440)		(1,251,180)
Cash, cash equivalents and restricted cash, at the beginning of the period		24,206,658		23,183,386		54,474,923		7,506,845
Cash, cash equivalents and restricted cash, at end of the period		46,085,520		54,474,923		45,395,483		6,255,665
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net		1,182,711		603,514		1,206,555		166,268
Cash paid for interest expenses		146,455		24,343		97,424		13,425
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,
		2024		2024		2025		2025
		RMB		RMB		RMB		USD (Note 1)
Net revenues:
Games and related value-added services		21,460,378		21,242,410		24,048,007		3,313,904
Youdao		1,391,859		1,339,798		1,298,262		178,905
NetEase Cloud Music		2,029,541		1,880,490		1,858,388		256,093
Innovative businesses and others		1,969,963		2,285,113		1,623,888		223,778
Total net revenues		26,851,741		26,747,811		28,828,545		3,972,680
Cost of revenues:
Games and related value-added services		(6,555,311)		(7,075,562)		(7,495,262)		(1,032,875)
Youdao		(710,356)		(699,045)		(684,035)		(94,263)
NetEase Cloud Music		(1,259,006)		(1,279,951)		(1,175,777)		(162,026)
Innovative businesses and others		(1,311,148)		(1,420,912)		(994,065)		(136,985)
Total cost of revenues		(9,835,821)		(10,475,470)		(10,349,139)		(1,426,149)
Gross profit:
Games and related value-added services		14,905,067		14,166,848		16,552,745		2,281,029
Youdao		681,503		640,753		614,227		84,642
NetEase Cloud Music		770,535		600,539		682,611		94,067
Innovative businesses and others		658,815		864,201		629,823		86,793
Total gross profit		17,015,920		16,272,341		18,479,406		2,546,531
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 United States dollars (USD) is based on the noon buying rate of USD1.00 = RMB7.2567 on the last trading day of March 2025 (March 31, 2025) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on March 31, 2025, or at any other certain date.

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):

NETEASE, INC.
RMB in thousands
		Three Months Ended
			March 31,		December 31,		March 31,		March 31,
			2024		2024		2025		2025
			RMB		RMB		RMB		USD (Note 1)
Share-based compensation cost included in:
Cost of revenues			254,935		304,687		233,711		32,206
Operating expenses
Selling and marketing expenses			17,869		7,435		32,578		4,489
General and administrative expenses			289,636		246,424		261,259		36,002
Research and development expenses			331,860		372,898		424,324		58,473

 

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):

NETEASE, INC.
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(in thousands, except per share data or per ADS data)
		Three Months Ended
		March 31,		December 31,		March 31,		March 31,
		2024		2024		2025		2025
		RMB		RMB		RMB		USD (Note 1)
Net income attributable to the Company's shareholders		7,633,946		8,766,479		10,301,157		1,419,537
Add: Share-based compensation		876,898		915,489		935,570		128,925
Non-GAAP net income attributable to the Company's shareholders		8,510,844		9,681,968		11,236,727		1,548,462
Non-GAAP net income per share *
Basic		2.65		3.05		3.54		0.49
Diluted		2.62		3.02		3.50		0.48
Non-GAAP net income per ADS *
Basic		13.25		15.25		17.70		2.44
Diluted		13.10		15.09		17.51		2.41
*  Each ADS represents five ordinary shares.
The accompanying notes are an integral part of this announcement.

 

View original content:https://www.prnewswire.com/news-releases/netease-announces-first-quarter-2025-unaudited-financial-results-302456373.html

SOURCE NetEase, Inc.

FAQ

What were NetEase's (NTES) key financial results for Q1 2025?

NetEase reported Q1 2025 revenues of RMB28.8 billion (US$4.0 billion), up 7.4% YoY, with net income of RMB10.3 billion (US$1.4 billion). Gaming revenue grew 12.1% to RMB24.0 billion.

How much dividend did NetEase (NTES) declare for Q1 2025?

NetEase declared a quarterly dividend of US$0.1350 per share (US$0.6750 per ADS) for Q1 2025, payable to shareholders of record as of May 30, 2025.

How did NetEase's gaming segment perform in Q1 2025?

NetEase's gaming segment showed strong performance with revenue of RMB24.0 billion, up 12.1% YoY, driven by successful launches including Marvel Rivals, Where Winds Meet, and FragPunk.

What is NetEase's (NTES) current share repurchase program status?

As of March 31, 2025, NetEase had repurchased approximately 21.6 million ADSs for US$1.9 billion under its US$5.0 billion share repurchase program that commenced on January 10, 2023.

How much cash does NetEase (NTES) have as of Q1 2025?

NetEase reported a net cash position of RMB137.0 billion (US$18.9 billion) as of March 31, 2025, an increase from RMB131.5 billion in the previous quarter.