NetEase Announces Second Quarter 2025 Unaudited Financial Results

Rhea-AI Summary

NetEase (NASDAQ: NTES) reported strong Q2 2025 financial results with net revenues of RMB27.9 billion (US$3.9 billion), up 9.4% year-over-year. The company's gaming segment led growth with RMB22.8 billion in revenues, increasing 13.7% from 2024. Net income reached RMB8.6 billion (US$1.2 billion), with non-GAAP earnings of US$0.42 per share.

The quarter saw successful global game launches, including FragPunk, Dunk City Dynasty, and MARVEL Mystic Mayhem. Established franchises maintained strong momentum, with Fantasy Westward Journey Online reaching a new peak of 2.93 million concurrent players. The company declared a quarterly dividend of US$0.5700 per ADS and continued its share repurchase program, having bought back US$2.0 billion worth of ADSs.

Key metrics showed solid performance in gaming and education segments, though Cloud Music revenues decreased 3.5% and innovative businesses declined 17.8% year-over-year.

Positive

• Net revenues increased 9.4% year-over-year to RMB27.9 billion (US$3.9 billion)
• Gaming segment revenues grew 13.7% year-over-year to RMB22.8 billion
• Gross profit increased 12.5% year-over-year to RMB18.1 billion
• Operating expenses decreased 0.6% year-over-year
• Strong cash position with net cash of RMB142.1 billion (US$19.8 billion)
• Successful global game launches with top chart rankings
• Quarterly dividend of US$0.5700 per ADS declared

Negative

• NetEase Cloud Music revenues decreased 3.5% year-over-year
• Innovative businesses segment declined 17.8% year-over-year
• Quarter-over-quarter decrease in online games net revenues
• Net income decreased from RMB10.3 billion in Q1 to RMB8.6 billion in Q2 2025

News Market Reaction

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On the day this news was published, NTES declined 3.88%, reflecting a moderate negative market reaction. Argus tracked a trough of -2.8% from its starting point during tracking. Our momentum scanner triggered 4 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $3.45B from the company's valuation, bringing the market cap to $85.42B at that time.

Data tracked by StockTitan Argus on the day of publication.

HANGZHOU, China, Aug. 14, 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 second quarter ended June 30, 2025.

Second Quarter 2025 Financial Highlights

• Net revenues were RMB27.9 billion (US$3.9 billion), an increase of 9.4% compared with the same quarter of 2024.
  • Games and related value-added services net revenues were RMB22.8 billion (US$3.2 billion), an increase of 13.7% compared with the same quarter of 2024.
  • Youdao net revenues were RMB1.4 billion (US$197.9 million), an increase of 7.2% compared with the same quarter of 2024.
  • NetEase Cloud Music net revenues were RMB2.0 billion (US$274.8 million), a decrease of 3.5% compared with the same quarter of 2024.
  • Innovative businesses and others net revenues were RMB1.7 billion (US$237.2 million), a decrease of 17.8% compared with the same quarter of 2024.
• Gross profit was RMB18.1 billion (US$2.5 billion), an increase of 12.5% compared with the same quarter of 2024.
• Total operating expenses were RMB9.0 billion (US$1.3 billion), a decrease of 0.6% compared with the same quarter of 2024.
• Net income attributable to the Company's shareholders was RMB8.6 billion (US$1.2 billion). Non-GAAP net income attributable to the Company's shareholders was RMB9.5 billion (US$1.3 billion).^[1]
• Basic net income per share was US$0.38 (US$1.88 per ADS). Non-GAAP basic net income per share was US$0.42 (US$2.09 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.

Second Quarter 2025 and Recent Operational Highlights

• Extended global traction with new launches across regions:
  • FragPunk ranked No. 2 on PlayStation's North America free-to-play download chart in May, following its April 29 global launch on Xbox Series X|S and PlayStation 5.
  • Dunk City Dynasty gained substantial momentum with its May 22 global launch, topping iOS download charts in multiple regions and reaching No. 2 in the U.S.
  • MARVEL Mystic Mayhem's June 25 launch propelled the game to No. 1 on iOS download charts across multiple regions and No. 2 in the U.S.
• Sustained player momentum and operating strength across established franchises:
  • Sword of Justice (previously Justice mobile game) hit No. 3 on China's iOS top-grossing chart shortly after its second anniversary update on June 30.
  • Once Human reached No. 4 on Steam's global top sellers chart following its anniversary update on July 3.
  • Identity V ranked No. 6 on the iOS top-grossing chart in China following its seasonal update on July 10.
  • Naraka: Bladepoint mobile game celebrated its first anniversary with the launch of a new version on July 10, propelling it to No. 6 on China's iOS top-grossing chart.
  • Eggy Party reached No. 5 on China's iOS top-grossing chart on July 11 after a series of third-anniversary events.
  • Marvel Rivals ranked No. 2 on Steam's global top-sellers chart and No. 1 in the U.S with its Summer Party Event unveiled on July 17.
  • Fantasy Westward Journey Online reached a new all-time high with over 2.93 million peak concurrent players in August.
• Further captivated players in China with Blizzard titles. Hearthstone ranked No. 5 on China's iOS top-grossing chart on July 9, fueled by the launch of The Lost City of Un'Goro expansion pack, while World of Warcraft's 20th anniversary celebration in China sparked strong community engagement with the announcement of a new China-exclusive server set to launch in November.
• Enriched global pipeline with exciting new titles underway, including NetEase's original ocean adventure RPG Sea of Remnants and story-driven action-adventure game Blood Message, along with plans to bring Sword of Justice and Where Winds Meet to the global market.

"In the second quarter, we grew our player community with thrilling new content that reinforces our position as a creator of high-impact, genre-defining games," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "At the core of our expansion is product innovation, disciplined execution and deep community engagement, all capabilities we have honed over many years and powered by our strong technological foundation. We will continue to push the boundaries of player experiences, scaling original IP to build lasting franchises and growing alongside our collaborative global partners.

"Beyond games, we remain focused on innovation, refining our products and content to deliver long-term value for our users, partners and shareholders," Mr. Ding concluded.

Second Quarter 2025 Financial Results

Net Revenues

Net revenues for the second quarter of 2025 were RMB27.9 billion (US$3.9 billion), compared with RMB28.8 billion and RMB25.5 billion for the preceding quarter and the same quarter of 2024, respectively.

Net revenues from games and related value-added services were RMB22.8 billion (US$3.2 billion) for the second quarter of 2025, compared with RMB24.0 billion and RMB20.1 billion for the preceding quarter and the same quarter of 2024, respectively. Net revenues from the operation of online games accounted for approximately 97.1% of the segment's net revenues for the second quarter of 2025, compared with 97.5% and 96.1% for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter decrease in online games net revenues was due to certain self-developed and licensed games. The year-over-year increase was attributable to higher net revenues from Identity V, our newly launched games Where Winds Meet and Marvel Rivals and certain licensed games.

Net revenues from Youdao were RMB1.4 billion (US$197.9 million) for the second quarter of 2025, compared with RMB1.3 billion each for the preceding quarter and the same quarter of 2024. Net revenues from its online marketing services and learning services increased quarter-over-quarter and year-over-year, while net revenues from its smart devices decreased quarter-over-quarter and year-over-year.

Net revenues from NetEase Cloud Music were RMB2.0 billion (US$274.8 million) for the second quarter of 2025, compared with RMB1.9 billion and RMB2.0 billion for the preceding quarter and the same quarter of 2024, respectively. Net revenues from its online music services increased both quarter-over-quarter and year-over-year, while net revenues from its social entertainment services and others increased quarter-over-quarter but decreased year-over-year.

Net revenues from innovative businesses and others were RMB1.7 billion (US$237.2 million) for the second quarter of 2025, compared with RMB1.6 billion and RMB2.1 billion for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter increase was led by increased net revenues from Yanxuan. The year-over-year decrease was due to decreased net revenues from Yanxuan, advertising services and certain other businesses in this segment.

Cost of Revenues

Cost of revenues for the second quarter of 2025 was RMB9.8 billion (US$1.4 billion), compared with RMB10.3 billion and RMB9.4 billion for the preceding quarter and the same quarter of 2024, respectively, with revenue sharing costs related to platforms and royalties for licensed games decreasing quarter-over-quarter, while royalties for licensed games increased year-over-year.

Gross Profit

Gross profit for the second quarter of 2025 was RMB18.1 billion (US$2.5 billion), compared with RMB18.5 billion and RMB16.0 billion for the preceding quarter and the same quarter of 2024, respectively.

Operating Expenses

Total operating expenses for the second quarter of 2025 were RMB9.0 billion (US$1.3 billion), compared with RMB8.0 billion and RMB9.0 billion for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter increase was primarily due to increased marketing expenditures related to games and related value-added services.

Other Income/(Expenses)

Other income/(expenses) consisted of investment income, interest income, net exchange losses/(gains) and others. The quarter-over-quarter decrease was mainly due to fair value changes of equity security investments, and the year-over-year increase was primarily due to net exchange gains in the second quarter of 2025, compared with net exchange losses recorded in the same quarter of 2024.

Income Tax

The Company recorded a net income tax charge of RMB1.6 billion (US$217.9 million) for the second quarter of 2025, compared with RMB1.9 billion and RMB1.3 billion for the preceding quarter and the same quarter of 2024, respectively. The effective tax rate for the second quarter of 2025 was 14.7%, compared with 15.3% 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 RMB8.6 billion (US$1.2 billion) for the second quarter of 2025, compared with RMB10.3 billion and RMB6.8 billion for the preceding quarter and the same quarter of 2024, respectively.

Basic net income was US$0.38 per share (US$1.88 per ADS) for the second quarter of 2025, compared with US$0.45 per share (US$2.27 per ADS) and US$0.29 per share (US$1.47 per ADS) for the preceding quarter and the same quarter of 2024, respectively.

Non-GAAP net income attributable to the Company's shareholders totaled RMB9.5 billion (US$1.3 billion) for the second quarter of 2025, compared with RMB11.2 billion and RMB7.8 billion for the preceding quarter and the same quarter of 2024, respectively.

Non-GAAP basic net income was US$0.42 per share (US$2.09 per ADS) for the second quarter of 2025, compared with US$0.49 per share (US$2.47 per ADS) and US$0.34 per share (US$1.70 per ADS) for the preceding quarter and the same quarter of 2024, respectively.

Other Financial Information

As of June 30, 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 RMB142.1 billion (US$19.8 billion), compared with RMB131.5 billion as of December 31, 2024. Net cash provided by operating activities was RMB10.9 billion (US$1.5 billion) for the second quarter of 2025, compared with RMB12.1 billion and RMB6.5 billion for the preceding quarter and the second quarter of 2024, respectively.

Quarterly Dividend

The board of directors approved a dividend of US$0.1140 per share (US$0.5700 per ADS) for the second quarter of 2025 to holders of ordinary shares and holders of ADSs as of the close of business on August 28, 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 August 28, 2025 (Beijing/Hong Kong Time). The payment date is expected to be September 8, 2025 for holders of ordinary shares and on or around September 11, 2025, for holders of ADSs.

NetEase paid a dividend of US$0.1350 per share (US$0.6750 per ADS) for the first quarter of 2025 in June 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 June 30, 2025, approximately 22.1 million ADSs had been repurchased under this program for a total cost of US$2.0 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. Eastern Time on Thursday, August 14, 2025 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, August 14, 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: 10049137, 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: 10049137. The replay will be available through August 21, 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,		June 30,		June 30,
	2024		2025		2025
	RMB		RMB		USD (Note 1)
Assets
Current assets:
Cash and cash equivalents	51,383,310		54,430,728		7,598,237
Time deposits	75,441,355		75,277,705		10,508,362
Restricted cash	3,086,405		3,731,100		520,841
Accounts receivable, net	5,669,027		5,776,412		806,356
Inventories	571,548		591,756		82,606
Prepayments and other current assets, net	6,416,868		6,161,982		860,179
Short-term investments	10,756,143		16,980,429		2,370,376
Total current assets	153,324,656		162,950,112		22,746,957
Non-current assets:
Property, equipment and software, net	8,520,101		8,447,022		1,179,159
Land use rights, net	4,172,465		4,111,093		573,886
Deferred tax assets	1,113,435		2,190,156		305,734
Time deposits	3,025,000		2,935,000		409,710
Restricted cash	5,208		5,266		735
Other long-term assets	25,830,685		27,860,004		3,889,107
Total non-current assets	42,666,894		45,548,541		6,358,331
Total assets	195,991,550		208,498,653		29,105,288
Liabilities, Redeemable Noncontrolling Interests     and Shareholders' Equity
Current liabilities:
Accounts payable	720,549		695,414		97,076
Salary and welfare payables	4,683,009		3,560,061		496,965
Taxes payable	2,759,185		3,796,135		529,920
Short-term loans	11,805,051		11,276,303		1,574,111
Contract liabilities	15,299,222		16,966,562		2,368,441
Accrued liabilities and other payables	14,400,641		14,157,432		1,976,301
Total current liabilities	49,667,657		50,451,907		7,042,814
Non-current liabilities:
Deferred tax liabilities	2,173,117		2,724,485		380,323
Long-term loans	427,997		-		-
Other long-term liabilities	1,228,641		1,218,109		170,041
Total non-current liabilities	3,829,755		3,942,594		550,364
Total liabilities	53,497,412		54,394,501		7,593,178
Redeemable noncontrolling interests	84,272		87,741		12,248
NetEase, Inc.'s shareholders' equity	138,685,606		149,587,316		20,881,584
Noncontrolling interests	3,724,260		4,429,095		618,278
Total equity	142,409,866		154,016,411		21,499,862
Total liabilities, redeemable noncontrolling      interests and shareholders' equity	195,991,550		208,498,653		29,105,288
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									Six Months Ended
			June 30,			March 31,		June 30,		June 30,		June 30,		June 30,		June 30,
			2024			2025		2025		2025		2024		2025		2025
			RMB			RMB		RMB		USD (Note 1)		RMB		RMB		USD (Note 1)
Net revenues			25,485,805			28,828,545		27,891,664		3,893,526		52,337,546		56,720,209		7,917,836
Cost of revenues			(9,443,587)			(10,349,139)		(9,839,182)		(1,373,497)		(19,279,408)		(20,188,321)		(2,818,181)
Gross profit			16,042,218			18,479,406		18,052,482		2,520,029		33,058,138		36,531,888		5,099,655
Operating expenses:
Selling and marketing expenses			(3,501,737)			(2,695,597)		(3,578,174)		(499,494)		(7,523,941)		(6,273,771)		(875,785)
General and administrative expenses			(1,091,441)			(956,337)		(1,056,578)		(147,493)		(2,287,916)		(2,012,915)		(280,992)
Research and development expenses			(4,455,717)			(4,386,313)		(4,356,646)		(608,164)		(8,630,475)		(8,742,959)		(1,220,470)
Total operating expenses			(9,048,895)			(8,038,247)		(8,991,398)		(1,255,151)		(18,442,332)		(17,029,645)		(2,377,247)
Operating profit			6,993,323			10,441,159		9,061,084		1,264,878		14,615,806		19,502,243		2,722,408
Other income/(expenses):
Investment income, net			103,674			692,751		328,444		45,849		282,965		1,021,195		142,553
Interest income, net			1,186,219			1,060,886		953,490		133,102		2,463,816		2,014,376		281,196
Exchange (losses)/gains, net			(239,375)			1,803		114,037		15,919		(224,364)		115,840		16,171
Other, net			85,694			255,315		192,167		26,825		279,582		447,482		62,466
Income before tax			8,129,535			12,451,914		10,649,222		1,486,573		17,417,805		23,101,136		3,224,794
Income tax			(1,300,939)			(1,905,143)		(1,560,757)		(217,873)		(2,786,849)		(3,465,900)		(483,821)
Net income			6,828,596			10,546,771		9,088,465		1,268,700		14,630,956		19,635,236		2,740,973
Accretion of redeemable noncontrolling     interests			(960)			(1,049)		(1,051)		(147)		(1,918)		(2,100)		(293)
Net income attributable to noncontrolling     interests and redeemable noncontrolling     interests			(68,887)			(244,565)		(486,404)		(67,899)		(236,343)		(730,969)		(102,039)
Net income attributable to the     Company's shareholders			6,758,749			10,301,157		8,601,010		1,200,654		14,392,695		18,902,167		2,638,641
Net income per share *
Basic			2.10			3.25		2.70		0.38		4.48		5.94		0.83
Diluted			2.08			3.21		2.67		0.37		4.43		5.88		0.82
Net income per ADS *
Basic			10.50			16.23		13.49		1.88		22.39		29.71		4.15
Diluted			10.42			16.06		13.36		1.87		22.17		29.41		4.11
Weighted average number of ordinary     shares used in calculating net income     per share *
Basic			3,217,699			3,173,899		3,188,634		3,188,634		3,214,682		3,181,307		3,181,307
Diluted			3,243,056			3,206,362		3,214,681		3,214,681		3,246,254		3,210,563		3,210,563
*  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								Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,		June 30,		June 30,
		2024		2025		2025		2025		2024		2025		2025
		RMB		RMB		RMB		USD (Note 1)		RMB		RMB		USD (Note 1)
Cash flows from operating activities:
Net income		6,828,596		10,546,771		9,088,465		1,268,700		14,630,956		19,635,236		2,740,973
Adjustments to reconcile net income to net cash provided         by operating activities:
Depreciation and amortization		631,957		480,761		428,427		59,806		1,199,880		909,188		126,918
Fair value changes of equity security and other investments		(7,887)		(558,499)		55,715		7,778		(376,145)		(502,784)		(70,186)
Impairment losses on investments		210,741		89,071		161,463		22,539		339,158		250,534		34,973
Fair value changes of short-term investments		(128,295)		(201,609)		(344,604)		(48,105)		(189,105)		(546,213)		(76,248)
Share-based compensation cost		1,079,056		951,872		946,395		132,112		1,973,356		1,898,267		264,988
Allowance for expected credit losses		9,281		16,771		153,179		21,383		20,881		169,950		23,724
(Gains)/losses on disposal of property, equipment and software		(326)		20,293		(30,920)		(4,316)		1,806		(10,627)		(1,484)
Unrealized exchange gains		(209,311)		(28,453)		(165,662)		(23,126)		(226,820)		(194,115)		(27,097)
(Gains)/losses on disposal of long-term investments,         business and subsidiaries		(141,114)		11,675		(141,078)		(19,694)		(154,601)		(129,403)		(18,064)
Deferred income taxes		(1,280,076)		328,272		(853,764)		(119,181)		(795,022)		(525,492)		(73,356)
Share of results on equity method investees		39,200		(18,668)		13,479		1,882		203,471		(5,189)		(724)
Changes in operating assets and liabilities:
Accounts receivable		1,410,478		(1,088,960)		953,295		133,075		51,767		(135,665)		(18,938)
Inventories		29,552		53,773		(73,944)		(10,322)		120,930		(20,171)		(2,816)
Prepayments and other assets		530,856		(295,178)		583,484		81,451		856,996		288,306		40,246
Accounts payable		(126,862)		(148,076)		119,644		16,702		(133,863)		(28,432)		(3,969)
Salary and welfare payables		879,058		(2,085,111)		920,662		128,520		(1,299,550)		(1,164,449)		(162,551)
Taxes payable		(1,462,700)		1,796,123		(764,372)		(106,702)		(190,878)		1,031,751		144,027
Contract liabilities		(1,270,324)		2,526,198		(718,719)		(100,329)		303,762		1,807,479		252,314
Accrued liabilities and other payables		(490,048)		(290,374)		530,718		74,085		(247,978)		240,344		33,551
Net cash provided by operating activities		6,531,832		12,106,652		10,861,863		1,516,258		16,089,001		22,968,515		3,206,281
Cash flows from investing activities:
Purchase of property, equipment and software		(168,880)		(454,071)		(189,842)		(26,501)		(583,898)		(643,913)		(89,887)
Proceeds from sale of property, equipment and software		660		1,336		21,499		3,001		4,166		22,835		3,188
Purchase of intangible assets, content and licensed copyrights		(399,533)		(298,771)		(313,349)		(43,742)		(588,354)		(612,120)		(85,449)
Net changes of short-term investments with terms of three months or less		(8,194,289)		(6,138,556)		776,428		108,385		(5,792,640)		(5,362,128)		(748,524)
Purchase of short-term investments with terms over three months		-		(2,970,000)		(5,800,000)		(809,649)		-		(8,770,000)		(1,224,245)
Proceeds from maturities of short-term investments with terms over three months		-		2,708,601		5,745,454		802,034		-		8,454,055		1,180,141
Investment in long-term investments and acquisition of subsidiaries		(193,450)		(90,966)		(2,741,641)		(382,718)		(675,254)		(2,832,607)		(395,417)
Proceeds from disposal of long-term investments, businesses,         subsidiaries and other financial instruments		840,649		77,428		784,855		109,562		926,105		862,283		120,370
Placement/rollover of matured time deposits		(61,775,606)		(49,601,807)		(27,980,605)		(3,905,942)		(96,334,442)		(77,582,412)		(10,830,087)
Proceeds from maturities of time deposits		55,211,839		43,926,482		33,617,510		4,692,823		101,260,221		77,543,992		10,824,724
Change in other long-term assets		(172,543)		(678)		(27,367)		(3,820)		(207,168)		(28,045)		(3,915)
Net cash (used in)/provided by investing activities		(14,851,153)		(12,841,002)		3,892,942		543,433		(1,991,264)		(8,948,060)		(1,249,101)
Cash flows from financing activities:
Net changes from loans with terms of three months or less		(2,085,053)		(2,254,415)		2,017,570		281,642		(2,484,779)		(236,845)		(33,062)
Proceeds of loans with terms over three months		1,069,020		2,747,550		1,231,000		171,841		8,067,270		3,978,550		555,384
Payment of loans with terms over three months		(10,681,827)		(2,935,677)		(1,804,730)		(251,930)		(11,638,827)		(4,740,407)		(661,735)
Net amounts received related to capital contribution from         of noncontrolling interests shareholders		50,572		42,517		42,400		5,919		92,786		84,917		11,854
Cash paid for repurchase of NetEase's ADSs/purchase of         subsidiaries' ADSs and shares		(2,007,030)		(303,601)		(355,563)		(49,635)		(3,240,810)		(659,164)		(92,016)
Dividends paid to NetEase's shareholders		(2,264,799)		(5,584,532)		(3,082,122)		(430,248)		(7,209,815)		(8,666,654)		(1,209,818)
Net cash used in financing activities		(15,919,117)		(8,288,158)		(1,951,445)		(272,411)		(16,414,175)		(10,239,603)		(1,429,393)
Effect of exchange rate changes on cash, cash equivalents and         restricted cash held in foreign currencies		8,234		(56,932)		(31,749)		(4,432)		(34,904)		(88,681)		(12,380)
Net(decrease)/ increase in cash, cash equivalents and restricted cash		(24,230,204)		(9,079,440)		12,771,611		1,782,848		(2,351,342)		3,692,171		515,407
Cash, cash equivalents and restricted cash, at the beginning of the period		46,085,520		54,474,923		45,395,483		6,336,965		24,206,658		54,474,923		7,604,406
Cash, cash equivalents and restricted cash, at end of the period		21,855,316		45,395,483		58,167,094		8,119,813		21,855,316		58,167,094		8,119,813
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net		2,848,493		1,206,555		2,184,556		304,952		4,031,204		3,391,111		473,381
Cash paid for interest expenses		152,943		97,424		64,366		8,985		299,398		161,790		22,585
The accompanying notes are an integral part of this announcement.

 

 

NETEASE, INC.
UNAUDITED SEGMENT INFORMATION
(in thousands)
		Three Months Ended								Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,		June 30,		June 30,
		2024		2025		2025		2025		2024		2025		2025
		RMB		RMB		RMB		USD (Note 1)		RMB		RMB		USD (Note 1)
Net revenues:
Games and related value-added services		20,055,819		24,048,007		22,806,459		3,183,659		41,516,197		46,854,466		6,540,631
Youdao		1,321,721		1,298,262		1,417,541		197,881		2,713,580		2,715,803		379,111
NetEase Cloud Music		2,040,952		1,858,388		1,968,729		274,824		4,070,493		3,827,117		534,245
Innovative businesses and others		2,067,313		1,623,888		1,698,935		237,162		4,037,276		3,322,823		463,849
Total net revenues		25,485,805		28,828,545		27,891,664		3,893,526		52,337,546		56,720,209		7,917,836
Cost of revenues:
Games and related value-added services		(6,008,604)		(7,495,262)		(6,792,240)		(948,161)		(12,563,915)		(14,287,502)		(1,994,458)
Youdao		(684,942)		(684,035)		(808,181)		(112,817)		(1,395,298)		(1,492,216)		(208,305)
NetEase Cloud Music		(1,385,756)		(1,175,777)		(1,258,855)		(175,729)		(2,644,762)		(2,434,632)		(339,862)
Innovative businesses and others		(1,364,285)		(994,065)		(979,906)		(136,790)		(2,675,433)		(1,973,971)		(275,556)
Total cost of revenues		(9,443,587)		(10,349,139)		(9,839,182)		(1,373,497)		(19,279,408)		(20,188,321)		(2,818,181)
Gross profit:
Games and related value-added services		14,047,215		16,552,745		16,014,219		2,235,498		28,952,282		32,566,964		4,546,173
Youdao		636,779		614,227		609,360		85,064		1,318,282		1,223,587		170,806
NetEase Cloud Music		655,196		682,611		709,874		99,095		1,425,731		1,392,485		194,383
Innovative businesses and others		703,028		629,823		719,029		100,372		1,361,843		1,348,852		188,293
Total gross profit		16,042,218		18,479,406		18,052,482		2,520,029		33,058,138		36,531,888		5,099,655
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 = RMB7.1636 on the last trading day of June 2025 (June 30, 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 June 30, 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):

		Three Months Ended									Six Months Ended
		June 30,			March 31,		June 30,		June 30,		June 30,		June 30,		June 30,
		2024			2025		2025		2025		2024		2025		2025
		RMB			RMB		RMB		USD (Note 1)		RMB		RMB		USD (Note 1)
Share-based compensation cost included in:
Cost of revenues		319,949			233,711		291,326		40,668		574,884		525,037		73,292
Operating expenses
Selling and marketing expenses		42,865			32,578		37,300		5,207		60,734		69,878		9,755
General and administrative expenses		286,350			261,259		207,202		28,924		575,986		468,461		65,395
Research and development expenses		429,892			424,324		410,567		57,313		761,752		834,891		116,546
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								Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,		June 30,		June 30,
		2024		2025		2025		2025		2024		2025		2025
		RMB		RMB		RMB		USD (Note 1)		RMB		RMB		USD (Note 1)
Net income attributable to the Company's shareholders		6,758,749		10,301,157		8,601,010		1,200,654		14,392,695		18,902,167		2,638,641
Add: Share-based compensation		1,059,939		935,570		930,921		129,952		1,936,837		1,866,491		260,552
Non-GAAP net income attributable to the Company's shareholders		7,818,688		11,236,727		9,531,931		1,330,606		16,329,532		20,768,658		2,899,193
Non-GAAP net income per share *
Basic		2.43		3.54		2.99		0.42		5.08		6.53		0.91
Diluted		2.41		3.50		2.96		0.41		5.03		6.46		0.90
Non-GAAP net income per ADS *
Basic		12.15		17.70		14.95		2.09		25.40		32.64		4.56
Diluted		12.05		17.51		14.81		2.07		25.15		32.32		4.51
*  Each ADS represents five ordinary shares.
The accompanying notes are an integral part of this announcement.

Note 5: Reconciliation between U.S. GAAP and IFRS Accounting Standards

The unaudited condensed consolidated financial information is prepared in accordance with U.S. GAAP, which differ in certain respects from IFRS Accounting Standards. The effects of material differences between the unaudited condensed consolidated financial information prepared under U.S. GAAP and IFRS Accounting Standards ("Reconciliation Statement") are as follows in RMB (in thousands).

PricewaterhouseCoopers, the auditor of the Company in Hong Kong, has performed a limited assurance engagement on the Reconciliation Statement in accordance with International Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information".

Reconciliation of unaudited condensed consolidated statements of income (Extract):

		For the Six Months Ended June 30, 2024
	Amounts as reported under U.S. GAAP	Investments measured at fair value	Redeemable noncontrolling interests	Amounts as reported under IFRS Accounting Standards
		(Note (a))	(Note (b))
Fair value changes of redeemable noncontrolling interests	-	-	(571)	(571)
Investment income, net	282,965	(108,548)	-	174,417
Income before tax	17,417,805	(108,548)	(571)	17,308,686
Income tax	(2,786,849)	7,127	-	(2,779,722)
Net income	14,630,956	(101,421)	(571)	14,528,964
Accretion of redeemable noncontrolling interests	(1,918)	-	1,918	-
Net income attributable to noncontrolling interests and   redeemable noncontrolling interests	(236,343)	-	571	(235,772)
Net income attributable to the Company's shareholders	14,392,695	(101,421)	1,918	14,293,192
		For the Six Months Ended June 30, 2025
	Amounts as reported under U.S. GAAP	Investments measured at fair value	Redeemable noncontrolling interests	Amounts as reported under IFRS Accounting Standards
		(Note (a))	(Note (b))
Investment income, net	1,021,195	(167,094)	-	854,101
Income before tax	23,101,136	(167,094)	-	22,934,042
Income tax	(3,465,900)	7,924	-	(3,457,976)
Net income	19,635,236	(159,170)	-	19,476,066
Accretion of redeemable noncontrolling interests	(2,100)	-	2,100	-
Net income attributable to noncontrolling interests and   redeemable noncontrolling interests	(730,969)	-	-	(730,969)
Net income attributable to the Company's shareholders	18,902,167	(159,170)	2,100	18,745,097

Reconciliation of unaudited condensed consolidated balance sheets (Extract):

		As of December 31, 2024
	Amounts as reported under U.S. GAAP	Investments measured at fair value	Redeemable noncontrolling interests	Amounts as reported under IFRS Accounting Standards
		(Note (a))	(Note (b))
Other long-term assets	25,830,685	(13,800,189)	-	12,030,496
Financial assets at fair value through profit or loss	-	15,682,924	-	15,682,924
Total Assets	195,991,550	1,882,735	-	197,874,285
Deferred tax liabilities	2,173,117	26,600	-	2,199,717
Total Liabilities	53,497,412	26,600	-	53,524,012
Redeemable noncontrolling interests	84,272	-	(84,272)	-
Total equity	142,409,866	1,856,135	84,272	144,350,273
Total liabilities, redeemable noncontrolling interests     and shareholders' equity	195,991,550	1,882,735	-	197,874,285
		As of June 30, 2025
	Amounts as reported under U.S. GAAP	Investments measured at fair value	Redeemable noncontrolling interests	Amounts as reported under IFRS Accounting Standards
		(Note (a))	(Note (b))
Other long-term assets	27,860,004	(15,990,681)	-	11,869,323
Financial assets at fair value through profit or loss	-	17,706,322	-	17,706,322
Total Assets	208,498,653	1,715,641	-	210,214,294
Deferred tax liabilities	2,724,485	18,676	-	2,743,161
Total Liabilities	54,394,501	18,676	-	54,413,177
Redeemable noncontrolling interests	87,741	-	(87,741)	-
Total equity	154,016,411	1,696,965	87,741	155,801,117
Total liabilities, redeemable noncontrolling interests    and shareholders' equity	208,498,653	1,715,641	-	210,214,294

Notes:

Basis of Preparation

The Company is responsible for preparation of the Reconciliation Statement in accordance with the relevant requirements of the Hong Kong Listing Rules and relevant guidance in HKEX-GL111-22. The Reconciliation Statement was prepared based on the Company's unaudited condensed consolidated financial information for the six months ended June 30, 2025 prepared under U.S. GAAP, with material adjustments made (if any) thereto in arriving at the unaudited financial information of the Company prepared under IFRS Accounting Standards. The adjustments reflect the material differences between the Company's accounting policies under U.S. GAAP and IFRS Accounting Standards.

Note a. Investments measured at fair value

Under U.S. GAAP, NetEase applied the measurement alternative to record the investments in equity securities (including preferred shares and ordinary shares without significant influence) without readily determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for observable price changes recognized in the consolidated income statements.

Under IFRS Accounting Standards, these investments were classified as financial assets at fair value through profit or loss and measured at fair value with changes in fair value recognized through profit or loss.

Note b. Redeemable noncontrolling interests

Under U.S. GAAP, SEC guidance provides for mezzanine-equity (temporary equity) category in addition to the financial liability and permanent equity categories. The purpose of this "in-between" category is to indicate that a security whose redemption is outside the control of the issuer may not be classified as a permanent part of equity. NetEase classified the redeemable preferred shares issued by certain subsidiaries as redeemable noncontrolling interests in the condensed consolidated balance sheets and recorded them initially at fair value, net of issuance costs. NetEase recognized accretion to the respective redemption value of the redeemable preferred shares over the period starting from issuance date to the earliest redemption date.

Under IFRS Accounting Standards, there is no concept of mezzanine or temporary equity classification. NetEase designated the redeemable preferred shares as financial liabilities at fair value through profit or loss which are measured at fair value. Subsequent to initial recognition, the amounts of changes in fair value that were attributed to changes in credit risk of the issuer were recognized in other comprehensive income, and the remaining amounts of changes in fair value were recognized in the profit or loss.

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SOURCE NetEase, Inc.

FAQ

What were NetEase's (NTES) Q2 2025 earnings results?

NetEase reported net revenues of RMB27.9 billion (US$3.9 billion), up 9.4% year-over-year, with net income of RMB8.6 billion (US$1.2 billion) and non-GAAP earnings of US$0.42 per share.

How did NetEase's gaming segment perform in Q2 2025?

Gaming segment revenues grew 13.7% year-over-year to RMB22.8 billion (US$3.2 billion), driven by successful launches and strong performance of titles like Identity V, Where Winds Meet, and Marvel Rivals.

What dividend did NetEase announce for Q2 2025?

NetEase declared a quarterly dividend of US$0.1140 per share (US$0.5700 per ADS), payable to shareholders of record as of August 28, 2025.

How much cash does NetEase have as of Q2 2025?

NetEase reported a net cash position of RMB142.1 billion (US$19.8 billion) as of June 30, 2025, compared to RMB131.5 billion at the end of 2024.

What is the status of NetEase's share repurchase program?

As of June 30, 2025, NetEase had repurchased approximately 22.1 million ADSs for US$2.0 billion under its US$5.0 billion share repurchase program that began January 10, 2023.