NetEase （Hangzhou ）Network Co., Ltd

NetEase （Hangzhou ）Network Co., Ltd en_US PRN Asia NetEase to Report Second Quarter 2026 Financial Results on August 20 2026-08-06 18:30:00 . 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HONG KONG, Aug. 6, 2026 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the 2026 second quarter on Thursday, August 20, 2026, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 8:00 a.m. Eastern Time on Thursday, August 20, 2026 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, August 20, 2026). 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: 10056362, 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: 10056362. The replay will be available through August 27, 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 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/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase Announces First Quarter 2026 Unaudited Financial Results 2026-05-21 16:30:00 . 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 subsidiariesYoudao (NYSE: DAO), an intelligent learning and advertising solutions provider, andNetEase Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well asYanxuan, 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 regulatory 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, 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 and Shareholders' Equity 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 interests and shareholders' equity 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 interests (1,049) (1,122) (1,104) (160) Net income attributable to noncontrolling interests and redeemable noncontrolling interests (244,565) (126,866) (170,394) (24,702) Net income attributable to the Company's shareholders 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 shares used in calculating net income per share * 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 by operating activities: Depreciation and amortization 480,761 720,367 430,583 62,421 Fair value changes of equity security, other investments and financial instruments (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 acquisition of subsidiaries (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 noncontrolling interests shareholders 42,517 819 (23,418) (3,395) Net amounts paid related to repurchase of NetEase's ADSs/purchase of subsidiaries' shares (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 restricted cash held in foreign currencies (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 United States dollars (USD) is based on the noon buying rate of USD1.00 = RMB 6.8980 on the last trading day of March 2026 (March 31, 2026) 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, 2026, 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 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. ]]> HONG KONG, May 21, 2026 /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, 2026.

First Quarter 2026 Financial Highlights

Net revenues were RMB30.6 billion (US$4.4 billion), an increase of 6.1% compared with the same quarter of 2025.
- Games and related value-added services net revenues were RMB25.7 billion (US$3.7 billion), an increase of 6.9% compared with the same quarter of 2025.
- Youdao net revenues were RMB1.3 billion (US$195.4 million), an increase of 3.8% compared with the same quarter of 2025.
- NetEase Cloud Music net revenues were RMB2.0 billion (US$287.2 million), an increase of 6.6% compared with the same quarter of 2025.
- Innovative businesses and others net revenues were RMB1.5 billion (US$224.6 million), a decrease of 4.6% compared with the same quarter of 2025.
Gross profit was RMB21.2 billion (US$3.1 billion), an increase of 14.8% compared with the same quarter of 2025.
Total operating expenses were RMB8.6 billion (US$1.2 billion), an increase of 6.5% compared with the same quarter of 2025.
Net income attributable to the Company's shareholders was RMB10.7 billion (US$1.5 billion). Non-GAAP net income attributable to the Company's shareholders was RMB11.3 billion (US$1.6 billion).^[1]
Basic net income per share was US$0.48 (US$2.42 per ADS). Non-GAAP basic net income per share was US$0.51 (US$2.56 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 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 RMB30.6 billion (US$4.4 billion), compared with RMB27.5 billion and RMB28.8 billion for the preceding quarter and the same quarter of 2025, respectively.

Net revenues from games and related value-added services were RMB25.7 billion (US$3.7 billion) for the first quarter of 2026, compared with RMB22.0 billion and RMB24.0 billion for the preceding quarter and the same quarter of 2025, 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 2026, compared with 96.8% and 97.5% for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter and year-over-year increases were attributable to higher net revenues from self-developed games, such as the Fantasy Westward Journey franchise and Where Winds Meet.

Net revenues from Youdao were RMB1.3 billion (US$195.4 million) for the first quarter of 2026, compared with RMB1.6 billion and RMB1.3 billion for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter decrease was mainly due to decreased net revenues from its learning services and smart devices.

Net revenues from NetEase Cloud Music were RMB2.0 billion (US$287.2 million) for the first quarter of 2026, compared with RMB2.0 billion and RMB1.9 billion for the preceding quarter and the same quarter of 2025, respectively.

Net revenues from innovative businesses and others were RMB1.5 billion (US$224.6 million) for the first quarter of 2026, compared with RMB2.0 billion and RMB1.6 billion for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter decrease was led by decreased net revenues from e-commerce and advertising businesses.

Cost of Revenues

Cost of revenues for the first quarter of 2026 was RMB9.4 billion (US$1.4 billion), compared with RMB9.9 billion and RMB10.3 billion for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter decrease was mainly due to lower product costs. The year-over-year decrease was mainly due to lower revenue-sharing costs related to platforms.

Gross Profit

Gross profit for the first quarter of 2026 was RMB21.2 billion (US$3.1 billion), compared with RMB17.7 billion and RMB18.5 billion for the preceding quarter and the same quarter of 2025, respectively.

Operating Expenses

Total operating expenses for the first quarter of 2026 were RMB8.6 billion (US$1.2 billion), compared with RMB9.4 billion and RMB8.0 billion for the preceding quarter and the same quarter of 2025, respectively. The variances in both the quarter-over-quarter and year-over-year results were primarily attributable to fluctuations in marketing expenses and general and administrative expenses.

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 RMB2.5 billion (US$365.9 million) for the first quarter of 2026, compared with RMB1.3 billion and RMB1.9 billion for the preceding quarter and the same quarter of 2025, respectively. The effective tax rate for the first quarter of 2026 was 18.9%, compared with 16.4% and 15.3% for the preceding quarter and the same quarter of 2025, 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 RMB10.7 billion (US$1.5 billion) for the first quarter of 2026, compared with RMB6.2 billion and RMB10.3 billion for the preceding quarter and the same quarter of 2025, respectively.

Basic net income was US$0.48 per share (US$2.42 per ADS) for the first quarter of 2026, compared with US$0.28 per share (US$1.42 per ADS) and US$0.47 per share (US$2.35 per ADS) for the preceding quarter and the same quarter of 2025, respectively.

Non-GAAP net income attributable to the Company's shareholders totaled RMB11.3 billion (US$1.6 billion) for the first quarter of 2026, compared with RMB7.1 billion and RMB11.2 billion for the preceding quarter and the same quarter of 2025, respectively.

Non-GAAP basic net income was US$0.51 per share (US$2.56 per ADS) for the first quarter of 2026, compared with US$0.32 per share (US$1.61 per ADS) and US$0.51 per share (US$2.57 per ADS) for the preceding quarter and the same quarter of 2025, respectively.

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 RMB167.5 billion (US$24.3 billion), compared with RMB163.5 billion as of December 31, 2025. Net cash provided by operating activities was RMB13.7 billion (US$2.0 billion) for the first quarter of 2026, compared with RMB14.8 billion and RMB12.1 billion for the preceding quarter and the first quarter of 2025, respectively.

Quarterly Dividend

The board of directors approved a dividend of US$0.144 per share (US$0.720 per ADS) for the first quarter of 2026 to holders of ordinary shares and holders of ADSs as of the close of business on June 5, 2026, 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 June 5, 2026 (Beijing/Hong Kong Time). The payment date is expected to be June 15, 2026 for holders of ordinary shares and on or around June 18, 2026, for holders of ADSs.

NetEase paid a dividend of US$0.232 per share (US$1.16 per ADS) for the fourth quarter of 2025 in March 2026.

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 US$5.0 billion of the Company's ADSs and ordinary shares in open market or other transactions for an additional 36 months until January 9, 2029. As of March 31, 2026, approximately 23.2 million ADSs had been repurchased under this program for a total cost of US$2.1 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, May 21, 2026 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, May 21, 2026). 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: 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.

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 regulatory 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,
	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 and Shareholders' Equity
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 interests and shareholders' equity	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 interests	(1,049)	(1,122)	(1,104)	(160)
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	(244,565)	(126,866)	(170,394)	(24,702)
Net income attributable to the Company's shareholders	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 shares used in calculating net income per share *
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 by operating activities:
Depreciation and amortization	480,761	720,367	430,583	62,421
Fair value changes of equity security, other investments and financial instruments	(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 acquisition of subsidiaries	(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 noncontrolling interests shareholders	42,517	819	(23,418)	(3,395)
Net amounts paid related to repurchase of NetEase's ADSs/purchase of subsidiaries' shares	(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 restricted cash held in foreign currencies	(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 United States dollars (USD) is based on the noon buying rate of USD1.00 = RMB 6.8980 on the last trading day of March 2026 (March 31, 2026) 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, 2026, 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

March 31,

December 31,

March 31,

2025

2026

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.

]]> NetEase to Report First Quarter 2026 Financial Results on May 21 2026-05-07 16:30:00 . 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HONG KONG, May 7, 2026 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the 2026 first quarter on Thursday, May 21, 2026, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 8:00 a.m. Eastern Time on Thursday, May 21, 2026 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, May 21, 2026). NetEase's management will be on the call to discuss the quarterly results and answer questions.

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.

For more information, please visit: http://ir.netease.com/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase, Inc. Announces Filing of Annual Report on Form 20-F for Fiscal Year 2025 2026-04-15 19:02:00 . The Company will provide a hard copy of its annual report containing the audited consolidated financial statements, free of charge, to its shareholders and ADS holders upon request. Requests should be directed to the IR Department, NetEase, Inc., Room 802, 8/F, China Life Centre, Tower A, One HarbourGate, No. 18 Hung Luen Road, Kowloon, Hong Kong, People's Republic of China at the contact information listed below. 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HONG KONG, April 15, 2026 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or "the Company"), a leading internet and game services provider, today announced that it filed its annual report on Form 20-F for the fiscal year ended December 31, 2025. The annual report can be accessed on the Company's investor relations website at http://ir.netease.com/.

The Company will provide a hard copy of its annual report containing the audited consolidated financial statements, free of charge, to its shareholders and ADS holders upon request. Requests should be directed to the IR Department, NetEase, Inc., Room 802, 8/F, China Life Centre, Tower A, One HarbourGate, No. 18 Hung Luen Road, Kowloon, Hong Kong, People's Republic of China at the contact information listed below.

About NetEase, Inc.

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/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase to Report Fourth Quarter and Fiscal Year 2025 Financial Results on February 11 2026-01-28 16:30:00 . 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 inChina 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, Jan. 28, 2026 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the fourth quarter and fiscal year 2025 on Wednesday, February 11, 2026, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 7:00 a.m. Eastern Time on Wednesday, February 11, 2026 (Beijing/Hong Kong Time: 8:00 p.m., Wednesday, February 11, 2026). 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: 10052758, 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: 10052758. The replay will be available through February 18, 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.

For more information, please visit: http://ir.netease.com/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase Announces Management Change 2025-12-27 05:15:00 . 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 inChina 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 regulatory 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. Contact for Media and Investors: Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, Dec. 27, 2025 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that after 23 years with the Company, Yingfeng Ding has decided to retire from his position as Executive Vice President and head of the Interactive Entertainment Group, a part of NetEase's online games division, effective December 31, 2025.

"We extend our sincere gratitude to Mr. Yingfeng Ding for his dedication and contributions," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "He played a pivotal role behind the success of our flagship titles and was instrumental in building our R&D and operational capabilities."

Mr. Yingfeng Ding will remain a consultant to NetEase in 2026 following his retirement.

About NetEase, Inc.

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

Contact for Media and Investors:
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase Announces Third Quarter 2025 Unaudited Financial Results 2025-11-20 16:30:00 . 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 inChina 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 subsidiariesYoudao (NYSE: DAO), an intelligent learning and advertising solutions provider, andNetEase Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well asYanxuan, 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 inChina 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 regulatory 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 inthe 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, September 30, September 30, 2024 2025 2025 RMB RMB USD (Note 1) Assets Current assets: Cash and cash equivalents 51,383,310 31,326,752 4,400,443 Time deposits 75,441,355 93,551,844 13,141,150 Restricted cash 3,086,405 8,654,295 1,215,662 Accounts receivable, net 5,669,027 5,962,060 837,486 Inventories 571,548 637,325 89,525 Prepayments and other current assets, net 6,416,868 6,863,085 964,050 Short-term investments 10,756,143 24,214,436 3,401,382 Total current assets 153,324,656 171,209,797 24,049,698 Non-current assets: Property, equipment and software, net 8,520,101 8,517,182 1,196,401 Land use rights, net 4,172,465 4,078,719 572,934 Deferred tax assets 1,113,435 2,612,046 366,912 Time deposits 3,025,000 2,845,000 399,635 Restricted cash 5,208 3,900 548 Other long-term assets 25,830,685 25,222,219 3,542,944 Total non-current assets 42,666,894 43,279,066 6,079,374 Total assets 195,991,550 214,488,863 30,129,072 Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity Current liabilities: Accounts payable 720,549 718,393 100,912 Salary and welfare payables 4,683,009 3,004,519 422,042 Taxes payable 2,759,185 4,312,685 605,799 Short-term loans 11,805,051 7,349,967 1,032,444 Contract liabilities 15,299,222 19,473,595 2,735,440 Accrued liabilities and other payables 14,400,641 15,229,406 2,139,262 Total current liabilities 49,667,657 50,088,565 7,035,899 Non-current liabilities: Deferred tax liabilities 2,173,117 2,212,733 310,821 Long-term loans 427,997 - - Other long-term liabilities 1,228,641 1,255,583 176,371 Total non-current liabilities 3,829,755 3,468,316 487,192 Total liabilities 53,497,412 53,556,881 7,523,091 Redeemable noncontrolling interests 84,272 89,465 12,567 NetEase, Inc.'s shareholders' equity 138,685,606 156,256,172 21,949,174 Noncontrolling interests 3,724,260 4,586,345 644,240 Total equity 142,409,866 160,842,517 22,593,414 Total liabilities, redeemable noncontrolling interests and shareholders' equity 195,991,550 214,488,863 30,129,072 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2024 2025 2025 2025 2024 2025 2025 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net revenues 26,209,879 27,891,664 28,358,625 3,983,512 78,547,425 85,078,834 11,950,953 Cost of revenues (9,733,274) (9,839,182) (10,181,020) (1,430,119) (29,012,682) (30,369,341) (4,265,956) Gross profit 16,476,605 18,052,482 18,177,605 2,553,393 49,534,743 54,709,493 7,684,997 Operating expenses: Selling and marketing expenses (3,805,071) (3,578,174) (4,457,675) (626,166) (11,329,012) (10,731,446) (1,507,437) General and administrative expenses (1,100,328) (1,056,578) (1,164,573) (163,587) (3,388,244) (3,177,488) (446,339) Research and development expenses (4,424,469) (4,356,646) (4,541,891) (637,996) (13,054,944) (13,284,850) (1,866,112) Total operating expenses (9,329,868) (8,991,398) (10,164,139) (1,427,749) (27,772,200) (27,193,784) (3,819,888) Operating profit 7,146,737 9,061,084 8,013,466 1,125,644 21,762,543 27,515,709 3,865,109 Other income/(expenses): Investment income, net 578,398 328,444 1,379,402 193,763 861,363 2,400,597 337,210 Interest income, net 1,282,766 953,490 936,706 131,578 3,746,582 2,951,082 414,536 Exchange (losses)/gains, net (1,055,518) 114,037 (373,812) (52,509) (1,279,882) (257,972) (36,237) Other, net 43,600 192,167 153,198 21,520 323,182 600,680 84,377 Income before tax 7,995,983 10,649,222 10,108,960 1,419,996 25,413,788 33,210,096 4,664,995 Income tax (1,289,545) (1,560,757) (1,316,356) (184,907) (4,076,394) (4,782,256) (671,760) Net income from continuing operations 6,706,438 9,088,465 8,792,604 1,235,089 21,337,394 28,427,840 3,993,235 Net income from discontinued operations - - - - - - - Net income 6,706,438 9,088,465 8,792,604 1,235,089 21,337,394 28,427,840 3,993,235 Accretion of redeemable noncontrolling interests (962) (1,051) (1,044) (147) (2,880) (3,144) (442) Net income attributable to noncontrolling interests and redeemable noncontrolling interests (167,041) (486,404) (175,883) (24,706) (403,384) (906,852) (127,385) Net income attributable to the Company's shareholders 6,538,435 8,601,010 8,615,677 1,210,236 20,931,130 27,517,844 3,865,408 Net income per share * Basic 2.04 2.70 2.70 0.38 6.52 8.64 1.21 Diluted 2.03 2.67 2.67 0.38 6.46 8.55 1.20 Net income per ADS * Basic 10.22 13.49 13.50 1.90 32.61 43.20 6.07 Diluted 10.14 13.36 13.36 1.88 32.30 42.77 6.01 Weighted average number of ordinary shares used in calculating net income per share * Basic 3,198,646 3,188,634 3,191,231 3,191,231 3,209,298 3,184,651 3,184,651 Diluted 3,224,110 3,214,681 3,223,497 3,223,497 3,238,834 3,214,910 3,214,910 * 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 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 6,706,438 9,088,465 8,792,604 1,235,089 21,337,394 28,427,840 3,993,235 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 520,567 428,427 617,872 86,792 1,720,447 1,527,060 214,505 Fair value changes of equity security, other investments and financial instruments (824,608) 55,715 (1,965,526) (276,096) (1,200,753) (2,468,310) (346,721) Impairment losses on investments 529,668 161,463 1,616,146 227,019 868,826 1,866,680 262,211 Fair value changes of short-term investments (100,071) (344,604) (278,636) (39,140) (289,176) (824,849) (115,866) Share-based compensation cost 978,139 946,395 902,201 126,732 2,951,495 2,800,468 393,379 Allowance for expected credit losses 36,022 153,179 180,085 25,296 56,903 350,035 49,169 (Gains)/losses on disposal of property, equipment and software (2,920) (30,920) 404 57 (1,114) (10,223) (1,436) Unrealized exchange losses/(gains) 1,050,644 (165,662) 368,559 51,771 823,824 174,444 24,504 Gains on disposal of long-term investments, business, subsidiaries and other financial instruments (118,046) (141,078) (38,072) (5,348) (272,647) (167,475) (23,525) Deferred income taxes 711,639 (853,764) (933,553) (131,135) (83,383) (1,459,045) (204,951) Share of results on equity method investees (28,466) 13,479 1,389,265 195,149 175,005 1,384,076 194,420 Changes in operating assets and liabilities: Accounts receivable 146,758 953,295 (194,823) (27,367) 198,525 (330,488) (46,423) Inventories (39,285) (73,944) (45,582) (6,403) 81,645 (65,753) (9,236) Prepayments and other assets (1,234,390) 583,484 (889,519) (124,950) (377,394) (601,213) (84,452) Accounts payable 6,316 119,644 16,042 2,253 (127,547) (12,390) (1,740) Salary and welfare payables (670,750) 920,662 (566,362) (79,556) (1,970,300) (1,730,811) (243,126) Taxes payable 224,015 (764,372) 517,353 72,672 33,137 1,549,104 217,601 Contract liabilities 1,928,060 (718,719) 2,579,424 362,330 2,231,822 4,386,903 616,225 Accrued liabilities and other payables 755,882 530,718 880,072 123,623 507,904 1,120,416 157,383 Net cash provided by operating activities 10,575,612 10,861,863 12,947,954 1,818,788 26,664,613 35,916,469 5,045,156 Cash flows from investing activities: Purchase of property, equipment and software (379,520) (189,842) (283,645) (39,843) (963,418) (927,558) (130,293) Proceeds from sale of property, equipment and software 1,072 21,499 1,261 177 5,238 24,096 3,385 Purchase of intangible assets, content and licensed copyrights (222,247) (313,349) (190,983) (26,827) (810,601) (803,103) (112,811) Net changes of short-term investments with terms of three months or less 1,585,395 776,428 (1,111,376) (156,114) (4,207,245) (6,473,504) (909,328) Purchase of short-term investments with terms over three months (3,675,000) (5,800,000) (7,270,000) (1,021,211) (3,675,000) (16,040,000) (2,253,126) Proceeds from maturities of short-term investments with terms over three months - 5,745,454 1,426,005 200,310 - 9,880,060 1,387,844 Investment in long-term investments and acquisition of subsidiaries (226,086) (2,741,641) (95,169) (13,368) (901,340) (2,927,776) (411,262) Proceeds from disposal of long-term investments, businesses, subsidiaries and other financial instruments 1,541,338 784,855 1,554,537 218,365 2,467,443 2,416,820 339,489 Placement/rollover of matured time deposits (36,766,094) (27,980,605) (49,326,969) (6,928,918) (133,100,536) (126,909,381) (17,826,855) Proceeds from maturities of time deposits 37,546,192 33,617,510 30,600,384 4,298,410 138,806,413 108,144,376 15,190,950 Change in other long-term assets (125,911) (27,367) 75,342 10,583 (333,079) 47,297 6,644 Net cash (used in)/provided by investing activities (720,861) 3,892,942 (24,620,613) (3,458,436) (2,712,125) (33,568,673) (4,715,363) Cash flows from financing activities: Net changes from loans with terms of three months or less (4,778,301) 2,017,570 536,886 75,416 (7,263,080) 300,041 42,146 Proceeds of loans with terms over three months 5,395,810 1,231,000 1,481,550 208,112 13,463,080 5,460,100 766,976 Payment of loans with terms over three months (3,100,520) (1,804,730) (5,879,605) (825,903) (14,739,347) (10,620,012) (1,491,784) Net amounts (paid)/received related to repurchase of or capital contribution from noncontrolling interests shareholders (8,394) 42,400 18,072 2,539 84,392 102,989 14,467 Net amount (paid)/received related to repurchase of NetEase's ADSs/purchase of subsidiaries' ADSs and shares (3,994,212) (355,563) 35,227 4,948 (7,235,022) (623,937) (87,644) Dividends paid to NetEase's shareholders (1,972,928) (3,082,122) (2,583,740) (362,936) (9,182,743) (11,250,394) (1,580,333) Net cash used in financing activities (8,458,545) (1,951,445) (6,391,610) (897,824) (24,872,720) (16,631,213) (2,336,172) Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies (68,136) (31,749) (117,878) (16,558) (103,040) (206,559) (29,015) Net increase/ (decrease) in cash, cash equivalents and restricted cash 1,328,070 12,771,611 (18,182,147) (2,554,030) (1,023,272) (14,489,976) (2,035,394) Cash, cash equivalents and restricted cash, at the beginning of the period 21,855,316 45,395,483 58,167,094 8,170,683 24,206,658 54,474,923 7,652,047 Cash, cash equivalents and restricted cash, at the end of the period 23,183,386 58,167,094 39,984,947 5,616,653 23,183,386 39,984,947 5,616,653 Supplemental disclosures of cash flow information: Cash paid for income taxes, net 554,867 2,184,556 1,967,228 276,335 4,586,071 5,358,339 752,681 Cash paid for interest expenses 165,881 64,366 207,879 29,201 465,279 369,669 51,927 The accompanying notes are an integral part of this announcement. NETEASE, INC. UNAUDITED SEGMENT INFORMATION (in thousands) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 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 20,864,036 22,806,459 23,327,508 3,276,796 62,380,233 70,181,974 9,858,403 Youdao 1,572,541 1,417,541 1,628,524 228,757 4,286,121 4,344,327 610,244 NetEase Cloud Music 1,999,163 1,968,729 1,964,063 275,890 6,069,656 5,791,180 813,482 Innovative businesses and others 1,774,139 1,698,935 1,438,530 202,069 5,811,415 4,761,353 668,824 Total net revenues 26,209,879 27,891,664 28,358,625 3,983,512 78,547,425 85,078,834 11,950,953 Cost of revenues: Games and related value-added services (6,503,146) (6,792,240) (7,151,130) (1,004,513) (19,067,061) (21,438,632) (3,011,467) Youdao (783,085) (808,181) (940,661) (132,134) (2,178,383) (2,432,877) (341,744) NetEase Cloud Music (1,343,921) (1,258,855) (1,269,289) (178,296) (3,988,683) (3,703,921) (520,287) Innovative businesses and others (1,103,122) (979,906) (819,940) (115,176) (3,778,555) (2,793,911) (392,458) Total cost of revenues (9,733,274) (9,839,182) (10,181,020) (1,430,119) (29,012,682) (30,369,341) (4,265,956) Gross profit: Games and related value-added services 14,360,890 16,014,219 16,176,378 2,272,283 43,313,172 48,743,342 6,846,936 Youdao 789,456 609,360 687,863 96,623 2,107,738 1,911,450 268,500 NetEase Cloud Music 655,242 709,874 694,774 97,594 2,080,973 2,087,259 293,195 Innovative businesses and others 671,017 719,029 618,590 86,893 2,032,860 1,967,442 276,366 Total gross profit 16,476,605 18,052,482 18,177,605 2,553,393 49,534,743 54,709,493 7,684,997 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 ofUSD1.00 = RMB7.1190 on the last trading day of September 2025 (September 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 September 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 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 306,283 291,326 267,472 37,572 881,167 792,509 111,323 Operating expenses Selling and marketing expenses 36,365 37,300 29,063 4,082 97,099 98,941 13,898 General and administrative expenses 247,440 207,202 209,916 29,487 823,426 678,377 95,291 Research and development expenses 388,051 410,567 395,750 55,591 1,149,803 1,230,641 172,867 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 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 6,538,435 8,601,010 8,615,677 1,210,236 20,931,130 27,517,844 3,865,408 Add: Share-based compensation 960,706 930,921 886,380 124,509 2,897,543 2,752,871 386,693 Non-GAAP net income attributable to the Company's shareholders 7,499,141 9,531,931 9,502,057 1,334,745 23,828,673 30,270,715 4,252,101 Non-GAAP net income per share * Basic 2.34 2.99 2.98 0.42 7.42 9.51 1.34 Diluted 2.33 2.96 2.95 0.41 7.35 9.41 1.32 Non-GAAP net income per ADS * Basic 11.72 14.95 14.89 2.09 37.12 47.53 6.68 Diluted 11.63 14.81 14.73 2.07 36.77 47.05 6.61 * Each ADS represents five ordinary shares. The accompanying notes are an integral part of this announcement. ]]> HANGZHOU, China, Nov. 20, 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 third quarter ended September 30, 2025.

Third Quarter 2025 Financial Highlights

Net revenues were RMB28.4 billion (US$4.0 billion), an increase of 8.2% compared with the same quarter of 2024.
- Games and related value-added services net revenues were RMB23.3 billion (US$3.3 billion), an increase of 11.8% compared with the same quarter of 2024.
- Youdao net revenues were RMB1.6 billion (US$228.8 million), an increase of 3.6% compared with the same quarter of 2024.
- NetEase Cloud Music net revenues were RMB2.0 billion (US$275.9 million), a decrease of 1.8% compared with the same quarter of 2024.
- Innovative businesses and others net revenues were RMB1.4 billion (US$202.1 million), a decrease of 18.9% compared with the same quarter of 2024.
Gross profit was RMB18.2 billion (US$2.6 billion), an increase of 10.3% compared with the same quarter of 2024.
Total operating expenses were RMB10.2 billion (US$1.4 billion), an increase of 8.9% 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$1.90 per ADS). Non-GAAP basic net income per share was US$0.42 (US$2.09 per ADS).^[1]

Third Quarter 2025 and Recent Operational Highlights

Showcased strong long-term operating capabilities with enduring player engagement across well-established titles. Notably, Fantasy Westward Journey Online achieved four successive record peak concurrent player counts since the third quarter, reaching a height of 3.58 million. Multiple established titles strengthened player appeal through innovative gameplay updates and crossover synergy events, including Fantasy Westward Journey mobile game, Identity V, Eggy Party, Sword of Justice and Where Winds Meet.
Strengthened the global portfolio and pipeline with new games across a variety of genres:
- Destiny: Rising topped the iOS download chart in multiple regions across Western markets with its August 28 global launch, as well as in China with its October 16 domestic launch.
- ANANTA sparked substantial enthusiasm with its brand-new experience at Tokyo Games Show 2025's playtesting session.
- Sword of Justice and Where Winds Meet hit global markets on November 7 and 14, respectively, bringing captivating, distinctive Wuxia worlds to players everywhere.
- Sea of Remnants is advancing steadily toward its planned 2026 launch.
Blizzard titles continued to deliver enhanced experiences to Chinese players. World of Warcraft launched the long-awaited, China-exclusive Titan Reforged Server on November 18, igniting strong enthusiasm among local players. Diablo II: Resurrected returned to China on August 27, followed by StarCraft II on October 28, while Diablo IV is scheduled to launch on December 12, to deliver another exceptional experience to players in China.

"We delivered another quarter of solid execution, underscoring our healthy growth in China and rising global appeal," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "Over the years, we have honed our innovation capabilities and proven them title after title by delivering exceptional gaming experiences. This edge has afforded us a strong domestic foundation to extend our distinctive, sophisticated games to players worldwide.

"User experience remains the heart of our value system as we look to raise the bar for creativity and tech-inspired games while enriching and expanding our vibrant player community. Through close collaboration with partners and top talent around the world, we aim to create even greater value for players and sustain our momentum across markets," Mr. Ding concluded.

Third Quarter 2025 Financial Results

Net Revenues

Net revenues for the third quarter of 2025 were RMB28.4 billion (US$4.0 billion), compared with RMB27.9 billion and RMB26.2 billion for the preceding quarter and the same quarter of 2024, respectively.

Net revenues from games and related value-added services were RMB23.3 billion (US$3.3 billion) for the third quarter of 2025, compared with RMB22.8 billion and RMB20.9 billion for the preceding quarter and the same quarter of 2024, respectively. Net revenues from the operation of online games accounted for approximately 97.6% of the segment's net revenues for the third quarter of 2025, compared with 97.1% and 96.8% for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter increase in online games net revenues was due to higher net revenues from self-developed games such as Fantasy Westward Journey Online and Sword of Justice, as well as certain licensed games. The year-over-year increase was attributable to higher net revenues from self-developed games such as Fantasy Westward Journey Online, Eggy Party and newly-launched Where Winds Meet and Marvel Rivals, as well as certain licensed games.

Net revenues from Youdao were RMB1.6 billion (US$228.8 million) for the third quarter of 2025, compared with RMB1.4 billion and RMB1.6 billion for the preceding quarter and the same quarter of 2024. The quarter-over-quarter increase was due to increased net revenues from its smart devices and online marketing services.

Net revenues from NetEase Cloud Music were RMB2.0 billion (US$275.9 million) for the third quarter of 2025, compared with RMB2.0 billion each for the preceding quarter and the same quarter of 2024.

Net revenues from innovative businesses and others were RMB1.4 billion (US$202.1 million) for the third quarter of 2025, compared with RMB1.7 billion and RMB1.8 billion for the preceding quarter and the same quarter of 2024, respectively. Results from this segment were mainly driven by net revenues from Yanxuan, advertising services and other value-added services, as well as certain inter-segment transaction eliminations. The quarter-over-quarter decrease was led by decreased net revenues from Yanxuan. The year-over-year decrease reflected an increase in certain inter-segment transaction elimination and, to a lesser extent, decreased net revenues from Yanxuan and certain other businesses.

Cost of Revenues

Cost of revenues for the third quarter of 2025 was RMB10.2 billion (US$1.4 billion), compared with RMB9.8 billion and RMB9.7 billion for the preceding quarter and the same quarter of 2024, respectively. Staff-related costs, revenue sharing costs and royalties for licensed games increased quarter-over-quarter and year-over-year.

Gross Profit

Gross profit for the third quarter of 2025 was RMB18.2 billion (US$2.6 billion), compared with RMB18.1 billion and RMB16.5 billion for the preceding quarter and the same quarter of 2024, respectively.

Operating Expenses

Total operating expenses for the third quarter of 2025 were RMB10.2 billion (US$1.4 billion), compared with RMB9.0 billion and RMB9.3 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 marketing expenditures related to online games.

Other Income/(Expenses)

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

Income Tax

The Company recorded a net income tax charge of RMB1.3 billion (US$184.9 million) for the third quarter of 2025, compared with RMB1.6 billion and RMB1.3 billion for the preceding quarter and the same quarter of 2024, respectively. The effective tax rate for the third quarter of 2025 was 13.0%, compared with 14.7% and 16.1% 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 third quarter of 2025, compared with RMB8.6 billion and RMB6.5 billion for the preceding quarter and the same quarter of 2024, respectively.

Basic net income was US$0.38 per share (US$1.90 per ADS) for the third quarter of 2025, compared with US$0.38 per share (US$1.89 per ADS) and US$0.29 per share (US$1.44 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 third quarter of 2025, compared with RMB9.5 billion and RMB7.5 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 third quarter of 2025, compared with US$0.42 per share (US$2.10 per ADS) and US$0.33 per share (US$1.65 per ADS) for the preceding quarter and the same quarter of 2024, respectively.

Other Financial Information

As of September 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 RMB153.2 billion (US$21.5 billion), compared with RMB131.5 billion as of December 31, 2024. Net cash provided by operating activities was RMB12.9 billion (US$1.8 billion) for the third quarter of 2025, compared with RMB10.9 billion and RMB10.6 billion for the preceding quarter and the third 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 third quarter of 2025 to holders of ordinary shares and holders of ADSs as of the close of business on December 5, 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 December 5, 2025 (Beijing/Hong Kong Time). The payment date is expected to be December 16, 2025 for holders of ordinary shares and on or around December 19, 2025, for holders of ADSs.

NetEase paid a dividend of US$0.1140 per share (US$0.5700 per ADS) for the second quarter of 2025 in September 2025.

Share Repurchase Program

The Company announced today that its previously approved share repurchase program of up to US$5.0 billion of the Company's ADSs and ordinary shares in open market or other transactions will be extended for an additional 36 months until January 9, 2029. As of September 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 7:00 a.m. Eastern Time on Thursday, November 20, 2025 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, November 20, 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: 10051135, 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: 10051135. The replay will be available through November 27, 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.

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

Non-GAAP Financial Measures

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,	September 30,	September 30,
	2024	2025	2025
	RMB	RMB	USD (Note 1)
Assets
Current assets:
Cash and cash equivalents	51,383,310	31,326,752	4,400,443
Time deposits	75,441,355	93,551,844	13,141,150
Restricted cash	3,086,405	8,654,295	1,215,662
Accounts receivable, net	5,669,027	5,962,060	837,486
Inventories	571,548	637,325	89,525
Prepayments and other current assets, net	6,416,868	6,863,085	964,050
Short-term investments	10,756,143	24,214,436	3,401,382
Total current assets	153,324,656	171,209,797	24,049,698

Non-current assets:
Property, equipment and software, net	8,520,101	8,517,182	1,196,401
Land use rights, net	4,172,465	4,078,719	572,934
Deferred tax assets	1,113,435	2,612,046	366,912
Time deposits	3,025,000	2,845,000	399,635
Restricted cash	5,208	3,900	548
Other long-term assets	25,830,685	25,222,219	3,542,944
Total non-current assets	42,666,894	43,279,066	6,079,374
Total assets	195,991,550	214,488,863	30,129,072

Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity
Current liabilities:
Accounts payable	720,549	718,393	100,912
Salary and welfare payables	4,683,009	3,004,519	422,042
Taxes payable	2,759,185	4,312,685	605,799
Short-term loans	11,805,051	7,349,967	1,032,444
Contract liabilities	15,299,222	19,473,595	2,735,440
Accrued liabilities and other payables	14,400,641	15,229,406	2,139,262
Total current liabilities	49,667,657	50,088,565	7,035,899

Non-current liabilities:
Deferred tax liabilities	2,173,117	2,212,733	310,821
Long-term loans	427,997	-	-
Other long-term liabilities	1,228,641	1,255,583	176,371
Total non-current liabilities	3,829,755	3,468,316	487,192
Total liabilities	53,497,412	53,556,881	7,523,091

Redeemable noncontrolling interests	84,272	89,465	12,567

NetEase, Inc.'s shareholders' equity	138,685,606	156,256,172	21,949,174
Noncontrolling interests	3,724,260	4,586,345	644,240
Total equity	142,409,866	160,842,517	22,593,414

Total liabilities, redeemable noncontrolling interests and shareholders' equity	195,991,550	214,488,863	30,129,072

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					Nine Months Ended
		September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 30,
		2024	2025	2025	2025	2024	2025	2025
		RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)

Net revenues		26,209,879	27,891,664	28,358,625	3,983,512	78,547,425	85,078,834	11,950,953
Cost of revenues		(9,733,274)	(9,839,182)	(10,181,020)	(1,430,119)	(29,012,682)	(30,369,341)	(4,265,956)
Gross profit		16,476,605	18,052,482	18,177,605	2,553,393	49,534,743	54,709,493	7,684,997

Operating expenses:
Selling and marketing expenses		(3,805,071)	(3,578,174)	(4,457,675)	(626,166)	(11,329,012)	(10,731,446)	(1,507,437)
General and administrative expenses		(1,100,328)	(1,056,578)	(1,164,573)	(163,587)	(3,388,244)	(3,177,488)	(446,339)
Research and development expenses		(4,424,469)	(4,356,646)	(4,541,891)	(637,996)	(13,054,944)	(13,284,850)	(1,866,112)
Total operating expenses		(9,329,868)	(8,991,398)	(10,164,139)	(1,427,749)	(27,772,200)	(27,193,784)	(3,819,888)
Operating profit		7,146,737	9,061,084	8,013,466	1,125,644	21,762,543	27,515,709	3,865,109

Other income/(expenses):
Investment income, net		578,398	328,444	1,379,402	193,763	861,363	2,400,597	337,210
Interest income, net		1,282,766	953,490	936,706	131,578	3,746,582	2,951,082	414,536
Exchange (losses)/gains, net		(1,055,518)	114,037	(373,812)	(52,509)	(1,279,882)	(257,972)	(36,237)
Other, net		43,600	192,167	153,198	21,520	323,182	600,680	84,377
Income before tax		7,995,983	10,649,222	10,108,960	1,419,996	25,413,788	33,210,096	4,664,995
Income tax		(1,289,545)	(1,560,757)	(1,316,356)	(184,907)	(4,076,394)	(4,782,256)	(671,760)

Net income from continuing operations		6,706,438	9,088,465	8,792,604	1,235,089	21,337,394	28,427,840	3,993,235
Net income from discontinued operations		-	-	-	-	-	-	-
Net income		6,706,438	9,088,465	8,792,604	1,235,089	21,337,394	28,427,840	3,993,235

Accretion of redeemable noncontrolling interests		(962)	(1,051)	(1,044)	(147)	(2,880)	(3,144)	(442)
Net income attributable to noncontrolling interests and redeemable noncontrolling interests		(167,041)	(486,404)	(175,883)	(24,706)	(403,384)	(906,852)	(127,385)
Net income attributable to the Company's shareholders		6,538,435	8,601,010	8,615,677	1,210,236	20,931,130	27,517,844	3,865,408

Net income per share *
Basic		2.04	2.70	2.70	0.38	6.52	8.64	1.21
Diluted		2.03	2.67	2.67	0.38	6.46	8.55	1.20

Net income per ADS *
Basic		10.22	13.49	13.50	1.90	32.61	43.20	6.07
Diluted		10.14	13.36	13.36	1.88	32.30	42.77	6.01

Weighted average number of ordinary shares used in calculating net income per share *
Basic		3,198,646	3,188,634	3,191,231	3,191,231	3,209,298	3,184,651	3,184,651
Diluted		3,224,110	3,214,681	3,223,497	3,223,497	3,238,834	3,214,910	3,214,910

* 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				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 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	6,706,438	9,088,465	8,792,604	1,235,089	21,337,394	28,427,840	3,993,235
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	520,567	428,427	617,872	86,792	1,720,447	1,527,060	214,505
Fair value changes of equity security, other investments and financial instruments	(824,608)	55,715	(1,965,526)	(276,096)	(1,200,753)	(2,468,310)	(346,721)
Impairment losses on investments	529,668	161,463	1,616,146	227,019	868,826	1,866,680	262,211
Fair value changes of short-term investments	(100,071)	(344,604)	(278,636)	(39,140)	(289,176)	(824,849)	(115,866)
Share-based compensation cost	978,139	946,395	902,201	126,732	2,951,495	2,800,468	393,379
Allowance for expected credit losses	36,022	153,179	180,085	25,296	56,903	350,035	49,169
(Gains)/losses on disposal of property, equipment and software	(2,920)	(30,920)	404	57	(1,114)	(10,223)	(1,436)
Unrealized exchange losses/(gains)	1,050,644	(165,662)	368,559	51,771	823,824	174,444	24,504
Gains on disposal of long-term investments, business, subsidiaries and other financial instruments	(118,046)	(141,078)	(38,072)	(5,348)	(272,647)	(167,475)	(23,525)
Deferred income taxes	711,639	(853,764)	(933,553)	(131,135)	(83,383)	(1,459,045)	(204,951)
Share of results on equity method investees	(28,466)	13,479	1,389,265	195,149	175,005	1,384,076	194,420
Changes in operating assets and liabilities:
Accounts receivable	146,758	953,295	(194,823)	(27,367)	198,525	(330,488)	(46,423)
Inventories	(39,285)	(73,944)	(45,582)	(6,403)	81,645	(65,753)	(9,236)
Prepayments and other assets	(1,234,390)	583,484	(889,519)	(124,950)	(377,394)	(601,213)	(84,452)
Accounts payable	6,316	119,644	16,042	2,253	(127,547)	(12,390)	(1,740)
Salary and welfare payables	(670,750)	920,662	(566,362)	(79,556)	(1,970,300)	(1,730,811)	(243,126)
Taxes payable	224,015	(764,372)	517,353	72,672	33,137	1,549,104	217,601
Contract liabilities	1,928,060	(718,719)	2,579,424	362,330	2,231,822	4,386,903	616,225
Accrued liabilities and other payables	755,882	530,718	880,072	123,623	507,904	1,120,416	157,383
Net cash provided by operating activities	10,575,612	10,861,863	12,947,954	1,818,788	26,664,613	35,916,469	5,045,156

Cash flows from investing activities:
Purchase of property, equipment and software	(379,520)	(189,842)	(283,645)	(39,843)	(963,418)	(927,558)	(130,293)
Proceeds from sale of property, equipment and software	1,072	21,499	1,261	177	5,238	24,096	3,385
Purchase of intangible assets, content and licensed copyrights	(222,247)	(313,349)	(190,983)	(26,827)	(810,601)	(803,103)	(112,811)
Net changes of short-term investments with terms of three months or less	1,585,395	776,428	(1,111,376)	(156,114)	(4,207,245)	(6,473,504)	(909,328)
Purchase of short-term investments with terms over three months	(3,675,000)	(5,800,000)	(7,270,000)	(1,021,211)	(3,675,000)	(16,040,000)	(2,253,126)
Proceeds from maturities of short-term investments with terms over three months	-	5,745,454	1,426,005	200,310	-	9,880,060	1,387,844
Investment in long-term investments and acquisition of subsidiaries	(226,086)	(2,741,641)	(95,169)	(13,368)	(901,340)	(2,927,776)	(411,262)
Proceeds from disposal of long-term investments, businesses, subsidiaries and other financial instruments	1,541,338	784,855	1,554,537	218,365	2,467,443	2,416,820	339,489
Placement/rollover of matured time deposits	(36,766,094)	(27,980,605)	(49,326,969)	(6,928,918)	(133,100,536)	(126,909,381)	(17,826,855)
Proceeds from maturities of time deposits	37,546,192	33,617,510	30,600,384	4,298,410	138,806,413	108,144,376	15,190,950
Change in other long-term assets	(125,911)	(27,367)	75,342	10,583	(333,079)	47,297	6,644
Net cash (used in)/provided by investing activities	(720,861)	3,892,942	(24,620,613)	(3,458,436)	(2,712,125)	(33,568,673)	(4,715,363)

Cash flows from financing activities:
Net changes from loans with terms of three months or less	(4,778,301)	2,017,570	536,886	75,416	(7,263,080)	300,041	42,146
Proceeds of loans with terms over three months	5,395,810	1,231,000	1,481,550	208,112	13,463,080	5,460,100	766,976
Payment of loans with terms over three months	(3,100,520)	(1,804,730)	(5,879,605)	(825,903)	(14,739,347)	(10,620,012)	(1,491,784)
Net amounts (paid)/received related to repurchase of or capital contribution from noncontrolling interests shareholders	(8,394)	42,400	18,072	2,539	84,392	102,989	14,467
Net amount (paid)/received related to repurchase of NetEase's ADSs/purchase of subsidiaries' ADSs and shares	(3,994,212)	(355,563)	35,227	4,948	(7,235,022)	(623,937)	(87,644)
Dividends paid to NetEase's shareholders	(1,972,928)	(3,082,122)	(2,583,740)	(362,936)	(9,182,743)	(11,250,394)	(1,580,333)
Net cash used in financing activities	(8,458,545)	(1,951,445)	(6,391,610)	(897,824)	(24,872,720)	(16,631,213)	(2,336,172)

Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies	(68,136)	(31,749)	(117,878)	(16,558)	(103,040)	(206,559)	(29,015)
Net increase/ (decrease) in cash, cash equivalents and restricted cash	1,328,070	12,771,611	(18,182,147)	(2,554,030)	(1,023,272)	(14,489,976)	(2,035,394)
Cash, cash equivalents and restricted cash, at the beginning of the period	21,855,316	45,395,483	58,167,094	8,170,683	24,206,658	54,474,923	7,652,047
Cash, cash equivalents and restricted cash, at the end of the period	23,183,386	58,167,094	39,984,947	5,616,653	23,183,386	39,984,947	5,616,653

Supplemental disclosures of cash flow information:
Cash paid for income taxes, net	554,867	2,184,556	1,967,228	276,335	4,586,071	5,358,339	752,681
Cash paid for interest expenses	165,881	64,366	207,879	29,201	465,279	369,669	51,927

The accompanying notes are an integral part of this announcement.

NETEASE, INC.
UNAUDITED SEGMENT INFORMATION
(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 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	20,864,036	22,806,459	23,327,508	3,276,796	62,380,233	70,181,974	9,858,403
Youdao	1,572,541	1,417,541	1,628,524	228,757	4,286,121	4,344,327	610,244
NetEase Cloud Music	1,999,163	1,968,729	1,964,063	275,890	6,069,656	5,791,180	813,482
Innovative businesses and others	1,774,139	1,698,935	1,438,530	202,069	5,811,415	4,761,353	668,824
Total net revenues	26,209,879	27,891,664	28,358,625	3,983,512	78,547,425	85,078,834	11,950,953

Cost of revenues:
Games and related value-added services	(6,503,146)	(6,792,240)	(7,151,130)	(1,004,513)	(19,067,061)	(21,438,632)	(3,011,467)
Youdao	(783,085)	(808,181)	(940,661)	(132,134)	(2,178,383)	(2,432,877)	(341,744)
NetEase Cloud Music	(1,343,921)	(1,258,855)	(1,269,289)	(178,296)	(3,988,683)	(3,703,921)	(520,287)
Innovative businesses and others	(1,103,122)	(979,906)	(819,940)	(115,176)	(3,778,555)	(2,793,911)	(392,458)
Total cost of revenues	(9,733,274)	(9,839,182)	(10,181,020)	(1,430,119)	(29,012,682)	(30,369,341)	(4,265,956)

Gross profit:
Games and related value-added services	14,360,890	16,014,219	16,176,378	2,272,283	43,313,172	48,743,342	6,846,936
Youdao	789,456	609,360	687,863	96,623	2,107,738	1,911,450	268,500
NetEase Cloud Music	655,242	709,874	694,774	97,594	2,080,973	2,087,259	293,195
Innovative businesses and others	671,017	719,029	618,590	86,893	2,032,860	1,967,442	276,366
Total gross profit	16,476,605	18,052,482	18,177,605	2,553,393	49,534,743	54,709,493	7,684,997

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 = RMB7.1190 on the last trading day of September 2025 (September 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 September 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				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 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	306,283	291,326	267,472	37,572	881,167	792,509	111,323
Operating expenses
Selling and marketing expenses	36,365	37,300	29,063	4,082	97,099	98,941	13,898
General and administrative expenses	247,440	207,202	209,916	29,487	823,426	678,377	95,291
Research and development expenses	388,051	410,567	395,750	55,591	1,149,803	1,230,641	172,867

The accompanying notes are an integral part of this announcement.

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				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 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	6,538,435	8,601,010	8,615,677	1,210,236	20,931,130	27,517,844	3,865,408
Add: Share-based compensation	960,706	930,921	886,380	124,509	2,897,543	2,752,871	386,693
Non-GAAP net income attributable to the Company's shareholders	7,499,141	9,531,931	9,502,057	1,334,745	23,828,673	30,270,715	4,252,101

Non-GAAP net income per share *
Basic	2.34	2.99	2.98	0.42	7.42	9.51	1.34
Diluted	2.33	2.96	2.95	0.41	7.35	9.41	1.32

Non-GAAP net income per ADS *
Basic	11.72	14.95	14.89	2.09	37.12	47.53	6.68
Diluted	11.63	14.81	14.73	2.07	36.77	47.05	6.61

* Each ADS represents five ordinary shares.
The accompanying notes are an integral part of this announcement.

]]> NetEase to Report Third Quarter 2025 Financial Results on November 20 2025-11-06 16:30:00 . 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 inChina 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, Nov. 6, 2025 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the 2025 third quarter on Thursday, November 20, 2025, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 7:00 a.m. Eastern Time on Thursday, November 20, 2025 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, November 20, 2025). NetEase's management will be on the call to discuss the quarterly results and answer questions.

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.

For more information, please visit: http://ir.netease.com/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase Announces Second Quarter 2025 Unaudited Financial Results 2025-08-14 16:30:00 . 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 inChina 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 subsidiariesYoudao (NYSE: DAO), an intelligent learning and advertising solutions provider, andNetEase Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well asYanxuan, 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 inChina 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 inthe 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 ofUSD1.00 = 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 onJune 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 endedJune 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. ]]> 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.

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.

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

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 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
	Amounts as reported under U.S. GAAP	(Note (a))	(Note (b))	Amounts as reported under IFRS Accounting Standards
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
	Amounts as reported under U.S. GAAP	(Note (a))	(Note (b))	Amounts as reported under IFRS Accounting Standards
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
	Amounts as reported under U.S. GAAP	(Note (a))	(Note (b))	Amounts as reported under IFRS Accounting Standards
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
	Amounts as reported under U.S. GAAP	(Note (a))	(Note (b))	Amounts as reported under IFRS Accounting Standards
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.

]]> NetEase Enhances Board Independence with New Director Appointment 2025-08-14 16:30:00 . 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 inChina 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. Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> 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 the appointment of Mr. Kok Chung Johnny Chan to its board of directors as an independent director, effective as of August 14, 2025.

Mr. Chan has over 40 years of experience in the investment banking and investment management industry. He is currently the Chief Investment Officer of the Hong Kong Cyberport Management Company and a member of the Market Misconduct Tribunal, established under the Securities and Futures Ordinance of Hong Kong, as well as the Securities and Futures Appeals Tribunal. Mr. Chan previously served as a deputy chairman of the Listing Committee of the Hong Kong Stock Exchange.

Mr. Chan also serves as an independent non-executive director of CNQC International Holdings Ltd. (HKEX: 1240) and Hangzhou SF Intra-city Industrial Co., Ltd. (HKEX: 9699). He received a bachelor's degree (majoring in economics) from City of London Polytechnic (now London Metropolitan University), a master's degree in business administration from City University London and a postgraduate diploma from the Securities Institute of Australia (now The Financial Services Institute of Australasia (FINSIA)).

"We are delighted to welcome Johnny to the board," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "We believe his extensive background and nuanced understanding of the capital markets, supported by a regarded standing in the industry, will bring fresh and practical insights that align with our commitment to excellence and innovation."

About NetEase, Inc.

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.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase to Report Second Quarter 2025 Financial Results on August 14 2025-07-31 16:30:00 . 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 inChina 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, July 31, 2025 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the 2025 second quarter on Thursday, August 14, 2025, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place 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.

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.

For more information, please visit: http://ir.netease.com/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase Announces First Quarter 2025 Unaudited Financial Results 2025-05-15 16:30:00 . 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 inChina 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 subsidiariesYoudao (NYSE: DAO), an intelligent learning and advertising solutions provider, andNetEase Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well asYanxuan, 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 inChina 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 inthe 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 ofUSD1.00 = 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 onMarch 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. ]]> 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]

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.

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.

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

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 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.

]]> NetEase to Report First Quarter 2025 Financial Results on May 15 2025-04-30 16:30:00 . 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 inChina 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, April 30, 2025 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the 2025 first quarter on Thursday, May 15, 2025, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 8:00 a.m. Eastern 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.

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.

For more information, please visit: http://ir.netease.com/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase, Inc. Announces Filing of Annual Report on Form 20-F for Fiscal Year 2024 2025-04-15 18:20:00 . The Company will provide a hard copy of its annual report containing the audited consolidated financial statements, free of charge, to its shareholders and ADS holders upon request. Requests should be directed to the IR Department, NetEase, Inc., NetEase Building, No. 399 Wangshang Road, Binjiang District, Hangzhou, 310052, People's Republic of China at the contact information listed below. 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 inChina 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, April 15, 2025 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or "the Company"), a leading internet and game services provider, today announced that it filed its annual report on Form 20-F for the fiscal year ended December 31, 2024. The annual report can be accessed on the Company's investor relations website at http://ir.netease.com/.

The Company will provide a hard copy of its annual report containing the audited consolidated financial statements, free of charge, to its shareholders and ADS holders upon request. Requests should be directed to the IR Department, NetEase, Inc., NetEase Building, No. 399 Wangshang Road, Binjiang District, Hangzhou, 310052, People's Republic of China at the contact information listed below.

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.

For more information, please visit: http://ir.netease.com/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase Announces Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results 2025-02-20 16:30:00 . 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 inChina 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 subsidiariesYoudao (NYSE: DAO), an intelligent learning company with industry-leading technology, andNetEase Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well asYanxuan, 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 inChina 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 events; 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 inthe 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, December 31, December 31, 2023 2024 2024 RMB RMB USD (Note 1) Assets Current assets: Cash and cash equivalents 21,428,902 51,383,310 7,039,485 Time deposits 100,856,034 75,441,355 10,335,423 Restricted cash 2,777,206 3,086,405 422,836 Accounts receivable, net 6,422,417 5,669,027 776,654 Inventories 695,374 571,548 78,302 Prepayments and other current assets, net 6,076,595 6,416,868 879,107 Short-term investments 4,436,057 10,756,143 1,473,586 Total current assets 142,692,585 153,324,656 21,005,393 Non-current assets: Property, equipment and software, net 8,075,044 8,520,101 1,167,249 Land use rights, net 4,075,143 4,172,465 571,625 Deferred tax assets 1,560,088 1,113,435 152,540 Time deposits 1,050,000 3,025,000 414,423 Restricted cash 550 5,208 713 Other long-term assets 28,471,568 25,830,685 3,538,789 Total non-current assets 43,232,393 42,666,894 5,845,339 Total assets 185,924,978 195,991,550 26,850,732 Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity Current liabilities: Accounts payable 881,016 720,549 98,715 Salary and welfare payables 4,857,206 4,683,009 641,570 Taxes payable 2,571,534 2,759,185 378,007 Short-term loans 19,240,163 11,805,051 1,617,285 Contract liabilities 13,362,166 15,299,222 2,095,985 Accrued liabilities and other payables 12,930,399 14,400,641 1,972,879 Total current liabilities 53,842,484 49,667,657 6,804,441 Non-current liabilities: Deferred tax liabilities 2,299,303 2,173,117 297,716 Long-term loans 427,997 427,997 58,635 Other long-term liabilities 1,271,113 1,228,641 168,323 Total non-current liabilities 3,998,413 3,829,755 524,674 Total liabilities 57,840,897 53,497,412 7,329,115 Redeemable noncontrolling interests 115,759 84,272 11,545 NetEase, Inc.'s shareholders' equity 124,285,776 138,685,606 18,999,850 Noncontrolling interests 3,682,546 3,724,260 510,222 Total equity 127,968,322 142,409,866 19,510,072 Total liabilities, redeemable noncontrolling interests and shareholders' equity 185,924,978 195,991,550 26,850,732 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 Year Ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net revenues 27,140,165 26,209,879 26,747,811 3,664,435 103,468,159 105,295,236 14,425,388 Cost of revenues (10,315,030) (9,733,274) (10,475,470) (1,435,134) (40,404,765) (39,488,152) (5,409,855) Gross profit 16,825,135 16,476,605 16,272,341 2,229,301 63,063,394 65,807,084 9,015,533 Operating expenses: Selling and marketing expenses (4,225,556) (3,805,071) (2,818,645) (386,153) (13,969,460) (14,147,657) (1,938,221) General and administrative expenses (1,251,869) (1,100,328) (1,162,381) (159,246) (4,899,880) (4,550,625) (623,433) Research and development expenses (4,479,219) (4,424,469) (4,469,868) (612,369) (16,484,910) (17,524,812) (2,400,889) Total operating expenses (9,956,644) (9,329,868) (8,450,894) (1,157,768) (35,354,250) (36,223,094) (4,962,543) Operating profit 6,868,491 7,146,737 7,821,447 1,071,533 27,709,144 29,583,990 4,052,990 Other income/(expenses): Investment (losses)/income, net (8,940) 578,398 (506,077) (69,332) 1,306,722 355,286 48,674 Interest income, net 1,261,583 1,282,766 1,174,333 160,883 4,120,418 4,920,915 674,163 Exchange (losses)/gains, net (810,904) (1,055,518) 1,535,312 210,337 (132,999) 255,430 34,994 Other, net 434,759 43,600 278,952 38,216 1,053,642 602,134 82,492 Income before tax 7,744,989 7,995,983 10,303,967 1,411,637 34,056,927 35,717,755 4,893,313 Income tax (1,068,657) (1,289,545) (1,385,014) (189,746) (4,699,704) (5,461,408) (748,210) Net income 6,676,332 6,706,438 8,918,953 1,221,891 29,357,223 30,256,347 4,145,103 Accretion of redeemable noncontrolling interests (966) (962) (1,039) (142) (3,589) (3,919) (537) Net (income)/loss attributable to noncontrolling interests and redeemable noncontrolling interests (93,103) (167,041) (151,435) (20,747) 62,918 (554,819) (76,010) Net income attributable to the Company's shareholders 6,582,263 6,538,435 8,766,479 1,201,002 29,416,552 29,697,609 4,068,556 Net income per share * Basic 2.05 2.04 2.76 0.38 9.15 9.28 1.27 Diluted 2.02 2.03 2.73 0.37 9.05 9.19 1.26 Net income per ADS * Basic 10.25 10.22 13.81 1.89 45.73 46.40 6.36 Diluted 10.12 10.14 13.67 1.87 45.23 45.95 6.29 Weighted average number of ordinary shares used in calculating net income per share * Basic 3,212,328 3,198,646 3,174,113 3,174,113 3,216,475 3,200,453 3,200,453 Diluted 3,253,166 3,224,110 3,206,100 3,206,100 3,252,029 3,230,602 3,230,602 * 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 Year Ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Cash flows from operating activities: Net income 6,676,332 6,706,438 8,918,953 1,221,891 29,357,223 30,256,347 4,145,103 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 659,772 520,567 697,447 95,550 3,055,260 2,417,894 331,250 Fair value changes of equity security, other investments and financial instruments 151,571 (824,608) 358,852 49,163 (535,316) (841,901) (115,340) Impairment losses on investments 140,648 529,668 422,801 57,924 469,159 1,291,627 176,952 Fair value changes of short-term investments (106,532) (100,071) (241,431) (33,076) (414,207) (530,607) (72,693) Share-based compensation cost 812,987 978,139 931,444 127,608 3,242,810 3,882,939 531,960 Allowance for expected credit losses 9,500 36,022 12,031 1,648 61,146 68,934 9,444 Losses/(gains) on disposal of property, equipment and software 3,385 (2,920) (3,644) (499) 5,676 (4,758) (652) Unrealized exchange losses/(gains) 838,056 1,050,644 (1,542,986) (211,388) 119,935 (719,162) (98,525) (Gains)/losses on disposal of long-term investments, business and subsidiaries (38,437) (118,046) 232 32 (63,784) (272,415) (37,321) Deferred income taxes 193,854 711,639 404,109 55,363 131,437 320,726 43,939 Share of results on equity method investees and revaluation results from previously held equity interest (88,805) (28,466) (19,437) (2,663) (473,947) 155,568 21,313 Changes in operating assets and liabilities: Accounts receivable 53,089 146,758 517,850 70,945 (1,470,374) 716,375 98,143 Inventories 25,054 (39,285) 42,135 5,772 296,764 123,780 16,958 Prepayments and other assets 542,593 (1,234,390) (432,196) (59,211) 87,556 (809,590) (110,913) Accounts payable 18,443 6,316 218,689 29,960 (559,419) 91,142 12,486 Salary and welfare payables 1,992,931 (670,750) 1,759,382 241,034 (62,917) (210,918) (28,896) Taxes payable (500,172) 224,015 154,651 21,187 (244,261) 187,788 25,727 Contract liabilities (847,562) 1,928,060 (209,626) (28,719) 1,161,861 2,022,196 277,041 Accrued liabilities and other payables 1,271,572 755,882 1,022,944 140,143 1,166,673 1,530,848 209,725 Net cash provided by operating activities 11,808,279 10,575,612 13,012,200 1,782,664 35,331,275 39,676,813 5,435,701 Cash flows from investing activities: Purchase of property, equipment and software (484,927) (379,520) (311,982) (42,741) (2,301,554) (1,275,400) (174,729) Proceeds from sale of property, equipment and software 405 1,072 9,295 1,273 10,302 14,533 1,991 Purchase of intangible assets, content and licensed copyrights (121,797) (222,247) (120,387) (16,493) (1,974,323) (930,988) (127,545) Net changes of short-term investments with terms of three months or less (690,628) 1,585,395 3,798,989 520,460 (1,777,687) (408,256) (55,931) Purchase of short-term investments with terms over three months - (3,675,000) (4,560,000) (624,717) - (8,235,000) (1,128,190) Proceeds from maturities of short-term investments with terms over three months 4,897,291 - 2,853,778 390,966 5,378,510 2,853,778 390,966 Investment in long-term investments and acquisition of subsidiaries (914,962) (226,086) (201,686) (27,631) (2,831,686) (1,103,026) (151,114) Proceeds from disposal of long-term investments, businesses, subsidiaries and other financial instruments 73,855 1,541,338 355,142 48,654 152,564 2,822,585 386,692 Placement/rollover of matured time deposits (46,666,670) (36,766,094) (21,691,769) (2,971,760) (124,693,598) (154,792,305) (21,206,459) Proceeds from maturities of time deposits 33,273,393 37,546,192 40,570,700 5,558,163 111,417,969 179,377,113 24,574,564 Change in other long-term assets (90,635) (125,911) (73,553) (10,077) (423,928) (406,632) (55,708) Net cash (used in)/provided by investing activities (10,724,675) (720,861) 20,628,527 2,826,097 (17,043,431) 17,916,402 2,454,537 Cash flows from financing activities: Net changes from loans with terms of three months or less 6,179,979 (4,778,301) 606,092 83,034 (13,654,704) (6,656,988) (912,004) Proceeds of loans with terms over three months 2,511,000 5,395,810 457,000 62,609 13,569,160 13,920,080 1,907,043 Payment of loans with terms over three months (695,000) (3,100,520) - - (8,219,472) (14,739,347) (2,019,282) Net amounts received/(paid) related to capital contribution from or repurchase of noncontrolling interests shareholders 28,009 (8,394) 51,614 7,071 86,159 136,006 18,633 Cash paid for repurchase of NetEase's ADSs/purchase of subsidiaries' ADSs and shares (625,832) (3,994,212) (1,595,093) (218,527) (5,234,294) (8,830,115) (1,209,721) Dividends paid to NetEase's shareholders (2,258,892) (1,972,928) (1,982,595) (271,614) (8,013,903) (11,165,338) (1,529,645) Net cash provided/(used in) by financing activities 5,139,264 (8,458,545) (2,462,982) (337,427) (21,467,054) (27,335,702) (3,744,976) Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies (174,276) (68,136) 113,792 15,589 (202,457) 10,752 1,473 Net increase/(decrease) in cash, cash equivalents and restricted cash 6,048,592 1,328,070 31,291,537 4,286,923 (3,381,667) 30,268,265 4,146,735 Cash, cash equivalents and restricted cash, at the beginning of the period 18,158,066 21,855,316 23,183,386 3,176,111 27,588,325 24,206,658 3,316,299 Cash, cash equivalents and restricted cash, at end of the period 24,206,658 23,183,386 54,474,923 7,463,034 24,206,658 54,474,923 7,463,034 Supplemental disclosures of cash flow information: Cash paid for income taxes, net 1,030,932 554,867 603,514 82,681 4,895,752 5,189,585 710,970 Cash paid for interest expenses 71,847 165,881 24,343 3,335 779,872 489,622 67,078 The accompanying notes are an integral part of this announcement. NETEASE, INC. UNAUDITED SEGMENT INFORMATION (in thousands, except percentages) Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net revenues: Games and related value-added services 20,921,355 20,864,036 21,242,410 2,910,198 81,565,449 83,622,643 11,456,254 Youdao 1,480,521 1,572,541 1,339,798 183,552 5,389,208 5,625,919 770,748 NetEase Cloud Music 1,985,548 1,999,163 1,880,490 257,626 7,866,992 7,950,146 1,089,166 Innovative businesses and others 2,752,741 1,774,139 2,285,113 313,059 8,646,510 8,096,528 1,109,220 Total net revenues 27,140,165 26,209,879 26,747,811 3,664,435 103,468,159 105,295,236 14,425,388 Cost of revenues: Games and related value-added services (6,383,474) (6,503,146) (7,075,562) (969,348) (25,938,865) (26,142,623) (3,581,525) Youdao (741,720) (783,085) (699,045) (95,769) (2,621,746) (2,877,428) (394,206) NetEase Cloud Music (1,384,537) (1,343,921) (1,279,951) (175,353) (5,764,322) (5,268,634) (721,800) Innovative businesses and others (1,805,299) (1,103,122) (1,420,912) (194,664) (6,079,832) (5,199,467) (712,324) Total cost of revenues (10,315,030) (9,733,274) (10,475,470) (1,435,134) (40,404,765) (39,488,152) (5,409,855) Gross profit: Games and related value-added services 14,537,881 14,360,890 14,166,848 1,940,850 55,626,584 57,480,020 7,874,729 Youdao 738,801 789,456 640,753 87,783 2,767,462 2,748,491 376,542 NetEase Cloud Music 601,011 655,242 600,539 82,273 2,102,670 2,681,512 367,366 Innovative businesses and others 947,442 671,017 864,201 118,395 2,566,678 2,897,061 396,896 Total gross profit 16,825,135 16,476,605 16,272,341 2,229,301 63,063,394 65,807,084 9,015,533 Gross profit margin: Games and related value-added services 69.5 % 68.8 % 66.7 % 66.7 % 68.2 % 68.7 % 68.7 % Youdao 49.9 % 50.2 % 47.8 % 47.8 % 51.4 % 48.9 % 48.9 % NetEase Cloud Music 30.3 % 32.8 % 31.9 % 31.9 % 26.7 % 33.7 % 33.7 % Innovative businesses and others 34.4 % 37.8 % 37.8 % 37.8 % 29.7 % 35.8 % 35.8 % 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 ofUSD1.00 = RMB7.2993 on the last trading day of December 2024 (December 31, 2024) 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 December 31, 2024, 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 Year Ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Share-based compensation cost included in: Cost of revenues 216,717 306,283 304,687 41,742 823,765 1,185,854 162,461 Operating expenses Selling and marketing expenses 35,575 36,365 7,435 1,019 132,801 104,534 14,321 General and administrative expenses 262,830 247,440 246,424 33,760 1,119,018 1,069,850 146,569 Research and development expenses 297,865 388,051 372,898 51,087 1,167,226 1,522,701 208,609 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 Year Ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net income attributable to the Company's shareholders 6,582,263 6,538,435 8,766,479 1,201,002 29,416,552 29,697,609 4,068,556 Add: Share-based compensation 797,194 960,706 915,489 125,421 3,191,753 3,813,032 522,383 Non-GAAP net income attributable to the Company's shareholders 7,379,457 7,499,141 9,681,968 1,326,423 32,608,305 33,510,641 4,590,939 Non-GAAP net income per share * Basic 2.30 2.34 3.05 0.42 10.14 10.47 1.43 Diluted 2.27 2.33 3.02 0.41 10.03 10.37 1.42 Non-GAAP net income per ADS * Basic 11.49 11.72 15.25 2.09 50.69 52.35 7.17 Diluted 11.34 11.63 15.09 2.07 50.14 51.85 7.10 * Each ADS represents five ordinary shares. The accompanying notes are an integral part of this announcement. ]]> HANGZHOU, China, Feb. 20, 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 fourth quarter and fiscal year ended December 31, 2024.

Fourth Quarter 2024 Financial Highlights

Net revenues were RMB26.7 billion (US$3.7 billion), a decrease of 1.4% compared with the same quarter of 2023.
- Games and related value-added services net revenues were RMB21.2 billion (US$2.9 billion), an increase of 1.5% compared with the same quarter of 2023.
- Youdao net revenues were RMB1.3 billion (US$183.6 million), a decrease of 9.5% compared with the same quarter of 2023.
- NetEase Cloud Music net revenues were RMB1.9 billion (US$257.6 million), a decrease of 5.3% compared with the same quarter of 2023.
- Innovative businesses and others net revenues were RMB2.3 billion (US$313.1 million), a decrease of 17.0% compared with the same quarter of 2023.
Gross profit was RMB16.3 billion (US$2.2 billion), a decrease of 3.3% compared with the same quarter of 2023.
Total operating expenses were RMB8.5 billion (US$1.2 billion), a decrease of 15.1% compared with the same quarter of 2023.
Net income attributable to the Company's shareholders was RMB8.8 billion (US$1.2 billion). Non-GAAP net income attributable to the Company's shareholders was RMB9.7 billion (US$1.3 billion).^[1]
Basic net income per share was US$0.38 (US$1.89 per ADS). Non-GAAP basic net income per share was US$0.42 (US$2.09 per ADS).^[1]

Fourth Quarter 2024 and Early 2025 Operational Highlights

Introduced more new blockbuster games around the globe, reinforcing NetEase's leadership across diverse genres and growing global momentum.
- Marvel Rivals topped Steam's global top sellers chart shortly after its launch on December 6, amassing over 10 million registered users within 72 hours and over 40 million to date. Its Season 1 update in January 2025 sparked another surge, claiming the No. 1 spots on Steam's top sellers and most-played charts worldwide.
- Where Winds Meet surpassed 3 million downloads in China within four days of its PC launch and topped the iOS download chart for approximately two weeks following its mobile launch. A successful release of the game's mobile version drove total players across PC and mobile to over 15 million within two weeks.
- Justice mobile game topped the iOS download charts in Hong Kong, Macau and Taiwan and reached No. 1 position on the iOS top grossing chart in Taiwan in January 2025.
Blizzard titles World of Warcraft and Hearthstone continued to generate strong enthusiasm from the Chinese gaming community, while the return of Overwatch 2 on February 19, 2025 further fueled players' passion.
Established titles maintained their popularity, such as Westward Journey Online 2, Fantasy Westward Journey Online and mobile game, Infinite Borders, Onmyoji, Identity V, Naraka: Bladepoint and Justice franchise, demonstrating NetEase's prowess in long-term game operations.
New game lineup for global markets, including Fragpunk, Destiny: Rising and MARVEL Mystic Mayhem, positioned to further diversify game portfolio.
Youdao continued to focus on technology-driven innovation and profitability enhancement, achieving a 10.3% year-over-year increase in operating profit during the fourth quarter and recording first-ever annual operating profit in 2024.
NetEase Cloud Music continued to drive quality development across its music-centric ecosystem, remaining committed to nurturing its unique community and enriching its distinctive content offering. It also further improved music-oriented monetization supported by enlarging subscription-based memberships.

"We boldly pushed the boundaries of innovation once again in 2024, delivering groundbreaking gaming experiences that captivated players worldwide," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "Our new hit titles not only redefined gameplay but also set new industry benchmarks, while our legacy franchises gained fresh momentum through striking enhancements in design, storytelling and immersive content. As our diverse game portfolio expands across more genres and engages an ever-growing global audience, we remain dedicated to fostering creativity and collaborating with top talent and strategic partners to shape the next wave of gaming trends.

"Beyond gaming, Youdao and NetEase Cloud Music maintained healthy development in 2024, led by our focus on meticulously crafted content and exceptional user experiences. Our enduring pursuit of innovation, global expansion and game diversification is fueling lasting value creation across the industries we serve and for our partners and shareholders alike," Mr. Ding concluded.

Fourth Quarter 2024 Financial Results

Net Revenues

Net revenues for the fourth quarter of 2024 were RMB26.7 billion (US$3.7 billion), compared with RMB26.2 billion and RMB27.1 billion for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from games and related value-added services were RMB21.2 billion (US$2.9 billion) for the fourth quarter of 2024, compared with RMB20.9 billion each for the preceding quarter and the same quarter of 2023. Net revenues from the operation of online games accounted for approximately 96.7% of the segment's net revenues for the fourth quarter of 2024, compared with 96.8% and 93.4% for the preceding quarter and the same quarter of 2023, respectively. Net revenues from mobile games accounted for approximately 65.3% of net revenues from the operation of online games for the fourth quarter of 2024, compared with 70.8% and 76.7% for the preceding quarter and the same quarter of 2023, respectively. The change in revenue mix was mainly due to the increased net revenues from PC games, including certain licensed titles.

Net revenues from Youdao were RMB1.3 billion (US$183.6 million) for the fourth quarter of 2024, compared with RMB1.6 billion and RMB1.5 billion for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from NetEase Cloud Music were RMB1.9 billion (US$257.6 million) for the fourth quarter of 2024, compared with RMB2.0 billion each for the preceding quarter and the same quarter of 2023.

Net revenues from innovative businesses and others were RMB2.3 billion (US$313.1 million) for the fourth quarter of 2024, compared with RMB1.8 billion and RMB2.8 billion for the preceding quarter and the same quarter of 2023, respectively.

Gross Profit

Gross profit for the fourth quarter of 2024 was RMB16.3 billion (US$2.2 billion), compared with RMB16.5 billion and RMB16.8 billion for the preceding quarter and the same quarter of 2023, respectively.

The quarter-over-quarter and year-over-year decreases in games and related value-added services' gross profit were primarily due to decreased net revenues from certain mobile games, partially offset by increased net revenues from PC games, including certain licensed titles.

The quarter-over-quarter and year-over-year decreases in Youdao's gross profit were primarily due to decreased net revenues from its learning services.

The quarter-over-quarter decrease in NetEase Cloud Music's gross profit was primarily due to decreased net revenues from social entertainment services.

The quarter-over-quarter increase in innovative businesses and others' gross profit was primarily due to increased gross profit from Yanxuan and advertising services. The year-over-year decrease was primarily due to decreased gross profit from several businesses within the segment including advertising services.

Gross Profit Margin

Gross profit margin for games and related value-added services for the fourth quarter of 2024 was 66.7%, compared with 68.8% and 69.5% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year decreases were mainly attributable to higher revenue contribution from licensed games which have comparatively lower gross profit margins.

Gross profit margin for Youdao for the fourth quarter of 2024 was 47.8%, compared with 50.2% and 49.9% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year decreases were mainly due to decreased revenue contribution from its learning services.

Gross profit margin for NetEase Cloud Music for the fourth quarter of 2024 was 31.9%, compared with 32.8% and 30.3% for the preceding quarter and the same quarter of 2023, respectively. The year-over-year increase was mainly due to increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.

Gross profit margin for innovative businesses and others for the fourth quarter of 2024 was 37.8%, compared with 37.8% and 34.4% for the preceding quarter and the same quarter of 2023, respectively. The year-over-year increase was mainly due to increased gross profit margins from Yanxuan.

Operating Expenses

Total operating expenses for the fourth quarter of 2024 were RMB8.5 billion (US$1.2 billion), compared with RMB9.3 billion and RMB10.0 billion for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year decreases were mainly due to decreased marketing expenditures related to games and related value-added services.

Other Income/(Expenses)

Other income/(expenses) consisted of investment (losses)/income, interest income, exchange gains/(losses) and others. The quarter-over-quarter and year-over-year increases were mainly due to net exchange gains in the fourth quarter of 2024 compared with net exchange losses recorded in the preceding quarter and the same quarter of 2023.

Income Tax

The Company recorded a net income tax charge of RMB1.4 billion (US$189.7 million) for the fourth quarter of 2024, compared with RMB1.3 billion and RMB1.1 billion for the preceding quarter and the same quarter of 2023, respectively. The effective tax rate for the fourth quarter of 2024 was 13.4%, compared with 16.1% and 13.8% for the preceding quarter and the same quarter of 2023, 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 RMB8.8 billion (US$1.2 billion) for the fourth quarter of 2024, compared with RMB6.5 billion and RMB6.6 billion for the preceding quarter and the same quarter of 2023, respectively.

Basic net income was US$0.38 per share (US$1.89 per ADS) for the fourth quarter of 2024, compared with US$0.28 per share (US$1.40 per ADS) each for the preceding quarter and the same quarter of 2023, respectively.

Non-GAAP net income attributable to the Company's shareholders totaled RMB9.7 billion (US$1.3 billion) for the fourth quarter of 2024, compared with RMB7.5 billion and RMB7.4 billion for the preceding quarter and the same quarter of 2023, respectively.

Non-GAAP basic net income was US$0.42 per share (US$2.09 per ADS) for the fourth quarter of 2024, compared with US$0.32 per share (US$1.61 per ADS) and US$0.32 per share (US$1.57 per ADS) for the preceding quarter and the same quarter of 2023, respectively.

Fiscal Year 2024 Financial Results

Net Revenues

Net revenues for fiscal year 2024 were RMB105.3 billion (US$14.4 billion), compared with RMB103.5 billion for fiscal year 2023.

Net revenues from games and related value-added services were RMB83.6 billion (US$11.5 billion) for fiscal year 2024, compared with RMB81.6 billion for fiscal year 2023. Net revenues from the operation of online games accounted for approximately 96.2% of the segment's total net revenues for fiscal year 2024, compared with 92.9% for fiscal year 2023. Net revenues from mobile games accounted for approximately 72.7% of net revenues from the operation of online games for fiscal year 2024, compared with 75.2% for fiscal year 2023. The change in revenue mix was mainly due to higher net revenues generated by PC games such as Naraka: Bladepoint and licensed titles.

Net revenues from Youdao were RMB5.6 billion (US$770.7 million) for fiscal year 2024, compared with RMB5.4 billion for fiscal year 2023.

Net revenues from NetEase Cloud Music were RMB8.0 billion (US$1.1 billion) for fiscal year 2024, compared with RMB7.9 billion for fiscal year 2023.

Net revenues from innovative businesses and others were RMB8.1 billion (US$1.1 billion) for fiscal year 2024, compared with RMB8.6 billion for fiscal year 2023.

Gross Profit

Gross profit for fiscal year 2024 was RMB65.8 billion (US$9.0 billion), compared with RMB63.1 billion for fiscal year 2023.

The year-over-year increase in games and related value-added services' gross profit was primarily due to increased net revenues from the operation of online games, such as Identity V and Naraka: Bladepoint PC and mobile games.

The slight year-over-year decrease in Youdao's gross profit was mainly due to decreased revenue contribution from its learning services, which was partially offset by increased revenue contribution from its online marketing services.

The year-over-year increase in NetEase Cloud Music's gross profit was primarily attributable to increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.

The year-over-year increase in innovative businesses and others' gross profit was primarily due to increased gross profits from Yanxuan and several other businesses included within the segment.

Operating Expenses

Total operating expenses for fiscal year 2024 were RMB36.2 billion (US$5.0 billion), compared with RMB35.4 billion for fiscal year 2023. The year-over-year increase was primarily due to higher research and development investments for games and related value-added services.

Other Income/(Expenses)

The year-over-year decrease was mainly due to higher impairment provisions related to certain investments, which was partially offset by higher interest income resulting from the Company's increased net cash position.

Income Taxes

The Company recorded a net income tax charge of RMB5.5 billion (US$748.2 million) for fiscal year 2024, compared with RMB4.7 billion for fiscal year 2023. The effective tax rate was 15.3% for fiscal year 2024, compared with 13.8% for fiscal year 2023.

Net Income and Non-GAAP Net Income

Net income attributable to the Company's shareholders for fiscal year 2024 totaled RMB29.7 billion (US$4.1 billion), compared with RMB29.4 billion for fiscal year 2023.

Basic net income was US$1.27 per share (US$6.36 per ADS) for fiscal year 2024, compared with US$1.25 per share (US$6.26 per ADS) for fiscal year 2023.

Non-GAAP net income attributable to the Company's shareholders for fiscal year 2024 totaled RMB33.5 billion (US$4.6 billion), compared with RMB32.6 billion for fiscal year 2023.

Non-GAAP basic net income was US$1.43 per share (US$7.17 per ADS) for fiscal year 2024, compared with US$1.39 per share (US$6.94 per ADS) for fiscal year 2023.

Other Financial Information

As of December 31, 2024, 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 RMB131.5 billion (US$18.0 billion), compared with RMB110.9 billion as of December 31, 2023. Net cash provided by operating activities was RMB39.7 billion (US$5.4 billion) for fiscal year 2024, compared with RMB35.3 billion for fiscal year 2023.

Quarterly Dividend

The board of directors approved a dividend of US$0.24405 per share (US$1.22025 per ADS) for the fourth quarter of 2024 to holders of ordinary shares and holders of ADSs as of the close of business on March 6, 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 March 6, 2025 (Beijing/Hong Kong Time). The payment date is expected to be March 17, 2025, for holders of ordinary shares and on or around March 20, 2025, for holders of ADSs.

NetEase paid a dividend of US$0.0870 per share (US$0.4350 per ADS) for the third quarter of 2024 in December 2024.

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 December 31, 2024, approximately 21.2 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 7:00 a.m. New York Time on Thursday, February 20, 2025 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, February 20, 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: 10044895, 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: 10044895. The replay will be available through February 27, 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.

Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning company with industry-leading technology, 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 events; 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

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,	December 31,	December 31,
	2023	2024	2024
	RMB	RMB	USD (Note 1)
Assets
Current assets:
Cash and cash equivalents	21,428,902	51,383,310	7,039,485
Time deposits	100,856,034	75,441,355	10,335,423
Restricted cash	2,777,206	3,086,405	422,836
Accounts receivable, net	6,422,417	5,669,027	776,654
Inventories	695,374	571,548	78,302
Prepayments and other current assets, net	6,076,595	6,416,868	879,107
Short-term investments	4,436,057	10,756,143	1,473,586
Total current assets	142,692,585	153,324,656	21,005,393

Non-current assets:
Property, equipment and software, net	8,075,044	8,520,101	1,167,249
Land use rights, net	4,075,143	4,172,465	571,625
Deferred tax assets	1,560,088	1,113,435	152,540
Time deposits	1,050,000	3,025,000	414,423
Restricted cash	550	5,208	713
Other long-term assets	28,471,568	25,830,685	3,538,789
Total non-current assets	43,232,393	42,666,894	5,845,339
Total assets	185,924,978	195,991,550	26,850,732

Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity
Current liabilities:
Accounts payable	881,016	720,549	98,715
Salary and welfare payables	4,857,206	4,683,009	641,570
Taxes payable	2,571,534	2,759,185	378,007
Short-term loans	19,240,163	11,805,051	1,617,285
Contract liabilities	13,362,166	15,299,222	2,095,985
Accrued liabilities and other payables	12,930,399	14,400,641	1,972,879
Total current liabilities	53,842,484	49,667,657	6,804,441

Non-current liabilities:
Deferred tax liabilities	2,299,303	2,173,117	297,716
Long-term loans	427,997	427,997	58,635
Other long-term liabilities	1,271,113	1,228,641	168,323
Total non-current liabilities	3,998,413	3,829,755	524,674
Total liabilities	57,840,897	53,497,412	7,329,115

Redeemable noncontrolling interests	115,759	84,272	11,545

NetEase, Inc.'s shareholders' equity	124,285,776	138,685,606	18,999,850
Noncontrolling interests	3,682,546	3,724,260	510,222
Total equity	127,968,322	142,409,866	19,510,072

Total liabilities, redeemable noncontrolling interests and shareholders' equity	185,924,978	195,991,550	26,850,732

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				Year Ended
	December 31,	September 30,	December 31,	December 31,	December 31,	December 31,	December 31,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)

Net revenues	27,140,165	26,209,879	26,747,811	3,664,435	103,468,159	105,295,236	14,425,388
Cost of revenues	(10,315,030)	(9,733,274)	(10,475,470)	(1,435,134)	(40,404,765)	(39,488,152)	(5,409,855)
Gross profit	16,825,135	16,476,605	16,272,341	2,229,301	63,063,394	65,807,084	9,015,533

Operating expenses:
Selling and marketing expenses	(4,225,556)	(3,805,071)	(2,818,645)	(386,153)	(13,969,460)	(14,147,657)	(1,938,221)
General and administrative expenses	(1,251,869)	(1,100,328)	(1,162,381)	(159,246)	(4,899,880)	(4,550,625)	(623,433)
Research and development expenses	(4,479,219)	(4,424,469)	(4,469,868)	(612,369)	(16,484,910)	(17,524,812)	(2,400,889)
Total operating expenses	(9,956,644)	(9,329,868)	(8,450,894)	(1,157,768)	(35,354,250)	(36,223,094)	(4,962,543)
Operating profit	6,868,491	7,146,737	7,821,447	1,071,533	27,709,144	29,583,990	4,052,990

Other income/(expenses):
Investment (losses)/income, net	(8,940)	578,398	(506,077)	(69,332)	1,306,722	355,286	48,674
Interest income, net	1,261,583	1,282,766	1,174,333	160,883	4,120,418	4,920,915	674,163
Exchange (losses)/gains, net	(810,904)	(1,055,518)	1,535,312	210,337	(132,999)	255,430	34,994
Other, net	434,759	43,600	278,952	38,216	1,053,642	602,134	82,492
Income before tax	7,744,989	7,995,983	10,303,967	1,411,637	34,056,927	35,717,755	4,893,313
Income tax	(1,068,657)	(1,289,545)	(1,385,014)	(189,746)	(4,699,704)	(5,461,408)	(748,210)
Net income	6,676,332	6,706,438	8,918,953	1,221,891	29,357,223	30,256,347	4,145,103

Accretion of redeemable noncontrolling interests	(966)	(962)	(1,039)	(142)	(3,589)	(3,919)	(537)
Net (income)/loss attributable to noncontrolling interests and redeemable noncontrolling interests	(93,103)	(167,041)	(151,435)	(20,747)	62,918	(554,819)	(76,010)
Net income attributable to the Company's shareholders	6,582,263	6,538,435	8,766,479	1,201,002	29,416,552	29,697,609	4,068,556

Net income per share *
Basic	2.05	2.04	2.76	0.38	9.15	9.28	1.27
Diluted	2.02	2.03	2.73	0.37	9.05	9.19	1.26

Net income per ADS *
Basic	10.25	10.22	13.81	1.89	45.73	46.40	6.36
Diluted	10.12	10.14	13.67	1.87	45.23	45.95	6.29

Weighted average number of ordinary shares used in calculating net income per share *
Basic	3,212,328	3,198,646	3,174,113	3,174,113	3,216,475	3,200,453	3,200,453
Diluted	3,253,166	3,224,110	3,206,100	3,206,100	3,252,029	3,230,602	3,230,602

* 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				Year Ended
	December 31,	September 30,	December 31,	December 31,	December 31,	December 31,	December 31,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Cash flows from operating activities:
Net income	6,676,332	6,706,438	8,918,953	1,221,891	29,357,223	30,256,347	4,145,103
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	659,772	520,567	697,447	95,550	3,055,260	2,417,894	331,250
Fair value changes of equity security, other investments and financial instruments	151,571	(824,608)	358,852	49,163	(535,316)	(841,901)	(115,340)
Impairment losses on investments	140,648	529,668	422,801	57,924	469,159	1,291,627	176,952
Fair value changes of short-term investments	(106,532)	(100,071)	(241,431)	(33,076)	(414,207)	(530,607)	(72,693)
Share-based compensation cost	812,987	978,139	931,444	127,608	3,242,810	3,882,939	531,960
Allowance for expected credit losses	9,500	36,022	12,031	1,648	61,146	68,934	9,444
Losses/(gains) on disposal of property, equipment and software	3,385	(2,920)	(3,644)	(499)	5,676	(4,758)	(652)
Unrealized exchange losses/(gains)	838,056	1,050,644	(1,542,986)	(211,388)	119,935	(719,162)	(98,525)
(Gains)/losses on disposal of long-term investments, business and subsidiaries	(38,437)	(118,046)	232	32	(63,784)	(272,415)	(37,321)
Deferred income taxes	193,854	711,639	404,109	55,363	131,437	320,726	43,939
Share of results on equity method investees and revaluation results from previously held equity interest	(88,805)	(28,466)	(19,437)	(2,663)	(473,947)	155,568	21,313
Changes in operating assets and liabilities:
Accounts receivable	53,089	146,758	517,850	70,945	(1,470,374)	716,375	98,143
Inventories	25,054	(39,285)	42,135	5,772	296,764	123,780	16,958
Prepayments and other assets	542,593	(1,234,390)	(432,196)	(59,211)	87,556	(809,590)	(110,913)
Accounts payable	18,443	6,316	218,689	29,960	(559,419)	91,142	12,486
Salary and welfare payables	1,992,931	(670,750)	1,759,382	241,034	(62,917)	(210,918)	(28,896)
Taxes payable	(500,172)	224,015	154,651	21,187	(244,261)	187,788	25,727
Contract liabilities	(847,562)	1,928,060	(209,626)	(28,719)	1,161,861	2,022,196	277,041
Accrued liabilities and other payables	1,271,572	755,882	1,022,944	140,143	1,166,673	1,530,848	209,725
Net cash provided by operating activities	11,808,279	10,575,612	13,012,200	1,782,664	35,331,275	39,676,813	5,435,701

Cash flows from investing activities:
Purchase of property, equipment and software	(484,927)	(379,520)	(311,982)	(42,741)	(2,301,554)	(1,275,400)	(174,729)
Proceeds from sale of property, equipment and software	405	1,072	9,295	1,273	10,302	14,533	1,991
Purchase of intangible assets, content and licensed copyrights	(121,797)	(222,247)	(120,387)	(16,493)	(1,974,323)	(930,988)	(127,545)
Net changes of short-term investments with terms of three months or less	(690,628)	1,585,395	3,798,989	520,460	(1,777,687)	(408,256)	(55,931)
Purchase of short-term investments with terms over three months	-	(3,675,000)	(4,560,000)	(624,717)	-	(8,235,000)	(1,128,190)
Proceeds from maturities of short-term investments with terms over three months	4,897,291	-	2,853,778	390,966	5,378,510	2,853,778	390,966
Investment in long-term investments and acquisition of subsidiaries	(914,962)	(226,086)	(201,686)	(27,631)	(2,831,686)	(1,103,026)	(151,114)
Proceeds from disposal of long-term investments, businesses, subsidiaries and other financial instruments	73,855	1,541,338	355,142	48,654	152,564	2,822,585	386,692
Placement/rollover of matured time deposits	(46,666,670)	(36,766,094)	(21,691,769)	(2,971,760)	(124,693,598)	(154,792,305)	(21,206,459)
Proceeds from maturities of time deposits	33,273,393	37,546,192	40,570,700	5,558,163	111,417,969	179,377,113	24,574,564
Change in other long-term assets	(90,635)	(125,911)	(73,553)	(10,077)	(423,928)	(406,632)	(55,708)
Net cash (used in)/provided by investing activities	(10,724,675)	(720,861)	20,628,527	2,826,097	(17,043,431)	17,916,402	2,454,537

Cash flows from financing activities:
Net changes from loans with terms of three months or less	6,179,979	(4,778,301)	606,092	83,034	(13,654,704)	(6,656,988)	(912,004)
Proceeds of loans with terms over three months	2,511,000	5,395,810	457,000	62,609	13,569,160	13,920,080	1,907,043
Payment of loans with terms over three months	(695,000)	(3,100,520)	-	-	(8,219,472)	(14,739,347)	(2,019,282)
Net amounts received/(paid) related to capital contribution from or repurchase of noncontrolling interests shareholders	28,009	(8,394)	51,614	7,071	86,159	136,006	18,633
Cash paid for repurchase of NetEase's ADSs/purchase of subsidiaries' ADSs and shares	(625,832)	(3,994,212)	(1,595,093)	(218,527)	(5,234,294)	(8,830,115)	(1,209,721)
Dividends paid to NetEase's shareholders	(2,258,892)	(1,972,928)	(1,982,595)	(271,614)	(8,013,903)	(11,165,338)	(1,529,645)
Net cash provided/(used in) by financing activities	5,139,264	(8,458,545)	(2,462,982)	(337,427)	(21,467,054)	(27,335,702)	(3,744,976)

Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies	(174,276)	(68,136)	113,792	15,589	(202,457)	10,752	1,473
Net increase/(decrease) in cash, cash equivalents and restricted cash	6,048,592	1,328,070	31,291,537	4,286,923	(3,381,667)	30,268,265	4,146,735
Cash, cash equivalents and restricted cash, at the beginning of the period	18,158,066	21,855,316	23,183,386	3,176,111	27,588,325	24,206,658	3,316,299
Cash, cash equivalents and restricted cash, at end of the period	24,206,658	23,183,386	54,474,923	7,463,034	24,206,658	54,474,923	7,463,034

Supplemental disclosures of cash flow information:
Cash paid for income taxes, net	1,030,932	554,867	603,514	82,681	4,895,752	5,189,585	710,970
Cash paid for interest expenses	71,847	165,881	24,343	3,335	779,872	489,622	67,078

The accompanying notes are an integral part of this announcement.

NETEASE, INC.
UNAUDITED SEGMENT INFORMATION
(in thousands, except percentages)

	Three Months Ended				Year Ended
	December 31,	September 30,	December 31,	December 31,	December 31,	December 31,	December 31,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Net revenues:
Games and related value-added services	20,921,355	20,864,036	21,242,410	2,910,198	81,565,449	83,622,643	11,456,254
Youdao	1,480,521	1,572,541	1,339,798	183,552	5,389,208	5,625,919	770,748
NetEase Cloud Music	1,985,548	1,999,163	1,880,490	257,626	7,866,992	7,950,146	1,089,166
Innovative businesses and others	2,752,741	1,774,139	2,285,113	313,059	8,646,510	8,096,528	1,109,220
Total net revenues	27,140,165	26,209,879	26,747,811	3,664,435	103,468,159	105,295,236	14,425,388

Cost of revenues:
Games and related value-added services	(6,383,474)	(6,503,146)	(7,075,562)	(969,348)	(25,938,865)	(26,142,623)	(3,581,525)
Youdao	(741,720)	(783,085)	(699,045)	(95,769)	(2,621,746)	(2,877,428)	(394,206)
NetEase Cloud Music	(1,384,537)	(1,343,921)	(1,279,951)	(175,353)	(5,764,322)	(5,268,634)	(721,800)
Innovative businesses and others	(1,805,299)	(1,103,122)	(1,420,912)	(194,664)	(6,079,832)	(5,199,467)	(712,324)
Total cost of revenues	(10,315,030)	(9,733,274)	(10,475,470)	(1,435,134)	(40,404,765)	(39,488,152)	(5,409,855)

Gross profit:
Games and related value-added services	14,537,881	14,360,890	14,166,848	1,940,850	55,626,584	57,480,020	7,874,729
Youdao	738,801	789,456	640,753	87,783	2,767,462	2,748,491	376,542
NetEase Cloud Music	601,011	655,242	600,539	82,273	2,102,670	2,681,512	367,366
Innovative businesses and others	947,442	671,017	864,201	118,395	2,566,678	2,897,061	396,896
Total gross profit	16,825,135	16,476,605	16,272,341	2,229,301	63,063,394	65,807,084	9,015,533

Gross profit margin:
Games and related value-added services	69.5 %	68.8 %	66.7 %	66.7 %	68.2 %	68.7 %	68.7 %
Youdao	49.9 %	50.2 %	47.8 %	47.8 %	51.4 %	48.9 %	48.9 %
NetEase Cloud Music	30.3 %	32.8 %	31.9 %	31.9 %	26.7 %	33.7 %	33.7 %
Innovative businesses and others	34.4 %	37.8 %	37.8 %	37.8 %	29.7 %	35.8 %	35.8 %

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 = RMB7.2993 on the last trading day of December 2024 (December 31, 2024) 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 December 31, 2024, 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				Year Ended
	December 31,	September 30,	December 31,	December 31,	December 31,	December 31,	December 31,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Share-based compensation cost included in:
Cost of revenues	216,717	306,283	304,687	41,742	823,765	1,185,854	162,461
Operating expenses
Selling and marketing expenses	35,575	36,365	7,435	1,019	132,801	104,534	14,321
General and administrative expenses	262,830	247,440	246,424	33,760	1,119,018	1,069,850	146,569
Research and development expenses	297,865	388,051	372,898	51,087	1,167,226	1,522,701	208,609

The accompanying notes are an integral part of this announcement.

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				Year Ended
	December 31,	September 30,	December 31,	December 31,	December 31,	December 31,	December 31,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Net income attributable to the Company's shareholders	6,582,263	6,538,435	8,766,479	1,201,002	29,416,552	29,697,609	4,068,556
Add: Share-based compensation	797,194	960,706	915,489	125,421	3,191,753	3,813,032	522,383
Non-GAAP net income attributable to the Company's shareholders	7,379,457	7,499,141	9,681,968	1,326,423	32,608,305	33,510,641	4,590,939

Non-GAAP net income per share *
Basic	2.30	2.34	3.05	0.42	10.14	10.47	1.43
Diluted	2.27	2.33	3.02	0.41	10.03	10.37	1.42

Non-GAAP net income per ADS *
Basic	11.49	11.72	15.25	2.09	50.69	52.35	7.17
Diluted	11.34	11.63	15.09	2.07	50.14	51.85	7.10

* Each ADS represents five ordinary shares.
The accompanying notes are an integral part of this announcement.

]]> NetEase to Report Fourth Quarter and Fiscal Year 2024 Financial Results on February 20 2025-02-06 16:30:00 . 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 inChina 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 company with industry-leading technology, 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, Feb. 6, 2025 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the fourth quarter and fiscal year 2024 on Thursday, February 20, 2025, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 7:00 a.m. Eastern Time on Thursday, February 20, 2025 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, February 20, 2025). NetEase's management will be on the call to discuss the quarterly results and answer questions.

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.

Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning company with industry-leading technology, 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/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase Announces Third Quarter 2024 Unaudited Financial Results 2024-11-14 16:30:00 . 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 inChina 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 subsidiariesYoudao (NYSE: DAO), an intelligent learning company with industry-leading technology, andNetEase Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well asYanxuan, 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 inChina 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 government regulation that could adversely affect the industry and geographical markets in which 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 economic uncertainty and capital market disruption; risks related to the expansion of NetEase's businesses and operations internationally; risks associated with cybersecurity threats or incidents; and the risk that fluctuations in the value of the Renminbi with respect to other currencies 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 inthe 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 provide 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, September 30, September 30, 2023 2024 2024 RMB RMB USD (Note 1) Assets Current assets: Cash and cash equivalents 21,428,902 20,184,013 2,876,199 Time deposits 100,856,034 91,195,431 12,995,245 Restricted cash 2,777,206 2,994,096 426,655 Accounts receivable, net 6,422,417 6,173,077 879,656 Inventories 695,374 613,685 87,449 Prepayments and other current assets, net 6,076,595 6,811,171 970,584 Short-term investments 4,436,057 12,607,188 1,796,510 Total current assets 142,692,585 140,578,661 20,032,298 Non-current assets: Property, equipment and software, net 8,075,044 8,200,464 1,168,557 Land use rights, net 4,075,143 4,204,865 599,188 Deferred tax assets 1,560,088 1,173,270 167,190 Time deposits 1,050,000 4,025,000 573,558 Restricted cash 550 5,277 752 Other long-term assets 28,471,568 26,708,737 3,805,965 Total non-current assets 43,232,393 44,317,613 6,315,210 Total assets 185,924,978 184,896,274 26,347,508 Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity Current liabilities: Accounts payable 881,016 755,372 107,640 Salary and welfare payables 4,857,206 2,941,618 419,177 Taxes payable 2,571,534 2,606,842 371,472 Short-term loans 19,240,163 10,594,342 1,509,682 Contract liabilities 13,362,166 15,543,023 2,214,863 Accrued liabilities and other payables 12,930,399 13,270,811 1,891,075 Total current liabilities 53,842,484 45,712,008 6,513,909 Non-current liabilities: Deferred tax liabilities 2,299,303 1,828,869 260,612 Long-term loans 427,997 427,997 60,989 Other long-term liabilities 1,271,113 1,199,075 170,867 Total non-current liabilities 3,998,413 3,455,941 492,468 Total liabilities 57,840,897 49,167,949 7,006,377 Redeemable noncontrolling interests 115,759 122,494 17,455 NetEase, Inc.'s shareholders' equity 124,285,776 132,150,155 18,831,246 Noncontrolling interests 3,682,546 3,455,676 492,430 Total equity 127,968,322 135,605,831 19,323,676 Total liabilities, redeemable noncontrolling interests and shareholders' equity 185,924,978 184,896,274 26,347,508 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net revenues 27,270,406 25,485,805 26,209,879 3,734,878 76,327,994 78,547,425 11,192,919 Cost of revenues (10,304,106) (9,443,587) (9,733,274) (1,386,980) (30,089,735) (29,012,682) (4,134,274) Gross profit 16,966,300 16,042,218 16,476,605 2,347,898 46,238,259 49,534,743 7,058,645 Operating expenses: Selling and marketing expenses (3,567,153) (3,501,737) (3,805,071) (542,218) (9,743,904) (11,329,012) (1,614,371) General and administrative expenses (1,494,186) (1,091,441) (1,100,328) (156,795) (3,648,011) (3,388,244) (482,821) Research and development expenses (4,347,052) (4,455,717) (4,424,469) (630,482) (12,005,691) (13,054,944) (1,860,315) Total operating expenses (9,408,391) (9,048,895) (9,329,868) (1,329,495) (25,397,606) (27,772,200) (3,957,507) Operating profit 7,557,909 6,993,323 7,146,737 1,018,403 20,840,653 21,762,543 3,101,138 Other income/(expenses): Investment income, net 556,603 103,674 578,398 82,421 1,315,662 861,363 122,743 Interest income, net 1,147,227 1,186,219 1,282,766 182,793 2,858,835 3,746,582 533,884 Exchange (losses)/gains, net (400,483) (239,375) (1,055,518) (150,410) 677,905 (1,279,882) (182,382) Other, net 240,024 85,694 43,600 6,213 618,883 323,182 46,053 Income before tax 9,101,280 8,129,535 7,995,983 1,139,420 26,311,938 25,413,788 3,621,436 Income tax (1,290,398) (1,300,939) (1,289,545) (183,759) (3,631,047) (4,076,394) (580,881) Net income 7,810,882 6,828,596 6,706,438 955,661 22,680,891 21,337,394 3,040,555 Accretion of redeemable noncontrolling interests (895) (960) (962) (137) (2,623) (2,880) (410) Net loss/(income) attributable to noncontrolling interests and redeemable noncontrolling interests 26,901 (68,887) (167,041) (23,803) 156,021 (403,384) (57,482) Net income attributable to the Company's shareholders 7,836,888 6,758,749 6,538,435 931,721 22,834,289 20,931,130 2,982,663 Net income per share * Basic 2.44 2.10 2.04 0.29 7.10 6.52 0.93 Diluted 2.41 2.08 2.03 0.29 7.02 6.46 0.92 Net income per ADS * Basic 12.19 10.50 10.22 1.46 35.48 32.61 4.65 Diluted 12.06 10.42 10.14 1.44 35.11 32.30 4.60 Weighted average number of ordinary shares used in calculating net income per share * Basic 3,213,834 3,217,699 3,198,646 3,198,646 3,217,873 3,209,298 3,209,298 Diluted 3,249,649 3,243,056 3,224,110 3,224,110 3,251,666 3,238,834 3,238,834 * 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Cash flows from operating activities: Net income 7,810,882 6,828,596 6,706,438 955,661 22,680,891 21,337,394 3,040,555 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 651,856 631,957 520,567 74,180 2,395,488 1,720,447 245,162 Fair value changes of equity security, other investments and financial instruments (382,132) (7,887) (824,608) (117,506) (686,887) (1,200,753) (171,106) Impairment losses on investments 280,641 210,741 529,668 75,477 328,511 868,826 123,807 Fair value changes of short-term investments (72,875) (128,295) (100,071) (14,260) (307,675) (289,176) (41,207) Share-based compensation cost 819,548 1,079,056 978,139 139,384 2,429,823 2,951,495 420,584 Allowance for expected credit losses 22,386 9,281 36,022 5,133 51,646 56,903 8,109 Losses/(gains) on disposal of property, equipment and software 2,649 (326) (2,920) (416) 2,291 (1,114) (159) Unrealized exchange losses/(gains) 362,213 (209,311) 1,050,644 149,715 (718,121) 823,824 117,394 Gains on disposal of long-term investments, business and subsidiaries (3,197) (141,114) (118,046) (16,821) (25,347) (272,647) (38,852) Deferred income taxes (305,703) (1,280,076) 711,639 101,408 (62,417) (83,383) (11,882) Share of results on equity method investees (160,042) 39,200 (28,466) (4,057) (385,142) 175,005 24,938 Changes in operating assets and liabilities: Accounts receivable (1,177,732) 1,410,478 146,758 20,913 (1,523,463) 198,525 28,289 Inventories 84,970 29,552 (39,285) (5,598) 271,710 81,645 11,634 Prepayments and other assets (573,631) 530,856 (1,234,390) (175,899) (455,037) (377,394) (53,778) Accounts payable 150,868 (126,862) 6,316 900 (577,862) (127,547) (18,175) Salary and welfare payables (588,217) 879,058 (670,750) (95,581) (2,055,848) (1,970,300) (280,766) Taxes payable 515,087 (1,462,700) 224,015 31,922 255,911 33,137 4,722 Contract liabilities 1,560,628 (1,270,324) 1,928,060 274,746 2,009,423 2,231,822 318,032 Accrued liabilities and other payables 845,721 (490,048) 755,882 107,712 (104,899) 507,904 72,376 Net cash provided by operating activities 9,843,920 6,531,832 10,575,612 1,507,013 23,522,996 26,664,613 3,799,677 Cash flows from investing activities: Purchase of property, equipment and software (643,144) (168,880) (379,520) (54,081) (1,816,627) (963,418) (137,286) Proceeds from sale of property, equipment and software 3,101 660 1,072 153 9,897 5,238 746 Purchase of intangible assets, content and licensed copyrights (742,523) (399,533) (222,247) (31,670) (1,852,526) (810,601) (115,510) Net changes of short-term investments with terms of three months or less (1,993,921) (8,194,289) 1,585,395 225,917 (1,087,059) (4,207,245) (599,528) Purchase of short-term investments with terms over three months - - (3,675,000) (523,683) - (3,675,000) (523,683) Proceeds from maturities of short-term investments with terms over three months 376,950 - - - 481,219 - - Investment in long-term investments and acquisition of subsidiaries (417,448) (193,450) (226,086) (32,217) (1,916,724) (901,340) (128,440) Proceeds from disposal of long-term investments, businesses, subsidiaries and other financial instruments 20,898 840,649 1,541,338 219,639 78,709 2,467,443 351,608 Placement/rollover of matured time deposits (30,831,994) (61,775,606) (36,766,094) (5,239,127) (78,026,928) (133,100,536) (18,966,675) Proceeds from maturities of time deposits 33,893,436 55,211,839 37,546,192 5,350,289 78,144,576 138,806,413 19,779,756 Change in other long-term assets (181,263) (172,543) (125,911) (17,942) (333,293) (333,079) (47,463) Net cash used in investing activities (515,908) (14,851,153) (720,861) (102,722) (6,318,756) (2,712,125) (386,475) Cash flows from financing activities: Net changes from loans with terms of three months or less (7,501,788) (2,085,053) (4,778,301) (680,902) (19,834,683) (7,263,080) (1,034,981) Proceeds of loans with terms over three months 7,607,060 1,069,020 5,395,810 768,897 11,058,160 13,463,080 1,918,473 Payment of loans with terms over three months (4,250,550) (10,681,827) (3,100,520) (441,821) (7,524,472) (14,739,347) (2,100,340) Net amounts received/(paid) related to capital contribution from or repurchase of noncontrolling interests shareholders 11,573 50,572 (8,394) (1,196) 58,150 84,392 12,026 Cash paid for repurchase of NetEase's ADSs/purchase of subsidiaries' ADSs and shares (296,495) (2,007,030) (3,994,212) (569,171) (4,608,462) (7,235,022) (1,030,982) Dividends paid to NetEase's shareholders (2,423,355) (2,264,799) (1,972,928) (281,140) (5,755,011) (9,182,743) (1,308,530) Net cash used in financing activities (6,853,555) (15,919,117) (8,458,545) (1,205,333) (26,606,318) (24,872,720) (3,544,334) Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies 4,197 8,234 (68,136) (9,710) (28,181) (103,040) (14,683) Net increase/(decrease) in cash, cash equivalents and restricted cash 2,478,654 (24,230,204) 1,328,070 189,248 (9,430,259) (1,023,272) (145,815) Cash, cash equivalents and restricted cash, at the beginning of the period 15,679,412 46,085,520 21,855,316 3,114,358 27,588,325 24,206,658 3,449,421 Cash, cash equivalents and restricted cash, at end of the period 18,158,066 21,855,316 23,183,386 3,303,606 18,158,066 23,183,386 3,303,606 Supplemental disclosures of cash flow information: Cash paid for income taxes, net 1,165,196 2,848,493 554,867 79,068 3,864,820 4,586,071 653,510 Cash paid for interest expenses 105,665 152,943 165,881 23,638 708,025 465,279 66,302 The accompanying notes are an integral part of this announcement. NETEASE, INC. UNAUDITED SEGMENT INFORMATION (in thousands, except percentages) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net revenues: Games and related value-added services 21,779,851 20,055,819 20,864,036 2,973,102 60,644,094 62,380,233 8,889,113 Youdao 1,538,783 1,321,721 1,572,541 224,085 3,908,687 4,286,121 610,767 NetEase Cloud Music 1,973,064 2,040,952 1,999,163 284,878 5,881,444 6,069,656 864,919 Innovative businesses and others 1,978,708 2,067,313 1,774,139 252,813 5,893,769 5,811,415 828,120 Total net revenues 27,270,406 25,485,805 26,209,879 3,734,878 76,327,994 78,547,425 11,192,919 Cost of revenues: Games and related value-added services (6,749,507) (6,008,604) (6,503,146) (926,691) (19,555,391) (19,067,061) (2,717,034) Youdao (679,147) (684,942) (783,085) (111,588) (1,880,026) (2,178,383) (310,417) NetEase Cloud Music (1,436,552) (1,385,756) (1,343,921) (191,507) (4,379,785) (3,988,683) (568,383) Innovative businesses and others (1,438,900) (1,364,285) (1,103,122) (157,194) (4,274,533) (3,778,555) (538,440) Total cost of revenues (10,304,106) (9,443,587) (9,733,274) (1,386,980) (30,089,735) (29,012,682) (4,134,274) Gross profit: Games and related value-added services 15,030,344 14,047,215 14,360,890 2,046,411 41,088,703 43,313,172 6,172,079 Youdao 859,636 636,779 789,456 112,497 2,028,661 2,107,738 300,350 NetEase Cloud Music 536,512 655,196 655,242 93,371 1,501,659 2,080,973 296,536 Innovative businesses and others 539,808 703,028 671,017 95,619 1,619,236 2,032,860 289,680 Total gross profit 16,966,300 16,042,218 16,476,605 2,347,898 46,238,259 49,534,743 7,058,645 Gross profit margin: Games and related value-added services 69.0 % 70.0 % 68.8 % 68.8 % 67.8 % 69.4 % 69.4 % Youdao 55.9 % 48.2 % 50.2 % 50.2 % 51.9 % 49.2 % 49.2 % NetEase Cloud Music 27.2 % 32.1 % 32.8 % 32.8 % 25.5 % 34.3 % 34.3 % Innovative businesses and others 27.3 % 34.0 % 37.8 % 37.8 % 27.5 % 35.0 % 35.0 % 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 ofUSD1.00 = RMB7.0176 on the last trading day of September 2024 (September 30, 2024) 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 September 30, 2024, 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Share-based compensation cost included in: Cost of revenues 210,533 319,949 306,283 43,645 607,048 881,167 125,565 Operating expenses Selling and marketing expenses 33,804 42,865 36,365 5,182 97,226 97,099 13,836 General and administrative expenses 280,581 286,350 247,440 35,260 856,188 823,426 117,337 Research and development expenses 294,630 429,892 388,051 55,297 869,361 1,149,803 163,846 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net income attributable to the Company's shareholders 7,836,888 6,758,749 6,538,435 931,721 22,834,289 20,931,130 2,982,663 Add: Share-based compensation 808,276 1,059,939 960,706 136,900 2,394,559 2,897,543 412,897 Non-GAAP net income attributable to the Company's shareholders 8,645,164 7,818,688 7,499,141 1,068,621 25,228,848 23,828,673 3,395,560 Non-GAAP net income per share * Basic 2.69 2.43 2.34 0.33 7.84 7.42 1.06 Diluted 2.66 2.41 2.33 0.33 7.76 7.35 1.05 Non-GAAP net income per ADS * Basic 13.45 12.15 11.72 1.67 39.20 37.12 5.29 Diluted 13.30 12.05 11.63 1.66 38.79 36.77 5.24 * Each ADS represents five ordinary shares. The accompanying notes are an integral part of this announcement. ]]> HANGZHOU, China, Nov. 14, 2024 /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 third quarter ended September 30, 2024.

Third Quarter 2024 Financial Highlights

Net revenues were RMB26.2 billion (US$3.7 billion), a decrease of 3.9% compared with the same quarter of 2023.
- Games and related value-added services net revenues were RMB20.9 billion (US$3.0 billion), a decrease of 4.2% compared with the same quarter of 2023.
- Youdao net revenues were RMB1.6 billion (US$224.1 million), an increase of 2.2% compared with the same quarter of 2023.
- NetEase Cloud Music net revenues were RMB2.0 billion (US$284.9 million), an increase of 1.3% compared with the same quarter of 2023.
- Innovative businesses and others net revenues were RMB1.8 billion (US$252.8 million), a decrease of 10.3% compared with the same quarter of 2023.
Gross profit was RMB16.5 billion (US$2.3 billion), a decrease of 2.9% compared with the same quarter of 2023.
Total operating expenses were RMB9.3 billion (US$1.3 billion), a decrease of 0.8% compared with the same quarter of 2023.
Net income attributable to the Company's shareholders was RMB6.5 billion (US$931.7 million). Non-GAAP net income attributable to the Company's shareholders was RMB7.5 billion (US$1.1 billion).^[1]
Basic net income per share was US$0.29 (US$1.46 per ADS). Non-GAAP basic net income per share was US$0.33 (US$1.67 per ADS).^[1]

Third Quarter 2024 and Recent Operational Highlights

Launched popular new titles and expanded established games in new regions, strengthening NetEase's competitive edge across more markets in diversified genres.
- Naraka: Bladepoint mobile game gained significant popularity since its launch in July, reaching No. 4 on the iOS grossing chart with its September seasonal update, effectively catering to growing player demand for action-based PvP games.
- Racing Master topped the App Store and Google Play free-to-play charts in Japan following its launch in August.
- World of Warcraft and Hearthstone's return to China reignited historic level of player community enthusiasm. Following their relaunch, World of Warcraft saw a 50% increase in daily active players as compared to levels before the shutdown, while Hearthstone achieved over 150% growth.
Generated continued popularity of hit games Identity V and Naraka: Bladepoint, showcasing NetEase's long-term operation capabilities for online games.
Strengthened diversified portfolio, announcing more exciting titles in the making, including Destiny: Rising and MARVEL Mystic Mayhem, and new games, such as Marvel Rivals and Where Winds Meet, set for launch in December.
Youdao significantly improved its profitability in the third quarter, achieving its first-ever third-quarter operating profit and a record-high quarterly operating profit, compared with a loss in the same period last year.
NetEase Cloud Music continued to drive quality development across its music-centric ecosystem, further expanding its subscriber base and sustaining healthy revenue growth momentum in its online music services.

"To further diversify our game portfolio across genres and expand globally, we launched a variety of new games to captivate players worldwide and achieved breakthrough milestones," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "Throughout our development journey over the past two decades, players have remained at the core of our creations and operations, ensuring the long-lasting popularity of our games. As we expand, we will continue to prioritize player demand and propel innovation, bringing more exciting NetEase gaming experiences to players domestically and around the world.

"NetEase Cloud Music and Youdao are both positioned for steady growth alongside our games. Across the NetEase family, we focus on creating unique, engaging and impactful experiences for our community that fuel our ongoing success," Mr. Ding concluded.

Third Quarter 2024 Financial Results

Net Revenues

Net revenues for the third quarter of 2024 were RMB26.2 billion (US$3.7 billion), compared with RMB25.5 billion and RMB27.3 billion for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from games and related value-added services were RMB20.9 billion (US$3.0 billion) for the third quarter of 2024, compared with RMB20.1 billion and RMB21.8 billion for the preceding quarter and the same quarter of 2023, respectively. Net revenues from the operation of online games accounted for approximately 96.8% of the segment's net revenues for the third quarter of 2024, compared with 96.1% and 93.7% for the preceding quarter and the same quarter of 2023, respectively. Net revenues from mobile games accounted for approximately 70.8% of net revenues from the operation of online games for the third quarter of 2024, compared with 76.4% and 77.6% for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from Youdao were RMB1.6 billion (US$224.1 million) for the third quarter of 2024, compared with RMB1.3 billion and RMB1.5 billion for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from NetEase Cloud Music were RMB2.0 billion (US$284.9 million) for the third quarter of 2024, compared with RMB2.0 billion each for the preceding quarter and the same quarter of 2023.

Net revenues from innovative businesses and others were RMB1.8 billion (US$252.8 million) for the third quarter of 2024, compared with RMB2.1 billion and RMB2.0 billion for the preceding quarter and the same quarter of 2023, respectively.

Gross Profit

Gross profit for the third quarter of 2024 was RMB16.5 billion (US$2.3 billion), compared with RMB16.0 billion and RMB17.0 billion for the preceding quarter and the same quarter of 2023, respectively.

The quarter-over-quarter increase in games and related value-added services' gross profit was primarily due to higher net revenues from PC games. The year-over-year decrease was primarily due to decreased net revenues from mobile games.

The quarter-over-quarter increase in Youdao's gross profit was primarily due to higher net revenues from sales of smart devices and learning services. The year-over-year decrease was primarily due to decreased net revenues from its learning services.

The year-over-year increase in NetEase Cloud Music's gross profit was primarily due to increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.

The quarter-over-quarter decrease in innovative businesses and others' gross profit was primarily due to decreased e-commerce gross profit from Yanxuan. The year-over-year increase was primarily due to increased gross profit from several businesses included within the segment.

Gross Profit Margin

Gross profit margin for games and related value-added services for the third quarter of 2024 was 68.8%, compared with 70.0% and 69.0% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year decreases were mainly attributable to changes in product mix.

Gross profit margin for Youdao for the third quarter of 2024 was 50.2%, compared with 48.2% and 55.9% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year fluctuations were mainly due to the factors enumerated above.

Gross profit margin for NetEase Cloud Music for the third quarter of 2024 was 32.8%, compared with 32.1% and 27.2% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year increases were mainly due to increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.

Gross profit margin for innovative businesses and others for the third quarter of 2024 was 37.8%, compared with 34.0% and 27.3% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year increases were mainly due to increased gross profit margins from several businesses included within the segment.

Operating Expenses

Total operating expenses for the third quarter of 2024 were RMB9.3 billion (US$1.3 billion), compared with RMB9.0 billion and RMB9.4 billion for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter increase was mainly 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, exchange (losses)/gains and others. The quarter-over-quarter and year-over-year decreases were mainly due to higher net exchange losses in the third quarter of 2024.

Income Tax

The Company recorded a net income tax charge of RMB1.3 billion (US$183.8 million) for the third quarter of 2024, compared with RMB1.3 billion each for the preceding quarter and the same quarter of 2023. The effective tax rate for the third quarter of 2024 was 16.1%, compared with 16.0% and 14.2% for the preceding quarter and the same quarter of 2023, 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 RMB6.5 billion (US$931.7 million) for the third quarter of 2024, compared with RMB6.8 billion and RMB7.8 billion for the preceding quarter and the same quarter of 2023, respectively.

NetEase reported basic net income of US$0.29 per share (US$1.46 per ADS) for the third quarter of 2024, compared with US$0.30 per share (US$1.50 per ADS) and US$0.35 per share (US$1.74 per ADS) for the preceding quarter and the same quarter of 2023, respectively.

Non-GAAP net income attributable to the Company's shareholders totaled RMB7.5 billion (US$1.1 billion) for the third quarter of 2024, compared with RMB7.8 billion and RMB8.6 billion for the preceding quarter and the same quarter of 2023, respectively.

NetEase reported non-GAAP basic net income of US$0.33 per share (US$1.67 per ADS) for the third quarter of 2024, compared with US$0.35 per share (US$1.73 per ADS) and US$0.38 per share (US$1.92 per ADS) for the preceding quarter and the same quarter of 2023, respectively.

Other Financial Information

As of September 30, 2024, 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 RMB120.0 billion (US$17.1 billion), compared with RMB110.9 billion as of December 31, 2023. Net cash provided by operating activities was RMB10.6 billion (US$1.5 billion) for the third quarter of 2024, compared with RMB6.5 billion and RMB9.8 billion for the preceding quarter and the same quarter of 2023, respectively.

Quarterly Dividend

The board of directors approved a dividend of US$0.0870 per share (US$0.4350 per ADS) for the third quarter of 2024 to holders of ordinary shares and holders of ADSs as of the close of business on November 29, 2024, 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 November 29, 2024 (Beijing/ Hong Kong Time). The payment date is expected to be December 10, 2024 for holders of ordinary shares and on or around December 13, 2024 for holders of ADSs.

NetEase paid a dividend of US$0.0870 per share (US$0.4350 per ADS) for the second quarter of 2024 in September 2024.

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 September 30, 2024, approximately 18.2 million ADSs had been repurchased under this program for a total cost of US$1.6 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 7:00 a.m. New York Time on Thursday, November 14, 2024 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, November 14, 2024). 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: 10042941, 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: 10042941. The replay will be available through November 21, 2024.

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.

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 government regulation that could adversely affect the industry and geographical markets in which 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 economic uncertainty and capital market disruption; risks related to the expansion of NetEase's businesses and operations internationally; risks associated with cybersecurity threats or incidents; and the risk that fluctuations in the value of the Renminbi with respect to other currencies 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 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 provide 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.

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,	September 30,	September 30,
	2023	2024	2024
	RMB	RMB	USD (Note 1)
Assets
Current assets:
Cash and cash equivalents	21,428,902	20,184,013	2,876,199
Time deposits	100,856,034	91,195,431	12,995,245
Restricted cash	2,777,206	2,994,096	426,655
Accounts receivable, net	6,422,417	6,173,077	879,656
Inventories	695,374	613,685	87,449
Prepayments and other current assets, net	6,076,595	6,811,171	970,584
Short-term investments	4,436,057	12,607,188	1,796,510
Total current assets	142,692,585	140,578,661	20,032,298

Non-current assets:
Property, equipment and software, net	8,075,044	8,200,464	1,168,557
Land use rights, net	4,075,143	4,204,865	599,188
Deferred tax assets	1,560,088	1,173,270	167,190
Time deposits	1,050,000	4,025,000	573,558
Restricted cash	550	5,277	752
Other long-term assets	28,471,568	26,708,737	3,805,965
Total non-current assets	43,232,393	44,317,613	6,315,210
Total assets	185,924,978	184,896,274	26,347,508

Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity
Current liabilities:
Accounts payable	881,016	755,372	107,640
Salary and welfare payables	4,857,206	2,941,618	419,177
Taxes payable	2,571,534	2,606,842	371,472
Short-term loans	19,240,163	10,594,342	1,509,682
Contract liabilities	13,362,166	15,543,023	2,214,863
Accrued liabilities and other payables	12,930,399	13,270,811	1,891,075
Total current liabilities	53,842,484	45,712,008	6,513,909

Non-current liabilities:
Deferred tax liabilities	2,299,303	1,828,869	260,612
Long-term loans	427,997	427,997	60,989
Other long-term liabilities	1,271,113	1,199,075	170,867
Total non-current liabilities	3,998,413	3,455,941	492,468
Total liabilities	57,840,897	49,167,949	7,006,377

Redeemable noncontrolling interests	115,759	122,494	17,455

NetEase, Inc.'s shareholders' equity	124,285,776	132,150,155	18,831,246
Noncontrolling interests	3,682,546	3,455,676	492,430
Total equity	127,968,322	135,605,831	19,323,676

Total liabilities, redeemable noncontrolling interests and shareholders' equity	185,924,978	184,896,274	26,347,508

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				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 30,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)

Net revenues	27,270,406	25,485,805	26,209,879	3,734,878	76,327,994	78,547,425	11,192,919
Cost of revenues	(10,304,106)	(9,443,587)	(9,733,274)	(1,386,980)	(30,089,735)	(29,012,682)	(4,134,274)
Gross profit	16,966,300	16,042,218	16,476,605	2,347,898	46,238,259	49,534,743	7,058,645

Operating expenses:
Selling and marketing expenses	(3,567,153)	(3,501,737)	(3,805,071)	(542,218)	(9,743,904)	(11,329,012)	(1,614,371)
General and administrative expenses	(1,494,186)	(1,091,441)	(1,100,328)	(156,795)	(3,648,011)	(3,388,244)	(482,821)
Research and development expenses	(4,347,052)	(4,455,717)	(4,424,469)	(630,482)	(12,005,691)	(13,054,944)	(1,860,315)
Total operating expenses	(9,408,391)	(9,048,895)	(9,329,868)	(1,329,495)	(25,397,606)	(27,772,200)	(3,957,507)
Operating profit	7,557,909	6,993,323	7,146,737	1,018,403	20,840,653	21,762,543	3,101,138

Other income/(expenses):
Investment income, net	556,603	103,674	578,398	82,421	1,315,662	861,363	122,743
Interest income, net	1,147,227	1,186,219	1,282,766	182,793	2,858,835	3,746,582	533,884
Exchange (losses)/gains, net	(400,483)	(239,375)	(1,055,518)	(150,410)	677,905	(1,279,882)	(182,382)
Other, net	240,024	85,694	43,600	6,213	618,883	323,182	46,053
Income before tax	9,101,280	8,129,535	7,995,983	1,139,420	26,311,938	25,413,788	3,621,436
Income tax	(1,290,398)	(1,300,939)	(1,289,545)	(183,759)	(3,631,047)	(4,076,394)	(580,881)
Net income	7,810,882	6,828,596	6,706,438	955,661	22,680,891	21,337,394	3,040,555

Accretion of redeemable noncontrolling interests	(895)	(960)	(962)	(137)	(2,623)	(2,880)	(410)
Net loss/(income) attributable to noncontrolling interests and redeemable noncontrolling interests	26,901	(68,887)	(167,041)	(23,803)	156,021	(403,384)	(57,482)
Net income attributable to the Company's shareholders	7,836,888	6,758,749	6,538,435	931,721	22,834,289	20,931,130	2,982,663

Net income per share *
Basic	2.44	2.10	2.04	0.29	7.10	6.52	0.93
Diluted	2.41	2.08	2.03	0.29	7.02	6.46	0.92

Net income per ADS *
Basic	12.19	10.50	10.22	1.46	35.48	32.61	4.65
Diluted	12.06	10.42	10.14	1.44	35.11	32.30	4.60

Weighted average number of ordinary shares used in calculating net income per share *
Basic	3,213,834	3,217,699	3,198,646	3,198,646	3,217,873	3,209,298	3,209,298
Diluted	3,249,649	3,243,056	3,224,110	3,224,110	3,251,666	3,238,834	3,238,834

* 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				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 30,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Cash flows from operating activities:
Net income	7,810,882	6,828,596	6,706,438	955,661	22,680,891	21,337,394	3,040,555
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	651,856	631,957	520,567	74,180	2,395,488	1,720,447	245,162
Fair value changes of equity security, other investments and financial instruments	(382,132)	(7,887)	(824,608)	(117,506)	(686,887)	(1,200,753)	(171,106)
Impairment losses on investments	280,641	210,741	529,668	75,477	328,511	868,826	123,807
Fair value changes of short-term investments	(72,875)	(128,295)	(100,071)	(14,260)	(307,675)	(289,176)	(41,207)
Share-based compensation cost	819,548	1,079,056	978,139	139,384	2,429,823	2,951,495	420,584
Allowance for expected credit losses	22,386	9,281	36,022	5,133	51,646	56,903	8,109
Losses/(gains) on disposal of property, equipment and software	2,649	(326)	(2,920)	(416)	2,291	(1,114)	(159)
Unrealized exchange losses/(gains)	362,213	(209,311)	1,050,644	149,715	(718,121)	823,824	117,394
Gains on disposal of long-term investments, business and subsidiaries	(3,197)	(141,114)	(118,046)	(16,821)	(25,347)	(272,647)	(38,852)
Deferred income taxes	(305,703)	(1,280,076)	711,639	101,408	(62,417)	(83,383)	(11,882)
Share of results on equity method investees	(160,042)	39,200	(28,466)	(4,057)	(385,142)	175,005	24,938
Changes in operating assets and liabilities:
Accounts receivable	(1,177,732)	1,410,478	146,758	20,913	(1,523,463)	198,525	28,289
Inventories	84,970	29,552	(39,285)	(5,598)	271,710	81,645	11,634
Prepayments and other assets	(573,631)	530,856	(1,234,390)	(175,899)	(455,037)	(377,394)	(53,778)
Accounts payable	150,868	(126,862)	6,316	900	(577,862)	(127,547)	(18,175)
Salary and welfare payables	(588,217)	879,058	(670,750)	(95,581)	(2,055,848)	(1,970,300)	(280,766)
Taxes payable	515,087	(1,462,700)	224,015	31,922	255,911	33,137	4,722
Contract liabilities	1,560,628	(1,270,324)	1,928,060	274,746	2,009,423	2,231,822	318,032
Accrued liabilities and other payables	845,721	(490,048)	755,882	107,712	(104,899)	507,904	72,376
Net cash provided by operating activities	9,843,920	6,531,832	10,575,612	1,507,013	23,522,996	26,664,613	3,799,677

Cash flows from investing activities:
Purchase of property, equipment and software	(643,144)	(168,880)	(379,520)	(54,081)	(1,816,627)	(963,418)	(137,286)
Proceeds from sale of property, equipment and software	3,101	660	1,072	153	9,897	5,238	746
Purchase of intangible assets, content and licensed copyrights	(742,523)	(399,533)	(222,247)	(31,670)	(1,852,526)	(810,601)	(115,510)
Net changes of short-term investments with terms of three months or less	(1,993,921)	(8,194,289)	1,585,395	225,917	(1,087,059)	(4,207,245)	(599,528)
Purchase of short-term investments with terms over three months	-	-	(3,675,000)	(523,683)	-	(3,675,000)	(523,683)
Proceeds from maturities of short-term investments with terms over three months	376,950	-	-	-	481,219	-	-
Investment in long-term investments and acquisition of subsidiaries	(417,448)	(193,450)	(226,086)	(32,217)	(1,916,724)	(901,340)	(128,440)
Proceeds from disposal of long-term investments, businesses, subsidiaries and other financial instruments	20,898	840,649	1,541,338	219,639	78,709	2,467,443	351,608
Placement/rollover of matured time deposits	(30,831,994)	(61,775,606)	(36,766,094)	(5,239,127)	(78,026,928)	(133,100,536)	(18,966,675)
Proceeds from maturities of time deposits	33,893,436	55,211,839	37,546,192	5,350,289	78,144,576	138,806,413	19,779,756
Change in other long-term assets	(181,263)	(172,543)	(125,911)	(17,942)	(333,293)	(333,079)	(47,463)
Net cash used in investing activities	(515,908)	(14,851,153)	(720,861)	(102,722)	(6,318,756)	(2,712,125)	(386,475)

Cash flows from financing activities:
Net changes from loans with terms of three months or less	(7,501,788)	(2,085,053)	(4,778,301)	(680,902)	(19,834,683)	(7,263,080)	(1,034,981)
Proceeds of loans with terms over three months	7,607,060	1,069,020	5,395,810	768,897	11,058,160	13,463,080	1,918,473
Payment of loans with terms over three months	(4,250,550)	(10,681,827)	(3,100,520)	(441,821)	(7,524,472)	(14,739,347)	(2,100,340)
Net amounts received/(paid) related to capital contribution from or repurchase of noncontrolling interests shareholders	11,573	50,572	(8,394)	(1,196)	58,150	84,392	12,026
Cash paid for repurchase of NetEase's ADSs/purchase of subsidiaries' ADSs and shares	(296,495)	(2,007,030)	(3,994,212)	(569,171)	(4,608,462)	(7,235,022)	(1,030,982)
Dividends paid to NetEase's shareholders	(2,423,355)	(2,264,799)	(1,972,928)	(281,140)	(5,755,011)	(9,182,743)	(1,308,530)
Net cash used in financing activities	(6,853,555)	(15,919,117)	(8,458,545)	(1,205,333)	(26,606,318)	(24,872,720)	(3,544,334)

Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies	4,197	8,234	(68,136)	(9,710)	(28,181)	(103,040)	(14,683)
Net increase/(decrease) in cash, cash equivalents and restricted cash 2,478,654		(24,230,204)	1,328,070	189,248	(9,430,259)	(1,023,272)	(145,815)
Cash, cash equivalents and restricted cash, at the beginning of the period	15,679,412	46,085,520	21,855,316	3,114,358	27,588,325	24,206,658	3,449,421
Cash, cash equivalents and restricted cash, at end of the period	18,158,066	21,855,316	23,183,386	3,303,606	18,158,066	23,183,386	3,303,606

Supplemental disclosures of cash flow information:
Cash paid for income taxes, net	1,165,196	2,848,493	554,867	79,068	3,864,820	4,586,071	653,510
Cash paid for interest expenses	105,665	152,943	165,881	23,638	708,025	465,279	66,302

The accompanying notes are an integral part of this announcement.

NETEASE, INC.
UNAUDITED SEGMENT INFORMATION
(in thousands, except percentages)

	Three Months Ended				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 30,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Net revenues:
Games and related value-added services	21,779,851	20,055,819	20,864,036	2,973,102	60,644,094	62,380,233	8,889,113
Youdao	1,538,783	1,321,721	1,572,541	224,085	3,908,687	4,286,121	610,767
NetEase Cloud Music	1,973,064	2,040,952	1,999,163	284,878	5,881,444	6,069,656	864,919
Innovative businesses and others	1,978,708	2,067,313	1,774,139	252,813	5,893,769	5,811,415	828,120
Total net revenues	27,270,406	25,485,805	26,209,879	3,734,878	76,327,994	78,547,425	11,192,919

Cost of revenues:
Games and related value-added services	(6,749,507)	(6,008,604)	(6,503,146)	(926,691)	(19,555,391)	(19,067,061)	(2,717,034)
Youdao	(679,147)	(684,942)	(783,085)	(111,588)	(1,880,026)	(2,178,383)	(310,417)
NetEase Cloud Music	(1,436,552)	(1,385,756)	(1,343,921)	(191,507)	(4,379,785)	(3,988,683)	(568,383)
Innovative businesses and others	(1,438,900)	(1,364,285)	(1,103,122)	(157,194)	(4,274,533)	(3,778,555)	(538,440)
Total cost of revenues	(10,304,106)	(9,443,587)	(9,733,274)	(1,386,980)	(30,089,735)	(29,012,682)	(4,134,274)

Gross profit:
Games and related value-added services	15,030,344	14,047,215	14,360,890	2,046,411	41,088,703	43,313,172	6,172,079
Youdao	859,636	636,779	789,456	112,497	2,028,661	2,107,738	300,350
NetEase Cloud Music	536,512	655,196	655,242	93,371	1,501,659	2,080,973	296,536
Innovative businesses and others	539,808	703,028	671,017	95,619	1,619,236	2,032,860	289,680
Total gross profit	16,966,300	16,042,218	16,476,605	2,347,898	46,238,259	49,534,743	7,058,645

Gross profit margin:
Games and related value-added services	69.0 %	70.0 %	68.8 %	68.8 %	67.8 %	69.4 %	69.4 %
Youdao	55.9 %	48.2 %	50.2 %	50.2 %	51.9 %	49.2 %	49.2 %
NetEase Cloud Music	27.2 %	32.1 %	32.8 %	32.8 %	25.5 %	34.3 %	34.3 %
Innovative businesses and others	27.3 %	34.0 %	37.8 %	37.8 %	27.5 %	35.0 %	35.0 %

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 = RMB7.0176 on the last trading day of September 2024 (September 30, 2024) 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 September 30, 2024, 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				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 30,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Share-based compensation cost included in:
Cost of revenues	210,533	319,949	306,283	43,645	607,048	881,167	125,565
Operating expenses
Selling and marketing expenses	33,804	42,865	36,365	5,182	97,226	97,099	13,836
General and administrative expenses	280,581	286,350	247,440	35,260	856,188	823,426	117,337
Research and development expenses	294,630	429,892	388,051	55,297	869,361	1,149,803	163,846

The accompanying notes are an integral part of this announcement.

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				Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,	September 30,	September 30,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Net income attributable to the Company's shareholders	7,836,888	6,758,749	6,538,435	931,721	22,834,289	20,931,130	2,982,663
Add: Share-based compensation	808,276	1,059,939	960,706	136,900	2,394,559	2,897,543	412,897
Non-GAAP net income attributable to the Company's shareholders	8,645,164	7,818,688	7,499,141	1,068,621	25,228,848	23,828,673	3,395,560

Non-GAAP net income per share *
Basic	2.69	2.43	2.34	0.33	7.84	7.42	1.06
Diluted	2.66	2.41	2.33	0.33	7.76	7.35	1.05

Non-GAAP net income per ADS *
Basic	13.45	12.15	11.72	1.67	39.20	37.12	5.29
Diluted	13.30	12.05	11.63	1.66	38.79	36.77	5.24

* Each ADS represents five ordinary shares.
The accompanying notes are an integral part of this announcement.

]]> NetEase to Report Third Quarter 2024 Financial Results on November 14 2024-10-31 16:30:00 . 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 inChina 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 company with industry-leading technology, and 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, Oct. 31, 2024 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the 2024 third quarter on Thursday, November 14, 2024, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 7:00 a.m. Eastern Time on Thursday, November 14, 2024 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, November 14, 2024). NetEase's management will be on the call to discuss the quarterly results and answer questions.

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.

Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning company with industry-leading technology, and 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/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]> NetEase Announces Second Quarter 2024 Unaudited Financial Results 2024-08-22 17:01:00 . 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 inChina 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 subsidiariesYoudao (NYSE: DAO), an intelligent learning company with industry-leading technology, andCloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well asYanxuan, 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 inChina 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 government regulation that could adversely affect the industry and geographical markets in which 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 economic uncertainty and capital market disruption; risks related to the expansion of NetEase's businesses and operations internationally; risks associated with cybersecurity threats or incidents; and the risk that fluctuations in the value of the Renminbi with respect to other currencies 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 inthe 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 provide 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, 2023 2024 2024 RMB RMB USD (Note 1) Assets Current assets: Cash and cash equivalents 21,428,902 18,982,239 2,612,043 Time deposits 100,856,034 93,456,225 12,860,005 Restricted cash 2,777,206 2,869,827 394,901 Accounts receivable, net 6,422,417 6,364,847 875,832 Inventories 695,374 574,441 79,046 Prepayments and other current assets, net 6,076,595 5,487,749 755,139 Short-term investments 4,436,057 10,417,802 1,433,537 Total current assets 142,692,585 138,153,130 19,010,503 Non-current assets: Property, equipment and software, net 8,075,044 8,092,032 1,113,501 Land use rights, net 4,075,143 4,022,255 553,481 Deferred tax assets 1,560,088 1,504,697 207,053 Time deposits 1,050,000 3,940,000 542,162 Restricted cash 550 3,250 447 Other long-term assets 28,471,568 27,627,257 3,801,637 Total non-current assets 43,232,393 45,189,491 6,218,281 Total assets 185,924,978 183,342,621 25,228,784 Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity Current liabilities: Accounts payable 881,016 792,003 108,983 Salary and welfare payables 4,857,206 3,606,360 496,252 Taxes payable 2,571,534 2,381,220 327,667 Short-term loans 19,240,163 13,187,247 1,814,626 Contract liabilities 13,362,166 13,615,857 1,873,604 Accrued liabilities and other payables 12,930,399 12,345,208 1,698,757 Total current liabilities 53,842,484 45,927,895 6,319,889 Non-current liabilities: Deferred tax liabilities 2,299,303 1,448,781 199,359 Long-term loans 427,997 427,997 58,894 Other long-term liabilities 1,271,113 1,192,543 164,099 Total non-current liabilities 3,998,413 3,069,321 422,352 Total liabilities 57,840,897 48,997,216 6,742,241 Redeemable noncontrolling interests 115,759 119,498 16,443 NetEase, Inc.'s shareholders' equity 124,285,776 130,909,906 18,013,803 Noncontrolling interests 3,682,546 3,316,001 456,297 Total equity 127,968,322 134,225,907 18,470,100 Total liabilities, redeemable noncontrolling interests and shareholders' equity 185,924,978 183,342,621 25,228,784 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, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net revenues 24,011,301 26,851,741 25,485,805 3,506,963 49,057,588 52,337,546 7,201,886 Cost of revenues (9,635,888) (9,835,821) (9,443,587) (1,299,481) (19,785,629) (19,279,408) (2,652,935) Gross profit 14,375,413 17,015,920 16,042,218 2,207,482 29,271,959 33,058,138 4,548,951 Operating expenses: Selling and marketing expenses (3,271,705) (4,022,204) (3,501,737) (481,855) (6,176,751) (7,523,941) (1,035,329) General and administrative expenses (1,132,147) (1,196,475) (1,091,441) (150,187) (2,153,825) (2,287,916) (314,828) Research and development expenses (3,908,907) (4,174,758) (4,455,717) (613,127) (7,658,639) (8,630,475) (1,187,593) Total operating expenses (8,312,759) (9,393,437) (9,048,895) (1,245,169) (15,989,215) (18,442,332) (2,537,750) Operating profit 6,062,654 7,622,483 6,993,323 962,313 13,282,744 14,615,806 2,011,201 Other income/(expenses): Investment income, net 287,691 179,291 103,674 14,266 759,059 282,965 38,937 Interest income, net 935,578 1,277,597 1,186,219 163,229 1,711,608 2,463,816 339,032 Exchange gains/(losses), net 1,464,956 15,011 (239,375) (32,939) 1,078,388 (224,364) (30,874) Other, net 120,826 193,888 85,694 11,792 378,859 279,582 38,472 Income before tax 8,871,705 9,288,270 8,129,535 1,118,661 17,210,658 17,417,805 2,396,768 Income tax (712,090) (1,485,910) (1,300,939) (179,015) (2,340,649) (2,786,849) (383,483) Net income 8,159,615 7,802,360 6,828,596 939,646 14,870,009 14,630,956 2,013,285 Accretion of redeemable noncontrolling interests (868) (958) (960) (132) (1,728) (1,918) (264) Net loss/(income) attributable to noncontrolling interests and redeemable noncontrolling interests 84,020 (167,456) (68,887) (9,479) 129,120 (236,343) (32,522) Net income attributable to the Company's shareholders 8,242,767 7,633,946 6,758,749 930,035 14,997,401 14,392,695 1,980,499 Net income per share * Basic 2.56 2.38 2.10 0.29 4.66 4.48 0.62 Diluted 2.54 2.35 2.08 0.29 4.61 4.43 0.61 Net income per ADS * Basic 12.80 11.88 10.50 1.45 23.29 22.39 3.08 Diluted 12.69 11.75 10.42 1.43 23.05 22.17 3.05 Weighted average number of ordinary shares used in calculating net income per share * Basic 3,218,783 3,211,665 3,217,699 3,217,699 3,219,926 3,214,682 3,214,682 Diluted 3,248,916 3,249,452 3,243,056 3,243,056 3,252,707 3,246,254 3,246,254 * 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, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Cash flows from operating activities: Net income 8,159,615 7,802,360 6,828,596 939,646 14,870,009 14,630,956 2,013,285 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 661,363 567,923 631,957 86,960 1,743,632 1,199,880 165,109 Fair value changes of equity security and other investments (78,035) (368,258) (7,887) (1,085) (304,755) (376,145) (51,759) Impairment losses on investments 47,870 128,417 210,741 28,999 47,870 339,158 46,670 Fair value changes of short-term investments (96,884) (60,810) (128,295) (17,654) (234,800) (189,105) (26,022) Share-based compensation cost 787,862 894,300 1,079,056 148,482 1,610,275 1,973,356 271,543 Allowance for expected credit losses 8,540 11,600 9,281 1,277 29,260 20,881 2,873 Losses/(gains) on disposal of property, equipment and software 252 2,132 (326) (45) (358) 1,806 249 Unrealized exchange (gains)/losses (1,466,295) (17,509) (209,311) (28,802) (1,080,334) (226,820) (31,211) Gains on disposal of long-term investments, business and subsidiaries (16,382) (13,487) (141,114) (19,418) (22,150) (154,601) (21,274) Deferred income taxes (334,380) 485,054 (1,280,076) (176,144) 243,286 (795,022) (109,399) Share of results on equity method investees (129,292) 164,271 39,200 5,394 (225,100) 203,471 27,999 Changes in operating assets and liabilities: Accounts receivable 770,551 (1,358,711) 1,410,478 194,088 (345,731) 51,767 7,123 Inventories 69,410 91,378 29,552 4,067 186,740 120,930 16,641 Prepayments and other assets (7,233) 326,140 530,856 73,048 118,594 856,996 117,927 Accounts payable (115,791) (7,001) (126,862) (17,457) (728,730) (133,863) (18,420) Salary and welfare payables 758,106 (2,178,608) 879,058 120,963 (1,467,631) (1,299,550) (178,824) Taxes payable (992,892) 1,271,822 (1,462,700) (201,274) (259,176) (190,878) (26,266) Contract liabilities (41,196) 1,574,086 (1,270,324) (174,801) 448,795 303,762 41,799 Accrued liabilities and other payables (306,784) 242,070 (490,048) (67,433) (950,620) (247,978) (34,123) Net cash provided by operating activities 7,678,405 9,557,169 6,531,832 898,811 13,679,076 16,089,001 2,213,920 Cash flows from investing activities: Purchase of property, equipment and software (520,544) (415,018) (168,880) (23,239) (1,173,483) (583,898) (80,347) Proceeds from sale of property, equipment and software 4,292 3,506 660 91 6,796 4,166 573 Purchase of intangible assets, content and licensed copyrights (283,321) (188,821) (399,533) (54,978) (1,110,003) (588,354) (80,960) Net changes of short-term investments with terms of three months or less 1,630,013 2,401,649 (8,194,289) (1,127,572) 906,862 (5,792,640) (797,094) Proceeds from maturities of short-term investments with terms over three months - - - - 104,269 - - Investment in long-term investments and acquisition of subsidiaries (270,228) (481,804) (193,450) (26,620) (1,499,276) (675,254) (92,918) Proceeds from disposal of long-term investments, businesses and subsidiaries 16,531 85,456 840,649 115,677 57,811 926,105 127,436 Placement/rollover of matured time deposits (10,874,831) (34,558,836) (61,775,606) (8,500,606) (47,194,934) (96,334,442) (13,256,060) Proceeds from maturities of time deposits 21,918,791 46,048,382 55,211,839 7,597,402 44,251,140 101,260,221 13,933,870 Change in other long-term assets (31,189) (34,625) (172,543) (23,743) (152,030) (207,168) (28,507) Net cash provided by/(used in) investing activities 11,589,514 12,859,889 (14,851,153) (2,043,588) (5,802,848) (1,991,264) (274,007) Cash flows from financing activities: Net changes from loans with terms of three months or less (14,970,935) (399,726) (2,085,053) (286,913) (12,332,895) (2,484,779) (341,917) Proceeds of loans with terms over three months 2,171,541 6,998,250 1,069,020 147,102 3,451,100 8,067,270 1,110,093 Payment of loans with terms over three months (3,233,500) (957,000) (10,681,827) (1,469,868) (3,273,922) (11,638,827) (1,601,556) Net amounts received related to capital contribution from noncontrolling interests shareholders 22,228 42,214 50,572 6,959 46,577 92,786 12,768 Cash paid for repurchase of NetEase's ADSs/purchase of subsidiaries' ADSs and shares (2,195,210) (1,233,780) (2,007,030) (276,177) (4,311,967) (3,240,810) (445,950) Dividends paid to NetEase's shareholders (2,119,316) (4,945,016) (2,264,799) (311,647) (3,331,656) (7,209,815) (992,104) Net cash used in financing activities (20,325,192) (495,058) (15,919,117) (2,190,544) (19,752,763) (16,414,175) (2,258,666) Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies (47,876) (43,138) 8,234 1,133 (32,378) (34,904) (4,803) Net (decrease)/increase in cash, cash equivalents and restricted cash (1,105,149) 21,878,862 (24,230,204) (3,334,188) (11,908,913) (2,351,342) (323,556) Cash, cash equivalents and restricted cash, at the beginning of the period 16,784,561 24,206,658 46,085,520 6,341,579 27,588,325 24,206,658 3,330,947 Cash, cash equivalents and restricted cash, at end of the period 15,679,412 46,085,520 21,855,316 3,007,391 15,679,412 21,855,316 3,007,391 Supplemental disclosures of cash flow information: Cash paid for income taxes, net 1,625,045 1,182,711 2,848,493 391,966 2,699,624 4,031,204 554,712 Cash paid for interest expenses 326,646 146,455 152,943 21,046 602,360 299,398 41,199 The accompanying notes are an integral part of this announcement. NETEASE, INC. UNAUDITED SEGMENT INFORMATION (in thousands, except percentages) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, June 30, June 30, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net revenues: Games and related value-added services 18,798,646 21,460,378 20,055,819 2,759,772 38,864,243 41,516,197 5,712,819 Youdao 1,206,634 1,391,859 1,321,721 181,875 2,369,904 2,713,580 373,401 Cloud Music 1,948,539 2,029,541 2,040,952 280,844 3,908,380 4,070,493 560,118 Innovative businesses and others 2,057,482 1,969,963 2,067,313 284,472 3,915,061 4,037,276 555,548 Total net revenues 24,011,301 26,851,741 25,485,805 3,506,963 49,057,588 52,337,546 7,201,886 Cost of revenues: Games and related value-added services (6,122,836) (6,555,311) (6,008,604) (826,812) (12,805,884) (12,563,915) (1,728,853) Youdao (639,459) (710,356) (684,942) (94,251) (1,200,879) (1,395,298) (191,999) Cloud Music (1,422,855) (1,259,006) (1,385,756) (190,686) (2,943,233) (2,644,762) (363,931) Innovative businesses and others (1,450,738) (1,311,148) (1,364,285) (187,732) (2,835,633) (2,675,433) (368,152) Total cost of revenues (9,635,888) (9,835,821) (9,443,587) (1,299,481) (19,785,629) (19,279,408) (2,652,935) Gross profit: Games and related value-added services 12,675,810 14,905,067 14,047,215 1,932,960 26,058,359 28,952,282 3,983,966 Youdao 567,175 681,503 636,779 87,624 1,169,025 1,318,282 181,402 Cloud Music 525,684 770,535 655,196 90,158 965,147 1,425,731 196,187 Innovative businesses and others 606,744 658,815 703,028 96,740 1,079,428 1,361,843 187,396 Total gross profit 14,375,413 17,015,920 16,042,218 2,207,482 29,271,959 33,058,138 4,548,951 Gross profit margin: Games and related value-added services 67.4 % 69.5 % 70.0 % 70.0 % 67.0 % 69.7 % 69.7 % Youdao 47.0 % 49.0 % 48.2 % 48.2 % 49.3 % 48.6 % 48.6 % Cloud Music 27.0 % 38.0 % 32.1 % 32.1 % 24.7 % 35.0 % 35.0 % Innovative businesses and others 29.5 % 33.4 % 34.0 % 34.0 % 27.6 % 33.7 % 33.7 % 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 ofUSD1.00 = RMB7.2672 on the last trading day of June 2024 (June 28, 2024) 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 onJune 28, 2024, 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, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Share-based compensation cost included in: Cost of revenues 193,001 254,935 319,949 44,026 396,515 574,884 79,107 Operating expenses Selling and marketing expenses 31,069 17,869 42,865 5,898 63,422 60,734 8,357 General and administrative expenses 281,326 289,636 286,350 39,403 575,607 575,986 79,258 Research and development expenses 282,466 331,860 429,892 59,155 574,731 761,752 104,821 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, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1) Net income attributable to the Company's shareholders 8,242,767 7,633,946 6,758,749 930,035 14,997,401 14,392,695 1,980,499 Add: Share-based compensation 774,683 876,898 1,059,939 145,852 1,586,283 1,936,837 266,518 Non-GAAP net income attributable to the Company's shareholders 9,017,450 8,510,844 7,818,688 1,075,887 16,583,684 16,329,532 2,247,017 Non-GAAP net income per share * Basic 2.80 2.65 2.43 0.33 5.15 5.08 0.70 Diluted 2.78 2.62 2.41 0.33 5.10 5.03 0.69 Non-GAAP net income per ADS * Basic 14.01 13.25 12.15 1.67 25.75 25.40 3.49 Diluted 13.88 13.10 12.05 1.66 25.49 25.15 3.46 * Each ADS represents five ordinary shares. The accompanying notes are an integral part of this announcement. Note 5: Reconciliation between U.S. GAAP and International Financial Reporting Standards The unaudited condensed consolidated financial information is prepared in accordance with U.S. GAAP, which differ in certain respects from International Financial Reporting Standards ("IFRSs"). The effects of material differences between the unaudited condensed consolidated financial information prepared under U.S. GAAP and IFRSs ("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, 2023 IFRSs adjustments Amounts as reported under U.S. GAAP Investments measured at fair value Redeemable noncontrolling interests Amounts as reported under IFRSs (Note (a)) (Note (b)) Investment income, net 759,059 694,453 - 1,453,512 Income before tax 17,210,658 694,453 - 17,905,111 Income tax (2,340,649) 15,289 - (2,325,360) Net income 14,870,009 709,742 - 15,579,751 Accretion of redeemable noncontrolling interests (1,728) - 1,728 - Net loss attributable to noncontrolling interests and redeemable noncontrolling interests 129,120 - (3,879) 125,241 Net income attributable to the Company's shareholders 14,997,401 709,742 (2,151) 15,704,992 For the Six Months Ended June 30, 2024 IFRSs adjustments Amounts as reported under U.S. GAAP Investments measured at fair value Redeemable noncontrolling interests Amounts as reported under IFRSs (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 Reconciliation of unaudited condensed consolidated balance sheets (Extract): As of December 31, 2023 IFRSs adjustments Amounts as reported under U.S. GAAP Investments measured at fair value Redeemable noncontrolling interests Amounts as reported under IFRSs (Note (a)) (Note (b)) Other long-term assets 28,471,568 (15,673,947) - 12,797,621 Financial assets at fair value through profit or loss - 18,369,496 - 18,369,496 Total Assets 185,924,978 2,695,549 - 188,620,527 Financial liabilities at fair value through profit or loss - - 37,961 37,961 Deferred tax liabilities 2,299,303 29,886 - 2,329,189 Total Liabilities 57,840,897 29,886 37,961 57,908,744 Redeemable noncontrolling interests 115,759 - (115,759) - Total equity 127,968,322 2,665,663 77,798 130,711,783 Total liabilities, redeemable noncontrolling interests and shareholders' equity 185,924,978 2,695,549 - 188,620,527 As of June 30, 2024 IFRSs adjustments Amounts as reported under U.S. GAAP Investments measured at fair value Redeemable noncontrolling interests Amounts as reported under IFRSs (Note (a)) (Note (b)) Other long-term assets 27,627,257 (14,942,321) - 12,684,936 Financial assets at fair value through profit or loss - 17,529,322 - 17,529,322 Total Assets 183,342,621 2,587,001 - 185,929,622 Financial liabilities at fair value through profit or loss - - 38,532 38,532 Deferred tax liabilities 1,448,781 22,759 - 1,471,540 Total Liabilities 48,997,216 22,759 38,532 49,058,507 Redeemable noncontrolling interests 119,498 - (119,498) - Total equity 134,225,907 2,564,242 80,966 136,871,115 Total liabilities, redeemable noncontrolling interests and shareholders' equity 183,342,621 2,587,001 - 185,929,622 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 endedJune 30, 2024 prepared under U.S. GAAP, with material adjustments made (if any) thereto in arriving at the unaudited financial information of the Company prepared under IFRSs. The adjustments reflect the material differences between the Company's accounting policies under U.S. GAAP and IFRSs. Note a. Investments measured at fair value Under U.S. GAAP, the investments in convertible redeemable preferred shares and ordinary shares with preferential rights that are issued by privately-held companies and therefore without readily determinable fair values could be accounted for using measurement alternative as an accounting policy choice. NetEase elected the measurement alternative to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under IFRSs, 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 IFRSs, 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. ]]> HANGZHOU, China, Aug. 22, 2024 /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, 2024.

Second Quarter 2024 Financial Highlights

Net revenues were RMB25.5 billion (US$3.5 billion), an increase of 6.1% compared with the same quarter of 2023.
- Games and related value-added services net revenues were RMB20.1 billion (US$2.8 billion), an increase of 6.7% compared with the same quarter of 2023.
- Youdao net revenues were RMB1.3 billion (US$181.9 million), an increase of 9.5% compared with the same quarter of 2023.
- Cloud Music net revenues were RMB2.0 billion (US$280.8 million), an increase of 4.7% compared with the same quarter of 2023.
- Innovative businesses and others net revenues were RMB2.1 billion (US$284.5 million), which was relatively stable compared with the same quarter of 2023.
Gross profit was RMB16.0 billion (US$2.2 billion), an increase of 11.6% compared with the same quarter of 2023.
Total operating expenses were RMB9.0 billion (US$1.2 billion), an increase of 8.9% compared with the same quarter of 2023.
Net income attributable to the Company's shareholders was RMB6.8 billion (US$930.0 million). Non-GAAP net income attributable to the Company's shareholders was RMB7.8 billion (US$1.1 billion).^[1]
Basic net income per share was US$0.29 (US$1.45 per ADS). Non-GAAP basic net income per share was US$0.33 (US$1.67 per ADS).^[1]

Second Quarter 2024 and Recent Operational Highlights

Launched popular new titles, further enhancing our appeal in diversified genres:
- Lost Light mobile game, a multiplayer tactical shooter game, topped the iOS download charts in China following its June launch.
- Once Human, a multiplayer open-world survival game set in a post-apocalyptic world, attained over 230,000 peak concurrent users on Steam soon after its launch, ranking among the top 5 most-played games in the world.
- Naraka: Bladepoint mobile game hit the top 3 on iOS grossing charts soon after launch in China, and topped the iOS download chart for over a week.
Generated continued popularity of hit games, with Naraka: Bladepoint reaching record-high DAUs on its three-year anniversary, and Identity V continuing its strong performance, hitting record-high DAUs in July and August, consecutively.
Brought highly anticipated NetEase titles to partners' world-leading gaming platforms:
- Unveiled plans to bring Where Winds Meet and Marvel Rivals to consoles at PlayStation State of Play. Marvel Rivals also announced during Gamescom its release date for December 6^th.
- Announced FragPunk, a 5v5 first-person hero shooter game, at the Xbox Games Showcase 2024, highlighting its innovative shooting experience with unique card mechanics.
- Eggy Party joined Nintendo Direct with upcoming plans for a worldwide release on Switch.
Brought World of Warcraft back to China with players enthusiastically welcoming the unfolding return of Blizzard's game portfolio.
Youdao continued to drive growth in digital content services, online marketing services and AI-driven subscription services, recording historic-high operating cash flow and significantly narrowed operating loss compared with the same quarter of last year.
Cloud Music continued to propel quality development across its music-centric ecosystem, further augmented its unique community, and kept bringing users high-quality music experiences.

"The robust R&D and operating capabilities we've built over the past two decades have shaped our formidable games portfolio of time-honored titles and newer innovative hits that redefine genres and diversify our offerings," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "With a growing portfolio of games that feature higher quality and cover more genres, we are thrilled to bring exciting NetEase gaming experiences to more players around the globe. As we expand our reach to players in China and worldwide, innovation remains our priority. We will continue to explore opportunities with talent and partners in the industry to drive the next wave of gaming trends.

"Alongside our games, Cloud Music and Youdao are also on track for continued growth this year. Superior content is the thread that connects our NetEase family, and we continue to bring experiences that resonate with our users across our businesses," Mr. Ding concluded.

Second Quarter 2024 Financial Results

Net Revenues

Net revenues for the second quarter of 2024 were RMB25.5 billion (US$3.5 billion), compared with RMB26.9 billion and RMB24.0 billion for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from games and related value-added services were RMB20.1 billion (US$2.8 billion) for the second quarter of 2024, compared with RMB21.5 billion and RMB18.8 billion for the preceding quarter and the same quarter of 2023, respectively. Net revenues from the operation of online games accounted for approximately 96.1% of the segment's net revenues for the second quarter of 2024, compared with 95.2% and 91.7% for the preceding quarter and the same quarter of 2023, respectively. Net revenues from mobile games accounted for approximately 76.4% of net revenues from the operation of online games for the second quarter of 2024, compared with 78.6% and 73.6% for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from Youdao were RMB1.3 billion (US$181.9 million) for the second quarter of 2024, compared with RMB1.4 billion and RMB1.2 billion for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from Cloud Music were RMB2.0 billion (US$280.8 million) for the second quarter of 2024, compared with RMB2.0 billion and RMB1.9 billion for the preceding quarter and the same quarter of 2023, respectively.

Net revenues from innovative businesses and others were RMB2.1 billion (US$284.5 million) for the second quarter of 2024, compared with RMB2.0 billion and RMB2.1 billion for the preceding quarter and the same quarter of 2023, respectively.

Gross Profit

Gross profit for the second quarter of 2024 was RMB16.0 billion (US$2.2 billion), compared with RMB17.0 billion and RMB14.4 billion for the preceding quarter and the same quarter of 2023, respectively.

The quarter-over-quarter decrease in games and related value-added services' gross profit was primarily due to lower net revenues from certain mobile games. The year-over-year increase was primarily due to increased net revenues from mobile games such as Identity V and Justice mobile game, launched in 2023.

The quarter-over-quarter decrease in Youdao's gross profit was primarily due to lower net revenues from its learning services. The year-over-year increase was primarily due to higher net revenues from its online marketing services.

The quarter-over-quarter decrease in Cloud Music's gross profit primarily resulted from the one-off adjustment of certain copyright costs in the preceding quarter. The year-over-year increase was primarily due to increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.

The quarter-over-quarter and year-over-year increases in innovative businesses and others' gross profit were primarily due to increased gross profit from Yanxuan and several other businesses included within the segment.

Gross Profit Margin

Gross profit margin for games and related value-added services for the second quarter of 2024 was 70.0%, compared with 69.5% and 67.4% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year increases were mainly attributable to changes in product mix.

Gross profit margin for Youdao for the second quarter of 2024 was 48.2%, compared with 49.0% and 47.0% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter decrease was mainly due to decreased revenue contribution from its learning services. The year-over-year increase was mainly due to the improvement of gross profit margin from its online marketing services.

Gross profit margin for Cloud Music for the second quarter of 2024 was 32.1%, compared with 38.0% and 27.0% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year fluctuations were mainly due to the factors enumerated above. The one-off adjustment of copyright costs mentioned above increased the gross profit margin in the preceding quarter by approximately five percentage points.

Gross profit margin for innovative businesses and others for the second quarter of 2024 was 34.0%, compared with 33.4% and 29.5% for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter and year-over-year increases were mainly due to changes in the product mix within the segment.

Operating Expenses

Total operating expenses for the second quarter of 2024 were RMB9.0 billion (US$1.2 billion), compared with RMB9.4 billion and RMB8.3 billion for the preceding quarter and the same quarter of 2023, respectively. The quarter-over-quarter decrease was mainly due to decreased marketing expenditures related to games and related value-added services. The year-over-year increase was mainly due to increased research and development investments and marketing expenditures associated with games and related value-added services.

Other Income/(Expenses)

Other income/(expenses) consisted of investment income, interest income, exchange gains/(losses) and others. The quarter-over-quarter and year-over-year decreases were mainly due to net exchange losses in the second quarter of 2024 compared with net exchange gains recorded in the preceding quarter and the same quarter of 2023.

Income Tax

The Company recorded a net income tax charge of RMB1.3 billion (US$179.0 million) for the second quarter of 2024, compared with RMB1.5 billion and RMB712.1 million for the preceding quarter and the same quarter of 2023, respectively. The effective tax rate for the second quarter of 2024 was 16.0%, compared with 16.0% and 8.0% for the preceding quarter and the same quarter of 2023, 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 RMB6.8 billion (US$930.0 million) for the second quarter of 2024, compared with RMB7.6 billion and RMB8.2 billion for the preceding quarter and the same quarter of 2023, respectively.

NetEase reported basic net income of US$0.29 per share (US$1.45 per ADS) for the second quarter of 2024, compared with US$0.33 per share (US$1.64 per ADS) and US$0.35 per share (US$1.76 per ADS) for the preceding quarter and the same quarter of 2023, respectively.

Non-GAAP net income attributable to the Company's shareholders totaled RMB7.8 billion (US$1.1 billion) for the second quarter of 2024, compared with RMB8.5 billion and RMB9.0 billion for the preceding quarter and the same quarter of 2023, respectively.

NetEase reported non-GAAP basic net income of US$0.33 per share (US$1.67 per ADS) for the second quarter of 2024, compared with US$0.36 per share (US$1.82 per ADS) and US$0.39 per share (US$1.93 per ADS) for the preceding quarter and the same quarter of 2023, respectively.

Other Financial Information

As of June 30, 2024, 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 RMB116.1 billion (US$16.0 billion), compared with RMB110.9 billion as of December 31, 2023. Net cash provided by operating activities was RMB6.5 billion (US$898.8 million) for the second quarter of 2024, compared with RMB9.6 billion and RMB7.7 billion for the preceding quarter and the same quarter of 2023, respectively.

Quarterly Dividend

The board of directors has approved a dividend of US$0.0870 per share (US$0.4350 per ADS) for the second quarter of 2024 to holders of ordinary shares and holders of ADSs as of the close of business on September 6, 2024, 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 September 6, 2024 (Beijing/ Hong Kong Time). The payment date is expected to be September 17, 2024 for holders of ordinary shares and on or around September 20, 2024 for holders of ADSs.

NetEase paid a dividend of US$0.0990 per share (US$0.4950 per ADS) for the first quarter of 2024 in June 2024.

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, 2024, approximately 11.9 million ADSs had been repurchased under this program for a total cost of US$1.1 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, August 22, 2024 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, August 22, 2024). 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: 10040836, 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: 10040836. The replay will be available through August 29, 2024.

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.

Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning company with industry-leading technology, and 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 government regulation that could adversely affect the industry and geographical markets in which 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 economic uncertainty and capital market disruption; risks related to the expansion of NetEase's businesses and operations internationally; risks associated with cybersecurity threats or incidents; and the risk that fluctuations in the value of the Renminbi with respect to other currencies 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 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 provide 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.

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,
	2023	2024	2024
	RMB	RMB	USD (Note 1)
Assets
Current assets:
Cash and cash equivalents	21,428,902	18,982,239	2,612,043
Time deposits	100,856,034	93,456,225	12,860,005
Restricted cash	2,777,206	2,869,827	394,901
Accounts receivable, net	6,422,417	6,364,847	875,832
Inventories	695,374	574,441	79,046
Prepayments and other current assets, net	6,076,595	5,487,749	755,139
Short-term investments	4,436,057	10,417,802	1,433,537
Total current assets	142,692,585	138,153,130	19,010,503

Non-current assets:
Property, equipment and software, net	8,075,044	8,092,032	1,113,501
Land use rights, net	4,075,143	4,022,255	553,481
Deferred tax assets	1,560,088	1,504,697	207,053
Time deposits	1,050,000	3,940,000	542,162
Restricted cash	550	3,250	447
Other long-term assets	28,471,568	27,627,257	3,801,637
Total non-current assets	43,232,393	45,189,491	6,218,281
Total assets	185,924,978	183,342,621	25,228,784

Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity
Current liabilities:
Accounts payable	881,016	792,003	108,983
Salary and welfare payables	4,857,206	3,606,360	496,252
Taxes payable	2,571,534	2,381,220	327,667
Short-term loans	19,240,163	13,187,247	1,814,626
Contract liabilities	13,362,166	13,615,857	1,873,604
Accrued liabilities and other payables	12,930,399	12,345,208	1,698,757
Total current liabilities	53,842,484	45,927,895	6,319,889

Non-current liabilities:
Deferred tax liabilities	2,299,303	1,448,781	199,359
Long-term loans	427,997	427,997	58,894
Other long-term liabilities	1,271,113	1,192,543	164,099
Total non-current liabilities	3,998,413	3,069,321	422,352
Total liabilities	57,840,897	48,997,216	6,742,241

Redeemable noncontrolling interests	115,759	119,498	16,443

NetEase, Inc.'s shareholders' equity	124,285,776	130,909,906	18,013,803
Noncontrolling interests	3,682,546	3,316,001	456,297
Total equity	127,968,322	134,225,907	18,470,100

Total liabilities, redeemable noncontrolling interests and shareholders' equity	185,924,978	183,342,621	25,228,784

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,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)

Net revenues	24,011,301	26,851,741	25,485,805	3,506,963	49,057,588	52,337,546	7,201,886
Cost of revenues	(9,635,888)	(9,835,821)	(9,443,587)	(1,299,481)	(19,785,629)	(19,279,408)	(2,652,935)
Gross profit	14,375,413	17,015,920	16,042,218	2,207,482	29,271,959	33,058,138	4,548,951

Operating expenses:
Selling and marketing expenses	(3,271,705)	(4,022,204)	(3,501,737)	(481,855)	(6,176,751)	(7,523,941)	(1,035,329)
General and administrative expenses	(1,132,147)	(1,196,475)	(1,091,441)	(150,187)	(2,153,825)	(2,287,916)	(314,828)
Research and development expenses	(3,908,907)	(4,174,758)	(4,455,717)	(613,127)	(7,658,639)	(8,630,475)	(1,187,593)
Total operating expenses	(8,312,759)	(9,393,437)	(9,048,895)	(1,245,169)	(15,989,215)	(18,442,332)	(2,537,750)
Operating profit	6,062,654	7,622,483	6,993,323	962,313	13,282,744	14,615,806	2,011,201

Other income/(expenses):
Investment income, net	287,691	179,291	103,674	14,266	759,059	282,965	38,937
Interest income, net	935,578	1,277,597	1,186,219	163,229	1,711,608	2,463,816	339,032
Exchange gains/(losses), net	1,464,956	15,011	(239,375)	(32,939)	1,078,388	(224,364)	(30,874)
Other, net	120,826	193,888	85,694	11,792	378,859	279,582	38,472
Income before tax	8,871,705	9,288,270	8,129,535	1,118,661	17,210,658	17,417,805	2,396,768
Income tax	(712,090)	(1,485,910)	(1,300,939)	(179,015)	(2,340,649)	(2,786,849)	(383,483)
Net income	8,159,615	7,802,360	6,828,596	939,646	14,870,009	14,630,956	2,013,285

Accretion of redeemable noncontrolling interests	(868)	(958)	(960)	(132)	(1,728)	(1,918)	(264)
Net loss/(income) attributable to noncontrolling interests and redeemable noncontrolling interests	84,020	(167,456)	(68,887)	(9,479)	129,120	(236,343)	(32,522)
Net income attributable to the Company's shareholders	8,242,767	7,633,946	6,758,749	930,035	14,997,401	14,392,695	1,980,499

Net income per share *
Basic	2.56	2.38	2.10	0.29	4.66	4.48	0.62
Diluted	2.54	2.35	2.08	0.29	4.61	4.43	0.61

Net income per ADS *
Basic	12.80	11.88	10.50	1.45	23.29	22.39	3.08
Diluted	12.69	11.75	10.42	1.43	23.05	22.17	3.05

Weighted average number of ordinary shares used in calculating net income per share *
Basic	3,218,783	3,211,665	3,217,699	3,217,699	3,219,926	3,214,682	3,214,682
Diluted	3,248,916	3,249,452	3,243,056	3,243,056	3,252,707	3,246,254	3,246,254

* 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,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Cash flows from operating activities:
Net income	8,159,615	7,802,360	6,828,596	939,646	14,870,009	14,630,956	2,013,285
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	661,363	567,923	631,957	86,960	1,743,632	1,199,880	165,109
Fair value changes of equity security and other investments	(78,035)	(368,258)	(7,887)	(1,085)	(304,755)	(376,145)	(51,759)
Impairment losses on investments	47,870	128,417	210,741	28,999	47,870	339,158	46,670
Fair value changes of short-term investments	(96,884)	(60,810)	(128,295)	(17,654)	(234,800)	(189,105)	(26,022)
Share-based compensation cost	787,862	894,300	1,079,056	148,482	1,610,275	1,973,356	271,543
Allowance for expected credit losses	8,540	11,600	9,281	1,277	29,260	20,881	2,873
Losses/(gains) on disposal of property, equipment and software	252	2,132	(326)	(45)	(358)	1,806	249
Unrealized exchange (gains)/losses	(1,466,295)	(17,509)	(209,311)	(28,802)	(1,080,334)	(226,820)	(31,211)
Gains on disposal of long-term investments, business and subsidiaries	(16,382)	(13,487)	(141,114)	(19,418)	(22,150)	(154,601)	(21,274)
Deferred income taxes	(334,380)	485,054	(1,280,076)	(176,144)	243,286	(795,022)	(109,399)
Share of results on equity method investees	(129,292)	164,271	39,200	5,394	(225,100)	203,471	27,999
Changes in operating assets and liabilities:
Accounts receivable	770,551	(1,358,711)	1,410,478	194,088	(345,731)	51,767	7,123
Inventories	69,410	91,378	29,552	4,067	186,740	120,930	16,641
Prepayments and other assets	(7,233)	326,140	530,856	73,048	118,594	856,996	117,927
Accounts payable	(115,791)	(7,001)	(126,862)	(17,457)	(728,730)	(133,863)	(18,420)
Salary and welfare payables	758,106	(2,178,608)	879,058	120,963	(1,467,631)	(1,299,550)	(178,824)
Taxes payable	(992,892)	1,271,822	(1,462,700)	(201,274)	(259,176)	(190,878)	(26,266)
Contract liabilities	(41,196)	1,574,086	(1,270,324)	(174,801)	448,795	303,762	41,799
Accrued liabilities and other payables	(306,784)	242,070	(490,048)	(67,433)	(950,620)	(247,978)	(34,123)
Net cash provided by operating activities	7,678,405	9,557,169	6,531,832	898,811	13,679,076	16,089,001	2,213,920

Cash flows from investing activities:
Purchase of property, equipment and software	(520,544)	(415,018)	(168,880)	(23,239)	(1,173,483)	(583,898)	(80,347)
Proceeds from sale of property, equipment and software	4,292	3,506	660	91	6,796	4,166	573
Purchase of intangible assets, content and licensed copyrights	(283,321)	(188,821)	(399,533)	(54,978)	(1,110,003)	(588,354)	(80,960)
Net changes of short-term investments with terms of three months or less	1,630,013	2,401,649	(8,194,289)	(1,127,572)	906,862	(5,792,640)	(797,094)
Proceeds from maturities of short-term investments with terms over three months	-	-	-	-	104,269	-	-
Investment in long-term investments and acquisition of subsidiaries	(270,228)	(481,804)	(193,450)	(26,620)	(1,499,276)	(675,254)	(92,918)
Proceeds from disposal of long-term investments, businesses and subsidiaries	16,531	85,456	840,649	115,677	57,811	926,105	127,436
Placement/rollover of matured time deposits	(10,874,831)	(34,558,836)	(61,775,606)	(8,500,606)	(47,194,934)	(96,334,442)	(13,256,060)
Proceeds from maturities of time deposits	21,918,791	46,048,382	55,211,839	7,597,402	44,251,140	101,260,221	13,933,870
Change in other long-term assets	(31,189)	(34,625)	(172,543)	(23,743)	(152,030)	(207,168)	(28,507)
Net cash provided by/(used in) investing activities	11,589,514	12,859,889	(14,851,153)	(2,043,588)	(5,802,848)	(1,991,264)	(274,007)

Cash flows from financing activities:
Net changes from loans with terms of three months or less	(14,970,935)	(399,726)	(2,085,053)	(286,913)	(12,332,895)	(2,484,779)	(341,917)
Proceeds of loans with terms over three months	2,171,541	6,998,250	1,069,020	147,102	3,451,100	8,067,270	1,110,093
Payment of loans with terms over three months	(3,233,500)	(957,000)	(10,681,827)	(1,469,868)	(3,273,922)	(11,638,827)	(1,601,556)
Net amounts received related to capital contribution from noncontrolling interests shareholders	22,228	42,214	50,572	6,959	46,577	92,786	12,768
Cash paid for repurchase of NetEase's ADSs/purchase of subsidiaries' ADSs and shares	(2,195,210)	(1,233,780)	(2,007,030)	(276,177)	(4,311,967)	(3,240,810)	(445,950)
Dividends paid to NetEase's shareholders	(2,119,316)	(4,945,016)	(2,264,799)	(311,647)	(3,331,656)	(7,209,815)	(992,104)
Net cash used in financing activities	(20,325,192)	(495,058)	(15,919,117)	(2,190,544)	(19,752,763)	(16,414,175)	(2,258,666)

Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies	(47,876)	(43,138)	8,234	1,133	(32,378)	(34,904)	(4,803)
Net (decrease)/increase in cash, cash equivalents and restricted cash	(1,105,149)	21,878,862	(24,230,204)	(3,334,188)	(11,908,913)	(2,351,342)	(323,556)
Cash, cash equivalents and restricted cash, at the beginning of the period	16,784,561	24,206,658	46,085,520	6,341,579	27,588,325	24,206,658	3,330,947
Cash, cash equivalents and restricted cash, at end of the period	15,679,412	46,085,520	21,855,316	3,007,391	15,679,412	21,855,316	3,007,391

Supplemental disclosures of cash flow information:
Cash paid for income taxes, net	1,625,045	1,182,711	2,848,493	391,966	2,699,624	4,031,204	554,712
Cash paid for interest expenses	326,646	146,455	152,943	21,046	602,360	299,398	41,199

The accompanying notes are an integral part of this announcement.

NETEASE, INC.
UNAUDITED SEGMENT INFORMATION
(in thousands, except percentages)

	Three Months Ended				Six Months Ended
	June 30,	March 31,	June 30,	June 30,	June 30,	June 30,	June 30,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Net revenues:
Games and related value-added services	18,798,646	21,460,378	20,055,819	2,759,772	38,864,243	41,516,197	5,712,819
Youdao	1,206,634	1,391,859	1,321,721	181,875	2,369,904	2,713,580	373,401
Cloud Music	1,948,539	2,029,541	2,040,952	280,844	3,908,380	4,070,493	560,118
Innovative businesses and others	2,057,482	1,969,963	2,067,313	284,472	3,915,061	4,037,276	555,548
Total net revenues	24,011,301	26,851,741	25,485,805	3,506,963	49,057,588	52,337,546	7,201,886

Cost of revenues:
Games and related value-added services	(6,122,836)	(6,555,311)	(6,008,604)	(826,812)	(12,805,884)	(12,563,915)	(1,728,853)
Youdao	(639,459)	(710,356)	(684,942)	(94,251)	(1,200,879)	(1,395,298)	(191,999)
Cloud Music	(1,422,855)	(1,259,006)	(1,385,756)	(190,686)	(2,943,233)	(2,644,762)	(363,931)
Innovative businesses and others	(1,450,738)	(1,311,148)	(1,364,285)	(187,732)	(2,835,633)	(2,675,433)	(368,152)
Total cost of revenues	(9,635,888)	(9,835,821)	(9,443,587)	(1,299,481)	(19,785,629)	(19,279,408)	(2,652,935)

Gross profit:
Games and related value-added services	12,675,810	14,905,067	14,047,215	1,932,960	26,058,359	28,952,282	3,983,966
Youdao	567,175	681,503	636,779	87,624	1,169,025	1,318,282	181,402
Cloud Music	525,684	770,535	655,196	90,158	965,147	1,425,731	196,187
Innovative businesses and others	606,744	658,815	703,028	96,740	1,079,428	1,361,843	187,396
Total gross profit	14,375,413	17,015,920	16,042,218	2,207,482	29,271,959	33,058,138	4,548,951

Gross profit margin:
Games and related value-added services	67.4 %	69.5 %	70.0 %	70.0 %	67.0 %	69.7 %	69.7 %
Youdao	47.0 %	49.0 %	48.2 %	48.2 %	49.3 %	48.6 %	48.6 %
Cloud Music	27.0 %	38.0 %	32.1 %	32.1 %	24.7 %	35.0 %	35.0 %
Innovative businesses and others	29.5 %	33.4 %	34.0 %	34.0 %	27.6 %	33.7 %	33.7 %

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 = RMB7.2672 on the last trading day of June 2024 (June 28, 2024) 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 28, 2024, 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,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Share-based compensation cost included in:
Cost of revenues	193,001	254,935	319,949	44,026	396,515	574,884	79,107
Operating expenses
Selling and marketing expenses	31,069	17,869	42,865	5,898	63,422	60,734	8,357
General and administrative expenses	281,326	289,636	286,350	39,403	575,607	575,986	79,258
Research and development expenses	282,466	331,860	429,892	59,155	574,731	761,752	104,821

The accompanying notes are an integral part of this announcement.

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,
	2023	2024	2024	2024	2023	2024	2024
	RMB	RMB	RMB	USD (Note 1)	RMB	RMB	USD (Note 1)
Net income attributable to the Company's shareholders	8,242,767	7,633,946	6,758,749	930,035	14,997,401	14,392,695	1,980,499
Add: Share-based compensation	774,683	876,898	1,059,939	145,852	1,586,283	1,936,837	266,518
Non-GAAP net income attributable to the Company's shareholders	9,017,450	8,510,844	7,818,688	1,075,887	16,583,684	16,329,532	2,247,017

Non-GAAP net income per share *
Basic	2.80	2.65	2.43	0.33	5.15	5.08	0.70
Diluted	2.78	2.62	2.41	0.33	5.10	5.03	0.69

Non-GAAP net income per ADS *
Basic	14.01	13.25	12.15	1.67	25.75	25.40	3.49
Diluted	13.88	13.10	12.05	1.66	25.49	25.15	3.46

* Each ADS represents five ordinary shares.
The accompanying notes are an integral part of this announcement.

Note 5: Reconciliation between U.S. GAAP and International Financial Reporting Standards

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

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



		For the Six Months Ended June 30, 2023 IFRSs adjustments
	Amounts as reported under U.S. GAAP	Investments measured at fair value	Redeemable noncontrolling interests	Amounts as reported under IFRSs
	Amounts as reported under U.S. GAAP	(Note (a))	(Note (b))	Amounts as reported under IFRSs
Investment income, net	759,059	694,453	-	1,453,512
Income before tax	17,210,658	694,453	-	17,905,111
Income tax	(2,340,649)	15,289	-	(2,325,360)
Net income	14,870,009	709,742	-	15,579,751
Accretion of redeemable noncontrolling interests	(1,728)	-	1,728	-
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests	129,120	-	(3,879)	125,241
Net income attributable to the Company's shareholders	14,997,401	709,742	(2,151)	15,704,992

		For the Six Months Ended June 30, 2024 IFRSs adjustments
	Amounts as reported under U.S. GAAP	Investments measured at fair value	Redeemable noncontrolling interests	Amounts as reported under IFRSs
	Amounts as reported under U.S. GAAP	(Note (a))	(Note (b))	Amounts as reported under IFRSs
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

Reconciliation of unaudited condensed consolidated balance sheets (Extract):


		As of December 31, 2023 IFRSs adjustments
	Amounts as reported under U.S. GAAP	Investments measured at fair value	Redeemable noncontrolling interests	Amounts as reported under IFRSs
	Amounts as reported under U.S. GAAP	(Note (a))	(Note (b))	Amounts as reported under IFRSs
Other long-term assets	28,471,568	(15,673,947)	-	12,797,621
Financial assets at fair value through profit or loss	-	18,369,496	-	18,369,496
Total Assets	185,924,978	2,695,549	-	188,620,527
Financial liabilities at fair value through profit or loss	-	-	37,961	37,961
Deferred tax liabilities	2,299,303	29,886	-	2,329,189
Total Liabilities	57,840,897	29,886	37,961	57,908,744
Redeemable noncontrolling interests	115,759	-	(115,759)	-
Total equity	127,968,322	2,665,663	77,798	130,711,783
Total liabilities, redeemable noncontrolling interests and shareholders' equity	185,924,978	2,695,549	-	188,620,527

		As of June 30, 2024 IFRSs adjustments
	Amounts as reported under U.S. GAAP	Investments measured at fair value	Redeemable noncontrolling interests	Amounts as reported under IFRSs
	Amounts as reported under U.S. GAAP	(Note (a))	(Note (b))	Amounts as reported under IFRSs
Other long-term assets	27,627,257	(14,942,321)	-	12,684,936
Financial assets at fair value through profit or loss	-	17,529,322	-	17,529,322
Total Assets	183,342,621	2,587,001	-	185,929,622
Financial liabilities at fair value through profit or loss	-	-	38,532	38,532
Deferred tax liabilities	1,448,781	22,759	-	1,471,540
Total Liabilities	48,997,216	22,759	38,532	49,058,507
Redeemable noncontrolling interests	119,498	-	(119,498)	-
Total equity	134,225,907	2,564,242	80,966	136,871,115
Total liabilities, redeemable noncontrolling interests and shareholders' equity	183,342,621	2,587,001	-	185,929,622

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, 2024 prepared under U.S. GAAP, with material adjustments made (if any) thereto in arriving at the unaudited financial information of the Company prepared under IFRSs. The adjustments reflect the material differences between the Company's accounting policies under U.S. GAAP and IFRSs.

Note a. Investments measured at fair value

Under U.S. GAAP, the investments in convertible redeemable preferred shares and ordinary shares with preferential rights that are issued by privately-held companies and therefore without readily determinable fair values could be accounted for using measurement alternative as an accounting policy choice. NetEase elected the measurement alternative to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes.

Under IFRSs, 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 IFRSs, 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.

]]> NetEase to Report Second Quarter 2024 Financial Results on August 22 2024-08-05 16:30:00 . 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 inChina 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 company with industry-leading technology, and 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/ . Contact for Media and Investors: Investor Relations Email: ir@service.netease.com Tel: (+86) 571-8985-3378 ]]> HANGZHOU, China, Aug. 5, 2024 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the 2024 second quarter on Thursday, August 22, 2024, before the open of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 8:00 a.m. Eastern Time on Thursday, August 22, 2024 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, August 22, 2024). NetEase's management will be on the call to discuss the quarterly results and answer questions.

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.

Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning company with industry-leading technology, and 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/.

Contact for Media and Investors:

Investor Relations
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378

]]>