HANGZHOU, China, Aug. 24,
2023 /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, 2023.
Second Quarter 2023 Financial Highlights
- Net revenues were RMB24.0 billion
(US$3.3 billion), an increase of 3.7%
compared with the second quarter of 2022.
-
- Games and related value-added services net revenues were
RMB18.8 billion (US$2.6 billion), an increase of 3.6% compared
with the second quarter of 2022.
- Youdao net revenues were RMB1.2
billion (US$166.4 million), an
increase of 26.2% compared with the second quarter of 2022.
- Cloud Music net revenues were RMB1.9
billion (US$268.7 million), a
decrease of 11.1% compared with the second quarter of 2022.
- Innovative businesses and others net revenues were RMB2.1 billion (US$283.7
million), an increase of 9.9% compared with the second
quarter of 2022.
- Gross profit was RMB14.4 billion
(US$2.0 billion), an increase of
11.1% compared with the second quarter of 2022.
- Total operating expenses were RMB8.3
billion (US$1.1 billion), an
increase of 4.0% compared with the second quarter of 2022.
- Net income attributable to the Company's shareholders was
RMB8.2 billion (US$1.1 billion). Non-GAAP net income from
continuing operations attributable to the Company's shareholders
was RMB9.0 billion (US$1.2 billion).[1]
- Basic net income per share was US$0.35 (US$1.77
per ADS). Non-GAAP basic net income from continuing operations per
share was US$0.39 (US$1.93 per ADS).[1]
[1] As
used in this announcement, non-GAAP net income from continuing
operations attributable to the Company's shareholders and non-GAAP
basic and diluted net income from continuing operations per share
and per ADS are defined to exclude share-based compensation
expenses. See "Unaudited Reconciliation of GAAP and Non-GAAP
Results" at the end of this announcement.
|
Second Quarter 2023 and Recent Operational Highlights
- Released new hit titles in June across diverse genres and
strengthened global appeal:
-
- Justice mobile game led China's iOS top grossing and download charts
following its launch.
- Racing Master ranked No. 3 on China's iOS top grossing chart soon after its
launch.
- Badlanders ranked No. 2 on China's iOS top download chart soon after its
launch.
- Launched Harry Potter:
Magic Awakened in the global market, including Japan, North
America and Europe.
- Achieved steady performances with longstanding flagship titles
including the Fantasy Westward Journey series and
maintained the popularity of hit games including Eggy Party, Identity V and
Justice.
- Bolstered robust game pipeline with ongoing development of
multiple highly anticipated games in diversified genres.
- Delivered notable growth of subscription-based memberships for
Cloud Music, driving meaningful profit margin expansion and setting
the stage for future development.
- Achieved robust year-over-year revenue growth and improved
operating cash flow for Youdao, driven by the strong
performance of learning services and online marketing
services.
"Our steady second quarter results reflect our dedication to
producing exceptional content across our businesses, which
generated total net revenues of RMB24.0
billion, up nearly 4% year-over-year," said Mr. William Ding, Chief Executive Officer and
Director of NetEase. "Players continue to revere our flagship
Fantasy Westward Journey series, while embracing newer titles
like Eggy Party that
extend our reach in casual games. The June releases of widely
acclaimed Justice mobile game and Racing
Master further showcase our endless drive to bring players
innovative, first-rate games in diversified genres. We believe that
each addition to our game portfolio validates our exceptional
R&D capabilities and the broad influence our ingenuity has in
the marketplace, including expanding the casual game market and
altering the face of traditional MMOs.
"In addition to games, our Cloud Music and
Youdao businesses remain on track and are generating premium
content. Throughout the NetEase family, we prioritize the creation
of novel and high-quality products and services that grow our
global appeal, elevate user experiences, and advance their
respective industries," Mr. Ding concluded.
Second Quarter 2023 Financial Results
Net Revenues
Net revenues for the second quarter of 2023 were
RMB24,011.3 million
(US$3,311.3 million), compared
with RMB25,046.3 million and
RMB23,159.1 million for the
preceding quarter and the second quarter of 2022, respectively.
Net revenues from games and related value-added services were
RMB18,798.6 million
(US$2,592.5 million) for the
second quarter of 2023, compared with RMB20,065.6 million and RMB18,139.8 million for the preceding
quarter and the second quarter of 2022, respectively. Net revenues
from the operation of online games accounted for approximately
91.7% of the segment's net revenues for the second quarter of 2023,
compared with 92.7% and 92.8% for the
preceding quarter and the second quarter of 2022,
respectively. Net revenues from mobile games accounted for
approximately 73.6% of net revenues from the operation of online
games for the second quarter of 2023, compared with 72.3% and
66.1% for the preceding quarter and the second
quarter of 2022, respectively.
Net revenues from Youdao were RMB1,206.6
million (US$166.4 million) for the second quarter of
2023, compared with RMB1,163.3
million and RMB956.2 million
for the preceding quarter and the second quarter of 2022,
respectively.
Net revenues from Cloud Music were RMB1,948.5 million (US$268.7 million) for the second quarter of 2023,
compared with RMB1,959.8 million and
RMB2,191.5 million for the preceding
quarter and the second quarter of 2022, respectively.
Net revenues from innovative businesses and others were
RMB2,057.5 million (US$283.7 million) for the second quarter of 2023,
compared with RMB1,857.6 million and
RMB1,871.5 million for the preceding
quarter and the second quarter of 2022, respectively.
Gross Profit
Gross profit for the second quarter of 2023 was RMB14,375.4 million (US$1,982.5 million), compared with
RMB14,896.5 million and RMB12,941.5 million for the preceding
quarter and the second quarter of 2022, respectively.
The quarter-over-quarter decrease in games and related
value-added services' gross profit was primarily due to decreased
net revenues from the operation of online games as a result of
seasonality. The year-over-year increase was primarily due to
increased net revenues from the operation of online games such as
Eggy Party, as well as
decreased royalty fees due to the termination of certain licensed
games.
The quarter-over-quarter decrease in Youdao's gross profit
primarily resulted from decreased revenue contribution from
its learning services. The year-over-year increase primarily
resulted from increased revenue
contribution from its online marketing services and
learning services.
The quarter-over-quarter and year-over-year increases in
Cloud Music's gross profit primarily resulted from 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 e-commerce net revenues from Yanxuan.
Gross Profit Margin
Gross profit margin for games and related value-added services
for the second quarter of 2023 was 67.4%, compared with 66.7% and
64.9% for the preceding quarter and the second quarter of 2022,
respectively. The quarter-over-quarter and year-over-year
increases were primarily attributable to changes in the revenue mix
of NetEase's self-developed, co-developed and licensed games.
Gross profit margin for Youdao for the second quarter of 2023
was 47.0%, compared with 51.7% and 42.8% for the preceding quarter
and the second quarter of 2022, respectively. The
quarter-over-quarter decrease was mainly due to the reduction in
revenue contribution from its learning services which have a
higher gross profit margin compared to its other products and
services. The year-over-year increase was mainly due to increased
revenue contribution from its online marketing
services and learning services.
Gross profit margin for Cloud Music for the second quarter of
2023 was 27.0%, compared with 22.4% and 13.0% for the preceding
quarter and the second quarter of 2022, respectively. The
quarter-over-quarter and year-over-year improvements were mainly
due to the factors enumerated above.
Gross profit margin for innovative businesses and others for the
second quarter of 2023 was 29.5%, compared with 25.4% and
25.8% for the preceding quarter and the second quarter of 2022,
respectively. The quarter-over-quarter and year-over-year
increases were mainly due to margin improvement from
Yanxuan.
Operating Expenses
Total operating expenses for the second quarter of 2023 were
RMB8,312.8 million (US$1,146.4 million), compared with RMB7,676.5 million and RMB7,995.2 million for the preceding quarter and
the second quarter of 2022, respectively. The quarter-over-quarter
increase was mainly due to increased marketing and research and
development expenditures related to games and related value-added
services. The year-over-year increase was mainly due to higher
staff-related costs.
Other Income/ (Expenses)
Other income/ (expenses) consisted of investment (loss)/ income,
interest income, exchange gains/ (losses) and others. The
quarter-over-quarter increase was mainly due to net unrealized
exchange gains arising from the Company's U.S. dollar-denominated
bank deposits and loans balances as the exchange rate of the U.S.
dollar against the RMB fluctuated in the second quarter of 2023.
The year-over-year increase was mainly due to higher investment
income from fair value changes of equity investments with readily
determinable fair value, as well as higher net unrealized
exchange gains.
Income Tax
The Company recorded a net income tax charge of RMB712.1 million (US$98.2
million) for the second quarter of 2023, compared with
RMB1,628.6 million and RMB1,259.3 million for the preceding quarter and
the second quarter of 2022, respectively. The effective tax rate
for the second quarter of 2023 was 8.0%, compared with 19.5% and
22.0% for the preceding quarter and the second quarter of 2022,
respectively. The lower effective tax rate for the second quarter
of 2023 was primarily due to tax benefits recognized in the quarter. 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
RMB8,242.8 million (US$1,136.7 million) for the second quarter of
2023, compared with RMB6,754.6
million and RMB5,291.5 million
for the preceding quarter and the second quarter of 2022,
respectively.
NetEase reported basic net income of US$0.35 per share (US$1.77 per ADS) for the second quarter of 2023,
compared with US$0.29 per share
(US$1.45 per ADS) and US$0.22 per share (US$1.11 per ADS) for the preceding quarter and
the second quarter of 2022, respectively.
Non-GAAP net income from continuing operations attributable to
the Company's shareholders totaled RMB9,017.5 million (US$1,243.6 million) for the second quarter of
2023, compared with RMB7,566.2
million and RMB5,409.8 million
for the preceding quarter and the second quarter of 2022,
respectively.
NetEase reported non-GAAP basic net income from continuing
operations of US$0.39 per share
(US$1.93 per ADS) for the second
quarter of 2023, compared with US$0.32 per share (US$1.62 per ADS) and US$0.23 per share (US$1.14 per ADS) for the preceding quarter and
the second quarter of 2022, respectively.
Other Financial Information
As of June 30, 2023, the Company's
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 RMB99.6
billion (US$13.7 billion),
compared with RMB95.6 billion as of
December 31, 2022. Cash flow
generated from operating activities was RMB7.7 billion (US$1.1
billion) for the second quarter of 2023, compared with
RMB6.0 billion and RMB6.6 billion for the preceding quarter and the
second quarter of 2022, respectively.
Quarterly Dividend
The board of directors has approved a dividend of US$0.1050 per share (US$0.5250 per ADS) for the second quarter of
2023 to holders of ordinary shares and holders of ADSs as of the
close of business on September 8,
2023, 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, 17th Floor, Hopewell
Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 p.m. on September 8,
2023 (Beijing/ Hong Kong
Time). The payment date is expected to be September 19, 2023 for holders of ordinary
shares, and on or around September 22,
2023 for holders of ADSs.
NetEase paid a dividend of US$0.0930 per share (US$0.4650 per ADS) for the first quarter of
2023 in June 2023.
Under the Company's current dividend policy, the determination
to make dividend distributions and the amount of such distribution
in any particular quarter will be made at the discretion of its
board of directors and will be based upon the Company's operations
and earnings, cash flow, financial condition and other relevant
factors.
Share Repurchase Program
On November 17, 2022, the Company
announced that its board of directors had approved a new 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 following the
completion of the prior program on January
9, 2023, and will be in effect for a period not to exceed 36
months from such date. As of June 30,
2023, approximately 6.1 million ADSs had been
repurchased under this program for a total cost of US$536.4 million.
The extent to which NetEase repurchases its ADSs and its
ordinary shares depends upon a variety of factors, including market
conditions. These programs may be suspended or discontinued at any
time.
** The United States dollar
(US$) 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
simultaneous webcast at 8:00 a.m.
New York Time on Thursday, August 24,
2023 (Beijing/ Hong Kong
Time: 8:00 p.m., Thursday, August 24, 2023). 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: 10032534,
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:
10032534. The replay will be available through August 31, 2023.
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 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.
NetEase's market-leading ESG initiatives are among the most
recognized in the global media and entertainment industry, earning
it inclusion in 2022 Dow Jones Sustainability World Index, 2022 Dow
Jones Sustainability Emerging Markets Index, and 2023 Bloomberg
Gender-Equality Index, as well as receiving an "A" rating from
MSCI. 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 statements.
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; the risk related to
economic uncertainty and capital market disruption; the risk
related to the expansion of NetEase's businesses and operations
internationally; 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 from continuing operations attributable to the
Company's shareholders and non-GAAP basic and diluted net income
from continuing operations 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 from continuing operations
attributable to the Company's shareholders as net income from
continuing operations attributable to the Company's shareholders
excluding share-based compensation expenses. Non-GAAP net income
from continuing operations 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 these non-GAAP financial measures
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 from continuing operations
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 from continuing operations
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 from continuing operations 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 "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:
Margaret Shi
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378
Twitter: https://twitter.com/NetEase_Global
NETEASE, INC.
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
|
(in thousands)
|
|
|
December 31,
|
|
June 30,
|
|
June 30,
|
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
24,889,000
|
|
12,766,270
|
|
1,760,549
|
Time
deposits
|
|
84,947,679
|
|
90,195,524
|
|
12,438,532
|
Restricted
cash
|
|
2,699,055
|
|
2,912,852
|
|
401,701
|
Accounts
receivable, net
|
|
5,002,872
|
|
5,343,028
|
|
736,837
|
Inventories
|
|
993,636
|
|
806,960
|
|
111,285
|
Prepayments and other current assets, net
|
|
5,448,284
|
|
5,352,876
|
|
738,195
|
Short-term
investments
|
|
7,622,673
|
|
6,846,342
|
|
944,154
|
Total current
assets
|
|
131,603,199
|
|
124,223,852
|
|
17,131,253
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property,
equipment and software, net
|
|
6,342,330
|
|
7,347,204
|
|
1,013,226
|
Land use
rights, net
|
|
4,121,767
|
|
4,147,468
|
|
571,962
|
Deferred
tax assets
|
|
1,480,789
|
|
1,320,697
|
|
182,132
|
Time
deposits
|
|
2,973,840
|
|
2,681,840
|
|
369,843
|
Restricted
cash
|
|
270
|
|
290
|
|
40
|
Other
long-term assets
|
|
26,238,790
|
|
28,184,371
|
|
3,886,803
|
Total non-current
assets
|
|
41,157,786
|
|
43,681,870
|
|
6,024,006
|
Total
assets
|
|
172,760,985
|
|
167,905,722
|
|
23,155,259
|
|
|
|
|
|
|
|
Liabilities, Redeemable Noncontrolling Interests
and Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
1,507,141
|
|
740,607
|
|
102,134
|
Salary and
welfare payables
|
|
4,732,941
|
|
3,386,236
|
|
466,983
|
Taxes
payable
|
|
2,813,096
|
|
2,560,047
|
|
353,047
|
Short-term
loans
|
|
23,875,704
|
|
11,881,623
|
|
1,638,551
|
Contract
liabilities
|
|
12,518,890
|
|
12,943,844
|
|
1,785,038
|
Accrued
liabilities and other payables
|
|
11,381,075
|
|
10,826,617
|
|
1,493,060
|
Total current
liabilities
|
|
56,828,847
|
|
42,338,974
|
|
5,838,813
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Deferred
tax liabilities
|
|
2,126,120
|
|
2,209,583
|
|
304,715
|
Long-term
loans
|
|
3,654,964
|
|
3,953,664
|
|
545,235
|
Other
long-term liabilities
|
|
1,277,574
|
|
1,137,672
|
|
156,892
|
Total non-current
liabilities
|
|
7,058,658
|
|
7,300,919
|
|
1,006,842
|
Total
liabilities
|
|
63,887,505
|
|
49,639,893
|
|
6,845,655
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
136,440
|
|
135,415
|
|
18,675
|
|
|
|
|
|
|
|
NetEase, Inc.'s
shareholders' equity
|
|
104,731,317
|
|
114,264,783
|
|
15,757,834
|
Noncontrolling
interests
|
|
4,005,723
|
|
3,865,631
|
|
533,095
|
Total equity
|
|
108,737,040
|
|
118,130,414
|
|
16,290,929
|
|
|
|
|
|
|
|
Total liabilities,
redeemable noncontrolling
interests and shareholders'
equity
|
|
172,760,985
|
|
167,905,722
|
|
23,155,259
|
|
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,
|
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
23,159,078
|
|
25,046,287
|
|
24,011,301
|
|
3,311,310
|
|
46,714,920
|
|
49,057,588
|
|
6,765,351
|
Cost of revenues
|
|
(10,217,587)
|
|
(10,149,741)
|
|
(9,635,888)
|
|
(1,328,851)
|
|
(20,937,050)
|
|
(19,785,629)
|
|
(2,728,563)
|
Gross profit
|
|
12,941,491
|
|
14,896,546
|
|
14,375,413
|
|
1,982,459
|
|
25,777,870
|
|
29,271,959
|
|
4,036,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
(3,300,705)
|
|
(2,905,046)
|
|
(3,271,705)
|
|
(451,188)
|
|
(6,216,194)
|
|
(6,176,751)
|
|
(851,813)
|
General and
administrative expenses
|
|
(1,112,755)
|
|
(1,021,678)
|
|
(1,132,147)
|
|
(156,130)
|
|
(2,128,524)
|
|
(2,153,825)
|
|
(297,026)
|
Research and
development expenses
|
|
(3,581,700)
|
|
(3,749,732)
|
|
(3,908,907)
|
|
(539,063)
|
|
(6,979,782)
|
|
(7,658,639)
|
|
(1,056,175)
|
Total operating
expenses
|
|
(7,995,160)
|
|
(7,676,456)
|
|
(8,312,759)
|
|
(1,146,381)
|
|
(15,324,500)
|
|
(15,989,215)
|
|
(2,205,014)
|
Operating profit
|
|
4,946,331
|
|
7,220,090
|
|
6,062,654
|
|
836,078
|
|
10,453,370
|
|
13,282,744
|
|
1,831,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income/ (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment (loss)/
income, net
|
|
(707,489)
|
|
471,368
|
|
287,691
|
|
39,674
|
|
(1,256,191)
|
|
759,059
|
|
104,679
|
Interest income,
net
|
|
505,991
|
|
776,030
|
|
935,578
|
|
129,022
|
|
964,235
|
|
1,711,608
|
|
236,042
|
Exchange gains/
(losses), net
|
|
865,283
|
|
(386,568)
|
|
1,464,956
|
|
202,027
|
|
767,403
|
|
1,078,388
|
|
148,717
|
Other, net
|
|
121,175
|
|
258,033
|
|
120,826
|
|
16,663
|
|
337,505
|
|
378,859
|
|
52,247
|
Income before tax
|
|
5,731,291
|
|
8,338,953
|
|
8,871,705
|
|
1,223,464
|
|
11,266,322
|
|
17,210,658
|
|
2,373,459
|
Income tax
|
|
(1,259,320)
|
|
(1,628,559)
|
|
(712,090)
|
|
(98,202)
|
|
(2,478,591)
|
|
(2,340,649)
|
|
(322,790)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing
operations
|
|
4,471,971
|
|
6,710,394
|
|
8,159,615
|
|
1,125,262
|
|
8,787,731
|
|
14,870,009
|
|
2,050,669
|
Net income from discontinued
operations
|
|
624,864
|
|
-
|
|
-
|
|
-
|
|
624,864
|
|
-
|
|
-
|
Net income
|
|
5,096,835
|
|
6,710,394
|
|
8,159,615
|
|
1,125,262
|
|
9,412,595
|
|
14,870,009
|
|
2,050,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of redeemable
noncontrolling
interests
|
|
(754)
|
|
(860)
|
|
(868)
|
|
(120)
|
|
(1,487)
|
|
(1,728)
|
|
(238)
|
Net loss attributable
to noncontrolling
interests
|
|
195,395
|
|
45,100
|
|
84,020
|
|
11,587
|
|
274,391
|
|
129,120
|
|
17,806
|
Net income attributable to the
Company's shareholders
|
|
5,291,476
|
|
6,754,634
|
|
8,242,767
|
|
1,136,729
|
|
9,685,499
|
|
14,997,401
|
|
2,068,237
|
Including:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Net income from
continuing operations
attributable to the Company's
shareholders
|
|
4,666,612
|
|
6,754,634
|
|
8,242,767
|
|
1,136,729
|
|
9,060,635
|
|
14,997,401
|
|
2,068,237
|
-Net income from
discontinued operations
attributable to the Company's
shareholders
|
|
624,864
|
|
-
|
|
-
|
|
-
|
|
624,864
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share *
|
|
1.62
|
|
2.10
|
|
2.56
|
|
0.35
|
|
2.96
|
|
4.66
|
|
0.64
|
-Continuing
operations
|
|
1.43
|
|
2.10
|
|
2.56
|
|
0.35
|
|
2.77
|
|
4.66
|
|
0.64
|
-Discontinued
operations
|
|
0.19
|
|
-
|
|
-
|
|
-
|
|
0.19
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per ADS *
|
|
8.08
|
|
10.49
|
|
12.80
|
|
1.77
|
|
14.78
|
|
23.29
|
|
3.21
|
-Continuing
operations
|
|
7.13
|
|
10.49
|
|
12.80
|
|
1.77
|
|
13.83
|
|
23.29
|
|
3.21
|
-Discontinued
operations
|
|
0.95
|
|
-
|
|
-
|
|
-
|
|
0.95
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share *
|
|
1.60
|
|
2.07
|
|
2.54
|
|
0.35
|
|
2.93
|
|
4.61
|
|
0.64
|
-Continuing
operations
|
|
1.41
|
|
2.07
|
|
2.54
|
|
0.35
|
|
2.74
|
|
4.61
|
|
0.64
|
-Discontinued
operations
|
|
0.19
|
|
-
|
|
-
|
|
-
|
|
0.19
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per ADS *
|
|
8.00
|
|
10.37
|
|
12.69
|
|
1.75
|
|
14.63
|
|
23.05
|
|
3.18
|
-Continuing
operations
|
|
7.05
|
|
10.37
|
|
12.69
|
|
1.75
|
|
13.69
|
|
23.05
|
|
3.18
|
-Discontinued
operations
|
|
0.95
|
|
-
|
|
-
|
|
-
|
|
0.94
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares used in calculating net income
per share *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
3,274,695
|
|
3,221,083
|
|
3,218,783
|
|
3,218,783
|
|
3,275,980
|
|
3,219,926
|
|
3,219,926
|
Diluted
|
|
3,305,504
|
|
3,256,511
|
|
3,248,916
|
|
3,248,916
|
|
3,310,809
|
|
3,252,707
|
|
3,252,707
|
|
* 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,
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
5,096,835
|
|
6,710,394
|
|
8,159,615
|
|
1,125,262
|
|
9,412,595
|
|
14,870,009
|
|
2,050,669
|
Net
income from discontinued operations
|
(624,864)
|
|
-
|
|
-
|
|
-
|
|
(624,864)
|
|
-
|
|
-
|
Adjustments to reconcile net income to net cash provided
by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
609,036
|
|
1,082,269
|
|
661,363
|
|
91,206
|
|
1,375,216
|
|
1,743,632
|
|
240,458
|
Fair
value changes of equity security investments
|
735,159
|
|
(226,720)
|
|
(78,035)
|
|
(10,762)
|
|
2,276,161
|
|
(304,755)
|
|
(42,028)
|
Impairment losses of investments and other long-term
assets
|
243,085
|
|
-
|
|
47,870
|
|
6,602
|
|
248,085
|
|
47,870
|
|
6,602
|
Fair
value changes of short-term investments
|
(119,882)
|
|
(137,916)
|
|
(96,884)
|
|
(13,361)
|
|
(199,658)
|
|
(234,800)
|
|
(32,380)
|
Share-based compensation cost
|
764,447
|
|
822,413
|
|
787,862
|
|
108,652
|
|
1,510,601
|
|
1,610,275
|
|
222,067
|
Allowance for expected credit losses
|
10,965
|
|
20,720
|
|
8,540
|
|
1,178
|
|
10,652
|
|
29,260
|
|
4,035
|
Losses/ (gains) on disposal of property, equipment and
software
|
481
|
|
(610)
|
|
252
|
|
35
|
|
1,926
|
|
(358)
|
|
(49)
|
|
Unrealized exchange (gains)/ losses
|
(890,066)
|
|
385,961
|
|
(1,466,295)
|
|
(202,211)
|
|
(792,032)
|
|
(1,080,334)
|
|
(148,985)
|
Gains on disposal of long-term investments
|
-
|
|
(5,768)
|
|
(16,382)
|
|
(2,259)
|
|
(4,000)
|
|
(22,150)
|
|
(3,055)
|
Deferred income taxes
|
(169,539)
|
|
577,666
|
|
(334,380)
|
|
(46,113)
|
|
145,689
|
|
243,286
|
|
33,551
|
Share of results on equity method investees
|
(134,569)
|
|
(95,808)
|
|
(129,292)
|
|
(17,830)
|
|
(1,046,067)
|
|
(225,100)
|
|
(31,043)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
82,282
|
|
(1,116,282)
|
|
770,551
|
|
106,264
|
|
294,357
|
|
(345,731)
|
|
(47,678)
|
Inventories
|
17,791
|
|
117,330
|
|
69,410
|
|
9,572
|
|
121,382
|
|
186,740
|
|
25,753
|
Prepayments and other assets
|
(163,612)
|
|
125,827
|
|
(7,233)
|
|
(997)
|
|
(733,455)
|
|
118,594
|
|
16,355
|
Accounts
payable
|
48,452
|
|
(612,939)
|
|
(115,791)
|
|
(15,968)
|
|
(43,921)
|
|
(728,730)
|
|
(100,496)
|
Salary and
welfare payables
|
782,789
|
|
(2,225,737)
|
|
758,106
|
|
104,548
|
|
(973,435)
|
|
(1,467,631)
|
|
(202,396)
|
Taxes
payable
|
(538,234)
|
|
733,716
|
|
(992,892)
|
|
(136,926)
|
|
(464,788)
|
|
(259,176)
|
|
(35,742)
|
Contract
liabilities
|
279,669
|
|
489,991
|
|
(41,196)
|
|
(5,681)
|
|
201,469
|
|
448,795
|
|
61,892
|
Accrued
liabilities and other payables
|
600,934
|
|
(643,836)
|
|
(306,784)
|
|
(42,312)
|
|
497,798
|
|
(950,620)
|
|
(131,099)
|
Net
cash provided by operating activities
|
6,631,159
|
|
6,000,671
|
|
7,678,405
|
|
1,058,899
|
|
11,213,711
|
|
13,679,076
|
|
1,886,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, equipment and software
|
(445,054)
|
|
(652,939)
|
|
(520,544)
|
|
(71,786)
|
|
(1,194,415)
|
|
(1,173,483)
|
|
(161,831)
|
Proceeds from sale of property, equipment and software
|
23,338
|
|
2,504
|
|
4,292
|
|
592
|
|
35,903
|
|
6,796
|
|
937
|
Purchase of intangible assets, content and licensed
copyrights
|
(85,121)
|
|
(826,682)
|
|
(283,321)
|
|
(39,072)
|
|
(228,957)
|
|
(1,110,003)
|
|
(153,076)
|
Net
change in short-term investments with terms of three
months or
less
|
(159,173)
|
|
(723,151)
|
|
1,630,013
|
|
224,789
|
|
1,551,672
|
|
906,862
|
|
125,062
|
Purchase of short-term investments with terms over three
months
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,250,000)
|
|
-
|
|
-
|
Proceeds from maturities of short-term investments with terms
over three
months
|
1,459,172
|
|
104,269
|
|
-
|
|
-
|
|
2,013,003
|
|
104,269
|
|
14,379
|
Investment in long-term investments
|
(899,968)
|
|
(1,229,048)
|
|
(270,228)
|
|
(37,266)
|
|
(2,590,239)
|
|
(1,499,276)
|
|
(206,760)
|
Proceeds from disposal of long-term investments
|
6,413
|
|
41,280
|
|
16,531
|
|
2,280
|
|
40,650
|
|
57,811
|
|
7,973
|
Placement/ rollover of matured time deposits
|
(33,122,029)
|
|
(36,320,103)
|
|
(10,874,831)
|
|
(1,499,708)
|
|
(57,168,026)
|
|
(47,194,934)
|
|
(6,508,479)
|
Proceeds from maturities of time deposits
|
32,100,141
|
|
22,332,349
|
|
21,918,791
|
|
3,022,740
|
|
46,799,936
|
|
44,251,140
|
|
6,102,511
|
Change in other long-term assets
|
(60,900)
|
|
(120,841)
|
|
(31,189)
|
|
(4,301)
|
|
(230,445)
|
|
(152,030)
|
|
(20,966)
|
Net
cash (used in)/ provided by investing activities
|
(1,183,181)
|
|
(17,392,362)
|
|
11,589,514
|
|
1,598,268
|
|
(12,220,918)
|
|
(5,802,848)
|
|
(800,250)
|
|
The accompanying notes
are an integral part of this announcement.
|
NETEASE, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
changes from loans with terms of three months or
less
|
|
2,721,487
|
|
2,638,040
|
|
(14,970,935)
|
|
(2,064,586)
|
|
6,124,682
|
|
(12,332,895)
|
|
(1,700,784)
|
Proceed of loans with terms over three months
|
|
1,641,708
|
|
1,279,559
|
|
2,171,541
|
|
299,469
|
|
3,556,918
|
|
3,451,100
|
|
475,928
|
Payment of loans with terms over three months
|
|
(32,273)
|
|
(40,422)
|
|
(3,233,500)
|
|
(445,920)
|
|
(32,273)
|
|
(3,273,922)
|
|
(451,494)
|
Net
Amounts received/ (paid) related to capital contribution from
or repurchase of
noncontrolling interests shareholders
|
|
33,200
|
|
24,349
|
|
22,228
|
|
3,065
|
|
(68,842)
|
|
46,577
|
|
6,423
|
Cash
paid for repurchase of NetEase's ADSs/ purchase of
subsidiaries' ADSs and
shares
|
|
(2,119,613)
|
|
(2,116,757)
|
|
(2,195,210)
|
|
(302,733)
|
|
(3,363,530)
|
|
(4,311,967)
|
|
(594,647)
|
Dividends paid to NetEase's shareholders
|
|
(1,403,637)
|
|
(1,212,340)
|
|
(2,119,316)
|
|
(292,267)
|
|
(3,087,109)
|
|
(3,331,656)
|
|
(459,456)
|
Net
cash provided by/ (used in) financing
activities
|
|
840,872
|
|
572,429
|
|
(20,325,192)
|
|
(2,802,972)
|
|
3,129,846
|
|
(19,752,763)
|
|
(2,724,030)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash held in
foreign currencies
|
|
74,898
|
|
15,498
|
|
(47,876)
|
|
(6,602)
|
|
53,696
|
|
(32,378)
|
|
(4,465)
|
Net increase/
(decrease) in cash, cash equivalents and restricted
cash
|
6,363,748
|
|
(10,803,764)
|
|
(1,105,149)
|
|
(152,407)
|
|
2,176,335
|
|
(11,908,913)
|
|
(1,642,314)
|
Cash, cash equivalents and restricted cash, at the
beginning
of the period
|
|
13,188,702
|
|
27,588,325
|
|
16,784,561
|
|
2,314,697
|
|
17,376,115
|
|
27,588,325
|
|
3,804,604
|
Cash, cash equivalents and restricted cash, at end of
the period
|
|
19,552,450
|
|
16,784,561
|
|
15,679,412
|
|
2,162,290
|
|
19,552,450
|
|
15,679,412
|
|
2,162,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for income tax, net
|
|
1,055,096
|
|
1,074,579
|
|
1,625,045
|
|
224,104
|
|
2,570,426
|
|
2,699,624
|
|
372,295
|
Cash
paid for interest expense
|
|
93,079
|
|
275,714
|
|
326,646
|
|
45,047
|
|
130,820
|
|
602,360
|
|
83,069
|
|
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,
|
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
18,139,843
|
|
20,065,597
|
|
18,798,646
|
|
2,592,452
|
|
36,781,657
|
|
38,864,243
|
|
5,359,624
|
Youdao
|
|
956,225
|
|
1,163,270
|
|
1,206,634
|
|
166,402
|
|
2,156,766
|
|
2,369,904
|
|
326,825
|
Cloud Music
|
|
2,191,510
|
|
1,959,841
|
|
1,948,539
|
|
268,716
|
|
4,258,716
|
|
3,908,380
|
|
538,990
|
Innovative businesses
and others
|
|
1,871,500
|
|
1,857,579
|
|
2,057,482
|
|
283,740
|
|
3,517,781
|
|
3,915,061
|
|
539,912
|
Total net
revenues
|
|
23,159,078
|
|
25,046,287
|
|
24,011,301
|
|
3,311,310
|
|
46,714,920
|
|
49,057,588
|
|
6,765,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
(6,375,598)
|
|
(6,683,048)
|
|
(6,122,836)
|
|
(844,379)
|
|
(13,427,648)
|
|
(12,805,884)
|
|
(1,766,012)
|
Youdao
|
|
(546,498)
|
|
(561,420)
|
|
(639,459)
|
|
(88,185)
|
|
(1,109,189)
|
|
(1,200,879)
|
|
(165,609)
|
Cloud Music
|
|
(1,905,954)
|
|
(1,520,378)
|
|
(1,422,855)
|
|
(196,221)
|
|
(3,721,603)
|
|
(2,943,233)
|
|
(405,890)
|
Innovative businesses
and others
|
|
(1,389,537)
|
|
(1,384,895)
|
|
(1,450,738)
|
|
(200,066)
|
|
(2,678,610)
|
|
(2,835,633)
|
|
(391,052)
|
Total cost of
revenues
|
|
(10,217,587)
|
|
(10,149,741)
|
|
(9,635,888)
|
|
(1,328,851)
|
|
(20,937,050)
|
|
(19,785,629)
|
|
(2,728,563)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
11,764,245
|
|
13,382,549
|
|
12,675,810
|
|
1,748,073
|
|
23,354,009
|
|
26,058,359
|
|
3,593,612
|
Youdao
|
|
409,727
|
|
601,850
|
|
567,175
|
|
78,217
|
|
1,047,577
|
|
1,169,025
|
|
161,216
|
Cloud Music
|
|
285,556
|
|
439,463
|
|
525,684
|
|
72,495
|
|
537,113
|
|
965,147
|
|
133,100
|
Innovative businesses
and others
|
|
481,963
|
|
472,684
|
|
606,744
|
|
83,674
|
|
839,171
|
|
1,079,428
|
|
148,860
|
Total gross
profit
|
|
12,941,491
|
|
14,896,546
|
|
14,375,413
|
|
1,982,459
|
|
25,777,870
|
|
29,271,959
|
|
4,036,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
64.9 %
|
|
66.7 %
|
|
67.4 %
|
|
67.4 %
|
|
63.5 %
|
|
67.0 %
|
|
67.0 %
|
Youdao
|
|
42.8 %
|
|
51.7 %
|
|
47.0 %
|
|
47.0 %
|
|
48.6 %
|
|
49.3 %
|
|
49.3 %
|
Cloud Music
|
|
13.0 %
|
|
22.4 %
|
|
27.0 %
|
|
27.0 %
|
|
12.6 %
|
|
24.7 %
|
|
24.7 %
|
Innovative businesses
and others
|
|
25.8 %
|
|
25.4 %
|
|
29.5 %
|
|
29.5 %
|
|
23.9 %
|
|
27.6 %
|
|
27.6 %
|
|
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 =
RMB7.2513 on the last trading day of
June 2023 (June 30, 2023) 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, 2023, 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,
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
Share-based
compensation cost included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
173,840
|
|
203,514
|
|
193,001
|
|
26,616
|
|
371,975
|
|
396,515
|
|
54,682
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing expenses
|
31,817
|
|
32,353
|
|
31,069
|
|
4,285
|
|
62,190
|
|
63,422
|
|
8,746
|
General and
administrative expenses
|
297,891
|
|
294,281
|
|
281,326
|
|
38,797
|
|
576,953
|
|
575,607
|
|
79,380
|
Research and
development expenses
|
260,899
|
|
292,265
|
|
282,466
|
|
38,954
|
|
499,483
|
|
574,731
|
|
79,259
|
|
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 subsidiaries to meet the disclosure
requirements under U.S. GAAP or different accounting standards
requirement.
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,
|
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
Net income from
continuing operations attributable to the
Company's shareholders
|
|
4,666,612
|
|
6,754,634
|
|
8,242,767
|
|
1,136,729
|
|
9,060,635
|
|
14,997,401
|
|
2,068,237
|
Add: Share-based
compensation
|
|
743,198
|
|
811,600
|
|
774,683
|
|
106,834
|
|
1,466,801
|
|
1,586,283
|
|
218,758
|
Non-GAAP net income
from continuing operations
attributable to the Company's
shareholders
|
|
5,409,810
|
|
7,566,234
|
|
9,017,450
|
|
1,243,563
|
|
10,527,436
|
|
16,583,684
|
|
2,286,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net
income from continuing
operations per share *
|
|
1.65
|
|
2.35
|
|
2.80
|
|
0.39
|
|
3.21
|
|
5.15
|
|
0.71
|
Non-GAAP basic net
income from continuing
operations per ADS *
|
|
8.26
|
|
11.74
|
|
14.01
|
|
1.93
|
|
16.07
|
|
25.75
|
|
3.55
|
Non-GAAP diluted net
income from continuing
operations per share *
|
|
1.64
|
|
2.32
|
|
2.78
|
|
0.38
|
|
3.18
|
|
5.10
|
|
0.70
|
Non-GAAP diluted net
income from continuing
operations per ADS *
|
|
8.18
|
|
11.62
|
|
13.88
|
|
1.91
|
|
15.90
|
|
25.49
|
|
3.52
|
|
* Each ADS
represents five ordinary shares.
|
The accompanying notes
are an integral part of this announcement.
|
Note 5: A reconciliation statement to the International
Financial Reporting Standards in respect of the Company's unaudited
financial results for the six months ended June 30, 2023 prepared in accordance with U.S.
GAAP set forth above will be published pursuant to the rules and
regulations applicable to the Company in Hong Kong by September
30, 2023.
View original
content:https://www.prnewswire.com/news-releases/netease-announces-second-quarter-2023-unaudited-financial-results-301909008.html
SOURCE NetEase, Inc.