NetEase, Inc (NASDAQ:NTES) reported fiscal second-quarter 2024 revenue growth of 6.1% year-on-year to $3.51 billion (25.5 billion Chinese yuan), missing the analyst consensus estimate of $3.70 billion.

The Chinese gaming player's adjusted EPADS of $1.66 beat the analyst consensus estimate of $1.65.

Segments and margins: Games and related value-added services revenues grew 6.7% year over year to $2.8 billion. The corresponding gross margin increased by 260 bps to 70.0%, mainly attributable to changes in product mix.

Youdao, Inc's (NYSE:DAO) revenue climbed by 9.5% year over year to $181.9 million, and the corresponding gross margin improved by 182 bps to 48.2%, mainly due to increased revenue contribution from its online marketing services.

Cloud Music's revenues were $280.8 million, up 4.7% year over year, and its gross margin expanded by 510 bps to 32.1%.

Innovative businesses and other revenue remained stable year over year at $284.5 million, and the gross margin increased by 450 bps to 34.0%, mainly due to changes in the product mix within the segment.

As of June 30, 2024, NetEase held $16 billion in cash and equivalents and generated $898.8 million in operating cash flow.

Dividend: The board of directors has approved a dividend of $0.4350 per ADS for the second quarter of 2024.

CEO William Ding: "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."

Price Action: NTES shares traded lower by 4.91% at $88.04 premarket at the last check Thursday.