Due to the drag from the gaming business, netease's net revenue in the third quarter decreased by nearly 4% year-on-year, and net income decreased by 16.7% year-on-year. Gaming-related business revenue decreased by 4.2% year-on-year, but performance in PC games was outstanding, with a 29% year-on-year increase in revenue and a 30% increase compared to the previous quarter.
Due to the decline in the gaming business, netease's revenue and net income both shrank in the third quarter, but the performance of client games was outstanding, achieving double-digit growth in both revenue compared to the previous quarter and year-over-year.
On Thursday, November 14, netease released its third-quarter financial report:
1) Key Financial Figures:
Net income: 26.2 billion yuan (3.7 billion USD), a year-on-year decrease of 3.9%, expected 26.59 billion yuan;
Gross profit: 16.5 billion yuan (2.3 billion USD), a year-on-year decrease of 2.9%, expected 16.55 billion yuan;
Net income: 6.5 billion yuan (0.932 billion USD), a year-on-year decrease of 16.67%, a quarter-on-quarter decrease of 4.41%;
Earnings per share: 0.29 USD;
Operating expenses: 9.3 billion yuan (1.3 billion USD), up 3.33% month-on-month, mainly due to increased marketing expenses for gaming and related value-added services.
2) Main business:
Net income from gaming and related value-added services: 20.9 billion yuan (3 billion USD), down 4.2% year-on-year, up 5% month-on-month, of which net income from online games accounts for about 96.8%, and net income from mobile games accounts for about 70.8% of net income from online games; revenue from PC online games increased by 29% year-on-year and 30% month-on-month.
Youdao net income: 1.6 billion yuan (0.224 billion USD), up 2.2% year-on-year;
Net income from NetEase Cloud Music: 2 billion yuan (0.285 billion USD), up 1.3% year-on-year;
Net income from innovation and other businesses: 1.8 billion yuan (0.253 billion USD), down 10.3% year-on-year.
As of press time, Netease's pre-market trading surged by 5.51%.
Netease's PC games have performed exceptionally well, with revenue increasing by 29% year-on-year.
In the third quarter, Netease's game business performed fairly, with net income of 20.9 billion yuan, a 5% increase quarter-on-quarter, but a 4.2% decrease year-on-year. However, the PC games performed exceptionally well, with revenue increasing by 29% year-on-year and 30% quarter-on-quarter.
According to the report, the gross profit from games and related value-added services increased quarter-on-quarter mainly due to the increase in net income from PC games, while the year-on-year decline was mainly due to the decrease in net income from mobile games.
Netease's games "Identity V" and "Naraka: Bladepoint" have seen stable increases in popularity. "Naraka: Bladepoint" launched its seasonal update in September and climbed to fourth place on the iOS best-seller list. After "Peak Speed" launched in Japan in August, it quickly topped the free charts of Apple and Google app stores.
NetEase CEO and director Ding Lei said:
"In the process of diversification and globalization, we continue to launch various new games to attract global players, achieving milestone breakthroughs. We will continue to prioritize player needs, drive development through innovation, and bring excellent gaming experiences to more players both domestically and internationally."
Editor/ping
