HANGZHOU, China, Aug. 18,
2022 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and
HKEX: 9999, "NetEase" or the "Company"), one of China's leading internet and online game
services providers, today announced its unaudited financial results
for the second quarter ended June 30,
2022.
Second Quarter 2022 Financial Highlights
- Net revenues were RMB23.2 billion
(US$3.5 billion), an increase of
12.8% compared with the second quarter of 2021.
- Games and related value-added services net
revenues were RMB18.1 billion
(US$2.7 billion), an increase of
15.0% compared with the second quarter of 2021.[1]
- Youdao net revenues were RMB956.2 million (US$142.8
million), a decrease of 26.1% compared with the second
quarter of 2021.
- Cloud Music net revenues were RMB2.2 billion (US$327.2
million), an increase of 29.5% compared with the second
quarter of 2021.
- Innovative businesses and others net revenues
were RMB1.9 billion (US$279.4 million), an increase of 6.1% compared
with the second quarter of 2021.[1]
- Gross profit was RMB12.9 billion
(US$1.9 billion), an increase of
15.7% compared with the second quarter of 2021.
- Total operating expenses were RMB8.0
billion (US$1.2 billion), an
increase of 7.6% compared with the second quarter of 2021.
- Net income from continuing operations attributable to the
Company's shareholders was RMB4.7
billion (US$696.7 million).
Non-GAAP net income from continuing operations attributable to the
Company's shareholders was RMB5.4
billion (US$807.7 million).
[2]
- Basic net income from continuing operations per share was
US$0.21 (US$1.07 per ADS). Non-GAAP basic net income from
continuing operations per share was US$0.25 (US$1.23
per ADS).[2]
[1] Effective as of the second
quarter of 2022, the Company renamed its "online game services"
segment as "games and related value-added services," and
transferred certain business lines that are related or ancillary to
its games from "innovative businesses and others" to "games and
related value-added services." The Company retrospectively recast
prior periods' segment information to conform to the current period
presentation. See "Change in Segment Reporting" in this
announcement.
|
[2] 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 2022 and Recent Operational Highlights
- Delivered captivating content updates for popular title
Naraka: Bladepoint and launched its Xbox version in
June.
- Diablo® Immortal™, co-developed by NetEase
and Blizzard Entertainment, made its debut in the global market,
which topped iOS download charts in multiple regions.
- Extended the longevity of leading franchise titles including
both the Fantasy Westward Journey and Westward Journey
Online series and maintained the popularity of other hit titles
including Identity V and Infinite Lagrange.
- Propelled pipeline by advancing new games under development
including Naraka: Bladepoint mobile game, Justice
mobile game and Ghost World Chronicle, as well as the
roll-out of Harry Potter: Magic
Awakened in international markets.
- Achieved positive operating cashflow from Youdao, maintained
sound development of its STEAM courses and demonstrated the
resilience of its smart devices.
- Enhanced content and product innovation at Cloud Music, driving
solid growth in net revenues and continued margin improvement while
securing multiple licensing agreements with major overseas and
domestic music labels including SM Entertainment and TF
Entertainment.
"In the second quarter, we generated solid results with total
net revenues of RMB23.2 billion, an
increase of 12.8% year-over-year," said Mr. William Ding, CEO and Director of NetEase.
"Players continued to gravitate to our longstanding games in the
second quarter, highlighting our strength in game operations
longevity. Moreover, the launch of Diablo®
Immortal™ attracted the attention of gamers around the world,
showcasing our exceptional mobile game development capabilities.
With our strong in-house R&D team in China and our very own studios in Canada, Japan
and the U.S., as well as plans for other regions in the
future, we are spearheading the next generation of top-quality
games for the global gaming community.
"Youdao and Cloud Music are also making key advancements that
bolster their operations. With exciting gains across our business
lines, we hope to make the NetEase brand synonymous with impressive
technology, outstanding service and entertainment in its finest
form," Mr. Ding concluded.
Second Quarter 2022 Financial Results
Net Revenues
Net revenues for the second quarter of 2022 were
RMB23,159.1 million (US$3,457.6 million), compared with
RMB23,555.8 million and RMB20,524.5 million for the preceding
quarter and the second quarter of 2021, respectively.
Net revenues from games and related value-added services, which
include both the operation of online games as well as other related
or ancillary services to the games, were RMB18,139.8 million (US$2,708.2 million) for the second quarter
of 2022, compared with RMB18,641.8
million and RMB15,774.8 million for the preceding
quarter and the second quarter of 2021, respectively. Net revenues
from the operation of online games, which is the primary component
of this segment, accounted for approximately 92.8% of net revenues
from games and related value-added services for the second quarter
of 2022, compared with 92.7% and 92.1% for the
preceding quarter and the second quarter of 2021,
respectively. Net revenues from mobile games accounted for
approximately 66.1% of net revenues from the operation of online
games for the second quarter of 2022, compared with 66.9% and
72.1% for the preceding quarter and the second
quarter of 2021, respectively.
Net revenues from Youdao were RMB956.2
million (US$142.8 million) for the second quarter of
2022, compared with RMB1,200.5
million and RMB1,293.4 million for the preceding quarter
and the second quarter of 2021, respectively.
Net revenues from Cloud Music were RMB2,191.5 million (US$327.2 million) for the second quarter of
2022, compared with RMB2,067.2
million and RMB1,692.5 million
for the preceding quarter and the second quarter of 2021,
respectively.
Net revenues from innovative businesses and others were
RMB1,871.5 million (US$279.4 million) for the second quarter of 2022,
compared with RMB1,646.3 million and
RMB1,763.8 million for the preceding
quarter and the second quarter of 2021, respectively.
Gross Profit
Gross profit for the second quarter of 2022 was RMB12,941.5 million (US$1,932.1 million), compared with
RMB12,836.4 million and RMB11,189.6 million for the preceding
quarter and the second quarter of 2021, respectively.
The year-over-year increase in games and related value-added
services gross profit was primarily due to increased net revenues
from both mobile and PC games, including the newly launched
Naraka: Bladepoint and Harry
Potter: Magic Awakened which were released in the third
quarter of 2021 and other existing games such as Fantasy
Westward Journey Online.
The quarter-over-quarter decrease in Youdao gross profit
primarily resulted from a decline in economic scale due to
decreased learning services revenues in the second quarter of 2022.
The year-over-year decrease was mainly due to the conclusion of its
after-school tutoring services for academic subjects under
China's compulsory education
system.
The quarter-over-quarter and year-over-year increases in Cloud
Music gross profit were primarily due to increased net revenues
from its membership subscriptions and social entertainment
services, as well as improved cost control.
The quarter-over-quarter increase in innovative businesses and
others gross profit was primarily due to increased gross profit
contribution from Yanxuan and advertising services.
Gross Profit Margin
Gross profit margin for games and related value-added services
for the second quarter of 2022 was 64.9%, compared with 62.2% and
63.2% for the preceding quarter and the second quarter of 2021,
respectively. Gross profit margin for games and related
value-added services is generally stable, fluctuating within a
narrow band based on the revenue mix of NetEase's mobile and PC
games, self-developed, co-developed and licensed games, as well as
the relative revenue contribution from different distribution
channels.
Gross profit margin for Youdao for the second quarter of 2022
was 42.8%, compared with 53.1% and 52.3% for the preceding quarter
and the second quarter of 2021, respectively. The
quarter-over-quarter and year-over-year decreases were primarily
attributable to the factors enumerated above.
Gross profit margin for Cloud Music was 13.0% for the second
quarter of 2022, compared with 12.2% and 4.1% for the preceding
quarter and the second quarter of 2021, 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 2022 was 25.8%, compared with 21.7% and 27.3% for
the preceding quarter and the second quarter of 2021,
respectively. The quarter-over-quarter and year-over-year
fluctuations were mainly due to changes in the gross profit margin
from advertising services.
Operating Expenses
Total operating expenses for the second quarter of 2022 were
RMB7,995.2 million (US$1,193.6 million), compared with RMB7,329.3 million and RMB7,431.5 million for the preceding quarter and
the second quarter of 2021, respectively. The quarter-over-quarter
and year-over-year increases were mainly due to increased marketing
expenditures related to games and related value-added services, as
well as higher staff-related costs and research and development
investments.
Other Income/ (Expenses)
Other income/ (expenses) consisted of investment income/ (loss),
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
2022.
Income Taxes
The Company recorded a net income tax charge of RMB1,259.3 million (US$188.0 million) for the second quarter of 2022,
compared with RMB1,219.3 million and
RMB1,113.2 million for the preceding
quarter and the second quarter of 2021, respectively. The effective
tax rate for the second quarter of 2022 was 22.0%, compared with
22.0% and 24.3% for the preceding quarter and the second quarter of
2021, 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 from continuing operations attributable to the
Company's shareholders totaled RMB4,666.6
million (US$696.7 million) for
the second quarter of 2022, compared with RMB4,394.0 million and RMB3,541.8 million for the preceding quarter and
the second quarter of 2021, respectively. Net income from
discontinued operations attributable to the Company's shareholders
totaled RMB624.9 million
(US$93.3 million), which was related
to the disposal of the Kaola business.
Non-GAAP net income from continuing operations attributable to
the Company's shareholders totaled RMB5,409.8 million (US$807.7 million) for the second quarter of 2022,
compared with RMB5,117.6 million and
RMB4,227.9 million for the preceding
quarter and the second quarter of 2021, respectively.
NetEase reported basic net income from continuing operations of
US$0.21 per share (US$1.07 per ADS) for the second quarter of 2022,
compared with US$0.20 per share
(US$1.00 per ADS) and US$0.16 per share (US$0.79 per ADS) for the preceding quarter and
the second quarter of 2021, respectively.
NetEase reported non-GAAP basic net income from continuing
operations of US$0.25 per share
(US$1.23 per ADS) for the second
quarter of 2022, compared with US$0.23 per share (US$1.17 per ADS) and US$0.19 per share (US$0.94 per ADS) for the preceding quarter and
the second quarter of 2021, respectively.
Quarterly Dividend
The board of directors has approved a dividend of US$0.0720 per share (US$0.3600 per ADS) for the second quarter of 2022
to holders of ordinary shares and holders of ADSs as of the close
of business on September 1, 2022,
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 1, 2022 (Beijing/ Hong Kong Time). The payment date is
expected to be on September 13, 2022
for holders of ordinary shares and on or around September 16, 2022 for holders of ADSs.
NetEase paid a dividend of US$0.0644 per share (US$0.3220 per ADS) for the first quarter of 2022
in June 2022.
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.
Other Information
As of June 30, 2022, 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 RMB87.7
billion (US$13.1 billion),
compared with RMB85.6 billion as of
December 31, 2021. Cash flow
generated from operating activities was RMB6.6 billion (US$990.0 million) for the second quarter of 2022,
compared with RMB4.6 billion and
RMB4.7 billion for the preceding
quarter and the second quarter of 2021, respectively.
Change in Segment Reporting
Effective as of the second quarter of 2022, the Company
implemented certain changes to align its segment financial
reporting more closely with the manner in which the Company's
management currently receives and uses financial information to
allocate resources and evaluate the performance of reporting
segments. The Company renamed its "online game services" segment as
"games and related value-added services," and transferred certain
business lines that are related or ancillary to its games from
"innovative businesses and others" to "games and related
value-added services," including the NetEase CC live streaming
service (a platform offering various live streaming content with a
primary focus on game broadcasting) and other value-added
services. The Company retrospectively recast prior periods'
segment information to conform to current period presentation.
These changes had no impact on NetEase's previously reported
consolidated net revenues, net income or net income per share.
Share Repurchase/ Purchase Program
On February 25, 2021, the Company
announced that its board of directors had approved a new share
repurchase program of up to US$2.0
billion of the Company's outstanding ADSs and ordinary
shares in open market transactions for a period not to exceed 24
months beginning on March 2, 2021. On
August 31, 2021, the Company
announced that its board of directors had approved an
amendment to such program to increase the total authorized
repurchase amount to US$3.0 billion.
As of June 30, 2022, approximately 23.6 million ADSs had been
repurchased under this program for a total cost of US$2.3 billion.
On August 31, 2021, the Company
announced that its board of directors had approved a share purchase
program of up to US$50.0 million of
Youdao's outstanding ADSs for a period not to exceed 36
months beginning on September 2,
2021. Under the terms of this program, NetEase may purchase
Youdao's ADSs in open-market transactions on the New York
Stock Exchange. As of June 30, 2022,
approximately 1.7 million ADSs had been purchased under this
program for a total cost of US$17.7
million.
The Company also purchased approximately 0.8 million ordinary
shares of Cloud Music in open market transactions on the Hong Kong
Stock Exchange for a total cost of US$8.3
million during the second quarter of 2022.
The extent to which NetEase repurchases its ADSs and its
ordinary shares or purchases Youdao's ADSs and Cloud Music's
ordinary shares will depend upon a variety of factors, including
market conditions. These programs may be suspended or discontinued
at any time.
** The United States dollar
(US$) 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 18,
2022 (Beijing/ Hong Kong
Time: 8:00 p.m., Thursday, August 18, 2022). 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 1-323-701-0160 and providing conference ID: 1239376, 15
minutes prior to the initiation of the call. A replay of the call
will be available by dialing 1-719-457-0820 and entering passcode
1239376#. The replay will be available through August 31, 2022.
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.
As a leading internet technology company based in China, NetEase, Inc. (NASDAQ: NTES and
HKEX:9999, "NetEase") provides premium online services centered
around content creation. With extensive offerings across its
expanding gaming ecosystem, the Company develops and operates some
of China's most popular and
longest running mobile and PC games. Powered by industry-leading
in-house R&D capabilities in China and globally, 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),
China's leading technology-focused
intelligent learning company, and Cloud Music (HKEX: 9899),
China's leading online music
content community, as well as Yanxuan, NetEase's private
label consumer lifestyle brand.
NetEase's ESG initiatives are among the best in the global media
and entertainment industry, earning it a distinction as one of the
S&P Global Industry Movers and 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
game market will not continue to grow or that NetEase will not be
able to maintain its position in that market in China or globally; the risk that COVID-19 or
other health risks in China or
globally could adversely affect the Company's operations or
financial results; 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, including, among others, initiatives to
enhance supervision of companies listed on an overseas stock
exchange and tighten scrutiny over data privacy and data security,
as well as the risk that NetEase's ADSs could be barred from
trading in the United States as a
result of the Holding Foreign Companies Accountable Act and the
rules promulgated thereunder; 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; competition in NetEase's existing and
potential markets; 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 the 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,
|
|
|
2021
|
|
2022
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
14,498,157
|
|
16,461,908
|
|
2,457,698
|
Time
deposits
|
|
70,754,846
|
|
84,916,751
|
|
12,677,737
|
Restricted
cash
|
|
2,876,628
|
|
3,089,413
|
|
461,237
|
Accounts
receivable, net
|
|
5,507,988
|
|
5,213,151
|
|
778,303
|
Inventories
|
|
964,733
|
|
843,767
|
|
125,971
|
Prepayments and other current assets, net
|
|
6,235,857
|
|
7,317,644
|
|
1,092,495
|
Short-term
investments
|
|
12,281,548
|
|
10,166,531
|
|
1,517,823
|
Assets
held for sale
|
|
497
|
|
-
|
|
-
|
Total current
assets
|
|
113,120,254
|
|
128,009,165
|
|
19,111,264
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property,
equipment and software, net
|
|
5,433,858
|
|
6,022,365
|
|
899,115
|
Land use
right, net
|
|
4,108,090
|
|
4,156,674
|
|
620,575
|
Deferred
tax assets
|
|
1,297,954
|
|
1,254,640
|
|
187,313
|
Time
deposits
|
|
5,823,840
|
|
4,473,840
|
|
667,927
|
Restricted
cash
|
|
1,330
|
|
1,129
|
|
169
|
Other
long-term assets, net
|
|
23,857,510
|
|
24,261,773
|
|
3,622,187
|
Assets
held for sale
|
|
1,088
|
|
-
|
|
-
|
Total non-current
assets
|
|
40,523,670
|
|
40,170,421
|
|
5,997,286
|
Total
assets
|
|
153,643,924
|
|
168,179,586
|
|
25,108,550
|
|
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interests
and Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
985,059
|
|
942,070
|
|
140,647
|
Salary and
welfare payables
|
|
4,133,254
|
|
3,211,330
|
|
479,439
|
Taxes
payable
|
|
4,537,050
|
|
3,260,873
|
|
486,835
|
Short-term
loans
|
|
19,352,313
|
|
28,027,125
|
|
4,184,340
|
Contract
liabilities
|
|
12,132,743
|
|
12,316,763
|
|
1,838,844
|
Accrued
liabilities and other payables
|
|
9,360,907
|
|
9,686,526
|
|
1,446,160
|
Total current
liabilities
|
|
50,501,326
|
|
57,444,687
|
|
8,576,265
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Deferred
tax liabilities
|
|
1,345,874
|
|
1,448,250
|
|
216,218
|
Long-term
loans
|
|
1,275,140
|
|
3,355,700
|
|
500,993
|
Other
long-term payable
|
|
1,097,708
|
|
1,023,880
|
|
152,861
|
Total non-current
liabilities
|
|
3,718,722
|
|
5,827,830
|
|
870,072
|
Total
liabilities
|
|
54,220,048
|
|
63,272,517
|
|
9,446,337
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
145,238
|
|
142,579
|
|
21,286
|
|
|
|
|
|
|
|
NetEase, Inc.'s
shareholders' equity
|
|
95,328,080
|
|
100,830,817
|
|
15,053,645
|
Noncontrolling
interests
|
|
3,950,558
|
|
3,933,673
|
|
587,282
|
Total shareholders'
equity
|
|
99,278,638
|
|
104,764,490
|
|
15,640,927
|
|
|
|
|
|
|
|
Total liabilities,
redeemable noncontrolling
interests and shareholders'
equity
|
|
153,643,924
|
|
168,179,586
|
|
25,108,550
|
|
|
|
|
|
|
|
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,
|
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
20,524,501
|
|
23,555,842
|
|
23,159,078
|
|
3,457,559
|
|
41,041,712
|
|
46,714,920
|
|
6,974,354
|
Cost of
revenues
|
|
(9,334,887)
|
|
(10,719,463)
|
|
(10,217,587)
|
|
(1,525,446)
|
|
(18,799,459)
|
|
(20,937,050)
|
|
(3,125,819)
|
Gross
profit
|
|
11,189,614
|
|
12,836,379
|
|
12,941,491
|
|
1,932,113
|
|
22,242,253
|
|
25,777,870
|
|
3,848,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
(3,013,447)
|
|
(2,915,489)
|
|
(3,300,705)
|
|
(492,782)
|
|
(5,780,129)
|
|
(6,216,194)
|
|
(928,053)
|
General and
administrative expenses
|
|
(1,011,183)
|
|
(1,015,769)
|
|
(1,112,755)
|
|
(166,130)
|
|
(1,961,377)
|
|
(2,128,524)
|
|
(317,780)
|
Research and
development expenses
|
|
(3,406,859)
|
|
(3,398,082)
|
|
(3,581,700)
|
|
(534,734)
|
|
(6,467,048)
|
|
(6,979,782)
|
|
(1,042,054)
|
Total operating
expenses
|
|
(7,431,489)
|
|
(7,329,340)
|
|
(7,995,160)
|
|
(1,193,646)
|
|
(14,208,554)
|
|
(15,324,500)
|
|
(2,287,887)
|
Operating
profit
|
|
3,758,125
|
|
5,507,039
|
|
4,946,331
|
|
738,467
|
|
8,033,699
|
|
10,453,370
|
|
1,560,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income/
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income/
(loss), net
|
|
889,392
|
|
(548,702)
|
|
(707,489)
|
|
(105,625)
|
|
1,584,690
|
|
(1,256,191)
|
|
(187,544)
|
Interest income,
net
|
|
386,207
|
|
458,244
|
|
505,991
|
|
75,542
|
|
775,135
|
|
964,235
|
|
143,956
|
Exchange
(losses)/gains, net
|
|
(591,720)
|
|
(97,880)
|
|
865,283
|
|
129,183
|
|
(312,401)
|
|
767,403
|
|
114,570
|
Other, net
|
|
147,588
|
|
216,330
|
|
121,175
|
|
18,091
|
|
295,555
|
|
337,505
|
|
50,388
|
Income before
tax
|
|
4,589,592
|
|
5,535,031
|
|
5,731,291
|
|
855,658
|
|
10,376,678
|
|
11,266,322
|
|
1,682,018
|
Income tax
|
|
(1,113,228)
|
|
(1,219,271)
|
|
(1,259,320)
|
|
(188,012)
|
|
(2,386,636)
|
|
(2,478,591)
|
|
(370,044)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
|
3,476,364
|
|
4,315,760
|
|
4,471,971
|
|
667,646
|
|
7,990,042
|
|
8,787,731
|
|
1,311,974
|
Net income from
discontinued operations
|
|
-
|
|
-
|
|
624,864
|
|
93,290
|
|
-
|
|
624,864
|
|
93,290
|
Net
income
|
|
3,476,364
|
|
4,315,760
|
|
5,096,835
|
|
760,936
|
|
7,990,042
|
|
9,412,595
|
|
1,405,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of redeemable
noncontrolling
interests
|
|
(145,415)
|
|
(733)
|
|
(754)
|
|
(113)
|
|
(289,242)
|
|
(1,487)
|
|
(222)
|
Net loss attributable
to noncontrolling
interests
|
|
210,805
|
|
78,996
|
|
195,395
|
|
29,172
|
|
280,106
|
|
274,391
|
|
40,965
|
Net income
attributable to the
Company's shareholders
|
|
3,541,754
|
|
4,394,023
|
|
5,291,476
|
|
789,995
|
|
7,980,906
|
|
9,685,499
|
|
1,446,007
|
Including:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Net income from
continuing operations
attributable to the Company's shareholders
|
|
3,541,754
|
|
4,394,023
|
|
4,666,612
|
|
696,705
|
|
7,980,906
|
|
9,060,635
|
|
1,352,717
|
-Net income from
discontinued operations
attributable to the Company's shareholders
|
|
-
|
|
-
|
|
624,864
|
|
93,290
|
|
-
|
|
624,864
|
|
93,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share *
|
|
1.06
|
|
1.34
|
|
1.62
|
|
0.24
|
|
2.38
|
|
2.96
|
|
0.44
|
-Continuing
operations
|
|
1.06
|
|
1.34
|
|
1.43
|
|
0.21
|
|
2.38
|
|
2.77
|
|
0.41
|
-Discontinued
operations
|
|
-
|
|
-
|
|
0.19
|
|
0.03
|
|
-
|
|
0.19
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS *
|
|
5.29
|
|
6.70
|
|
8.08
|
|
1.21
|
|
11.92
|
|
14.78
|
|
2.21
|
-Continuing
operations
|
|
5.29
|
|
6.70
|
|
7.13
|
|
1.07
|
|
11.92
|
|
13.83
|
|
2.07
|
-Discontinued
operations
|
|
-
|
|
-
|
|
0.95
|
|
0.14
|
|
-
|
|
0.95
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share *
|
|
1.05
|
|
1.33
|
|
1.60
|
|
0.24
|
|
2.35
|
|
2.93
|
|
0.44
|
-Continuing
operations
|
|
1.05
|
|
1.33
|
|
1.41
|
|
0.21
|
|
2.35
|
|
2.74
|
|
0.41
|
-Discontinued
operations
|
|
-
|
|
-
|
|
0.19
|
|
0.03
|
|
-
|
|
0.19
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per ADS *
|
|
5.23
|
|
6.63
|
|
8.00
|
|
1.19
|
|
11.76
|
|
14.63
|
|
2.18
|
-Continuing
operations
|
|
5.23
|
|
6.63
|
|
7.05
|
|
1.05
|
|
11.76
|
|
13.69
|
|
2.04
|
-Discontinued
operations
|
|
-
|
|
-
|
|
0.95
|
|
0.14
|
|
-
|
|
0.94
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary
shares used in calculating net income
per share *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
3,347,507
|
|
3,277,280
|
|
3,274,695
|
|
3,274,695
|
|
3,348,567
|
|
3,275,980
|
|
3,275,980
|
Diluted
|
|
3,385,953
|
|
3,316,129
|
|
3,305,504
|
|
3,305,504
|
|
3,392,961
|
|
3,310,809
|
|
3,310,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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,
|
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
3,476,364
|
|
4,315,760
|
|
5,096,835
|
|
760,936
|
|
7,990,042
|
|
9,412,595
|
|
1,405,264
|
Net
income from discontinued operations
|
|
-
|
|
-
|
|
(624,864)
|
|
(93,290)
|
|
-
|
|
(624,864)
|
|
(93,290)
|
Adjustments to reconcile net income to net cash provided
by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
814,370
|
|
766,180
|
|
609,036
|
|
90,927
|
|
1,634,200
|
|
1,375,216
|
|
205,314
|
Fair
value changes of equity security investments
|
|
(203,720)
|
|
1,541,002
|
|
735,159
|
|
109,756
|
|
(681,317)
|
|
2,276,161
|
|
339,822
|
Impairment losses of investments and other long-term
assets
|
|
4,797
|
|
5,000
|
|
243,085
|
|
36,292
|
|
4,797
|
|
248,085
|
|
37,038
|
Fair
value changes of short-term investments
|
|
(170,676)
|
|
(79,776)
|
|
(119,882)
|
|
(17,898)
|
|
(288,680)
|
|
(199,658)
|
|
(29,808)
|
Share-based compensation cost
|
|
700,114
|
|
746,154
|
|
764,447
|
|
114,129
|
|
1,350,367
|
|
1,510,601
|
|
225,527
|
Allowance for/ (reversal of) expected credit losses
|
|
27,384
|
|
(313)
|
|
10,965
|
|
1,637
|
|
40,988
|
|
10,652
|
|
1,590
|
Losses on disposal of property, equipment and
software
|
|
1,424
|
|
1,445
|
|
481
|
|
72
|
|
1,265
|
|
1,926
|
|
288
|
Unrealized exchange losses/(gains)
|
|
572,708
|
|
98,034
|
|
(890,066)
|
|
(132,883)
|
|
298,661
|
|
(792,032)
|
|
(118,247)
|
Gains on disposal of long-term investments, business and
subsidiaries
|
|
(166,505)
|
|
(4,000)
|
|
-
|
|
-
|
|
(173,828)
|
|
(4,000)
|
|
(597)
|
Deferred income taxes
|
|
202,894
|
|
315,228
|
|
(169,539)
|
|
(25,312)
|
|
530,969
|
|
145,689
|
|
21,751
|
Share of results on equity method investees and revaluation
results from previously
held equity interest
|
|
(342,760)
|
|
(911,498)
|
|
(134,569)
|
|
(20,091)
|
|
(394,652)
|
|
(1,046,067)
|
|
(156,174)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
573,111
|
|
212,075
|
|
82,282
|
|
12,284
|
|
88,768
|
|
294,357
|
|
43,946
|
Inventories
|
|
(9,608)
|
|
103,591
|
|
17,791
|
|
2,656
|
|
(263,103)
|
|
121,382
|
|
18,122
|
Prepayments and other assets
|
|
593,379
|
|
(569,843)
|
|
(163,612)
|
|
(24,426)
|
|
(191,845)
|
|
(733,455)
|
|
(109,502)
|
Accounts
payable
|
|
(178,097)
|
|
(92,373)
|
|
48,452
|
|
7,234
|
|
(238,751)
|
|
(43,921)
|
|
(6,557)
|
Salary and
welfare payables
|
|
856,775
|
|
(1,756,224)
|
|
782,789
|
|
116,867
|
|
(369,380)
|
|
(973,435)
|
|
(145,330)
|
Taxes
payable
|
|
(1,397,390)
|
|
73,446
|
|
(538,234)
|
|
(80,355)
|
|
161,228
|
|
(464,788)
|
|
(69,391)
|
Contract
liabilities
|
|
(381,446)
|
|
(78,200)
|
|
279,669
|
|
41,754
|
|
359,492
|
|
201,469
|
|
30,078
|
Accrued
liabilities and other payables
|
|
(250,312)
|
|
(103,136)
|
|
600,934
|
|
89,717
|
|
406,252
|
|
497,798
|
|
74,319
|
Net
cash provided by operating activities
|
|
4,722,806
|
|
4,582,552
|
|
6,631,159
|
|
990,006
|
|
10,265,473
|
|
11,213,711
|
|
1,674,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, equipment and software
|
|
(421,872)
|
|
(749,361)
|
|
(445,054)
|
|
(66,445)
|
|
(751,618)
|
|
(1,194,415)
|
|
(178,321)
|
Proceeds from sale of property, equipment and software
|
|
2,458
|
|
12,565
|
|
23,338
|
|
3,484
|
|
3,977
|
|
35,903
|
|
5,360
|
Purchase of intangible assets, content and licensed
copyrights
|
|
(566,736)
|
|
(143,836)
|
|
(85,121)
|
|
(12,708)
|
|
(992,869)
|
|
(228,957)
|
|
(34,182)
|
Net
change in short-term investments with terms of three
months or
less
|
|
1,668,673
|
|
1,710,845
|
|
(159,173)
|
|
(23,764)
|
|
5,001,283
|
|
1,551,672
|
|
231,659
|
Purchase of short-term investments with terms over three
months
|
|
(2,450,000)
|
|
(1,250,000)
|
|
-
|
|
-
|
|
(10,355,000)
|
|
(1,250,000)
|
|
(186,620)
|
Proceeds from maturities of short-term investments with terms
over three
months
|
|
813,211
|
|
553,831
|
|
1,459,172
|
|
217,849
|
|
3,670,552
|
|
2,013,003
|
|
300,533
|
Investment in long-term investments and acquisition of
subsidiaries
|
|
(3,376,973)
|
|
(1,690,271)
|
|
(899,968)
|
|
(134,362)
|
|
(3,935,414)
|
|
(2,590,239)
|
|
(386,713)
|
Proceeds from disposal of long-term investments, businesses
and
subsidiaries
|
|
266,284
|
|
34,237
|
|
6,413
|
|
957
|
|
465,184
|
|
40,650
|
|
6,069
|
Placement/rollover of matured time deposits
|
|
(27,223,584)
|
|
(24,045,997)
|
|
(33,122,029)
|
|
(4,944,989)
|
|
(42,946,333)
|
|
(57,168,026)
|
|
(8,534,962)
|
Proceeds from maturities of time deposits
|
|
25,790,186
|
|
14,699,795
|
|
32,100,141
|
|
4,792,425
|
|
37,271,321
|
|
46,799,936
|
|
6,987,046
|
Change in other long-term assets
|
|
(44,877)
|
|
(169,545)
|
|
(60,900)
|
|
(9,092)
|
|
(99,530)
|
|
(230,445)
|
|
(34,405)
|
Net
cash used in investing activities
|
|
(5,543,230)
|
|
(11,037,737)
|
|
(1,183,181)
|
|
(176,645)
|
|
(12,668,447)
|
|
(12,220,918)
|
|
(1,824,536)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
|
|
2021
|
|
2022
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
changes in bank loans with terms of three months or
less
|
4,978,642
|
|
3,403,195
|
|
2,721,487
|
|
406,307
|
|
|
7,100,683
|
|
6,124,682
|
|
914,391
|
Proceed of bank loans with terms over three months
|
|
1,320,614
|
|
1,915,210
|
|
1,641,708
|
|
245,101
|
|
|
1,557,530
|
|
3,556,918
|
|
531,034
|
Payment of bank loans with terms over three months
|
|
(582,328)
|
|
-
|
|
(32,273)
|
|
(4,818)
|
|
|
(750,028)
|
|
(32,273)
|
|
(4,818)
|
Amounts paid for NetEase's issuance of shares in Hong
Kong
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
(13,800)
|
|
-
|
|
-
|
Net
Amounts received/ (paid) related to capital contribution
from
or repurchase of
noncontrolling interests and redeemable
noncontrolling interests
shareholders
|
|
8,176
|
|
(102,042)
|
|
33,200
|
|
4,957
|
|
|
1,515,225
|
|
(68,842)
|
|
(10,278)
|
Cash
paid for repurchase of NetEase's ADSs/ purchase of
subsidiaries' ADSs and
shares
|
|
(2,468,969)
|
|
(1,243,917)
|
|
(2,119,613)
|
|
(316,450)
|
|
|
(4,487,436)
|
|
(3,363,530)
|
|
(502,162)
|
Dividends paid to NetEase's shareholders
|
|
(1,278,879)
|
|
(1,683,472)
|
|
(1,403,637)
|
|
(209,557)
|
|
|
(1,539,721)
|
|
(3,087,109)
|
|
(460,893)
|
Net
cash provided by financing
activities
|
|
1,977,256
|
|
2,288,974
|
|
840,872
|
|
125,540
|
|
|
3,382,453
|
|
3,129,846
|
|
467,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash held in
foreign currencies
|
|
(25,112)
|
|
(21,202)
|
|
74,898
|
|
11,182
|
|
|
10,881
|
|
53,696
|
|
8,017
|
Net increase/
(decrease) in cash, cash equivalents and restricted
cash
|
1,131,720
|
|
(4,187,413)
|
|
6,363,748
|
|
950,083
|
|
|
990,360
|
|
2,176,335
|
|
324,918
|
Cash, cash
equivalents and restricted cash, at the beginning
of the period
|
|
12,027,245
|
|
17,376,115
|
|
13,188,702
|
|
1,969,021
|
|
|
12,168,605
|
|
17,376,115
|
|
2,594,186
|
Cash, cash
equivalents and restricted cash, at end of the
period
|
|
13,158,965
|
|
13,188,702
|
|
19,552,450
|
|
2,919,104
|
|
|
13,158,965
|
|
19,552,450
|
|
2,919,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for income tax, net
|
|
1,240,692
|
|
1,515,330
|
|
1,055,096
|
|
157,522
|
|
|
1,790,883
|
|
2,570,426
|
|
383,754
|
Cash
paid for interest expense
|
|
48,082
|
|
37,741
|
|
93,079
|
|
13,896
|
|
|
91,984
|
|
130,820
|
|
19,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
15,774,818
|
|
18,641,814
|
|
18,139,843
|
|
2,708,207
|
|
31,881,629
|
|
36,781,657
|
|
5,491,357
|
Youdao
|
|
1,293,407
|
|
1,200,541
|
|
956,225
|
|
142,761
|
|
2,633,274
|
|
2,156,766
|
|
321,997
|
Cloud Music
|
|
1,692,507
|
|
2,067,206
|
|
2,191,510
|
|
327,184
|
|
3,183,674
|
|
4,258,716
|
|
635,810
|
Innovative businesses
and others
|
|
1,763,769
|
|
1,646,281
|
|
1,871,500
|
|
279,407
|
|
3,343,135
|
|
3,517,781
|
|
525,190
|
Total net
revenues
|
|
20,524,501
|
|
23,555,842
|
|
23,159,078
|
|
3,457,559
|
|
41,041,712
|
|
46,714,920
|
|
6,974,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
(5,813,002)
|
|
(7,052,050)
|
|
(6,375,598)
|
|
(951,852)
|
|
(12,026,054)
|
|
(13,427,648)
|
|
(2,004,695)
|
Youdao
|
|
(616,661)
|
|
(562,691)
|
|
(546,498)
|
|
(81,590)
|
|
(1,189,076)
|
|
(1,109,189)
|
|
(165,598)
|
Cloud Music
|
|
(1,623,327)
|
|
(1,815,649)
|
|
(1,905,954)
|
|
(284,551)
|
|
(3,161,053)
|
|
(3,721,603)
|
|
(555,621)
|
Innovative businesses
and others
|
|
(1,281,897)
|
|
(1,289,073)
|
|
(1,389,537)
|
|
(207,453)
|
|
(2,423,276)
|
|
(2,678,610)
|
|
(399,905)
|
Total cost of
revenues
|
|
(9,334,887)
|
|
(10,719,463)
|
|
(10,217,587)
|
|
(1,525,446)
|
|
(18,799,459)
|
|
(20,937,050)
|
|
(3,125,819)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
9,961,816
|
|
11,589,764
|
|
11,764,245
|
|
1,756,355
|
|
19,855,575
|
|
23,354,009
|
|
3,486,662
|
Youdao
|
|
676,746
|
|
637,850
|
|
409,727
|
|
61,171
|
|
1,444,198
|
|
1,047,577
|
|
156,399
|
Cloud Music
|
|
69,180
|
|
251,557
|
|
285,556
|
|
42,633
|
|
22,621
|
|
537,113
|
|
80,189
|
Innovative businesses
and others
|
|
481,872
|
|
357,208
|
|
481,963
|
|
71,954
|
|
919,859
|
|
839,171
|
|
125,285
|
Total gross
profit
|
|
11,189,614
|
|
12,836,379
|
|
12,941,491
|
|
1,932,113
|
|
22,242,253
|
|
25,777,870
|
|
3,848,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
63.2 %
|
|
62.2 %
|
|
64.9 %
|
|
64.9 %
|
|
62.3 %
|
|
63.5 %
|
|
63.5 %
|
Youdao
|
|
52.3 %
|
|
53.1 %
|
|
42.8 %
|
|
42.8 %
|
|
54.8 %
|
|
48.6 %
|
|
48.6 %
|
Cloud Music
|
|
4.1 %
|
|
12.2 %
|
|
13.0 %
|
|
13.0 %
|
|
0.7 %
|
|
12.6 %
|
|
12.6 %
|
Innovative businesses
and others
|
|
27.3 %
|
|
21.7 %
|
|
25.8 %
|
|
25.8 %
|
|
27.5 %
|
|
23.9 %
|
|
23.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 =
RMB6.6981 on the last trading
day of June 2022 (June 30, 2022)
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, 2022, 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,
|
|
|
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2022
|
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
|
Share-based
compensation cost included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
197,370
|
|
198,135
|
|
173,840
|
|
25,954
|
|
385,296
|
|
371,975
|
|
55,534
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing expenses
|
|
26,434
|
|
30,373
|
|
31,817
|
|
4,750
|
|
50,665
|
|
62,190
|
|
9,285
|
|
|
General and
administrative expenses
|
|
258,544
|
|
279,062
|
|
297,891
|
|
44,474
|
|
488,147
|
|
576,953
|
|
86,137
|
|
|
Research and
development expenses
|
|
217,766
|
|
238,584
|
|
260,899
|
|
38,951
|
|
426,259
|
|
499,483
|
|
74,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 on 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,
|
|
|
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2022
|
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
|
Net income from
continuing operations attributable to
the Company's shareholders
|
|
3,541,754
|
|
4,394,023
|
|
4,666,612
|
|
696,705
|
|
7,980,906
|
|
9,060,635
|
|
1,352,717
|
|
|
Add: Share-based
compensation
|
|
686,111
|
|
723,603
|
|
743,198
|
|
110,957
|
|
1,327,645
|
|
1,466,801
|
|
218,988
|
|
|
Non-GAAP net income
from continuing operations
attributable to the Company's
shareholders
|
|
4,227,865
|
|
5,117,626
|
|
5,409,810
|
|
807,662
|
|
9,308,551
|
|
10,527,436
|
|
1,571,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net
income from continuing
operations per share *
|
|
1.26
|
|
1.56
|
|
1.65
|
|
0.25
|
|
2.78
|
|
3.21
|
|
0.48
|
|
|
Non-GAAP basic net
income from continuing
operations per ADS *
|
|
6.31
|
|
7.81
|
|
8.26
|
|
1.23
|
|
13.90
|
|
16.07
|
|
2.40
|
|
|
Non-GAAP diluted net
income from continuing
operations per share *
|
|
1.25
|
|
1.54
|
|
1.64
|
|
0.24
|
|
2.74
|
|
3.18
|
|
0.47
|
|
|
Non-GAAP diluted net
income from continuing
operations per ADS *
|
|
6.24
|
|
7.72
|
|
8.18
|
|
1.22
|
|
13.72
|
|
15.90
|
|
2.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Each ADS
represents five ordinary shares.
|
|
The accompanying notes
are an integral part of this announcement.
|
|
View original
content:https://www.prnewswire.com/news-releases/netease-announces-second-quarter-2022-unaudited-financial-results-301608275.html
SOURCE NetEase, Inc.