HANGZHOU, China, Nov. 17,
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 third quarter ended September 30,
2022.
Third Quarter 2022 Financial Highlights
- Net revenues were RMB24.4 billion
(US$3.4 billion), an increase of
10.1% compared with the third quarter of 2021.
- Games and related value-added services net
revenues were RMB18.7 billion
(US$2.6 billion), an increase of 9.1%
compared with the third quarter of 2021.[1]
- Youdao net revenues were RMB1.4 billion (US$197.2
million), an increase of 1.1% compared with the third
quarter of 2021.
- Cloud Music net revenues were RMB2.4 billion (US$331.4
million), an increase of 22.5% compared with the third
quarter of 2021.
- Innovative businesses and others net revenues
were RMB2.0 billion (US$276.7 million), an increase of 13.6% compared
with the third quarter of
2021.[1]
- Gross profit was RMB13.7 billion
(US$1.9 billion), an increase of
16.4% compared with the third quarter of 2021.
- Total operating expenses were RMB9.0
billion (US$1.3 billion), an
increase of 12.0% compared with the third quarter of 2021.
- Net income attributable to the Company's shareholders was
RMB6.7 billion (US$941.8 million). Non-GAAP net income from
continuing operations attributable to the Company's shareholders
was RMB7.5 billion (US$1.1 billion).[2]
- Basic net income per share was US$0.29 (US$1.44
per ADS). Non-GAAP basic net income from continuing operations per
share was US$0.32 (US$1.61 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.
|
Third Quarter 2022 and Recent Operational Highlights
- Extended the longevity of leading franchise titles including
both the Fantasy Westward Journey and Westward Journey
Online series, and other hit titles including Identity V
and Infinite Lagrange.
- Delivered exciting anniversary content updates for the popular
title Naraka: Bladepoint in August, winning wide acclaim
among players.
- Diablo® Immortal™, co-developed by NetEase
and Blizzard Entertainment, debuted in Chinese mainland, topping
the iOS download chart soon after its launch.
- Advanced pipeline, propelling new games under development
including Naraka: Bladepoint mobile game, Justice
mobile game and Ghost World Chronicle.
- Continued preparations for the roll-out of Harry Potter: Magic Awakened in
international markets, which is now expected to be launched
globally in 2023.
- Net revenues of Youdao maintained healthy growth with increased
contributions from sales of new services and smart devices.
- Enhanced content and product innovation for Cloud Music,
driving solid growth in net revenues and continued margin
improvement.
As previously disclosed, NetEase has entered into certain
licensing agreements covering the publication of several Blizzard
titles in Chinese mainland.
These licenses will expire in January 2023
and will not be renewed. Net revenues and net income
contribution from these licensed Blizzard games represented low
single digits as a percentage of NetEase's total net revenues and
net income in 2021 and in the first nine months of 2022. The
expiration of such licenses will have no material impact on
NetEase's financial results. The co-development and publishing of
Diablo® Immortal™ is covered by a separate
long-term agreement.
Commenting on this quarter's financial results, Mr. William Ding, Chief Executive Officer and
Director of NetEase said, "Steady growth characterized our
third quarter, generating total net revenues of RMB24.4 billion, an increase of 10.1%
year-over-year. Our games business continues to see solid gains.
Beloved flagship titles such as our Fantasy Westward Journey
sagas further grew in the third quarter, impressing the industry
with their strength and longevity. The successful launch of
thrilling new games such as Diablo® Immortal™ is
a further testament to our robust R&D programs and ability to
captivate the attention of players in the international arena."
"In addition to our games, we maintained our differentiated
offerings with Youdao, Cloud Music and Yanxuan businesses. As we
move forward, we will continue to leverage our innovative content
and services to drive sustainable growth across each of our
carefully cultivated businesses," Mr. Ding concluded.
Third Quarter 2022 Financial Results
Net Revenues
Net revenues for the third quarter of 2022 were
RMB24,426.8 million (US$3,433.9 million), compared with
RMB23,159.1 million and RMB22,190.7 million for the preceding
quarter and the third 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 RMB18,699.1 million (US$2,628.7 million) for the third quarter of
2022, compared with RMB18,139.8 million and RMB17,145.7 million for the preceding
quarter and the third quarter of 2021, respectively. Net revenues
from the operation of online games, which is the primary component
of this segment, accounted for approximately 92.9% of the segment
for the third quarter of 2022, compared with 92.8%
and 92.7% for the preceding quarter and the third
quarter of 2021, respectively. Net revenues from mobile games
accounted for approximately 68.6% of net revenues from the
operation of online games for the third quarter of 2022, compared
with 66.1% and 69.2% for the preceding quarter and
the third quarter of 2021, respectively.
Net revenues from Youdao were RMB1,402.4
million (US$197.2 million) for the third quarter of
2022, compared with RMB956.2 million
and RMB1,387.3 million for the
preceding quarter and the third quarter of 2021, respectively.
Net revenues from Cloud Music were RMB2,357.2 million (US$331.4 million) for the third quarter of
2022, compared with RMB2,191.5
million and RMB1,924.7 million
for the preceding quarter and the third quarter of 2021,
respectively.
Net revenues from innovative businesses and others were
RMB1,968.0 million (US$276.7 million) for the third quarter of 2022,
compared with RMB1,871.5 million and
RMB1,733.1 million for the preceding
quarter and the third quarter of 2021, respectively.
Gross Profit
Gross profit for the third quarter of 2022 was RMB13,743.9 million (US$1,932.1 million), compared with
RMB12,941.5 million and RMB11,810.8 million for the preceding
quarter and the third quarter of 2021, respectively.
The quarter-over-quarter and year-over-year increases in games
and related value-added services gross profit were primarily due to
increased net revenues from online games, including the Fantasy
Westward Journey Online series and Infinite Lagrange,
and certain newly launched titles.
The quarter-over-quarter increase in Youdao gross profit
was primarily attributable to the increase in net revenues from
improved economies of scale for its learning services as well as
increased sales volume of its smart devices.
The quarter-over-quarter and year-over-year increases in Cloud
Music gross profit were primarily due to increased net revenues
from its social entertainment services, as well as continuously
improved cost control measures.
The quarter-over-quarter and year-over-year increases in
innovative businesses and others gross profit were primarily due to
increased gross profit contribution from Yanxuan.
Gross Profit Margin
Gross profit margin for games and related value-added services
for the third quarter of 2022 was 65.0%, compared with 64.9% and
61.3% for the preceding quarter and the third quarter of 2021,
respectively. The year-over-year increase in gross profit
margin was mainly due to changes in the revenue contribution from
different distribution channels.
Gross profit margin for Youdao for the third quarter of 2022 was
54.2%, compared with 42.8% and 56.6% for the preceding quarter and
the third quarter of 2021, respectively. The
quarter-over-quarter increase was primarily attributable to
the factors enumerated above. The year-over-year decrease
mainly resulted from a decline in economies of scale due to the
decreased net revenues from its learning services.
Gross profit margin for Cloud Music was 14.2% for the third
quarter of 2022, compared with 13.0% and 2.2% for the preceding
quarter and the third 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
third quarter of 2022 was 25.5%, compared with 25.8% and 27.2%
for the preceding quarter and the third quarter of 2021,
respectively. The year-over-year fluctuations were mainly due
to changes in gross profit margin from advertising services.
Operating Expenses
Total operating expenses for the third quarter of 2022 were
RMB9,002.1 million (US$1,265.5 million), compared with RMB7,995.2 million and RMB8,035.6 million for the preceding quarter and
the third 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 and
Youdao, as well as higher staff-related costs.
Other Income/ (Expenses)
Other income/ (expenses) consisted of investment income/ (loss),
interest income, exchange gains/ (losses) and others. The
quarter-over-quarter and year-over-year increases were mainly due
to investment income arising from the disposal of certain equity
investments and 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 third quarter of 2022.
Income Taxes
The Company recorded a net income tax charge of RMB1,586.7 million (US$223.1 million) for the third quarter of 2022,
compared with RMB1,259.3 million and
RMB807.6 million for the preceding
quarter and the third quarter of 2021, respectively. The effective
tax rate for the third quarter of 2022 was 19.3%, compared with
22.0% and 19.6% for the preceding quarter and the third 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 attributable to the Company's shareholders totaled
RMB6,699.4 million (US$941.8 million) for the third quarter of 2022,
compared with RMB5,291.5 million and
RMB3,181.8 million for the preceding
quarter and the third quarter of 2021, respectively. Net income
attributable to the Company's shareholders for the preceding
quarter also included net income from discontinued operations of
RMB624.9 million which was related to
the prior disposal of the Kaola business.
Non-GAAP net income from continuing operations attributable to
the Company's shareholders totaled RMB7,469.6 million (US$1,050.1 million) for the third quarter of
2022, compared with RMB5,409.8
million and RMB3,857.8 million
for the preceding quarter and the third quarter of 2021,
respectively.
NetEase reported basic net income of US$0.29 per share (US$1.44 per ADS) for the third quarter of 2022,
compared with US$0.23 per share
(US$1.14 per ADS) and US$0.13 per share (US$0.67 per ADS) for the preceding quarter and
the third quarter of 2021, respectively.
NetEase reported non-GAAP basic net income from continuing
operations of US$0.32 per share
(US$1.61 per ADS) for the third
quarter of 2022, compared with US$0.23 per share (US$1.16 per ADS) and US$0.16 per share (US$0.82 per ADS) for the preceding quarter and
the third quarter of 2021, respectively.
Quarterly Dividend
The board of directors has approved a dividend of US$0.0870 per share (US$0.4350 per ADS) for the third quarter of 2022
to holders of ordinary shares and holders of ADSs as of the close
of business on December 2, 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 December 2, 2022 (Beijing/ Hong Kong Time). The payment date is
expected to be on December 13, 2022
for holders of ordinary shares and on or around December 16, 2022 for holders of ADSs.
NetEase paid a dividend of US$0.0720 per share (US$0.3600 per ADS) for the second quarter of 2022
in September 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 September 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 RMB94.6 billion (US$13.3 billion), compared with RMB85.6 billion as of December 31, 2021. Cash flow generated from
operating activities was RMB7.5 billion (US$1.1 billion) for the third quarter of 2022,
compared with RMB6.6 billion and
RMB6.3 billion for the preceding
quarter and the third 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 September 30, 2022,
approximately 27.0 million ADSs had been repurchased under this
program for a total cost of US$2.5
billion.
The Company also announced today that its board of directors has
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 new share repurchase
program will be in effect for a period not to exceed 36 months,
commencing upon the expiration of the Company's existing share
repurchase program or, if earlier, the date on which the Company
has repurchased the maximum amount authorized under the existing
program.
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 September 30,
2022, approximately 2.3 million ADSs had been purchased
under this program for a total cost of US$20.7 million.
NetEase also purchased approximately 0.7 million ordinary
shares of Cloud Music in open market transactions on the Hong Kong
Stock Exchange for a total cost of US$6.9
million during the third quarter of 2022.
The extent to which NetEase repurchases its ADSs and its
ordinary shares or purchases Youdao's ADSs and Cloud Music's
ordinary shares will depend upon a variety of factors, including
market conditions. These programs may be suspended or discontinued
at any time.
** The United States dollar
(US$) 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 7:00 a.m.
New York Time on Thursday, November 17,
2022 (Beijing/ Hong Kong
Time: 8:00 p.m., Thursday, November 17, 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 1-914-202-3258 and providing conference ID: 10026570, 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:
10026570. The replay will be available through November 24, 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,
|
|
September
30,
|
|
September
30,
|
|
|
2021
|
|
2022
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
14,498,157
|
|
17,999,166
|
|
2,530,283
|
Time
deposits
|
|
70,754,846
|
|
89,301,940
|
|
12,553,868
|
Restricted
cash
|
|
2,876,628
|
|
2,844,386
|
|
399,857
|
Accounts
receivable, net
|
|
5,507,988
|
|
5,208,019
|
|
732,132
|
Inventories
|
|
964,733
|
|
932,905
|
|
131,146
|
Prepayments and other current assets, net
|
|
6,235,857
|
|
6,371,412
|
|
895,679
|
Short-term
investments
|
|
12,281,548
|
|
8,934,202
|
|
1,255,950
|
Assets
held for sale
|
|
497
|
|
-
|
|
-
|
Total current
assets
|
|
113,120,254
|
|
131,592,030
|
|
18,498,915
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property,
equipment and software, net
|
|
5,433,858
|
|
6,165,151
|
|
866,683
|
Land use
right, net
|
|
4,108,090
|
|
4,134,507
|
|
581,220
|
Deferred
tax assets
|
|
1,297,954
|
|
1,387,083
|
|
194,993
|
Time
deposits
|
|
5,823,840
|
|
4,473,840
|
|
628,922
|
Restricted
cash
|
|
1,330
|
|
850
|
|
119
|
Other
long-term assets, net
|
|
23,857,510
|
|
24,954,210
|
|
3,508,008
|
Assets
held for sale
|
|
1,088
|
|
-
|
|
-
|
Total non-current
assets
|
|
40,523,670
|
|
41,115,641
|
|
5,779,945
|
Total
assets
|
|
153,643,924
|
|
172,707,671
|
|
24,278,860
|
|
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interests
and Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
985,059
|
|
867,298
|
|
121,923
|
Salary and
welfare payables
|
|
4,133,254
|
|
2,701,749
|
|
379,806
|
Taxes
payable
|
|
4,537,050
|
|
3,740,750
|
|
525,866
|
Short-term
loans
|
|
19,352,313
|
|
25,445,617
|
|
3,577,088
|
Contract
liabilities
|
|
12,132,743
|
|
13,901,882
|
|
1,954,296
|
Accrued
liabilities and other payables
|
|
9,360,907
|
|
10,371,294
|
|
1,457,973
|
Total current
liabilities
|
|
50,501,326
|
|
57,028,590
|
|
8,016,952
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Deferred
tax liabilities
|
|
1,345,874
|
|
1,354,827
|
|
190,459
|
Long-term
loans
|
|
1,275,140
|
|
3,549,900
|
|
499,037
|
Other
long-term liabilities
|
|
1,097,708
|
|
1,125,227
|
|
158,182
|
Total non-current
liabilities
|
|
3,718,722
|
|
6,029,954
|
|
847,678
|
Total
liabilities
|
|
54,220,048
|
|
63,058,544
|
|
8,864,630
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
145,238
|
|
143,354
|
|
20,152
|
|
|
|
|
|
|
|
NetEase, Inc.'s
shareholders' equity
|
|
95,328,080
|
|
105,364,713
|
|
14,811,937
|
Noncontrolling
interests
|
|
3,950,558
|
|
4,141,060
|
|
582,141
|
Total shareholders'
equity
|
|
99,278,638
|
|
109,505,773
|
|
15,394,078
|
|
|
|
|
|
|
|
Total liabilities,
redeemable noncontrolling
interests and shareholders'
equity
|
|
153,643,924
|
|
172,707,671
|
|
24,278,860
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
|
|
|
NETEASE,
INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
(in thousands,
except per share data or per ADS data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
2021
|
|
2022
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
22,190,749
|
|
23,159,078
|
|
24,426,760
|
|
3,433,860
|
|
63,232,461
|
|
71,141,680
|
|
10,000,939
|
Cost of
revenues
|
|
(10,379,981)
|
|
(10,217,587)
|
|
(10,682,868)
|
|
(1,501,774)
|
|
(29,179,440)
|
|
(31,619,918)
|
|
(4,445,058)
|
Gross
profit
|
|
11,810,768
|
|
12,941,491
|
|
13,743,892
|
|
1,932,086
|
|
34,053,021
|
|
39,521,762
|
|
5,555,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
(3,134,030)
|
|
(3,300,705)
|
|
(3,768,618)
|
|
(529,784)
|
|
(8,914,159)
|
|
(9,984,812)
|
|
(1,403,643)
|
General and
administrative expenses
|
|
(1,140,296)
|
|
(1,112,755)
|
|
(1,264,342)
|
|
(177,738)
|
|
(3,101,673)
|
|
(3,392,866)
|
|
(476,962)
|
Research and
development expenses
|
|
(3,761,239)
|
|
(3,581,700)
|
|
(3,969,156)
|
|
(557,975)
|
|
(10,228,287)
|
|
(10,948,938)
|
|
(1,539,177)
|
Total operating
expenses
|
|
(8,035,565)
|
|
(7,995,160)
|
|
(9,002,116)
|
|
(1,265,497)
|
|
(22,244,119)
|
|
(24,326,616)
|
|
(3,419,782)
|
Operating
profit
|
|
3,775,203
|
|
4,946,331
|
|
4,741,776
|
|
666,589
|
|
11,808,902
|
|
15,195,146
|
|
2,136,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income/
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment (loss)/
income, net
|
|
(264,611)
|
|
(707,489)
|
|
1,347,269
|
|
189,396
|
|
1,320,079
|
|
91,078
|
|
12,804
|
Interest income,
net
|
|
349,550
|
|
505,991
|
|
556,148
|
|
78,182
|
|
1,124,685
|
|
1,520,383
|
|
213,732
|
Exchange gains/
(losses), net
|
|
153,310
|
|
865,283
|
|
1,398,045
|
|
196,534
|
|
(159,091)
|
|
2,165,448
|
|
304,414
|
Other, net
|
|
117,636
|
|
121,175
|
|
164,435
|
|
23,116
|
|
413,191
|
|
501,940
|
|
70,562
|
Income before
tax
|
|
4,131,088
|
|
5,731,291
|
|
8,207,673
|
|
1,153,817
|
|
14,507,766
|
|
19,473,995
|
|
2,737,611
|
Income tax
|
|
(807,648)
|
|
(1,259,320)
|
|
(1,586,673)
|
|
(223,051)
|
|
(3,194,284)
|
|
(4,065,264)
|
|
(571,486)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
|
3,323,440
|
|
4,471,971
|
|
6,621,000
|
|
930,766
|
|
11,313,482
|
|
15,408,731
|
|
2,166,125
|
Net income from
discontinued operations
|
|
-
|
|
624,864
|
|
-
|
|
-
|
|
-
|
|
624,864
|
|
87,842
|
Net
income
|
|
3,323,440
|
|
5,096,835
|
|
6,621,000
|
|
930,766
|
|
11,313,482
|
|
16,033,595
|
|
2,253,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of redeemable
noncontrolling
interests
|
|
(147,825)
|
|
(754)
|
|
(781)
|
|
(110)
|
|
(437,067)
|
|
(2,268)
|
|
(319)
|
Net loss attributable
to noncontrolling
interests
|
|
6,167
|
|
195,395
|
|
79,145
|
|
11,126
|
|
286,273
|
|
353,536
|
|
49,699
|
Net income
attributable to the
Company's shareholders
|
|
3,181,782
|
|
5,291,476
|
|
6,699,364
|
|
941,782
|
|
11,162,688
|
|
16,384,863
|
|
2,303,347
|
Including:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Net income from
continuing operations
attributable to the Company's
shareholders
|
|
3,181,782
|
|
4,666,612
|
|
6,699,364
|
|
941,782
|
|
11,162,688
|
|
15,759,999
|
|
2,215,505
|
-Net income from
discontinued operations
attributable to the Company's shareholders
|
|
-
|
|
624,864
|
|
-
|
|
-
|
|
-
|
|
624,864
|
|
87,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share *
|
|
0.96
|
|
1.62
|
|
2.05
|
|
0.29
|
|
3.34
|
|
5.01
|
|
0.70
|
-Continuing
operations
|
|
0.96
|
|
1.43
|
|
2.05
|
|
0.29
|
|
3.34
|
|
4.82
|
|
0.67
|
-Discontinued
operations
|
|
-
|
|
0.19
|
|
-
|
|
-
|
|
-
|
|
0.19
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS *
|
|
4.78
|
|
8.08
|
|
10.27
|
|
1.44
|
|
16.71
|
|
25.04
|
|
3.52
|
-Continuing
operations
|
|
4.78
|
|
7.13
|
|
10.27
|
|
1.44
|
|
16.71
|
|
24.09
|
|
3.39
|
-Discontinued
operations
|
|
-
|
|
0.95
|
|
-
|
|
-
|
|
-
|
|
0.95
|
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share *
|
|
0.95
|
|
1.60
|
|
2.03
|
|
0.29
|
|
3.30
|
|
4.96
|
|
0.70
|
-Continuing
operations
|
|
0.95
|
|
1.41
|
|
2.03
|
|
0.29
|
|
3.30
|
|
4.77
|
|
0.67
|
-Discontinued
operations
|
|
-
|
|
0.19
|
|
-
|
|
-
|
|
-
|
|
0.19
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per ADS *
|
|
4.73
|
|
8.00
|
|
10.17
|
|
1.43
|
|
16.50
|
|
24.79
|
|
3.48
|
-Continuing
operations
|
|
4.73
|
|
7.05
|
|
10.17
|
|
1.43
|
|
16.50
|
|
23.84
|
|
3.35
|
-Discontinued
operations
|
|
-
|
|
0.95
|
|
-
|
|
-
|
|
-
|
|
0.95
|
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary
shares used in calculating net income
per share *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
3,325,892
|
|
3,274,695
|
|
3,262,989
|
|
3,262,989
|
|
3,340,925
|
|
3,271,602
|
|
3,271,602
|
Diluted
|
|
3,361,727
|
|
3,305,504
|
|
3,293,766
|
|
3,293,766
|
|
3,382,467
|
|
3,305,081
|
|
3,305,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Each ADS
represents five ordinary shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
NETEASE,
INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
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
|
|
3,323,440
|
|
5,096,835
|
|
6,621,000
|
|
930,766
|
|
11,313,482
|
|
16,033,595
|
|
2,253,967
|
Net
income from discontinued operations
|
|
-
|
|
(624,864)
|
|
-
|
|
-
|
|
-
|
|
(624,864)
|
|
(87,842)
|
Adjustments to reconcile net income to net cash provided
by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
805,485
|
|
609,036
|
|
713,852
|
|
100,352
|
|
2,439,685
|
|
2,089,068
|
|
293,676
|
Fair
value changes of equity security investments
|
|
1,194,338
|
|
735,159
|
|
680,019
|
|
95,596
|
|
513,021
|
|
2,956,180
|
|
415,573
|
Impairment losses of investments and other long-term
assets
|
|
26,055
|
|
243,085
|
|
6,763
|
|
951
|
|
30,852
|
|
254,848
|
|
35,826
|
Fair
value changes of short-term investments
|
|
(184,564)
|
|
(119,882)
|
|
(119,620)
|
|
(16,816)
|
|
(473,244)
|
|
(319,278)
|
|
(44,884)
|
Share-based compensation cost
|
|
688,226
|
|
764,447
|
|
786,999
|
|
110,635
|
|
2,038,593
|
|
2,297,600
|
|
322,991
|
Allowance for expected credit losses
|
|
212,010
|
|
10,965
|
|
44,126
|
|
6,203
|
|
252,998
|
|
54,778
|
|
7,701
|
Losses on disposal of property, equipment and
software
|
|
4,008
|
|
481
|
|
528
|
|
74
|
|
5,273
|
|
2,454
|
|
345
|
Unrealized exchange (gains)/losses
|
|
(157,292)
|
|
(890,066)
|
|
(1,401,893)
|
|
(197,075)
|
|
141,369
|
|
(2,193,925)
|
|
(308,417)
|
Gains on disposal of long-term investments, business and
subsidiaries
|
|
(1)
|
|
-
|
|
(1,724,433)
|
|
(242,417)
|
|
(173,829)
|
|
(1,728,433)
|
|
(242,979)
|
Deferred income taxes
|
|
307,994
|
|
(169,539)
|
|
(234,336)
|
|
(32,943)
|
|
838,963
|
|
(88,647)
|
|
(12,461)
|
Share of results on equity method investees and revaluation
results from previously
held equity interest
|
|
(730,363)
|
|
(134,569)
|
|
(159,128)
|
|
(22,370)
|
|
(1,125,015)
|
|
(1,205,195)
|
|
(169,424)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(1,178,290)
|
|
82,282
|
|
35,786
|
|
5,031
|
|
(1,089,522)
|
|
330,143
|
|
46,411
|
Inventories
|
|
(154,072)
|
|
17,791
|
|
(88,300)
|
|
(12,413)
|
|
(417,175)
|
|
33,082
|
|
4,651
|
Prepayments and other assets
|
|
(38,490)
|
|
(163,612)
|
|
368,673
|
|
51,827
|
|
(230,335)
|
|
(364,782)
|
|
(51,280)
|
Accounts
payable
|
|
172,696
|
|
48,452
|
|
(84,434)
|
|
(11,870)
|
|
(66,055)
|
|
(128,355)
|
|
(18,044)
|
Salary and
welfare payables
|
|
(647,029)
|
|
782,789
|
|
(567,676)
|
|
(79,803)
|
|
(1,016,409)
|
|
(1,541,111)
|
|
(216,646)
|
Taxes
payable
|
|
(434,893)
|
|
(538,234)
|
|
475,245
|
|
66,809
|
|
(273,665)
|
|
10,457
|
|
1,470
|
Contract
liabilities
|
|
2,154,751
|
|
279,669
|
|
1,580,450
|
|
222,176
|
|
2,514,243
|
|
1,781,919
|
|
250,498
|
Accrued
liabilities and other payables
|
|
928,647
|
|
600,934
|
|
552,688
|
|
77,696
|
|
1,334,899
|
|
1,050,486
|
|
147,675
|
Net
cash provided by operating activities
|
|
6,292,656
|
|
6,631,159
|
|
7,486,309
|
|
1,052,409
|
|
16,558,129
|
|
18,700,020
|
|
2,628,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, equipment and software
|
|
(407,688)
|
|
(445,054)
|
|
(557,028)
|
|
(78,306)
|
|
(1,159,306)
|
|
(1,751,443)
|
|
(246,214)
|
Proceeds from sale of property, equipment and software
|
|
11,030
|
|
23,338
|
|
3,307
|
|
465
|
|
15,007
|
|
39,210
|
|
5,512
|
Purchase
of intangible assets, content and licensed
copyrights
|
|
(218,168)
|
|
(85,121)
|
|
(152,276)
|
|
(21,407)
|
|
(1,211,037)
|
|
(381,233)
|
|
(53,593)
|
Net
change in short-term investments with terms of three
months or
less
|
|
167,978
|
|
(159,173)
|
|
156,475
|
|
21,997
|
|
5,169,261
|
|
1,708,147
|
|
240,127
|
Purchase of short-term investments with terms over three
months
|
|
(630,000)
|
|
-
|
|
-
|
|
-
|
|
(10,985,000)
|
|
(1,250,000)
|
|
(175,722)
|
Proceeds from maturities of short-term investments with terms
over three months
|
|
6,251,750
|
|
1,459,172
|
|
1,195,475
|
|
168,057
|
|
9,922,302
|
|
3,208,478
|
|
451,041
|
Investment in long-term investments and acquisition of
subsidiaries
|
|
(586,124)
|
|
(899,968)
|
|
(844,513)
|
|
(118,720)
|
|
(4,521,538)
|
|
(3,434,752)
|
|
(482,850)
|
Proceeds from disposal of long-term investments,
businesses and subsidiaries
|
|
33,731
|
|
6,413
|
|
2,277,625
|
|
320,183
|
|
498,915
|
|
2,318,275
|
|
325,898
|
Placement/rollover of matured time deposits
|
|
(11,723,614)
|
|
(33,122,029)
|
|
(18,830,844)
|
|
(2,647,198)
|
|
(54,669,947)
|
|
(75,998,870)
|
|
(10,683,752)
|
Proceeds from maturities of time deposits
|
|
28,328,155
|
|
32,100,141
|
|
17,770,581
|
|
2,498,149
|
|
65,599,476
|
|
64,570,517
|
|
9,077,179
|
Change in other long-term assets
|
|
(69,429)
|
|
(60,900)
|
|
(31,782)
|
|
(4,468)
|
|
(168,959)
|
|
(262,227)
|
|
(36,863)
|
Net
cash provided by/ (used in) investing activities
|
|
21,157,621
|
|
(1,183,181)
|
|
987,020
|
|
138,752
|
|
8,489,174
|
|
(11,233,898)
|
|
(1,579,237)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
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
|
(7,967,910)
|
|
2,721,487
|
|
(3,645,232)
|
|
(512,439)
|
|
(867,227)
|
|
2,479,450
|
|
348,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceed of bank loans with terms over three months
|
|
612,885
|
|
1,641,708
|
|
70,691
|
|
9,938
|
|
2,170,415
|
|
3,627,609
|
|
509,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of bank loans with terms over three months
|
|
(235,284)
|
|
(32,273)
|
|
(50,208)
|
|
(7,058)
|
|
(985,312)
|
|
(82,481)
|
|
(11,595)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
34,800
|
|
33,200
|
|
14,305
|
|
2,011
|
|
1,550,025
|
|
(54,537)
|
|
(7,667)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for repurchase of NetEase's ADSs/ purchase of
subsidiaries' ADSs and
shares
|
|
(6,310,841)
|
|
(2,119,613)
|
|
(1,956,829)
|
|
(275,087)
|
|
(10,798,277)
|
|
(5,320,359)
|
|
(747,924)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid to NetEase's shareholders
|
|
(1,028,116)
|
|
(1,403,637)
|
|
(1,617,574)
|
|
(227,395)
|
|
(2,567,837)
|
|
(4,704,683)
|
|
(661,374)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash (used in)/ provided by financing
activities
|
|
(14,894,466)
|
|
840,872
|
|
(7,184,847)
|
|
(1,010,030)
|
|
(11,512,013)
|
|
(4,055,001)
|
|
(570,043)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash held in
foreign currencies
|
|
14,435
|
|
74,898
|
|
3,470
|
|
488
|
|
25,316
|
|
57,166
|
|
8,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted
cash
|
12,570,246
|
|
6,363,748
|
|
1,291,952
|
|
181,619
|
|
13,560,606
|
|
3,468,287
|
|
487,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash, at the beginning
of the period
|
|
13,158,965
|
|
13,188,702
|
|
19,552,450
|
|
2,748,640
|
|
12,168,605
|
|
17,376,115
|
|
2,442,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash, at end of the
period
|
|
25,729,211
|
|
19,552,450
|
|
20,844,402
|
|
2,930,259
|
|
25,729,211
|
|
20,844,402
|
|
2,930,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for income tax, net
|
|
898,112
|
|
1,055,096
|
|
1,550,748
|
|
218,001
|
|
2,688,995
|
|
4,121,174
|
|
579,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for interest expense
|
|
52,765
|
|
93,079
|
|
193,329
|
|
27,178
|
|
144,749
|
|
324,149
|
|
45,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NETEASE,
INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands,
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
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
|
|
17,145,668
|
|
18,139,843
|
|
18,699,106
|
|
2,628,679
|
|
49,027,297
|
|
55,480,763
|
|
7,799,362
|
Youdao
|
|
1,387,292
|
|
956,225
|
|
1,402,434
|
|
197,151
|
|
4,020,566
|
|
3,559,200
|
|
500,344
|
Cloud Music
|
|
1,924,683
|
|
2,191,510
|
|
2,357,248
|
|
331,377
|
|
5,108,357
|
|
6,615,964
|
|
930,057
|
Innovative businesses
and others
|
|
1,733,106
|
|
1,871,500
|
|
1,967,972
|
|
276,653
|
|
5,076,241
|
|
5,485,753
|
|
771,176
|
Total net
revenues
|
|
22,190,749
|
|
23,159,078
|
|
24,426,760
|
|
3,433,860
|
|
63,232,461
|
|
71,141,680
|
|
10,000,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
(6,634,238)
|
|
(6,375,598)
|
|
(6,551,193)
|
|
(920,952)
|
|
(18,660,292)
|
|
(19,978,841)
|
|
(2,808,581)
|
Youdao
|
|
(601,741)
|
|
(546,498)
|
|
(642,254)
|
|
(90,287)
|
|
(1,790,817)
|
|
(1,751,443)
|
|
(246,214)
|
Cloud Music
|
|
(1,881,859)
|
|
(1,905,954)
|
|
(2,023,600)
|
|
(284,473)
|
|
(5,042,912)
|
|
(5,745,203)
|
|
(807,648)
|
Innovative businesses
and others
|
|
(1,262,143)
|
|
(1,389,537)
|
|
(1,465,821)
|
|
(206,062)
|
|
(3,685,419)
|
|
(4,144,431)
|
|
(582,615)
|
Total cost of
revenues
|
|
(10,379,981)
|
|
(10,217,587)
|
|
(10,682,868)
|
|
(1,501,774)
|
|
(29,179,440)
|
|
(31,619,918)
|
|
(4,445,058)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
10,511,430
|
|
11,764,245
|
|
12,147,913
|
|
1,707,727
|
|
30,367,005
|
|
35,501,922
|
|
4,990,781
|
Youdao
|
|
785,551
|
|
409,727
|
|
760,180
|
|
106,864
|
|
2,229,749
|
|
1,807,757
|
|
254,130
|
Cloud Music
|
|
42,824
|
|
285,556
|
|
333,648
|
|
46,904
|
|
65,445
|
|
870,761
|
|
122,409
|
Innovative businesses
and others
|
|
470,963
|
|
481,963
|
|
502,151
|
|
70,591
|
|
1,390,822
|
|
1,341,322
|
|
188,561
|
Total gross
profit
|
|
11,810,768
|
|
12,941,491
|
|
13,743,892
|
|
1,932,086
|
|
34,053,021
|
|
39,521,762
|
|
5,555,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
61.3 %
|
|
64.9 %
|
|
65.0 %
|
|
65.0 %
|
|
61.9 %
|
|
64.0 %
|
|
64.0 %
|
Youdao
|
|
56.6 %
|
|
42.8 %
|
|
54.2 %
|
|
54.2 %
|
|
55.5 %
|
|
50.8 %
|
|
50.8 %
|
Cloud Music
|
|
2.2 %
|
|
13.0 %
|
|
14.2 %
|
|
14.2 %
|
|
1.3 %
|
|
13.2 %
|
|
13.2 %
|
Innovative businesses
and others
|
|
27.2 %
|
|
25.8 %
|
|
25.5 %
|
|
25.5 %
|
|
27.4 %
|
|
24.5 %
|
|
24.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
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|
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|
|
|
|
|
|
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 =
RMB7.1135 on the last trading day of
September 2022 (September 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 September 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
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
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
|
|
180,669
|
|
173,840
|
|
190,645
|
|
26,800
|
|
565,965
|
|
562,620
|
|
79,092
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing expenses
|
|
29,289
|
|
31,817
|
|
24,980
|
|
3,512
|
|
79,954
|
|
87,170
|
|
12,254
|
|
|
General and
administrative expenses
|
|
258,805
|
|
297,891
|
|
288,598
|
|
40,570
|
|
746,952
|
|
865,551
|
|
121,677
|
|
|
Research and
development expenses
|
|
219,463
|
|
260,899
|
|
282,776
|
|
39,752
|
|
645,722
|
|
782,259
|
|
109,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
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|
|
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|
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|
|
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):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
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
|
|
3,181,782
|
|
4,666,612
|
|
6,699,364
|
|
941,782
|
|
11,162,688
|
|
15,759,999
|
|
2,215,505
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Share-based
compensation
|
|
675,999
|
|
743,198
|
|
770,255
|
|
108,281
|
|
2,003,644
|
|
2,237,056
|
|
314,480
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
from continuing operations
attributable to the Company's
shareholders
|
|
3,857,781
|
|
5,409,810
|
|
7,469,619
|
|
1,050,063
|
|
13,166,332
|
|
17,997,055
|
|
2,529,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net
income from continuing
operations per share *
|
|
1.16
|
|
1.65
|
|
2.29
|
|
0.32
|
|
3.94
|
|
5.50
|
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net
income from continuing
operations per ADS *
|
|
5.80
|
|
8.26
|
|
11.45
|
|
1.61
|
|
19.70
|
|
27.50
|
|
3.87
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted net
income from continuing
operations per share *
|
|
1.15
|
|
1.64
|
|
2.27
|
|
0.32
|
|
3.89
|
|
5.45
|
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted net
income from continuing
operations per ADS *
|
|
5.74
|
|
8.18
|
|
11.34
|
|
1.59
|
|
19.46
|
|
27.23
|
|
3.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
* Each ADS
represents five ordinary shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
View original
content:https://www.prnewswire.com/news-releases/netease-announces-third-quarter-2022-unaudited-financial-results-301681177.html
SOURCE NetEase, Inc.