NetEase First Quarter 2025 Unaudited Financial Results

Key insights

6 takeaways

01
NetEase reported Q1 2025 total net revenues of RMB 28.8 billion, a 7.4% year-over-year increase driven by a 12.1% growth in the gaming segment to RMB 24.0 billion.See it on page 1
02
Net income reached RMB 10.3 billion, with non-GAAP net income rising to RMB 11.2 billion, supported by a 14.4% reduction in total operating expenses to RMB 8.0 billion.See it on page 1
03
Gaming performance was bolstered by new titles including Where Winds Meet, FragPunk, and Marvel Rivals, the global mobile launch of Once Human, and the return of Blizzard Entertainment titles to the Chinese market.See it on page 2
04
Non-gaming segments underperformed, with Youdao, NetEase Cloud Music, and innovative businesses experiencing revenue declines of 6.7%, 8.4%, and 17.6% respectively.See it on page 3
05
The company maintains a strong liquidity position with RMB 137.0 billion in net cash as of March 31, 2025.See it on page 9
06
Shareholder returns remain a priority, with a declared quarterly dividend of US$0.1350 per share and a total of US$1.9 billion deployed in share repurchases since 2023.See it on page 5

Summary

NetEase reported strong financial results for the first quarter of 2025, characterized by significant revenue growth and improved profitability. The company achieved total net revenues of RMB 28.8 billion (US$4.0 billion), representing a 7.4% increase compared to the same period in 2024. This growth was primarily driven by the games and related value-added services segment, which generated RMB 24.0 billion, a 12.1% year-over-year increase. Net income attributable to shareholders reached RMB 10.3 billion, with non-GAAP net income rising to RMB 11.2 billion, reflecting the company’s successful execution of its long-term operational strategy.

The gaming division’s performance was bolstered by the successful launch of new titles and the sustained popularity of established franchises. Key contributors included the performance of Where Winds Meet, FragPunk, and Marvel Rivals, alongside the global mobile launch of Once Human. Furthermore, the company strengthened its regional market position in China through the return of Blizzard Entertainment titles, including World of Warcraft and Hearthstone, while maintaining high engagement for core titles like Eggy Party and Naraka: Bladepoint. Conversely, the company’s other segments, including Youdao, NetEase Cloud Music, and innovative businesses, experienced year-over-year revenue declines of 6.7%, 8.4%, and 17.6%, respectively.

Operational efficiency improved during the quarter, as total operating expenses decreased by 14.4% year-over-year to RMB 8.0 billion, largely due to reduced marketing expenditures. The company maintained a robust liquidity position, reporting RMB 137.0 billion in net cash as of March 31, 2025. In line with its commitment to shareholder value, the board of directors approved a quarterly dividend of US$0.1350 per share and continued its ongoing share repurchase program, which has seen US$1.9 billion in capital deployed since its inception in 2023.