NetEase Reports Second Quarter Results with $3.9B in Revenue

NetEase, Inc. (NASDAQ: NTES and HKEX: 9999) released its unaudited financial results for the second quarter of 2025, showing a strong performance despite a challenging economic environment. The company, a prominent player in the internet and gaming sectors, exceeded market expectations in several key areas.

NetEase’s Subsidiary Youdao is a Key Driver of Growth

NetEase, Inc. (NASDAQ: NTES) reported net revenues of RMB27.9 billion (US$3.9 billion) for the second quarter of 2025, marking a 9.4% increase from the same period in 2024. This performance exceeded the market’s expectation of US$3.85 billion. The company’s earnings per share (EPS) came in at US$0.38 per share or US$2.07 per ADS, above the anticipated EPS of US$2.04 per ADS. This quarter was driven by strong performances in its gaming and related value-added services segment, which generated RMB22.8 billion (US$3.2 billion) in net revenues, reflecting a 13.7% year-over-year increase.

NetEase’s subsidiary, Youdao, also contributed positively, with net revenues reaching RMB1.4 billion (US$197.9 million), up 7.2% from the same quarter in 2024. However, NetEase Cloud Music saw a slight decline, with net revenues of RMB2.0 billion (US$274.8 million), representing a 3.5% decrease year-over-year. The company’s innovative businesses and other segments experienced a more significant decline, with revenues dropping by 17.8% to RMB1.7 billion (US$237.2 million).

Despite these mixed results across segments, NetEase’s gross profit rose to RMB18.1 billion (US$2.5 billion), a 12.5% increase from the previous year. Operating expenses were reduced by 0.6% to RMB9.0 billion (US$1.3 billion), reflecting the company’s focus on cost management and efficiency. Overall, NetEase’s strong financial performance in the second quarter of 2025 highlights its ability to adapt and thrive in a competitive market.

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NetEase Optimistic on Growth Prospects

Looking ahead, NetEase remains optimistic about its growth prospects, supported by a robust pipeline of new game launches and continued expansion into international markets. The company’s recent global launches, including FragPunk and Dunk City Dynasty, have already gained significant traction, indicating strong potential for future revenue growth. NetEase plans to continue leveraging its technological capabilities and innovative product offerings to capture a larger share of the global gaming market.

NetEase’s management has provided guidance that suggests continued growth in the coming quarters. The company expects to maintain its momentum by focusing on product innovation, disciplined execution, and deep community engagement. With a strong cash position of RMB142.1 billion (US$19.8 billion) and a commitment to shareholder returns, including dividends and share repurchases, NetEase is well-positioned to navigate future challenges and capitalize on emerging opportunities.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.