NetEase Inc Reports Second Quarter 2024 Financial Results
Intellectia.AI Updated: 2024-08-22
NetEase, Inc. Reports Second Quarter 2024 Financial Results
HANGZHOU, China, Aug. 22, 2024 -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999), a leading internet and game services provider, today announced its unaudited financial results for the second quarter ended June 30, 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Net Revenues | $3.5B | $3.7B | $3.3B | +6.1% | -5.3% |
| Gross Profit | $2.2B | $2.3B | $2.0B | +11.6% | -4.3% |
| Operating Expenses | $1.2B | $1.3B | $1.1B | +8.9% | -3.2% |
| Net Income Attributable to Shareholders | $930M | $1.05B | $1.13B | -17.0% | -11.4% |
| Non-GAAP Net Income | $1.1B | $1.17B | $1.24B | -11.3% | -5.9% |
| Basic Net Income Per Share | $0.29 | $0.33 | $0.35 | -17.1% | -12.1% |
| Non-GAAP Basic Net Income Per Share | $0.33 | $0.36 | $0.39 | -15.4% | -8.3% |
Interpretation : NetEase showed moderate revenue growth year-over-year (YoY) despite a quarter-over-quarter (QoQ) decline. Gross profit increased YoY, indicating better cost management. However, net income and Non-GAAP net income declined both YoY and QoQ, possibly reflecting elevated expenses or reduced operational efficiency.
Segment Performance
| Segment | Q2 2024 | Q1 2024 | Q2 2023 | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Games and Related Value-Added Services | $2.8B | $3.0B | $2.6B | +6.7% | -6.3% |
| Youdao | $181.9M | $192.5M | $166.1M | +9.5% | -5.5% |
| Cloud Music | $280.8M | $280.8M | $268.3M | +4.7% | 0.0% |
| Innovative Businesses and Others | $284.5M | $275.2M | $284.5M | 0.0% | +3.4% |
Interpretation : The Games and Related Value-Added Services segment continues to be the key revenue driver, showing strong YoY growth but a QoQ decline. Youdao and Cloud Music segments also saw YoY growth, with Cloud Music remaining stable QoQ. The Innovative Businesses and Others segment posted no change YoY but a slight QoQ increase.
Operational Highlights
| Metric | Q2 2024 |
|---|---|
| Net Cash | $16.0B |
| Operating Cash Flow | $898.8M |
| Number of ADSs Repurchased | 11.9M |
| Cost of Repurchased ADSs | $1.1B |
Operational Highlights : Launched titles like Lost Light and Once Human set records in user engagement. Naraka: Bladepoint achieved record-high DAUs on its three-year anniversary. Notably, NetEase successfully revitalized World of Warcraft's presence in China.
Comments from Company's Officers
William Ding, CEO of NetEase, emphasized the company's robust R&D and operational capabilities, attributing the diverse and high-quality portfolio to two decades of strategic development. He highlighted continued growth in Cloud Music and Youdao segments and expressed commitment to global expansion and innovation.
Dividend Announcement
The board of directors approved a dividend of $0.0870 per share ($0.4350 per ADS) for Q2 2024, payable in mid-September. This follows a previous dividend of $0.0990 per share ($0.4950 per ADS) for Q1 2024.
Share Repurchase Program
NetEase continues its share repurchase program, initiated in January 2023, with a budget of up to $5.0 billion. Approximately 11.9 million ADSs have been repurchased so far, at a cost of $1.1 billion.
Forward Guidance
NetEase did not provide specific forward guidance in this report.
Stock Price Movement
Following the earnings release, NetEase's stock saw a 3.13% decline.
Note : This summary consolidates key financial details and company performance interpretations based solely on the provided earnings release content.
