NetEase Reports Second Quarter 2024 Financial Results
Intellectia.AI Updated: 2024-08-22
NetEase Reports Second Quarter 2024 Financial Results
NetEase, Inc. (NASDAQ: NTES and HKEX: 9999), a leading internet and game services provider, 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 | Consensus Estimates |
|---|---|---|---|---|---|---|
| Revenue | $3.5B | $3.7B | $3.3B | +6.1% | -5.4% | $3.64B |
| Gross Profit | $2.2B | $2.3B | $2.0B | +11.6% | -4.3% | |
| Net Income | $930.0M | $1.04B | $1.13B | -17.7% | -10.6% | |
| EPS (Basic) | $0.29 | $0.33 | $0.35 | -17.1% | -12.1% | |
| Non-GAAP Net Income | $1.1B | $1.17B | $1.24B | -11.3% | -6.0% | |
| Non-GAAP EPS (Basic) | $0.33 | $0.36 | $0.39 | -15.4% | -8.3% |
Interpretation: NetEase reported total revenue of $3.5 billion, an increase of 6.1% year-over-year but a decrease of 5.4% quarter-over-quarter, missing analysts' expectations of $3.64 billion. Earnings per share stood at $0.29 per share, falling short of the Wall Street consensus.
Segment Revenue Performance
| Segment | Q2 2024 (USD) | Q1 2024 (USD) | Q2 2023 (USD) | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Games & Related Value-Added Svcs | $2.80B | $2.96B | $2.58B | +6.7% | -5.4% |
| Youdao | $181.9M | $192.6M | $166.2M | +9.5% | -5.6% |
| Cloud Music | $280.8M | $275.3M | $268.2M | +4.7% | +2.0% |
| Innovative Businesses & Others | $284.5M | $275.3M | $284.5M | 0.0% | +3.3% |
Interpretation: Revenue from Games and related services saw a year-over-year increase of 6.7% but decreased 5.4% quarter-over-quarter. Youdao and Cloud Music also experienced year-over-year growth, although Youdao saw a quarter-over-quarter decline.
Key Operational Data
| Operational Highlights |
|---|
| New game "Lost Light" topped iOS download charts in China |
| "Once Human" achieved over 230,000 concurrent users on Steam |
| "Naraka: Bladepoint" ranked top 3 on iOS grossing charts |
Interpretation: NetEase launched several successful new game titles and maintained strong performance in existing hit games.
Management Comments
William Ding, Chief Executive Officer and Director of NetEase, stated, "The robust R&D and operating capabilities we've built over the past two decades have shaped our formidable games portfolio of time-honored titles and newer innovative hits that redefine genres and diversify our offerings. We are thrilled to bring exciting NetEase gaming experiences to more players around the globe as innovation remains our priority."
Dividend and Share Repurchase Program
The Board of Directors approved a dividend of $0.0870 per share ($0.4350 per ADS) for the second quarter of 2024. Additionally, under NetEase's ongoing share repurchase program authorized up to $5.0 billion, approximately 11.9 million ADSs have been repurchased at a total cost of $1.1 billion as of June 30, 2024.
Forward Guidance
NetEase did not provide specific forward guidance in this earnings release.
Stock Price Movement
Following the release of the earnings report, NetEase's stock price experienced a decline of approximately 2.56%.
Overall, NetEase demonstrated solid growth in key segments, although it fell below consensus revenue estimates and saw a dip in net income compared to the previous quarters.
