NetEase's Q1 Earnings: Gaming Giant Shows Resilience with Growth in Cash Flow and Cloud Music
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 23 2024
0mins
Should l Buy NTES?
Source: Benzinga
NetEase, Inc Financial Performance:
- Reported 7.2% revenue growth in Q1 2024 to $3.72 billion, missing analyst estimates.
- Adjusted EPADS of $1.81 exceeded analyst consensus.
- Games and related services revenues grew by 7.0% with a gross margin increase to 69.5%.
- Youdao, Inc.'s revenue increased by 19.7%, but gross margin declined due to online marketing services.
- Cloud Music's revenue was up by 3.6% with an expanded gross margin.
Other Financial Highlights:
- Innovative businesses revenue grew by 6.1% with an improved gross margin.
- NetEase held $15.7 billion in cash and equivalents as of March 31, 2024.
- Approved a dividend of $0.4950 per ADS for the first quarter of 2024.
CEO Statement and Stock Performance:
- CEO William Ding highlighted the company's premium games and global expansion plans.
- NetEase stock gained over 17% in the last 12 months.
- NTES shares traded lower by 3.62% at $94.80 premarket on Thursday.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy NTES?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on NTES
Wall Street analysts forecast NTES stock price to rise
6 Analyst Rating
5 Buy
1 Hold
0 Sell
Strong Buy
Current: 118.170
Low
135.00
Averages
157.33
High
166.00
Current: 118.170
Low
135.00
Averages
157.33
High
166.00
About NTES
NetEase Inc is a company principally engaged in the gaming business. The Company operates through four segments. Games and Related Value-Added Services segment is engaged in the development and sale of mobile games, game operations, and other value-added services, including in-game virtual items and prepaid credits. Youdao segment provides learning services, smart devices, and online marketing services. The segment's products and services include online courses and digital content services. NetEase Cloud Music segment provides online music services, social entertainment services, and other services through the sale of membership subscriptions for various content and service packages, primarily through the sale of virtual items. Innovative Businesses and Others segment provides rigorous selection, advertising services, email, and other value-added services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
NetEase Q4 2025 Earnings Call Highlights
- Strong Financial Performance: NetEase reported total net revenues of RMB 112.6 billion for 2025, a 7% year-over-year increase, with RMB 92.1 billion from games and value-added services, demonstrating the company's solid market leadership with 23 consecutive years of growth in online gaming.
- AI-Driven Transformation: The company has comprehensively integrated AI into its internal workflows, utilizing proprietary tools like CodeMaker and DreamMaker to accelerate development and reduce costs, which enhances product quality and efficiency, indicating a significant shift in future game development.
- Global Product Milestones: The game
See More
Mattel Shares Drop 30% Following Earnings Report, While Competitor Hasbro Rises.
Mattel's Stock Performance: Mattel's stock fell over 30% following a disappointing earnings report, indicating a significant loss of investor confidence.
Hasbro's Stock Performance: In contrast, Hasbro's shares reached a six-year high after reporting strong fourth-quarter results, showcasing a positive market response.
See More
NetEase Reports Disappointing Q4 Results, Stock Drops
- Disappointing Revenue: NetEase's Q4 revenue rose 3.0% year-on-year to $3.94 billion, falling short of the $4.10 billion analyst consensus, indicating competitive pressures that may affect investor confidence moving forward.
- Gaming Segment Growth: Revenues from games and related value-added services increased by 3.4% to $3.14 billion, with gross margin rising 384 basis points to 70.5%, reflecting the successful launch of self-developed games like Fantasy Westward Journey Online and Where Winds Meet.
- Cloud Music and Innovation Challenges: NetEase Cloud Music's revenue grew by 4.7% to $281.46 million, with gross margin expanding by 273 basis points to 34.7%, while innovative businesses saw a 10.4% decline in revenue to $292.77 million, indicating challenges in the diversification strategy.
- Dividend and Cash Flow: The board approved a dividend of 23.2 cents per share, up from 11.4 cents in Q3, demonstrating robust cash flow with $2.12 billion generated in operating cash flow for the quarter, which enhances shareholder return confidence.
See More
NetEase Cloud Music Reports FY 2025 Financial Results
- Revenue and Profit Growth: In FY 2025, NetEase Cloud Music reported revenue of RMB 7,759.45 million, a slight increase of 0.1%, while operating profit surged by 38.5% to RMB 1,621.95 million, indicating robust growth and improved profitability in the music streaming market.
- User Engagement Increase: The DAU/MAU ratio exceeded 30% in 2025, driven by enhanced user experience and brand awareness, which contributed to steady growth in user engagement and solidified the platform's position among young users.
- Diverse Content Ecosystem: The company expanded its copyrighted music library and actively promoted original music, with over 1 million independent artists contributing 5.6 million tracks, enriching the platform's content and enhancing user stickiness and appeal.
- Innovative Product Features: In 2025, NetEase Cloud Music introduced the AI recommendation model Climber and several innovative features like the
See More
NetEase Declares $1.16 Quarterly Dividend with 3.76% Yield
- Quarterly Dividend Announcement: NetEase (NTES) has declared a quarterly dividend of $1.16 per ADS, payable on March 27, which reflects the company's stable cash flow amidst current market conditions.
- Dividend Yield: The forward yield of 3.76% not only provides a steady return for investors but may also attract more income-seeking investors to consider NetEase's stock.
- Financial Performance Overview: Despite NetEase's non-GAAP EPADS of $1.58 in Q3 2025 missing expectations by $0.46 and revenue of $3.9 billion falling short by $250 million, the company continues to maintain its dividend payments, demonstrating financial resilience.
- Future Outlook: With the Q4 2025 earnings report approaching, investors will closely monitor how NetEase addresses the decline in revenue and operating profit to assess its long-term growth potential and dividend sustainability.
See More
NetEase Q4 2025 Earnings Report Analysis
- Disappointing Earnings: NetEase reported a Q4 2025 Non-GAAP EPADS of $1.58, missing estimates by $0.46, indicating a significant decline in profitability that could negatively impact investor confidence.
- Lackluster Revenue Growth: The company generated $3.9 billion in total revenue, a 3.0% year-over-year increase, but fell short of expectations by $250 million, reflecting pressures from intensified market competition and slowing consumer spending.
- Gaming Segment Performance: Net revenues from games and related value-added services reached RMB 22.0 billion ($3.1 billion), up 3.4% year-over-year, yet this modest growth failed to significantly enhance overall performance, highlighting industry growth bottlenecks.
- Dividend Policy: The board approved a dividend of $0.232 per share for Q4 2025, demonstrating a commitment to shareholders despite poor performance, which may help stabilize shareholder confidence.
See More
NetEase Q4 2025 Earnings Call Highlights
- Strong Financial Performance: NetEase reported total net revenues of RMB 112.6 billion for 2025, a 7% year-over-year increase, with RMB 92.1 billion from games and value-added services, demonstrating the company's solid market leadership with 23 consecutive years of growth in online gaming.
- AI-Driven Transformation: The company has comprehensively integrated AI into its internal workflows, utilizing proprietary tools like CodeMaker and DreamMaker to accelerate development and reduce costs, which enhances product quality and efficiency, indicating a significant shift in future game development.
- Global Product Milestones: The game
See More
Mattel Shares Drop 30% Following Earnings Report, While Competitor Hasbro Rises.
Mattel's Stock Performance: Mattel's stock fell over 30% following a disappointing earnings report, indicating a significant loss of investor confidence.
Hasbro's Stock Performance: In contrast, Hasbro's shares reached a six-year high after reporting strong fourth-quarter results, showcasing a positive market response.
See More
NetEase Reports Disappointing Q4 Results, Stock Drops
- Disappointing Revenue: NetEase's Q4 revenue rose 3.0% year-on-year to $3.94 billion, falling short of the $4.10 billion analyst consensus, indicating competitive pressures that may affect investor confidence moving forward.
- Gaming Segment Growth: Revenues from games and related value-added services increased by 3.4% to $3.14 billion, with gross margin rising 384 basis points to 70.5%, reflecting the successful launch of self-developed games like Fantasy Westward Journey Online and Where Winds Meet.
- Cloud Music and Innovation Challenges: NetEase Cloud Music's revenue grew by 4.7% to $281.46 million, with gross margin expanding by 273 basis points to 34.7%, while innovative businesses saw a 10.4% decline in revenue to $292.77 million, indicating challenges in the diversification strategy.
- Dividend and Cash Flow: The board approved a dividend of 23.2 cents per share, up from 11.4 cents in Q3, demonstrating robust cash flow with $2.12 billion generated in operating cash flow for the quarter, which enhances shareholder return confidence.
See More
NetEase Cloud Music Reports FY 2025 Financial Results
- Revenue and Profit Growth: In FY 2025, NetEase Cloud Music reported revenue of RMB 7,759.45 million, a slight increase of 0.1%, while operating profit surged by 38.5% to RMB 1,621.95 million, indicating robust growth and improved profitability in the music streaming market.
- User Engagement Increase: The DAU/MAU ratio exceeded 30% in 2025, driven by enhanced user experience and brand awareness, which contributed to steady growth in user engagement and solidified the platform's position among young users.
- Diverse Content Ecosystem: The company expanded its copyrighted music library and actively promoted original music, with over 1 million independent artists contributing 5.6 million tracks, enriching the platform's content and enhancing user stickiness and appeal.
- Innovative Product Features: In 2025, NetEase Cloud Music introduced the AI recommendation model Climber and several innovative features like the
See More
NetEase Declares $1.16 Quarterly Dividend with 3.76% Yield
- Quarterly Dividend Announcement: NetEase (NTES) has declared a quarterly dividend of $1.16 per ADS, payable on March 27, which reflects the company's stable cash flow amidst current market conditions.
- Dividend Yield: The forward yield of 3.76% not only provides a steady return for investors but may also attract more income-seeking investors to consider NetEase's stock.
- Financial Performance Overview: Despite NetEase's non-GAAP EPADS of $1.58 in Q3 2025 missing expectations by $0.46 and revenue of $3.9 billion falling short by $250 million, the company continues to maintain its dividend payments, demonstrating financial resilience.
- Future Outlook: With the Q4 2025 earnings report approaching, investors will closely monitor how NetEase addresses the decline in revenue and operating profit to assess its long-term growth potential and dividend sustainability.
See More
NetEase Q4 2025 Earnings Report Analysis
- Disappointing Earnings: NetEase reported a Q4 2025 Non-GAAP EPADS of $1.58, missing estimates by $0.46, indicating a significant decline in profitability that could negatively impact investor confidence.
- Lackluster Revenue Growth: The company generated $3.9 billion in total revenue, a 3.0% year-over-year increase, but fell short of expectations by $250 million, reflecting pressures from intensified market competition and slowing consumer spending.
- Gaming Segment Performance: Net revenues from games and related value-added services reached RMB 22.0 billion ($3.1 billion), up 3.4% year-over-year, yet this modest growth failed to significantly enhance overall performance, highlighting industry growth bottlenecks.
- Dividend Policy: The board approved a dividend of $0.232 per share for Q4 2025, demonstrating a commitment to shareholders despite poor performance, which may help stabilize shareholder confidence.
See More
