NetEase (9999) investor relations material

Executive summary

• Net revenues reached RMB 30.6 billion (US$4.4 billion) in Q1 2026, up 6.1% year-over-year and 11.1% sequentially, driven by strong performance in established gaming titles and international expansion.

• Games and related value-added services generated RMB 25.7 billion (US$3.7 billion), up 6.9% year-over-year, with major titles like Where Winds Meet and Fantasy Westward Journey achieving record engagement.

• Net income attributable to shareholders was RMB 10.7 billion (US$1.5 billion), with non-GAAP net income at RMB 11.3 billion (US$1.6 billion), stable year-over-year.

• Gross profit increased 14.8% year-over-year to RMB 21.2 billion (US$3.1 billion), with gross margin improving to 69.4% from 64.1% a year ago.

• CEO emphasized ongoing innovation, global expansion, and technological advancement.

Financial highlights

• Total net revenue: RMB 30.6 billion (US$4.4 billion), up 6.1% year-over-year and 11.1% sequentially.

• Games and related VAS: RMB 25.7 billion (US$3.7 billion), up 6.9% year-over-year.

• Youdao net revenue: RMB 1.3 billion (US$195.4 million), up 3.8% year-over-year, but declined sequentially.

• NetEase Cloud Music net revenue: RMB 2.0 billion (US$287.2 million), up 6.6% year-over-year, stable sequentially.

• Innovative businesses and others: RMB 1.5 billion (US$224.6 million), down 4.6% year-over-year and 24% sequentially, mainly due to e-commerce and advertising declines.

Outlook and guidance

• Management plans to strengthen technological capabilities, focus on innovation, and expand globally, with new titles like Sea of Elements targeting Q3 launch and positive user feedback.