NetEase (9999) Q1 2025 earnings summary

Executive summary

• Net revenues for Q1 2025 reached RMB 28.8 billion (US$4.0 billion), up 7.4% year-over-year, driven by strong performance in gaming and value-added services.

• Net income attributable to shareholders was RMB 10.3 billion (US$1.4 billion), with non-GAAP net income at RMB 11.2 billion (US$1.5 billion), reflecting robust profitability.

• Major new game launches, including Marvel Rivals, FragPunk, Once Human, and Where Winds Meet, achieved global success and record engagement.

• Global expansion, innovation in game development, and the return of Blizzard titles in China reinforced competitive positioning.

• ESG initiatives and sustainability efforts led to improved ratings and industry recognition.

Financial highlights

• Gross profit for Q1 was RMB 18.5 billion (US$2.5 billion), up 8.6% year-over-year, with a gross profit margin of 64.1%.

• Net revenues from games and related value-added services rose 12.1% year-over-year to RMB 24.0 billion (US$3.3 billion), with a gross margin of 69.5%.

• Total operating expenses decreased 14.4% year-over-year to RMB 8.0 billion (US$1.1 billion), or 28% of net revenues.

• Net cash position as of March 31, 2025, was RMB 137.0 billion (US$18.9 billion), up from RMB 131.5 billion at year-end 2024.

• Net cash provided by operating activities was RMB 12.1 billion (US$1.7 billion), up from RMB 9.6 billion in Q1 2024.

Outlook and guidance

• Robust pipeline of new game releases and ongoing global expansion expected to sustain growth.

• Continued investment in content creation, product development, and esports operations.

• Focus on long-term operations, deepening user engagement, and technology-driven innovation.