NetEase (9999) Q1 2026 earnings summary

Executive summary

• Q1 2026 net revenues reached RMB30.6 billion (US$4.4 billion), up 6.1% year-over-year and 11.1% sequentially, driven by strong games business and global expansion.

• Net income attributable to shareholders was RMB10.7 billion (US$1.5 billion), up from RMB10.3 billion a year ago; non-GAAP net income was RMB11.3 billion (US$1.6 billion), stable year-over-year.

• Major titles like Where Winds Meet, Marvel Rivals, and Fantasy Westward Journey achieved record engagement and revenue, with international expansion and stable Blizzard operations in China.

• CEO emphasized ongoing innovation, international growth, and focus on technological capabilities.

• Operating profit margin improved to 41.4%, reflecting enhanced profitability.

Financial highlights

• Total net revenue: RMB30.6 billion (US$4.4 billion), up 6.1% YoY; games and related VAS: RMB25.7 billion (US$3.7 billion), up 6.9% YoY.

• Gross profit was RMB21.2 billion (US$3.1 billion), up 14.8% YoY; gross margin improved to 69.4% from 64.1% YoY.

• NetEase Cloud Music net revenue: RMB2.0 billion (US$287.2 million), up 6.6% YoY.

• Youdao net revenue: RMB1.3 billion (US$195.4 million), up 3.8% YoY, but down sequentially.

• Innovative businesses and others: RMB1.5 billion (US$224.6 million), down 4.6% YoY and 24% QoQ, mainly due to e-commerce and advertising declines.

Outlook and guidance

• Focus on innovation, differentiated gameplay, and strengthening technological capabilities to compete globally.

• Continued investment in global expansion, localization, and cross-device compatibility for flagship titles.

• Sea of Elements and Ananta are on track for launch, with Sea of Elements targeting Q3 and positive user feedback.