NetEase (9999) Q2 2024 earnings summary

Executive summary

• Net revenues for Q2 2024 reached RMB 25.5 billion (US$3.5 billion), up 6.1% year-over-year, driven by strong performance in mobile games and diversified business segments.

• Gross profit increased 11.6% year-over-year to RMB 16.0 billion (US$2.2 billion).

• Net income attributable to shareholders was RMB 6.8 billion (US$930.0 million); non-GAAP net income was RMB 7.8 billion (US$1.1 billion).

• Major new game launches and updates, including Once Human, Lost Light, Naraka: Bladepoint Mobile, and Justice Mobile, contributed to record user engagement and revenue highs.

• International expansion and partnerships, such as the return of World of Warcraft and new Marvel titles, are broadening global reach.

Financial highlights

• Games and related value-added services net revenues rose 6.7% year-over-year to RMB 20.1 billion (US$2.8 billion); mobile games accounted for 76.4% of online game revenue.

• Youdao net revenues increased 9.5% year-over-year to RMB 1.3 billion (US$181.9 million), driven by online marketing and AI subscription services.

• Cloud Music net revenues grew 4.7% year-over-year to RMB 2.0 billion (US$280.8 million), mainly from membership subscriptions.

• Gross profit margin improved to 62.9% from 59.9% a year ago; games and related VAS margin rose to 70%.

• Non-GAAP net income attributable to shareholders was RMB 7.8 billion (US$1.1 billion); non-GAAP basic EPS was US$1.67 per ADS.

Outlook and guidance

• Focus remains on innovation, expanding game genres, and international growth, with several high-profile launches planned for late 2024 and 2025.

• Continued investment in R&D, AI, and content creation to sustain long-term growth in gaming, education, and music.