HANGZHOU, China, Feb. 29,
2024 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and
HKEX: 9999, "NetEase" or the "Company"), a leading internet and
game services provider, today announced its unaudited financial
results for the fourth quarter and fiscal year ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights
- Net revenues were RMB27.1 billion
(US$3.8 billion), an increase of 7.0%
compared with the fourth quarter of 2022.
- Games and related value-added services net revenues were
RMB20.9 billion (US$2.9 billion), an increase of 9.6% compared
with the fourth quarter of 2022.
- Youdao net revenues were RMB1.5
billion (US$208.5 million), an
increase of 1.8% compared with the fourth quarter of 2022.
- Cloud Music net revenues were RMB2.0
billion (US$279.7 million), a
decrease of 16.4% compared with the fourth quarter of 2022.
- Innovative businesses and others net revenues were RMB2.8 billion (US$387.7
million), an increase of 12.9% compared with the fourth
quarter of 2022.
- Gross profit was RMB16.8 billion
(US$2.4 billion), an increase of
27.0% compared with the fourth quarter of 2022.
- Total operating expenses were RMB10.0
billion (US$1.4 billion), an
increase of 13.0% compared with the fourth quarter of 2022.
- Net income attributable to the Company's shareholders was
RMB6.6 billion (US$927.1 million). Non-GAAP net income from
continuing operations attributable to the Company's shareholders
was RMB7.4 billion (US$1.0 billion).[1]
- Basic net income per share was US$0.29 (US$1.44
per ADS). Non-GAAP basic net income from continuing operations per
share was US$0.32 (US$1.62 per ADS).[1]
[1] As
used in this announcement, non-GAAP net income from continuing
operations attributable to the Company's shareholders and non-GAAP
basic and diluted net income from continuing operations per share
and per ADS are defined to exclude share-based compensation
expenses. See the unaudited reconciliation of GAAP and non-GAAP
results at the end of this announcement.
|
Fourth Quarter 2023 and Early 2024
Operational Highlights
- Leading franchises, such as Fantasy Westward Journey and
Westward Journey Online, maintained enduring user appeal,
supported by periodic new content introductions.
- Eggy Party's broad
popularity has engaged over 500 million cumulative registered
players since its launch in 2022 and made a significant
breakthrough of 40 million daily active users during the Lunar New
Year.
- Justice franchises reached a new milestone of 100
million active users with densely packed content and widely
embraced in-game events for players.
- Racing Master achieved superb performances in
Hong Kong, Macau and Taiwan, including topping the local iOS
download and grossing charts in Taiwan within the first week of its
launch.
- Cloud Music considerably enhanced its music-centric
monetization and further improved profitability, while continuing
to cultivate its music community and introduce new premium content
and features.
- Youdao further improved its profitability and achieved
record-high operating cash flow, driven by the robust performance
of digital content services and online marketing services.
"2023 proved to be another landmark year for NetEase Games with
continuous cross-category innovations that expand and diversify our
robust game portfolio," said Mr. William
Ding, Chief Executive Officer and Director of NetEase. "The
success of games like Eggy
Party and our heralded new titles, such as Racing
Master and Dunk City Dynasty, highlights our ability to
bring players dynamic and original products in multiple genres. At
the same time, we have maintained a strategic advantage with our
MMO roots, propelling Justice mobile game to transcend the
boundaries of conventional MMO gaming.
"Alongside our business's momentum, we have assumed increasing
social responsibility. By integrating a 'Minors Mode' across our
domestic game lineup, we have strengthened our existing
anti-addiction system and continue to steer the gaming ecosystem
toward a healthier trajectory with innovative products and
technology.
"Besides games, our diverse business segments, such as Cloud
Music and Youdao, remain on course, consistently delivering premium
content. Throughout the NetEase family, we prioritize the creation
of novel and high-quality products and services that grow our
global appeal and elevate user experiences while pushing innovation
forward," Mr. Ding concluded.
Fourth Quarter 2023 Financial Results
Net Revenues
Net revenues for the fourth quarter of 2023 were
RMB27.1 billion (US$3.8 billion), compared with RMB27.3 billion and RMB25.4 billion for the preceding quarter and the
fourth quarter of 2022, respectively.
Net revenues from games and related value-added services were
RMB20.9 billion (US$2.9 billion) for the fourth quarter of 2023,
compared with RMB21.8 billion
and RMB19.1 billion for the preceding
quarter and the fourth quarter of 2022, respectively. Net revenues
from the operation of online games accounted for approximately
93.4% of the segment's net revenues for the fourth quarter of 2023,
compared with 93.7% and 91.8% for the
preceding quarter and the fourth quarter of 2022,
respectively. Net revenues from mobile games accounted for
approximately 76.7% of net revenues from the operation of online
games for the fourth quarter of 2023, compared with 77.6% and
66.4% for the preceding quarter and the fourth
quarter of 2022, respectively.
Net revenues from Youdao were RMB1.5
billion (US$208.5 million) for
the fourth quarter of 2023, compared with RMB1.5 billion each for the preceding quarter and
the fourth quarter of 2022.
Net revenues from Cloud Music were RMB2.0
billion (US$279.7 million) for
the fourth quarter of 2023, compared with RMB2.0 billion and RMB2.4
billion for the preceding quarter and the fourth quarter of
2022, respectively.
Net revenues from innovative businesses and others were
RMB2.8 billion (US$387.7 million) for the fourth quarter of 2023,
compared with RMB2.0 billion and
RMB2.4 billion for the preceding
quarter and the fourth quarter of 2022, respectively.
Gross Profit
Gross profit for the fourth quarter of 2023 was RMB16.8 billion (US$2.4
billion), compared with RMB17.0
billion and RMB13.2 billion
for the preceding quarter and the fourth quarter of 2022,
respectively.
The slight quarter-over-quarter decrease in games and
related value-added services' gross profit was primarily due
to decreased net revenues from online games. The year-over-year
increase was primarily due to increased net revenues from online
games such as Justice mobile game, which was launched
in 2023, and Eggy Party,
offset in part by the termination of certain licensed
games.
The quarter-over-quarter decrease in Youdao's gross profit was
primarily due to decreased revenue contribution from its learning
services. The slight year-over-year decrease was primarily due
to reduced revenue contribution from its smart devices, which was
partially offset by increased revenue contribution from its online
marketing services.
The quarter-over-quarter and year-over-year increases in
Cloud Music's gross profit primarily resulted from increased net
revenues from sales of membership subscriptions and continued
improvement in cost control measures.
The quarter-over-quarter and year-over-year increases in
innovative businesses and others' gross profit were primarily due
to increased gross profit contribution from Yanxuan and advertising
services.
Gross Profit Margin
Gross profit margin for games and related value-added services
for the fourth quarter of 2023 was 69.5%, compared with 69.0% and
59.1% for the preceding quarter and the fourth quarter of 2022,
respectively. The slight quarter-over-quarter increase was
primarily attributable to changes in the revenue contribution from
different channels. The year-over-year increase was mainly
attributable to a higher proportion of net revenues contributed by
NetEase's self-developed games.
Gross profit margin for Youdao for the fourth quarter of 2023
was 49.9%, compared with 55.9% and 53.3% for the preceding quarter
and the fourth quarter of 2022, respectively. The
quarter-over-quarter and year-over-year decreases were mainly due
to decreased revenue contribution from its learning services and
decreased gross profit margin from its smart devices.
Gross profit margin for Cloud Music for the fourth quarter of
2023 was 30.3%, compared with 27.2% and 17.8% for the preceding
quarter and the fourth quarter of 2022, respectively. The
quarter-over-quarter and year-over-year improvements were mainly
due to the factors enumerated above.
Gross profit margin for innovative businesses and others for the
fourth quarter of 2023 was 34.4%, compared with 27.3% and
31.5% for the preceding quarter and the fourth quarter of 2022,
respectively. The quarter-over-quarter increase was mainly due
to improved gross profit margin from advertising services. The
year-over-year increase was mainly due to improved gross profit
margin from Yanxuan and advertising services.
Operating Expenses
Total operating expenses for the fourth quarter of 2023 were
RMB10.0 billion (US$1.4 billion), compared with RMB9.4 billion and RMB8.8
billion for the preceding quarter and the fourth quarter of
2022, respectively. The quarter-over-quarter and
year-over-year increases were mainly due to increased
marketing expenditures and research and development investments
associated with games and related value-added services.
Other Income/(Expenses)
Other income/(expenses) consisted of investment (loss)/income,
interest income, exchange (losses)/ gains and others. The
quarter-over-quarter decrease was mainly due to a net investment
loss resulting from fair value changes of equity investments with
readily determinable fair value in the fourth quarter of 2023,
compared with a net investment income recorded in the prior
quarter, as well as a higher net exchange loss arising from the
fluctuation of the exchange rate of the U.S. dollar against the RMB
in the fourth quarter of 2023. The year-over-year increase was
primarily attributable to higher interest income resulting from the
improved net cash position.
Income Tax
The Company recorded a net income tax charge of RMB1.1 billion (US$150.5
million) for the fourth quarter of 2023, compared with
RMB1.3 billion and RMB966.6 million for the preceding quarter and
the fourth quarter of 2022, respectively. The effective tax rate
for the fourth quarter of 2023 was 13.8%, compared with 14.2% and
20.2% for the preceding quarter and the fourth quarter of 2022,
respectively. The effective tax rate represents certain estimates
by the Company as to the tax obligations and benefits applicable to
it in each quarter.
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders totaled
RMB6.6 billion (US$927.1 million) for the fourth quarter of 2023,
compared with RMB7.8 billion and
RMB4.0 billion for the preceding
quarter and the fourth quarter of 2022, respectively.
NetEase reported basic net income of US$0.29 per share (US$1.44 per ADS) for the fourth quarter of 2023,
compared with US$0.34 per share
(US$1.72 per ADS) and US$0.17 per share (US$0.86 per ADS) for the preceding quarter and
the fourth quarter of 2022, respectively.
Non-GAAP net income from continuing operations attributable to
the Company's shareholders totaled RMB7.4
billion (US$1.0 billion) for
the fourth quarter of 2023, compared with RMB8.6 billion and RMB4.8
billion for the preceding quarter and the fourth quarter of
2022, respectively.
NetEase reported non-GAAP basic net income from continuing
operations of US$0.32 per share
(US$1.62 per ADS) for the fourth
quarter of 2023, compared with US$0.38 per share (US$1.89 per ADS) and US$0.21 per share (US$1.05 per ADS) for the preceding quarter and
the fourth quarter of 2022, respectively.
Fiscal Year 2023 Financial Results
Net Revenues
Net revenues for fiscal year 2023 were RMB103.5 billion (US$14.6 billion), compared with RMB96.5 billion for fiscal year 2022.
Net revenues from games and related value-added services were
RMB81.6 billion (US$11.5 billion) for fiscal year 2023, compared
with RMB74.6 billion for fiscal year
2022. Net revenues from the operation of online games accounted for
approximately 92.9% of the segment's total net revenues for fiscal
year 2023, compared with 92.5% for fiscal year 2022. Net revenues
from mobile games accounted for approximately 75.2% of net revenues
from the operation of online games for fiscal year 2023, compared
with 67.0% for fiscal year 2022. The higher percentage contribution
from mobile games was mainly due to a higher proportion of net
revenues generated by mobile games such as Eggy Party and Justice mobile
game.
Net revenues from Youdao were RMB5.4
billion (US$759.1 million) for
fiscal year 2023, compared with RMB5.0
billion for fiscal year 2022.
Net revenues from Cloud Music were RMB7.9
billion (US$1.1 billion) for
fiscal year 2023, compared with RMB9.0
billion for fiscal year 2022.
Net revenues from innovative businesses and others were
RMB8.6 billion (US$1.2 billion) for fiscal year 2023,
compared with RMB7.9 billion for
fiscal year 2022.
Gross Profit
Gross profit for fiscal year 2023 was RMB63.1 billion (US$8.9 billion), compared with RMB52.8 billion for fiscal year 2022.
The year-over-year increase in games and related value-added
services gross profit was primarily due to increased net
revenues from the operation of online games, mainly from certain
newly launched mobile games.
The year-over-year increase in Youdao gross profit was mainly
due to increased revenue contribution from its online marketing
services and learning services.
The year-over-year increase in Cloud Music gross profit was
primarily attributable to increased net revenues from sales of
membership subscriptions and continued improvement in cost control
measures.
The year-over-year increase in innovative businesses and others
gross profit was primarily due to increased gross profits from
Yanxuan and several other businesses included within the
segment.
Operating Expenses
Total operating expenses for fiscal year 2023 were RMB35.4 billion (US$5.0
billion), compared with RMB33.1
billion for fiscal year 2022. The year-over-year increase
was primarily due to higher research and development investments
and marketing expenditures for games and related value-added
services.
Other Income/(Expenses)
The year-over-year increase was mainly due to higher interest
income resulting from the Company's increased net cash
position, and investment income arising from fair value
changes of equity investments with readily determinable fair value.
The foregoing was partially offset by the fact that the Company
recorded a net exchange loss in fiscal year 2023, compared to a net
exchange gain in fiscal year 2022, mainly resulting from the
fluctuation of the exchange rate of the U.S. dollar against the RMB
during the years.
Income Taxes
The Company recorded a net income tax charge of RMB4.7 billion (US$661.9
million) for fiscal year 2023, compared with RMB5.0 billion for fiscal year 2022. The
effective tax rate was 13.8% for fiscal year
2023, compared with 20.7% for fiscal year 2022. The lower
effective tax rate for fiscal year 2023 was partially due to tax
benefits recognized in the year.
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders for fiscal
year 2023 totaled RMB29.4 billion
(US$4.1 billion), compared with
RMB20.3 billion for fiscal year
2022.
NetEase reported basic net income of US$1.29 per share (US$6.44 per ADS) for fiscal year 2023, compared
with US$0.88 per share (US$4.39 per ADS) for fiscal year 2022.
Non-GAAP net income from continuing operations attributable
to the Company's shareholders for fiscal year 2023
totaled RMB32.6 billion (US$4.6 billion), compared with RMB22.8 billion for fiscal year 2022.
NetEase reported non-GAAP basic net income from continuing
operations of US$1.43 per share
(US$7.14 per ADS) for fiscal year
2023, compared with US$0.98 per share
(US$4.92 per ADS) for fiscal year
2022.
Other Financial Information
As of December 31, 2023, the
Company's net cash (total cash and cash equivalents, current and
non-current time deposits and restricted cash, as well as
short-term investments balance, minus short-term and long-term
loans) totaled RMB110.9 billion (US$15.6 billion), compared with RMB95.6 billion as of December 31, 2022. Net cash provided by operating
activities was RMB35.3 billion
(US$5.0 billion) for fiscal
year 2023, compared with RMB27.7
billion for fiscal year 2022.
Quarterly Dividend
The board of directors has approved a dividend of US$0.21597 per share (US$1.07985 per ADS) for the fourth quarter
of 2023 to holders of ordinary shares and holders of ADSs as of the
close of business on March 14, 2024,
Beijing/Hong Kong Time and New
York Time, respectively, payable in U.S. dollars. For holders of
ordinary shares, in order to qualify for the dividend, all valid
documents for the transfer of shares accompanied by the relevant
share certificates must be lodged for registration with the
Company's Hong Kong branch share
registrar, Computershare Hong Kong Investor Services Limited, at
Shops 1712-1716, 17th Floor, Hopewell Centre, 183
Queen's Road East, Wanchai, Hong
Kong no later than 4:30 p.m.
on March 14, 2024 (Beijing/ Hong Kong Time). The payment date is
expected to be March 25, 2024 for
holders of ordinary shares, and on or around March 28, 2024 for holders of ADSs.
NetEase paid a dividend of US$0.0990 per share (US$0.4950 per ADS) for the third quarter of
2023 in December 2023.
Under the Company's current dividend policy, the determination
to make dividend distributions and the amount of such distribution
in any particular quarter will be made at the discretion of its
board of directors and will be based upon the Company's operations
and earnings, cash flow, financial condition and other relevant
factors.
Share Repurchase Program
On November 17, 2022, the Company
announced that its board of directors had approved a share
repurchase program of up to US$5.0
billion of the Company's ADSs and ordinary shares in open
market transactions. This share repurchase program commenced on
January 10, 2023 and will be in
effect for a period not to exceed 36 months from such date. As of
December 31, 2023,
approximately 7.2 million ADSs had been repurchased under this
program for a total cost of US$644.1
million.
The extent to which NetEase repurchases its ADSs and its
ordinary shares depends upon a variety of factors, including market
conditions. These programs may be suspended or discontinued at any
time.
** The United States dollar
(US$) amounts disclosed in this announcement are presented solely
for the convenience of the reader. The percentages stated are
calculated based on RMB.
Conference Call
NetEase's management team will host a teleconference call with a
simultaneous webcast at 7:00 a.m.
New York Time on Thursday, February 29,
2024 (Beijing/ Hong Kong
Time: 8:00 p.m., Thursday,
February 29, 2024). NetEase's management will be on the call
to discuss the quarterly results and answer questions.
Interested parties may participate in the conference call by
dialing 1-914-202-3258 and providing conference ID: 10036635,
15 minutes prior to the initiation of the call. A replay of the
call will be available by dialing 1-855-883-1031 and entering PIN:
10036635. The replay will be available through March 6, 2024.
This call will be webcast live and the replay will be available
for 12 months. Both will be available on NetEase's Investor
Relations website at http://ir.netease.com/.
About NetEase, Inc.
NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase") is a
leading internet and game services provider centered around premium
content. With extensive offerings across its expanding gaming
ecosystem, the Company develops and operates some of the most
popular and longest running mobile and PC games available in
China and globally.
Powered by one of the largest in-house game R&D teams
focused on mobile, PC and console, NetEase creates superior gaming
experiences, inspires players, and passionately delivers value for
its thriving community worldwide. By infusing play with culture,
and education with technology, NetEase transforms gaming into a
meaningful vehicle to build a more entertaining and enlightened
world.
Beyond games, NetEase service offerings include its
majority-controlled subsidiaries Youdao (NYSE: DAO), an
intelligent learning company with industry-leading technology, and
Cloud Music (HKEX: 9899), a well-known online music platform
featuring a vibrant content community, as well as Yanxuan,
NetEase's private label consumer lifestyle brand.
NetEase's market-leading ESG initiatives are among the most
recognized in the global media and entertainment industry, earning
it inclusion in the 2022 Dow Jones Sustainability World Index, 2022
Dow Jones Sustainability Emerging Markets Index and 2023 Bloomberg
Gender-Equality Index, as well as receiving an "A" rating from
MSCI. For more information, please visit:
http://ir.netease.com/.
Forward Looking Statements
This announcement contains statements of a forward-looking
nature. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. You can identify these forward-looking statements by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar
expressions. In addition, statements that are not historical facts,
including statements about NetEase's strategies and business plans,
its expectations regarding the growth of its business and its
revenue and the quotations from management in this announcement are
or contain forward-looking statements. NetEase may also make
forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission (the "SEC"), in announcements
made on the website of The Stock Exchange of Hong Kong Limited (the
"Hong Kong Stock Exchange"), in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. The accuracy of these statements may be
impacted by a number of business risks and uncertainties that could
cause actual results to differ materially from those projected or
anticipated, including risks related to: the risk that the online
games market will not continue to grow or that NetEase will not be
able to maintain its position in that market in China or globally; risks associated with
NetEase's business and operating strategies and its ability to
implement such strategies; NetEase's ability to develop and manage
its operations and business; competition for, among other things,
capital, technology and skilled personnel; potential changes
in government regulation that could adversely affect the industry
and geographical markets in which NetEase operates; the risk that
NetEase may not be able to continuously develop new and creative
online services or that NetEase will not be able to set, or follow
in a timely manner, trends in the market; risks related to
economic uncertainty and capital market disruption; risks related
to the expansion of NetEase's businesses and operations
internationally; risks associated with cybersecurity threats
or incidents; and the risk that fluctuations in the value of the
Renminbi with respect to other currencies could adversely affect
NetEase's business and financial results. Further information
regarding these and other risks is included in NetEase's filings
with the SEC and announcements on the website of the Hong Kong
Stock Exchange. NetEase does not undertake any obligation to update
this forward-looking information, except as required under
applicable law.
Non-GAAP Financial Measures
NetEase considers and uses non-GAAP financial measures, such as
non-GAAP net income from continuing operations attributable to the
Company's shareholders and non-GAAP basic and diluted net income
from continuing operations per ADS and per share, as supplemental
metrics in reviewing and assessing its operating performance and
formulating its business plan. The presentation of non-GAAP
financial measures is not intended to be considered in isolation or
as a substitute for the financial information prepared and
presented in accordance with accounting principles generally
accepted in the United States of
America ("U.S. GAAP").
NetEase defines non-GAAP net income from continuing operations
attributable to the Company's shareholders as net income from
continuing operations attributable to the Company's shareholders
excluding share-based compensation expenses. Non-GAAP net income
from continuing operations attributable to the Company's
shareholders enables NetEase's management to assess its operating
results without considering the impact of share-based compensation
expenses. NetEase believes that this non-GAAP financial measure
provide useful information to investors in understanding and
evaluating the Company's current operating performance and
prospects in the same manner as management does, if they so choose.
NetEase also believes that the use of this non-GAAP financial
measure facilitates investors' assessment of its operating
performance.
Non-GAAP financial measures are not defined under U.S. GAAP and
are not presented in accordance with U.S. GAAP. Non-GAAP financial
measures have limitations as analytical tools. One of the key
limitations of using non-GAAP net income from continuing operations
attributable to the Company's shareholders is that it does not
reflect all items of expense/ income that affect our operations.
Share-based compensation expenses have been and may continue to be
incurred in NetEase's business and are not reflected in the
presentation of non-GAAP net income from continuing operations
attributable to the Company's shareholders. In addition, the
non-GAAP financial measures NetEase uses may differ from the
non-GAAP measures used by other companies, including peer
companies, and therefore their comparability may be limited.
NetEase compensates for these limitations by reconciling
non-GAAP net income from continuing operations attributable to the
Company's shareholders to the nearest U.S. GAAP performance
measure, all of which should be considered when evaluating the
Company's performance. See the unaudited reconciliation of GAAP and
non-GAAP results at the end of this announcement. NetEase
encourages you to review its financial information in its entirety
and not rely on a single financial measure.
Contact for Media and Investors:
Email:
ir@service.netease.com
Tel: (+86) 571-8985-3378
NETEASE,
INC.
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
(in
thousands)
|
|
December
31,
|
|
|
December
31,
|
|
December
31,
|
|
2022
|
|
|
2023
|
|
2023
|
|
RMB
|
|
|
RMB
|
|
USD (Note
1)
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
24,889,000
|
|
|
21,428,902
|
|
3,018,198
|
Time
deposits
|
84,947,679
|
|
|
100,856,034
|
|
14,205,275
|
Restricted
cash
|
2,699,055
|
|
|
2,777,206
|
|
391,161
|
Accounts
receivable, net
|
5,002,872
|
|
|
6,422,417
|
|
904,579
|
Inventories
|
993,636
|
|
|
695,374
|
|
97,941
|
Prepayments and other current assets, net
|
5,448,284
|
|
|
6,076,595
|
|
855,871
|
Short-term
investments
|
7,622,673
|
|
|
4,436,057
|
|
624,806
|
Total current
assets
|
131,603,199
|
|
|
142,692,585
|
|
20,097,831
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property,
equipment and software, net
|
6,342,330
|
|
|
8,075,044
|
|
1,137,346
|
Land use
rights, net
|
4,121,767
|
|
|
4,075,143
|
|
573,972
|
Deferred
tax assets
|
1,480,789
|
|
|
1,560,088
|
|
219,734
|
Time
deposits
|
2,973,840
|
|
|
1,050,000
|
|
147,889
|
Restricted
cash
|
270
|
|
|
550
|
|
77
|
Other
long-term assets
|
26,238,790
|
|
|
28,471,568
|
|
4,010,136
|
Total non-current
assets
|
41,157,786
|
|
|
43,232,393
|
|
6,089,154
|
Total
assets
|
172,760,985
|
|
|
185,924,978
|
|
26,186,985
|
|
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interests
and Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
1,507,141
|
|
|
881,016
|
|
124,089
|
Salary and
welfare payables
|
4,732,941
|
|
|
4,857,206
|
|
684,123
|
Taxes
payable
|
2,813,096
|
|
|
2,571,534
|
|
362,193
|
Short-term
loans
|
23,875,704
|
|
|
19,240,163
|
|
2,709,920
|
Contract
liabilities
|
12,518,890
|
|
|
13,362,166
|
|
1,882,022
|
Accrued
liabilities and other payables
|
11,381,075
|
|
|
12,930,399
|
|
1,821,209
|
Total current
liabilities
|
56,828,847
|
|
|
53,842,484
|
|
7,583,556
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Deferred
tax liabilities
|
2,126,120
|
|
|
2,299,303
|
|
323,850
|
Long-term
loans
|
3,654,964
|
|
|
427,997
|
|
60,282
|
Other
long-term liabilities
|
1,277,574
|
|
|
1,271,113
|
|
179,032
|
Total non-current
liabilities
|
7,058,658
|
|
|
3,998,413
|
|
563,164
|
Total
liabilities
|
63,887,505
|
|
|
57,840,897
|
|
8,146,720
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
136,440
|
|
|
115,759
|
|
16,304
|
|
|
|
|
|
|
|
NetEase, Inc.'s
shareholders' equity
|
104,731,317
|
|
|
124,285,776
|
|
17,505,285
|
Noncontrolling
interests
|
4,005,723
|
|
|
3,682,546
|
|
518,676
|
Total equity
|
108,737,040
|
|
|
127,968,322
|
|
18,023,961
|
|
|
|
|
|
|
|
Total liabilities,
redeemable noncontrolling
interests and shareholders'
equity
|
172,760,985
|
|
|
185,924,978
|
|
26,186,985
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
NETEASE,
INC.
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(in thousands,
except per share data or per ADS data)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
25,354,129
|
|
27,270,406
|
|
27,140,165
|
|
3,822,612
|
|
96,495,809
|
|
103,468,159
|
|
14,573,185
|
Cost of
revenues
|
|
(12,109,765)
|
|
(10,304,106)
|
|
(10,315,030)
|
|
(1,452,842)
|
|
(43,729,683)
|
|
(40,404,765)
|
|
(5,690,892)
|
Gross
profit
|
|
13,244,364
|
|
16,966,300
|
|
16,825,135
|
|
2,369,770
|
|
52,766,126
|
|
63,063,394
|
|
8,882,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
(3,417,909)
|
|
(3,567,153)
|
|
(4,225,556)
|
|
(595,157)
|
|
(13,402,721)
|
|
(13,969,460)
|
|
(1,967,557)
|
General and
administrative expenses
|
|
(1,302,932)
|
|
(1,494,186)
|
|
(1,251,869)
|
|
(176,322)
|
|
(4,695,798)
|
|
(4,899,880)
|
|
(690,134)
|
Research and
development expenses
|
|
(4,090,076)
|
|
(4,347,052)
|
|
(4,479,219)
|
|
(630,885)
|
|
(15,039,014)
|
|
(16,484,910)
|
|
(2,321,851)
|
Total operating
expenses
|
|
(8,810,917)
|
|
(9,408,391)
|
|
(9,956,644)
|
|
(1,402,364)
|
|
(33,137,533)
|
|
(35,354,250)
|
|
(4,979,542)
|
Operating
profit
|
|
4,433,447
|
|
7,557,909
|
|
6,868,491
|
|
967,406
|
|
19,628,593
|
|
27,709,144
|
|
3,902,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income/(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
(loss)/income, net
|
|
(37,102)
|
|
556,603
|
|
(8,940)
|
|
(1,259)
|
|
53,976
|
|
1,306,722
|
|
184,048
|
Interest income,
net
|
|
629,290
|
|
1,147,227
|
|
1,261,583
|
|
177,690
|
|
2,149,673
|
|
4,120,418
|
|
580,349
|
Exchange (losses)/gains
, net
|
|
(594,241)
|
|
(400,483)
|
|
(810,904)
|
|
(114,213)
|
|
1,571,207
|
|
(132,999)
|
|
(18,733)
|
Other, net
|
|
344,875
|
|
240,024
|
|
434,759
|
|
61,235
|
|
846,815
|
|
1,053,642
|
|
148,402
|
Income before
tax
|
|
4,776,269
|
|
9,101,280
|
|
7,744,989
|
|
1,090,859
|
|
24,250,264
|
|
34,056,927
|
|
4,796,817
|
Income tax
|
|
(966,574)
|
|
(1,290,398)
|
|
(1,068,657)
|
|
(150,517)
|
|
(5,031,838)
|
|
(4,699,704)
|
|
(661,939)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
|
3,809,695
|
|
7,810,882
|
|
6,676,332
|
|
940,342
|
|
19,218,426
|
|
29,357,223
|
|
4,134,878
|
Net income from
discontinued operations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
624,864
|
|
-
|
|
-
|
Net
income
|
|
3,809,695
|
|
7,810,882
|
|
6,676,332
|
|
940,342
|
|
19,843,290
|
|
29,357,223
|
|
4,134,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of redeemable
noncontrolling
interests
|
|
(710)
|
|
(895)
|
|
(966)
|
|
(136)
|
|
(2,978)
|
|
(3,589)
|
|
(506)
|
Net loss/(income)
attributable to noncontrolling
interests
|
|
143,752
|
|
26,901
|
|
(93,103)
|
|
(13,113)
|
|
497,288
|
|
62,918
|
|
8,862
|
Net income
attributable to the
Company's shareholders
|
|
3,952,737
|
|
7,836,888
|
|
6,582,263
|
|
927,093
|
|
20,337,600
|
|
29,416,552
|
|
4,143,234
|
Including:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Net income from
continuing operations
attributable to the Company's
shareholders
|
|
3,952,737
|
|
7,836,888
|
|
6,582,263
|
|
927,093
|
|
19,712,736
|
|
29,416,552
|
|
4,143,234
|
-Net income from
discontinued operations
attributable to the Company's
shareholders
|
|
-
|
|
-
|
|
-
|
|
-
|
|
624,864
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share *
|
|
1.22
|
|
2.44
|
|
2.05
|
|
0.29
|
|
6.23
|
|
9.15
|
|
1.29
|
-Continuing
operations
|
|
1.22
|
|
2.44
|
|
2.05
|
|
0.29
|
|
6.04
|
|
9.15
|
|
1.29
|
-Discontinued
operations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.19
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS *
|
|
6.10
|
|
12.19
|
|
10.25
|
|
1.44
|
|
31.16
|
|
45.73
|
|
6.44
|
-Continuing
operations
|
|
6.10
|
|
12.19
|
|
10.25
|
|
1.44
|
|
30.20
|
|
45.73
|
|
6.44
|
-Discontinued
operations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.96
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share *
|
|
1.21
|
|
2.41
|
|
2.02
|
|
0.28
|
|
6.17
|
|
9.05
|
|
1.27
|
-Continuing
operations
|
|
1.21
|
|
2.41
|
|
2.02
|
|
0.28
|
|
5.98
|
|
9.05
|
|
1.27
|
-Discontinued
operations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.19
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per ADS *
|
|
6.05
|
|
12.06
|
|
10.12
|
|
1.42
|
|
30.85
|
|
45.23
|
|
6.37
|
-Continuing
operations
|
|
6.05
|
|
12.06
|
|
10.12
|
|
1.42
|
|
29.90
|
|
45.23
|
|
6.37
|
-Discontinued
operations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.95
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary
shares used in calculating net income
per share *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
3,239,282
|
|
3,213,834
|
|
3,212,328
|
|
3,212,328
|
|
3,263,455
|
|
3,216,475
|
|
3,216,475
|
Diluted
|
|
3,269,082
|
|
3,249,649
|
|
3,253,166
|
|
3,253,166
|
|
3,296,014
|
|
3,252,029
|
|
3,252,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Each ADS
represents five ordinary shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NETEASE,
INC.
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
3,809,695
|
|
7,810,882
|
|
6,676,332
|
|
940,342
|
|
19,843,290
|
|
29,357,223
|
|
4,134,878
|
Net
income from discontinued operations
|
-
|
|
-
|
|
-
|
|
-
|
|
(624,864)
|
|
-
|
|
-
|
Adjustments to reconcile net income to net cash provided
by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
769,141
|
|
651,856
|
|
659,772
|
|
92,927
|
|
2,858,209
|
|
3,055,260
|
|
430,324
|
Fair
value changes of equity security investments
|
148,156
|
|
(382,132)
|
|
151,571
|
|
21,348
|
|
3,104,336
|
|
(535,316)
|
|
(75,398)
|
Impairment losses on investments and other long-term
assets
|
45,401
|
|
280,641
|
|
140,648
|
|
19,810
|
|
300,249
|
|
469,159
|
|
66,080
|
Fair
value changes of short-term investments
|
(23,364)
|
|
(72,875)
|
|
(106,532)
|
|
(15,005)
|
|
(342,642)
|
|
(414,207)
|
|
(58,340)
|
Share-based compensation cost
|
876,560
|
|
819,548
|
|
812,987
|
|
114,507
|
|
3,174,160
|
|
3,242,810
|
|
456,740
|
Allowance for expected credit losses
|
6,615
|
|
22,386
|
|
9,500
|
|
1,338
|
|
61,393
|
|
61,146
|
|
8,612
|
Losses on disposal of property, equipment and
software
|
1,166
|
|
2,649
|
|
3,385
|
|
477
|
|
3,620
|
|
5,676
|
|
799
|
Unrealized exchange losses/(gains)
|
589,665
|
|
362,213
|
|
838,056
|
|
118,038
|
|
(1,604,260)
|
|
119,935
|
|
16,893
|
Gains on disposal of long-term investments, business and
subsidiaries
|
(62,922)
|
|
(3,197)
|
|
(38,437)
|
|
(5,414)
|
|
(1,791,355)
|
|
(63,784)
|
|
(8,984)
|
Deferred income taxes
|
578,317
|
|
(305,703)
|
|
193,854
|
|
27,304
|
|
489,670
|
|
131,437
|
|
18,513
|
Share of results on equity method investees and revaluation
results from previously
held equity interest
|
(54,746)
|
|
(160,042)
|
|
(88,805)
|
|
(12,508)
|
|
(1,259,941)
|
|
(473,947)
|
|
(66,754)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
224,197
|
|
(1,177,732)
|
|
53,089
|
|
7,477
|
|
554,340
|
|
(1,470,374)
|
|
(207,098)
|
Inventories
|
(60,695)
|
|
84,970
|
|
25,054
|
|
3,529
|
|
(27,613)
|
|
296,764
|
|
41,798
|
Prepayments and other assets
|
1,095,882
|
|
(573,631)
|
|
542,593
|
|
76,423
|
|
731,100
|
|
87,556
|
|
12,332
|
Accounts
payable
|
576,021
|
|
150,868
|
|
18,443
|
|
2,598
|
|
447,666
|
|
(559,419)
|
|
(78,792)
|
Salary and
welfare payables
|
1,965,624
|
|
(588,217)
|
|
1,992,931
|
|
280,698
|
|
424,513
|
|
(62,917)
|
|
(8,862)
|
Taxes
payable
|
(928,071)
|
|
515,087
|
|
(500,172)
|
|
(70,448)
|
|
(917,614)
|
|
(244,261)
|
|
(34,403)
|
Contract
liabilities
|
(1,396,523)
|
|
1,560,628
|
|
(847,562)
|
|
(119,377)
|
|
385,396
|
|
1,161,861
|
|
163,645
|
Accrued
liabilities and other payables
|
849,094
|
|
845,721
|
|
1,271,572
|
|
179,098
|
|
1,899,580
|
|
1,166,673
|
|
164,323
|
Net
cash provided by operating activities
|
9,009,213
|
|
9,843,920
|
|
11,808,279
|
|
1,663,162
|
|
27,709,233
|
|
35,331,275
|
|
4,976,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, equipment and software
|
(348,821)
|
|
(643,144)
|
|
(484,927)
|
|
(68,300)
|
|
(2,100,264)
|
|
(2,301,554)
|
|
(324,167)
|
Proceeds from sale of property, equipment and software
|
2,257
|
|
3,101
|
|
405
|
|
57
|
|
41,467
|
|
10,302
|
|
1,451
|
Purchase of intangible assets, content and licensed
copyrights
|
(161,987)
|
|
(742,523)
|
|
(121,797)
|
|
(17,155)
|
|
(543,220)
|
|
(1,974,323)
|
|
(278,078)
|
Net
change in short-term investments with terms of three
months or
less
|
(931,790)
|
|
(1,993,921)
|
|
(690,628)
|
|
(97,273)
|
|
776,357
|
|
(1,777,687)
|
|
(250,382)
|
Purchase of short-term investments with terms over three
months
|
(4,700,000)
|
|
-
|
|
-
|
|
-
|
|
(5,950,000)
|
|
-
|
|
-
|
Proceeds from maturities of short-term investments with terms
over three
months
|
6,966,682
|
|
376,950
|
|
4,897,291
|
|
689,769
|
|
10,175,160
|
|
5,378,510
|
|
757,547
|
Investment in long-term investments and acquisition of
subsidiaries
|
(1,694,928)
|
|
(417,448)
|
|
(914,962)
|
|
(128,870)
|
|
(5,129,680)
|
|
(2,831,686)
|
|
(398,834)
|
Proceeds from disposal of long-term investments, businesses
and
subsidiaries
|
92,795
|
|
20,898
|
|
73,855
|
|
10,402
|
|
2,411,070
|
|
152,564
|
|
21,488
|
Placement/rollover of matured time deposits
|
(22,975,014)
|
|
(30,831,994)
|
|
(46,666,670)
|
|
(6,572,863)
|
|
(98,973,884)
|
|
(124,693,598)
|
|
(17,562,726)
|
Proceeds from maturities of time deposits
|
27,676,529
|
|
33,893,436
|
|
33,273,393
|
|
4,686,459
|
|
92,247,046
|
|
111,417,969
|
|
15,692,893
|
Change in other long-term assets
|
(61,552)
|
|
(181,263)
|
|
(90,635)
|
|
(12,766)
|
|
(323,779)
|
|
(423,928)
|
|
(59,709)
|
Net
cash provided by/(used in) investing activities
|
3,864,171
|
|
(515,908)
|
|
(10,724,675)
|
|
(1,510,540)
|
|
(7,369,727)
|
|
(17,043,431)
|
|
(2,400,517)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
changes from loans with terms of three months or
less
|
(3,753,493)
|
|
(7,501,788)
|
|
6,179,979
|
|
870,432
|
|
(1,274,043)
|
|
(13,654,704)
|
|
(1,923,225)
|
Proceed of loans with terms over three months
|
2,765,086
|
|
7,607,060
|
|
2,511,000
|
|
353,667
|
|
6,392,695
|
|
13,569,160
|
|
1,911,176
|
Payment of loans with terms over three months
|
(191,158)
|
|
(4,250,550)
|
|
(695,000)
|
|
(97,889)
|
|
(273,639)
|
|
(8,219,472)
|
|
(1,157,688)
|
Net
amounts received/(paid) related to capital contribution from
or repurchase of
noncontrolling interests shareholders
|
23,616
|
|
11,573
|
|
28,009
|
|
3,945
|
|
(30,921)
|
|
86,159
|
|
12,136
|
Cash
paid for repurchase of NetEase's ADSs/purchase of
subsidiaries' ADSs and
shares
|
(3,007,765)
|
|
(296,495)
|
|
(625,832)
|
|
(88,147)
|
|
(8,328,124)
|
|
(5,234,294)
|
|
(737,235)
|
Dividends paid to NetEase's shareholders
|
(2,018,984)
|
|
(2,423,355)
|
|
(2,258,892)
|
|
(318,158)
|
|
(6,723,667)
|
|
(8,013,903)
|
|
(1,128,735)
|
Net
cash (used in)/provided by financing
activities
|
(6,182,698)
|
|
(6,853,555)
|
|
5,139,264
|
|
723,850
|
|
(10,237,699)
|
|
(21,467,054)
|
|
(3,023,571)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash held in
foreign currencies
|
53,237
|
|
4,197
|
|
(174,276)
|
|
(24,546)
|
|
110,403
|
|
(202,457)
|
|
(28,516)
|
Net increase/(decrease)
in cash, cash equivalents and restricted
cash
|
6,743,923
|
|
2,478,654
|
|
6,048,592
|
|
851,926
|
|
10,212,210
|
|
(3,381,667)
|
|
(476,298)
|
Cash, cash
equivalents and restricted cash, at the beginning
of the period
|
20,844,402
|
|
15,679,412
|
|
18,158,066
|
|
2,557,510
|
|
17,376,115
|
|
27,588,325
|
|
3,885,734
|
Cash, cash
equivalents and restricted cash, at end of the
period
|
27,588,325
|
|
18,158,066
|
|
24,206,658
|
|
3,409,436
|
|
27,588,325
|
|
24,206,658
|
|
3,409,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for income tax, net
|
971,217
|
|
1,165,196
|
|
1,030,932
|
|
145,204
|
|
5,092,391
|
|
4,895,752
|
|
689,552
|
Cash
paid for interest expenses
|
264,232
|
|
105,665
|
|
71,847
|
|
10,119
|
|
588,381
|
|
779,872
|
|
109,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NETEASE,
INC.
|
UNAUDITED SEGMENT
INFORMATION
|
(in thousands,
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
19,085,708
|
|
21,779,851
|
|
20,921,355
|
|
2,946,711
|
|
74,566,471
|
|
81,565,449
|
|
11,488,253
|
Youdao
|
|
1,453,982
|
|
1,538,783
|
|
1,480,521
|
|
208,527
|
|
5,013,182
|
|
5,389,208
|
|
759,054
|
Cloud Music
|
|
2,376,257
|
|
1,973,064
|
|
1,985,548
|
|
279,659
|
|
8,992,221
|
|
7,866,992
|
|
1,108,043
|
Innovative businesses
and others
|
|
2,438,182
|
|
1,978,708
|
|
2,752,741
|
|
387,715
|
|
7,923,935
|
|
8,646,510
|
|
1,217,835
|
Total net
revenues
|
|
25,354,129
|
|
27,270,406
|
|
27,140,165
|
|
3,822,612
|
|
96,495,809
|
|
103,468,159
|
|
14,573,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
(7,805,578)
|
|
(6,749,507)
|
|
(6,383,474)
|
|
(899,094)
|
|
(27,784,419)
|
|
(25,938,865)
|
|
(3,653,413)
|
Youdao
|
|
(679,295)
|
|
(679,147)
|
|
(741,720)
|
|
(104,469)
|
|
(2,430,738)
|
|
(2,621,746)
|
|
(369,265)
|
Cloud Music
|
|
(1,953,900)
|
|
(1,436,552)
|
|
(1,384,537)
|
|
(195,008)
|
|
(7,699,103)
|
|
(5,764,322)
|
|
(811,888)
|
Innovative businesses
and others
|
|
(1,670,992)
|
|
(1,438,900)
|
|
(1,805,299)
|
|
(254,271)
|
|
(5,815,423)
|
|
(6,079,832)
|
|
(856,326)
|
Total cost of
revenues
|
|
(12,109,765)
|
|
(10,304,106)
|
|
(10,315,030)
|
|
(1,452,842)
|
|
(43,729,683)
|
|
(40,404,765)
|
|
(5,690,892)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
11,280,130
|
|
15,030,344
|
|
14,537,881
|
|
2,047,617
|
|
46,782,052
|
|
55,626,584
|
|
7,834,840
|
Youdao
|
|
774,687
|
|
859,636
|
|
738,801
|
|
104,058
|
|
2,582,444
|
|
2,767,462
|
|
389,789
|
Cloud Music
|
|
422,357
|
|
536,512
|
|
601,011
|
|
84,651
|
|
1,293,118
|
|
2,102,670
|
|
296,155
|
Innovative businesses
and others
|
|
767,190
|
|
539,808
|
|
947,442
|
|
133,444
|
|
2,108,512
|
|
2,566,678
|
|
361,509
|
Total gross
profit
|
|
13,244,364
|
|
16,966,300
|
|
16,825,135
|
|
2,369,770
|
|
52,766,126
|
|
63,063,394
|
|
8,882,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games and related
value-added services
|
|
59.1 %
|
|
69.0 %
|
|
69.5 %
|
|
69.5 %
|
|
62.7 %
|
|
68.2 %
|
|
68.2 %
|
Youdao
|
|
53.3 %
|
|
55.9 %
|
|
49.9 %
|
|
49.9 %
|
|
51.5 %
|
|
51.4 %
|
|
51.4 %
|
Cloud Music
|
|
17.8 %
|
|
27.2 %
|
|
30.3 %
|
|
30.3 %
|
|
14.4 %
|
|
26.7 %
|
|
26.7 %
|
Innovative businesses
and others
|
|
31.5 %
|
|
27.3 %
|
|
34.4 %
|
|
34.4 %
|
|
26.6 %
|
|
29.7 %
|
|
29.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
NETEASE, INC.
NOTES TO UNAUDITED FINANCIAL INFORMATION
Note 1: The conversion of Renminbi (RMB) into United States dollars (USD) is based on the
noon buying rate of USD1.00 =
RMB7.0999 on the last trading day of
December 2023 (December 29, 2023) as set forth in the H.10
statistical release of the U.S. Federal Reserve Board. No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at that rate on December 29, 2023, or at any other certain
date.
Note 2: Share-based compensation cost reported in the Company's
unaudited condensed consolidated statements of comprehensive income
is set out as follows in RMB and USD (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
Share-based
compensation cost included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
195,793
|
|
210,533
|
|
216,717
|
|
30,524
|
|
758,413
|
|
823,765
|
|
116,025
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing expenses
|
33,001
|
|
33,804
|
|
35,575
|
|
5,011
|
|
120,171
|
|
132,801
|
|
18,705
|
General and
administrative expenses
|
349,444
|
|
280,581
|
|
262,830
|
|
37,019
|
|
1,214,995
|
|
1,119,018
|
|
157,610
|
Research and
development expenses
|
298,322
|
|
294,630
|
|
297,865
|
|
41,953
|
|
1,080,581
|
|
1,167,226
|
|
164,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 3: The financial information prepared and presented in this
announcement might be different from those published and to be
published by NetEase's listed subsidiaries to meet the
disclosure requirements under U.S. GAAP or different accounting
standards requirements.
Note 4: The unaudited reconciliation of GAAP and non-GAAP
results is set out as follows in RMB and USD (in thousands, except
per share data or per ADS data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2022
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
|
RMB
|
|
RMB
|
|
USD (Note 1)
|
Net income from
continuing operations attributable to the
Company's shareholders
|
|
3,952,737
|
|
7,836,888
|
|
6,582,263
|
|
927,093
|
|
19,712,736
|
|
29,416,552
|
|
4,143,234
|
Add: Share-based
compensation
|
|
858,637
|
|
808,276
|
|
797,194
|
|
112,282
|
|
3,095,693
|
|
3,191,753
|
|
449,549
|
Non-GAAP net income
from continuing operations
attributable to the Company's
shareholders
|
|
4,811,374
|
|
8,645,164
|
|
7,379,457
|
|
1,039,375
|
|
22,808,429
|
|
32,608,305
|
|
4,592,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net
income from continuing
operations per share *
|
|
1.49
|
|
2.69
|
|
2.30
|
|
0.32
|
|
6.99
|
|
10.14
|
|
1.43
|
Non-GAAP basic net
income from continuing
operations per ADS *
|
|
7.43
|
|
13.45
|
|
11.49
|
|
1.62
|
|
34.95
|
|
50.69
|
|
7.14
|
Non-GAAP diluted net
income from continuing
operations per share *
|
|
1.47
|
|
2.66
|
|
2.27
|
|
0.32
|
|
6.92
|
|
10.03
|
|
1.41
|
Non-GAAP diluted net
income from continuing
operations per ADS *
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7.36
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13.30
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11.34
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1.60
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34.60
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50.14
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7.06
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* Each ADS
represents five ordinary shares.
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The accompanying notes
are an integral part of this announcement.
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View original
content:https://www.prnewswire.com/news-releases/netease-announces-fourth-quarter-and-fiscal-year-2023-unaudited-financial-results-302075427.html
SOURCE NetEase, Inc.