NetEase Registers 13% Revenue Growth In Q2 Backed By Gaming Strength

  • NetEase, Inc NTES reported second-quarter FY22 revenue growth of 12.8% year-on-year to $3.5 billion.
  • Segments and margins: Games and related value-added services revenues grew 15% Y/Y to $2.7 billion. The gross margin for online game services expanded by 170 bps to 64.9%.
  • Youdao, Inc's DAO revenue decreased 26.1% Y/Y to $142.8 million, and the corresponding gross margin contracted by 950 bps to 42.8%.
  • Cloud Music's revenues were $327.2 million, up 29.5% Y/Y, and its gross margin expanded 890 bps to 13%.
  • Innovative businesses and other revenue rose 6.1% Y/Y to $279.4 million, and the gross margin contracted 150 bps to 25.8%.
  • Non-GAAP net income per ADS was $1.23.
  • NetEase held $13.1 billion in cash and equivalents and generated $990 million in operating cash flow.
  • Dividend: The board approved a dividend of $0.3600 per ADS for Q2 versus $0.3220 in Q1.
  • Price Action: NTES shares traded higher by 2.48% at $93.85 in the premarket session on the last check Thursday.
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