- Internet and game services provider NetEase Inc. (NASDAQ:NTES) revealed a bump in revenues, though not without controversy regarding one of its biggest titles
- NetEase reported net revenues of ¥26.7 billion (US$3.7 billion) for Q4 2024, a slight increase from ¥26.2 billion in the previous quarter but a decrease from ¥27.1 billion in the same quarter of 2023
- For the fiscal year 2024, net revenues were ¥105.3 billion (US$14.4 billion), up from ¥103.5 billion in 2023
- NetEase stock (NASDAQ:NTES) opened trading at US$99.12
Internet and game services provider NetEase Inc. (NASDAQ:NTES) revealed a bump in revenues, though not without controversy regarding one of its biggest titles.
Q4 2024 financial results
Net revenues: In a news release, NetEase reported net revenues of ¥26.7 billion (US$3.7 billion) for Q4 2024, a slight increase from ¥26.2 billion in the previous quarter but a decrease from ¥27.1 billion in the same quarter of 2023.
- Games and related value-added services: This segment generated net revenues of ¥21.2 billion (US$2.9 billion), consistent with the preceding quarter and the same quarter of 2023. Online games accounted for approximately 96.7 per cent of the segment’s net revenues, with mobile games contributing 65.3 per cent.
- Youdao: Net revenues were ¥1.3 billion (US$183.6 million), down from ¥1.6 billion in the previous quarter and ¥1.5 billion in the same quarter of 2023.
- NetEase Cloud Music: Net revenues were ¥1.9 billion (US$257.6 million), slightly down from ¥2.0 billion in the previous quarter and the same quarter of 2023.
- Innovative businesses and others: Net revenues increased to ¥2.3 billion (US$313.1 million) from ¥1.8 billion in the previous quarter but decreased from ¥2.8 billion in the same quarter of 2023.
Gross profit: Q4 gross profit was ¥16.3 billion (US$2.2 billion), compared to ¥16.5 billion in the previous quarter and ¥16.8 billion in the same quarter of 2023. The decrease was primarily due to lower revenues from certain mobile games, offset by increased revenues from PC games.
Operating expenses: Total operating expenses were ¥8.5 billion (US$1.2 billion), down from ¥9.3 billion in the previous quarter and ¥10.0 billion in the same quarter of 2023, mainly due to reduced marketing expenditures.
Fiscal year 2024 financial results
Net revenues: For the fiscal year 2024, net revenues were ¥105.3 billion (US$14.4 billion), up from ¥103.5 billion in 2023.
- Games and related value-added services: This segment generated net revenues of ¥83.6 billion (US$11.5 billion), up from ¥81.6 billion in 2023. Online games accounted for 96.2 per cent of the segment’s total net revenues, with mobile games contributing 72.7 per cent.
- Youdao: Net revenues were ¥5.6 billion (US$770.7 million), up from ¥5.4 billion in 2023.
- NetEase CLOUD MUSIC: Net revenues were ¥8.0 billion (US$1.1 billion), up from ¥7.9 billion in 2023.
- Innovative businesses and others: Net revenues were ¥8.1 billion (US$1.1 billion), down from ¥8.6 billion in 2023.
Gross profit: The gross profit for the fiscal year was ¥65.8 billion (US$9.0 billion), up from ¥63.1 billion in 2023.
Operating expenses: Total operating expenses were ¥36.2 billion (US$5.0 billion), up from ¥35.4 billion in 2023, primarily due to increased R&D investments.
Other financial information: As of December 31, 2024, NetEase’s net cash totaled ¥131.5 billion (US$18.0 billion), up from ¥110.9 billion as of December 31, 2023. Net cash provided by operating activities was ¥39.7 billion (US$5.4 billion), up from ¥35.3 billion in 2023.
NetEase Games executes layoffs at Marvel Rivals’ Seattle studio
In a surprising move, NetEase Games announced layoffs at its Seattle-based support studio for Marvel Rivals, despite the game’s significant success. The company confirmed the layoffs were due to “organizational reasons”, affecting the design team in Seattle. The exact number of employees laid off has not been disclosed. The Seattle office no longer has staff dedicated to the game’s development, with the core development team remaining in China.
Thaddeus Sasser, the director, highlighted his team’s achievements, including the successful launch of Marvel Rivals, which gained 10 million players within 72 hours of its release last year. Despite this success, the decision was made to let the team go.
NetEase Inc. operates through four business segments. the games and related value-added services segment is engaged in development and sales of mobile game, personal computer (PC) games, operation of games and other value-added services, including in-game virtual items and prepaid points.
NetEase stock (NASDAQ:NTES) opened trading more than 3 per cent lower at US$99.12. Though it has risen 12.59 per cent since the year began, its stock is down 7.72 per cent compared to this time last year.
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(Top image: Marvel Rivals promotional artwork via Marvel.)