NetEase FY2026 Q2 Earnings Release

2Q26 Investor Presentation
Investor Relations
August 20, 2026
N e t E a s e

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 term inology such as “will,”
“expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar expressions. In addition, stateme nts that are not
historical facts, including statements about NetEase’s strategies and business plans, its expectations regarding the grow th of its business and
its revenue and the quotations from management in this announcem ent 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 H ong Kong Limited (the “Hong Kong Stock Exchange”), in press releases and other written mat erials
and in oral statements made by its officers, directors or employees to third parties. The accuracy of these statements may be im pacted by a
number of business risks and uncertainties that could cause actual results to differ materially from those projected or antic ipa ted, 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 im plem ent such strategies;
NetEase’s ability to develop and m anage its operations and business; competition for, among other things, capital, technology and skill ed
personnel; potential changes in regulatory environment in the markets where NetEase operates, including policy or rule changes on taxation;
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 tim ely manner, trends in the market; risks related to evolving economic cycles and geopolitical tensions, includi ng the direct or
indirect impacts of national trade, investm ent, protectionist, tax or other laws or policies as well as export controls and e con omic or trade
sanctions; risks related to the expansion of NetEase’s businesses and operations internationally; risks associated with cybersecurity threats
or incidents; and fluctuations in foreign currency exchange rates that 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 announcem ents on the website of the Hong
Kong Stock Exchange. NetEase does not undertake any obligation to update this forward -looking inform ation, except as required under
applicable law.
SAFE HARBOR STATEMENT

NetEase, Inc.
NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, “Ne tEase”) is a leading inte rnet and game ser vices provider center ed around premi um content. With
extensive offerings across its expanding g aming ecosystem, the Company develops an d operates some o f the most popular and lon ges t-running m obile
and PC game s available in China and globally.
Powered by o ne of the largest in -house gam e R&D teams focused on mobile, PC and console , NetEase creates super ior gaming experie nces, inspires
players, an d passionately delivers v alue for its thriving com munity worldwide. By infu sing play with culture, an d education w ith technology, NetEase
transform s gaming into a mea ningful vehicle to build a more entertaining and enlightened wor ld.
Beyond gam es, NetEase service offerings inc lude its majority -controlled s ubsidiaries Youd ao (NYSE: DAO), an in telligent learning and advertising solutions
provider , and NetEase Cloud Music (HKEX: 9899) , a well -known online music platform featu ring a vibrant conten t community, as well as Yanxuan ,
NetEase’s private -label consum er lifestyle brand. F or more information, please visit: http://ir.netease.com/.

MARKET SNAPSHOT
In USD
Notes: 1 Market cap is calculated using the closi ng price on NASDAQ; our market cap is HK$622.3 billion based on the closing price on the Hong Kong Stock Exchange 2 Net cash refers to total cash and cash equivalents, curr ent and non -cur rent time deposits and restr icted cash, as well as short -term investments balance, m inus loans 3 The r esult is based on the latest update in M arch 2026
$81.5
billion
Market Cap 1
(8/19/26)
Shares Outstanding,
Diluted (2Q26)
3.2
billion
Basic Net Income per ADS
(GAAP) (2Q26)
$1.61
Net Revenues
(2Q26)
$4.4
billion
Net Income Attributable to the
Company’s Shareholders (GAAP)
(2Q26)
$1.0
billion
Net Cash 2
(6/30/26)
$24.7
billion
AAA
MSCI ESG Rating 3

3,361
3,790 3,688
2Q25 1Q26 2Q26
Online Games Related VAS
GAMES AND RELATED VALUE – ADDED SERVICES
Games and Related Value -added Services
Net Revenues
Note: 1 US$1.00 = RMB6.7851 on June 30, 2026. Same exchange rate is applied to all years for illustr ative purposes
Online G ames
98% (2Q26)
Related
VAS
USD mi llion 1

• The Fantasy Westward Journey franchise, Identity V , Eggy Party , Sword of Justice and Where W inds Meet sustained solid
momentum through ongoing content updates, gameplay innovation and vibrant community activities.
• Advanced our global strategy and enhanced player engagement through strong live operations. For example, Where W inds
Meet and Marvel Rivals further broadened their international reach with a steady stream of fresh content and community –
focused initiatives in various markets including North America and Europe.
• Sea of R emnants launched in C hina in July 2026, while development of Ananta and Blood Message remained on track,
strengthening our innovative pipeline across diverse genres, gameplay and markets.
ONLINE GAMES
PC & CONSOLE GAMES MOBILE GAMES
Flagship Self -Developed PC & Console Titles Self -Developed Mobile Games
Licensed Mobile Games From Overseas Developers
Mobile Games in Overseas Markets
Flagship Licensed Titles

209
199
216
80 86 92 98 104 110 116 122 128 134 140 146 152 158 164 170 176 182 188 194 200 206 212 218 224 230 236
2Q25 1Q26 2Q26
Net Revenues
YOUDAO
Youdao
Net Revenues
USD mi llion 1
• Youdao advanced its AI -native strategy and deepened
AI -driven innovation across its ecosystem.
• Launched the large language model Confucius 4,
which delivers leading mathematical reasoning
capabilities at lower inference costs compared to its
previous version.
• The learning services segment continued its healthy
development, driven by the strong performance of
Youdao Lingshi .
• Advertising efficiency in Youdao’s online marketing
services continued to improve.
• Smart devices segment sustained its focus on product
innovation, with the Youdao Dictionary Pen
maintaining a strong market position.
Note: 1 US$1.00 = RMB6.7851 on June 30, 2026. Same exchange rate is applied to all years for illustr ative purposes

290 292 291
2Q25 1Q26 2Q26
Net Revenues
NETEASE CLOUD MUSIC
NetEase Cloud Music
Net Revenues
• NetEase Cloud Music further developed its music –
centric ecosystem.
• Enhancements to the user experience and strong
brand perception continued to drive higher user
engagement and expanded the daily active user base.
• Enriched its comprehensive and distinctive content
library by expanding copyrighted music and promoting
original music.
• Advanced product innovation across music discovery
and consumption experiences.
• Subscription -based memberships grew as well,
improving its music -oriented monetization.
USD mi llion 1
Note: 1 US$1.00 = RMB6.7851 on June 30, 2026. Same exchange rate is applied to all years for illustr ative purposes

INNOVATIVE BUSINESSES AND OTHERS
Innovative Businesses and Others
Net Revenues
USD mi llion 1
NetEase Yanxuan
Wangyi Xinwen
• 163.com Portal & Wangyi Xinwen
App: Delivering quality content
across news, sports, technology,
fashion, and entertainment
E -mail Services
• China’ s leading e -mail
service provider since
1997
• Leading private -label consumer lifestyle brand in China
• Continued to strengthen its brand presence with highly popular
products in focused categories
• Maintained leading sales positions on e -commerce platforms for
categories like pet products and household cleaning products
250
228
242
-90.0%
-70.0%
-50.0%
-30.0%
-10.0%
10.0%
30.0%
50.0%
2Q25 1Q26 2Q26
Net Revenues
Note: 1 US$1.00 = RMB6.7851 on June 30, 2026. Same exchange rate is applied to all years for illustr ative purposes

5.2 5.8
7.5
1.5
FY20 23 FY20 24 FY20 25 2Q26
15.2 15.5 16.6
4.4
FY20 23 FY20 24 FY20 25 2Q26
FINANCIAL HIGHLIGHTS
Net Revenues Net Income Attributable to Shareholders (GAAP)
Operating Cash Flow
Value Returned to Shareholders
US$ FY2023 FY2024 FY2025 2Q26
Dividend per
ADS (declared) $2.56485 $2.58525 $2.97500 $0.480
Total Dividends
(declared) $1,649 m $1,651 m $1,896 m $307 m
Share Buyback $687 m $1,230 m $93 m $197 m
4.3 4.4
5.0
1.0
FY20 23 FY20 24 FY20 25 2Q26
Notes: 1 US$1.00 = RMB6.7851 on June 30, 2026. Same exchange r ate is applied to all year s for illustrative purposes 2 Total dividends (declar ed) is equal to dividend per ADS (decl ared) multi plied by each quarter ’s corresponding weighted average number of ADS outstanding, basic
USD bil lion 1
2

ESG PERFORMANCE
MSCI Ratings S&P Global ESG Score Sustainalytics Ratings
Last Updated: March 2026
According to MSC I’s evaluation,
NetEase is a leader among over 200
companies in the media & entertainment
industry
AAA
Last Updated: January 2026
NetEase has been selected as a
member of the 2022 Dow Jones
Sustainability World Index and Dow
Jones Sustainability Emerging Markets
Index. The Company is also included
in the S&P Global Sustainability
Yearbook 2025 and 2022
50 13.9
Last Updated: August 2025

NetEase is rated as a low -risk
company

NetEase was included in
Sustainalytics ’ list of ESG Top -Rated
Companies in 2023

BALANCE SHEET SUMMARY 2025
Dec 31, RMB Jun 30, RMB Jun 30, USD
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents 47,168 22,815 3,362
Time deposits 92,639 101,979 15,030
Other current assets 40,808 67,270 9,915
Total current assets 180,615 192,064 28,307
Property, equipment and software, net 8,425 8,180 1,206
Other non-current assets 32,375 31,964 4,710
Total assets 221,415 232,208 34,223
LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS & SHAREHOLDERS’ EQUITY
Current liabilities:
Contract liabilities 20,515 19,297 2,844
Other current liabilities 31,854 36,321 5,353
Total current liabilities 52,369 55,618 8,197
Total liabilities 56,311 60,646 8,938
Redeemable noncontrolling interests 91 95 14
Total equity 165,013 171,467 25,271
Total liabilities, redeemable noncontrolling interests
and shareholders’ equity 221,415 232,208 34,223
in millions
2026

UNAUDITED INCOME STATEMENT SUMMARY
Note: Al l percentages are calculated based on numbers in mi llions except per ADS data 2Q25 1Q26 2Q26 2Q26 QoQ YoY
RMB RMB RMB USD Change Change
Total net revenues: 27,892 30,591 30,107 4,437 -1.6% 7.9%
Games and related value-added services 22,806 25,713 25,023 3,688 -2.7% 9.7%
Youdao 1,418 1,348 1,467 216 8.8% 3.5%
NetEase Cloud Music 1,969 1,981 1,977 291 -0.2% 0.4%
Innovative businesses and others 1,699 1,549 1,640 242 5.9% -3.5%
Gross profit 18,052 21,217 21,217 3,127 0.0% 17.5%
Gross profit margin 64.7% 69.4% 70.5% 70.5%
Operating profit 9,061 12,657 12,089 1,782 -4.5% 33.4%
Operating profit margin 32.5% 41.4% 40.2% 40.2%
Net income attributable to the Company’s shareholders 8,601 10,674 6,981 1,029 -34.6% -18.8%
Diluted net income per ADS ¥13.36 ¥16.53 ¥10.83 $1.60 -34.5% -18.9%
in m illions except per ADS data & percentage data

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