NetEase FY2025 Q2 Earnings Release

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Contact for Media and Investors:
Email : ir@service.netease.com
Tel: (+86) 571 -8985 -3378

NetEase Announces Second Quarter 2025 Unaudited Financial Results
Hangzhou , China, August 14 , 202 5 – 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 second quarter ended June 30, 202 5.
Second Quarter 202 5 Financial Highlights
• Net revenues were RMB 27.9 billion (US$ 3.9 billion), a n increase of 9.4 % compared with the
same quarter of 202 4.
• Games and related value -added services net revenues were RMB 22.8 billion (US$ 3.2 billion),
an increase of 13.7 % compared with the same quarter of 202 4.
• Youdao net revenues were RMB1. 4 billion (US$ 197.9 million), a n increase of 7.2 % compared
with the same quarter of 202 4.
• NetEase Cloud Music net revenues were RMB 2.0 billion (US$ 274.8 million), a de crease of
3.5 % compared with the same quarter of 202 4.
• Innovative businesses and others net revenues were RMB 1.7 billion (US$ 237.2 million), a
de crease of 17.8 % compared with the same quarter of 202 4.
• Gross profit was RMB 18.1 billion (US$2. 5 billion), a n increase of 12.5 % compared with the same
quarter of 202 4.
• Total operating expenses were RMB 9.0 billion (US$ 1.3 billion), a de crease of 0.6 % compared
with the same quarter of 202 4.
• Net income attributable to the Company’s shareholders was RMB 8.6 billion (US$1. 2 billion).
Non -GAAP net income attributable to the Company’s shareholders was RMB 9.5 billion (US$1. 3
billion ).[1]
• Basic net income per share was US$0. 38 (US$ 1.88 per ADS). Non -GAAP basic net income per
share was US$0.4 2 (US$ 2.09 per ADS). [1]
[1] As used in this announcement, non -GAAP net income attributable to the Company ’s shareholders and non -GAAP basic
and diluted net income 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.

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Second Quarter 202 5 and Recent Operational Highlights
• Extended global traction with new launches across regions :
• FragPunk ranked No. 2 on PlayStation ’s North America free -to-play download chart in May,
following its April 29 global launch on Xbox Series X|S and PlayStation 5 .
• Dunk City Dynasty gained substantial momentum with its May 22 global launch, topping iOS
download charts in multiple regions and reaching No. 2 in the U.S.
• MARVEL Mystic Mayhem ’s June 25 launch propelled the game to No. 1 on iOS download
charts across multiple regions and No. 2 in the U.S.
• Sustained player momentum and operating strength across established franchises :
• Sword of Justic e (previously Justice mobile game) hit No. 3 on China ’s iOS top -grossing
chart shortly after its second anniversary update on June 30.
• Once Human reached No. 4 on Steam’s global top sellers chart following its anniversary
update on July 3.
• Identity V ranked No. 6 on the iOS top -grossing chart in China following its seasonal update
on July 10 .
• Naraka: Bladepoint mobile game celebrated its first anniversary with the launch of a new
version on July 10, propelling it to No. 6 on China’s iOS top -grossing chart.
• Eggy Party reached No. 5 on China’s iOS top -grossing chart on July 11 after a series of third –
anniversary events .
• Marvel Rivals ranked No. 2 on Steam’s global top -sellers chart and No. 1 in the U.S with its
Summer Party Event unveiled on July 17 .
• Fantasy Westward Journey Online reached a new all -time high with over 2. 93 million peak
concurrent players in August .
• Further captivated players in China with Blizzard titles. Hearthstone ranked No. 5 on China’s iOS
top -grossing chart on July 9, fueled by the launch of The Lost City of Un’Goro expansion pack,
while World of Warcraft ’s 20th anniversary celebration in China sparked strong community
engagement with the announcement of a new China -exclusive server set to launch in November .
• Enriched global pipeline with exciting new titles underway, including NetEase’s original ocean
adventure RPG Sea of Remnants and story -driven action -adventure game Blood Message , along
with plans to bring Sword of Justice and Where Winds Meet to the global market.

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“In the second quarter, we grew our player community with thrilling new content that reinforces our
position as a creator of high -impact, genre -defining games,” said Mr. William Ding, Chief Executive
Officer and Director of NetEase. “At the core of our exp ansion is product innovation, disciplined
execution and deep community engagement, all capabilities we have honed over many years and
powered by our strong technological foundation. We will continue to push the boundaries of player
experiences, scaling ori ginal IP to build lasting franchises and growing alongside our collaborative
global partners.
“Beyond games, we remain focused on innovation, refining our products and content to deliver long –
term value for our users , partners and shareholders,” Mr. Ding concluded.
Second Quarter 202 5 Financial Results
Net Revenues
Net revenues for the second quarter of 2025 were RMB 27.9 billion (US$ 3.9 billion), compared with
RMB 28.8 billion and RMB 25.5 billion for the preceding quarter and the same quarter of 202 4,
respectively.
Net r evenues from games and related value -added services were RMB 22.8 billion (US$ 3.2 billion) for
the second quarter of 2025, compared with RMB 24.0 billion and RMB20.1 billion for the preceding
quarter and the same quarter of 202 4, respectively . Net revenues from the operation of online games
accounted for approximately 97.1 % of the segment’s net revenues for the second quarter of 2025,
compared with 97.5 % and 96.1 % for the preceding quarter and the same quarter of 202 4, respectively.
The quarter -over -quar ter de crease in online games net revenues was due to certain sel f-developed and
licensed games . The year -over -year increase was attributable to higher net revenues from Identity V ,
our newly launched games Where Winds Meet and Marvel Rivals and certain licensed games.
Net r evenues from Youdao were RMB1. 4 billion (US$ 197.9 million) for the second quarter of 2025,
compared with RMB1. 3 billion each for the preceding quarter and the same quarter of 202 4. Net
revenues from its online marketing services and learning services increased quarter -over -quarter and
year -over -year, while net revenues from its smart devices decreased quarter -over -quarter and year –
over -year .
Net revenues from NetEase C loud M usic were RMB 2.0 billion (US$ 274.8 million) for the second
quarter of 2025, compared with RMB 1.9 billion and RMB2.0 billion for the preceding quarter and the
same quarter of 202 4, respectively. N et revenues from its online music services increased both quarter –
over -quarter and year -over -year, while net revenues from its social entertainment services and others
increased quarter -over -quarter but decreased year -over -year.

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Net revenues fr om innovative businesses and others were RMB 1.7 billion (US$ 237.2 million) for the
second quarter of 2025, compared with RMB 1.6 billion and RMB 2.1 billion for the preceding quarter
and the same quarter of 202 4, respectively. The quarter -over -quarter increase was led by increased net
revenues from Yanxuan . The year -over -year de crease was due to decreased net revenues from
Yanxuan , advertising services and certain other businesses in this segment .
Cost of Revenues
Cost of revenues for the second quarter of 2025 was RMB9.8 billion (US$1.4 billion), compared with
RMB 10.3 billion and RMB9 .4 billion for the preceding quarter and the same quarter of 202 4,
respectively, with revenue sharing costs related to platforms and royalties for licensed games
decreasing quarter -over -quarter, while royalties for licensed games increased year -over -year.
Gross Profit
Gross profit for the second quarter of 2025 was RMB 18.1 billion (US$2. 5 billion), compared with
RMB 18.5 billion and RMB 16.0 billion for the preceding quarter and the same quarter of 202 4,
respectively.
Operating Expenses
Total operating expenses for the second quarter of 2025 were RMB 9.0 billion (US$1. 3 billion),
compared with RMB 8.0 billion and RMB 9.0 billion for the preceding quarter an d the same quarter of
202 4, respectively . The quarter -over -quarter increase was primarily due to increased marketing
expenditures related to games and related value -added services.

Other Income/(Expenses)
Other income/(expenses) consisted of investment income, interest income, net exchange losses/( gains )
and others . The quarter -over -quarter de crease was mainly due to fair value change s of equity security
investments, and the year -over -year increase was primarily due to net exchange gains in the second
quarter of 2025 , compared with net exchange losses recorded in the same quarter of 2024 .
Income Tax
The Company recorded a net income tax charge of RMB1. 6 billion (US$ 217.9 million) for the second
quarter of 2025 , compared with RMB1. 9 billion and RMB1.3 billion for the preceding quarter and the
same quarter of 202 4, respectively. The effective tax rate for the second quarter of 2025 was 14.7 %,
compared with 15.3 % and 16.0 % for the preceding quarter and the same quarter of 202 4, respectively.
The effective tax rate represents certain estimates by the Company as to the tax obligations and benefits
applicabl e to it in each quarter.

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Net Income and Non -GAAP Net Income
Net income attributable to the Company’s shareholders totaled RMB 8.6 billion (US$ 1.2 billion) for
the second quarter of 2025 , compared with RMB 10.3 billion and RMB 6.8 billion for the preceding
quarter and the same quarter of 202 4, respectively.
Basic net income was US$0 .38 per share (US$ 1.88 per ADS) for the second quarter of 2025, compared
with US$ 0.45 per share (US$ 2.27 per ADS) and US$ 0.29 per share (US$ 1.47 per ADS) for the
preceding quarter and the same quarter of 202 4, respectively.
Non -GAAP net income attributable to the Company’s shareholders totaled RMB 9.5 billion (US$1. 3
billion) for the second quarter of 2025, compared with RMB 11.2 billion and RMB 7.8 billion for the
preceding quarter and the same quarter of 202 4, respectively.
Non -GAAP basic net income was US$ 0.42 per share (US$ 2.09 per ADS) for the second quarter of
2025, compared with US$0. 49 per share (US$ 2.47 per ADS) and US$0. 34 per share (US$ 1.70 per
ADS) for the preceding quarter and the s ame quarter of 202 4, respectively.
Other Financial Information
As of June 30, 202 5, 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 RMB 142.1 billion (US$ 19.8 billion), compared with RMB 131.5 billion as of
December 31, 202 4. Net cash provided by operating activities was RMB 10.9 billion (US$ 1.5 billion)
for the second quarter of 2025 , compared with RMB 12.1 billion and RMB6.5 billion for the preceding
quarter and the second quarter of 2024, respectively .
Quarterly Dividend
The board of directors approved a dividend of US$0. 1140 per share (US$ 0.5700 per ADS) for the
second quarter of 2025 to holders of ordinary shares and holders of ADSs as of the close of business
on August 28 , 202 5, 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 H ong Kong branch share registrar, Computershare Hong Kong Investor Services
Limited, at Shops 1712 -1716, 17 th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong
Kong , no later than 4:30 p.m. on August 28 , 202 5 (Beijing/Hong Kong Time). The payment date is
expected to be September 8 , 202 5 for holders of ordinary shares and on or around September 11 , 202 5,
for holders of ADSs.
NetEase paid a dividend of US$ 0.1350 per share (US$ 0.6750 per ADS) for the first quarter of 202 5 in
June 2025 .

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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 operat ions 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 ha d approved a share
repurchase program of up to US$5.0 billion of the Company’s ADSs and ordinary shares in open
market transactions. This share repurchase program commenced on January 10, 2023, and will be in
effect for a period not to exceed 36 months from such date. As of June 30, 202 5, approximately 22.1
million ADSs had been repurchased under this program for a total cost of US$ 2.0 billion.
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 8:00 a.m.
Eastern Time on Thursday , August 14 , 202 5 (Beijing/Hong Kong Time: 8:00 p.m., Thursday , August
14, 202 5). 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: 1004 9137, 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: 10049137. The replay will be available through
August 21, 202 5.

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.

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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 and advertising solutions provider, and NetEase 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.
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 s uch 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
expectati ons 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 emplo yees 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; Net Ease’s ability to develop and manage its operations and business; competition for,
among other things, capital, technology and skilled personnel; potential changes in regulation
environment in the markets where NetEase operates; the ris k 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 evolving economic cycles and geopolitical
tensions, includ ing the direct or in direct impacts of national trade, investment, protectionist, tax or
other laws or policies as well as export controls and economic 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 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.

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Non -GAAP Financial Measures
NetEase considers and uses non -GAAP financial measures, such as non -GAAP net income attributable
to the Company’s shareholders and non -GAAP basic and diluted net income 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 g enerally accepted in the United States of America (“U.S. GAAP”).
NetEase defines non -GAAP net income attributable to the Company’s shareholders as net income
attributable to the Company’s shareholders excluding share -based compensation expenses. Non –
GAAP net income attributable to the Company’s shareholders enables NetE ase’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 s 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 attributable to the Co mpany’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 -GAA P net income 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 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 unaud ited 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.

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
De ce mbe r 31, June 30, June 30,
2024 2025 2025
RMB RMB USD (Note 1)
Asse ts
Current assets:
Cash and cash equivalents 51,383,310 54,430,728 7,598,237
Time deposits 75,441,355 75,277,705 10,508,362
Restricted cash 3,086,405 3,731,100 520,841
Accounts receivable, net 5,669,027 5,776,412 806,356
Inventories 571,548 591,756 82,606
Prepayments and other current assets, net 6,416,868 6,161,982 860,179
Short-term investments 10,756,143 16,980,429 2,370,376
Total current assets 153,324,656 162,950,112 22,746,957
Non-current assets:
Property, equipment and software, net 8,520,101 8,447,022 1,179,159
Land use rights, net 4,172,465 4,111,093 573,886
Deferred tax assets 1,113,435 2,190,156 305,734
Time deposits 3,025,000 2,935,000 409,710
Restricted cash 5,208 5,266 735
Other long-term assets 25,830,685 27,860,004 3,889,107
Total non-current assets 42,666,894 45,548,541 6,358,331
Total assets 195,991,550 208,498,653 29,105,288
Liabilitie s, Re de e mable Noncontrolling Inte re sts
and Share holde rs’ Equity
Current liabilities:
Accounts payable 720,549 695,414 97,076
Salary and welfare payables 4,683,009 3,560,061 496,965
Taxes payable 2,759,185 3,796,135 529,920
Short-term loans 11,805,051 11,276,303 1,574,111
Contract liabilities 15,299,222 16,966,562 2,368,441
Accrued liabilities and other payables 14,400,641 14,157,432 1,976,301
Total current liabilities 49,667,657 50,451,907 7,042,814
Non-current liabilities:
Deferred tax liabilities 2,173,117 2,724,485 380,323
Long-term loans 427,997 – –
Other long-term liabilities 1,228,641 1,218,109 170,041
Total non-current liabilities 3,829,755 3,942,594 550,364
Total liabilities 53,497,412 54,394,501 7,593,178
Redeemable noncontrolling interests 84,272 87,741 12,248
NetEase, Inc.’s shareholders’ equity 138,685,606 149,587,316 20,881,584
Noncontrolling interests 3,724,260 4,429,095 618,278
Total equity 142,409,866 154,016,411 21,499,862
Total liabilities, redeemable noncontrolling
interests and shareholders’ equity 195,991,550 208,498,653 29,105,288
The accompanying notes are an integral part of this announcement.

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NETEASE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, e xce pt pe r share data or pe r ADS data)
June 30, March 31, June 30, June 30, June 30, June 30, June 30,
2024 2025 2025 2025 2024 2025 2025
RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)
Ne t re ve nue s 25,485,805 28,828,545 27,891,664 3,893,526 52,337,546 56,720,209 7,917,836
Cost of re ve nue s (9,443,587) (10,349,139) (9,839,182) (1,373,497) (19,279,408) (20,188,321) (2,818,181)
Gross profit 16,042,218 18,479,406 18,052,482 2,520,029 33,058,138 36,531,888 5,099,655
Ope rating e xpe nse s:
Selling and marketing expenses (3,501,737) (2,695,597) (3,578,174) (499,494) (7,523,941) (6,273,771) (875,785)
General and administrative expenses (1,091,441) (956,337) (1,056,578) (147,493) (2,287,916) (2,012,915) (280,992)
Research and development expenses (4,455,717) (4,386,313) (4,356,646) (608,164) (8,630,475) (8,742,959) (1,220,470)
Total operating expenses (9,048,895) (8,038,247) (8,991,398) (1,255,151) (18,442,332) (17,029,645) (2,377,247)
Ope rating profit 6,993,323 10,441,159 9,061,084 1,264,878 14,615,806 19,502,243 2,722,408
Othe r income /(e xpe nse s):
Investment income, net 103,674 692,751 328,444 45,849 282,965 1,021,195 142,553
Interest income, net 1,186,219 1,060,886 953,490 133,102 2,463,816 2,014,376 281,196
Exchange (losses)/gains, net (239,375) 1,803 114,037 15,919 (224,364) 115,840 16,171
Other, net 85,694 255,315 192,167 26,825 279,582 447,482 62,466
Income be fore tax 8,129,535 12,451,914 10,649,222 1,486,573 17,417,805 23,101,136 3,224,794
Income tax (1,300,939) (1,905,143) (1,560,757) (217,873) (2,786,849) (3,465,900) (483,821)
Ne t income 6,828,596 10,546,771 9,088,465 1,268,700 14,630,956 19,635,236 2,740,973
Accretion of redeemable noncontrolling
interests (960) (1,049) (1,051) (147) (1,918) (2,100) (293)
Net income attributable to noncontrolling
interests and redeemable noncontrolling
interests
(68,887) (244,565) (486,404) (67,899) (236,343) (730,969) (102,039)
Ne t income attributable to the
Company’s share holde rs 6,758,749 10,301,157 8,601,010 1,200,654 14,392,695 18,902,167 2,638,641
Ne t income pe r share *
Basic 2.10 3.25 2.70 0.38 4.48 5.94 0.83
Diluted 2.08 3.21 2.67 0.37 4.43 5.88 0.82
Ne t income pe r ADS *
Basic 10.50 16.23 13.49 1.88 22.39 29.71 4.15
Diluted 10.42 16.06 13.36 1.87 22.17 29.41 4.11
We ighte d ave rage numbe r of ordinary
share s use d in calculating ne t income
pe r share *
Basic 3,217,699 3,173,899 3,188,634 3,188,634 3,214,682 3,181,307 3,181,307
Diluted 3,243,056 3,206,362 3,214,681 3,214,681 3,246,254 3,210,563 3,210,563
* Each ADS represents five ordinary shares.
The accompanying notes are an integral part of this announcement.
Thre e Months Ende d Six Months Ende d

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NETEASE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
June 30, March 31, June 30, June 30, June 30, June 30, June 30,
2024 2025 2025 2025 2024 2025 2025
RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)
Cash flows from ope rating activitie s:
Net income 6,828,596 10,546,771 9,088,465 1,268,700 14,630,956 19,635,236 2,740,973
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 631,957 480,761 428,427 59,806 1,199,880 909,188 126,918
Fair value changes of equity security and other investments (7,887) (558,499) 55,715 7,778 (376,145) (502,784) (70,186)
Impairment losses on investments 210,741 89,071 161,463 22,539 339,158 250,534 34,973
Fair value changes of short-term investments (128,295) (201,609) (344,604) (48,105) (189,105) (546,213) (76,248)
Share-based compensation cost 1,079,056 951,872 946,395 132,112 1,973,356 1,898,267 264,988
Allowance for expected credit losses 9,281 16,771 153,179 21,383 20,881 169,950 23,724
(Gains)/losses on disposal of property, equipment and software (326) 20,293 (30,920) (4,316) 1,806 (10,627) (1,484)
Unrealized exchange gains (209,311) (28,453) (165,662) (23,126) (226,820) (194,115) (27,097)
(Gains)/losses on disposal of long-term investments,
business and subsidiaries (141,114) 11,675 (141,078) (19,694) (154,601) (129,403) (18,064)
Deferred income taxes (1,280,076) 328,272 (853,764) (119,181) (795,022) (525,492) (73,356)
Share of results on equity method investees 39,200 (18,668) 13,479 1,882 203,471 (5,189) (724)
Changes in operating assets and liabilities:
Accounts receivable 1,410,478 (1,088,960) 953,295 133,075 51,767 (135,665) (18,938)
Inventories 29,552 53,773 (73,944) (10,322) 120,930 (20,171) (2,816)
Prepayments and other assets 530,856 (295,178) 583,484 81,451 856,996 288,306 40,246
Accounts payable (126,862) (148,076) 119,644 16,702 (133,863) (28,432) (3,969)
Salary and welfare payables 879,058 (2,085,111) 920,662 128,520 (1,299,550) (1,164,449) (162,551)
Taxes payable (1,462,700) 1,796,123 (764,372) (106,702) (190,878) 1,031,751 144,027
Contract liabilities (1,270,324) 2,526,198 (718,719) (100,329) 303,762 1,807,479 252,314
Accrued liabilities and other payables (490,048) (290,374) 530,718 74,085 (247,978) 240,344 33,551
Net cash provided by operating activities 6,531,832 12,106,652 10,861,863 1,516,258 16,089,001 22,968,515 3,206,281
Cash flows from inve sting activitie s:
Purchase of property, equipment and software (168,880) (454,071) (189,842) (26,501) (583,898) (643,913) (89,887)
Proceeds from sale of property, equipment and software 660 1,336 21,499 3,001 4,166 22,835 3,188
Purchase of intangible assets, content and licensed copyrights (399,533) (298,771) (313,349) (43,742) (588,354) (612,120) (85,449)
Net changes of short-term investments with terms of three months or less (8,194,289) (6,138,556) 776,428 108,385 (5,792,640) (5,362,128) (748,524)
Purchase of short-term investments with terms over three months – (2,970,000) (5,800,000) (809,649) – (8,770,000) (1,224,245)
Proceeds from maturities of short-term investments with terms over three months – 2,708,601 5,745,454 802,034 – 8,454,055 1,180,141
Investment in long-term investments and acquisition of subsidiaries (193,450) (90,966) (2,741,641) (382,718) (675,254) (2,832,607) (395,417)
Proceeds from disposal of long-term investments, businesses,
subsidiaries and other financial instruments 840,649 77,428 784,855 109,562 926,105 862,283 120,370
Placement/rollover of matured time deposits (61,775,606) (49,601,807) (27,980,605) (3,905,942) (96,334,442) (77,582,412) (10,830,087)
Proceeds from maturities of time deposits 55,211,839 43,926,482 33,617,510 4,692,823 101,260,221 77,543,992 10,824,724
Change in other long-term assets (172,543) (678) (27,367) (3,820) (207,168) (28,045) (3,915)
Net cash (used in)/provided by investing activities (14,851,153) (12,841,002) 3,892,942 543,433 (1,991,264) (8,948,060) (1,249,101)
Cash flows from financing activitie s:
Net changes from loans with terms of three months or less (2,085,053) (2,254,415) 2,017,570 281,642 (2,484,779) (236,845) (33,062)
Proceeds of loans with terms over three months 1,069,020 2,747,550 1,231,000 171,841 8,067,270 3,978,550 555,384
Payment of loans with terms over three months (10,681,827) (2,935,677) (1,804,730) (251,930) (11,638,827) (4,740,407) (661,735)
Net amounts received related to capital contribution from
of noncontrolling interests shareholders 50,572 42,517 42,400 5,919 92,786 84,917 11,854
Cash paid for repurchase of NetEase’s ADSs/purchase of
subsidiaries’ ADSs and shares (2,007,030) (303,601) (355,563) (49,635) (3,240,810) (659,164) (92,016)
Dividends paid to NetEase’s shareholders (2,264,799) (5,584,532) (3,082,122) (430,248) (7,209,815) (8,666,654) (1,209,818)
Net cash used in financing activities (15,919,117) (8,288,158) (1,951,445) (272,411) (16,414,175) (10,239,603) (1,429,393)
Effect of exchange rate changes on cash, cash equivalents and
restricted cash held in foreign currencies 8,234 (56,932) (31,749) (4,432) (34,904) (88,681) (12,380)
Net(decrease)/ increase in cash, cash equivalents and restricted cash (24,230,204) (9,079,440) 12,771,611 1,782,848 (2,351,342) 3,692,171 515,407
Cash, cash e quivale nts and re stricte d cash, at the be ginning of the pe riod 46,085,520 54,474,923 45,395,483 6,336,965 24,206,658 54,474,923 7,604,406
Cash, cash e quivale nts and re stricte d cash, at e nd of the pe riod 21,855,316 45,395,483 58,167,094 8,119,813 21,855,316 58,167,094 8,119,813
Supple me ntal disclosure s of cash flow information:
Cash paid for income taxes, net 2,848,493 1,206,555 2,184,556 304,952 4,031,204 3,391,111 473,381
Cash paid for interest expenses 152,943 97,424 64,366 8,985 299,398 161,790 22,585
The accompanying notes are an integral part of this announcement.
Thre e Months Ende d Six Months Ende d

12
NETEASE, INC.
UNAUDITED SEGMENT INFORMATION
(in thousands)
June 30, March 31, June 30, June 30, June 30, June 30, June 30,
2024 2025 2025 2025 2024 2025 2025
RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)
Ne t re ve nue s:
Games and related value-added services 20,055,819 24,048,007 22,806,459 3,183,659 41,516,197 46,854,466 6,540,631
Youdao 1,321,721 1,298,262 1,417,541 197,881 2,713,580 2,715,803 379,111
NetEase Cloud Music 2,040,952 1,858,388 1,968,729 274,824 4,070,493 3,827,117 534,245
Innovative businesses and others 2,067,313 1,623,888 1,698,935 237,162 4,037,276 3,322,823 463,849
Total net revenues 25,485,805 28,828,545 27,891,664 3,893,526 52,337,546 56,720,209 7,917,836
Cost of re ve nue s:
Games and related value-added services (6,008,604) (7,495,262) (6,792,240) (948,161) (12,563,915) (14,287,502) (1,994,458)
Youdao (684,942) (684,035) (808,181) (112,817) (1,395,298) (1,492,216) (208,305)
NetEase Cloud Music (1,385,756) (1,175,777) (1,258,855) (175,729) (2,644,762) (2,434,632) (339,862)
Innovative businesses and others (1,364,285) (994,065) (979,906) (136,790) (2,675,433) (1,973,971) (275,556)
Total cost of revenues (9,443,587) (10,349,139) (9,839,182) (1,373,497) (19,279,408) (20,188,321) (2,818,181)
Gross profit:
Games and related value-added services 14,047,215 16,552,745 16,014,219 2,235,498 28,952,282 32,566,964 4,546,173
Youdao 636,779 614,227 609,360 85,064 1,318,282 1,223,587 170,806
NetEase Cloud Music 655,196 682,611 709,874 99,095 1,425,731 1,392,485 194,383
Innovative businesses and others 703,028 629,823 719,029 100,372 1,361,843 1,348,852 188,293
Total gross profit 16,042,218 18,479,406 18,052,482 2,520,029 33,058,138 36,531,888 5,099,655
The accompanying notes are an integral part of this announcement.
Thre e Months Ende d Six Months Ende d

13
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. 1636 on the last trading day of June 202 5 (June 30 , 202 5) 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 June 30 , 202 5, 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):

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 subsidiar y to meet the disclosure
requirements under 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):

Note 5: Reconciliation between U.S. GAAP and IFRS Accounting Standards

The unaudited condensed consolidated financial information is prepared in accordance with U.S.
GAAP, which differ in certain respects from IFRS Accounting Standards. The effects of material
differences between the unaudited condensed consolidated financial information prepared under U.S.
GAAP and IFRS Accounting Standards (“Reconciliation Statement”) are as follows in RMB (in
thousands).
June 30, March 31, June 30, June 30, June 30, June 30, June 30,
2024 2025 2025 2025 2024 2025 2025
RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)
Share-based compensation cost included in:
Cost of revenues 319,949 233,711 291,326 40,668 574,884 525,037 73,292
Operating expenses
Selling and marketing expenses 42,865 32,578 37,300 5,207 60,734 69,878 9,755
General and administrative expenses 286,350 261,259 207,202 28,924 575,986 468,461 65,395
Research and development expenses 429,892 424,324 410,567 57,313 761,752 834,891 116,546
The accompanying notes are an integral part of this announcement.
Thre e Months Ende d Six Months Ende d June 30, March 31, June 30, June 30, June 30, June 30, June 30,
2024 2025 2025 2025 2024 2025 2025
RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)
Net income attributable to the Company’s shareholders 6,758,749 10,301,157 8,601,010 1,200,654 14,392,695 18,902,167 2,638,641
Add: Share-based compensation 1,059,939 935,570 930,921 129,952 1,936,837 1,866,491 260,552
Non-GAAP net income attributable to the Company’s shareholders 7,818,688 11,236,727 9,531,931 1,330,606 16,329,532 20,768,658 2,899,193
Non-GAAP ne t income pe r share *
Basic 2.43 3.54 2.99 0.42 5.08 6.53 0.91
Diluted 2.41 3.50 2.96 0.41 5.03 6.46 0.90
Non-GAAP ne t income pe r ADS *
Basic 12.15 17.70 14.95 2.09 25.40 32.64 4.56
Diluted 12.05 17.51 14.81 2.07 25.15 32.32 4.51
* Each ADS represents five ordinary shares.
The accompanying notes are an integral part of this announcement.
Thre e Months Ende d Six Months Ende d

14
PricewaterhouseCoopers, the auditor of the Company in Hong Kong, has performed a limited
assurance engagement on the Reconciliation Statement in accordance with International Standard on
Assurance Engagements 3000 (Revised) “Assurance Engagements Other Than Audits or Reviews of
Historical Financial Information”.
Reconciliation of unaudited condensed consolidated statements of income (Extract):

Reconciliation of unaudited condensed consolidated balance sheets (Extract):

15
Notes:
Basis of Preparation
The Company is responsible for preparation of the Reconciliation Statement in accordance with the
relevant requirements of the Hong Kong Listing Rules and relevant guidance in HKEX -GL111 -22.
The Reconciliation Statement was prepared based on the Company’s unaudited condensed
consolidated financial information for the six months ended June 30, 2025 prepared under U.S. GAAP,
with material adjustments made (if any) thereto in arriving at the unaudited financial information of
the Company prepared under IFRS Ac counting Standards. The adjustments reflect the material
differences between the Company’s accounting policies under U.S. GAAP and IFRS Accounting
Standards.
Note a. Investments measured at fair value
Under U.S. GAAP, NetEase applied the measurement alternative to record the investments in equity
securities (including preferred shares and ordinary shares without significant influence) without readily
determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for
observable price changes recognized in the consolidated income statements.
Under IFRS Accounting Standards, these investments were classified as financial assets at fair value
through profit or loss and measured at fair value with changes in fair value recognized through profit
or loss.
Note b. Redeemable noncontrolling interests
Under U.S. GAAP, SEC guidance provides for mezzanine -equity (temporary equity) category in
addition to the financial liability and permanent equity categories. The purpose of this “in -between”
category is to indicate that a security whose redemption is out side the control of the issuer may not be
classified as a permanent part of equity. NetEase classified the redeemable preferred shares issued by
certain subsidiaries as redeemable noncontrolling interests in the condensed consolidated balance
sheets and re corded them initially at fair value, net of issuance costs. NetEase recognized accretion to
the respective redemption value of the redeemable preferred shares over the period starting from
issuance date to the earliest redemption date.
Under IFRS Accounting Standards, there is no concept of mezzanine or temporary equity classification.
NetEase designated the redeemable preferred shares as financial liabilities at fair value through profit
or loss which are measured at fair value. Subsequ ent to initial recognition, the amounts of changes in
fair value that were attributed to changes in credit risk of the issuer were recognized in other
comprehensive income, and the remaining amounts of changes in fair value were recognized in the
profit or loss.