Third Quarter 2025 Financial Highlights
Net revenues were RMB28.4 billion (US$4.0 billion), an increase of 8.2% compared with the same quarter of 2024.
Games and related value-added services net revenues were RMB23.3 billion (US$3.3 billion), an increase of 11.8% compared with the same quarter of 2024.
Youdao net revenues were RMB1.6 billion (US$228.8 million), an increase of 3.6% compared with the same quarter of 2024.
NetEase Cloud Music net revenues were RMB2.0 billion (US$275.9 million), a decrease of 1.8% compared with the same quarter of 2024.
Innovative businesses and others net revenues were RMB1.4 billion (US$202.1 million), a decrease of 18.9% compared with the same quarter of 2024.
Gross profit was RMB18.2 billion (US$2.6 billion), an increase of 10.3% compared with the same quarter of 2024.
Total operating expenses were RMB10.2 billion (US$1.4 billion), an increase of 8.9% compared with the same quarter of 2024.
Net income attributable to the Company's shareholders was RMB8.6 billion (US$1.2 billion). Non-GAAP net income attributable to the Company's shareholders was RMB9.5 billion (US$1.3 billion).[1]
Basic net income per share was US$0.38 (US$1.90 per ADS). Non-GAAP basic net income per share was US$0.42 (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.
Third Quarter 2025 and Recent Operational Highlights
Showcased strong long-term operating capabilities with enduring player engagement across well-established titles. Notably, Fantasy Westward Journey Online achieved four successive record peak concurrent player counts since the third quarter, reaching a height of 3.58 million. Multiple established titles strengthened player appeal through innovative gameplay updates and crossover synergy events, including Fantasy Westward Journey mobile game, Identity V, Eggy Party, Sword of Justice and Where Winds Meet.
Strengthened the global portfolio and pipeline with new games across a variety of genres:
Destiny: Rising topped the iOS download chart in multiple regions across Western markets with its August 28 global launch, as well as in China with its October 16 domestic launch.
ANANTA sparked substantial enthusiasm with its brand-new experience at Tokyo Games Show 2025's playtesting session.
Sword of Justice and Where Winds Meet hit global markets on November 7 and 14, respectively, bringing captivating, distinctive Wuxia worlds to players everywhere.
Sea of Remnants is advancing steadily toward its planned 2026 launch.
Blizzard titles continued to deliver enhanced experiences to Chinese players. World of Warcraft launched the long-awaited, China-exclusive Titan Reforged Server on November 18, igniting strong enthusiasm among local players. Diablo II: Resurrected returned to China on August 27, followed by StarCraft II on October 28, while Diablo IV is scheduled to launch on December 12, to deliver another exceptional experience to players in China.
"We delivered another quarter of solid execution, underscoring our healthy growth in China and rising global appeal," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "Over the years, we have honed our innovation capabilities and proven them title after title by delivering exceptional gaming experiences. This edge has afforded us a strong domestic foundation to extend our distinctive, sophisticated games to players worldwide.
"User experience remains the heart of our value system as we look to raise the bar for creativity and tech-inspired games while enriching and expanding our vibrant player community. Through close collaboration with partners and top talent around the world, we aim to create even greater value for players and sustain our momentum across markets," Mr. Ding concluded.
Third Quarter 2025 Financial Results
Net Revenues
Net revenues for the third quarter of 2025 were RMB28.4 billion (US$4.0 billion), compared with RMB27.9 billion and RMB26.2 billion for the preceding quarter and the same quarter of 2024, respectively.
Net revenues from games and related value-added services were RMB23.3 billion (US$3.3 billion) for the third quarter of 2025, compared with RMB22.8 billion and RMB20.9 billion for the preceding quarter and the same quarter of 2024, respectively. Net revenues from the operation of online games accounted for approximately 97.6% of the segment's net revenues for the third quarter of 2025, compared with 97.1% and 96.8% for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter increase in online games net revenues was due to higher net revenues from self-developed games such as Fantasy Westward Journey Online and Sword of Justice, as well as certain licensed games. The year-over-year increase was attributable to higher net revenues from self-developed games such as Fantasy Westward Journey Online, Eggy Party and newly-launched Where Winds Meet and Marvel Rivals, as well as certain licensed games.
Net revenues from Youdao were RMB1.6 billion (US$228.8 million) for the third quarter of 2025, compared with RMB1.4 billion and RMB1.6 billion for the preceding quarter and the same quarter of 2024. The quarter-over-quarter increase was due to increased net revenues from its smart devices and online marketing services.
Net revenues from NetEase Cloud Music were RMB2.0 billion (US$275.9 million) for the third quarter of 2025, compared with RMB2.0 billion each for the preceding quarter and the same quarter of 2024.
Net revenues from innovative businesses and others were RMB1.4 billion (US$202.1 million) for the third quarter of 2025, compared with RMB1.7 billion and RMB1.8 billion for the preceding quarter and the same quarter of 2024, respectively. Results from this segment were mainly driven by net revenues from Yanxuan, advertising services and other value-added services, as well as certain inter-segment transaction eliminations. The quarter-over-quarter decrease was led by decreased net revenues from Yanxuan. The year-over-year decrease reflected an increase in certain inter-segment transaction elimination and, to a lesser extent, decreased net revenues from Yanxuan and certain other businesses.
Cost of Revenues
Cost of revenues for the third quarter of 2025 was RMB10.2 billion (US$1.4 billion), compared with RMB9.8 billion and RMB9.7 billion for the preceding quarter and the same quarter of 2024, respectively. Staff-related costs, revenue sharing costs and royalties for licensed games increased quarter-over-quarter and year-over-year.
Gross Profit
Gross profit for the third quarter of 2025 was RMB18.2 billion (US$2.6 billion), compared with RMB18.1 billion and RMB16.5 billion for the preceding quarter and the same quarter of 2024, respectively.
Operating Expenses
Total operating expenses for the third quarter of 2025 were RMB10.2 billion (US$1.4 billion), compared with RMB9.0 billion and RMB9.3 billion for the preceding quarter and the same quarter of 2024, respectively. The quarter-over-quarter and year-over-year increases were primarily due to increased marketing expenditures related to online games.
Other Income/(Expenses)
Other income/(expenses) consisted of investment income, interest income, net exchange losses/(gains) and others. The quarter-over-quarter increase was mainly due to fair value changes of equity security investments in the third quarter of 2025. The year-over-year increase was primarily due to fair value changes of equity security investments and lower net exchange losses in the third quarter of 2025, compared with the same quarter of 2024.
Income Tax
The Company recorded a net income tax charge of RMB1.3 billion (US$184.9 million) for the third quarter of 2025, compared with RMB1.6 billion and RMB1.3 billion for the preceding quarter and the same quarter of 2024, respectively. The effective tax rate for the third quarter of 2025 was 13.0%, compared with 14.7% and 16.1% for the preceding quarter and the same quarter of 2024, 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 RMB8.6 billion (US$1.2 billion) for the third quarter of 2025, compared with RMB8.6 billion and RMB6.5 billion for the preceding quarter and the same quarter of 2024, respectively.
Basic net income was US$0.38 per share (US$1.90 per ADS) for the third quarter of 2025, compared with US$0.38 per share (US$1.89 per ADS) and US$0.29 per share (US$1.44 per ADS) for the preceding quarter and the same quarter of 2024, respectively.
Non-GAAP net income attributable to the Company's shareholders totaled RMB9.5 billion (US$1.3 billion) for the third quarter of 2025, compared with RMB9.5 billion and RMB7.5 billion for the preceding quarter and the same quarter of 2024, respectively.
Non-GAAP basic net income was US$0.42 per share (US$2.09 per ADS) for the third quarter of 2025, compared with US$0.42 per share (US$2.10 per ADS) and US$0.33 per share (US$1.65 per ADS) for the preceding quarter and the same quarter of 2024, respectively.
Other Financial Information
As of September 30, 2025, 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 RMB153.2 billion (US$21.5 billion), compared with RMB131.5 billion as of December 31, 2024. Net cash provided by operating activities was RMB12.9 billion (US$1.8 billion) for the third quarter of 2025, compared with RMB10.9 billion and RMB10.6 billion for the preceding quarter and the third 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 third quarter of 2025 to holders of ordinary shares and holders of ADSs as of the close of business on December 5, 2025, 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 December 5, 2025 (Beijing/Hong Kong Time). The payment date is expected to be December 16, 2025 for holders of ordinary shares and on or around December 19, 2025, for holders of ADSs.
NetEase paid a dividend of US$0.1140 per share (US$0.5700 per ADS) for the second quarter of 2025 in September 2025.
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
The Company announced today that its previously approved share repurchase program of up to US$5.0 billion of the Company's ADSs and ordinary shares in open market or other transactions will be extended for an additional 36 months until January 9, 2029. As of September 30, 2025, 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 7:00 a.m. Eastern Time on Thursday, November 20, 2025 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, November 20, 2025). 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: 10051135, 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: 10051135. The replay will be available through November 27, 2025.
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, ", 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 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 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 regulatory environment in the markets where 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 evolving economic cycles and geopolitical tensions, including the direct or indirect 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.
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 generally 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 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 provides 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 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 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 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: Tel: (+86) 571-8985-3378
NETEASE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
September 30,
September 30,
2024
2025
2025
RMB
RMB
USD (Note 1)
Assets
Current assets:
Cash and cash equivalents
51,383,310
31,326,752
4,400,443
Time deposits
75,441,355
93,551,844
13,141,150
Restricted cash
3,086,405
8,654,295
1,215,662
Accounts receivable, net
5,669,027
5,962,060
837,486
Inventories
571,548
637,325
89,525
Prepayments and other current assets, net
6,416,868
6,863,085
964,050
Short-term investments
10,756,143
24,214,436
3,401,382
Total current assets
153,324,656
171,209,797
24,049,698
Non-current assets:
Property, equipment and software, net
8,520,101
8,517,182
1,196,401
Land use rights, net
4,172,465
4,078,719
572,934
Deferred tax assets
1,113,435
2,612,046
366,912
Time deposits
3,025,000
2,845,000
399,635
Restricted cash
5,208
3,900
548
Other long-term assets
25,830,685
25,222,219
3,542,944
Total non-current assets
42,666,894
43,279,066
6,079,374
Total assets
195,991,550
214,488,863
30,129,072
Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity
Current liabilities:
Accounts payable
720,549
718,393
100,912
Salary and welfare payables
4,683,009
3,004,519
422,042
Taxes payable
2,759,185
4,312,685
605,799
Short-term loans
11,805,051
7,349,967
1,032,444
Contract liabilities
15,299,222
19,473,595
2,735,440
Accrued liabilities and other payables
14,400,641
15,229,406
2,139,262
Total current liabilities
49,667,657
50,088,565
7,035,899
Non-current liabilities:
Deferred tax liabilities
2,173,117
2,212,733
310,821
Long-term loans
427,997
-
-
Other long-term liabilities
1,228,641
1,255,583
176,371
Total non-current liabilities
3,829,755
3,468,316
487,192
Total liabilities
53,497,412
53,556,881
7,523,091
Redeemable noncontrolling interests
84,272
89,465
12,567
NetEase, Inc.'s shareholders' equity
138,685,606
156,256,172
21,949,174
Noncontrolling interests
3,724,260
4,586,345
644,240
Total equity
142,409,866
160,842,517
22,593,414
Total liabilities, redeemable noncontrolling interests and shareholders' equity
195,991,550
214,488,863
30,129,072
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
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
September 30,
September 30,
2024
2025
2025
2025
2024
2025
2025
RMB
RMB
RMB
USD (Note 1)
RMB
RMB
USD (Note 1)
Net revenues
26,209,879
27,891,664
28,358,625
3,983,512
78,547,425
85,078,834
11,950,953
Cost of revenues
(9,733,274)
(9,839,182)
(10,181,020)
(1,430,119)
(29,012,682)
(30,369,341)
(4,265,956)
Gross profit
16,476,605
18,052,482
18,177,605
2,553,393
49,534,743
54,709,493
7,684,997
Operating expenses:
Selling and marketing expenses
(3,805,071)
(3,578,174)
(4,457,675)
(626,166)
(11,329,012)
(10,731,446)
(1,507,437)
General and administrative expenses
(1,100,328)
(1,056,578)
(1,164,573)
(163,587)
(3,388,244)
(3,177,488)
(446,339)
Research and development expenses
(4,424,469)
(4,356,646)
(4,541,891)
(637,996)
(13,054,944)
(13,284,850)
(1,866,112)
Total operating expenses
(9,329,868)
(8,991,398)
(10,164,139)
(1,427,749)
(27,772,200)
(27,193,784)
(3,819,888)
Operating profit
7,146,737
9,061,084
8,013,466
1,125,644
21,762,543
27,515,709
3,865,109
Other income/(expenses):
Investment income, net
