Shulou(Shulou.com)11/24 Report--

According to CTOnews.com news on August 18, NetEase today announced unaudited financial results for the second quarter. Second-quarter revenue was 23.2 billion yuan, up 12.8 percent from the same period last year, with an estimate of 23.04 billion yuan. Second-quarter gross profit was 12.9 billion yuan, up 15.7 percent from the same period last year.

Net income from games and related value-added services was 18.1 billion yuan ($2.7 billion), up 15.0% from the second quarter of 2021.

Youdao's net income was 956.2 million yuan ($142.8 million), down 26.1% from the second quarter of 2021.

Cloud Music's net income was 2.2 billion yuan ($327.2 million), up 29.5% from the second quarter of 2021.

Net income from innovation and other businesses was 1.9 billion yuan ($279.4 million), up 6.1 per cent from the second quarter of 2021.

Total operating expenses were 8 billion yuan (US $1.2 billion), an increase of 7.6 per cent compared to the second quarter of 2021.

The net income from continuing operations attributable to the company's shareholders is 4.7 billion yuan (US $696.7 million). The net income from continuing operations attributable to the Company's shareholders under non-GAAP is RMB 5.4 billion (US $807.7 million).

CTOnews.com learned that starting from the second quarter of 2022, NetEase changed the name of the "online game services" section to "games and related value-added services" and transferred some of the business lines related to or affiliated to games from "innovative business and other" to "games and related value-added services".

Gross profit margins on games and related value-added services were 64.9% in the second quarter of 2022, compared with 62.2% in the previous quarter and 63.2% in the second quarter of 2021. The gross profit margin of games and related value-added services is generally stable, and narrow fluctuations come from different distribution channels according to the income mix of NetEase mobile games and PC games, self-research, cooperative and licensed games, as well as relative income contributions.

Youdao's gross margin was 42.8% in the second quarter of 2022, compared with 53.1% in the previous quarter and 52.3% in the second quarter of 2021.

Cloud Music's gross margin was 13.0% in the second quarter of 2022, compared with 12.2% in the previous quarter and 4.1% in the second quarter of 2021. The month-on-month and year-on-year growth of Cloud Music gross margin is mainly due to an increase in net income from its member subscription and social entertainment services, as well as improved cost control.

Gross profit margins for innovation and other businesses were 25.8% in the second quarter of 2022, compared with 21.7% in the previous quarter and 27.3% in the second quarter of 2021. Month-on-month and year-on-year fluctuations are mainly due to changes in advertising service gross profit margin.

In addition, NetEase Yun Music released its financial results for the first half of 2022. According to the financial report, NetEase Yun Music's net income in the first half of 2022 was 4.26 billion yuan, an increase of 33.8% over the same period last year, and its gross profit margin also rose sharply to 12.6% from-0.4% in the same period last year.

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