News Release
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NetEase Reports Third Quarter 2019 Unaudited Financial Results
Third Quarter 2019 Financial Highlights[1]
- Net revenues[2] were
RMB14,635.7 million (US$2,047.6 million ), an increase of 11.2% compared to the third quarter of 2018.
- Online game services net revenues wereRMB11,534.8 million (US$1,613.8 million ), an increase of 11.5% compared to the third quarter of 2018.
-Youdao net revenues wereRMB345.9 million (US$48.4 million ), an increase of 98.4% compared to the third quarter of 2018.
- Innovative businesses and others net revenues wereRMB2,755.0 million (US$385.4 million ), an increase of 4.5% compared to the third quarter of 2018. - Gross profit was
RMB7,870.4 million (US$1,101.1 million ), an increase of 8.9% compared to the third quarter of 2018. - Total operating expenses were
RMB4,535.6 million (US$634.6 million ), a decrease of 3.3% compared to the third quarter of 2018. - Net income from continuing operations attributable to the Company's shareholders was
RMB12,885.4 million (US$1,802.7 million ). Non-GAAP net income from continuing operations attributable to the Company's shareholders wasRMB4,726.0 million (US$661.2 million ). [3] - Basic net income per ADS from continuing operations was
US$13.97 ; non-GAAP basic net income per ADS from continuing operations wasUS$5.12 .[3]
[1] In September 2019, NetEase sold its Kaola e-commerce business, the principal terms of which were previously announced. As a result, Kaola has been deconsolidated from the Company and its historical financial results are reflected in the Company's consolidated financial statements as discontinued operations accordingly. The financial information and non-GAAP financial information disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated. |
[2] Effective in the third quarter of 2019, the Company changed its segment disclosure to add the financial results of its certain advertising services and its private label e-commerce business Yanxuan into "innovative businesses and others" in light of the relatively small revenue contribution from those businesses to the Company's total consolidated net revenues in 2019. In addition, the Company has commenced separately reporting the results of Youdao. As a result, the Company now reports segments as online game services, Youdao and innovative businesses and others. See "Change of segment reporting" in this press release. |
[3] As used in this press release, non-GAAP net income from continuing operations attributable to the Company's shareholders and non-GAAP basic and diluted net income from continuing operations per ADS are defined to exclude share-based compensation expenses and net gain from disposal of business due to change in business focus. See "Unaudited Reconciliation of GAAP and Non-GAAP Results" at the end of this press release. |
Third Quarter 2019 and Recent Operational Highlights
- Introduced thrilling new titles to
China's gamer community including Cyber Hunter,Xuan Yuan Sword : Dragon Upon the Cloud and Bloom & Blade. - Fortified global brand recognition:
- Knives Out ledJapan's iOS top grossing chart several times in August, September and October.
- Identity V ledJapan's iOS top grossing chart for the first time in September. Launched Blizzard Entertainment's World of Warcraft Classic inChina , yielding increased revenue and total number of subscribers both year-over-year and quarter-over-quarter.- Progressed exciting game pipeline including Fantasy Westward Journey 3D, Onmyoji: The Card Game,
Marvel Super War , Onmyoji: Yokai Koya,Harry Potter : Magic Awakened, EVE Echoes,Ghost World Chronicle , Diablo Immortal and Pokémon Quest. - Sold e-commerce platform Kaola to
Alibaba Group Holding Limited ("Alibaba "). - Entered into a definitive agreement for an approximately
US$700 million investment in NetEase Cloud Music byAlibaba and Yunfeng. - Completed the initial public offering and listing of
Youdao, Inc. (NYSE: DAO) on theNew York Stock Exchange inOctober 2019 .
"During our eventful third quarter, we realized value for our shareholders across our business lines. On a year-over-year basis, we achieved solid growth in net revenues of 11% and non-GAAP net income from continuing operations of 74%. In recognition of this success, our board of directors has approved a dividend of
"Online games remain the cornerstone of our business with steady growth from our existing titles and exciting new titles in
Third Quarter 2019 Financial Results
Net Revenues
Net revenues for the third quarter of 2019 were
Net revenues from online game services were
Net revenues from
Net revenues from innovative businesses and others were
Gross Profit
Gross profit for the third quarter of 2019 was
The quarter-over-quarter increase in online game services gross profit was primarily due to increased net revenues from certain PC-client games. The year-over-year increase in online game services gross profit was primarily due to increased net revenues from mobile games such as Life-After, Invincible and Identity V.
The year-over-year increase in
The year-over-year decrease in innovative businesses and others gross profit was primarily due to decreased net revenues from certain advertising services which were affected by the macro-environment and increased expenses related to staff cost and content purchases.
Gross Profit Margin
Gross profit margin for online game services for the third quarter of 2019 was 63.8%, compared to 63.1% and 65.1% for the preceding quarter and the third quarter of 2018, respectively. The year-over-year decrease in gross profit margin was mainly due to higher revenue contribution from mobile games with comparatively lower margin.
Gross profit margin for
Gross profit margin for innovative businesses and others for the third quarter of 2019 was 15.2%, compared to 15.5% and 17.0% for the preceding quarter and the third quarter of 2018, respectively. The year-over-year decrease in innovative businesses and others gross profit margin was primarily due to decreased net revenues from certain advertising services which were affected by the macro-environment and increased expenses related to staff cost and content purchases.
Operating Expenses
Total operating expenses for the third quarter of 2019 were
Other Income
Other income consisted of investment (loss)/ income, interest income, foreign exchange gains and others. The quarter-over-quarter and year-over-year increases in other income were mainly due to the gain from the disposal of Kaola and investment income.
Income Taxes
The Company recorded a net income tax charge of
Net Income and Non-GAAP Net Income
Net income from continuing operations attributable to the Company's shareholders for the third quarter of 2019 totaled
Quarterly Dividend
The basic net income per ADS was
Starting in the second quarter of 2019, the Company's policy has been to set quarterly dividends at an amount equivalent to approximately 20%-30% of the Company's anticipated net income after tax in each fiscal quarter. The determination to make dividend distributions and the amount of such distributions in any particular quarter will be made at the discretion of the board of directors and will be based upon the Company's operations and earnings, cash flow, financial condition and other relevant factors.
Other Information
As of
Share Repurchase/ Purchase Program
On
The Company also announced today that its board of directors has approved a share purchase program of up to
Under the terms of this program,
**
Change in Segment Reporting
Effective in the third quarter of 2019, the Company changed its segment disclosure to add the financial results of its certain advertising services and Yanxuan into innovative businesses and others in light of the relatively small revenue contribution from those businesses to the Company's total consolidated net revenues in 2019. The Company sold its Kaola e-commerce business in
Impact of the Recently Adopted Major Accounting Pronouncement
In
Conference Call
Interested parties may participate in the conference call by dialing 1-929-477-0402 and providing conference ID: 7150397, 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-719-457-0820 and entering passcode 7150397#. The replay will be available through
About
Forward Looking Statements
This press release 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 statements. 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 game market will not continue to grow or that
Non-GAAP Financial Measures
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 from continuing operations 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 and net gain from disposal of business due to change in business focus have been and may continue to be incurred in our business and are not reflected in the presentation of non-GAAP net income from continuing operations attributable to the Company's shareholders. In addition, the non-GAAP financial measures
Contact for Media and Investors:
ir@service.netease.com
Tel: (+86) 571-8985-3378
Investor Relations
netease@thepiacentegroup.com
Tel: (+1) 212-481-2050
NETEASE, INC. |
|||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(RMB and USD in thousands) |
|||||||
December 31, |
September 30, |
September 30, |
|||||
2018 |
2019 |
2019 |
|||||
RMB |
RMB |
USD (Note 1) |
|||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
4,988,451 |
2,741,419 |
383,539 |
||||
Time deposits |
32,900,287 |
39,224,063 |
5,487,648 |
||||
Restricted cash |
4,692,050 |
3,947,201 |
552,234 |
||||
Accounts receivable, net |
4,118,706 |
4,706,696 |
658,491 |
||||
Inventories, net |
1,065,615 |
686,749 |
96,080 |
||||
Prepayments and other current assets |
4,134,233 |
11,823,684 |
1,654,193 |
||||
Short-term investments |
11,674,775 |
19,416,209 |
2,716,428 |
||||
Assets held for sale |
5,141,603 |
- |
- |
||||
Total current assets |
68,715,720 |
82,546,021 |
11,548,613 |
||||
Non-current assets: |
|||||||
Property, equipment and software, net |
4,673,128 |
4,708,165 |
658,697 |
||||
Land use right, net |
3,271,512 |
3,303,913 |
462,234 |
||||
Deferred tax assets |
1,064,295 |
797,387 |
111,559 |
||||
Time deposits |
100,000 |
50,000 |
6,995 |
||||
Other long-term assets |
8,175,536 |
14,418,332 |
2,017,199 |
||||
Assets held for sale |
967,737 |
- |
- |
||||
Total non-current assets |
18,252,208 |
23,277,797 |
3,256,684 |
||||
Total assets |
86,967,928 |
105,823,818 |
14,805,297 |
||||
Liabilities, Redeemable Noncontrolling Interests and |
|||||||
Current liabilities: |
|||||||
Accounts payable |
1,201,675 |
1,219,413 |
170,602 |
||||
Salary and welfare payables |
2,803,214 |
1,914,963 |
267,913 |
||||
Taxes payable |
2,260,810 |
2,988,084 |
418,048 |
||||
Short-term loans |
13,658,554 |
15,494,839 |
2,167,808 |
||||
Deferred revenue |
7,718,485 |
8,196,067 |
1,146,672 |
||||
Accrued liabilities and other payables |
5,005,391 |
4,797,203 |
671,153 |
||||
Liabilites held for sale |
2,460,881 |
- |
- |
||||
Total current liabilities |
35,109,010 |
34,610,569 |
4,842,196 |
||||
Non-current liabilities: |
|||||||
Deferred tax liabilities |
392,598 |
779,827 |
109,102 |
||||
Other long-term payable |
48,921 |
427,408 |
59,798 |
||||
Liabilites held for sale |
5,818 |
- |
- |
||||
Total non-current liabilities |
447,337 |
1,207,235 |
168,900 |
||||
Total liabilities |
35,556,347 |
35,817,804 |
5,011,096 |
||||
Redeemable noncontrolling interests |
5,385,736 |
5,953,894 |
832,980 |
||||
Total NetEase, Inc.'s equity |
45,231,636 |
63,381,110 |
8,867,343 |
||||
Noncontrolling interests |
794,209 |
671,010 |
93,878 |
||||
Total shareholders' equity |
46,025,845 |
64,052,120 |
8,961,221 |
||||
Total liabilities, redeemable noncontrolling interests and |
86,967,928 |
105,823,818 |
14,805,297 |
||||
The accompanying notes are an integral part of this press release. |
NETEASE, INC. |
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||
(in thousands, except per share data or per ADS data) |
||||||||
Quarter Ended |
||||||||
September 30, |
June 30, |
September 30, |
September 30, |
|||||
2018 |
2019 |
2019 |
2019 |
|||||
RMB |
RMB |
RMB |
USD (Note 1) |
|||||
Net revenues |
13,160,151 |
14,448,442 |
14,635,690 |
2,047,608 |
||||
Cost of revenues |
(5,936,032) |
(6,711,594) |
(6,765,340) |
(946,506) |
||||
Gross profit |
7,224,119 |
7,736,848 |
7,870,350 |
1,101,102 |
||||
Selling and marketing expenses |
(1,750,680) |
(1,289,763) |
(1,619,531) |
(226,581) |
||||
General and administrative expenses |
(790,828) |
(776,900) |
(753,794) |
(105,460) |
||||
Research and development expenses |
(2,147,138) |
(1,945,788) |
(2,162,254) |
(302,510) |
||||
Total operating expenses |
(4,688,646) |
(4,012,451) |
(4,535,579) |
(634,551) |
||||
Operating profit |
2,535,473 |
3,724,397 |
3,334,771 |
466,551 |
||||
Other income: |
||||||||
Investment (loss)/ income, net |
(25,400) |
24,142 |
394,907 |
55,250 |
||||
Interest income, net |
113,181 |
185,227 |
184,795 |
25,854 |
||||
Exchange gains, net |
95,955 |
72,646 |
120,562 |
16,867 |
||||
Other, net |
211,005 |
78,026 |
9,994,708 |
1,398,311 |
||||
Income before tax |
2,930,214 |
4,084,438 |
14,029,743 |
1,962,833 |
||||
Income tax |
(842,900) |
(683,755) |
(1,116,653) |
(156,225) |
||||
Net income from continuing operations |
2,087,314 |
3,400,683 |
12,913,090 |
1,806,608 |
||||
Net loss from discontinued operations |
(466,453) |
(282,815) |
(155,076) |
(21,696) |
||||
Net income |
1,620,861 |
3,117,868 |
12,758,014 |
1,784,912 |
||||
Deemed dividends attributable to redeemable |
(18,086) |
(73,048) |
(70,124) |
(9,811) |
||||
Net (income)/ loss attributable to noncontrolling |
(6,482) |
26,547 |
42,409 |
5,933 |
||||
Net income attributable to the Company's |
1,596,293 |
3,071,367 |
12,730,299 |
1,781,034 |
||||
Including: |
||||||||
-Net income from continuing operations attributable to |
2,062,746 |
3,354,182 |
12,885,375 |
1,802,730 |
||||
-Net loss from discontined operations attributable to |
(466,453) |
(282,815) |
(155,076) |
(21,696) |
||||
Basic net income/ (loss) per share: |
0.50 |
0.95 |
3.95 |
0.55 |
||||
-Continuing operations |
0.64 |
1.04 |
3.99 |
0.56 |
||||
-Discontinued operations |
(0.14) |
(0.09) |
(0.04) |
(0.01) |
||||
Basic net income/ (loss) per ADS: |
12.43 |
23.84 |
98.66 |
13.80 |
||||
-Continuing operations |
16.06 |
26.03 |
99.86 |
13.97 |
||||
-Discontinued operations |
(3.63) |
(2.19) |
(1.20) |
(0.17) |
||||
Diluted net income/ (loss) per share: |
0.49 |
0.95 |
3.91 |
0.55 |
||||
-Continuing operations |
0.64 |
1.03 |
3.96 |
0.56 |
||||
-Discontinued operations |
(0.15) |
(0.08) |
(0.05) |
(0.01) |
||||
Diluted net income/ (loss) per ADS: |
12.37 |
23.64 |
97.80 |
13.68 |
||||
-Continuing operations |
15.98 |
25.82 |
98.99 |
13.85 |
||||
-Discontinued operations |
(3.61) |
(2.18) |
(1.19) |
(0.17) |
||||
Weighted average number of ordinary shares |
3,210,940 |
3,221,306 |
3,225,704 |
3,225,704 |
||||
Weighted average number of ADS outstanding, basic |
128,438 |
128,852 |
129,028 |
129,028 |
||||
Weighted average number of ordinary shares |
3,226,763 |
3,247,408 |
3,254,269 |
3,254,269 |
||||
Weighted average number of ADS outstanding, diluted |
129,071 |
129,896 |
130,171 |
130,171 |
||||
The accompanying notes are an integral part of this press release. |
NETEASE, INC. |
||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||
(RMB and USD in thousands) |
||||||||||||||
Quarter Ended |
||||||||||||||
September 30, |
March 31, |
June 30, |
September 30, |
September 30, |
||||||||||
2018 |
2019 |
2019 |
2019 |
2019 |
||||||||||
RMB |
RMB |
RMB |
RMB |
USD (Note 1) |
||||||||||
Cash flows from operating activities: |
||||||||||||||
Net income |
1,620,861 |
2,463,274 |
3,117,868 |
12,758,014 |
1,784,912 |
|||||||||
Net loss from discontinued operations |
466,453 |
350,755 |
282,815 |
155,076 |
21,696 |
|||||||||
Adjustments to reconcile net income to net |
||||||||||||||
Depreciation and amortization |
564,754 |
581,177 |
633,574 |
703,387 |
98,407 |
|||||||||
Fair value changes and impairment losses of short-term |
6,233 |
(158,461) |
(18,399) |
(285,705) |
(39,972) |
|||||||||
Share-based compensation cost |
649,996 |
620,799 |
567,668 |
593,259 |
83,000 |
|||||||||
Allowance for/ (reversal of) provision for doubtful debts |
38,424 |
(18,319) |
2,854 |
4,725 |
661 |
|||||||||
Losses/ (gains) on disposal of property, equipment and software |
768 |
2,738 |
1,452 |
(2,639) |
(369) |
|||||||||
Unrealized exchange (gains)/ losses |
(104,128) |
41,806 |
(71,849) |
(111,807) |
(15,642) |
|||||||||
Gains on disposal of long-term investments and businesses |
- |
(11,978) |
(156) |
(9,908,185) |
(1,386,206) |
|||||||||
Deferred income taxes |
(195,015) |
303,052 |
466,324 |
(114,434) |
(16,010) |
|||||||||
Net equity share of losses/ (gains) from associated companies |
21,949 |
17,454 |
(912) |
(8,595) |
(1,202) |
|||||||||
Changes in operating assets and liabilities: |
||||||||||||||
Accounts receivable |
(694,225) |
(609,092) |
386,030 |
(333,859) |
(46,709) |
|||||||||
Inventories |
(74,589) |
163,004 |
132,712 |
83,150 |
11,633 |
|||||||||
Land use right/ prepayments of land use right |
- |
- |
- |
(418,876) |
(58,603) |
|||||||||
Other prepayments and current assets |
(333,447) |
(979,373) |
546,551 |
(327,558) |
(45,827) |
|||||||||
Accounts payable |
292,280 |
94,147 |
(112,477) |
(105,131) |
(14,708) |
|||||||||
Salary and welfare payables |
547,801 |
(484,045) |
42,803 |
(447,025) |
(62,541) |
|||||||||
Taxes payable |
700,044 |
939,359 |
(833,059) |
620,347 |
86,790 |
|||||||||
Deferred revenue |
998,400 |
151,641 |
(490,658) |
816,599 |
114,246 |
|||||||||
Accrued liabilities and other payables |
(14,620) |
(842,077) |
274,985 |
175,544 |
24,560 |
|||||||||
Net cash provided by continuing operating activities |
4,491,939 |
2,625,861 |
4,928,126 |
3,846,287 |
538,116 |
|||||||||
Net cash (used in)/ provided by discontinued operating activities |
(874,408) |
760,713 |
(462,362) |
7,136 |
998 |
|||||||||
Net cash provided by operating activities |
3,617,531 |
3,386,574 |
4,465,764 |
3,853,423 |
539,114 |
|||||||||
Cash flows from investing activities: |
||||||||||||||
Purchase of property, equipment and software |
(577,788) |
(369,590) |
(274,448) |
(329,722) |
(46,130) |
|||||||||
Proceeds from sale of property, equipment and software |
1,616 |
3,820 |
1,898 |
5,190 |
726 |
|||||||||
Purchase of intangible assets, content and licensed copyrights |
(325,895) |
(851,560) |
(298,301) |
(208,748) |
(29,205) |
|||||||||
Purchase of land use right |
(2,338,865) |
- |
- |
- |
- |
|||||||||
Net change in short-term investments with terms of three |
865,824 |
(40,255) |
1,503,083 |
(683,304) |
(95,598) |
|||||||||
Purchase of short-term investments with terms over three months |
(2,430,000) |
(4,890,000) |
(9,110,000) |
(4,997,000) |
(699,106) |
|||||||||
Proceeds from maturities of short-term investments with terms |
2,778,151 |
2,311,322 |
2,759,491 |
5,901,842 |
825,698 |
|||||||||
Investment in associated companies and other long-term |
(1,031,594) |
(392,016) |
(227,229) |
(711,229) |
(99,505) |
|||||||||
Proceeds from disposal of long-term investments |
- |
208,682 |
42,399 |
127,332 |
17,814 |
|||||||||
Placement/rollover of matured time deposits |
(11,405,346) |
(16,596,540) |
(16,234,752) |
(19,339,634) |
(2,705,714) |
|||||||||
Proceeds from maturities of time deposits |
14,306,245 |
15,959,459 |
18,588,553 |
11,869,243 |
1,660,568 |
|||||||||
Net change in other assets |
(24,964) |
(31,759) |
(56,553) |
63,196 |
8,842 |
|||||||||
Amounts (paid to) / received from disposed businesses |
(1,005,358) |
651,176 |
(200,690) |
1,488,349 |
208,228 |
|||||||||
Net cash used in continuing investing activities |
(1,187,974) |
(4,037,261) |
(3,506,549) |
(6,814,485) |
(953,382) |
|||||||||
Net cash provided by/ (used in) discontinued investing activities |
789,074 |
(704,004) |
136,649 |
(264,897) |
(37,060) |
|||||||||
Net cash used in investing activities |
(398,900) |
(4,741,265) |
(3,369,900) |
(7,079,382) |
(990,442) |
|||||||||
The accompanying notes are an integral part of this press release. |
NETEASE, INC. |
||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) |
||||||||||||||
(RMB and USD in thousands) |
||||||||||||||
Quarter Ended |
||||||||||||||
September 30, |
March 31, |
June 30, |
September 30, |
September 30, |
||||||||||
2018 |
2019 |
2019 |
2019 |
2019 |
||||||||||
RMB |
RMB |
RMB |
RMB |
USD (Note 1) |
||||||||||
Cash flows from financing activities: |
||||||||||||||
Proceeds of short-term bank loans with terms over three months |
- |
15,000 |
297,875 |
58,840 |
8,232 |
|||||||||
Payment of short-term bank loans with terms over three months |
(9,256) |
- |
- |
- |
- |
|||||||||
Net changes in short-term loans with terms of three months or less |
274,678 |
741,113 |
(1,144,121) |
1,469,031 |
205,525 |
|||||||||
Capital contribution from noncontrolling interests and |
1,139,700 |
68,611 |
215,913 |
128,192 |
17,935 |
|||||||||
Cash (paid)/ refund received for share repurchase |
(1,785,572) |
- |
10,645 |
(7) |
(1) |
|||||||||
Dividends paid to shareholders |
(533,726) |
(413,589) |
(613,117) |
(923,444) |
(129,195) |
|||||||||
Net cash (used in)/ provided by financing activities |
(914,176) |
411,135 |
(1,232,805) |
732,612 |
102,496 |
|||||||||
Effect of exchange rate changes on cash, cash equivalents |
||||||||||||||
and restricted cash held in foreign currencies |
54,007 |
(17,894) |
35,624 |
38,196 |
5,344 |
|||||||||
Net increase/ (decrease) in cash, cash equivalents and restricted cash |
2,358,462 |
(961,450) |
(101,317) |
(2,455,151) |
(343,488) |
|||||||||
Cash, cash equivalents and restricted cash, |
7,363,045 |
10,206,538 |
9,245,088 |
9,143,771 |
1,279,261 |
|||||||||
Cash, cash equivalents and restricted cash, end of the period |
9,721,507 |
9,245,088 |
9,143,771 |
6,688,620 |
935,773 |
|||||||||
Less: Cash, cash equivalents and restricted cash of discontinued |
383,198 |
580,979 |
255,151 |
- |
- |
|||||||||
Cash, cash equivalents and restricted cash of continuing operations |
9,338,309 |
8,664,109 |
8,888,620 |
6,688,620 |
935,773 |
|||||||||
Supplemental disclosures of cash flow information of continuing |
||||||||||||||
Cash paid for income tax, net |
598,283 |
535,723 |
562,032 |
906,425 |
126,814 |
|||||||||
Cash paid for interest expense |
88,695 |
108,664 |
115,410 |
73,573 |
10,293 |
|||||||||
Supplemental schedule of non-cash investing and financing activities of |
||||||||||||||
Fixed asset purchases financed by accounts payable and accrued liabilities |
327,119 |
253,232 |
312,346 |
292,528 |
40,926 |
|||||||||
The accompanying notes are an integral part of this press release. |
NETEASE, INC. |
||||||||
UNAUDITED SEGMENT INFORMATION |
||||||||
(RMB and USD in thousands, except percentages) |
||||||||
Quarter Ended |
||||||||
September 30, |
June 30, |
September 30, |
September 30, |
|||||
2018 |
2019 |
2019 |
2019 |
|||||
RMB |
RMB |
RMB |
USD (Note 1) |
|||||
Net revenues: |
||||||||
Online game services |
10,348,430 |
11,433,361 |
11,534,763 |
1,613,773 |
||||
Youdao |
174,352 |
322,812 |
345,908 |
48,394 |
||||
Innovative businesses and others |
2,637,369 |
2,692,269 |
2,755,019 |
385,441 |
||||
Total net revenues |
13,160,151 |
14,448,442 |
14,635,690 |
2,047,608 |
||||
Cost of revenues: |
||||||||
Online game services |
(3,611,946) |
(4,220,652) |
(4,172,678) |
(583,779) |
||||
Youdao |
(133,782) |
(216,749) |
(256,674) |
(35,910) |
||||
Innovative businesses and others |
(2,190,304) |
(2,274,193) |
(2,335,988) |
(326,817) |
||||
Total cost of revenues |
(5,936,032) |
(6,711,594) |
(6,765,340) |
(946,506) |
||||
Gross profit: |
||||||||
Online game services |
6,736,484 |
7,212,709 |
7,362,085 |
1,029,994 |
||||
Youdao |
40,570 |
106,063 |
89,234 |
12,484 |
||||
Innovative businesses and others |
447,065 |
418,076 |
419,031 |
58,624 |
||||
Total gross profit |
7,224,119 |
7,736,848 |
7,870,350 |
1,101,102 |
||||
Gross profit margin: |
||||||||
Online game services |
65.1% |
63.1% |
63.8% |
63.8% |
||||
Youdao |
23.3% |
32.9% |
25.8% |
25.8% |
||||
Innovative businesses and others |
17.0% |
15.5% |
15.2% |
15.2% |
||||
The accompanying notes are an integral part of this press release. |
NOTES TO UNAUDITED FINANCIAL INFORMATION
Note 1: The conversion of Renminbi (RMB) into
of
the H.10 statistical release of the U.S. Federal Reserve Board.
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):
Quarter Ended |
||||||||
September 30, |
June 30, |
September 30, |
September 30, |
|||||
2018 |
2019 |
2019 |
2019 |
|||||
RMB |
RMB |
RMB |
USD (Note 1) |
|||||
Share-based compensation cost included in: |
||||||||
Cost of revenue |
196,329 |
187,141 |
180,990 |
25,321 |
||||
Operating expenses |
||||||||
- Selling and marketing expenses |
23,910 |
21,144 |
21,176 |
2,963 |
||||
- General and administrative expenses |
202,471 |
187,362 |
200,394 |
28,036 |
||||
- Research and development expenses |
227,286 |
172,021 |
190,699 |
26,680 |
||||
The accompanying notes are an integral part of this press release. |
NETEASE, INC. |
||||||||
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS |
||||||||
(in thousands, except per share data or per ADS data) |
||||||||
Quarter Ended |
||||||||
September 30, |
June 30, |
September 30, |
September 30, |
|||||
2018 |
2019 |
2019 |
2019 |
|||||
RMB |
RMB |
RMB |
USD (Note 1) |
|||||
Net income from continuing operations attributable to |
2,062,746 |
3,354,182 |
12,885,375 |
1,802,730 |
||||
Add: Share-based compensation |
649,516 |
566,869 |
591,769 |
82,792 |
||||
Less: Net gain from disposal of business due to change in |
- |
- |
(8,751,165) |
(1,224,333) |
||||
Non-GAAP net income from continuing operations |
2,712,262 |
3,921,051 |
4,725,979 |
661,189 |
||||
Non-GAAP basic net income from continuing |
0.84 |
1.22 |
1.47 |
0.20 |
||||
Non-GAAP basic net income from continuing |
21.12 |
30.43 |
36.63 |
5.12 |
||||
Non-GAAP diluted net income from continuing |
0.84 |
1.21 |
1.45 |
0.20 |
||||
Non-GAAP diluted net income from continuing |
21.01 |
30.19 |
36.31 |
5.08 |
||||
The accompanying notes are an integral part of this press release. |
View original content:http://www.prnewswire.com/news-releases/netease-reports-third-quarter-2019-unaudited-financial-results-300961986.html
SOURCE