NTES-S：截至2022年6月30日的第二季度未經審計財務業績以及第二季度股息公告和中期報告.pdf

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1、 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited(the“Hong Kong Stock Exchange”)take no responsibility for the contents of this announcement,make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss hows

2、oever arising from or in reliance upon the whole or any part of the contents of this announcement.NetEase,Inc.(Incorporated in the Cayman Islands with limited liability)(Stock Code:9999)UNAUDITED FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED JUNE 30 2022 AND THE SECOND QUARTER DIVIDEND ANNOUNCEMENT

3、 AND INTERIM REPORT NetEase,Inc.(the“Company”)hereby announces its quarterly dividend and results for the second quarter of 2022,which contains unaudited financial results for the three months and six months ended June 30,2022.This results announcement is also provided to shareholders as our interim

4、 report for 2022 under Rule 13.48(1)of the Listing Rules.This results announcement will be available for viewing on the website of the Hong Kong Stock Exchange at www.hkexnews.hk and the Companys website at http:/.By Order of the Board NetEase,Inc.William Lei Ding Director Hangzhou,China,August 18,2

5、022 As at the date of this announcement,the board of directors of the Company comprises Mr.William Lei Ding as the director,and Ms.Grace Tang,Ms.Alice Cheng,Mr.Joseph Tong,Mr.Lun Feng and Mr.Michael Leung as the independent directors.1 Contact for Media and Investors:Margaret Shi Email: Tel:(+86)571

6、-8985-3378 Twitter:https:/ NetEase Announces Second Quarter 2022 Unaudited Financial Results(Hangzhou-August 18,2022)-NetEase,Inc.(NASDAQ:NTES and HKEX:9999,“NetEase”or the“Company”),one of Chinas leading internet and online game services providers,today announced its unaudited financial results for

7、 the second quarter ended June 30,2022.Second Quarter 2022 Financial Highlights Net revenues were RMB23.2 billion(US$3.5 billion),an increase of 12.8%compared with the second quarter of 2021.Games and related value-added services net revenues were RMB18.1 billion(US$2.7 billion),an increase of 15.0%

8、compared with the second quarter of 2021.1 Youdao net revenues were RMB956.2 million(US$142.8 million),a decrease of 26.1%compared with the second quarter of 2021.Cloud Music net revenues were RMB2.2 billion(US$327.2 million),an increase of 29.5%compared with the second quarter of 2021.Innovative bu

9、sinesses and others net revenues were RMB1.9 billion(US$279.4 million),an increase of 6.1%compared with the second quarter of 2021.1 Gross profit was RMB12.9 billion(US$1.9 billion),an increase of 15.7%compared with the second quarter of 2021.Total operating expenses were RMB8.0 billion(US$1.2 billi

10、on),an increase of 7.6%compared with the second quarter of 2021.1 Effective as of the second quarter of 2022,the Company renamed its“online game services”segment as“games and related value-added services,”and transferred certain business lines that are related or ancillary to its games from“innovati

11、ve businesses and others”to“games and related value-added services.”The Company retrospectively recast prior periods segment information to conform to the current period presentation.See“Change in Segment Reporting”in this announcement.2 Net income from continuing operations attributable to the Comp

12、anys shareholders was RMB4.7 billion(US$696.7 million).Non-GAAP net income from continuing operations attributable to the Companys shareholders was RMB5.4 billion(US$807.7 million).2 Basic net income from continuing operations per share was US$0.21(US$1.07 per ADS).Non-GAAP basic net income from con

13、tinuing operations per share was US$0.25(US$1.23 per ADS).2 Second Quarter 2022 and Recent Operational Highlights Delivered captivating content updates for popular title Naraka:Bladepoint and launched its Xbox version in June.Diablo Immortal,co-developed by NetEase and Blizzard Entertainment,made it

14、s debut in the global market,which topped iOS download charts in multiple regions.Extended the longevity of leading franchise titles including both the Fantasy Westward Journey and Westward Journey Online series and maintained the popularity of other hit titles including Identity V and Infinite Lagr

15、ange.Propelled pipeline by advancing new games under development including Naraka:Bladepoint mobile game,Justice mobile game and Ghost World Chronicle,as well as the roll-out of Harry Potter:Magic Awakened in international markets.Achieved positive operating cashflow from Youdao,maintained sound dev

16、elopment of its STEAM courses and demonstrated the resilience of its smart devices.Enhanced content and product innovation at Cloud Music,driving solid growth in net revenues and continued margin improvement while securing multiple licensing agreements with major overseas and domestic music labels i

17、ncluding SM Entertainment and TF Entertainment.“In the second quarter,we generated solid results with total net revenues of RMB23.2 billion,an increase of 12.8%year-over-year,”said Mr.William Ding,CEO and Director of NetEase.“Players continued to gravitate to our longstanding games in the second qua

18、rter,highlighting our strength in game operations longevity.Moreover,the launch of Diablo Immortal attracted the attention of gamers around the world,showcasing our exceptional mobile game development capabilities.With our strong in-house R&D team in China and our very own studios in Canada,Japan an

19、d the U.S.,as well as plans for other regions in the future,we are spearheading the next generation of top-quality games for the global gaming community.2 As used in this announcement,non-GAAP net income from continuing operations attributable to the Companys shareholders and non-GAAP basic and dilu

20、ted net income from continuing operations per share and per ADS are defined to exclude share-based compensation expenses.See“Unaudited Reconciliation of GAAP and Non-GAAP Results”at the end of this announcement.3“Youdao and Cloud Music are also making key advancements that bolster their operations.W

21、ith exciting gains across our business lines,we hope to make the NetEase brand synonymous with impressive technology,outstanding service and entertainment in its finest form,”Mr.Ding concluded.Second Quarter 2022 Financial Results Net Revenues Net revenues for the second quarter of 2022 were RMB23,1

22、59.1 million(US$3,457.6 million),compared with RMB23,555.8 million and RMB20,524.5 million for the preceding quarter and the second quarter of 2021,respectively.Net revenues from games and related value-added services,which include both the operation of online games as well as other related or ancil

23、lary services to the games,were RMB18,139.8 million(US$2,708.2 million)for the second quarter of 2022,compared with RMB18,641.8 million and RMB15,774.8 million for the preceding quarter and the second quarter of 2021,respectively.Net revenues from the operation of online games,which is the primary c

24、omponent of this segment,accounted for approximately 92.8%of net revenues from games and related value-added services for the second quarter of 2022,compared with 92.7%and 92.1%for the preceding quarter and the second quarter of 2021,respectively.Net revenues from mobile games accounted for approxim

25、ately 66.1%of net revenues from the operation of online games for the second quarter of 2022,compared with 66.9%and 72.1%for the preceding quarter and the second quarter of 2021,respectively.Net revenues from Youdao were RMB956.2 million(US$142.8 million)for the second quarter of 2022,compared with

26、RMB1,200.5 million and RMB1,293.4 million for the preceding quarter and the second quarter of 2021,respectively.Net revenues from Cloud Music were RMB2,191.5 million(US$327.2 million)for the second quarter of 2022,compared with RMB2,067.2 million and RMB1,692.5 million for the preceding quarter and

27、the second quarter of 2021,respectively.Net revenues from innovative businesses and others were RMB1,871.5 million(US$279.4 million)for the second quarter of 2022,compared with RMB1,646.3 million and RMB1,763.8 million for the preceding quarter and the second quarter of 2021,respectively.Gross Profi

28、t Gross profit for the second quarter of 2022 was RMB12,941.5 million(US$1,932.1 million),compared with RMB12,836.4 million and RMB11,189.6 million for the preceding quarter and the second quarter of 2021,respectively.The year-over-year increase in games and related value-added services gross profit

29、 was primarily due to increased net revenues from both mobile and PC games,including the newly launched Naraka:4 Bladepoint and Harry Potter:Magic Awakened which were released in the third quarter of 2021 and other existing games such as Fantasy Westward Journey Online.The quarter-over-quarter decre

30、ase in Youdao gross profit primarily resulted from a decline in economic scale due to decreased learning services revenues in the second quarter of 2022.The year-over-year decrease was mainly due to the conclusion of its after-school tutoring services for academic subjects under Chinas compulsory ed

31、ucation system.The quarter-over-quarter and year-over-year increases in Cloud Music gross profit were primarily due to increased net revenues from its membership subscriptions and social entertainment services,as well as improved cost control.The quarter-over-quarter increase in innovative businesse

32、s and others gross profit was primarily due to increased gross profit contribution from Yanxuan and advertising services.Gross Profit Margin Gross profit margin for games and related value-added services for the second quarter of 2022 was 64.9%,compared with 62.2%and 63.2%for the preceding quarter a

33、nd the second quarter of 2021,respectively.Gross profit margin for games and related value-added services is generally stable,fluctuating within a narrow band based on the revenue mix of NetEases mobile and PC games,self-developed,co-developed and licensed games,as well as the relative revenue contr

34、ibution from different distribution channels.Gross profit margin for Youdao for the second quarter of 2022 was 42.8%,compared with 53.1%and 52.3%for the preceding quarter and the second quarter of 2021,respectively.The quarter-over-quarter and year-over-year decreases were primarily attributable to

35、the factors enumerated above.Gross profit margin for Cloud Music was 13.0%for the second quarter of 2022,compared with 12.2%and 4.1%for the preceding quarter and the second quarter of 2021,respectively.The quarter-over-quarter and year-over-year improvements were mainly due to the factors enumerated

36、 above.Gross profit margin for innovative businesses and others for the second quarter of 2022 was 25.8%,compared with 21.7%and 27.3%for the preceding quarter and the second quarter of 2021,respectively.The quarter-over-quarter and year-over-year fluctuations were mainly due to changes in the gross

37、profit margin from advertising services.Operating Expenses Total operating expenses for the second quarter of 2022 were RMB7,995.2 million(US$1,193.6 million),compared with RMB7,329.3 million and RMB7,431.5 million for the preceding quarter and the second quarter of 2021,respectively.The quarter-ove

38、r-quarter and year-over-year increases were mainly due to increased marketing expenditures related to games and related value-added services,as well as higher staff-related costs and research and development investments.5 Other Income/(Expenses)Other income/(expenses)consisted of investment income/(

39、loss),interest income,exchange gains/(losses)and others.The quarter-over-quarter increase was mainly due to net unrealized exchange gains arising from the Companys U.S.dollar-denominated bank deposits and loans balances as the exchange rate of the U.S.dollar against the RMB fluctuated in the second

40、quarter of 2022.Income Taxes The Company recorded a net income tax charge of RMB1,259.3 million(US$188.0 million)for the second quarter of 2022,compared with RMB1,219.3 million and RMB1,113.2 million for the preceding quarter and the second quarter of 2021,respectively.The effective tax rate for the

41、 second quarter of 2022 was 22.0%,compared with 22.0%and 24.3%for the preceding quarter and the second quarter of 2021,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 I

42、ncome Net income from continuing operations attributable to the Companys shareholders totaled RMB4,666.6 million(US$696.7 million)for the second quarter of 2022,compared with RMB4,394.0 million and RMB3,541.8 million for the preceding quarter and the second quarter of 2021,respectively.Net income fr

43、om discontinued operations attributable to the Companys shareholders totaled RMB624.9 million(US$93.3 million),which was related to the disposal of the Kaola business.Non-GAAP net income from continuing operations attributable to the Companys shareholders totaled RMB5,409.8 million(US$807.7 million)

44、for the second quarter of 2022,compared with RMB5,117.6 million and RMB4,227.9 million for the preceding quarter and the second quarter of 2021,respectively.NetEase reported basic net income from continuing operations of US$0.21 per share(US$1.07 per ADS)for the second quarter of 2022,compared with

45、US$0.20 per share(US$1.00 per ADS)and US$0.16 per share(US$0.79 per ADS)for the preceding quarter and the second quarter of 2021,respectively.NetEase reported non-GAAP basic net income from continuing operations of US$0.25 per share(US$1.23 per ADS)for the second quarter of 2022,compared with US$0.2

46、3 per share(US$1.17 per ADS)and US$0.19 per share(US$0.94 per ADS)for the preceding quarter and the second quarter of 2021,respectively.Quarterly Dividend The board of directors has approved a dividend of US$0.0720 per share(US$0.3600 per ADS)for the second quarter of 2022 to holders of ordinary sha

47、res and holders of ADSs as of the close of business on September 1,2022,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 6 transfer of shares accompanied by the relevant share

48、certificates must be lodged for registration with the Companys Hong Kong branch share registrar,Computershare Hong Kong Investor Services Limited,at Shops 1712-1716,17th Floor,Hopewell Centre,183 Queens Road East,Wanchai,Hong Kong no later than 4:30 p.m.on September 1,2022(Beijing/Hong Kong Time).Th

49、e payment date is expected to be on September 13,2022 for holders of ordinary shares and on or around September 16,2022 for holders of ADSs.NetEase paid a dividend of US$0.0644 per share(US$0.3220 per ADS)for the first quarter of 2022 in June 2022.Under the Companys current dividend policy,the deter

50、mination 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 Companys operations and earnings,cash flow,financial condition and other relevant factors.Other Information As of

51、June 30,2022,the Companys 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 RMB87.7 billion(US$13.1 billion),compared with RMB85.6 billion as of December 31,2021.Cash flow g

52、enerated from operating activities was RMB6.6 billion(US$990.0 million)for the second quarter of 2022,compared with RMB4.6 billion and RMB4.7 billion for the preceding quarter and the second quarter of 2021,respectively.Change in Segment Reporting Effective as of the second quarter of 2022,the Compa

53、ny implemented certain changes to align its segment financial reporting more closely with the manner in which the Companys management currently receives and uses financial information to allocate resources and evaluate the performance of reporting segments.The Company renamed its“online game service

54、s”segment as“games and related value-added services,”and transferred certain business lines that are related or ancillary to its games from“innovative businesses and others”to“games and related value-added services,”including the NetEase CC live streaming service(a platform offering various live str

55、eaming content with a primary focus on game broadcasting)and other value-added services.The Company retrospectively recast prior periods segment information to conform to current period presentation.These changes had no impact on NetEases previously reported consolidated net revenues,net income or n

56、et income per share.Share Repurchase/Purchase Program On February 25,2021,the Company announced that its board of directors had approved a new share repurchase program of up to US$2.0 billion of the Companys outstanding ADSs and ordinary shares in open market transactions for a period not to exceed

57、24 months beginning on March 2,2021.On 7 August 31,2021,the Company announced that its board of directors had approved an amendment to such program to increase the total authorized repurchase amount to US$3.0 billion.As of June 30,2022,approximately 23.6 million ADSs had been repurchased under this

58、program for a total cost of US$2.3 billion.On August 31,2021,the Company announced that its board of directors had approved a share purchase program of up to US$50.0 million of Youdaos outstanding ADSs for a period not to exceed 36 months beginning on September 2,2021.Under the terms of this program

59、,NetEase may purchase Youdaos ADSs in open-market transactions on the New York Stock Exchange.As of June 30,2022,approximately 1.7 million ADSs had been purchased under this program for a total cost of US$17.7 million.The Company also purchased approximately 0.8 million ordinary shares of Cloud Musi

60、c in open market transactions on the Hong Kong Stock Exchange for a total cost of US$8.3 million during the second quarter of 2022.The extent to which NetEase repurchases its ADSs and its ordinary shares or purchases Youdaos ADSs and Cloud Musics ordinary shares will depend upon a variety of factors

61、,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 NetEases management

62、team will host a teleconference call with simultaneous webcast at 8:00 a.m.New York Time on Thursday,August 18,2022(Beijing/Hong Kong Time:8:00 p.m.,Thursday,August 18,2022).NetEases management will be on the call to discuss the quarterly results and answer questions.Interested parties may participa

63、te in the conference call by dialing 1-323-701-0160 and providing conference ID:1239376,15 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 1239376#.The replay will be available through August 31,2022.This call will be

64、 webcast live and the replay will be available for 12 months.Both will be available on NetEases Investor Relations website at http:/ NetEase,Inc.As a leading internet technology company based in China,NetEase,Inc.(NASDAQ:NTES and HKEX:9999,“NetEase”)provides premium online services centered around c

65、ontent creation.With extensive offerings across its expanding gaming ecosystem,the Company develops and operates some of Chinas most popular and longest running mobile and PC games.Powered by industry-leading in-8 house R&D capabilities in China and globally,NetEase creates superior gaming experienc

66、es,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 i

67、ts majority-controlled subsidiaries Youdao(NYSE:DAO),Chinas leading technology-focused intelligent learning company,and Cloud Music(HKEX:9899),Chinas leading online music content community,as well as Yanxuan,NetEases private label consumer lifestyle brand.NetEases ESG initiatives are among the best

68、in the global media and entertainment industry,earning it a distinction as one of the S&P Global Industry Movers and an“A”rating from MSCI.For more information,please visit:http:/ Looking Statements This announcement contains statements of a forward-looking nature.These statements are made under the

69、“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.In addition,statements that are not histo

70、rical facts,including statements about NetEases 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 it

71、s 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 t

72、o 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 game market will not continue to grow or that

73、NetEase will not be able to maintain its position in that market in China or globally;the risk that COVID-19 or other health risks in China or globally could adversely affect the Companys operations or financial results;risks associated with NetEases business and operating strategies and its ability

74、 to implement such strategies;NetEases ability to develop and manage its operations and business;competition for,among other things,capital,technology and skilled personnel;potential changes in government regulation that could adversely affect the industry and geographical markets in which NetEase o

75、perates,including,among others,initiatives to enhance supervision of companies listed on an overseas stock exchange and tighten scrutiny over data privacy and data security,as well as the risk that NetEases ADSs could be barred from trading in the United States as a result of the Holding Foreign Com

76、panies Accountable Act and the rules promulgated thereunder;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;competition in NetEases existing and potential markets;

77、and the risk that fluctuations in the value of the Renminbi with respect to other currencies could adversely affect NetEases business and financial results.Further information regarding these and other risks is included in NetEases filings with the 9 SEC and announcements on the website of the Hong

78、Kong Stock Exchange.NetEase does not undertake any obligation to update this forward-looking information,except as required under the applicable law.Non-GAAP Financial Measures NetEase considers and uses non-GAAP financial measures,such as non-GAAP net income from continuing operations attributable

79、to the Companys shareholders and non-GAAP basic and diluted net income from continuing operations 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

80、 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 from continuing operations attributable to the Companys shareho

81、lders as net income from continuing operations attributable to the Companys shareholders excluding share-based compensation expenses.Non-GAAP net income from continuing operations attributable to the Companys shareholders enables NetEases management to assess its operating results without considerin

82、g the impact of share-based compensation expenses.NetEase believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating the Companys current operating performance and prospects in the same manner as management does,if they so choose.NetEase a

83、lso 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

84、 of the key limitations of using non-GAAP net income from continuing operations attributable to the Companys 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 NetEases busines

85、s and are not reflected in the presentation of non-GAAP net income from continuing operations attributable to the Companys 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

86、comparability may be limited.NetEase compensates for these limitations by reconciling non-GAAP net income from continuing operations attributable to the Companys shareholders to the nearest U.S.GAAP performance measure,all of which should be considered when evaluating the Companys performance.See“Un

87、audited 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.10 NETEASE,INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)December 31,June 30,Ju

88、ne 30,202120222022 RMB RMB USD(Note 1)AssetsCurrent assets:Cash and cash equivalents14,498,157 16,461,908 2,457,698 Time deposits70,754,846 84,916,751 12,677,737 Restricted cash2,876,628 3,089,413 461,237 Accounts receivable,net5,507,988 5,213,151 778,303 Inventories964,733 843,767 125,971 Prepaymen

89、ts and other current assets,net6,235,857 7,317,644 1,092,495 Short-term investments12,281,548 10,166,531 1,517,823 Assets held for sale497 -Total current assets113,120,254 128,009,165 19,111,264 Non-current assets:Property,equipment and software,net5,433,858 6,022,365 899,115 Land use right,net4,108

90、,090 4,156,674 620,575 Deferred tax assets1,297,954 1,254,640 187,313 Time deposits5,823,840 4,473,840 667,927 Restricted cash1,330 1,129 169 Other long-term assets,net23,857,510 24,261,773 3,622,187 Assets held for sale1,088 -Total non-current assets40,523,670 40,170,421 5,997,286 Total assets153,6

91、43,924 168,179,586 25,108,550 Liabilities,Redeemable Noncontrolling Interests and Shareholders EquityCurrent liabilities:Accounts payable985,059 942,070 140,647 Salary and welfare payables4,133,254 3,211,330 479,439 Taxes payable4,537,050 3,260,873 486,835 Short-term loans19,352,313 28,027,125 4,184

92、,340 Contract liabilities12,132,743 12,316,763 1,838,844 Accrued liabilities and other payables9,360,907 9,686,526 1,446,160 Total current liabilities50,501,326 57,444,687 8,576,265 Non-current liabilities:Deferred tax liabilities1,345,874 1,448,250 216,218 Long-term loans1,275,140 3,355,700 500,993

93、 Other long-term payable1,097,708 1,023,880 152,861 Total non-current liabilities3,718,722 5,827,830 870,072 Total liabilities54,220,048 63,272,517 9,446,337 Redeemable noncontrolling interests145,238 142,579 21,286 NetEase,Inc.s shareholders equity95,328,080 100,830,817 15,053,645 Noncontrolling in

94、terests3,950,558 3,933,673 587,282 Total shareholders equity99,278,638 104,764,490 15,640,927 Total liabilities,redeemable noncontrolling interests and shareholders equity153,643,924 168,179,586 25,108,550 The accompanying notes are an integral part of this announcement.11 NETEASE,INC.UNAUDITED COND

95、ENSED CONSOLIDATED STATEMENTS OF INCOME(in thousands,except per share data or per ADS data)June 30,March 31,June 30,June 30,June 30,June 30,June 30,2021202220222022202120222022 RMB RMB RMBUSD(Note 1)RMBRMBUSD(Note 1)Net revenues20,524,501 23,555,842 23,159,078 3,457,559 41,041,712 46,714,920 6,974,3

96、54 Cost of revenues(9,334,887)(10,719,463)(10,217,587)(1,525,446)(18,799,459)(20,937,050)(3,125,819)Gross profit11,189,614 12,836,379 12,941,491 1,932,113 22,242,253 25,777,870 3,848,535 Operating expenses:Selling and marketing expenses(3,013,447)(2,915,489)(3,300,705)(492,782)(5,780,129)(6,216,194)

97、(928,053)General and administrative expenses(1,011,183)(1,015,769)(1,112,755)(166,130)(1,961,377)(2,128,524)(317,780)Research and development expenses(3,406,859)(3,398,082)(3,581,700)(534,734)(6,467,048)(6,979,782)(1,042,054)Total operating expenses(7,431,489)(7,329,340)(7,995,160)(1,193,646)(14,208

98、,554)(15,324,500)(2,287,887)Operating profit3,758,125 5,507,039 4,946,331 738,467 8,033,699 10,453,370 1,560,648 Other income/(expenses):Investment income/(loss),net889,392 (548,702)(707,489)(105,625)1,584,690 (1,256,191)(187,544)Interest income,net386,207 458,244 505,991 75,542 775,135 964,235 143,

99、956 Exchange (losses)/gains,net(591,720)(97,880)865,283 129,183 (312,401)767,403 114,570 Other,net147,588 216,330 121,175 18,091 295,555 337,505 50,388 Income before tax4,589,592 5,535,031 5,731,291 855,658 10,376,678 11,266,322 1,682,018 Income tax(1,113,228)(1,219,271)(1,259,320)(188,012)(2,386,63

100、6)(2,478,591)(370,044)Net income from continuing operations3,476,364 4,315,760 4,471,971 667,646 7,990,042 8,787,731 1,311,974 Net income from discontinued operations-624,864 93,290 -624,864 93,290 Net income3,476,364 4,315,760 5,096,835 760,936 7,990,042 9,412,595 1,405,264 Accretion of redeemable

101、noncontrolling interests(145,415)(733)(754)(113)(289,242)(1,487)(222)Net loss attributable to noncontrolling interests210,805 78,996 195,395 29,172 280,106 274,391 40,965 Net income attributable to the Companys shareholders3,541,754 4,394,023 5,291,476 789,995 7,980,906 9,685,499 1,446,007 Including

102、:-Net income from continuing operationsattributable to the Companys shareholders3,541,754 4,394,023 4,666,612 696,705 7,980,906 9,060,635 1,352,717 -Net income from discontinued operationsattributable to the Companys shareholders-624,864 93,290 -624,864 93,290 Basic net income per share*1.06 1.34 1.

103、62 0.24 2.38 2.96 0.44-Continuing operations 1.06 1.34 1.43 0.21 2.38 2.77 0.41-Discontinued operations -0.19 0.03 -0.19 0.03Basic net income per ADS*5.29 6.70 8.08 1.21 11.92 14.78 2.21-Continuing operations 5.29 6.70 7.13 1.07 11.92 13.83 2.07-Discontinued operations -0.95 0.14 -0.95 0.14Diluted n

104、et income per share*1.05 1.33 1.60 0.24 2.35 2.93 0.44-Continuing operations 1.05 1.33 1.41 0.21 2.35 2.74 0.41-Discontinued operations -0.19 0.03 -0.19 0.03Diluted net income per ADS*5.23 6.63 8.00 1.19 11.76 14.63 2.18-Continuing operations 5.23 6.63 7.05 1.05 11.76 13.69 2.04-Discontinued operati

105、ons -0.95 0.14 -0.94 0.14Weighted average number of ordinary shares used in calculating net income per share*Basic 3,347,507 3,277,280 3,274,695 3,274,695 3,348,567 3,275,980 3,275,980Diluted 3,385,953 3,316,129 3,305,504 3,305,504 3,392,961 3,310,809 3,310,809*Each ADS represents five ordinary shar

106、es.The accompanying notes are an integral part of this announcement.Three Months Ended Six Months Ended 12 NETEASE,INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)June 30,March 31,June 30,June 30,June 30,June 30,June 30,2021202220222022202120222022 RMB RMB RMB USD(Note 1)R

107、MB RMB USD(Note 1)Cash flows from operating activities:Net income 3,476,364 4,315,760 5,096,835 760,936 7,990,042 9,412,595 1,405,264 Net income from discontinued operations-(624,864)(93,290)-(624,864)(93,290)Adjustments to reconcile net income to net cash provided by operating activities:Depreciati

108、on and amortization814,370 766,180 609,036 90,927 1,634,200 1,375,216 205,314 Fair value changes of equity security investments(203,720)1,541,002 735,159 109,756 (681,317)2,276,161 339,822 Impairment losses of investments and other long-term assets4,797 5,000 243,085 36,292 4,797 248,085 37,038 Fair

109、 value changes of short-term investments(170,676)(79,776)(119,882)(17,898)(288,680)(199,658)(29,808)Share-based compensation cost700,114 746,154 764,447 114,129 1,350,367 1,510,601 225,527 Allowance for/(reversal of)expected credit losses27,384 (313)10,965 1,637 40,988 10,652 1,590 Losses on disposa

110、l of property,equipment and software 1,424 1,445 481 72 1,265 1,926 288 Unrealized exchange losses/(gains)572,708 98,034 (890,066)(132,883)298,661 (792,032)(118,247)Gains on disposal of long-term investments,business and subsidiaries(166,505)(4,000)-(173,828)(4,000)(597)Deferred income taxes202,894

111、315,228 (169,539)(25,312)530,969 145,689 21,751 Share of results on equity method investees and revaluation results from previously held equity interest(342,760)(911,498)(134,569)(20,091)(394,652)(1,046,067)(156,174)Changes in operating assets and liabilities:Accounts receivable573,111 212,075 82,28

112、2 12,284 88,768 294,357 43,946 Inventories(9,608)103,591 17,791 2,656 (263,103)121,382 18,122 Prepayments and other assets593,379 (569,843)(163,612)(24,426)(191,845)(733,455)(109,502)Accounts payable(178,097)(92,373)48,452 7,234 (238,751)(43,921)(6,557)Salary and welfare payables856,775 (1,756,224)7

113、82,789 116,867 (369,380)(973,435)(145,330)Taxes payable(1,397,390)73,446 (538,234)(80,355)161,228 (464,788)(69,391)Contract liabilities(381,446)(78,200)279,669 41,754 359,492 201,469 30,078 Accrued liabilities and other payables(250,312)(103,136)600,934 89,717 406,252 497,798 74,319 Net cash provide

114、d by operating activities4,722,806 4,582,552 6,631,159 990,006 10,265,473 11,213,711 1,674,163 Cash flows from investing activities:Purchase of property,equipment and software(421,872)(749,361)(445,054)(66,445)(751,618)(1,194,415)(178,321)Proceeds from sale of property,equipment and software2,458 12

115、,565 23,338 3,484 3,977 35,903 5,360 Purchase of intangible assets,content and licensed copyrights(566,736)(143,836)(85,121)(12,708)(992,869)(228,957)(34,182)Net change in short-term investments with terms of three months or less1,668,673 1,710,845 (159,173)(23,764)5,001,283 1,551,672 231,659 Purcha

116、se of short-term investments with terms over three months(2,450,000)(1,250,000)-(10,355,000)(1,250,000)(186,620)Proceeds from maturities of short-term investments with terms over three months813,211 553,831 1,459,172 217,849 3,670,552 2,013,003 300,533 Investment in long-term investments and acquisi

117、tion of subsidiaries(3,376,973)(1,690,271)(899,968)(134,362)(3,935,414)(2,590,239)(386,713)Proceeds from disposal of long-term investments,businesses and subsidiaries266,284 34,237 6,413 957 465,184 40,650 6,069 Placement/rollover of matured time deposits(27,223,584)(24,045,997)(33,122,029)(4,944,98

118、9)(42,946,333)(57,168,026)(8,534,962)Proceeds from maturities of time deposits25,790,186 14,699,795 32,100,141 4,792,425 37,271,321 46,799,936 6,987,046 Change in other long-term assets(44,877)(169,545)(60,900)(9,092)(99,530)(230,445)(34,405)Net cash used in investing activities(5,543,230)(11,037,73

119、7)(1,183,181)(176,645)(12,668,447)(12,220,918)(1,824,536)The accompanying notes are an integral part of this announcement.Six Months EndedThree Months Ended 13 NETEASE,INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(CONTINUED)(in thousands)June 30,March 31,June 30,June 30,June 30,June

120、30,June 30,2021202220222022202120222022 RMB RMB RMB USD(Note 1)RMB RMB USD(Note 1)Cash flows from financing activities:Net changes in bank loans with terms of three months or less 4,978,642 3,403,195 2,721,487 406,307 7,100,683 6,124,682 914,391 Proceed of bank loans with terms over three months1,32

121、0,614 1,915,210 1,641,708 245,101 1,557,530 3,556,918 531,034 Payment of bank loans with terms over three months(582,328)-(32,273)(4,818)(750,028)(32,273)(4,818)Amounts paid for NetEases issuance of shares in Hong Kong-(13,800)-Net Amounts received/(paid)related to capital contribution from or repur

122、chase of noncontrolling interests and redeemable noncontrolling interests shareholders8,176 (102,042)33,200 4,957 1,515,225 (68,842)(10,278)Cash paid for repurchase of NetEases ADSs/purchase of subsidiaries ADSs and shares(2,468,969)(1,243,917)(2,119,613)(316,450)(4,487,436)(3,363,530)(502,162)Divid

123、ends paid to NetEases shareholders(1,278,879)(1,683,472)(1,403,637)(209,557)(1,539,721)(3,087,109)(460,893)Net cash provided by financing activities 1,977,256 2,288,974 840,872 125,540 3,382,453 3,129,846 467,274 Effect of exchange rate changes on cash,cash equivalents and restricted cash held in fo

124、reign currencies(25,112)(21,202)74,898 11,182 10,881 53,696 8,017 Net increase/(decrease)in cash,cash equivalents and restricted cash 1,131,720 (4,187,413)6,363,748 950,083 990,360 2,176,335 324,918 Cash,cash equivalents and restricted cash,at the beginning of the period12,027,245 17,376,115 13,188,

125、702 1,969,021 12,168,605 17,376,115 2,594,186 Cash,cash equivalents and restricted cash,at end of the period13,158,965 13,188,702 19,552,450 2,919,104 13,158,965 19,552,450 2,919,104 Supplemental disclosures of cash flow information:Cash paid for income tax,net1,240,692 1,515,330 1,055,096 157,522 1

126、,790,883 2,570,426 383,754 Cash paid for interest expense48,082 37,741 93,079 13,896 91,984 130,820 19,531 The accompanying notes are an integral part of this announcement.Three Months Ended Six Months Ended 14 NETEASE,INC.UNAUDITED SEGMENT INFORMATION(in thousands,except percentages)June 30,March 3

127、1,June 30,June 30,June 30,June 30,June 30,2021202220222022202120222022RMBRMBRMBUSD(Note 1)RMBRMBUSD(Note 1)Net revenues:Games and related value-added services15,774,818 18,641,814 18,139,843 2,708,207 31,881,629 36,781,657 5,491,357 Youdao1,293,407 1,200,541 956,225 142,761 2,633,274 2,156,766 321,9

128、97 Cloud Music1,692,507 2,067,206 2,191,510 327,184 3,183,674 4,258,716 635,810 Innovative businesses and others1,763,769 1,646,281 1,871,500 279,407 3,343,135 3,517,781 525,190 Total net revenues20,524,501 23,555,842 23,159,078 3,457,559 41,041,712 46,714,920 6,974,354 Cost of revenues:Games and re

129、lated value-added services(5,813,002)(7,052,050)(6,375,598)(951,852)(12,026,054)(13,427,648)(2,004,695)Youdao(616,661)(562,691)(546,498)(81,590)(1,189,076)(1,109,189)(165,598)Cloud Music(1,623,327)(1,815,649)(1,905,954)(284,551)(3,161,053)(3,721,603)(555,621)Innovative businesses and others(1,281,89

130、7)(1,289,073)(1,389,537)(207,453)(2,423,276)(2,678,610)(399,905)Total cost of revenues(9,334,887)(10,719,463)(10,217,587)(1,525,446)(18,799,459)(20,937,050)(3,125,819)Gross profit:Games and related value-added services9,961,816 11,589,764 11,764,245 1,756,355 19,855,575 23,354,009 3,486,662 Youdao67

131、6,746 637,850 409,727 61,171 1,444,198 1,047,577 156,399 Cloud Music69,180 251,557 285,556 42,633 22,621 537,113 80,189 Innovative businesses and others481,872 357,208 481,963 71,954 919,859 839,171 125,285 Total gross profit11,189,614 12,836,379 12,941,491 1,932,113 22,242,253 25,777,870 3,848,535

132、Gross profit margin:Games and related value-added services63.2%62.2%64.9%64.9%62.3%63.5%63.5%Youdao52.3%53.1%42.8%42.8%54.8%48.6%48.6%Cloud Music4.1%12.2%13.0%13.0%0.7%12.6%12.6%Innovative businesses and others27.3%21.7%25.8%25.8%27.5%23.9%23.9%The accompanying notes are an integral part of this ann

133、ouncement.Three Months Ended Six Months Ended 15 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=RMB6.6981 on the last trading day of June 2022(June 30,2022)as set forth in the H.10

134、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 30,2022,or at any other certain date.Note 2:Share-based compensation cost reported in the Companys unaudited condensed consolidated s

135、tatements 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 NetEases listed subsidiaries to meet the disclosure requirements under U.S.

136、GAAP or different accounting standards requirement.Note 4:The unaudited reconciliation on GAAP and non-GAAP results is set out as follows in RMB and USD(in thousands,except per share data or per ADS data):June 30,March 31,June 30,June 30,June 30,June 30,June 30,2021202220222022202120222022RMBRMBRMBU

137、SD(Note 1)RMBRMBUSD(Note 1)Share-based compensation cost included in:Cost of revenues197,370 198,135 173,840 25,954 385,296 371,975 55,534 Operating expenses Selling and marketing expenses26,434 30,373 31,817 4,750 50,665 62,190 9,285 General and administrative expenses258,544 279,062 297,891 44,474

138、 488,147 576,953 86,137 Research and development expenses217,766 238,584 260,899 38,951 426,259 499,483 74,571 The accompanying notes are an integral part of this announcement.Three Months Ended Six Months Ended June 30,March 31,June 30,June 30,June 30,June 30,June 30,2021202220222022202120222022RMB

139、RMBRMBUSD(Note 1)RMBRMBUSD(Note 1)Net income from continuing operations attributable to the Companys shareholders3,541,754 4,394,023 4,666,612 696,705 7,980,906 9,060,635 1,352,717 Add:Share-based compensation686,111 723,603 743,198 110,957 1,327,645 1,466,801 218,988 Non-GAAP net income from contin

140、uing operations attributable to the Companys shareholders4,227,865 5,117,626 5,409,810 807,662 9,308,551 10,527,436 1,571,705 Non-GAAP basic net income from continuing operations per share*1.26 1.56 1.65 0.25 2.78 3.21 0.48 Non-GAAP basic net income from continuing operations per ADS*6.31 7.81 8.26

141、1.23 13.90 16.07 2.40 Non-GAAP diluted net income from continuing operations per share*1.25 1.54 1.64 0.24 2.74 3.18 0.47 Non-GAAP diluted net income from continuing operations per ADS*6.24 7.72 8.18 1.22 13.72 15.90 2.37 *Each ADS represents five ordinary shares.The accompanying notes are an integral part of this announcement.Three Months Ended Six Months Ended