NetEase Announces First Quarter Financial Report for 2023

(Hangzhou May 25, 2023) NetEase Corporation, a leading internet and online gaming service provider in China (Nasdaq code: NTES and Hong Kong Stock Exchange code: 9999, "NetEase" or "Company"), today announced its unaudited financial results for the first quarter ended March 31, 2023.Key Financial Results for the First Quarter of 2023Key operational points for the first quarter and near term of 2023The impressive performance of our game products has brought a good start to 2023, with a total net revenue of RMB 25 billion in the first quarter, an increase of over 6% year-on-year, "said Mr

(Hangzhou May 25, 2023) NetEase Corporation, a leading internet and online gaming service provider in China (Nasdaq code: NTES and Hong Kong Stock Exchange code: 9999, "NetEase" or "Company"), today announced its unaudited financial results for the first quarter ended March 31, 2023.

Key Financial Results for the First Quarter of 2023

Key operational points for the first quarter and near term of 2023

The impressive performance of our game products has brought a good start to 2023, with a total net revenue of RMB 25 billion in the first quarter, an increase of over 6% year-on-year, "said Mr. Ding Lei, CEO and director of NetEase. Our flagship game continues to be popular among players, with increasing user engagement. At the same time, new games such as' Egg Party ' It has further expanded and enriched our user community. Looking forward to the coming year, we are looking forward to launching multiple highly anticipated new game products that will be more diverse and cover a wide range of regions. We will continue to focus on developing products that can attract diverse groups, adhere to our original intention, and create more outstanding and high-quality games for global players.

In addition to the gaming business, Cloud Music and Youdao are also continuously promoting content innovation and promoting industrial development. Throughout the entire NetEase family, we constantly raise our own requirements and are committed to providing fresh, interesting, and high-quality content, giving back to our expanding user base and various communities closely related to NetEase. "Mr. Ding Lei concluded.

Financial performance for the first quarter of 2023

net income

2023net income25,046.33,647.025,354.123,555.8

2023net income20,065.62,921.819,085.718,641.8net incomenet income92.7%91.8%92.7%net incomenet income72.3%66.4%66.9%

2023net income1,163.3169.41,454.01,200.5

2023net income1,959.8285.42,376.32,067.22023appnet income

2023net income1,857.6270.52,438.21,646.3

Gross profit

2023Gross profit14,896.52,169.113,244.412,836.4

Gross profit20225

Gross profitnet incomenet income

Gross profit

Gross profitnet incomenet incomenet income

Gross profit margin

2023Gross profit margin66.7%59.1%62.2%Gross profit margin

2023Gross profit margin51.7%53.3%53.1%Gross profit marginnet incomenet income

2023Gross profit margin22.4%17.8%12.2%Gross profit margin

2023Gross profit margin25.4%31.5%21.7%Gross profit margin

Operating expenses

2023Operating expenses7,676.51,117.88,810.97,329.3

Other income/(expenses)

Other income/(expenses)/

income tax

2023income tax1,628.6237.1966.61,219.3202319.5%20.2%22.0%

Net profit and non GAAP net profit

The net profit attributable to the company's shareholders in the first quarter of 2023 was RMB 6754.6 million (USD 983.6 million), compared to RMB 3952.7 million and RMB 4394.0 million in the previous quarter and the same period last year, respectively.

In the first quarter of 2023, the basic net profit per share was $0.31 (basic net profit per ADS was $1.53). In the previous quarter, the basic net profit per share was $0.18 (basic net profit per ADS was $0.89), and in the same period last year, the basic net profit per share was $0.20 (basic net profit per ADS was $0.98).

The net profit attributable to shareholders of the company under non GAAP in the first quarter of 2023 was RMB 7566.2 million ($1101.7 million), compared to RMB 4811.4 million and RMB 5117.6 million in the previous quarter and the same period last year, respectively.

In the first quarter of 2023, under non GAAP accounting standards, the basic net profit per share was $0.34 (basic net profit per ADS was $1.71). In the previous quarter, the basic net profit per share was $0.22 (basic net profit per ADS was $1.08), and in the same period last year, the basic net profit per share was $0.23 (basic net profit per ADS was $1.14).

Quarterly dividend

2023Quarterly dividend0.09300.4650/202369/202369430183171712-171620236212023623

2022Quarterly dividend0.05400.270020233

According to the current dividend policy of the company, the distribution and amount of dividends in any specific quarter will be determined by the board of directors at their discretion, and will be based on the company's operations and profitability, cash flow, financial condition, and other relevant factors.

Other information

As of March 31, 2023, the net amount of the company's cash and cash equivalents, current and non current term deposits, restricted cash, and short-term investment balances, after deducting short-term and long-term borrowings, was RMB 95.1 billion ($13.9 billion). As of December 31, 2022, this net amount was RMB 95.6 billion. The net cash inflow from operating activities in the first quarter of 2023 was RMB 6000.7 million ($873.8 million), compared to RMB 9009.2 million and RMB 4582.6 million in the previous quarter and the same period last year, respectively.

Share repurchase plan

2021225Share repurchase plan2021322420302023193033.6

20221117Share repurchase plan5020231103620233313.1267.1

NetEase's repurchase of its ADSs and ordinary shares will depend on various factors, including market conditions. These plans may be suspended or suspended at any time.

**The US dollar figures listed in this announcement are for ease of reading only. The percentages in this announcement are calculated on the basis of RMB.

Teleconferencing

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151-914-202-325810030397Teleconferencing2023611-855-883-1031PIN10030397

Meanwhile, the company's investor relations website http://ir.netease.com/ We will conduct a live broadcast of this financial report release and keep it for playback for 12 months.