NetEase (09999) releases Q3 financial report: revenue of 26.2 billion RMB, research and development investment intensity reaching 16.9%.

On November 14th, NetEase (09999) released its third quarter financial report for 2024. The report shows that NetEase's Q3 net revenue was 26.2 billion yuan, and the net profit attributable to the company's shareholders under non-GAAP was 7.5 billion yuan. Research and development investment in the quarter was 4.4 billion yuan, with a research and development intensity of 16.9%, leading the industry; deferred revenue was 15.5 billion yuan, an increase of 14% compared to the previous quarter. From January 10, 2023 to September 30, 2024, the company repurchased approximately 1.6 billion US dollars of American depositary shares, with a repurchase of 500 million US dollars in shares in Q3 2024, an increase of 98% from the previous quarter, releasing a positive signal and further boosting market confidence. In the third quarter, net revenue from games and related value-added services was 20.9 billion yuan, an increase of 4% from the previous quarter. Game revenue was 20.2 billion yuan, an increase of 5% from the previous quarter, with revenue from PC games increasing by 29% year-on-year and 30% quarter-on-quarter. Long-standing IPs such as "The Legend of Mir 2," "Identity V," and "Endless Abyss" reached new highs, with "World of Warcraft" and "Hearthstone" setting record returns in the Chinese market, with daily active users increasing by over 50% and 150% respectively compared to before the suspension. NetEase Youdao's net revenue was 1.6 billion yuan, and profitability significantly improved, with operating profit turning a loss into a profit on a year-on-year basis. This is the first time in Youdao's history to achieve profitability in the third quarter, and quarterly operating profit also reached a historical high. NetEase CLOUD MUSIC's net revenue was 2.0 billion yuan, further expanding its subscription member base and driving sustained healthy growth in online music revenue. Additionally, based on partnerships with Kakao Entertainment and JYP Entertainment, a copyright cooperation agreement was reached with CJ ENM, enriching the K-POP music library. In addition, net revenue from innovation and other businesses was 1.8 billion yuan. NetEase Yanxuan focused on brand strat...Using the intelligent NPC system built based on the large model of Netease Fuxi Yi Sheng, it has received exposure of over one billion and praise from players. On the first day of the launch of the Linked Great World, the number of new players reached a five-year high.Driven by the "AI+ Education" dual-wheel driving strategy, Netease Youdao's AI subscription service sales in the third quarter have reached nearly 70 million yuan, an increase of over 150% year-on-year. With the further maturity of the "Ziyue" large model technology and the continuous upgrading of AI products, Hi Echo has been heavily recommended on the App Store homepage, and is the only recommended educational technology AI application; Youdao XiaoP, the "AI comprehensive learning assistant", has nearly 20 million users in the third quarter, with a monthly compound growth rate exceeding 100%; Youdao AI document translation has translated a total of 100 million documents. In the "AI+ Music" field, Netease Cloud Music recently launched the "AI Singing Assistant" tool, allowing users to customize their own tone by recording their voice and sing their own melody, meeting the personalized needs of users through customized UGC content creation. In the "AI+ Industrial" field, Netease Intelligent Engineering Siasun Robot & Automation has stood out among over a hundred participating companies in the "2024 Global Digital Trade Innovation Competition" with its outstanding performance, including efficient autonomous operation capability, precise control system, and excellent environmental adaptability, winning the gold award.