HANGZHOU, China, Feb. 24, 2022 /PRNewswire/ -- NetEase, Inc.
(NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), one of
China's leading internet and
online game services providers, today announced its unaudited
financial results for the fourth quarter and fiscal year ended
December 31, 2021.
Fourth Quarter 2021 Financial Highlights
- Net revenues were RMB24.4 billion
(US$3.8 billion), an increase of
23.3% compared with the fourth quarter of 2020.
-
- Online game services net revenues were RMB17.4 billion (US$2.7
billion), an increase of 29.8% compared with the fourth
quarter of 2020.
- Youdao net revenues were RMB1.3
billion (US$209.3 million), an
increase of 20.5% compared with the fourth quarter of 2020.
- Cloud Music net revenues were RMB1.9
billion (US$296.5 million), an
increase of 23.9% compared with the fourth quarter of 2020.
[1]
- Innovative businesses and others net revenues were RMB3.8 billion (US$588.9
million), an increase of 0.6% compared with the fourth
quarter of 2020.
- Gross profit was RMB12.9 billion
(US$2.0 billion), an increase of
30.1% compared with the fourth quarter of 2020.
- Total operating expenses were RMB8.3
billion (US$1.3 billion), an
increase of 20.2% compared with the fourth quarter of 2020.
- Net income attributable to the Company's shareholders was
RMB5.7 billion (US$893.5 million). Non-GAAP net income
attributable to the Company's shareholders was RMB6.6 billion (US$1.0
billion). [2]
- Basic net income per share was US$0.27 (US$1.36
per ADS). Non-GAAP basic net income per share was US$0.32 (US$1.58
per ADS). [2]
Fourth Quarter 2021 and Early 2022
Operational Highlights
- New hit titles amassed immediate player popularity
including:
-
- Naraka: Bladepoint, which continually hit record-high
users and was named a "Top Seller" on Steam's Best of 2021 games
list. A new Bruce Lee-themed
crossover addition also invigorated the global player
community.
- Harry Potter: Magic
Awakened, with captivating content updates that drove the game
ranking to a leading position on China's iOS download chart and grossing chart
multiple times.
- The Showbiz: Dream Chaser, which ranked No. 1 on
China's iOS download chart after
its December 2021 debut.
- Extended the reach of leading franchise titles including both
the Fantasy Westward Journey and Westward Journey
Online series.
- Continued the advancement of upcoming games pipeline such as
console and mobile versions of Naraka: Bladepoint,
Diablo® Immortal™ and Ghost World
Chronicle, as well as the roll-out of Harry Potter: Magic Awakened and Dead by
Daylight Mobile -NetEase in international markets.
- Achieved continuing operating cash inflow from Youdao for the
fourth quarter of 2021, while advancing its learning services and
smart devices.
- Successfully completed the initial public offering and listing
of Cloud Village Inc. (HKEX: 9899,
"Cloud Village") on The Stock Exchange of Hong Kong Limited (the
"Hong Kong Stock Exchange") in December
2021. Increased Cloud Music's MAUs of online music services
around 1% from 2020 to 2021. Continued to nurture independent
artists, serving more than 400,000 independent musicians by the end
of 2021 through Cloud Music platforms.
[1] Effective in the fourth quarter
of 2021, the Company changed its segment disclosure to separately
report the results of Cloud Music. As a result, the Company now
reports segments as online game services, Youdao, Cloud Music and
innovative businesses and others. See "Change of segment reporting"
in this announcement.
|
[2] As used in this announcement,
non-GAAP net income attributable to the Company's shareholders and
non-GAAP basic and diluted net income per share and per ADS are
defined to exclude share-based compensation expenses. See
"Unaudited Reconciliation of GAAP and Non-GAAP Results"
in this announcement.
|
"2021 was a fruitful year with exciting new titles and steady
development that propelled growth across our business. We closed
the year with total net revenues of RMB24.4
billion in the fourth quarter, up 23.3% year-over-year,"
said Mr. William Ding, CEO and
Director of NetEase. "While our flagship titles remain strong, we
also introduced a number of highly successful games, including
Naraka: Bladepoint and Harry
Potter: Magic Awakened. These new titles further
strengthen our portfolio and demonstrate our ability to develop
world-class IP. For 2022, we are very excited to introduce more new
games to broader demographics, paving the way for solid
growth.
"Having completed Cloud Village's IPO, we will continue to
improve our music platforms' infrastructure and offerings to enrich
our users' experience. In 2022 we plan to further cultivate our
core interests and enhance content within each of our verticals,"
Mr. Ding concluded.
Fourth Quarter 2021 Financial Results
Net Revenues
Net revenues for the fourth quarter of 2021 were
RMB24,373.6 million
(US$3,824.7 million), compared
with RMB22,190.7 million and
RMB19,761.7 million for the
preceding quarter and the fourth quarter of 2020, respectively.
Net revenues from online game services were RMB17,397.5 million (US$2,730.1 million) for the fourth quarter
of 2021, compared with RMB15,899.1 million and RMB13,400.2 million for the preceding quarter and
the fourth quarter of 2020, respectively. Net revenues from mobile
games accounted for approximately 68.3% of net revenues from online
game services for the fourth quarter of 2021, compared with 69.2%
and 72.4% for the preceding quarter and the fourth
quarter of 2020, respectively.
Net revenues from Youdao were RMB1,333.8
million (US$209.3 million) for the fourth quarter of
2021, compared with RMB1,387.3 million and RMB1,106.8 million for the preceding quarter and
the fourth quarter of 2020, respectively.
Net revenues from Cloud Music were RMB1,889.3 million (US$296.5 million) for the fourth quarter of
2021, compared with RMB1,924.7 million and RMB1,524.5 million for the preceding quarter and
the fourth quarter of 2020, respectively.
Net revenues from innovative businesses and others were
RMB3,753.0 million (US$588.9 million) for the fourth quarter of
2021, compared with RMB2,979.7 million and RMB3,730.3 million for the preceding quarter
and the fourth quarter of 2020, respectively.
Gross Profit
Gross profit for the fourth quarter of 2021 was RMB12,917.8 million (US$2,027.1 million), compared with
RMB11,810.8 million and
RMB9,927.8 million for the
preceding quarter and the fourth quarter of 2020, respectively.
The quarter-over-quarter and year-over-year increases in online
game services gross profit were primarily due to increased net
revenues from new games such as Naraka: Bladepoint and
Harry Potter: Magic
Awakened.
The quarter-over-quarter decrease in Youdao gross profit
was primarily due to decreased net revenues from its after-school
tutoring services for academic subjects under China's compulsory education system (the
"Academic AST Business") which were included in its learning
services. The year-over-year increase was primarily due
to business development from its learning services.
The quarter-over-quarter increase in Cloud Music gross
profit was primarily due to improved cost control. The
year-over-year increase was primarily due to the increased net
revenues from its social entertainment services and others as well
as improved cost control.
The quarter-over-quarter increase in innovative businesses and
others gross profit was primarily due to increased gross profit
from advertising services and Yanxuan.
Gross Profit Margin
Gross profit margin for online game services for the fourth
quarter of 2021 was 64.1%, compared with 64.5% and 63.1% for the
preceding quarter and the fourth quarter of 2020,
respectively. Gross profit margin for online game services
generally fluctuates within a narrow band based on the revenue mix
of mobile and PC games, as well as NetEase's self-developed and
licensed games.
Gross profit margin for Youdao for the fourth quarter of 2021
was 50.7%, compared with 56.6% and 47.5% for the preceding quarter
and the fourth quarter of 2020, respectively. The
quarter-over-quarter and year-over-year fluctuations were mainly
due to the development and changes of its Academic AST
Business.
Gross profit margin for Cloud Music for the fourth quarter of
2021 was 4.1%, compared with 2.2% and negative gross profit margin
of 7.1% for the preceding quarter and the fourth quarter of 2020,
respectively. The quarter-over-quarter and year-over-year
improvements were mainly due to the factors enumerated
above.
Gross profit margin for innovative businesses and others for the
fourth quarter of 2021 was 26.8%, compared with 24.2% and 28.2% for
the preceding quarter and the fourth quarter of 2020, respectively.
The quarter-over-quarter increase was primarily due to increased
gross profit margin from advertising services.
Operating Expenses
Total operating expenses for the fourth quarter of 2021 were
RMB8,309.6 million (US$1,304.0 million), compared
with RMB8,035.6 million and RMB6,915.8
million for the preceding quarter and the fourth quarter of
2020, respectively. The quarter-over-quarter and
year-over-year increases were mainly due to increased
marketing expenditures related to online game services, higher
staff-related costs and research and development investments,
partially offset by decreased marketing expenditures related to
Youdao.
Other Income/ (Expenses)
Other income/ (expenses) consisted of investment (loss)/ income,
interest income, exchange (losses)/ gains and others. The
quarter-over-quarter increase in net other income was mainly due to
higher investment income arising from fair value changes
of equity investments, partially offset by higher unrealized
exchange losses arising from the Company's U.S.
dollar-denominated bank deposits and loans balances as the exchange
rate of the U.S. dollar against the RMB fluctuated over the
periods. The year-over-year increase in net other income was
mainly due to higher investment income arising from fair
value changes of equity investments and reduced unrealized exchange
losses.
Income Taxes
The Company recorded a net income tax charge of RMB934.0 million (US$146.6
million) for the fourth quarter of 2021, compared with
RMB807.6 million and RMB552.7 million for the preceding quarter and
the fourth quarter of 2020, respectively. The effective tax rate
for the fourth quarter of 2021 was 14.2%, compared with 19.6% and
37.2% for the preceding quarter and the fourth quarter of 2020,
respectively. The effective tax rate represents certain estimates
by the Company regarding the tax obligations and benefits
applicable to it in each quarter.
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders for the
fourth quarter of 2021 totaled RMB5,694.2
million (US$893.5 million),
compared with RMB3,181.8 million and
RMB975.7 million for the preceding
quarter and the fourth quarter of 2020, respectively.
Non-GAAP net income attributable to the Company's shareholders
for the fourth quarter of 2021 totaled RMB6,595.6 million (US$1,035.0 million), compared with RMB3,857.8 million and RMB1,597.9 million for the preceding quarter and
the fourth quarter of 2020, respectively.
NetEase reported basic net income of US$0.27 per share (US$1.36 per ADS) for the fourth quarter of 2021,
compared with US$0.15 per share
(US$0.75 per ADS) and US$0.05 (US$0.23
per ADS) for the preceding quarter and the fourth quarter of 2020,
respectively.
NetEase reported non-GAAP basic net income of US$0.32 per share (US$1.58 per ADS) for the fourth quarter of 2021,
compared with US$0.18 per share
(US$0.91 per ADS) and US$0.08 per share (US$0.37 per ADS) for the preceding quarter and
the fourth quarter of 2020, respectively.
Fiscal Year 2021 Financial Results
Net Revenues
Net revenues for fiscal year 2021 were RMB87,606.0 million (US$13,747.3 million), compared with
RMB73,667.1 million for fiscal
year 2020.
Net revenues from online game services were RMB62,806.5 million (US$9,855.7 million) for fiscal year 2021,
compared with RMB54,608.7 million for
fiscal year 2020. Net revenues from mobile games accounted for
approximately 70.4% of net revenues from online game services for
fiscal year 2021, compared with 71.9% for fiscal year 2020.
Net revenues from Youdao were RMB5,354.4
million (US$840.2 million) for
fiscal year 2021, compared with RMB3,167.5
million for fiscal year 2020.
Net revenues from Cloud Music were RMB6,997.6 million (US$1,098.1 million) for fiscal year 2021,
compared with RMB4,895.7 million for
fiscal year 2020.
Net revenues from innovative businesses and others were
RMB12,447.6
million (US$1,953.3 million)
for fiscal year 2021, compared with RMB10,995.2 million for fiscal year
2020.
Gross Profit
Gross profit for fiscal year 2021 was RMB46,970.8 million (US$7,370.7 million), compared with
RMB38,983.4 million for fiscal
year 2020.
The year-over-year increase in online game services gross profit
was primarily due to increased net revenues resulting from the
launch of new games during the year such as Revelation
mobile game, Naraka: Bladepoint and Harry Potter: Magic Awakened, as well as
from certain existing games such as the Fantasy Westward
Journey series and Sky.
The year-over-year increase in Youdao gross profit was primarily
attributable to increased gross profit from its learning services.
The year-over-year increase in Cloud Music gross profit was
primarily attributable to increased net revenues as well as
improved cost control.
The slight year-over-year decrease in innovative businesses
and others gross profit was primarily due to decreased gross
profit from advertising business.
Operating Expenses
Total operating expenses for fiscal year 2021 were RMB30,553.7 million (US$4,794.5 million), compared with
RMB24,445.0 million for fiscal
year 2020. The year-over-year increase was primarily due to
increased marketing expenditures especially related to online game
services, as well as higher research and development investments
and staff-related costs.
Other Income/ (Expenses)
Other income/ (expenses) consisted of investment income,
interest income, exchange losses and others. The year-over-year
increase in net other income was mainly due to a reduction in
unrealized exchange losses recorded as well as higher investment
income arising from fair value changes of equity
investments.
Income Taxes
The Company recorded a net income tax charge of RMB4,128.3 million (US$647.8 million) for fiscal year 2021, compared
with RMB3,041.8 million for
fiscal year 2020. The effective tax rate was 19.6% for fiscal
year 2021, compared with 19.8% for fiscal year 2020. The
slightly lower effective tax rate for fiscal year 2021 was
mainly due to reduced unrealized exchange losses.
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders for fiscal
year 2021 totaled RMB16,856.8 million
(US$2,645.2 million), compared
with RMB12,062.8 million for fiscal
year 2020.
Non-GAAP net income attributable to the Company's
shareholders for fiscal year 2021 totaled RMB19,761.9 million (US$3,101.1 million), compared with RMB14,706.0 million for fiscal year
2020.
NetEase reported basic net income of US$0.80 per share (US$3.98 per ADS) for fiscal year 2021, compared
with US$0.57 per share (US$2.86 per ADS) for fiscal year 2020.
NetEase reported non-GAAP basic net income of US$0.93 per share (US$4.66 per ADS) for fiscal year 2021, compared
with US$0.70 per share (US$3.49 per ADS) for fiscal year 2020.
Quarterly Dividend
The board of directors has approved a dividend of US$0.0810 per share (US$0.4050 per ADS) for the fourth quarter of
2021, to holders of ordinary shares and holders of ADSs as of the
close of business on March 11, 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 transfer of shares accompanied by the relevant
share certificates must be lodged for registration with the
Company's Hong Kong branch share
registrar, Computershare Hong Kong Investor Services Limited, at
Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road
East, Wanchai, Hong Kong no later
than 4:30 p.m. on March 11, 2022 (Beijing/ Hong Kong Time). The payment date is
expected to be on March 22, 2022 for
holders of ordinary shares and on or around March 25, 2022 for holders of ADSs.
NetEase paid a dividend of US$0.0450 per share (US$0.2250 per ADS) for the third quarter of
2021 in December 2021.
Currently, the Company's policy is 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. Future
declarations of dividends and the establishment of future record
and payment dates are subject to the final determination of
NetEase's 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 December 31, 2021, the
Company's total cash and cash equivalents, current and non-current
time deposits and short-term investments balance totaled
RMB103.4 billion (US$16.2 billion), compared with RMB100.1 billion as of December 31, 2020. Cash flow generated from
operating activities was RMB24.9
billion (US$3.9 billion)
for fiscal year 2021, compared to RMB24.9
billion for fiscal year 2020.
Update on Youdao's Disposal of Academic
After-School Tutoring Business
Youdao has ceased offering after-school tutoring services for
academic subjects under China's
compulsory education system and completed the disposal of this
business.
Change in Segment Reporting
Effective in the fourth quarter of 2021, the Company changed its
segment disclosure to separately report the results of its Cloud
Music business, generated from its majority-controlled subsidiary
Cloud Village which completed its initial public offering and
listing on the Hong Kong Stock Exchange in December 2021. As a result, the Company now
reports segments as online game services, Youdao, Cloud Music and
innovative businesses and others. This change in segment reporting
aligns with the manner, in which the Company's chief operating
decision maker ("CODM") currently receives and uses financial
information to allocate resources and evaluate the performance of
reporting segments. The Company retrospectively revised prior
period segment information to conform to current periods
presentation.
Share Repurchase /
Purchase Program
On February 25, 2021, the Company
announced that its board of directors had approved a share
repurchase program of up to US$2.0
billion of the Company's outstanding ADSs and ordinary
shares in open market transactions for a period not to exceed 24
months beginning on March 2, 2021. On
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 December 31, 2021,
approximately 18.5 million ADSs had been repurchased under this
program for a total cost of US$1.8 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 Youdao's outstanding ADSs for a period not to
exceed 36 months beginning on September
2, 2021. Under the terms of this program, NetEase may
purchase Youdao's ADSs in open-market transactions on the New
York Stock Exchange. As of December 31,
2021, approximately 0.6 million ADSs had been purchased
under this program for a total cost of US$8.2 million.
The extent to which NetEase repurchases its ADSs and its
ordinary shares or purchases Youdao's ADSs will depend upon a
variety of factors, including market conditions. These programs may
be suspended or discontinued at any time.
** The United States dollar
(US$) amounts disclosed in this announcement are presented solely
for the convenience of the reader. The percentages stated are
calculated based on RMB.
Conference Call
NetEase's management team will host a teleconference call with
simultaneous webcast at 7:00 a.m. New
York Time on Thursday, February 24,
2022 (Beijing/Hong Kong
Time: 8:00 p.m., Thursday, February 24, 2022). NetEase's
management will be on the call to discuss the quarterly results and
answer questions.
Interested parties may participate in the conference call by
dialing 1-646-828-8073 and providing conference ID: 6712767, 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
6712767#. The replay will be available through March 9, 2022.
This call will be webcast live and the replay will be available
for 12 months. Both will be available on NetEase's Investor
Relations website at http://ir.netease.com/.
About 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
innovative and diverse content, community, communication and
commerce. NetEase develops and operates some of China's most popular mobile and PC games. In
more recent years, NetEase has expanded into international markets
including Japan and North America. In addition to its
self-developed game content, NetEase partners with other leading
game developers, such as Blizzard Entertainment and Mojang AB (a
Microsoft subsidiary), to operate globally renowned games in
China. NetEase's other innovative
service offerings include the majority-controlled subsidiaries
Youdao (NYSE: DAO), China's
leading intelligent learning company, and Cloud Village (HKEX:
9899), also known as NetEase Cloud Music, China's leading online music content
community, as well as Yanxuan, NetEase's private label
e-commerce platform. For more information, please visit:
http://ir.netease.com/.
Forward Looking Statements
This announcement 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.
In addition, statements that are not historical facts, including
statements about NetEase's 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 its 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 to 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 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 Company's operations or
financial results; risks associated with NetEase's business and
operating strategies and its ability to implement such
strategies; NetEase's 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 operates, 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 NetEase's ADSs could be
barred from trading in the United
States as a result of the Holding Foreign Companies
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 NetEase's
existing and potential markets; and the risk that fluctuations in
the value of the Renminbi with respect to other currencies could
adversely affect NetEase's business and financial results. Further
information regarding these and other risks is included in
NetEase's filings with the SEC and announcements on the website of
the Hong 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 attributable to the Company's shareholders and
non-GAAP basic and diluted net income per share and per ADS, 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 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 attributable to the
Company's shareholders as net income attributable to the Company's
shareholders excluding share-based compensation expenses. Non-GAAP
net income attributable to the Company's shareholders enables
NetEase's management to assess its operating results without
considering 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
Company's current operating performance and prospects in the same
manner as management does, if they so choose. NetEase also 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 of the key
limitations of using non-GAAP net income attributable to the
Company's shareholders is that it does not reflect all items of
income / expense that affect our operations. Share-based
compensation expenses have been and may continue to be incurred in
NetEase's business and are not reflected in the presentation of
non-GAAP net income attributable to the Company's 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 comparability may be limited.
NetEase compensates for these limitations by reconciling
non-GAAP net income attributable to the Company's shareholders to
the nearest U.S. GAAP performance measure, all of which should be
considered when evaluating the Company's performance. See
"Unaudited 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.
NETEASE,
INC.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
2021
|
|
2021
|
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
9,117,219
|
|
14,498,157
|
|
2,275,077
|
Time
deposits
|
|
71,079,327
|
|
70,754,846
|
|
11,102,979
|
Restricted cash
|
|
3,051,386
|
|
2,876,628
|
|
451,406
|
Accounts
receivable, net
|
|
4,576,445
|
|
5,507,988
|
|
864,324
|
Inventories, net
|
|
591,508
|
|
964,733
|
|
151,388
|
Prepayments and other current assets, net
|
|
6,076,543
|
|
6,235,857
|
|
978,541
|
Short-term investments
|
|
13,273,026
|
|
12,281,548
|
|
1,927,243
|
Assets
held for sale
|
|
65,589
|
|
497
|
|
78
|
Total current
assets
|
|
107,831,043
|
|
113,120,254
|
|
17,751,036
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property, equipment and software, net
|
|
4,549,943
|
|
5,433,858
|
|
852,691
|
Land use
right, net
|
|
4,178,257
|
|
4,108,090
|
|
644,649
|
Deferred
tax assets
|
|
1,086,759
|
|
1,297,954
|
|
203,677
|
Time
deposits
|
|
6,630,000
|
|
5,823,840
|
|
913,888
|
Restricted cash
|
|
-
|
|
1,330
|
|
209
|
Other
long-term assets, net
|
|
17,593,117
|
|
23,857,510
|
|
3,743,763
|
Assets
held for sale
|
|
5,463
|
|
1,088
|
|
171
|
Total non-current
assets
|
|
34,043,539
|
|
40,523,670
|
|
6,359,048
|
Total
assets
|
|
141,874,582
|
|
153,643,924
|
|
24,110,084
|
|
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interests
and Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
1,134,413
|
|
985,059
|
|
154,577
|
Salary
and welfare payables
|
|
3,538,732
|
|
4,133,254
|
|
648,598
|
Taxes
payable
|
|
4,282,835
|
|
4,537,050
|
|
711,962
|
Short-term loans
|
|
19,504,696
|
|
19,352,313
|
|
3,036,800
|
Deferred
revenue
|
|
10,398,872
|
|
12,132,743
|
|
1,903,892
|
Accrued
liabilities and other payables
|
|
7,337,672
|
|
9,360,907
|
|
1,468,931
|
Liabilites held for sale
|
|
546,271
|
|
-
|
|
-
|
Total current
liabilities
|
|
46,743,491
|
|
50,501,326
|
|
7,924,760
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Deferred
tax liabilities
|
|
713,439
|
|
1,345,874
|
|
211,197
|
Long-term loan
|
|
-
|
|
1,275,140
|
|
200,097
|
Other
long-term liabilities
|
|
623,728
|
|
1,097,708
|
|
172,254
|
Total non-current
liabilities
|
|
1,337,167
|
|
3,718,722
|
|
583,548
|
Total
liabilities
|
|
48,080,658
|
|
54,220,048
|
|
8,508,308
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
10,796,120
|
|
145,238
|
|
22,791
|
|
|
|
|
|
|
|
NetEase, Inc.'s
shareholders' equity
|
|
82,126,798
|
|
95,328,080
|
|
14,959,056
|
Noncontrolling
interests
|
|
871,006
|
|
3,950,558
|
|
619,929
|
Total shareholders'
equity
|
|
82,997,804
|
|
99,278,638
|
|
15,578,985
|
|
|
|
|
|
|
|
Total liabilities,
redeemable noncontrolling
interests and shareholders'
equity
|
|
141,874,582
|
|
153,643,924
|
|
24,110,084
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of this announcement.
|
|
|
|
|
NETEASE,
INC.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
(in thousands,
except per share data or per ADS data)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2020
|
|
2021
|
|
2021
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
19,761,738
|
|
22,190,749
|
|
24,373,565
|
|
3,824,744
|
|
73,667,133
|
|
87,606,026
|
|
13,747,297
|
Cost of
revenues
|
|
(9,833,976)
|
|
(10,379,981)
|
|
(11,455,785)
|
|
(1,797,662)
|
|
(34,683,731)
|
|
(40,635,225)
|
|
(6,376,553)
|
Gross
profit
|
|
9,927,762
|
|
11,810,768
|
|
12,917,780
|
|
2,027,082
|
|
38,983,402
|
|
46,970,801
|
|
7,370,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
(3,076,499)
|
|
(3,134,030)
|
|
(3,300,032)
|
|
(517,847)
|
|
(10,703,788)
|
|
(12,214,191)
|
|
(1,916,673)
|
General and
administrative expenses
|
|
(809,956)
|
|
(1,140,296)
|
|
(1,161,876)
|
|
(182,324)
|
|
(3,371,827)
|
|
(4,263,549)
|
|
(669,044)
|
Research and
development expenses
|
|
(3,029,376)
|
|
(3,761,239)
|
|
(3,847,704)
|
|
(603,789)
|
|
(10,369,382)
|
|
(14,075,991)
|
|
(2,208,830)
|
Total operating
expenses
|
|
(6,915,831)
|
|
(8,035,565)
|
|
(8,309,612)
|
|
(1,303,960)
|
|
(24,444,997)
|
|
(30,553,731)
|
|
(4,794,547)
|
Operating
profit
|
|
3,011,931
|
|
3,775,203
|
|
4,608,168
|
|
723,122
|
|
14,538,405
|
|
16,417,070
|
|
2,576,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income/
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment (loss)/
income, net
|
|
(271,866)
|
|
(264,611)
|
|
1,627,642
|
|
255,413
|
|
1,610,045
|
|
2,947,721
|
|
462,562
|
Interest income,
net
|
|
410,001
|
|
349,550
|
|
395,029
|
|
61,989
|
|
1,598,618
|
|
1,519,714
|
|
238,476
|
Exchange (losses)/
gains, net
|
|
(1,801,891)
|
|
153,310
|
|
(331,390)
|
|
(52,003)
|
|
(3,112,152)
|
|
(490,481)
|
|
(76,967)
|
Other, net
|
|
139,321
|
|
117,636
|
|
297,244
|
|
46,644
|
|
737,168
|
|
710,435
|
|
111,482
|
Income before
tax
|
|
1,487,496
|
|
4,131,088
|
|
6,596,693
|
|
1,035,165
|
|
15,372,084
|
|
21,104,459
|
|
3,311,750
|
Income tax
|
|
(552,661)
|
|
(807,648)
|
|
(933,985)
|
|
(146,563)
|
|
(3,041,849)
|
|
(4,128,269)
|
|
(647,815)
|
Net
income
|
|
934,835
|
|
3,323,440
|
|
5,662,708
|
|
888,602
|
|
12,330,235
|
|
16,976,190
|
|
2,663,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion and deemed
dividends in
connection with repurchase of
redeemable noncontrolling interests
|
|
(131,604)
|
|
(147,825)
|
|
(99,914)
|
|
(15,678)
|
|
(787,029)
|
|
(536,981)
|
|
(84,265)
|
Net loss attributable
to noncontrolling
interests
|
|
172,471
|
|
6,167
|
|
131,360
|
|
20,613
|
|
519,548
|
|
417,633
|
|
65,536
|
Net income
attributable to the
Company's shareholders
|
|
975,702
|
|
3,181,782
|
|
5,694,154
|
|
893,537
|
|
12,062,754
|
|
16,856,842
|
|
2,645,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.29
|
|
0.96
|
|
1.74
|
|
0.27
|
|
3.65
|
|
5.07
|
|
0.80
|
Diluted
|
|
0.29
|
|
0.95
|
|
1.71
|
|
0.27
|
|
3.60
|
|
5.01
|
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per ADS
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
1.45
|
|
4.78
|
|
8.68
|
|
1.36
|
|
18.25
|
|
25.34
|
|
3.98
|
Diluted
|
|
1.43
|
|
4.73
|
|
8.57
|
|
1.34
|
|
18.01
|
|
25.03
|
|
3.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary
shares used in calculating net income
per share *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
3,362,793
|
|
3,325,892
|
|
3,281,172
|
|
3,281,172
|
|
3,305,448
|
|
3,325,864
|
|
3,325,864
|
Diluted
|
|
3,411,169
|
|
3,361,727
|
|
3,323,004
|
|
3,323,004
|
|
3,349,759
|
|
3,367,478
|
|
3,367,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Each ADS
represents five ordinary shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
NETEASE,
INC.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2020
|
|
2021
|
|
2021
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
934,835
|
|
3,323,440
|
|
5,662,708
|
|
888,602
|
|
12,330,235
|
|
16,976,190
|
|
2,663,935
|
Adjustments to reconcile net
income to net cash provided
by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
962,526
|
|
805,485
|
|
836,042
|
|
131,193
|
|
3,457,782
|
|
3,275,727
|
|
514,033
|
Fair value changes of equity
security investments
|
|
559,104
|
|
1,194,338
|
|
(984,901)
|
|
(154,552)
|
|
(720,565)
|
|
(471,880)
|
|
(74,048)
|
Impairment losses of
investments and other long-term assets
|
|
51,795
|
|
26,055
|
|
69,572
|
|
10,917
|
|
58,395
|
|
100,424
|
|
15,759
|
Fair value changes of
short-term investments
|
|
(118,945)
|
|
(184,564)
|
|
(166,513)
|
|
(26,129)
|
|
(580,732)
|
|
(639,757)
|
|
(100,392)
|
Share-based compensation
cost
|
|
628,979
|
|
688,226
|
|
1,002,899
|
|
157,377
|
|
2,663,489
|
|
3,041,492
|
|
477,276
|
(Reversal of)/ allowance for
expected credit losses
|
|
(5,888)
|
|
212,010
|
|
12,932
|
|
2,029
|
|
40,600
|
|
265,930
|
|
41,730
|
Losses on disposal of
property, equipment and software
|
|
2,730
|
|
4,008
|
|
48,779
|
|
7,654
|
|
6,482
|
|
54,052
|
|
8,482
|
Unrealized exchange losses/
(gains)
|
|
1,796,532
|
|
(157,292)
|
|
347,235
|
|
54,489
|
|
3,102,492
|
|
488,604
|
|
76,673
|
Losses/ (gains) on disposal
of long-term investments,
business and
subsidiaries
|
|
178
|
|
(1)
|
|
(13,091)
|
|
(2,054)
|
|
(27,063)
|
|
(186,920)
|
|
(29,332)
|
Deferred income
taxes
|
|
(74,041)
|
|
307,994
|
|
(431,015)
|
|
(67,636)
|
|
88,179
|
|
407,948
|
|
64,016
|
Share of results on equity
method investees and revaluation
results from previously
held equity interest
|
|
(216,528)
|
|
(730,363)
|
|
(448,053)
|
|
(70,309)
|
|
(302,602)
|
|
(1,573,068)
|
|
(246,849)
|
Changes in operating assets
and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
355,495
|
|
(1,178,290)
|
|
(97,064)
|
|
(15,231)
|
|
(530,413)
|
|
(1,186,586)
|
|
(186,201)
|
Inventories
|
|
(96,499)
|
|
(154,072)
|
|
73,588
|
|
11,548
|
|
29,699
|
|
(343,587)
|
|
(53,916)
|
Prepayments and other assets
|
|
791,254
|
|
(38,490)
|
|
870,684
|
|
136,629
|
|
(13,554)
|
|
640,349
|
|
100,485
|
Accounts payable
|
|
136,213
|
|
172,696
|
|
(89,207)
|
|
(13,999)
|
|
(86,352)
|
|
(155,262)
|
|
(24,364)
|
Salary and welfare payables
|
|
1,382,442
|
|
(647,029)
|
|
1,521,743
|
|
238,795
|
|
528,927
|
|
505,334
|
|
79,298
|
Taxes payable
|
|
220,244
|
|
(434,893)
|
|
528,725
|
|
82,968
|
|
1,126,648
|
|
255,060
|
|
40,024
|
Deferred revenue
|
|
568,704
|
|
2,154,751
|
|
(1,162,982)
|
|
(182,497)
|
|
2,342,916
|
|
1,351,261
|
|
212,042
|
Accrued liabilities and other payables
|
|
335,117
|
|
928,647
|
|
786,517
|
|
123,422
|
|
1,373,608
|
|
2,121,416
|
|
332,896
|
Net cash provided by
operating activities
|
|
8,214,247
|
|
6,292,656
|
|
8,368,598
|
|
1,313,216
|
|
24,888,171
|
|
24,926,727
|
|
3,911,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property,
equipment and software
|
|
(303,347)
|
|
(407,688)
|
|
(442,524)
|
|
(69,442)
|
|
(1,055,572)
|
|
(1,601,830)
|
|
(251,362)
|
Proceeds from sale of
property, equipment and software
|
|
7,895
|
|
11,030
|
|
56,517
|
|
8,869
|
|
17,540
|
|
71,524
|
|
11,224
|
Purchase of intangible
assets, content and licensed
copyrights
|
|
(333,507)
|
|
(218,168)
|
|
(297,142)
|
|
(46,628)
|
|
(2,234,915)
|
|
(1,508,179)
|
|
(236,666)
|
Net change in short-term
investments with terms of three
months or
less
|
|
(2,257,404)
|
|
167,978
|
|
(1,474,371)
|
|
(231,361)
|
|
(1,655,930)
|
|
3,694,890
|
|
579,809
|
Purchase of short-term
investments with terms over three
months
|
|
(2,200,000)
|
|
(630,000)
|
|
(4,300,000)
|
|
(674,764)
|
|
(19,905,000)
|
|
(15,285,000)
|
|
(2,398,550)
|
Proceeds from maturities of
short-term investments with terms
over three
months
|
|
3,597,659
|
|
6,251,750
|
|
3,313,543
|
|
519,967
|
|
24,126,210
|
|
13,235,845
|
|
2,076,993
|
Investment in long-term
investments and acquisition of
subsidiaries
|
|
(1,034,392)
|
|
(586,124)
|
|
(2,020,029)
|
|
(316,987)
|
|
(2,407,692)
|
|
(6,541,567)
|
|
(1,026,515)
|
Proceeds from disposal of
long-term investments,
businesses and
subsidiaries
|
|
93,926
|
|
33,731
|
|
616,542
|
|
96,749
|
|
722,076
|
|
1,115,457
|
|
175,039
|
Placement/rollover of
matured time deposits
|
|
(14,720,632)
|
|
(11,723,614)
|
|
(26,628,133)
|
|
(4,178,535)
|
|
(91,518,767)
|
|
(81,298,080)
|
|
(12,757,443)
|
Proceeds from maturities of
time deposits
|
|
18,246,875
|
|
28,328,155
|
|
15,707,821
|
|
2,464,900
|
|
64,880,317
|
|
81,307,297
|
|
12,758,889
|
Change in other long-term
assets
|
|
(52,092)
|
|
(69,429)
|
|
(99,692)
|
|
(15,644)
|
|
(160,674)
|
|
(268,651)
|
|
(42,157)
|
Net cash provided by/(used
in) investing activities
|
|
1,044,981
|
|
21,157,621
|
|
(15,567,468)
|
|
(2,442,876)
|
|
(29,192,407)
|
|
(7,078,294)
|
|
(1,110,739)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
NETEASE,
INC.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
|
(in
thousands)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2020
|
|
2021
|
|
2021
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceed of bank loan with
terms over three months
|
|
607,043
|
|
612,885
|
|
2,277,171
|
|
357,338
|
|
1,136,495
|
|
4,447,586
|
|
697,923
|
Payment of bank loan with
terms over three months
|
|
(361,973)
|
|
(235,284)
|
|
(1,311,823)
|
|
(205,854)
|
|
(818,539)
|
|
(2,297,135)
|
|
(360,471)
|
Net changes in bank loans
with terms of three months or
less
|
|
(2,152,677)
|
|
(7,967,910)
|
|
425,020
|
|
66,695
|
|
3,723,109
|
|
(442,207)
|
|
(69,392)
|
(Paid for)/ net amounts
received from NetEase's issuance of
shares in Hong
Kong
|
|
(171,440)
|
|
-
|
|
-
|
|
-
|
|
21,911,815
|
|
(13,800)
|
|
(2,165)
|
Capital contribution from/
(repurchase of) noncontrolling interests
and redeemable
noncontrolling interests shareholders, net
|
|
10,609
|
|
34,800
|
|
1,320,122
|
|
207,156
|
|
(268,343)
|
|
2,870,147
|
|
450,389
|
Cash paid for repurchase of
NetEase's ADSs/ purchase of
subsidiaries' ADSs and
shares
|
|
(3,445,930)
|
|
(6,310,841)
|
|
(2,112,256)
|
|
(331,459)
|
|
(11,490,988)
|
|
(12,910,533)
|
|
(2,025,944)
|
Dividends paid to
noncontrolling shareholders
|
|
-
|
|
-
|
|
(731,250)
|
|
(114,749)
|
|
-
|
|
(731,250)
|
|
(114,749)
|
Dividends paid to NetEase's
shareholders
|
|
(861,211)
|
|
(1,028,116)
|
|
(940,540)
|
|
(147,591)
|
|
(4,280,462)
|
|
(3,508,377)
|
|
(550,541)
|
Net cash (used in)/ provided
by financing
activities
|
|
(6,375,579)
|
|
(14,894,466)
|
|
(1,073,556)
|
|
(168,464)
|
|
9,913,087
|
|
(12,585,569)
|
|
(1,974,950)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash, cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and restricted cash held in
foreign currencies
|
|
(67,229)
|
|
14,435
|
|
(80,670)
|
|
(12,659)
|
|
161,894
|
|
(55,354)
|
|
(8,686)
|
Net increase/
(decrease) in cash, cash equivalents and restricted
cash
|
|
2,816,420
|
|
12,570,246
|
|
(8,353,096)
|
|
(1,310,783)
|
|
5,770,745
|
|
5,207,510
|
|
817,172
|
Cash, cash
equivalents and restricted cash, at the beginning
of the period
|
|
9,352,185
|
|
13,158,965
|
|
25,729,211
|
|
4,037,475
|
|
6,397,860
|
|
12,168,605
|
|
1,909,520
|
Cash, cash
equivalents and restricted cash, at end of the
period
|
|
12,168,605
|
|
25,729,211
|
|
17,376,115
|
|
2,726,692
|
|
12,168,605
|
|
17,376,115
|
|
2,726,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income tax,
net
|
|
347,389
|
|
898,112
|
|
858,304
|
|
134,687
|
|
2,046,119
|
|
3,547,299
|
|
556,649
|
Cash paid for interest
expense
|
|
46,177
|
|
52,765
|
|
42,879
|
|
6,729
|
|
246,051
|
|
187,628
|
|
29,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NETEASE,
INC.
|
UNAUDITED SEGMENT
INFORMATION
|
(in thousands,
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2020
|
|
2021
|
|
2021
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online game
services
|
|
13,400,182
|
|
15,899,070
|
|
17,397,517
|
|
2,730,050
|
|
54,608,717
|
|
62,806,453
|
|
9,855,703
|
Youdao
|
|
1,106,796
|
|
1,387,292
|
|
1,333,791
|
|
209,301
|
|
3,167,515
|
|
5,354,357
|
|
840,215
|
Cloud
Music
|
|
1,524,509
|
|
1,924,683
|
|
1,889,265
|
|
296,467
|
|
4,895,731
|
|
6,997,622
|
|
1,098,080
|
Innovative businesses
and others
|
|
3,730,251
|
|
2,979,704
|
|
3,752,992
|
|
588,926
|
|
10,995,170
|
|
12,447,594
|
|
1,953,299
|
Total net
revenues
|
|
19,761,738
|
|
22,190,749
|
|
24,373,565
|
|
3,824,744
|
|
73,667,133
|
|
87,606,026
|
|
13,747,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online game
services
|
|
(4,942,484)
|
|
(5,637,027)
|
|
(6,239,410)
|
|
(979,100)
|
|
(19,847,846)
|
|
(22,101,116)
|
|
(3,468,147)
|
Youdao
|
|
(581,327)
|
|
(601,741)
|
|
(657,329)
|
|
(103,149)
|
|
(1,713,229)
|
|
(2,448,146)
|
|
(384,168)
|
Cloud
Music
|
|
(1,632,497)
|
|
(1,881,859)
|
|
(1,812,036)
|
|
(284,348)
|
|
(5,491,066)
|
|
(6,854,948)
|
|
(1,075,691)
|
Innovative businesses
and others
|
|
(2,677,668)
|
|
(2,259,354)
|
|
(2,747,010)
|
|
(431,065)
|
|
(7,631,590)
|
|
(9,231,015)
|
|
(1,448,547)
|
Total cost of
revenues
|
|
(9,833,976)
|
|
(10,379,981)
|
|
(11,455,785)
|
|
(1,797,662)
|
|
(34,683,731)
|
|
(40,635,225)
|
|
(6,376,553)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online game
services
|
|
8,457,698
|
|
10,262,043
|
|
11,158,107
|
|
1,750,950
|
|
34,760,871
|
|
40,705,337
|
|
6,387,556
|
Youdao
|
|
525,469
|
|
785,551
|
|
676,462
|
|
106,152
|
|
1,454,286
|
|
2,906,211
|
|
456,047
|
Cloud
Music
|
|
(107,988)
|
|
42,824
|
|
77,229
|
|
12,119
|
|
(595,335)
|
|
142,674
|
|
22,389
|
Innovative businesses
and others
|
|
1,052,583
|
|
720,350
|
|
1,005,982
|
|
157,861
|
|
3,363,580
|
|
3,216,579
|
|
504,752
|
Total gross
profit
|
|
9,927,762
|
|
11,810,768
|
|
12,917,780
|
|
2,027,082
|
|
38,983,402
|
|
46,970,801
|
|
7,370,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online game
services
|
|
63.1%
|
|
64.5%
|
|
64.1%
|
|
64.1%
|
|
63.7%
|
|
64.8%
|
|
64.8%
|
Youdao
|
|
47.5%
|
|
56.6%
|
|
50.7%
|
|
50.7%
|
|
45.9%
|
|
54.3%
|
|
54.3%
|
Cloud
Music
|
|
(7.1%)
|
|
2.2%
|
|
4.1%
|
|
4.1%
|
|
(12.2%)
|
|
2.0%
|
|
2.0%
|
Innovative businesses
and others
|
|
28.2%
|
|
24.2%
|
|
26.8%
|
|
26.8%
|
|
30.6%
|
|
25.8%
|
|
25.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
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 =
RMB6.3726 on the last trading
day of December 2021 (December 30,
2021) as set forth in the H.10 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 December 30, 2021, or at
any other certain date.
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):
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
30,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2020
|
|
2021
|
|
2021
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Share-based
compensation cost included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
181,871
|
|
180,669
|
|
267,424
|
|
41,965
|
|
794,855
|
|
833,389
|
|
130,777
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Selling and
marketing expenses
|
|
24,892
|
|
29,289
|
|
38,657
|
|
6,066
|
|
102,300
|
|
118,611
|
|
18,613
|
- General and
administrative expenses
|
|
214,730
|
|
258,805
|
|
358,595
|
|
56,271
|
|
929,013
|
|
1,105,547
|
|
173,484
|
- Research and
development expenses
|
|
207,486
|
|
219,463
|
|
338,223
|
|
53,075
|
|
837,321
|
|
983,945
|
|
154,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 3: The unaudited financial information disclosed in this
press release is preliminary. The audit of the financial statements
and related notes to be included in the Company's annual report to
shareholders for the year ended December 31,
2021 is still in progress. In addition, because an audit of
the Company's internal controls over financial reporting in
connection with section 404 of the Sarbanes-Oxley Act of 2002 has
not yet been completed, the Company makes no representation as to
the effectiveness of those internal controls as of the end of
fiscal year 2021.
Adjustments to the financial statements may be identified when
the audit work is completed, which could result in significant
differences between the Company's audited financial statements and
this preliminary unaudited financial information.
Note 4: The financial information prepared and presented in this
announcement might be different from those published and to be
published by NetEase's listed subsidiaries to meet the disclosure
requirements under U.S. GAAP or different accounting standards
requirement.
Note 5: 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):
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
2020
|
|
|
2021
|
|
2021
|
|
2021
|
|
2020
|
|
2021
|
|
2021
|
|
|
RMB
|
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
|
RMB
|
|
RMB
|
|
USD (Note
1)
|
Net income
attributable to the Company's shareholders
|
|
975,702
|
|
|
3,181,782
|
|
5,694,154
|
|
893,537
|
|
12,062,754
|
|
16,856,842
|
|
2,645,206
|
Add: Share-based
compensation
|
|
622,185
|
|
|
675,999
|
|
901,421
|
|
141,453
|
|
2,643,287
|
|
2,905,065
|
|
455,868
|
Non-GAAP net income
attributable to the Company's
shareholders
|
|
1,597,887
|
|
|
3,857,781
|
|
6,595,575
|
|
1,034,990
|
|
14,706,041
|
|
19,761,907
|
|
3,101,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income per share *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.48
|
|
|
1.16
|
|
2.01
|
|
0.32
|
|
4.45
|
|
5.94
|
|
0.93
|
Diluted
|
|
0.47
|
|
|
1.15
|
|
1.98
|
|
0.31
|
|
4.39
|
|
5.87
|
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income per ADS *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
2.38
|
|
|
5.80
|
|
10.05
|
|
1.58
|
|
22.25
|
|
29.71
|
|
4.66
|
Diluted
|
|
2.34
|
|
|
5.74
|
|
9.92
|
|
1.56
|
|
21.95
|
|
29.34
|
|
4.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Each ADS
represents five ordinary shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of this announcement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact for Media and Investors:
Margaret Shi
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378
Twitter: https://twitter.com/NetEase_Global
View original
content:https://www.prnewswire.com/news-releases/netease-reports-fourth-quarter-and-fiscal-year-2021-unaudited-financial-results-301489341.html
SOURCE NetEase, Inc.