NetEase Inc (NASDAQ:NTES), Chinese videogame giant, stock rose 0.65% (As on November 15, 11:22:33 AM UTC-4, Source: Google Finance) after the company posted lower net profit and revenue in the third quarter amid gaming-segment weakness and a high base last year. Games and related value-added services net revenues were RMB20.9 billion (US$3.0 billion), a decrease of 4.2% compared with the same quarter of 2023. Youdao net revenues were RMB1.6 billion (US$224.1 million), an increase of 2.2% compared with the same quarter of 2023. NetEase Cloud Music net revenues were RMB2.0 billion (US$284.9 million), an increase of 1.3% compared with the same quarter of 2023. Innovative businesses and others net revenues were RMB1.8 billion (US$252.8 million), a decrease of 10.3% compared with the same quarter of 2023. Gross profit was RMB16.5 billion (US$2.3 billion), a decrease of 2.9% compared with the same quarter of 2023. Total operating expenses were RMB9.3 billion (US$1.3 billion), a decrease of 0.8% compared with the same quarter of 2023. Non-GAAP net income attributable to the Company’s shareholders was RMB7.5 billion (US$1.1 billion). As of September 30, 2024, the Company’s net cash (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 RMB120.0 billion (US$17.1 billion), compared with RMB110.9 billion as of December 31, 2023. Net cash provided by operating activities was RMB10.6 billion (US$1.5 billion) for the third quarter of 2024, compared with RMB6.5 billion and RMB9.8 billion for the preceding quarter and the same quarter of 2023, respectively.
Net profit dropped 17% to 6.54 billion yuan, equivalent to $905.3 million, missing the 7.45 billion yuan estimate from a FactSet poll of analysts. That marked its second consecutive quarter of net profit decline as its main gaming segment faced some headwinds. The Hangzhou-based company’s revenue fell 3.9% to 26.21 billion yuan, slightly lower than analysts’ expectations, as sales from games and value-added services declined 4.2% from a year earlier.
Moreover, during the third quarter, Bladepoint mobile game gained significant popularity since its launch in July, reaching No. 4 on the iOS grossing chart with its September seasonal update, effectively catering to growing player demand for action-based PvP games. Racing Master topped the App Store and Google Play free-to-play charts in Japan following its launch in August. World of Warcraft and Hearthstone’s return to China reignited historic level of player community enthusiasm. Following their relaunch, World of Warcraft saw a 50% increase in daily active players as compared to levels before the shutdown, while Hearthstone achieved over 150% growth.