NetEase Announces Third Quarter 2025 Unaudited Financial Results

NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, “NetEase” or the “Company”), a leading internet and game services provider, today announced its unaudited financial results for the third quarterended September 30, 2025.

Third Quarter2025Financial Highlights

— Net revenues were RMB28.4 billion (US$4.0 billion), an increase of 8.2% compared with the same quarter of 2024.

— Games and related value-added services net revenues were RMB23.3 billion (US$3.3 billion), an increase of 11.8% compared with the same quarter of 2024.

— Youdao net revenues were RMB1.6 billion (US$228.8 million), an increase of 3.6% compared with the same quarter of 2024.

— NetEase Cloud Music net revenues were RMB2.0 billion (US$275.9 million), a decrease of 1.8% compared with the same quarter of 2024.

— Innovative businesses and others net revenues were RMB1.4 billion (US$202.1 million), a decrease of 18.9% compared with the same quarter of 2024.

— Gross profit was RMB18.2 billion (US$2.6 billion), an increase of 10.3% compared with the same quarter of 2024.

— Total operating expenses were RMB10.2 billion (US$1.4 billion), an increase of 8.9% compared with the same quarter of 2024.

— Net income attributable to the Company's shareholders was RMB8.6 billion (US$1.2 billion). Non-GAAP net income attributable to the Company's shareholders was RMB9.5 billion (US$1.3 billion).[1]

— Basic net income per share was US$0.38 (US$1.90 per ADS). Non-GAAP basic net income per share was US$0.42 (US$2.09 per ADS).[1]

[1] 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 the unaudited reconciliation of GAAP and non-GAAP results at the end of this announcement.

Third Quarter 2025 and Recent Operational Highlights

— Showcased strong long-term operating capabilities with enduring player engagement across well-established titles. Notably, Fantasy Westward Journey Online achieved four successive record peak concurrent player counts since the third quarter, reaching a height of 3.58 million. Multiple established titles strengthened player appeal through innovative gameplay updates and crossover synergy events, including Fantasy Westward Journey mobile game, Identity V, Eggy Party, Sword of Justice and Where Winds Meet.

— Strengthened the global portfolio and pipeline with new games across a variety of genres:

— Destiny: Rising topped the iOS download chart in multiple regions across Western markets with its August 28 global launch, as well as in China with its October 16 domestic launch.

— ANANTA sparked substantial enthusiasm with its brand-new experience at Tokyo Games Show 2025's playtesting session.

— Sword of Justice and Where Winds Meet hit global markets on November 7 and 14, respectively, bringing captivating, distinctive Wuxia worlds to players everywhere.

— Sea of Remnants is advancing steadily toward its planned 2026 launch.

— Blizzard titles continued to deliver enhanced experiences to Chinese players. World of Warcraft launched the long-awaited, China-exclusive Titan Reforged Server on November 18, igniting strong enthusiasm among local players. Diablo II: Resurrected returned to China on August 27, followed by StarCraft II on October 28, while Diablo IV is scheduled to launch on December 12, to deliver another exceptional experience to players in China.

“We delivered another quarter of solid execution, underscoring our healthy growth in China and rising global appeal,” said Mr. William Ding, Chief Executive Officer and Director of NetEase. “Over the years, we have honed our innovation capabilities and proven them title after title by delivering exceptional gaming experiences. This edge has afforded us a strong domestic foundation to extend our distinctive, sophisticated games to players worldwide.

“User experience remains the heart of our value system as we look to raise the bar for creativity and tech-inspired games while enriching and expanding our vibrant player community. Through close collaboration with partners and top talent around the world, we aim to create even greater value for players and sustain our momentum across markets,” Mr. Ding concluded.

Third Quarter2025Financial Results

Net Revenues

Netrevenues for the third quarter of 2025 were RMB28.4 billion (US$4.0 billion), compared with RMB27.9billion and RMB26.2billion for the preceding quarter and the same quarter of 2024, respectively.

Net revenues from games and related value-added services were RMB23.3 billion (US$3.3 billion) for the third quarter of 2025, compared with RMB22.8 billion and RMB20.9 billion for the preceding quarter and the same quarter of 2024, respectively. Net revenues from the operation of online games accounted for approximately 97.6% of the segment's net revenues for the third quarter of 2025, compared with 97.1% and96.8%forthe precedingquarter and the same quarter of 2024, respectively. The quarter-over-quarterincrease in online games net revenues was due to higher net revenues fromself-developed games such as Fantasy Westward Journey Online and Sword of Justice, as well as certain licensed games. The year-over-year increasewas attributable to higher net revenues fromself-developed games such as Fantasy Westward Journey Online, Eggy Party and newly-launched Where Winds Meet and Marvel Rivals, as well ascertain licensed games.

Net revenues from Youdao were RMB1.6billion (US$228.8million) for the third quarter of 2025, compared with RMB1.4billionand RMB1.6 billion for the preceding quarter and the same quarter of 2024. The quarter-over-quarter increase was due to increased net revenues fromits smart devices and online marketing services.

Net revenues from NetEase Cloud Music were RMB2.0 billion (US$275.9 million) for the third quarter of 2025, compared with RMB2.0 billion each for the preceding quarter and the same quarter of 2024.

Net revenues from innovative businesses and others were RMB1.4billion (US$202.1million) for the third quarter of 2025, compared with RMB1.7 billion and RMB1.8billion for the preceding quarter and the same quarter of 2024, respectively.Results from this segment were mainly driven by net revenues from Yanxuan, advertising services and other value-added services, as well as certain inter-segment transaction eliminations. The quarter-over-quarterdecrease was led by decreased net revenues from Yanxuan. The year-over-year decreasereflected an increase in certain inter-segment transaction elimination and, to a lesser extent, decreased net revenues from Yanxuan and certainother businesses.

Cost of Revenues

Cost of revenues for the third quarter of 2025 was RMB10.2 billion (US$1.4 billion), compared with RMB9.8 billion and RMB9.7 billion for the preceding quarter and the same quarter of 2024, respectively. Staff-related costs, revenue sharing costs and royalties for licensed games increased quarter-over-quarter and year-over-year.

Gross Profit

Gross profit for the third quarter of 2025 was RMB18.2 billion (US$2.6 billion), compared with RMB18.1 billion and RMB16.5 billion for the preceding quarter and the same quarter of 2024, respectively.

Operating Expenses

Total operating expenses for the third quarter of 2025 were RMB10.2billion (US$1.4billion), compared with RMB9.0billion and RMB9.3billion for the preceding quarter and the samequarter of 2024, respectively. The quarter-over-quarter and year-over-year increases were primarily due to increased marketing expenditures related to online games.

Other Income/(Expenses)

Other income/(expenses) consisted of investment income, interest income, netexchange losses/(gains) and others.The quarter-over-quarter increase was mainly due to fair value changes of equity security investments in the third quarter of 2025. The year-over-year increase was primarily due to fair value changes of equity security investments and lower net exchange losses in the third quarter of 2025, compared with the same quarter of 2024.

Income Tax

The Company recorded a net income tax charge of RMB1.3 billion (US$184.9 million) for the third quarter of 2025, compared withRMB1.6 billion and RMB1.3 billion for the preceding quarter and the same quarter of 2024, respectively. The effective tax rate for the third quarter of 2025 was 13.0%, compared with 14.7% and 16.1% for the preceding quarter and the same quarter of 2024, 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 Income

Net income attributable to the Company's shareholders totaled RMB8.6 billion (US$1.2 billion) for the third quarter of 2025, compared with RMB8.6 billion and RMB6.5 billion for the preceding quarter and the same quarter of 2024, respectively.

Basic net income was US$0.38 per share (US$1.90 per ADS) for the third quarter of 2025, compared with US$0.38 per share (US$1.89 per ADS) and US$0.29 per share (US$1.44 per ADS) for the preceding quarter and the same quarter of 2024, respectively.

Non-GAAP net income attributable to the Company's shareholders totaled RMB9.5 billion (US$1.3 billion) for the third quarter of 2025, compared with RMB9.5 billion and RMB7.5 billion for the preceding quarter and the same quarter of 2024, respectively.

Non-GAAP basic net income was US$0.42 per share (US$2.09 per ADS) for the third quarter of 2025, compared with US$0.42 per share (US$2.10 per ADS) and US$0.33 per share (US$1.65 per ADS) for the preceding quarter and the same quarter of 2024, respectively.

Other Financial Information

As of September 30, 2025, 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) totaledRMB153.2billion (US$21.5billion), compared with RMB131.5billion as of December 31, 2024. Net cash provided by operating activities was RMB12.9billion (US$1.8 billion) for the third quarter of 2025, compared with RMB10.9billionand RMB10.6 billionfor the preceding quarter and the third quarter of 2024, respectively.

QuarterlyDividend

The board of directors approved a dividend of US$0.1140per share (US$0.5700per ADS)for the third quarter of 2025 to holders of ordinary shares and holders of ADSs as of the close of business on December 5, 2025, 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 December 5, 2025 (Beijing/Hong Kong Time). The payment date is expected to be December 16, 2025 for holders of ordinary shares and on or around December 19, 2025, for holders of ADSs.

NetEase paid a dividend of US$0.1140 per share (US$0.5700 per ADS) for the second quarter of 2025 in September 2025.

Under the Company's current dividend policy, the determination 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 Company's operations and earnings, cash flow, financial condition and other relevant factors.

Share Repurchase Program

The Company announced today that its previously approved share repurchase program of up to US$5.0 billion of the Company's ADSs and ordinary shares in open market or other transactions will be extended for an additional 36 months until January 9, 2029. As of September 30, 2025, approximately22.1 million ADSs had been repurchased under this program for a total cost of US$2.0 billion.

The extent to which NetEase repurchases its ADSs and its ordinary shares depends 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 a simultaneous webcast at 7:00 a.m. Eastern Time on Thursday, November 20, 2025(Beijing/Hong Kong Time: 8:00 p.m., Thursday, November 20, 2025). 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 1-914-202-3258and providing conference ID: 10051135,15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-855-883-1031 and entering PIN: 10051135. The replay will be available through November 27, 2025.

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.

NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, “NetEase”) isa leading internet and game services provider centered around premium content. With extensive offerings across its expanding gaming ecosystem, the Company develops and operates some of themost popular and longest-running mobile and PC games available in China and globally.

Powered by one of the largest in-house game R&D teams focused on mobile, PC and console, NetEase creates superior gaming experiences, 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 its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning and advertising solutions provider, and NetEase Cloud Music(HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well as Yanxuan, NetEase's private-label consumer lifestyle brand.

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 expressions. 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 games market will not continue to grow or that NetEase will not be able to maintain its position in that market in China or globally; 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 regulatory environment in the markets where NetEase operates; 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; risks related to evolving economic cycles and geopolitical tensions, including the direct or indirect impacts of national trade, investment, protectionist, tax or other laws or policies as well as export controls and economic or trade sanctions; risks related to the expansion of NetEase's businesses and operations internationally;risks associated with cybersecurity threats or incidents; and fluctuations in foreign currency exchange rates that 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 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 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 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 this non-GAAP financial measure providesuseful 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 expense/ income 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 the 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.

Contact for Media and Investors: Email: ir@service.netease.com Tel: (+86) 571-8985-3378

NETEASE, INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands) December 31, September 30, September 30, 2024 2025 2025 RMB RMB USD (Note 1)AssetsCurrent assets:Cash and cash equivalents 51,383,310 31,326,752 4,400,443Time deposits 75,441,355 93,551,844 13,141,150Restricted cash 3,086,405 8,654,295 1,215,662Accounts receivable, net 5,669,027 5,962,060 837,486Inventories 571,548 637,325 89,525Prepayments and other current assets, net 6,416,868 6,863,085 964,050Short-term investments 10,756,143 24,214,436 3,401,382Total current assets 153,324,656 171,209,797 24,049,698Non-current assets:Property, equipment and software, net 8,520,101 8,517,182 1,196,401Land use rights, net 4,172,465 4,078,719 572,934Deferred tax assets 1,113,435 2,612,046 366,912Time deposits 3,025,000 2,845,000 399,635Restricted cash 5,208 3,900 548Other long-term assets 25,830,685 25,222,219 3,542,944Total non-current assets 42,666,894 43,279,066 6,079,374Total assets 195,991,550 214,488,863 30,129,072Liabilities, Redeemable Noncontrolling Interestsand Shareholders' EquityCurrent liabilities:Accounts payable 720,549 718,393 100,912Salary and welfare payables 4,683,009 3,004,519 422,042Taxes payable 2,759,185 4,312,685 605,799Short-term loans 11,805,051 7,349,967 1,032,444Contract liabilities 15,299,222 19,473,595 2,735,440Accrued liabilities and other payables 14,400,641 15,229,406 2,139,262Total current liabilities 49,667,657 50,088,565 7,035,899Non-current liabilities:Deferred tax liabilities 2,173,117 2,212,733 310,821Long-term loans 427,997 – -Other long-term liabilities 1,228,641 1,255,583 176,371Total non-current liabilities 3,829,755 3,468,316 487,192Total liabilities 53,497,412 53,556,881 7,523,091Redeemable noncontrolling interests 84,272 89,465 12,567NetEase, Inc.'s shareholders' equity 138,685,606 156,256,172 21,949,174Noncontrolling interests 3,724,260 4,586,345 644,240Total equity 142,409,866 160,842,517 22,593,414Total liabilities, redeemable noncontrolling 195,991,550 214,488,863 30,129,072interests and shareholders' equityThe 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2024 2025 2025 2025 2024 2025 2025 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)Net revenues 26,209,879 27,891,664 28,358,625 3,983,512 78,547,425 85,078,834 11,950,953Cost of revenues (9,733,274) (9,839,182) (10,181,020) (1,430,119) (29,012,682) (30,369,341) (4,265,956)Gross profit 16,476,605 18,052,482 18,177,605 2,553,393 49,534,743 54,709,493 7,684,997Operating expenses:Selling and marketing expenses (3,805,071) (3,578,174) (4,457,675) (626,166) (11,329,012) (10,731,446) (1,507,437)General and administrative expenses (1,100,328) (1,056,578) (1,164,573) (163,587) (3,388,244) (3,177,488) (446,339)Research and development expenses (4,424,469) (4,356,646) (4,541,891) (637,996) (13,054,944) (13,284,850) (1,866,112)Total operating expenses (9,329,868) (8,991,398) (10,164,139) (1,427,749) (27,772,200) (27,193,784) (3,819,888)Operating profit 7,146,737 9,061,084 8,013,466 1,125,644 21,762,543 27,515,709 3,865,109Other income/(expenses):Investment income, net 578,398 328,444 1,379,402 193,763 861,363 2,400,597 337,210Interest income, net 1,282,766 953,490 936,706 131,578 3,746,582 2,951,082 414,536Exchange (losses)/gains, net (1,055,518) 114,037 (373,812) (52,509) (1,279,882) (257,972) (36,237)Other, net 43,600 192,167 153,198 21,520 323,182 600,680 84,377Income before tax 7,995,983 10,649,222 10,108,960 1,419,996 25,413,788 33,210,096 4,664,995Income tax (1,289,545) (1,560,757) (1,316,356) (184,907) (4,076,394) (4,782,256) (671,760)Net income from continuing operations 6,706,438 9,088,465 8,792,604 1,235,089 21,337,394 28,427,840 3,993,235Net income from discontinued operations – – – – – – -Net income 6,706,438 9,088,465 8,792,604 1,235,089 21,337,394 28,427,840 3,993,235Accretion of redeemable noncontrolling (962) (1,051) (1,044) (147) (2,880) (3,144) (442)interestsNet income attributable to noncontrolling (167,041) (486,404) (175,883) (24,706) (403,384) (906,852) (127,385)interests and redeemable noncontrollinginterestsNet income attributable to the 6,538,435 8,601,010 8,615,677 1,210,236 20,931,130 27,517,844 3,865,408Company's shareholdersNet income per share *Basic 2.04 2.70 2.70 0.38 6.52 8.64 1.21Diluted 2.03 2.67 2.67 0.38 6.46 8.55 1.20Net income per ADS *Basic 10.22 13.49 13.50 1.90 32.61 43.20 6.07Diluted 10.14 13.36 13.36 1.88 32.30 42.77 6.01Weighted average number of ordinaryshares used in calculating net incomeper share *Basic 3,198,646 3,188,634 3,191,231 3,191,231 3,209,298 3,184,651 3,184,651Diluted 3,224,110 3,214,681 3,223,497 3,223,497 3,238,834 3,214,910 3,214,910* 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2024 2025 2025 2025 2024 2025 2025 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)Cash flows from operating activities:Net income 6,706,438 9,088,465 8,792,604 1,235,089 21,337,394 28,427,840 3,993,235Adjustments to reconcile net income to net cash providedby operating activities:Depreciation and amortization 520,567 428,427 617,872 86,792 1,720,447 1,527,060 214,505Fair value changes of equity security, other investments and financial instruments (824,608) 55,715 (1,965,526) (276,096) (1,200,753) (2,468,310) (346,721)Impairment losses on investments 529,668 161,463 1,616,146 227,019 868,826 1,866,680 262,211Fair value changes of short-term investments (100,071) (344,604) (278,636) (39,140) (289,176) (824,849) (115,866)Share-based compensation cost 978,139 946,395 902,201 126,732 2,951,495 2,800,468 393,379Allowance for expected credit losses 36,022 153,179 180,085 25,296 56,903 350,035 49,169(Gains)/losses on disposal of property, equipment and software (2,920) (30,920) 404 57 (1,114) (10,223) (1,436)Unrealized exchange losses/(gains) 1,050,644 (165,662) 368,559 51,771 823,824 174,444 24,504Gains on disposal of long-term investments, (118,046) (141,078) (38,072) (5,348) (272,647) (167,475) (23,525)business, subsidiaries and other financial instrumentsDeferred income taxes 711,639 (853,764) (933,553) (131,135) (83,383) (1,459,045) (204,951)Share of results on equity method investees (28,466) 13,479 1,389,265 195,149 175,005 1,384,076 194,420Changes in operating assets and liabilities:Accounts receivable 146,758 953,295 (194,823) (27,367) 198,525 (330,488) (46,423)Inventories (39,285) (73,944) (45,582) (6,403) 81,645 (65,753) (9,236)Prepayments and other assets (1,234,390) 583,484 (889,519) (124,950) (377,394) (601,213) (84,452)Accounts payable 6,316 119,644 16,042 2,253 (127,547) (12,390) (1,740)Salary and welfare payables (670,750) 920,662 (566,362) (79,556) (1,970,300) (1,730,811) (243,126)Taxes payable 224,015 (764,372) 517,353 72,672 33,137 1,549,104 217,601Contract liabilities 1,928,060 (718,719) 2,579,424 362,330 2,231,822 4,386,903 616,225Accrued liabilities and other payables 755,882 530,718 880,072 123,623 507,904 1,120,416 157,383Net cash provided by operating activities 10,575,612 10,861,863 12,947,954 1,818,788 26,664,613 35,916,469 5,045,156Cash flows from investing activities:Purchase of property, equipment and software (379,520) (189,842) (283,645) (39,843) (963,418) (927,558) (130,293)Proceeds from sale of property, equipment and software 1,072 21,499 1,261 177 5,238 24,096 3,385Purchase of intangible assets, content and licensed copyrights (222,247) (313,349) (190,983) (26,827) (810,601) (803,103) (112,811)Net changes of short-term investments with terms of three months or less 1,585,395 776,428 (1,111,376) (156,114) (4,207,245) (6,473,504) (909,328)Purchase of short-term investments with terms over three months (3,675,000) (5,800,000) (7,270,000) (1,021,211) (3,675,000) (16,040,000) (2,253,126)Proceeds from maturities of short-term investments with terms over three months – 5,745,454 1,426,005 200,310 – 9,880,060 1,387,844Investment in long-term investments and acquisition of subsidiaries (226,086) (2,741,641) (95,169) (13,368) (901,340) (2,927,776) (411,262)Proceeds from disposal of long-term investments, businesses, 1,541,338 784,855 1,554,537 218,365 2,467,443 2,416,820 339,489subsidiaries and other financial instrumentsPlacement/rollover of matured time deposits (36,766,094) (27,980,605) (49,326,969) (6,928,918) (133,100,536) (126,909,381) (17,826,855)Proceeds from maturities of time deposits 37,546,192 33,617,510 30,600,384 4,298,410 138,806,413 108,144,376 15,190,950Change in other long-term assets (125,911) (27,367) 75,342 10,583 (333,079) 47,297 6,644Net cash (used in)/provided by investing activities (720,861) 3,892,942 (24,620,613) (3,458,436) (2,712,125) (33,568,673) (4,715,363)Cash flows from financing activities:Net changes from loans with terms of three months or less (4,778,301) 2,017,570 536,886 75,416 (7,263,080) 300,041 42,146Proceeds of loans with terms over three months 5,395,810 1,231,000 1,481,550 208,112 13,463,080 5,460,100 766,976Payment of loans with terms over three months (3,100,520) (1,804,730) (5,879,605) (825,903) (14,739,347) (10,620,012) (1,491,784)Net amounts (paid)/received related to repurchase of or capital contribution from (8,394) 42,400 18,072 2,539 84,392 102,989 14,467noncontrolling interests shareholdersNet amount (paid)/received related to repurchase of NetEase's ADSs/purchase of (3,994,212) (355,563) 35,227 4,948 (7,235,022) (623,937) (87,644)subsidiaries' ADSs and sharesDividends paid to NetEase's shareholders (1,972,928) (3,082,122) (2,583,740) (362,936) (9,182,743) (11,250,394) (1,580,333)Net cash used in financing activities (8,458,545) (1,951,445) (6,391,610) (897,824) (24,872,720) (16,631,213) (2,336,172)Effect of exchange rate changes on cash, cash equivalents and (68,136) (31,749) (117,878) (16,558) (103,040) (206,559) (29,015)restricted cash held in foreign currenciesNet increase/ (decrease) in cash, cash equivalents and restricted cash 1,328,070 12,771,611 (18,182,147) (2,554,030) (1,023,272) (14,489,976) (2,035,394)Cash, cash equivalents and restricted cash, at the beginning of the period 21,855,316 45,395,483 58,167,094 8,170,683 24,206,658 54,474,923 7,652,047Cash, cash equivalents and restricted cash, at the end of the period 23,183,386 58,167,094 39,984,947 5,616,653 23,183,386 39,984,947 5,616,653Supplemental disclosures of cash flow information:Cash paid for income taxes, net 554,867 2,184,556 1,967,228 276,335 4,586,071 5,358,339 752,681Cash paid for interest expenses 165,881 64,366 207,879 29,201 465,279 369,669 51,927The accompanying notes are an integral part of this announcement.
NETEASE, INC.UNAUDITED SEGMENT INFORMATION(in thousands) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2024 2025 2025 2025 2024 2025 2025 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)Net revenues:Games and related value-added services 20,864,036 22,806,459 23,327,508 3,276,796 62,380,233 70,181,974 9,858,403Youdao 1,572,541 1,417,541 1,628,524 228,757 4,286,121 4,344,327 610,244NetEase Cloud Music 1,999,163 1,968,729 1,964,063 275,890 6,069,656 5,791,180 813,482Innovative businesses and others 1,774,139 1,698,935 1,438,530 202,069 5,811,415 4,761,353 668,824Total net revenues 26,209,879 27,891,664 28,358,625 3,983,512 78,547,425 85,078,834 11,950,953Cost of revenues:Games and related value-added services (6,503,146) (6,792,240) (7,151,130) (1,004,513) (19,067,061) (21,438,632) (3,011,467)Youdao (783,085) (808,181) (940,661) (132,134) (2,178,383) (2,432,877) (341,744)NetEase Cloud Music (1,343,921) (1,258,855) (1,269,289) (178,296) (3,988,683) (3,703,921) (520,287)Innovative businesses and others (1,103,122) (979,906) (819,940) (115,176) (3,778,555) (2,793,911) (392,458)Total cost of revenues (9,733,274) (9,839,182) (10,181,020) (1,430,119) (29,012,682) (30,369,341) (4,265,956)Gross profit:Games and related value-added services 14,360,890 16,014,219 16,176,378 2,272,283 43,313,172 48,743,342 6,846,936Youdao 789,456 609,360 687,863 96,623 2,107,738 1,911,450 268,500NetEase Cloud Music 655,242 709,874 694,774 97,594 2,080,973 2,087,259 293,195Innovative businesses and others 671,017 719,029 618,590 86,893 2,032,860 1,967,442 276,366Total gross profit 16,476,605 18,052,482 18,177,605 2,553,393 49,534,743 54,709,493 7,684,997The 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 = RMB7.1190 on the last trading day of September 2025 (September 30, 2025)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 September 30, 2025, 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2024 2025 2025 2025 2024 2025 2025 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)Share-based compensation cost included in:Cost of revenues 306,283 291,326 267,472 37,572 881,167 792,509 111,323Operating expensesSelling and marketing expenses 36,365 37,300 29,063 4,082 97,099 98,941 13,898General and administrative expenses 247,440 207,202 209,916 29,487 823,426 678,377 95,291Research and development expenses 388,051 410,567 395,750 55,591 1,149,803 1,230,641 172,867The accompanying notes are an integral part of this announcement.

Note 3: The financial information prepared and presented in this announcement might be different from those published and to be published by NetEase's listed subsidiary to meet the disclosure requirements under different accounting standards requirements.

Note 4: The unaudited reconciliation of 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, September 30, 2024 2025 2025 2025 2024 2025 2025 RMB RMB RMB USD (Note 1) RMB RMB USD (Note 1)Net income attributable to the Company's shareholders 6,538,435 8,601,010 8,615,677 1,210,236 20,931,130 27,517,844 3,865,408Add: Share-based compensation 960,706 930,921 886,380 124,509 2,897,543 2,752,871 386,693Non-GAAP net income attributable to the Company's shareholders 7,499,141 9,531,931 9,502,057 1,334,745 23,828,673 30,270,715 4,252,101Non-GAAP net income per share *Basic 2.34 2.99 2.98 0.42 7.42 9.51 1.34Diluted 2.33 2.96 2.95 0.41 7.35 9.41 1.32Non-GAAP net income per ADS *Basic 11.72 14.95 14.89 2.09 37.12 47.53 6.68Diluted 11.63 14.81 14.73 2.07 36.77 47.05 6.61* Each ADS represents five ordinary shares.The accompanying notes are an integral part of this announcement.

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