NetEase Profit, Revenue Beat Expectations

By Sherry Qin

Chinese videogame maker NetEase reported higher-than-expected revenue and net profit for the first quarter despite a high base last year.

The company behind popular games like "Fantasy Westward Journey" said Thursday that net profit rose 3.6% from a year earlier to 10.67 billion yuan, equivalent to $1.57 billion. Analysts polled by Visible Alpha had expected net profit to fall in the three months ended March. Adjusted net profit, a closely watched metric that excludes share-based compensation expenses, was roughly flat at 11.27 billion yuan.

Revenue for the first quarter climbed 6.1% to 30.59 billion yuan, exceeding market expectations. Revenue from games and related value-added services increased 6.9%, picking up speed from the previous quarter.

The company attributed the growth to its self-developed games, such as "Fantasy Westward Journey" and "Where Winds Meet."

The earnings beat came even as the quarter was a relatively quiet one for NetEase's gaming business, with only a few titles being released. Analysts have said they expect growth to pick up later in 2026.

The next highly anticipated title, "Sea of Remnants," likely to be released in the third quarter, could accelerate gaming business growth in the second half of the year, Nomura said in a recent note.

Concerns about earnings growth and uncertainty around gaming pipeline have weighed on shares in China's second-largest videogame company. NetEase's Hong Kong-listed stock lost about one-fifth of its value in the first three months of the year and has largely traded sideways since then.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

May 21, 2026 05:22 ET (09:22 GMT)