NetEase Net Profit Falls on Investment Loss, but Revenue Beats
By Sherry Qin
NetEase's revenue beat market expectations as the Chinese game maker's evergreen titles continued to attract gamers, but its net profit fell on a heavy investment loss.
The company behind popular games such as "Fantasy Westward Journey" and "Eggy Party" said Thursday that second-quarter revenue rose 8% to 30.11 billion yuan, equivalent to $4.47 billion. That exceeded the 29.10 billion yuan estimate of analysts polled by FactSet.
Revenue from games and related value-added services increased 9.7%, picking up from the previous quarter's 6.9% growth, supported by popular self-developed games such as "Where Winds Meet."
However, China's second-largest game company recorded a 19% drop in net profit to 6.98 billion yuan. Analysts were looking for a 13% increase.
Adjusted net profit, a closely watched metric that excludes share-based compensation expenses, fell 19% to 7.7 billion yuan, also lower than the consensus.
Ahead of the results, Nomura analysts said the game maker's bottom line could come up short, weighed by bigger investment losses stemming from its holdings of Alibaba and PDD shares.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
August 20, 2026 05:41 ET (09:41 GMT)
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