NetEase Reports Third Quarter 2018 Unaudited Financial Results.
ENPNewswire-November 15, 2018--NetEase Reports Third Quarter 2018 Unaudited Financial Results
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Release date- 14112018 - NetEase, Inc. (NASDAQ: NTES) ('NetEase' or the 'Company'), one of China's leading internet and online game services providers, today announced its unaudited financial results for the third quarter ended September 30, 2018.
Third Quarter 2018 Financial Highlights
Net revenues[1] were RMB16.9 billion (US$2.5 billion), an increase of 35.1% compared with the third quarter of 2017.
Online game services net revenues were RMB10.3 billion (US$1.5 billion), an increase of 27.6% compared with the third quarter of 2017.
E-commerce net revenues were RMB4.5 billion (US$649.2 million), an increase of 67.2% compared with the third quarter of 2017.
Advertising services net revenues were RMB644.2 million (US$93.8 million), an increase of 2.0% compared with the third quarter of 2017.
E-mail and others net revenues were RMB1.4 billion (US$204.4 million), an increase of 31.5% compared with the third quarter of 2017.
Gross profit was RMB7.5 billion (US$1.1 billion), an increase of 26.9% compared with the third quarter of 2017.
Total operating expenses were RMB5.4 billion (US$792.1 million), an increase of 60.1% compared with the third quarter of 2017.
Net income attributable to the Company's shareholders was RMB1.6 billion (US$232.4 million). Non-GAAP net income attributable to the Company's shareholders was RMB2.3 billion (US$328.9 million). [2]
Diluted earnings per ADS were US$1.80; non-GAAP diluted earnings per ADS were US$2.55.
[1] The Company adopted ASC 606 as of January 1, 2018 on a modified retrospective basis. The adoption did
not have a significant impact on the Company's operating results for the third quarter of 2018 and comparable
periods. See 'Impact of the recently adopted major accounting pronouncements' in this press release.
[2] As used in this press release, non-GAAP net income attributable to the Company's shareholders is defined to
exclude share-based compensation expenses. See 'Unaudited Reconciliation of GAAP and Non-GAAP Results'
at the end of this press release.
Third Quarter 2018 and Recent Operational Highlights
Introduced PC-client game Justice at the end of June 2018, capturing wide interest from both dedicated gamers and younger generations.
Released additional mobile titles including ARPG Butterfly Sword in August, collectible card RPG Ancient Nocturne in September and a cooperative survival RPG Night Falls: Survival in November, all of which became the best performing games in their respective categories.
Maintained popularity of PC-client and mobile flagship titles including Fantasy Westward Journey and Westward Journey series, Invincible, Onmyoji, Knives Out and Identity V.
Launched Blizzard Entertainment's new expansion for World of Warcraft, Battle for Azeroth to an enthusiastic Chinese market, yielding increases in both revenue and the total number of subscribers in China.
Announced collaboration with Blizzard Entertainment to co-develop Diablo Immortal, a mobile massively multiplayer action-RPG for Android and iOS worldwide.
Expanded popularity of Minecraft in China reaching more than 150 million registered users, and continued to evolve developer platform.
Furthered pipeline expansion initiatives with advances in upcoming titles including Fantasy Westward Journey 3D.
Advanced future prospects for NetEase Cloud Music through financial investments by investors, including strategic partner Baidu, General Atlantic, Boyu Capital and several other investors. NetEase remains the controlling shareholder of NetEase Cloud Music.
'We are very pleased with the strong third quarter performances from each of our primary business lines, online games, e-commerce, advertising services and e-mail and others, which delivered 35.1% growth in total net revenues year-over-year,' said Mr. William Ding, Chief Executive Officer and Director of NetEase. 'In the third quarter, net revenues for our online games stood above RMB10 billion for the second consecutive quarter, supported by a game portfolio that is more diversified than ever before.
'While the performances from our flagship titles remain remarkably steady, we are innovators at our core. NetEase is one of the very few companies that has consistently created distinct new game IP for both PC-client and mobile platforms. Over the last few months, we rolled out several more hit games including Justice, Ancient Nocturne and Night Falls: Survival. Additionally, we have taken a more global view of our online games business. As a result, our international expansion, took another leap forward this quarter, contributing more than 10% of total online game net revenues for the first time in our company's history. We are also very excited about our collaboration with Blizzard to bring one of their...
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