NetEase, a leading Chinese internet technology company, will release its 2025 Q2 financial results before the U.S. stock market opens on August 14th. According to Bloomberg analysts' expectations, NetEase's Q2 revenue will reach 28.396 billion yuan, with adjusted net profit of 9.636 billion yuan and adjusted EPS of 15 yuan.​

Review of Last Quarter's Performance​

Financial reports show that revenue in the first quarter increased by over 7% year-on-year, and gross profit rose by 8.6% year-on-year. The gaming business performed brilliantly, with revenue growing by 12.1% year-on-year. New releases such as Marvel Rivals, Justice Online, Outerland Frenzy, and Once Human gained global popularity, while Blizzard games recovered in China. Youdao, a subsidiary, achieved a quarterly high operating profit of 104 million yuan, continuing its profit trend. CEO Ding Lei stated that continuous innovation and high-quality content were the core drivers of Q1 growth.​

This Quarter's Performance Forecast:​

Overall Revenue Forecast​

Citibank predicts that NetEase's total revenue in the second quarter will achieve an 11% year-on-year growth, reaching 28.3 billion yuan. This growth expectation mainly stems from the steady performance of the gaming business and the collaborative development of other business segments. BOC International holds a similar view, forecasting that NetEase's Q2 total revenue will grow by 11% year-on-year to 28.2 billion yuan. Comprehensive data from various institutions shows a general expectation of double-digit year-on-year revenue growth for NetEase in the second quarter. This reflects the market's recognition of NetEase's capabilities in business expansion and product operation. Even in the fiercely competitive internet industry environment, NetEase is expected to leverage its own advantages to drive sustained revenue growth.​

Analysis of Online Gaming Business​

As NetEase's core pillar, the performance of the online gaming business is crucial. Citibank expects the revenue of this business to grow by 15.2% year-on-year in the second quarter, reaching 23.1 billion yuan. The growth momentum mainly comes from the stable performance of popular games such as Fantasy Westward Journey mobile game, Justice Online, and Songs of Yan and Clouds. These games have attracted a large number of players and maintained high activity and payment rates through rich gameplay, high-quality content, and continuous updates. At the same time, the deferred recognition of part of the revenue from the first quarter has alleviated the potential seasonal revenue fluctuations in the second quarter to a certain extent.​

BOC International predicts a 16% growth in online gaming business revenue. Among them, computer game revenue is expected to surge by 67% to 7.6 billion yuan, benefiting from the positive market response to PC games such as Songs of Yan and Clouds and NetEase's continuous innovation investment in the PC game field. In contrast, mobile game revenue is expected to remain flat at approximately 14.8 billion yuan. Despite the fierce competition in the mobile game market, NetEase has maintained the stability of its mobile game business through the continuous operation of its classic mobile games and the gradual development of new games.​

China International Capital Corporation (CICC) expects the PC game business to maintain a high double-digit year-on-year growth in the second quarter of 2025, while the year-on-year decline of the mobile game business will further narrow. PC game revenue is expected to increase by 58% year-on-year, mainly driven by the continued popularity of Blizzard IP PC games, the market performance of Marvel Rivals, and the contribution of games such as Songs of Yan and Clouds. In terms of mobile games, due to the good sustainability of the new game Songs of Yan and Clouds and the enduring popularity of established mobile games like Identity V, the downward trend of the mobile game business has been effectively curbed.​

These series of data indicate that the effects of NetEase's diversified layout and product innovation strategies in the gaming business are gradually emerging. Whether in the traditionally advantageous PC game field or the fiercely competitive mobile game market, NetEase has strong market competitiveness.​

Profit Forecast​

In terms of profitability, various institutions have also given positive forecasts. Citibank expects NetEase's non-GAAP net profit in the second quarter to reach 9.46 billion yuan, which is close to the market's general forecast of 9.66 billion yuan. BOC International is more optimistic, predicting that NetEase's adjusted net profit in the second quarter will grow by 28% to 10 billion yuan, which is 4% higher than the market expectation. These data reflect that while revenue is growing, NetEase has achieved in profitability through effective cost control, refined operation, and optimization of business structure. Whether from the high gross profit margin of the gaming business or the collaborative profit effect of other business segments, NetEase is expected to deliver a satisfactory profit report in the second quarter.

This content is generated based on Tiger AI and Bloomberg data, for reference only.