NetEase Cloud Music revenue down 5.7% YoY to RMB3.83bln in H1 2025.

• NetEase Cloud Music Q2 revenue down 6.1% YoY to RMB3.83bn. • Gross profit falls 2.1% to RMB1.39bn. • Operating profit up 41.4% to RMB844.5m. • Profit before income tax increases 31% to RMB1.07bn. • Adjusted operating profit rises 34.9% to RMB905.4m. • Adjusted net profit surges 120.3% to RMB1.95bn. • Deferred tax credit of RMB849.4m recognised in Q2.

NetEase (NASDAQ: NTES) reported its second-quarter 2025 financial results, showing strong revenue growth and significant improvements in profitability. The company's net revenues reached RMB27.9 billion (US$3.9 billion), up 9.4% year-over-year [1]. The gaming segment led the growth, with revenues of RMB22.8 billion, increasing 13.7% from 2024 [2].

Despite the overall revenue growth, NetEase Cloud Music experienced a decline in revenues, falling 6.1% year-over-year to RMB3.83 billion [3]. Gross profit decreased by 2.1% to RMB1.39 billion, while operating profit surged by 41.4% to RMB844.5 million [3]. The company's profit before income tax increased by 31% to RMB1.07 billion, and adjusted operating profit rose by 34.9% to RMB905.4 million [3]. Notably, adjusted net profit surged by 120.3% to RMB1.95 billion, driven by a deferred tax credit of RMB849.4 million recognized in Q2 [3].

NetEase's gaming segment continued to perform strongly, with revenues growing 13.7% year-over-year, driven by successful global game launches and established franchises maintaining momentum [2]. However, revenues from innovative businesses declined 17.8% year-over-year, primarily due to lower revenues from Yanxuan and advertising services [2].

The company also declared a quarterly dividend of US$0.5700 per ADS and continued its share repurchase program, having bought back US$2.0 billion worth of ADSs [1]. The current average analyst rating on the shares is "buy," with 20 "strong buy" or "buy" recommendations, 1 "hold," and 1 "sell" or "strong sell" [2].

References:
[1] https://www.stocktitan.net/news/NTES/net-ease-announces-second-quarter-2025-unaudited-financial-9p0e9l96nwcz.html
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_PLX58DC5A:0-chinese-gaming-company-netease-s-q2-revenue-rises-9-4/
[3] https://finance.yahoo.com/news/netease-misses-q2-top-bottom-091321947.html