NetEase Cloud Music Inc. Reports Strong Growth in 2024

NetEase Cloud Music Inc. (HKEX: 9899), a leading interactive music streaming service provider in China, is set to report its fiscal year 2024 financial results on February 20, 2025. The company has experienced significant growth and improvements in its financial performance over the past year, driven by strategic initiatives aimed at strengthening its music-centric monetisation capabilities and content ecosystem.

In 2024, NetEase Cloud Music reported revenue of RMB4.1 billion, an increase of 4.1% compared with RMB3.9 billion in 2023. The company's gross profit also saw a significant increase of 47.7% to RMB1,425.7 million, compared with RMB965.1 million in 2023. This improvement in gross profit was due to the company's increased business scale, strong monetisation of its core online music business, and a one-off adjustment of certain copyright costs. NetEase Cloud Music's gross margin improved to 35.0% from 24.7% in 2023, reflecting the company's enhanced profitability and cost control measures.

NetEase Cloud Music's user base and engagement have also evolved positively over the past year, contributing to the company's revenue and profitability growth. The total user base remained largely stable, with a DAU/MAU ratio consistently staying above 30%. The MAUs of online music services climbed to 206.7 million in the first half of 2023, up 13.7% year-over-year. The monthly paying users of online music services expanded to 41.8 million in the first half of 2023, primarily attributed to the expanding offerings of personalised and diversified music and music-inspired content, and broadening consumption scenarios, as well as the enhanced user experience.

NetEase Cloud Music's strategic initiatives to strengthen its music-centric monetisation capabilities and content ecosystem have also contributed to the company's growth. The company continually broadened its content offerings for its diverse audience, with the addition of major Korean music labels like JYP Entertainment and Kakao Entertainment. This, combined with the company's strong support for independent artists and enhancements to its in-house music offering, has created a differentiated content ecosystem that encourages user stickiness and users' willingness to subscribe to premium offerings.

In conclusion, NetEase Cloud Music Inc. has reported strong growth in 2024, driven by its focus on enhancing the user experience, expanding its content ecosystem, and strengthening its music-centric monetisation capabilities. The company's financial performance, user base, and engagement have all improved significantly over the past year, positioning NetEase Cloud Music for continued success in the future. Investors should closely monitor the company's fiscal year 2024 financial results, as they are expected to provide valuable insights into the company's ongoing growth and prospects.