Gaming

- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), one of China's leading internet and online game services providers, today announced its unaudited financial results for the first quarter ended March 31, 2022 .

First Quarter 2022 Financial Highlights

  • Net revenues were RMB23 .6 billion ( US$3 .7 billion), an increase of 14.8% compared with the first quarter of 2021.

- Online game services net revenues were RMB17 .3 billion ( US$2 .7 billion), an increase of 15.3% compared with the first quarter of 2021.

- Youdao net revenues were RMB1 .2 billion ( US$189.4 million ), a decrease of 10.4% compared with the first quarter of 2021. [1]

- Cloud Music net revenues were RMB2.1 billion ( US$326.1 million ), an increase of 38.6% compared with the first quarter of 2021.

- Innovative businesses and others net revenues were RMB3.0 billion ( US$475.7 million ), an increase of 11.5% compared with the first quarter of 2021.

  • Gross profit was RMB12.8 billion ( US$2.0 billion ), an increase of 16.1% compared with the first quarter of 2021.
  • Total operating expenses were RMB7.3 billion ( US$1.2 billion ), an increase of 8.1% compared with the first quarter of 2021.
  • Net income attributable to the Company's shareholders was RMB4.4 billion ( US$693 .1 million). Non-GAAP net income attributable to the Company's shareholders was RMB5.1 billion ( US$807 .3 million). [ 2]
  • Basic net income per share was US$0 .21 ( US$1 .06 per ADS). Non-GAAP basic net income per share was US$0 .25 ( US$1 .23 per ADS). [2]

[1] Youdao ceased offering after-school tutoring services for academic subjects under China's compulsory education system (the "Academic AST Business") at the end of December 2021. The net revenues from such services were included in its net revenues from learning services in 2021 and prior periods.

[2] As used in this announcement, non-GAAP net income attributable to the Company's shareholders and non-GAAP basic net income per share and per ADS are defined to exclude share-based compensation expenses. See "Unaudited Reconciliation of GAAP and Non-GAAP Results" in this announcement.

First Quarter 2022 and Recent Operational Highlights

  • Announced 2022 launch date for Diablo ® Immortal™ , co-developed by NetEase and Blizzard Entertainment, slated for global market release on June 2 and release in China and Southeast Asia on June 23 .
  • Invigorated Naraka: Bladepoint 's player community with captivating content updates and the first World Championship tournament.
  • Delivered strong performances from longstanding flagship titles including Fantasy Westward Journey Online and New Westward Journey Online II , and maintained popularity of other hit titles including LifeAfter and Sky .
  • Launched new games in Japan in April: Revelation mobile game, The Lord of the Rings: Rise to War and Dead by Daylight Mobile - NetEase , capturing wide interest from game players.
  • Propelled pipeline by advancing new games under development including console and mobile versions of Naraka: Bladepoint and Ghost World Chronicle , as well as the roll-out of Harry Potter : Magic Awakened in international markets.
  • Continued Youdao's business development through the expansion of its smart devices and learning services portfolio, following its efficient transition to comply with the changing regulatory environment in China .
  • Advanced NetEase Cloud Music, with healthy growth in net revenues from both membership subscription and social entertainment services, and improved gross margin to 12.2%.

"Strong contributions from our steady online game services led our healthy growth in the first quarter with total net revenues of RMB23 .6 billion, an increase of 14.8% year-over-year," said Mr. William Ding , CEO and Director of NetEase. "Both our flagship titles and many of our newer games continued to captivate our enthusiastic player community. With the April releases of Revelation mobile game, The Lord of the Rings: Rise to War and Dead by Daylight Mobile NetEase , we reached more players overseas. With confirmed plans to release Diablo ® Immortal™ in June, we are eager to bring players more amazing titles later this year."

"Our other business lines, including Youdao, NetEase Cloud Music and Yanxuan, are also on track. We look forward to creating additional value for our stakeholders and bringing more creative content to our growing global community through the remainder of 2022," Mr. Ding concluded.

First Quarter 2022 Financial Results

Net Revenues

Net revenues were RMB23,555.8 million ( US$3,715.8 million ) for the first quarter of 2022, compared with RMB24,373.6 million and RMB20,517.2 million for the preceding quarter and the first quarter of 2021, respectively.

Net revenues from online game services were RMB17,272.7 million ( US$2,724.7 million ) for the first quarter of 2022, compared with RMB17,397.5 million and RMB14,981.8 million for the preceding quarter and the first quarter of 2021, respectively. Net revenues from mobile games accounted for approximately 66.9% of net revenues from online game services for the first quarter of 2022, compared with 68.3% and 72.8% for the preceding quarter and the first quarter of 2021, respectively.

Net revenues from Youdao were RMB1,200.5 million ( US$189.4 million ) for the first quarter of 2022, compared with RMB1,333.8 million and RMB1,339.9 million for the preceding quarter and the first quarter of 2021, respectively.

Net revenues from Cloud Music were RMB2,067.2 million ( US$326 .1 million) for the first quarter of 2022, compared with RMB1,889.3 million and RMB1,491.2 million for the preceding quarter and the first quarter of 2021, respectively.

Net revenues from innovative businesses and others were RMB3,015.4 million ( US$475.7 million ) for the first quarter of 2022, compared with RMB3,753.0 million and RMB2,704.4 million for the preceding quarter and the first quarter of 2021, respectively.

Gross Profit

Gross profit was RMB12,836.4 million ( US$2,024.9 million ) for the first quarter of 2022, compared with RMB12,917.8 million and RMB11,052.6 million for the preceding quarter and the first quarter of 2021, respectively.

Online game services gross profit was largely stable in the first quarter of 2022 compared with the preceding quarter. The year-over-year increase was mainly due to increased net revenues from newly launched games such as Naraka: Bladepoint and Harry Potter : Magic Awakened .

The quarter-over-quarter and year-over-year decreases in Youdao gross profit were primarily due to the conclusion of its Academic AST Business.

The quarter-over-quarter and year-over-year increases in Cloud Music gross profit were primarily due to increased net revenues from its membership subscriptions and social entertainment services, as well as improved cost control.

The quarter-over-quarter decrease in innovative businesses and others gross profit was primarily due to a decrease in gross profit from advertising services due to seasonality.

Gross Profit Margin

Gross profit margin for online game services was 65.1% for the first quarter of 2022, compared with 64.1% and 64.6% for the preceding quarter and the first quarter of 2021, respectively. Gross profit margin for online game services was generally stable, fluctuating within a narrow band based on the revenue mix of mobile and PC games, as well as self-developed and licensed games.

Gross profit margin for Youdao was 53.1% for the first quarter of 2022, compared with 50.7% and 57.3% for the preceding quarter and the first quarter of 2021, respectively. The quarter-over-quarter increase was mainly due to gross profit margin improvement from its learning services. The year-over-year decrease was mainly due to the conclusion of its Academic AST Business.

Gross profit margin for Cloud Music was 12.2% for the first quarter of 2022, compared with 4.1% and a negative gross margin of 3.1% for the preceding quarter and the first quarter of 2021, respectively. The quarter-over-quarter and year-over-year improvements were mainly due to the factors enumerated above.

Gross profit margin for innovative businesses and others was 23.3% for the first quarter of 2022, compared with 26.8% and 24.1% for the preceding quarter and the first quarter of 2021, respectively. The quarter-over-quarter decrease was primarily due to the factors enumerated above.

Operating Expenses

Total operating expenses were RMB7,329.3 million ( US$1,156.2 million ) for the first quarter of 2022, compared with RMB8,309.6 million and RMB6,777.1 million for the preceding quarter and the first quarter of 2021, respectively. The quarter-over-quarter decrease was mainly due to lower marketing, research and development expenditures related to online game services. The year-over-year increase was mainly due to increased marketing expenditures related to online game services, as well as higher research and development staff-related costs, which was partially offset by decreased marketing expenditures related to Youdao.

Other Income/ (Expense s )

Other income/ (expenses) consisted of investment income/ (loss), interest income, exchange gains/ (losses) and others. The quarter-over-quarter and year-over-year decreases were mainly due to higher investment loss arising from fair value changes of equity investments with readily determinable fair value.

Income Taxes

The Company recorded a net income tax charge of RMB1,219.3 million ( US$192.3 million ) for the first quarter of 2022, compared with RMB934 .0 million and RMB1,273.4 million for the preceding quarter and the first quarter of 2021, respectively. The effective tax rate for the first quarter of 2022 was 22.0%, compared with 14.2% and 22.0% for the preceding quarter and the first quarter of 2021, respectively. The effective tax rate represents certain estimates by the Company regarding the tax obligations and benefits applicable to it in each quarter.

Net Income and Non-GAAP Net Income

Net income attributable to the Company's shareholders totaled RMB4,394 .0 million ( US$693.1 million ) for the first quarter of 2022, compared with RMB5,694.2 million and RMB4,439.2 million for the preceding quarter and the first quarter of 2021, respectively.

Non-GAAP net income attributable to the Company's shareholders for the first quarter of 2022 totaled RMB5,117.6 million ( US$807.3 million ), compared with RMB6,595.6 million and RMB5,080.7 million for the preceding quarter and the first quarter of 2021, respectively.

NetEase reported basic net income of US$0.21 per share ( US$1.06 per ADS) for the first quarter of 2022, compared with US$0.27 per share ( US$1.37 per ADS) and US$0.21 per share ( US$1.05 per ADS) for the preceding quarter and the first quarter of 2021, respectively.

NetEase reported non-GAAP basic net income of US$0.25 per share ( US$1.23 per ADS) for the first quarter of 2022, compared with US$0.32 per share ( US$1.59 per ADS) and US$0.24 per share ( US$1.20 per ADS) for the preceding quarter and the first quarter of 2021, respectively.

Quarterly Dividend

The board of directors has approved a dividend of US$0.0644 per share ( US$0.3220 per ADS) for the first quarter of 2022, to holders of ordinary shares and holders of ADSs as of the close of business on June 8, 2022 , Beijing /Hong Kong Time and New York Time, respectively, payable in U.S. dollars. For holders of ordinary shares, in order to qualify for the dividend, all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 p.m. on June 8, 2022 ( Beijing / Hong Kong Time). The payment date is expected to be on June 20, 2022 for holders of ordinary shares and on or around June 23, 2022 for holders of ADSs.

NetEase paid a dividend of US$0.0810 per share ( US$0.4050 per ADS) for the fourth quarter of 2021 in March 2022 .

Under the Company's current dividend policy, the determination to make dividend distributions and the amount of such distribution in any particular quarter will be made at the discretion of its board of directors and will be based upon the Company's operations and earnings, cash flow, financial condition and other relevant factors.

Other Information

As of March 31, 2022 , the Company's total cash and cash equivalents, current and non-current time deposits and short-term investments balance totaled RMB107 .0 billion ( US$16.9 billion ), compared with RMB103.4 billion as of December 31, 2021 . Cash flows generated from operating activities was RMB4,582 .6 million ( US$722.9 million ) for the first quarter of 2022, compared with RMB8,368 .6 million and RMB5,542.7 million for the preceding quarter and the first quarter of 2021, respectively.

Share Repurchase/Purchase Program

On February 25, 2021 , the Company announced that its board of directors had approved a share repurchase program of up to US$2.0 billion of the Company's outstanding ADSs and ordinary shares in open market transactions for a period not to exceed 24 months beginning on March 2, 2021 . On August 31, 2021 , the Company announced that its board of directors had approved an amendment to such program to increase the total authorized repurchase amount to US$3.0 billion . As of March 31, 2022 , approximately 20.1 million ADSs had been repurchased under this program for a total cost of US$1.9 billion .

On August 31, 2021 , the Company announced that its board of directors had approved a share purchase program of up to US$50.0 million of Youdao's outstanding ADSs for a period not to exceed 36 months beginning on September 2, 2021 . Under the terms of this program, NetEase may purchase Youdao's ADSs in open-market transactions on the New York Stock Exchange. As of March 31, 2022 , approximately 1.2 million ADSs had been purchased under this program for a total cost of US$14.1 million .

The extent to which NetEase repurchases its ADSs and its ordinary shares or purchases Youdao's ADSs will depend upon a variety of factors, including market conditions. These programs may be suspended or discontinued at any time.

** The United States dollar (US$) amounts disclosed in this announcement are presented solely for the convenience of the reader. The percentages stated are calculated based on RMB.

Conference Call

NetEase's management team will host a teleconference call with simultaneous webcast at 8:00 a.m. New York Time on May 24, 2022 ( Beijing /Hong Kong Time: 8:00 p.m. , May 24, 2022 ). NetEase's management will be on the call to discuss the quarterly results and answer questions.

Interested parties may participate in the conference call by dialing 1-323-701-0160 and providing conference ID: 2366082, 15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-719-457-0820 and entering passcode 2366082#. The replay will be available through June 6, 2022 .

This call will be webcast live and the replay will be available for 12 months. Both will be available on NetEase's Investor Relations website at http://ir.netease.com/ .

About NetEase, Inc.

As a leading internet technology company based in China , NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase") provides premium online services centered around innovative and diverse content, community, communication and commerce. NetEase develops and operates some of China's most popular mobile and PC games. In more recent years, NetEase has expanded into international markets including Japan and North America . In addition to its self-developed game content, NetEase partners with other leading game developers, such as Blizzard Entertainment and Mojang AB (a Microsoft subsidiary), to operate globally renowned games in China . NetEase's other innovative service offerings include the majority-controlled subsidiaries Youdao (NYSE: DAO), China's leading technology-focused intelligent learning company, and Cloud Village (HKEX: 9899), also known as NetEase Cloud Music , China's leading online music content community, as well as Yanxuan , NetEase's private label e-commerce platform. For more information, please visit: http://ir.netease.com/ .

Forward Looking Statements

This announcement contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. In addition, statements that are not historical facts, including statements about NetEase's strategies and business plans, its expectations regarding the growth of its business and its revenue and the quotations from management in this announcement are or contain forward-looking statements. NetEase may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the online game market will not continue to grow or that NetEase will not be able to maintain its position in that market in China or globally; the risk that COVID-19 or other health risks in China or globally could adversely affect the Company's operations or financial results; risks associated with NetEase's business and operating strategies and its ability to implement such strategies; NetEase's ability to develop and manage its operations and business; competition for, among other things, capital, technology and skilled personnel; potential changes in government regulation that could adversely affect the industry and geographical markets in which NetEase operates, including, among others, initiatives to enhance supervision of companies listed on an overseas stock exchange and tighten scrutiny over data privacy and data security, as well as the risk that NetEase's ADSs could be barred from trading in the United States as a result of the Holding Foreign Companies Accountable Act and the rules promulgated thereunder; the risk that NetEase may not be able to continuously develop new and creative online services or that NetEase will not be able to set, or follow in a timely manner, trends in the market; competition in NetEase's existing and potential markets; and the risk that fluctuations in the value of the Renminbi with respect to other currencies could adversely affect NetEase's business and financial results. Further information regarding these and other risks is included in NetEase's filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. NetEase does not undertake any obligation to update this forward-looking information, except as required under the applicable law.

Non-GAAP Financial Measures

NetEase considers and uses non-GAAP financial measures, such as non-GAAP net income attributable to the Company's shareholders and non-GAAP basic and diluted net income per share and per ADS, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

NetEase defines non-GAAP net income attributable to the Company's shareholders as net income attributable to the Company's shareholders excluding share-based compensation expenses. Non-GAAP net income attributable to the Company's shareholders enables NetEase's management to assess its operating results without considering the impact of share-based compensation expenses. NetEase believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating the Company's current operating performance and prospects in the same manner as management does, if they so choose. NetEase also believes that the use of this non-GAAP financial measure facilitates investors' assessment of its operating performance.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP net income attributable to the Company's shareholders is that it does not reflect all items of income / expense that affect our operations. Share-based compensation expenses have been and may continue to be incurred in NetEase's business and are not reflected in the presentation of non-GAAP net income attributable to the Company's shareholders. In addition, the non-GAAP financial measures NetEase uses may differ from the non-GAAP measures used by other companies, including peer companies, and therefore their comparability may be limited.

NetEase compensates for these limitations by reconciling non-GAAP net income attributable to the Company's shareholders to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance. See "Unaudited Reconciliation of GAAP and Non-GAAP Results" at the end of this announcement. NetEase encourages you to review its financial information in its entirety and not rely on a single financial measure.

Contact for Media and Investors:
Margaret Shi
Email: ir@service.netease.com
Tel: (+86) 571-8985-3378
Twitter: https://twitter.com/NetEase_Global

NETEASE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)










December 31,


March 31,


March 31,



2021


2022


2022



RMB


RMB


USD (Note 1)

Assets







Current assets:







Cash and cash equivalents


14,498,157


9,851,996


1,554,114

Time deposits


70,754,846


81,302,719


12,825,189

Restricted cash


2,876,628


3,335,627


526,182

Accounts receivable, net


5,507,988


5,277,364


832,484

Inventories, net


964,733


861,312


135,869

Prepayments and other current assets, net


6,235,857


7,097,923


1,119,671

Short-term investments


12,281,548


11,346,649


1,789,890

Assets held for sale


497


-


-

Total current assets


113,120,254


119,073,590


18,783,399








Non-current assets:







Property, equipment and software, net


5,433,858


5,842,168


921,579

Land use right, net


4,108,090


4,149,942


654,637

Deferred tax assets


1,297,954


1,127,257


177,820

Time deposits


5,823,840


4,473,840


705,731

Restricted cash


1,330


1,079


170

Other long-term assets, net


23,857,510


24,580,233


3,877,436

Assets held for sale


1,088


-


-

Total non-current assets


40,523,670


40,174,519


6,337,373

Total assets


153,643,924


159,248,109


25,120,772








Liabilities, Redeemable Noncontrolling Interests
and Shareholders' Equity







Current liabilities:







Accounts payable


985,059


924,572


145,848

Salary and welfare payables


4,133,254


2,401,213


378,782

Taxes payable


4,537,050


4,614,865


727,977

Short-term loans


19,352,313


22,679,519


3,577,606

Contract liabilities


12,132,743


12,050,962


1,900,992

Accrued liabilities and other payables


9,360,907


9,093,256


1,434,426

Total current liabilities


50,501,326


51,764,387


8,165,631








Non-current liabilities:







Deferred tax liabilities


1,345,874


1,490,406


235,106

Long-term loans


1,275,140


3,174,100


500,702

Other long-term payable


1,097,708


1,044,882


164,826

Total non-current liabilities


3,718,722


5,709,388


900,634

Total liabilities


54,220,048


57,473,775


9,066,265








Redeemable noncontrolling interests


145,238


146,754


23,150








NetEase, Inc.'s shareholders' equity


95,328,080


97,671,521


15,407,304

Noncontrolling interests


3,950,558


3,956,059


624,053

Total shareholders' equity


99,278,638


101,627,580


16,031,357








Total liabilities, redeemable noncontrolling
interests and shareholders' equity


153,643,924


159,248,109


25,120,772








The accompanying notes are an integral part of this announcement.

NETEASE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data or per ADS data)






Three Months Ended




March 31,


December 31,


March 31,


March 31,




2021


2021


2022


2022




RMB


RMB


RMB


USD (Note 1)











Net revenues



20,517,211


24,373,565


23,555,842


3,715,843

Cost of revenues



(9,464,572)


(11,455,785)


(10,719,463)


(1,690,954)

Gross profit



11,052,639


12,917,780


12,836,379


2,024,889











Operating expenses:










Selling and marketing expenses



(2,766,682)


(3,300,032)


(2,915,489)


(459,907)

General and administrative expenses



(950,194)


(1,161,876)


(1,015,769)


(160,234)

Research and development expenses



(3,060,189)


(3,847,704)


(3,398,082)


(536,034)

Total operating expenses



(6,777,065)


(8,309,612)


(7,329,340)


(1,156,175)

Operating profit



4,275,574


4,608,168


5,507,039


868,714











Other income/ (expenses):










Investment income/ (loss), net



695,298


1,627,642


(548,702)


(86,556)

Interest income, net



388,928


395,029


458,244


72,286

Exchange gains/ (losses), net



279,319


(331,390)


(97,880)


(15,440)

Other, net



147,967


297,244


216,330


34,125

Income before tax



5,787,086


6,596,693


5,535,031


873,129

Income tax



(1,273,408)


(933,985)


(1,219,271)


(192,335)

Net income



4,513,678


5,662,708


4,315,760


680,794











Accretion of redeemable noncontrolling
interests



(143,827)


(99,914)


(733)


(116)

Net loss attributable to noncontrolling
interests



69,301


131,360


78,996


12,461

Net income attributable to the
Company's shareholders



4,439,152


5,694,154


4,394,023


693,139











Net income per share *










Basic



1.33


1.74


1.34


0.21

Diluted



1.31


1.71


1.33


0.21











Net income per ADS *










Basic



6.63


8.68


6.70


1.06

Diluted



6.53


8.57


6.63


1.05











Weighted average number of ordinary
shares used in calculating net income
per share *










Basic



3,349,638


3,281,172


3,277,280


3,277,280

Diluted



3,399,981


3,323,004


3,316,129


3,316,129











*  Each ADS represents five ordinary shares.

The accompanying notes are an integral part of this announcement.

NETEASE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



Three Months Ended



March 31,


December 31,


March 31,


March 31,



2021


2021


2022


2022



RMB


RMB


RMB


USD (Note 1)

Cash flows from operating activities:









Net income


4,513,678


5,662,708


4,315,760


680,794

Adjustments to reconcile net income to net cash provided
by operating activities:









Depreciation and amortization


819,830


836,042


766,180


120,862

Fair value changes of equity security investments


(477,597)


(984,901)


1,541,002


243,087

Impairment losses of investments and other long-term assets


-


69,572


5,000


789

Fair value changes of short-term investments


(118,004)


(166,513)


(79,776)


(12,584)

Share-based compensation cost


650,253


1,002,899


746,154


117,703

Allowance for/ (reversal of) expected credit losses


13,604


12,932


(313)


(49)

(Gains)/ losses on disposal of property, equipment and software


(159)


48,779


1,445


228

Unrealized exchange (gains)/ losses


(274,047)


347,235


98,034


15,464

Gains on disposal of long-term investments, business and
subsidiaries


(7,323)


(13,091)


(4,000)


(631)

Deferred income taxes


328,075


(431,015)


315,228


49,726

Share of results on equity method investees and revaluation
results from previously held equity interest


(51,892)


(448,053)


(911,498)


(143,785)

Changes in operating assets and liabilities:









Accounts receivable


(484,343)


(97,064)


212,075


33,454

Inventories


(253,495)


73,588


103,591


16,341

Prepayments and other assets


(785,224)


870,684


(569,843)


(89,891)

Accounts payable


(60,654)


(89,207)


(92,373)


(14,571)

Salary and welfare payables


(1,226,155)


1,521,743


(1,756,224)


(277,038)

Taxes payable


1,558,618


528,725


73,446


11,586

Contract liabilities


740,938


(1,162,982)


(78,200)


(12,336)

Accrued liabilities and other payables


656,564


786,517


(103,136)


(16,269)

Net cash provided by operating activities


5,542,667


8,368,598


4,582,552


722,880










Cash flows from investing activities:









Purchase of property, equipment and software


(329,746)


(442,524)


(749,361)


(118,209)

Proceeds from sale of property, equipment and software


1,519


56,517


12,565


1,982

Purchase of intangible assets, content and licensed copyrights


(426,133)


(297,142)


(143,836)


(22,690)

Net change in short-term investments with terms of three
months or less


3,332,610


(1,474,371)


1,710,845


269,879

Purchase of short-term investments with terms over three
months


(7,905,000)


(4,300,000)


(1,250,000)


(197,183)

Proceeds from maturities of short-term investments with terms
over three months


2,857,341


3,313,543


553,831


87,365

Investment in long-term investments and acquisition of
subsidiaries


(558,441)


(2,020,029)


(1,690,271)


(266,634)

Proceeds from disposal of long-term investments, businesses
and subsidiaries


198,900


616,542


34,237


5,401

Placement/rollover of matured time deposits


(15,722,749)


(26,628,133)


(24,045,997)


(3,793,163)

Proceeds from maturities of time deposits


11,481,135


15,707,821


14,699,795


2,318,836

Change in other long-term assets


(54,653)


(99,692)


(169,545)


(26,745)

Net cash used in investing activities


(7,125,217)


(15,567,468)


(11,037,737)


(1,741,161)










The accompanying notes are an integral part of this announcement.









NETEASE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)




Three Months Ended



March 31,


December 31,


March 31,


March 31,



2021


2021


2022


2022



RMB


RMB


RMB


USD (Note 1)

Cash flows from financing activities:









Net changes in bank loans with terms of three months or less


2,122,041


425,020


3,403,195


536,841

Proceed of bank loans with terms over three months


236,916


2,277,171


1,915,210


302,117

Payment of bank loans with terms over three months


(167,700)


(1,311,823)


-


-

Amounts paid for NetEase's issuance of shares in Hong Kong


(13,800)


-


-


-

Net Amounts received/ (paid) related to capital contribution from
or repurchase of noncontrolling interests and redeemable
noncontrolling interests shareholders


1,507,049


1,320,122


(102,042)


(16,097)

Cash paid for repurchase of NetEase's ADSs/ purchase of
subsidiaries' ADSs and shares


(2,018,467)


(2,112,256)


(1,243,917)


(196,223)

Dividends paid to noncontrolling interest shareholders


-


(731,250)


-


-

Dividends paid to NetEase's shareholders


(260,842)


(940,540)


(1,683,472)


(265,561)

Net cash provided by/ (used in) financing activities


1,405,197


(1,073,556)


2,288,974


361,077










Effect of exchange rate changes on cash, cash equivalents and
restricted cash held in foreign currencies


35,993


(80,670)


(21,202)


(3,345)

Net decrease in cash, cash equivalents and restricted cash


(141,360)


(8,353,096)


(4,187,413)


(660,549)

Cash, cash equivalents and restricted cash, at the beginning
of the period


12,168,605


25,729,211


17,376,115


2,741,015

Cash, cash equivalents and restricted cash, at end of the period


12,027,245


17,376,115


13,188,702


2,080,466










Supplemental disclosures of cash flow information:









Cash paid for income tax, net


550,191


858,304


1,515,330


239,037

Cash paid for interest expense


43,902


42,879


37,741


5,953










The accompanying notes are an integral part of this announcement.









NETEASE, INC.

UNAUDITED SEGMENT INFORMATION

(in thousands, except percentages)












Three Months Ended




March 31,


December 31,


March 31,


March 31,




2021


2021


2022


2022




RMB


RMB


RMB


USD (Note 1)

Net revenues:










Online game services



14,981,784


17,397,517


17,272,650


2,724,694

Youdao



1,339,867


1,333,791


1,200,541


189,381

Cloud Music



1,491,167


1,889,265


2,067,206


326,094

Innovative businesses and others



2,704,393


3,752,992


3,015,445


475,674

Total net revenues



20,517,211


24,373,565


23,555,842


3,715,843











Cost of revenues:










Online game services



(5,302,713)


(6,239,410)


(6,027,519)


(950,818)

Youdao



(572,415)


(657,329)


(562,691)


(88,762)

Cloud Music



(1,537,726)


(1,812,036)


(1,815,649)


(286,412)

Innovative businesses and others



(2,051,718)


(2,747,010)


(2,313,604)


(364,962)

Total cost of revenues



(9,464,572)


(11,455,785)


(10,719,463)


(1,690,954)











Gross profit:










Online game services



9,679,071


11,158,107


11,245,131


1,773,876

Youdao



767,452


676,462


637,850


100,619

Cloud Music



(46,559)


77,229


251,557


39,682

Innovative businesses and others



652,675


1,005,982


701,841


110,712

Total gross profit



11,052,639


12,917,780


12,836,379


2,024,889











Gross profit margin:










Online game services



64.6%


64.1%


65.1%


65.1%

Youdao



57.3%


50.7%


53.1%


53.1%

Cloud Music



(3.1%)


4.1%


12.2%


12.2%

Innovative businesses and others



24.1%


26.8%


23.3%


23.3%











The accompanying notes are an integral part of this announcement.

NETEASE, INC.

NOTES TO UNAUDITED FINANCIAL INFORMATION

Note 1: The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00 = RMB6 .3393 on the last trading day of March 2022 (March 31, 2022) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on March 31, 2022 , or at any other certain date.

Note 2: Share-based compensation cost reported in the Company's unaudited condensed consolidated statements of income is set out as follows in RMB and USD (in thousands):



Three Months Ended



March 31,


December 31,


March 31,


March 31,



2021


2021


2022


2022



RMB


RMB


RMB


USD (Note 1)

Share-based compensation cost included in:









Cost of revenues


187,926


267,424


198,135


31,255

Operating expenses









Selling and marketing expenses


24,231


38,657


30,373


4,791

General and administrative expenses


229,603


358,595


279,062


44,021

Research and development expenses


208,493


338,223


238,584


37,636










The accompanying notes are an integral part of this announcement.

Note 3: The financial information prepared and presented in this announcement might be different from those published and to be published by NetEase's listed subsidiaries to meet the disclosure requirements under U.S. GAAP or different accounting standards requirement.

Note 4: The unaudited reconciliation on GAAP and non-GAAP results is set out as follows in RMB and USD (in thousands, except per share data or per ADS data):












Three Months Ended



March 31,


December 31,


March 31,


March 31,



2021


2021


2022


2022



RMB


RMB


RMB


USD (Note 1)

Net income attributable to the Company's shareholders


4,439,152


5,694,154


4,394,023


693,139

Add: Share-based compensation


641,534


901,421


723,603


114,146

Non-GAAP net income attributable to the Company's
shareholders


5,080,686


6,595,575


5,117,626


807,285










Non-GAAP net income per share *









Basic


1.52


2.01


1.56


0.25

Diluted


1.49


1.98


1.54


0.24










Non-GAAP net income per ADS *









Basic


7.58


10.05


7.81


1.23

Diluted


7.47


9.92


7.72


1.22










*  Each ADS represents five ordinary shares.









The accompanying notes are an integral part of this announcement.









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SOURCE NetEase, Inc.

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GAMING00
East Side Games

The Office: Somehow We Manage Mobile Game Available Now

East Side Games Group (TSX: EAGR) (OTC: EAGRF) (" ESGG " or the " Company "), Canada's leading free-to-play mobile game group, in collaboration with Universal Games and Digital Platforms, announced today the worldwide launch of The Office: Somehow We Manage on iOS and Android. The free-to-play idle game is inspired by NBC's critically acclaimed, Emmy® Award-winning U.S. version of The Office which is now streaming exclusively on Peacock.

Watch the launch trailer here .

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Tesla Vehicle Production & Deliveries and Date for Financial Results & Webcast for Second Quarter 2022

Tesla Vehicle Production & Deliveries and Date for Financial Results & Webcast for Second Quarter 2022

In the second quarter, we produced over 258,000 vehicles and delivered over 254,000 vehicles, despite ongoing supply chain challenges and factory shutdowns beyond our control. June 2022 was the highest vehicle production month in Tesla's history.

Production

Tesla will post its financial results for the second quarter of 2022 after market close on Wednesday, July 20, 2022. At that time, Tesla will issue a brief advisory containing a link to the Q2 2022 update, which will be available on Tesla's Investor Relations website. Tesla management will hold a live question and answer webcast that day at 4:30 p.m. Central Time (5:30 p.m. Eastern Time) to discuss the Company's financial and business results and outlook.

What : Date of Tesla Q2 2022 Financial Results and Q&A Webcast
When : Wednesday, July 20, 2022
Time : 4:30 p.m. Central Time / 5:30 p.m. Eastern Time
Q2 2022 Update : https://ir.tesla.com
Webcast : https://ir.tesla.com (live and replay)

Approximately two hours after the Q&A session, an archived version of the webcast will be available on the Company's website.

For additional information, please visit https://ir.tesla.com .

Our net income and cash flow results will be announced along with the rest of our financial performance when we announce Q2 earnings. Tesla vehicle deliveries represent only one measure of the company's financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.

Investor Relations Contact:
ir@tesla.com

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The first regulated crypto fund BELOBABA invests 1MEuro in Team Queso

  • BELOBABA becomes lead investor after the tokenisation of the club last March in a round of security token financing
  • The agreement was presented this Friday at the Ubeat Live festival, which served to detail Team Queso's new strategic alliance in its commitment to GameFi
  • This joint venture opens up a range of opportunities for collaboration between the two organisations through the creation of new lines of business

Team Queso, a leading esports club in mobile gaming, takes a step forward in its business strategy by incorporating BELOBABA, the leading investment fund in the tokenised video game industry and member of the Blockchain Game Alliance (BGA), as a lead investor, with a contribution of €1M.

The co-founder and CEO of Team Queso, Álvaro González de Buitrago, and the co-founder and Chairman of BELOBABA, Lluís Mas. (PRNewsfoto/BELOBABA)

Beyond the financial investment, BELOBABA will bring its proven expertise in the field of decentralised finance as the first hedge fund with a regulated security token (KHAN). In March of this year, the esports club opened a financing round through the issuance of security tokens that gave investors the right to participate in the company. In part, the sale of these is aimed at acquiring 20% of the club's equity.

BELOBABA and the Blockchain division of Team Queso, TQ Olympo, revealed the details of their strategic alliance that will lead the way in the tokenisation of esports, facilitating access to Blockchain Gaming to investors and fans; and that will also be a definitive step in the tokenisation of the club, a benchmark in mobile gaming and in its commitment to GameFi.

All of this was part of the opening day of the Ubeat Live esports, freestyle and urban art festival, which took place this Friday, 1 July, at Fira de Barcelona and will run until Sunday, 3 July. This event brings together the main esports clubs of the scene and is presented as a reference event for Gen Zers.

The co-founder and CEO of Team Queso, Álvaro González de Buitrago, explained during the presentation that the agreement reached with BELOBABA is "a fundamental strategic step in the trajectory of the club. To be backed by the first regulated crypto fund as a lead investor consolidates the project we started a few months ago with the tokenisation of the club and, secondly, makes us see that we are heading in the right direction. We want to revolutionise the esports sector with this step forward and having BELOBABA as a partner is the best guarantee of success".

"Being able to invest in a leading project with TQ Olympo is great news for the growth of BELOBABA. This strategic alliance will reaffirm the company's position as a benchmark investment fund in the sector of tokenised video games and their integration into esports, which are key for the mass adoption of cryptocurrencies," said the company's founder and chairman, Lluís Mas.

A pioneering agreement in the esports sector

With this agreement, BELOBABA will directly participate in Team Queso's business which, according to BELOBABA, is a "groundbreaking project in gaming and esports with great projection".

Thanks to this joint venture, the regulated crypto fund will have access to the entire community of one of the best teams in the world in terms of competition in mobile gaming, which opens up a wide range of possibilities for collaboration to grow both organisations through the opening of new lines of business such as cross-marketing actions; educational programmes in gaming, esports, blockchain and cryptocurrencies; or the creation of a venture capital area for joint investment and exploitation in new tokenised gaming projects.

For its part, the esports club, through the partnership with BELOBABA, receives in return a significant investment that will allow it to improve the different divisions of the club, its content creation and to invest in technology.

Team Queso not only offers content for entertainment, but also intends to provide extra value to its entire community and to this end will provide free training courses for all Team Queso investors, as well as boot camps for all those related to the gaming and esports sector. In addition, it will have a blockchain games research team that will promote the professionalisation of these blockchain games given that they are the games content creators play on a daily basis.

About Team Queso

Team Queso is a Spanish esports organisation founded in February 2017 by YouTuber Álvaro "Alvaro845" González de Buitrago and Alicia "Alimorol" Morote Oliver. It features teams competing via mobile, PC and console. The club was Clash Royale world champion in 2020, as well as several times European and South American champion in other titles such as Rocket League or PUBG Mobile. As part of its strategy to expand into new business areas, Team Queso acquired the esports information platform Appgrade and the Patographics studio, which is integrated into the audiovisual content department; in addition to the video game company Metaworld, from which Chili Cheese Games, a mobile and blockchain video game studio, originated.

About BELOBABA

BELOBABA is the first multi-strategy cryptocurrency hedge fund with a regulated security token. Endorsed by the Gibraltar Financial Services Commission, the KHAN token provides its holders with rights to capital growth from multiple trading strategies on specialised exchanges and a transparent governance regime, which enables investment decisions to be made with the advice of a team of specialist and experienced advisors who provide insight based on technical, fundamental, on-chain and sentiment analysis. BELOBABA also has a native utility token for its BBCN community, powered by the BELOBABA Academy training centre and available through the BELOBABA Launchpad incubator.

Photo - https://mma.prnewswire.com/media/1852376/BELOBABA.jpg

Cision View original content to download multimedia: https://www.prnewswire.com/news-releases/the-first-regulated-crypto-fund-belobaba-invests-1m-in-team-queso-301579762.html

SOURCE BELOBABA

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Gaming Innovation Group signs with a new online operator in Spain

Gaming Innovation Group Inc. (GiG) has signed an agreement with a brand new partner in Spain to provide its award winning platform, powering their move online.

The new partner already has an established retail business in the region, and the partnership will allow the new licensed brand to expand its operations online by the end of this year. It is expected that their digital transformation will take advantage of the substantial experience and knowledge that GiG can offer.

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Gaming Innovation Group signs Moosh in Portugal

- Gaming Innovation Group Inc. (GiG) has signed an agreement with a brand new partner Caravel Entertainment Limited (Caravel), best known for operating the 'Moosh' brand in Portugal to provide its award winning sportsbook and platform.

The deal, which represents a continued strengthening of GiG's targeted strategy in fast growing regulated markets, will see Caravel shift from its existing technology to GiG's for the moosh.pt site, and as such will provide immediate revenue opportunities from what is an existing database migration, scheduled to take place during Q4 2022.

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BORANETWORK's Country Club Membership NFT sold out in 19 seconds on the heels of BIRDIE SHOT character NFT

  • Country Club Membership 793 NFTs for whitelist sale and 307 NFTs for public sale all sold out
  • BORANETWORK to provide tBORA by lot as a reward to commemorate the sell-out

- BORANETWORK (representative Gyehan Song) said on the 1st day that the Country Club Membership NFT of BIRDIE SHOT: Enjoy & Earn, a casual golf game that is being developed by METABORA, a subsidiary of Kakao Games was sold out in 19 seconds after inception of the public sale.

BORANETWORK's Country Club Membership NFT sold out in 19 seconds on the heels of BIRDIE SHOT character NFT.

BORANETWORK released 1,100 Country Club Membership NFTs in the whitelist sale on the 29th through BORA PORTAL and the remaining 307 NFTs for all users on the 30th, selling them out in 19 seconds.

The Country Club Membership NFT is an extreme-mode golf course that provides CON as award in BIRDIE SHOT and users holding the NFT will be given a variety of benefits within the game continually.

BORANETWORK plans to provide the Country Club Membership NFT purchasers with tBORA by lot as a reward to celebrate the sell-out of NFT.

BIRDIE SHOT is a blockchain game version of Friends Shot: Golf for All that is serviced in Korea and globally. It is a casual golf game where users create their own golf teams and match with various players in golf courses across the world. Users can earn game money CON by winning a match against others and exchange it with tokens on BORA PORTAL for profits and have fun of Enjoy & Earn by growing and converting their characters into NFTs and trading them.

  • APPENDIX

* BORA PORTAL (URL): https://boraportal.com/

*BIRDIE SHOT Website URL: https://birdieshot.io/

  • Press release contacts

Deputy Head Seungmin Lee at METABORA, kelly.meta@metabora.io

Manager Dongwan Ha at METABORA, allen.meta@metabora.io

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SOURCE BORANETWORK

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DeepWell DTx Unveils Winners for Inaugural Mental Health Game Jam

First Place Winner "Inner Room" Claims $25,000 Prize from Among 100+ Entries Spotlighting Game-Forward Treatments for Stress, Depression and Anxiety

DeepWell Digital Therapeutics (DTx) has revealed the winners of the company's inaugural Mental Health Game Jam, hosted in partnership with Global Game Jam. Bringing together a community of global developers to create valuable therapeutic experiences through games, DeepWell's Mental Health Game Jam was created to inspire games that can entertain while simultaneously addressing stress, anxiety, and depression and foster support and understanding for those dealing with mental health challenges.

Judged by a trusted panel of game industry luminaries and medical veterans – including Shahid Ahmad , Rami Ismail , Dr. Leeza Maron , American McGee, Alanah Pearce and Dr. Anne Marie Porter – across multiple criteria including gameplay, treatment mechanics, and furthering of understanding for mental health issues, DeepWell is proud to announce the first class of winners from more than 100 games submitted:

GRAND PRIZE | $25,000 USD

GAME: Inner Room

DEVELOPER: byebyesama

DESCRIPTION: "Inner Room is a game where you play three days of lockdown as a person dealing with depression, where his place of true elaboration is in his dreams. When awake, our main character must complete the most mundane tasks – waking up, eating, showering, and opening a window. In any typical game, these tasks would require just one click. Now you will need your whole keyboard to sort them out."

LINK: https://byebyesama.itch.io/inner-room

SECOND PLACE | $10,000 USD

GAME: Biotopîco
DEVELOPER: Everyday Lemonade

DESCRIPTION: "In Bíotópico, players can grow real trees using the Oxygen resource that is produced from their breath practice. We're partnering with OneTreePlanted.org to plant a physical tree on the player's behalf each time a digital tree is grown."

LINK: https://everydaylemonade.itch.io/biotopico

THIRD PLACE | $5,000 USD

GAME: Fumble

DEVELOPER: ComfyDev

DESCRIPTION: "Fumble is a puzzle game about how it feels to struggle to talk. It tells the story of someone suffering from social anxiety without realising it… The gameplay acts as a playable metaphor of social anxiety and offers what we believe is one possible representation of what it feels like to have the condition."

LINK: https://namidasai.itch.io/fumble

"We truly believe in the power of games to help treat mental illness," said Mike Wilson , co-founder, DeepWell DTx. "It goes to show that the games community recognizes that games are and can be good for you, and we are excited about taking the first steps to making games that can serve as both entertainment and with therapeutic value."

In addition to the winners, DeepWell and Global Game Jam have also cited several others competitors for distinction as best-in-category finalists across a number of categories:

"Most Educational" – Game: "Balance It Out" | Developer: lukeamer | Link
"Most Innovative" – Game: " Can You ?" | Developer: devbymark | Link
"Most Engaging" – Game: "Mockingzen" | Developer: havana24 | Link
"Most Accessible" – Game: "Bottles" | Developer: zrrz111 | Link
"Best Art" – Game: "Mood Farm" | Developer: Peregon | Link
"Best Audio" – Game: "Inner Room" | Developer: byebyesama | Link

The full list of games created during the month of May for the challenge can be found on the Global Game Jam's itch.io page for free public access here .

Founded by Devolver Digital co-founder Mike Wilson and medtech innovator Ryan Douglas , DeepWell DTx) is a first-of-its-kind video game publisher and developer dedicated to creating best-in-class gameplay that can simultaneously entertain and deliver, enhance and accelerate treatment for an array of globally pervasive health conditions. DeepWell is backed by a team of more than 40 industry-leading creators, game designers, scientists and medical researchers, coming together to prove the power of games in addressing mental health.

For the latest updates, please visit DeepWellDTx.com .

About DeepWell DTx
DeepWell is a video game developer and publisher dedicated to making games that are simultaneously world-class entertainment, as well as therapeutic for a myriad of health concerns. Founded by game industry veteran Mike Wilson and medtech innovator Ryan Douglas , the company is guided by an advisory board of more than 40 industry-leading creators, game designers, scientists, and medical researchers.

Media Contacts
fortyseven communications - deepwell@fortyseven.com
DeepWell PR – press@deepwelldtx.com

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SOURCE DeepWell DTx

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