NetEase Inc - ADR
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+ FollowMarket Cap$77.7B
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Earnings Call Q2 2026
August 20, 2026 - AI Summary
Strong 2Q revenue and gross margin expansion (games-led), but QoQ softness in online games
- 2Q total revenue: RMB 30.1bn (~$4.4bn).
- Games & related VAS net revenue: RMB 25.0bn (+10% YoY), driven by the broader portfolio performance.
- Online games net revenue: RMB 24.5bn (+10% YoY but -2% QoQ). Management said the QoQ decline was mainly from slight weakness in certain self-developed and licensed titles, while YoY growth came from stronger self-developed franchises (notably *Fantasy Westward Journey* and *Where Winds Meet*).
- Gross margin improvement: 2Q gross margin 70.5% vs 64.7% YoY; games gross margin 76.1% vs 70.2% YoY—improved mainly due to lower platform revenue-sharing costs.
- What’s good: clear profitability improvement despite modest QoQ revenue softness.
Earnings quality: non-GAAP income down YoY due to investment losses
- Non-GAAP net income attributable to shareholders (2Q): RMB 7.7bn (~$1.1bn), with YoY decline mainly from investment losses.
- Non-GAAP EPS (2Q): $1.78 per ADS (~$0.36 per share).
- Surprise/negative: even with strong gross margin and solid operating progress, non-GAAP profitability declined YoY due to investment impacts, which investors will watch going forward.
Capital returns and balance sheet strength (dividend + ongoing buybacks)
- Net cash position: RMB 167.5bn as of June 30, 2026, up from RMB 163.5bn at end of 2025.
- Dividend declared for the quarter: USD 0.096 per share / USD 0.48 per ADS.
- Share repurchase: under USD 5bn program, company repurchased ~24.8m ADS for ~USD 2.3bn by June 30, 2026.
- What’s good: shareholder-friendly posture supported by strong liquidity.
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Share Statistics
| Market cap | $77.70 Billion |
|---|---|
| Enterprise Value | $82.34 Billion |
| Annual dividend | $2.93 |
| Dividend yield | 2.60% |
| Earnings per Share | $52.9 |
| Beta | 0.77 |
| Outstanding Shares | 640,609,200 |
Return
| Return on Equity | 19.39% |
|---|---|
| Return on Assets | 13.95% |
| Return on Invested Capital | 23.17% |
Valuation & Multiples
| P/E Ratio | 14.76 |
|---|---|
| PEG | -77.39 |
| Price to Sales | 0.67 |
| Price to Book Ratio | 0.45 |
| Enterprise Value to Revenue | 0.71 |
| Enterprise Value to EBIT | 2.01 |
| Enterprise Value to Net Income | 2 |
| Total Debt to Enterprise | 0.39 |
| Debt to Equity | 0.19 |
Revenue Sources
No data
Last Earnings Call
Report Date
August 20, 2026
EPS Estimate
$2.32
Consensus analyst estimateRevenue Estimate
$4.33 B
Consensus analyst estimateNext Earnings Call
Expected Date
November 19, 2026
EPS Estimate
$2.44
Consensus analyst estimateRevenue Estimate
$4.51 B
Consensus analyst estimateInstitutional Put/Call Ratio
Compares institutional put options with call options. At 0.00, the ratio is below 1, so institutions hold more calls than puts.
| Put/Call Ratio | 0.0000▼ 56.31% |
|---|---|
| Total Calls | -▼ 100.00% |
| Total Puts | -▼ 100.00% |
Institutional Ownership
Holdings and activity of institutional investors.
| Ownership % | 1.44%▼ 7.70% |
|---|---|
| Total Invested | $1.12B▼ 85.11% |
| Investors Holding | 132▼ 351.00% |
About NetEase Inc
25,382 employees
CEO: Lei Ding
NetEase, Inc. delivers a broad spectrum of online services across the People's Republic of China and internationally, focusing on diverse areas such as content, community engagement, communication, and e-commerce. Its business is structu...