Q2 2024 NetEase Inc Earnings Call Transcript
Key Points
- NetEase Inc (NTES) reported a 6% year-over-year increase in total net revenue, reaching RMB25.5 billion.
- The company's mobile games accounted for approximately 76.4% of total net revenue from online game operations.
- NetEase Inc (NTES) achieved a gross profit margin of 70% for its games and related VAS, up from 67.4% in the same period last year.
- The company saw significant success with new game launches, such as Once Human and Naraka: Bladepoint Mobile, which achieved high user engagement and downloads.
- NetEase Inc (NTES) continues to innovate and expand its game portfolio, with upcoming titles like Marvel Rivals and FragPunk generating positive early feedback.
- The company faces short-term turbulence and potential financial impact from adjustments to legacy games like Fantasy Westward Journey (FWJ).
- Despite high user engagement, Eggy Party has a relatively low revenue-to-user ratio, indicating potential monetization challenges.
- Justice Mobile experienced a decline in grossing rank in August, raising concerns about its long-term player retention and competition impact.
- The company’s R&D expenses increased to 17.5% of total net revenue, up from 16.3% in the same period last year, reflecting higher investment in content creation and product development.
- NetEase Inc (NTES) is still exploring how to balance user size and revenue for high DAU games, indicating ongoing challenges in optimizing monetization strategies.
Good day and welcome to the NetEase 2024 second-quarter earnings conference call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Brandi Piacente. Please go ahead.
Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the future performance of the company and are intended to qualify for the Safe Harbor from liability as established by the US Private Securities Litigation Reform Act.
Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.
A general discussion of the risk factors that could affect NetEase's business and financial results is included in certain filings of the company with the Securities and Exchange Commission, including its annual
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