TLDR

Q2 2025 net revenues rose 9.4% to $3.9 billion, but sales missed analyst expectations.
Earnings of $2.07 per share matched estimates; up 22% year-over-year.
Gaming revenues climbed nearly 14%, offset by declines in music streaming.
Stock closed at $129.37 on August 14, down 3.9%, slipping under its 50-day average.
Top-performing games included FragPunk, Dunk City Dynasty, and Marvel Rivals.

NetEase, Inc. (NASDAQ: NTES) reported its second-quarter 2025 results on August 15, with the stock closing at $129.37, down 0.23% intraday and 3.9% lower from the previous close.

NetEase, Inc. (NTES)

While the company achieved notable earnings growth, sales came in slightly below expectations, prompting a market pullback. NetEase earned $2.07 per share on sales of $3.89 billion, matching analyst earnings forecasts but missing the $3.95 billion revenue target. Compared to the same quarter last year, earnings increased 22% and sales rose 9%.

Revenue Breakdown

Net revenues for the quarter grew 9.4% year-over-year to RMB27.9 billion ($3.9 billion). Gaming and related services remained the core driver, with revenues up 13.7% to RMB22.8 billion ($3.2 billion). The performance was supported by the success of newly launched titles like FragPunk and MARVEL Mystic Mayhem, as well as sustained engagement from established franchises. In contrast, NetEase Cloud Music experienced a 3.5% revenue decline, which weighed on overall performance.

NetEase, $NTES, Q2-25. Results:

📊 Adj. EPS: $2.07 🟢
💰 Revenue: $3.89B 🟢
📈 Net Income: $1.2B
🔎 Strong global performance driven by titles like Marvel Mystic Mayhem and Dunk City Dynasty, with Blizzard titles reigniting engagement in China. pic.twitter.com/bpu4w0s98x

— EarningsTime (@Earnings_Time) August 14, 2025

Profitability and Expenses

Gross profit reached RMB18.1 billion ($2.5 billion), representing a 12.5% increase year-over-year. Operating expenses fell slightly by 0.6% to RMB9.0 billion ($1.3 billion), reflecting operational efficiency despite ongoing investments in game development and global expansion.

Strategic and Global Expansion

The quarter showcased NetEase’s commitment to product innovation and international growth. New releases like FragPunk, Dunk City Dynasty, and Marvel Rivals achieved high rankings across multiple regions, boosting the company’s reputation as a developer of genre-defining games. Chief Executive William Ding emphasized the company’s ability to grow its player base with engaging content, reinforcing its position in the global gaming industry.

Stock Market Performance

Despite strong earnings, the sales miss led to a sharp market reaction. On August 15, NTES shares closed at $129.67, slipping below the 50-day moving average, which is seen as a key support level by technical traders. The stock had reached a record high of $141.45 on July 23, following a breakout from a 12-week consolidation at a buy point of $114.50. NetEase ranks first out of 25 stocks in IBD’s Computer Software-Gaming industry group, with a high Composite Rating of 96 out of 99.

Long-Term Returns

NetEase has consistently outperformed the Hang Seng Index. Year-to-date, NTES has returned 47.53%, compared to the index’s 25.97%. Over the past year, NTES delivered a 51.73% return, versus 47.70% for the index. Its five-year return of 53.76% far outpaces the Hang Seng’s 0.35%, underscoring its strong track record.

Looking ahead, NetEase aims to scale its original IP portfolio, enhance player experiences through technological innovation, and maintain momentum in both domestic and international markets. The company’s management expressed confidence in sustained growth and value creation for its stakeholders.

 

The post NetEase ($NTES) Stock: Q2 2025 Earnings Growth Despite Sales Miss appeared first on CoinCentral.

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Filed under: News - @ August 15, 2025 5:25 pm