NetEase (NTES, Financial) reported mixed results for its fourth quarter, with revenue falling short of expectations but net profit exceeding forecasts due to reduced marketing expenses. The company's total revenue decreased by 1.3% year-over-year to RMB 267.5 billion, missing analysts' estimates of RMB 272.5 billion. However, net profit surged by 33.6% year-over-year to RMB 89.2 billion, far surpassing expectations.
The standout performance came from NetEase's PC games segment, which saw a 56.6% year-over-year revenue increase to RMB 71.3 billion, significantly outperforming analyst expectations. In contrast, mobile game revenue declined by 10.5% to RMB 134.1 billion, nearly double the predicted drop.
NetEase's marketing expenses fell by 15% in the fourth quarter, contributing to the unexpected profit boost. This reduction is attributed to internal restructuring and anti-corruption efforts within the company, impacting regular marketing activities.
In gaming, NetEase launched several high-profile titles, including "Marvel Duel," which quickly gained popularity globally. The game topped the Steam global sales chart within hours of release and attracted millions of users soon after.
NetEase also highlighted the integration of DeepSeek AI technology across various business segments, including education and music, enhancing products like Youdao Dictionary and NetEase Cloud Music.
Looking ahead, NetEase expects continued strength in its PC gaming segment, driven by new releases and ongoing popularity of existing titles.
