Q2 2026 NetEase, Inc. Earnings Call Transcript
Key Points
- NetEase Inc (NTES) reported strong Q2 2026 revenue growth of 10% year-over-year in its games segment, driven by successful titles like Fantasy Westward Journey and Where Winds Meet.
- The company's gross profit margin for games and related VAS improved significantly to 76.1% from 70.2% year-over-year, driven by lower revenue sharing costs.
- Eggy Party reached a new milestone of 700 million registered users and maintained monthly active users above 100 million, with peak daily active users hitting a multi-year high.
- Where Winds Meet demonstrated strong global growth, with positive Steam reviews at 87% and successful launches on Xbox, ranking among top sellers on Steam.
- NetEase Inc (NTES) maintains a robust cash position of RMB167.5 billion and continues to return value to shareholders through dividends and a $5 billion share repurchase program.
- Non-GAAP net income attributable to shareholders declined year-over-year in Q2 2026, primarily due to investment losses.
- Online games net revenue decreased 2% quarter-over-quarter, attributed to a slight decline in revenue from certain self-developed and licensed games.
- The new game Sea of Remnants received criticism for not sufficiently lowering the learning curve for players in early stages, affecting initial player experience.
- NetEase Inc (NTES) has a relatively lean pipeline of new game launches, which may limit near-term growth opportunities.
- Revenue from the innovative business and others segment decreased 4% year-over-year, mainly due to a modest decline in e-commerce business revenue.
Good day, and welcome to the NetEase second quarter 2026 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
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