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NetEase Cloud Music (HKSE:09899) Degree of Operating Leverage : -73.51 (As of Dec. 2024)


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What is NetEase Cloud Music Degree of Operating Leverage?

Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. NetEase Cloud Music's Degree of Operating Leverage for the quarter that ended in Dec. 2024 was -73.51. The higher Degree of Operating Leverage, the higher operating risk the company will take.

The industry rank for NetEase Cloud Music's Degree of Operating Leverage or its related term are showing as below:

HKSE:09899's Degree of Operating Leverage is ranked better than
96.34% of 546 companies
in the Interactive Media industry
Industry Median: 1.015 vs HKSE:09899: -73.51

NetEase Cloud Music Degree of Operating Leverage Historical Data

The historical data trend for NetEase Cloud Music's Degree of Operating Leverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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NetEase Cloud Music Degree of Operating Leverage Chart

NetEase Cloud Music Annual Data
Trend Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24
Degree of Operating Leverage
Get a 7-Day Free Trial -0.14 0.82 -5.29 32.74 -73.51

NetEase Cloud Music Semi-Annual Data
Dec18 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23 Jun24 Dec24
Degree of Operating Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only -5.29 74.09 32.74 -26.39 -73.51

Competitive Comparison of NetEase Cloud Music's Degree of Operating Leverage

For the Internet Content & Information subindustry, NetEase Cloud Music's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


NetEase Cloud Music's Degree of Operating Leverage Distribution in the Interactive Media Industry

For the Interactive Media industry and Communication Services sector, NetEase Cloud Music's Degree of Operating Leverage distribution charts can be found below:

* The bar in red indicates where NetEase Cloud Music's Degree of Operating Leverage falls into.


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NetEase Cloud Music Degree of Operating Leverage Calculation

NetEase Cloud Music's Degree of Operating Leverage for the quarter that ended in Dec. 2024 is calculated as:

Degree of Operating Leverage=% Change in EBIT**/% Change in Revenue
=( 1676.773 (Dec. 2024) / 840.018 (Dec. 2023) - 1 )/( 8488.149 (Dec. 2024) / 8604.75 (Dec. 2023) - 1 )
=0.9961/-0.0136
=-73.51***

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.


NetEase Cloud Music  (HKSE:09899) Degree of Operating Leverage Explanation

Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.

A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.

Be Aware

The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.


NetEase Cloud Music Degree of Operating Leverage Related Terms

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NetEase Cloud Music Business Description

Traded in Other Exchanges
N/A
Address
No. 353 Benjing Avenue, Room 1201, Block A, Hangzhou International Expo Center, Qianjiang Century City, Xiaoshan District, Zhejiang Province, Hangzhou, CHN
Cloud Music is the second-largest online music service provider in China, founded in 2013 by NetEase. NetEase currently holds approximately 58% of Cloud Music's equity stake and controls 90% of its voting power. The platform's business model is similar to its main competitor, Tencent Music, as both offer music streaming services along with social entertainment features like live streaming to engage users and drive additional revenue.
Executives
Gic Private Limited 2501 Other
Gic (ventures) Pte. Ltd. 2201 Interest of corporation controlled by you
Gic Special Investments Private Limited 2102 Investment manager
Ding William Lei
Netease, Inc.
Shining Globe Holding Limited
Tmf (cayman) Ltd.
Alibaba Group Holding Limited 2201 Interest of corporation controlled by you
Taobao China Holding Limited 2101 Beneficial owner
Taobao Holding Limited 2201 Interest of corporation controlled by you
Shining Globe International Limited 2201 Interest of corporation controlled by you

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