NetEase (NASDAQ:NTES) reported first-quarter results ahead of analyst expectations, although the company’s shares fell around 2% following the release as investors focused on broader earnings trends and future growth prospects.
The Chinese gaming and internet group posted adjusted earnings per share of RMB17.46, comfortably above analyst forecasts of RMB15.39.
Quarterly revenue reached RMB30.6 billion (US$4.4 billion), exceeding the consensus estimate of RMB29.65 billion and marking a 6.1% increase compared with the same period in 2025.
NetEase’s core gaming and value-added services division generated revenue of RMB25.7 billion (US$3.7 billion), up 6.9% year-on-year.
Revenue from NetEase Cloud Music rose 6.6% to RMB2.0 billion (US$287.2 million), while education technology unit Youdao recorded a 3.8% increase in revenue to RMB1.3 billion (US$195.4 million).
Meanwhile, revenue from innovative businesses and other operations declined 4.6% year-on-year to RMB1.5 billion (US$224.6 million).
Gross profit increased 14.8% to RMB21.2 billion (US$3.1 billion), while total operating expenses rose 6.5% to RMB8.6 billion (US$1.2 billion).
Adjusted net income attributable to shareholders reached RMB11.3 billion (US$1.6 billion), translating into adjusted basic earnings per ADS of US$2.56.
“For the first quarter of 2026, we delivered another solid quarter across our established gaming portfolio, while continuing to make steady progress advancing our pipeline of new titles,” said William Ding, Chief Executive Officer and Director of NetEase.
The company highlighted continued strong engagement across several major gaming franchises, including Fantasy Westward Journey, Identity V, Eggy Party, Sword of Justice and Where Winds Meet.
NetEase also pointed to ongoing progress in its international expansion strategy through titles such as Where Winds Meet and Marvel Rivals, while noting that Blizzard titles continued to operate steadily in the Chinese market.