Southeast Asia Leading Position Sustained; Market Share in China and Other Markets Rises Steadily

HONG KONG, Aug. 20, 2026 /PRNewswire/ -- J&T Global Express Limited ("J&T Express" or "J&T" or the "Company", stock code: 01519.HK), a global logistics service provider, today announced its Interim Results 2026 ("1H2026"). In 1H2026, the Company sustained steady development across its global business, providing solid momentum for overall business growth. Revenue reached US$7.67 billion, up 39.5% YoY. Revenue from express delivery services reached US$7.46 billion, up 39.6% YoY.

In 1H2026, the Company's total parcel volume reached 17.50 billion, up 25.1% YoY. In the second quarter, the Company's global average daily parcel volume exceeded 100 million for the first time, marking a new stage in the Company's fulfillment scale. Alongside scale expansion, the Company's profitability improved significantly. Adjusted net profit reached US$350.6 million, up 124.3% YoY, while adjusted EBIT reached US$433.6 million, up 121.7% YoY. The Group's adjusted EBIT per parcel also achieved notable growth, reflecting the benefits of economies of scale, cost control and customer structure optimization. In June 2026, the Company was included as a constituent stock of the Hang Seng Index, officially becoming a Hong Kong blue-chip company.

Dylan Tey, Chief Financial Officer of J&T Express, said: "In 1H2026, the Company expanded its revenue base and significantly strengthened profitability. The Group's adjusted EBIT per parcel reached US$0.025, up 77% YoY. The improvement in both revenue and profitability was driven by parcel volume growth supported by the globalization of e-commerce and diversified customer expansion, as well as continued improvements in service quality and operational efficiency. In 1H2026, the Group's operating cash flow reached US$635.5 million, up 50.9% YoY. As of the end of the reporting period, the Group maintained ample cash resources, with cash and cash equivalents, restricted cash and bank wealth management products totaling US$2.91 billion. We have always placed great emphasis on shareholder returns. In 1H2026, the Company completed the repurchase of 99.318 million shares, and on June 25 announced an increase in the size of its new share repurchase plan to HK$2.0 billion."

Market Share in Southeast Asia Rises Further; Leadership Position Remains Solid

Southeast Asia was an important driver of J&T's business growth in the first half of the year. In 1H2026, parcel volume in Southeast Asia reached 5.52 billion, up 71.2% YoY, with average daily parcel volume reaching 30.50 million. According to Frost & Sullivan, by parcel volume, the Company has ranked first in the Southeast Asian market for six consecutive years since 2020, with its leading position further strengthened.

The Company continued to capture opportunities arising from regional e-commerce and social commerce development. Leveraging its extensive network coverage, stable fulfillment capabilities and localized operating experience, J&T strengthened its regional service capabilities. As of June 30, 2026, the Company operated 127 sorting centers in Southeast Asia, with the number of automated sorting lines increasing by 11 from the end of 2025 to 75, providing strong support for regional parcel volume growth and service quality improvement. At the same time, the Company advanced the development of last-mile automation capabilities in Southeast Asia by equipping outlets with automated equipment, improving frontline efficiency and reducing overall operating costs.

The Company also actively expanded its non-platform business, covering diversified customer groups such as social commerce merchants, online businesses of chain brands, enterprise customers and individual parcel customers. It also promoted time-definite products such as same-day and next-day delivery for non-platform customers, improved door-to-door pickup coverage, upgraded outlet appearances, and enhanced courier service evaluation mechanisms to support more diversified fulfillment scenarios.

China Market Grows Steadily amid High-Quality Industry Development

In China, the industry has entered a high-quality development cycle, while J&T has focused on service quality, network stability and end-to-end cost optimization, with market share extending its gains. In 1H2026, parcel volume in China reached 11.615 billion, up 9.6% YoY, with average daily parcel volume reaching 64.20 million. According to Frost & Sullivan data, by parcel volume, the Company's market share in China increased to 11.6%, up 0.5 percentage points YoY.

The Company continued to strengthen its network capabilities, helping network partners improve their market expansion, customer service and overall operating capabilities. Through enhanced value-added services such as door-to-door service, dedicated customer service, priority service channels and the "Tuyouda" service, the Company improved service adaptability and response efficiency. In terms of business structure, the Company actively expanded diversified customer groups, including brand customers, individual parcel customers and industrial belt customers, and deepened its presence in key industrial belts such as footwear, apparel and women's fashion, providing customized solutions for merchants' core needs such as packaging protection and pickup timeliness.

In smart logistics, the Company expanded the deployment of unmanned delivery vehicles in China. As of June 30, 2026, more than 1,900 unmanned delivery vehicles had been deployed across the network, up 87% from the end of 2025. The Company also deepened the application of AI to further improve service experience and operating efficiency.

Other Markets Maintain Rapid Growth; Localized Partnerships Continue to Deepen

In Other Markets, the Company maintained rapid business growth. In 1H2026, parcel volume in Other Markets reached 365 million, up 119.9% YoY. Frost & Sullivan data shows that, by parcel volume, the Company's market share in Other Markets increased from 6.2% in the first half of 2025 to 8.9%.

The Company seized e-commerce development and cross-border logistics opportunities in regions such as Latin America and the Middle East, deepening cooperation with global e-commerce platforms and short-video livestreaming platforms including TikTok, SHEIN, Temu, Kwai and AliExpress. It also strengthened its cooperation with local e-commerce platforms, deepening cooperation with Mercado Libre in Brazil and Mexico and continuing to reinforce partnerships with Noon and Salla in the Middle East, further expanding its local business opportunities.

As of June 30, 2026, the Company had 52 sorting centers and more than 2,700 outlets in Other Markets, and had deployed 14 automated sorting lines. The Company actively explored flexible last-mile fulfillment models tailored to the needs of different markets, working with market players possessing local resources and operational experience to address fulfillment challenges in complex market environments. At the same time, by leveraging mature experience accumulated in China and Southeast Asia, J&T improved local network coverage, operating efficiency and service quality to better capture opportunities arising from e-commerce development and growing express delivery demand in regions such as Latin America.

From the perspective of global network layout and transportation capabilities, in the first half of 2026, the Company operated 260 sorting centers globally, had approximately 19,800 outlets, 435 automated sorting lines and approximately 13,380 line-haul vehicles, including approximately 8,500 self-owned line-haul vehicles. To meet customer needs, the Company actively expanded service scenarios including cross-border e-commerce, brand customers, non-platform parcel business and fulfillment warehouses, extending its fulfillment service chain. The Company currently has a total of 272 warehouses worldwide, with a total area of over 1.01 million square meters.

Charles Hou, Group Vice President of J&T Express, said: "In 1H2026, J&T achieved strong growth in global parcel volume. The scale benefits and fulfillment capabilities of J&T's global network continued to strengthen, with profitability also improving. We are committed to strengthening operating quality and efficiency to drive steady business scale expansion. In the second quarter, the Company's global average daily parcel volume exceeded 100 million for the first time. Looking ahead, we will tailor our approach to the development stage of each market, stay guided by customer needs, continue to refine service quality, capture opportunities from global expansion, and drive steady, long-term growth across our global business."

HANGZHOU, China, Aug. 20, 2026 /PRNewswire/ -- Youdao, Inc. ("Youdao" or the "Company") (NYSE: DAO), an AI solutions provider specializing in learning and advertising, today announced its unaudited financial results for the second quarter ended June 30, 2026.

Second Quarter 2026 Financial Highlights

• Total net revenues were RMB1.5 billion (US$216.2 million), representing a 3.5% increase from the same period in 2025.
  - Net revenues from learning services were RMB795.6 million (US$117.3 million), representing a 20.9% increase from the same period in 2025.
  - Net revenues from smart devices were RMB86.8 million (US$12.8 million), representing a 31.5% decrease from the same period in 2025.
  - Net revenues from online marketing services were RMB584.4 million (US$86.1 million), representing a 7.7% decrease from the same period in 2025.
• Gross margin was 48.9%, compared with 43.0% for the same period in 2025.
• Income from operations was RMB111.5 million (US$16.4 million), increasing by nearly 2.9 times from the same period in 2025.
• Basic and diluted net income per American depositary share ("ADS") attributable to ordinary shareholders were RMB0.62 (US$0.09) and RMB0.61 (US$0.09), respectively, compared with basic and diluted net loss per ADS attributable to ordinary shareholders of RMB0.15 for the same period of 2025. Non-GAAP basic and diluted net income per ADS attributable to ordinary shareholders were RMB0.76 (US$0.11) and RMB0.75 (US$0.11), respectively, compared with RMB0.11 and RMB0.10 for the same period of 2025.

"We delivered another strong quarter, with continued revenue growth, record operating profit and robust operating cash flow, marking our eighth consecutive quarter of operating profitability," said Dr. Feng Zhou, Chief Executive Officer and Director of Youdao. "These results reflect the progress we are making toward healthier and more sustainable growth."

"AI is increasingly translating into tangible business results across Youdao. Learning services maintained strong growth, supported by Youdao Lingshi and our expanding portfolio of AI-driven subscription products, while our disciplined focus on higher-quality opportunities further improved the profitability of online marketing services. With the continued advancement of Confucius 4 and our AI Agent portfolio, we will deepen the application of AI across learning and advertising to enhance user experience, improve operating efficiency and drive sustainable growth," Dr. Zhou concluded.

Second Quarter 2026 Financial Results

Net Revenues 

Net revenues for the second quarter of 2026 were RMB1.5 billion (US$216.2 million), representing a 3.5% increase from RMB1.4 billion for the same period of 2025.

Net revenues from learning services were RMB795.6 million (US$117.3 million) for the second quarter of 2026, representing a 20.9% increase from RMB657.8 million for the same period of 2025. The year-over-year increase was primarily driven by the strong momentum of tutoring services compared with the same period of 2025.

Net revenues from smart devices were RMB86.8 million (US$12.8 million) for the second quarter of 2026, representing a 31.5% decrease from RMB126.8 million for the same period of 2025, primarily due to a decline in demand for smart learning devices.

Net revenues from online marketing services were RMB584.4 million (US$86.1 million) for the second quarter of 2026, representing a 7.7% decrease from RMB632.9 million for the same period of 2025. The year-over-year decrease reflects Youdao's disciplined, strategic approach to engagement acceptance, which places greater emphasis on higher ROI (return on investment) engagements. Youdao believes this strategy has enhanced the overall operational efficiency of its business.

Gross Profit and Gross Margin

Gross profit for the second quarter of 2026 was RMB716.9 million (US$105.7 million), representing a 17.6% increase from RMB609.4 million for the same period of 2025. Gross margin was 48.9% for the second quarter of 2026, compared with 43.0% for the same period of 2025.

Gross margin for learning services was 65.5% for the second quarter of 2026, compared with 59.8% for the same period of 2025. The improvement was primarily attributable to improved economies of scale resulting from increased revenues from learning services.

Gross margin for smart devices was 32.8% for the second quarter of 2026, compared with 41.5% for the same period of 2025. The decrease was mainly attributable to increased bill-of-materials cost for smart devices.

Gross margin for online marketing services was 28.7% for the second quarter of 2026, compared with 25.8% for the same period of 2025.

Operating Expenses

Total operating expenses for the second quarter of 2026 were RMB605.3 million (US$89.2 million), compared with RMB580.6 million for the same period of last year.

Sales and marketing expenses for the second quarter of 2026 were RMB424.1 million (US$62.5 million), representing an increase of 5.5% from RMB401.8 million for the same period of 2025. This increase was primarily driven by increased sales and marketing efforts associated with learning services.

Research and development expenses for the second quarter of 2026 were RMB142.0 million (US$20.9 million), representing an increase of 10.7% from RMB128.3 million for the same period of 2025. The increase was primarily driven by Youdao's increased investments in cutting-edge AI technology to enhance product and service quality.

General and administrative expenses for the second quarter of 2026 were RMB39.2 million (US$5.8 million), representing a decrease of 22.3% from RMB50.4 million for the same period of 2025. The decrease was mainly attributable to a decrease in expected credit losses on the Company's accounts receivables.

Income from Operations

As a result of the foregoing, income from operations for the second quarter of 2026 was RMB111.5 million (US$16.4 million), increasing by nearly 2.9 times from RMB28.8 million for the same period in 2025. The margin of income from operations was 7.6%, compared with 2.0% for the same period of last year.

Net Income/(Loss) Attributable to Youdao's Ordinary Shareholders

Net income attributable to Youdao's ordinary shareholders for the second quarter of 2026 was RMB73.8 million (US$10.9 million), compared with net loss attributable to Youdao's ordinary shareholders of RMB17.8 million for the same period of last year. Non-GAAP net income attributable to Youdao's ordinary shareholders for the second quarter of 2026 was RMB90.6 million (US$13.4 million), surging over sevenfold from RMB12.5 million for the same period of last year.

Basic and diluted net income per ADS attributable to ordinary shareholders for the second quarter of 2026 were RMB0.62 (US$0.09) and RMB0.61 (US$0.09), respectively, compared with basic and diluted net loss per ADS attributable to ordinary shareholders of RMB0.15 for the same period of 2025. Non-GAAP basic and diluted net income per ADS attributable to ordinary shareholders were RMB0.76 (US$0.11) and RMB0.75 (US$0.11), respectively, compared with RMB0.11 and RMB0.10 for the same period of 2025.

Other Information

As of June 30, 2026, Youdao's cash, cash equivalents, current and non-current restricted cash, and short-term investments totaled RMB849.3 million (US$125.2 million), compared with RMB743.2 million as of December 31, 2025. For the second quarter of 2026, net cash provided by operating activities was RMB334.2 million (US$49.3 million). Youdao's ability to continue as a going concern is dependent on management's ability to implement an effective business plan amid a changing regulatory environment, generate operating cash flows, and secure external financing for future development. As of June 30, 2026, Youdao has received various forms of financial support from NetEase Group, including, among others, RMB878.0 million in a short-term loan, and US$118.9 million in long-term loans maturing on March 31, 2030, drawn from a US$300.0 million revolving loan facility.

As of June 30, 2026, the Company's contract liabilities, which mainly consisted of deferred revenues generated from Youdao's learning services, were RMB835.1 million (US$123.1 million), compared with RMB847.7 million as of December 31, 2025.

Share Repurchase Program

On November 17, 2022, the Company announced that its Board of Directors had authorized the Company to adopt a share repurchase program in accordance with applicable laws and regulations for up to US$20.0 million of its Class A ordinary shares (including in the form of ADSs) during a period of up to 36 months beginning on November 18, 2022. This amount was subsequently increased to US$40.0 million in August 2023. In November 2025 and August 2026, the Board approved amendments to this Program, each extending its expiration date by one year, ultimately to November 17, 2027. As of June 30, 2026, the Company had repurchased a total of approximately 7.5 million ADSs in the open market under the share repurchase program for a total consideration of approximately US$33.8 million.

Announcement on Change in Management

The Company also announced today that Mr. William Lei Ding has resigned from his position as a director of the Company's Board of Directors, effective August 18, 2026, for personal reasons. Mr. Jinhai Chen was appointed as a director of the Company's Board of Directors, effective August 18, 2026. 

Jinhai Chen currently serves as vice president of NetEase Cloud Music Inc. (HKEX: 9899). Prior to joining NetEase Cloud Music in 2020, Mr. Chen served as technical director at Tencent Holdings Limited from 2014 to 2020. Mr. Chen received his master's degree in information and communication engineering from Harbin Institute of Technology.

Conference Call

Youdao's management team will host a teleconference call with a simultaneous webcast at 6:00 a.m. Eastern Time on Thursday, August 20, 2026 (Beijing/Hong Kong Time: 6:00 p.m., Thursday, August 20, 2026). Youdao's management will be on the call to discuss the financial results and answer questions.

Dial-in details for the earnings conference call are as follows:

A live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.youdao.com.

A replay of the conference call will be accessible by phone one hour after the conclusion of the live call at the following numbers, until August 27, 2026:

About Youdao, Inc. 

Youdao, Inc. (NYSE: DAO) is strategically positioned as an AI solutions provider specializing in learning and advertising. Youdao mainly offers learning services, online marketing services and smart devices – all powered by advanced technologies. Youdao was founded in 2006 as part of NetEase, Inc. (NASDAQ: NTES; HKEX: 9999), a leading internet technology company in China.

For more information, please visit: http://ir.youdao.com.

Non-GAAP Measures

Youdao considers and uses non-GAAP financial measures, such as non-GAAP net income attributable to the Company's ordinary shareholders and non-GAAP basic and diluted net income per ADS, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Youdao defines non-GAAP net income attributable to the Company's ordinary shareholders as net income attributable to the Company's ordinary shareholders excluding share-based compensation expenses, impairment of long-term investments, gain from fair value change of long-term investment and adjustment for GAAP to non-GAAP reconciling item for the loss/(income) attributable to noncontrolling interests. Non-GAAP net income attributable to the Company's ordinary shareholders enables Youdao's management to assess its operating results without considering the impact of these items, which are non-cash charges in nature. Youdao believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating the Company's current operating performance and prospects in the same manner as management does, if they so choose.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools, which possibly do not reflect all items of expense that affect our operations. In addition, the non-GAAP financial measures Youdao uses may differ from the non-GAAP measures uses by other companies, including peer companies, and therefore their comparability may be limited.

For more information on these non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this release.

The accompanying table has more details on the reconciliation between our GAAP financial measures that are mostly directly comparable to non-GAAP financial measures. Youdao encourages you to review its financial information in its entirety and not rely on a single financial measure.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.7851 to US$1.00, the exchange rate on June 30, 2026 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred to could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Further information regarding such risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

For investor and media inquiries, please contact:

In China:
Jeffrey Wang
Youdao, Inc.
Tel: +86-10-8255-8163 ext. 89980
E-mail: [email protected]

Piacente Financial Communications
Helen Wu
Tel: +86-10-6508-0677
E-mail: [email protected]

In the United States:
Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: [email protected]

HONG KONG, Aug. 20, 2026 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced its unaudited financial results for the second quarter ended June 30, 2026.

In this results announcement, "we", "us", and "our" refer to the Company and where the context otherwise requires, the Group.

"Our robust performance in the first half of 2026 reflects players' growing enthusiasm for both our newly launched and established games, underscoring our ability to create distinctive and refreshing experiences with lasting appeal," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "As we continue to strengthen both our live game operations and new title pipeline, we are sharpening our focus on original gameplay, cutting-edge technology and deeper global reach to support our enduring growth.

"Looking ahead, we will remain committed to creating original content that shapes industry trends, building evergreen franchises, and cultivating vibrant communities that sustain player engagement. Backed by disciplined execution and an expanding global presence, we aim to keep pushing creative boundaries, delivering exceptional gaming experiences and creating long-term value for our players, partners and shareholders," Mr. Ding concluded.

FINANCIAL HIGHLIGHTS

Second Quarter 2026 Financial Highlights

• Net revenues were RMB30.1 billion (US$4.4 billion), an increase of 7.9% compared with the same quarter of 2025.
  • Games and related value-added services net revenues were RMB25.0 billion (US$3.7 billion), an increase of 9.7% compared with the same quarter of 2025.
  • Youdao net revenues were RMB1.5 billion (US$216.2 million), an increase of 3.5% compared with the same quarter of 2025.
  • NetEase Cloud Music net revenues were RMB2.0 billion (US$291.4 million), which was relatively stable compared with the same quarter of 2025.
  • Innovative businesses and others net revenues were RMB1.6 billion (US$241.6 million), a decrease of 3.5% compared with the same quarter of 2025.
• Gross profit was RMB21.2 billion (US$3.1 billion), an increase of 17.5% compared with the same quarter of 2025.
• Total operating expenses were RMB9.1 billion (US$1.3 billion), an increase of 1.5% compared with the same quarter of 2025.
• Net income attributable to the Company's shareholders was RMB7.0 billion (US$1.0 billion). Non-GAAP net income attributable to the Company's shareholders was RMB7.7 billion (US$1.1 billion).^[1]
• Basic net income per share was US$0.32 (US$1.61 per ADS). Non-GAAP basic net income per share was US$0.36 (US$1.78 per ADS).^[1]

Six Months Ended June 30, 2026 Financial Highlights

• Net revenues were RMB60.7 billion (US$8.9 billion), an increase of 7.0% compared with the same period of 2025.
  • Games and related value-added services net revenues were RMB50.7 billion (US$7.5 billion), an increase of 8.3% compared with the same period of 2025.
  • Youdao net revenues were RMB2.8 billion (US$414.9 million), an increase of 3.6% compared with the same period of 2025.
  • NetEase Cloud Music net revenues were RMB4.0 billion (US$583.4 million), an increase of 3.4% compared with the same period of 2025.
  • Innovative businesses and others net revenues were RMB3.2 billion (US$469.9 million), a decrease of 4.0% compared with the same period of 2025.
• Gross profit was RMB42.4 billion (US$6.3 billion), an increase of 16.2% compared with the same period of 2025.
• Total operating expenses were RMB17.7 billion (US$2.6 billion), an increase of 3.9% compared with the same period of 2025.
• Net income attributable to the Company's shareholders was RMB17.7 billion (US$2.6 billion). Non-GAAP net income attributable to the Company's shareholders was RMB19.0 billion (US$2.8 billion). ^[1]
• Basic net income per share was US$0.81 (US$4.06 per ADS). Non-GAAP basic net income per share was US$0.88 (US$4.38 per ADS).^[1]

BUSINESS OVERVIEW

We continue to drive innovation across both newly launched and established titles, while further advancing our pipeline of titles in development.

Below are some recent highlights from our key products and services:

Games and related value-added services

The Fantasy Westward Journey franchise, Identity V, Eggy Party, Sword of Justice and Where Winds Meet sustained solid momentum through ongoing content updates, gameplay innovation and vibrant community activities.

We also advanced our global strategy and enhanced player engagement through strong live operations. For example, Where Winds Meet and Marvel Rivals further broadened their international reach with a steady stream of fresh content and community-focused initiatives in various markets including North America and Europe.

With respect to our pipeline of new titles, Sea of Remnants launched in China in July 2026, while development of Ananta and Blood Message remained on track, strengthening our innovative pipeline across diverse genres, gameplay and markets.

Youdao

Youdao advanced its AI-native strategy and deepened AI-driven innovation across its ecosystem. In the second quarter, it launched the large language model, Confucius 4, which delivers leading mathematical reasoning capabilities at lower inference costs compared to its previous version. Youdao also advanced its AI agent capabilities toward the autonomous execution of complex work and learning tasks.

NetEase Cloud Music

NetEase Cloud Music further developed its music-centric ecosystem by nurturing its distinctive community and enriching its differentiated content offering with original music, thereby driving stronger community engagement. It also further improved music-oriented monetization through continued growth in subscription-based memberships.

Innovative businesses and others

Innovative businesses and others remained focused on sustainable development and efficient operations, with Yanxuan maintaining leading positions on major e-commerce platforms in China across its key categories, including pet food, home scents and home goods.

FINANCIAL REVIEW

Second Quarter 2026 Financial Results

Net Revenues

Net revenues for the second quarter of 2026 were RMB30.1 billion (US$4.4 billion), compared with RMB30.6 billion and RMB27.9 billion for the preceding quarter and the same quarter of 2025, respectively.

Net revenues from games and related value-added services were RMB25.0 billion (US$3.7 billion) for the second quarter of 2026, compared with RMB25.7 billion and RMB22.8 billion for the preceding quarter and the same quarter of 2025, respectively. Net revenues from the operation of online games accounted for approximately 97.7% of the segment's net revenues for the second quarter of 2026, compared with 97.5% and 97.1% for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter decrease was mainly due to a slight decline in net revenues from certain self-developed and licensed games. The year-over-year increase was attributable to higher net revenues from self-developed games, such as the Fantasy Westward Journey franchise and Where Winds Meet.

Net revenues from Youdao were RMB1.5 billion (US$216.2 million) for the second quarter of 2026, compared with RMB1.3 billion and RMB1.4 billion for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter and year-over-year increases were mainly attributable to higher net revenues from its learning services.

Net revenues from NetEase Cloud Music were RMB2.0 billion (US$291.4 million) for the second quarter of 2026, remaining stable compared with the preceding quarter and the same quarter of 2025.

Net revenues from innovative businesses and others were RMB1.6 billion (US$241.6 million) for the second quarter of 2026, compared with RMB1.5 billion and RMB1.7 billion for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter increase was mainly attributable to higher net revenues from e-commerce business and several other businesses included within the segment. The year-over-year decrease was mainly due to decreased net revenues from the e-commerce business.

Cost of Revenues

Cost of revenues for the second quarter of 2026 was RMB8.9 billion (US$1.3 billion), compared with RMB9.4 billion and RMB9.8 billion for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter decrease was mainly due to lower revenue-sharing costs. The year-over-year decrease was mainly due to lower revenue-sharing and product costs.

Gross Profit

Gross profit for the second quarter of 2026 was RMB21.2 billion (US$3.1 billion), compared with RMB21.2 billion and RMB18.1 billion for the preceding quarter and the same quarter of 2025, respectively.

Operating Expenses

Total operating expenses for the second quarter of 2026 were RMB9.1 billion (US$1.3 billion), compared with RMB8.6 billion and RMB9.0 billion for the preceding quarter and the same quarter of 2025, respectively. The quarter-over-quarter increase was primarily due to increased marketing expenditures, staff-related costs and research and development expenditures. The year-over-year increase was primarily due to increased research and development expenditures.

Other Income/(Expenses)

Other income/(expenses) consisted of net investment income/(loss), interest income, net exchange gains/(losses) and others. The quarter-over-quarter and year-over-year fluctuations in other income/(expenses) were mainly due to a decline in the fair value of equity security investments and impairment provisions made during the second quarter of 2026.

Income Tax

The Group recorded a net income tax charge of RMB2.5 billion (US$362.4 million) for the second quarter of 2026, compared with RMB2.5 billion and RMB1.6 billion for the preceding quarter and the same quarter of 2025, respectively. The effective tax rate for the second quarter of 2026 was 25.5%, compared with 18.9% and 14.7% for the preceding quarter and the same quarter of 2025, respectively. The effective tax rate represents certain estimates by the Group as to the tax obligations and benefits applicable to it in each quarter.

Net Income and Non-GAAP Net Income

Net income attributable to the Company's shareholders totaled RMB7.0 billion (US$1.0 billion) for the second quarter of 2026, compared with RMB10.7 billion and RMB8.6 billion for the preceding quarter and the same quarter of 2025, respectively.

Basic net income was US$0.32 per share (US$1.61 per ADS) for the second quarter of 2026, compared with US$0.49 per share (US$2.46 per ADS) and US$0.40 per share (US$1.99 per ADS) for the preceding quarter and the same quarter of 2025, respectively.

Non-GAAP net income attributable to the Company's shareholders totaled RMB7.7 billion (US$1.1 billion) for the second quarter of 2026, compared with RMB11.3 billion and RMB9.5 billion for the preceding quarter and the same quarter of 2025, respectively.

Non-GAAP basic net income was US$0.36 per share (US$1.78 per ADS) for the second quarter of 2026, compared with US$0.52 per share (US$2.60 per ADS) and US$0.44 per share (US$2.20 per ADS) for the preceding quarter and the same quarter of 2025, respectively.

Six Months Ended June 30, 2026 Financial Results

Net Revenues

Net revenues for the six months ended June 30, 2026 were RMB60.7 billion (US$8.9 billion), compared with RMB56.7 billion for the same period of 2025.

Net revenues from games and related value-added services were RMB50.7 billion (US$7.5 billion) for the six months ended June 30, 2026, compared with RMB46.9 billion for the same period of 2025. Net revenues from the operation of online games accounted for approximately 97.6% of the segment's net revenues for the six months ended June 30, 2026, compared with approximately 97.3% for the same period of 2025. The increase was attributable to higher net revenues from self-developed games, such as the Fantasy Westward Journey franchise, Where Winds Meet and Eggy Party.

Net revenues from Youdao were RMB2.8 billion (US$414.9 million) for the six months ended June 30, 2026, compared with RMB2.7 billion for the same period of 2025. The increase was mainly attributable to higher net revenues from its learning services and online marketing services, partially offset by a decrease in net revenues from smart devices.

Net revenues from NetEase Cloud Music were RMB4.0 billion (US$583.4 million) for the six months ended June 30, 2026, compared with RMB3.8 billion for the same period of 2025. The increase was mainly attributable to higher net revenues from online music services, driven by growth in sales of membership subscriptions.

Net revenues from innovative businesses and others were RMB3.2 billion (US$469.9 million) for the six months ended June 30, 2026, compared with RMB3.3 billion for the same period of 2025. The decrease was mainly due to a decline in net revenues from the e-commerce business.

Cost of Revenues

Cost of revenues for the six months ended June 30, 2026 was RMB18.3 billion (US$2.7 billion), compared with RMB20.2 billion for the same period of 2025. The decrease was mainly due to lower revenue-sharing and product costs.

Gross Profit

Gross profit for the six months ended June 30, 2026 was RMB42.4 billion (US$6.3 billion), compared with RMB36.5 billion for the same period of 2025.

Operating Expenses

Total operating expenses for the six months ended June 30, 2026 were RMB17.7 billion (US$2.6 billion), compared with RMB17.0 billion for the same period of 2025. The increase was primarily attributable to higher marketing and research and development expenditures for games and related value-added services.

Other Income/(Expenses)

Other income/(expenses) consisted of net investment income/(loss), interest income, net exchange gains/(losses) and others. The fluctuation in other income/(expenses) was mainly due to a decline in the fair value of equity security investments, increased net exchange losses, and impairment provisions made during the six months ended June 30, 2026.

Income Tax

The Group recorded a net income tax charge of RMB5.0 billion (US$734.3 million) for the six months ended June 30, 2026, compared with RMB3.5 billion for the same period of 2025. The effective tax rate for the six months ended June 30, 2026 was 21.7%, compared with 15.0% for the same period of 2025. The effective tax rate represents certain estimates by the Group as to the tax obligations and benefits applicable to it in each period.

Net Income and Non-GAAP Net Income

Net income attributable to the Company's shareholders totaled RMB17.7 billion (US$2.6 billion) for the six months ended June 30, 2026, compared with RMB18.9 billion for the same period of 2025.

Basic net income was US$0.81 per share (US$4.06 per ADS) for the six months ended June 30, 2026, compared with US$0.88 per share (US$4.38 per ADS) for the same period of 2025.

Non-GAAP net income attributable to the Company's shareholders totaled RMB19.0 billion (US$2.8 billion) for the six months ended June 30, 2026, compared with RMB20.8 billion for the same period of 2025.

Non-GAAP basic net income was US$0.88 per share (US$4.38 per ADS) for the six months ended June 30, 2026, compared with US$0.96 per share (US$4.81 per ADS) for the same period of 2025.

OTHER FINANCIAL INFORMATION

As of June 30, 2026, the Company's net cash (total cash and cash equivalents, current and non-current time deposits and restricted cash, as well as short-term investments balance, minus loans) totaled RMB167.5 billion (US$24.7 billion), compared with RMB163.5 billion as of December 31, 2025. Net cash provided by operating activities was RMB10.0 billion (US$1.5 billion) for the second quarter of 2026, compared with RMB13.7 billion and RMB10.9 billion for the preceding quarter and the second quarter of 2025, respectively.

EXCHANGE RATE INFORMATION

The United States dollar (US$) amounts disclosed in this announcement are presented solely for the convenience of the reader. The percentages stated are calculated based on RMB.

The conversion of Renminbi (RMB) into US$ is based on the noon buying rate of US$1.00 = RMB6.7851 on the last trading day of June 2026 (June 30, 2026) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on June 30, 2026, or at any other certain date.

CONFERENCE CALL

NetEase's management team will host a teleconference call with a simultaneous webcast at 8:00 a.m. Eastern Time on Thursday, August 20, 2026 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, August 20, 2026). NetEase's management will be on the call to discuss the results and answer questions.

Interested parties may participate in the conference call by dialing 1-914-202-3258 and providing conference ID: 10056362, 15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-855-883-1031 and entering PIN: 10056362. The replay will be available through August 27, 2026.

This call will be webcast live, and the replay will be available for 12 months. Both will be available on NetEase's Investor Relations website at http://ir.netease.com/.

ABOUT NETEASE, INC.

NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase") is a leading internet and game services provider centered around premium content. With extensive offerings across its expanding gaming ecosystem, the Company develops and operates some of the most popular and longest-running mobile and PC games available in China and globally.

Powered by one of the largest in-house game R&D teams focused on mobile, PC and console, NetEase creates superior gaming experiences, inspires players, and passionately delivers value for its thriving community worldwide. By infusing play with culture, and education with technology, NetEase transforms gaming into a meaningful vehicle to build a more entertaining and enlightened world.

Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning and advertising solutions provider, and NetEase Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well as Yanxuan, NetEase's private-label consumer lifestyle brand.

For more information, please visit: http://ir.netease.com/.

Contact for Media and Investors:

Email: [email protected] 

FORWARD-LOOKING STATEMENTS

This announcement contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions. In addition, statements that are not historical facts, including statements about NetEase's strategies and business plans, its expectations regarding the growth of its business and its revenue and the quotations from management in this announcement are or contain forward-looking statements. NetEase may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the online games market will not continue to grow or that NetEase will not be able to maintain its position in that market in China or globally; risks associated with NetEase's business and operating strategies and its ability to implement such strategies; NetEase's ability to develop and manage its operations and business; competition for, among other things, capital, technology and skilled personnel; potential changes in regulatory environment in the markets where NetEase operates, including policy or rule changes on taxation; the risk that NetEase may not be able to continuously develop new and creative online services or that NetEase will not be able to set, or follow in a timely manner, trends in the market; risks related to evolving economic cycles and geopolitical tensions, including the direct or indirect impacts of national trade, investment, protectionist, tax or other laws or policies as well as export controls and economic or trade sanctions; risks related to the expansion of NetEase's businesses and operations internationally; risks associated with cybersecurity threats or incidents; and fluctuations in foreign currency exchange rates that could adversely affect NetEase's business and financial results. Further information regarding these and other risks is included in NetEase's filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. NetEase does not undertake any obligation to update this forward-looking information, except as required under applicable law.

NON-GAAP FINANCIAL MEASURES

NetEase considers and uses non-GAAP financial measures, such as non-GAAP net income attributable to the Company's shareholders and non-GAAP basic and diluted net income per ADS and per share, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.

NetEase defines non-GAAP net income attributable to the Company's shareholders as net income attributable to the Company's shareholders excluding share-based compensation expenses. Non-GAAP net income attributable to the Company's shareholders enables NetEase's management to assess its operating results without considering the impact of share-based compensation expenses. NetEase believes that this non-GAAP financial measure provides useful information to investors in understanding and evaluating the Company's current operating performance and prospects in the same manner as management does, if they so choose. NetEase also believes that the use of this non-GAAP financial measure facilitates investors' assessment of its operating performance.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP net income attributable to the Company's shareholders is that it does not reflect all items of expense/income that affect the Company's operations. Share-based compensation expenses have been and may continue to be incurred in NetEase's business and are not reflected in the presentation of non-GAAP net income attributable to the Company's shareholders. In addition, the non-GAAP financial measures NetEase uses may differ from the non-GAAP measures used by other companies, including peer companies, and therefore their comparability may be limited.

NetEase compensates for these limitations by reconciling non-GAAP net income attributable to the Company's shareholders to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance. NetEase encourages you to review its financial information in its entirety and not rely on a single financial measure.

The unaudited reconciliation of GAAP and non-GAAP results is set out as follows in RMB and US$ (in thousands, except per share data or per ADS data):