NetEase Inc (NASDAQ:NTES) Q2 2025 Earnings Miss Revenue Estimates, Shares Drop 6% in Pre-Market Trading

NetEase Inc (NASDAQ:NTES) reported its second-quarter 2025 earnings, missing revenue estimates while matching earnings per share (EPS) expectations. The company’s performance has drawn a negative market reaction, with shares dropping over 6% in pre-market trading.

Earnings vs. Estimates

• Revenue: NetEase posted Q2 revenue of ¥27.93 billion ($3.85 billion), falling short of analyst expectations of ¥29.03 billion ($4.0 billion).
• EPS: The company reported earnings of ¥14.85 per share, slightly below the consensus estimate of ¥15.22.
• Market Reaction: The pre-market decline suggests investor disappointment, particularly with the revenue miss, despite EPS aligning closely with forecasts.

Full-Year and Q3 Outlook

Analysts project full-year 2025 revenue at ¥1.17 trillion ($161 billion) and Q3 sales at ¥29.42 billion ($4.05 billion). NetEase did not provide explicit forward guidance in its press release, leaving investors to rely on external estimates.

Key Takeaways from the Earnings Release

1. Gaming and Value-Added Services – The core segment remains a significant revenue driver, though growth may be slowing.
2. Youdao and Cloud Music – The company’s AI-powered learning (Youdao) and music streaming (Cloud Music) divisions continue to expand, but their contributions were not enough to offset the broader revenue shortfall.
3. Board Independence – NetEase recently appointed a new independent director, reinforcing corporate governance, though this had no immediate impact on earnings.

Market Sentiment and Performance

• Pre-Market Drop: The 6.6% decline reflects concerns over slowing revenue growth.
• Recent Performance: Over the past month, NTES shares had been relatively flat (+1.7%), indicating muted expectations ahead of earnings.

For a deeper dive into NetEase’s earnings history and future estimates, see NetEase Earnings & Estimates.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.