NetEase achieved structural margin expansion with gross margins reaching 69.4% in 2026Q1, supported by a 6.1% year-over-year revenue growth trajectory.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 |
|---|
| Sales/Revenue | 114.39B | 112.63B | 105.3B | 103.47B | 96.5B | 87.61B | 73.67B | 59.24B | 51.18B | 44.44B | 38.18B | 22.8B | 11.71B | 9.2B | 8.2B | 7.29B | 5.51B | 3.76B | 3.08B | 2.21B | 2.16B | 1.61B | 903.6M | 542.23M | 220.89M | 28.31M | 65.05M | 15.62M |
| Revenue Growth % | 6.63% | 6.96% | 1.77% | 7.23% | 10.15% | 18.92% | 24.35% | 15.75% | 15.17% | 16.39% | 67.43% | 94.68% | 27.37% | 12.14% | 12.49% | 32.37% | 46.6% | 21.8% | 39.37% | 2.26% | 34.24% | 78.44% | 66.64% | 145.47% | 680.38% | -56.49% | 316.52% | - |
| Cost of Goods Sold | 39.25B | 40.22B | 39.49B | 40.4B | 43.73B | 40.64B | 34.68B | 27.69B | 38.75B | 28.19B | 16.52B | 9.4B | 3.26B | 2.48B | 2.58B | 2.37B | 972.37M | 952.23M | 559.61M | 415.45M | 381.3M | 275.24M | 183.8M | 85.48M | 71.66M | 60.07M | 32.18M | 11.12M |
| COGS % of Revenue | - | 35.71% | 37.5% | 39.05% | 45.32% | 46.38% | 47.08% | 46.73% | 75.72% | 63.44% | 43.26% | 41.22% | 27.85% | 26.95% | 31.44% | 32.54% | 17.65% | 25.35% | 18.14% | 18.77% | 17.62% | 17.07% | 20.34% | 15.76% | 32.44% | 212.22% | 49.47% | 71.19% |
| Gross Profit | 75.14B | 72.4B | 65.81B | 63.06B | 52.77B | 46.97B | 38.98B | 31.56B | 28.4B | 25.91B | 21.66B | 13.4B | 8.45B | 6.72B | 5.62B | 4.92B | 2.78B | 2.78B | 2.52B | 1.8B | 1.78B | 1.34B | 719.79M | 456.75M | 149.23M | -31.76M | 32.87M | 4.5M |
| Gross Margin % | 65.69% | 64.29% | 62.5% | 60.95% | 54.68% | 53.62% | 52.92% | 53.27% | 55.5% | 58.31% | 56.74% | 58.78% | 72.15% | 73.05% | 68.56% | 67.46% | 50.56% | 74.12% | 81.86% | 81.23% | 82.38% | 82.93% | 79.66% | 84.24% | 67.56% | -112.22% | 50.53% | 28.81% |
| Gross Profit Growth % | - | 10.02% | 4.35% | 19.51% | 12.34% | 20.49% | 23.54% | 11.1% | 9.61% | 19.61% | 61.63% | 58.6% | 25.81% | 19.47% | 14.32% | 76.63% | 0% | 10.28% | 40.45% | 0.83% | 33.35% | 85.77% | 57.59% | 206.07% | 569.81% | -196.63% | 630.63% | - |
| Operating Expenses | 37.09B | 36.57B | 36.22B | 35.35B | 33.14B | 30.55B | 24.44B | 17.76B | 20.51B | 13.76B | 9.03B | 6.13B | 3.69B | 2.37B | 1.91B | 1.59B | 761.14M | 781.28M | 610.42M | 592.23M | 503.18M | 360.31M | 272.28M | 129.76M | 145.21M | 197.89M | 200.75M | 57.76M |
| OpEx % of Revenue | - | 32.47% | 34.4% | 34.17% | 34.34% | 34.88% | 33.18% | 29.99% | 40.08% | 30.96% | 23.66% | 26.89% | 31.47% | 25.72% | 23.31% | 21.88% | 13.82% | 20.8% | 19.79% | 26.76% | 23.25% | 22.35% | 30.13% | 23.93% | 65.74% | 699.12% | 308.59% | 369.8% |
| Selling, General & Admin | 19.27B | 18.85B | 18.7B | 18.87B | 18.1B | 16.48B | 14.08B | 9.35B | 12.72B | 9.39B | 5.99B | 3.97B | 2.36B | 1.44B | 1.19B | 1.13B | 516.87M | 550.84M | 403.39M | 411.5M | 350.02M | 270.14M | 237.92M | 110.79M | 94.66M | 181.59M | 179.44M | 51.05M |
| SG&A % of Revenue | - | 16.73% | 17.76% | 18.24% | 18.76% | 18.81% | 19.11% | 15.79% | 24.85% | 21.13% | 15.68% | 17.42% | 20.17% | 15.7% | 14.55% | 15.49% | 9.38% | 14.66% | 13.08% | 18.59% | 16.17% | 16.75% | 26.33% | 20.43% | 42.85% | 641.55% | 275.84% | 326.84% |
| Research & Development | 17.81B | 17.72B | 17.52B | 16.48B | 15.04B | 14.08B | 10.37B | 8.41B | 7.79B | 4.37B | 3.05B | 2.16B | 1.32B | 921.62M | 718.32M | 465.49M | 244.27M | 230.44M | 207.02M | 180.73M | 153.16M | 90.17M | 34.36M | 19.12M | 13.81M | 11.17M | 12.66M | 5.73M |
| R&D % of Revenue | - | 15.73% | 16.64% | 15.93% | 15.59% | 16.07% | 14.08% | 14.2% | 15.23% | 9.84% | 7.98% | 9.47% | 11.3% | 10.02% | 8.76% | 6.38% | 4.44% | 6.13% | 6.71% | 8.17% | 7.08% | 5.59% | 3.8% | 3.53% | 6.25% | 39.47% | 19.47% | 36.71% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -149.01K | 36.74M | 5.13M | 8.64M | 975.27K |
| Operating Income | 38.05B | 35.83B | 29.58B | 27.71B | 19.63B | 16.42B | 14.54B | 13.79B | 9.98B | 12.99B | 12.63B | 7.27B | 4.77B | 4.35B | 3.71B | 3.32B | 2.54B | 2.02T | 1.91B | 1.21B | 1.28B | 976.82M | 447.51M | 326.84M | 4.02M | -231.93M | -167.87M | -53.26M |
| Operating Margin % | 33.26% | 31.82% | 28.1% | 26.78% | 20.34% | 18.74% | 19.74% | 23.28% | 19.5% | 29.24% | 33.08% | 31.89% | 40.68% | 47.33% | 45.26% | 45.59% | 46.2% | 53858.52% | 62.07% | 54.47% | 59.13% | 60.58% | 49.53% | 60.28% | 1.82% | -819.38% | -258.05% | -340.99% |
| Operating Income Growth % | - | 21.13% | 6.77% | 41.17% | 19.56% | 12.92% | 5.42% | 38.22% | -23.22% | 2.9% | 73.66% | 52.61% | 9.48% | 17.27% | 11.68% | 30.62% | -99.87% | 105586.6% | 58.81% | -5.8% | 31.02% | 118.28% | 36.92% | 8033.99% | 101.73% | -38.16% | -215.21% | - |
| EBITDA | 40.24B | 38.07B | 32B | 30.76B | 22.49B | 19.69B | 18B | 16.4B | 12.06B | 13.8B | 12.96B | 7.45B | 4.94B | 4.51B | 3.9B | 3.62B | 2.78B | 2.02T | 2.01B | 1.3B | 1.36B | 1.02B | 473.96M | 344.27M | 25.81M | -214.59M | -159.23M | -52.28M |
| EBITDA Margin % | 35.18% | 33.8% | 30.39% | 29.73% | 23.3% | 22.48% | 24.43% | 27.69% | 23.57% | 31.05% | 33.94% | 32.69% | 42.17% | 49.05% | 47.51% | 49.61% | 50.41% | 53862.35% | 65.02% | 58.95% | 62.76% | 63.12% | 52.45% | 63.49% | 11.68% | -758.13% | -244.77% | -334.75% |
| EBITDA Growth % | 15.85% | 18.97% | 4.02% | 36.81% | 14.19% | 9.43% | 9.7% | 36.01% | -12.58% | 6.49% | 73.8% | 50.91% | 9.5% | 15.78% | 7.73% | 30.26% | -99.86% | 100800.27% | 53.71% | -3.94% | 33.46% | 114.73% | 37.67% | 1233.83% | 112.03% | -34.77% | -204.56% | - |
| D&A (Non-Cash Add-back) | 2.19B | 2.24B | 2.42B | 3.06B | 2.86B | 3.28B | 3.46B | 2.61B | 2.08B | 801.8M | 327.51M | 182.45M | 174.46M | 158.36M | 184.51M | 293.24M | 232.17M | 143.58M | 90.96M | 99.11M | 78.37M | 40.9M | 26.45M | 17.43M | 21.79M | 17.34M | 8.64M | 975.26K |
| EBIT | 38.05B | 35.83B | 29.58B | 27.71B | 19.63B | 16.42B | 14.54B | 13.79B | 9.98B | 12.99B | 12.63B | 7.27B | 4.77B | 4.35B | 3.71B | 3.32B | 2.54B | 2.02B | 1.91B | 1.21B | 1.37B | 1.03B | 473.87M | 344M | 15.31M | -229.65M | -159.23M | -52.29M |
| Net Interest Income | 4.45B | 4.62B | 4.92B | 4.12B | 2.15B | 1.52B | 1.6B | 821.77M | 586.67M | 666.62M | 541.97M | 596.93M | 601.5M | 506.18M | 423.63M | 258.05M | 141M | 128.17M | 144.81M | 112.6M | 94.36M | 57.73M | 18.46M | 11.27M | 6.16M | 0 | 27.83M | 0 |
| Interest Income | 4.45B | 4.62B | 4.92B | 4.12B | 2.15B | 1.52B | 1.6B | 821.77M | 586.67M | 667.32M | 541.97M | 596.93M | 601.5M | 506.18M | 423.63M | 258.05M | 141M | 128.17M | 144.81M | 112.6M | 94.36M | 58.07M | 22.33M | 11.28M | 7.56M | 0 | 27.83M | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 344.86K | 3.88M | 0 | 1.4M | 0 | 0 | 0 |
| Other Income/Expense | 3.7B | 5B | 6.13B | 6.35B | 4.62B | 4.69B | 833.68M | 2.59B | 1.1B | 844.67M | 1.27B | 838.18M | 693.32M | 623.22M | 566.57M | 292.29M | 32.17M | 127.2B | -17.23M | 61.1M | 94.99M | 50.13M | 22.49M | 17.22M | 9.89M | -14.09M | 25.23M | 1.36M |
| Pretax Income | 41.75B | 40.83B | 35.72B | 34.06B | 24.25B | 21.1B | 15.37B | 16.38B | 11.08B | 13.84B | 13.9B | 8.11B | 5.46B | 4.98B | 4.28B | 3.62B | 2.58B | 2.15T | 1.9B | 1.27B | 1.37B | 1.03B | 470M | 344.06M | 13.9M | -246.02M | -142.64M | -51.89M |
| Pretax Margin % | 36.5% | 36.25% | 33.92% | 32.92% | 25.13% | 24.09% | 20.87% | 27.66% | 21.64% | 31.14% | 36.4% | 35.57% | 46.6% | 54.11% | 52.17% | 49.59% | 46.78% | 57244.35% | 61.51% | 57.23% | 63.52% | 63.69% | 52.01% | 63.45% | 6.29% | -869.17% | -219.27% | -332.27% |
| Income Tax | 6.65B | 6.03B | 5.46B | 4.7B | 5.03B | 4.13B | 3.04B | 2.91B | 2.47B | 2.16B | 2.1B | 1.27B | 662.74M | 530.6M | 691.64M | 392.76M | 344.45M | 313.86M | 300.67M | 2.69M | 132.49M | 94.96M | 28.58M | 21.13M | -2.4M | 0 | 0 | 71.32K |
| Effective Tax Rate % | 15.93% | 14.77% | 15.29% | 13.8% | 20.75% | 19.56% | 19.79% | 17.79% | 22.27% | 15.62% | 15.13% | 15.7% | 12.14% | 10.66% | 16.17% | 10.86% | 13.37% | 0.01% | 15.85% | 0.21% | 9.64% | 9.25% | 6.08% | 6.14% | -17.23% | 0% | 0% | -0.14% |
| Net Income | 34.13B | 33.76B | 29.7B | 29.42B | 20.34B | 16.86B | 12.06B | 21.24B | 6.15B | 10.71B | 11.6B | 6.74B | 4.76B | 4.44B | 3.64B | 3.23B | 2.24B | 1.85B | 1.6B | 1.26B | 1.24B | 931.99M | 441.42M | 322.93M | 16.3M | -232.64M | -142.64M | -51.97M |
| Net Margin % | 29.84% | 29.98% | 28.2% | 28.43% | 21.08% | 19.24% | 16.37% | 35.85% | 12.02% | 24.1% | 30.4% | 29.54% | 40.61% | 48.32% | 44.35% | 44.36% | 40.59% | 49.25% | 51.76% | 57.11% | 57.42% | 57.8% | 48.85% | 59.56% | 7.38% | -821.89% | -219.27% | -332.72% |
| Net Income Growth % | 5.46% | 13.68% | 0.96% | 44.64% | 20.65% | 39.74% | -43.2% | 245.19% | -42.54% | -7.73% | 72.3% | 41.59% | 7.04% | 22.17% | 12.47% | 44.66% | 20.82% | 15.89% | 26.31% | 1.71% | 33.35% | 111.13% | 36.69% | 1881.42% | 107.01% | -63.09% | -174.5% | - |
| Net Income (Continuing) | 35.1B | 34.8B | 30.26B | 29.36B | 19.22B | 16.98B | 12.33B | 13.47B | 8.62B | 11.68B | 11.79B | 6.84B | 4.8B | 4.45B | 3.59B | 3.22B | 2.23B | 1.84B | 1.6B | 1.26B | 1.24B | 931.99M | 441.42M | 322.87M | 16.3M | -233.21M | -142.64M | -51.97M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 624.86M | 0 | 0 | 7.96B | -2.14B | -834.45M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 4.63B | 4.81B | 3.81B | 3.8B | 4.14B | 3.95B | 11.67B | 1.14B | 794.21M | 703.13M | 271.86M | 83.52M | -32.19M | -76.91M | -79.12M | -28.24M | -13.43M | -13.43M | 209.26K | 207.8K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 52.88 | 52.25 | 45.95 | 45.25 | 30.20 | 25.05 | 18.00 | 20.40 | 12.75 | 16.15 | 17.55 | 10.20 | 7.25 | 6.80 | 5.55 | 4.95 | 2.85 | 2.85 | 2.45 | 1.90 | 1.80 | 0.33 | 0.16 | 0.13 | 0.01 | -0.13 | -0.07 | -0.03 |
| EPS Growth % | 4.98% | 13.71% | 1.55% | 49.83% | 20.56% | 39.17% | -11.76% | 60% | -21.05% | -7.98% | 72.06% | 40.69% | 6.62% | 22.52% | 12.12% | 73.68% | 0% | 16.33% | 28.95% | 5.56% | 445.45% | 106.25% | 23.08% | 940% | 109.62% | -81.82% | -142.37% | - |
| EPS (Basic) | - | 52.90 | 46.40 | 45.75 | 31.15 | 25.35 | 18.25 | 20.60 | 12.80 | 16.25 | 17.70 | 10.25 | 7.30 | 6.85 | 5.55 | 4.95 | 2.85 | 2.90 | 2.55 | 2.05 | 1.90 | 0.36 | 0.18 | 0.13 | 0.01 | -0.10 | -0.07 | -0.03 |
| Diluted Shares Outstanding | 645.47M | 645.58M | 646.12M | 650.41M | 673.5M | 673.5M | 669.95M | 649.99M | 650.94M | 663.1M | 661.42M | 661.04M | 655.41M | 651.26M | 657.67M | 655.34M | 649.8M | 648.03M | 646.84M | 661.51M | 699.68M | 2.85B | 2.79B | 2.68B | 2.5B | 1.75B | 2B | 1.76B |
| Basic Shares Outstanding | 639.62M | 638.36M | 646.3M | 650.09M | 652.69M | 665.17M | 661.09M | 644.09M | 647.06M | 658.06M | 656.35M | 656.88M | 652.89M | 649.57M | 656.53M | 653.11M | 645.05M | 643.29M | 623.42M | 617.29M | 646.37M | 2.58B | 2.53B | 2.5B | 2.44B | 1.75B | 2B | 1.76B |
| Dividend Payout Ratio | - | 39.84% | 37.6% | 27.24% | 33.06% | 20.81% | 35.48% | 41.63% | 23.41% | 30.42% | 21.94% | 21.8% | 41.69% | 18.35% | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Regulatory and monetization policy shifts
As indicated by recent quarterly filings, NetEase achieved a 6.1% year-over-year revenue growth in 2026Q1, demonstrating a consistent ability to maintain top-line momentum despite the inherent volatility of the Chinese gaming market and the cyclical nature of its diverse digital service portfolio.
The company's revenue trajectory appears to be supported by the successful integration of legacy titles and the scaling of newer intellectual properties. Investors should monitor whether this growth remains sustainable as the company balances its domestic core with international expansion efforts.
According to the latest income statement data, NetEase expanded its gross margin to 69.4% in 2026Q1, a notable improvement from the 60.8% reported in 2024Q4, suggesting enhanced pricing power or a favorable shift in the underlying product mix toward higher-margin digital content.
This margin expansion implies that the company is successfully optimizing its cost of revenue, potentially through reduced reliance on third-party distribution channels or improved monetization of its proprietary game engines. Such structural gains warrant further investigation into whether this level of profitability is sustainable or subject to future competitive pressures.
Based on reported financial figures, operating income surged to $12.7B in 2026Q1, reflecting a significant improvement in operating leverage as the company effectively managed its SG&A expenses relative to the substantial growth in gross profit during the most recent reporting period.
The ability to scale operating income faster than gross profit suggests that the company's fixed-cost base is becoming increasingly efficient as its digital platforms reach greater maturity. This trend may indicate that management is successfully controlling overhead costs while simultaneously investing in long-term R&D initiatives.
As highlighted in recent financial statements, NetEase reported a net income of $10.7B in 2026Q1, with earnings quality appearing robust due to the company's minimal debt burden and the consistent cash-generative nature of its core gaming business model.
The reported EPS of 16.55 suggests a strong bottom-line performance, though investors should remain cautious regarding the impact of stock-based compensation and potential tax rate fluctuations. The company's ability to convert these earnings into tangible cash reserves remains a key indicator of its underlying financial health.
While the company shows strong profitability, as noted in recent regulatory filings, the potential for future government-mandated changes to monetization mechanics and game licensing remains a significant risk that could compress margins and disrupt the current trajectory of the core gaming segment.
Short-term volatility in the regulatory environment may lead to unpredictable shifts in player spending, which could undermine the annuity-like revenue streams the company currently enjoys. Investors should monitor how management adapts its monetization strategies to comply with evolving content standards without sacrificing long-term user engagement.
Quick answers to the most common questions about buying NTES stock.
For fiscal year 2025, NetEase, Inc. (NTES) reported total revenue of $112.63B. This represents a 721020.8% increase compared to $15.6M in 1999.
NetEase, Inc. (NTES) is profitable, generating $33.76B in net income for the fiscal year ending 2025 with a net profit margin of 30.0%.
NetEase, Inc. (NTES) reported an operating income of $35.83B, resulting in an operating profit margin of 31.8%. This margin reflects the operational efficiency of the business before interest and taxes.
NetEase, Inc. (NTES) generated $72.40B in gross profit for the year, representing a gross profit margin of 64.3%. This demonstrates the company's core pricing power and production efficiency.