In the first quarter, NetEase Youdao’s gross profit margin hit the highest level since its listing in October 2019.
Netease released its first quarter 2021 performance report.
According to the financial report, in the first quarter, NetEase’s revenue was 20.5 billion yuan, a year-on-year increase of 20.2%, and the market was expected to be 20.25 billion yuan; net profit attributable to the parent was 4.439 billion yuan, a year-on-year increase of 25%, and the market expected an adjusted net profit of 4.253 billion yuan.
From the perspective of business structure, in the first quarter, NetEase’s online game service revenue was 15 billion yuan, an increase of 10.8% year-on-year; Youdao’s revenue was 1.3 billion yuan, an increase of 147.5% year-on-year, setting a record high; net income from innovation and other businesses was 4.2 billion Yuan, an increase of 39.7% year-on-year.
In terms of games, NetEase said that popular game products, including “After Tomorrow”, “The Beach of the Land”, and “Onmyoji”, have remained popular. SensorTower data shows that from January to April 2021, NetEase firmly ranked second in the global revenue rankings of Chinese mobile game publishers, and a number of self-developed games ranked TOP 20 in China’s App Store mobile game revenue rankings.
In the future, NetEase will also launch new products such as “Harry Potter: Awakening of Magic”, “The Lord of the Rings: Rise to War”, “Super Fighting Dreamland” and “A Chinese Ghost Story”.
In the first quarter, NetEase Youdao’s gross profit margin reached 57.3%, the highest level since its listing in October 2019. NetEase Youdao’s income mainly comes from learning services and learning products based on online courses.
During the period, the revenue of learning services based on online courses was 1 billion yuan, a year-on-year increase of 156.8%. Among them, K12 business sales exceeded 400 million yuan, a year-on-year increase of 130.2%; adult business sales were 300 million yuan, a year-on-year increase of 17.8%.
At the same time, during the period, NetEase Youdao’s intelligent learning hardware revenue was 200 million yuan, a year-on-year increase of 279.8%.
It is worth mentioning that Youdao Dictionary has launched a short video function “WOW Circle”. Netease said that this feature has driven the average length of stay of Youdao dictionary users to more than double. During the reporting period, NetEase Youdao’s sales of new K12 orders increased by 129% year-on-year, 29% of which came from its own traffic.
NetEase innovation and other businesses include NetEase Cloud Music, NetEase Yanxuan, NetEase News, etc. Among them, in the first quarter, the number of users of NetEase Yanxuan’s omni-channel payment increased by 26.2% year-on-year; the number of Yanxuan Pro members increased by 258% year-on-year, and the total sales contribution of Pro members increased by 71% year-on-year.
As of press time, NetEase US stocks have risen nearly 4% before the market.