Companies /Communication Services

NetEase Inc

NASDAQ: NTES Electronic Gaming & Multimedia
$116.62
▼ $1.17 (−0.99%) today
Markets closed · 6:26pm ET

Q2 2026 Earnings

Reported Aug 20, 2026, 6:12am ET · SEC source
$1.77
Miss −88.61%
EPS · est. $15.54 Adjusted
$4.4B
Miss −84.95%
Revenue · est. $29.5B
5 quarters
Consecutive EPS misses

Market Reaction

% change · around the report
−3%0+3%Aug 20Aug 21report 6:12am ETearnings−0.4%+4.9%
−3%0+3%Aug 20Aug 21earnings−0.4%+4.9%
NTES +4.9%S&P 500 −0.4%
−3%0+3%Aug 20Aug 21report 6:12am ETearnings−0.5%+4.9%
−3%0+3%Aug 20Aug 21earnings−0.5%+4.9%
NTES +4.9%NASDAQ −0.5%
−3%0+3%Aug 19Aug 28report 6:12am ETearnings+0.3%−0.2%
−3%0+3%Aug 19Aug 28earnings+0.3%−0.2%
NTES −0.2%S&P 500 +0.3%
−3%0+3%Aug 19Aug 28report 6:12am ETearnings+0.3%−0.2%
−3%0+3%Aug 19Aug 28earnings+0.3%−0.2%
NTES −0.2%NASDAQ +0.3%
−5.85%
Day of report
+6.98%
Next session
+2.40%
One week

Did NTES Beat Earnings? Q2 2026 Results

NetEase delivered a sharp disappointment in Q2 2026, with both earnings and revenue falling well short of Wall Street expectations. The Chinese gaming giant posted adjusted non-GAAP EPS of $1.77, missing the consensus estimate of $15.54 by 88.61%, while net revenues of $4.44 billion trailed the $29.48 billion consensus by 84.95%, reflecting a 84.1% year-over-year decline. The most material drag came from a significant swing in other income and expenses, including declines in the fair value of equity security investments and impairment provisions, which weighed heavily on net income even as operating profit showed underlying strength. A jump in the effective tax rate to 25.5%, up from 14.7% in Q2 2025, compounded the pressure. For <a href="https://247wallst.com/investing/2026/08/19/heres-why-investors-may-want-to-own-netease-before-august-20th/">investors watching the stock closely</a>, the quarter adds uncertainty heading into a pipeline-heavy second half, with Sea of Remnants already launched in China and Ananta and Blood Message still in development as NetEase pushes deeper into global markets.

Key Takeaways
  • Higher net revenues from self-developed games including Fantasy Westward Journey franchise and Where Winds Meet drove YoY games growth
  • Lower revenue-sharing and product costs drove significant gross margin expansion
  • NetEase Cloud Music subscription membership growth drove online music revenue
  • Youdao learning services growth contributed to segment revenue increase

“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. 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.”

NetEase CEO, on the earnings call

Forward Guidance & Outlook

NetEase plans to remain committed to creating original content that shapes industry trends, building evergreen franchises, and cultivating vibrant communities. The company is sharpening focus on original gameplay, cutting-edge technology, and deeper global reach to support enduring growth. Sea of Remnants launched in China in July 2026, while Ananta and Blood Message remain in development, strengthening the pipeline across diverse genres and markets. Where Winds Meet and Marvel Rivals are expanding internationally in North America and Europe.

NTES YoY Financials

Q2 2026 vs Q2 2025 · SEC filings Q2 2025 Q2 2026
$0$8.0B$16.0B$24.0B$27.9B$4.4BRevenue$18.1B$3.1BGross Profit$9.1B$1.8BOperating Income$8.6B$1.0BNet Income
$0$8.0B$16.0B$24.0BRevenueGross ProfitOperating IncomeNet Income

NTES Revenue by Segment

Games and Related Value-Added Services$3.7B+9.7%
Innovative Businesses and Others$241.6M−3.5%
NetEase Cloud Music$291.4M+6.0%
Youdao$216.2M+3.5%

Figures from SEC filings and company reports. Not investment advice.