NetEase Q1 Revenue Rises 6% to RMB30.6 Billion as Games Revenue Climbs 7%
NTES•NetEase reported Q1 2026 net revenue of RMB30.6 billion (up 6%), with games revenue at RMB25.7 billion (up 7%) and Fantasy Welcome Journey Online peaking at 3.9 million concurrent users. Youdao’s gross margin fell to 44.7% from 47.3%, marketing costs rose to 11.2% of revenue and innovation segment revenue dropped 5%.
1. Q1 Financial Performance
NetEase achieved RMB30.6 billion in total net revenue for Q1 2026, a 6% year-over-year increase, led by games and related services generating RMB25.7 billion (up 7%). Gross profit margin improved to 69.4% driven by lower revenue sharing costs, and the board approved a dividend of USD14.4 per share (USD720 per ADS).
2. Gaming Segment Highlights
Fantasy Welcome Journey Online reached a new high of 3.9 million peak concurrent users and delivered its strongest quarterly revenue to date. The title ‘Where Wings Meet’ sustained global momentum with high ratings and sales across key markets, reinforcing NetEase’s international gaming footprint.
3. Margin and Expense Analysis
Youdao’s gross profit margin declined to 44.7% from 47.3% in Q1, reflecting lower smart device margins. Selling and marketing expenses rose to 11.2% of net revenues from 9.4% due to increased promotional investments, while the innovative business segment saw net revenue drop 5% year-over-year and 24% quarter-over-quarter.
4. Product Pipeline and Global Expansion
NetEase is preparing for a Q3 global launch of Sea of Remnant, focusing on natural monetization via character cosmetics. New title Ananta aims to stand out in the crowded open-world genre with an urban living concept, and cross-device compatibility enhancements are planned to extend overseas reach.
