NetEase's Q1 Earnings: Gaming Giant Shows Resilience with Growth in Cash Flow and Cloud Music
Portfolio Pulse from Anusuya Lahiri
NetEase, Inc. (NASDAQ:NTES) reported Q1 2024 revenue growth of 7.2% year-on-year to $3.72 billion, missing the analyst consensus estimate of $3.79 billion. Adjusted EPADS of $1.81 beat the consensus estimate of $1.79. Key segments showed mixed performance in margins. NetEase's stock traded lower by 3.62% premarket. Investors can gain exposure via VanEck Video Gaming And Esports ETF (NASDAQ:ESPO) and Global X Video Games & Esports ETF (NASDAQ:HERO).
May 23, 2024 | 12:42 pm
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NEUTRAL IMPACT
Youdao, Inc. (NYSE:DAO), a segment of NetEase, reported a 19.7% increase in revenue to $192.8 million, but gross margin declined by 270 bps to 49.0%.
While Youdao showed strong revenue growth, the decline in gross margin may concern investors. However, the overall impact on the stock may be neutral as the revenue growth is a positive sign.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
VanEck Video Gaming And Esports ETF (NASDAQ:ESPO) provides exposure to NetEase, which reported mixed Q1 2024 results. NetEase's stock traded lower premarket.
ESPO holds NetEase, which reported mixed earnings results. The decline in NetEase's stock may negatively impact ESPO in the short term.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30
NEGATIVE IMPACT
Global X Video Games & Esports ETF (NASDAQ:HERO) provides exposure to NetEase, which reported mixed Q1 2024 results. NetEase's stock traded lower premarket.
HERO holds NetEase, which reported mixed earnings results. The decline in NetEase's stock may negatively impact HERO in the short term.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30
NEGATIVE IMPACT
NetEase reported Q1 2024 revenue growth of 7.2% to $3.72 billion, missing analyst estimates. Adjusted EPADS beat expectations. Stock traded 3.62% lower premarket.
Despite revenue growth, NetEase missed analyst revenue estimates, which likely contributed to the premarket decline of 3.62%. The beat on adjusted EPADS was not enough to offset the negative sentiment from the revenue miss.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100