NetEase Cloud Music (9899) Q2 2025 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2025 was RMB3,827.1 million, down 6.0% year-over-year, mainly due to a 43.1% decline in social entertainment services revenue.

• Net profit surged 132.4% year-over-year to RMB1,882.1 million, driven by improved operating efficiency and a significant deferred tax credit.

• Online music services revenue grew 15.9% year-over-year, offsetting the decline in social entertainment services.

• Subscription-based membership revenue increased 15.2% year-over-year, with a growing subscriber base and higher retention rates.

• Gross margin improved to 36.4% from 35.0% year-over-year, reflecting cost optimization and business scale.

Financial highlights

• Gross profit was RMB1,392.5 million, down 2.3% year-over-year.

• Operating profit rose 40.8% to RMB844.5 million, mainly due to reduced promotion and advertising expenses.

• Adjusted operating profit (non-IFRS) was RMB905.4 million, up 35.0% year-over-year.

• Adjusted net profit (non-IFRS) reached RMB1,946.4 million, up 121.0% year-over-year.

• Basic EPS was RMB8.96, compared to RMB3.88 in the prior year period.

Outlook and guidance

• Strategic focus remains on enriching content, product innovation, and deepening user engagement.

• Plans include expanding differentiated content, optimizing user experience, and improving profitability through cost control.