NetEase Cloud Music (9899) Q4 2024 earnings summary

Executive summary

• Revenue grew 1.1% year-over-year to RMB7,950.1 million, with gross profit up 27.5% to RMB2,681.5 million and net profit surging 113.2% to RMB1,565.4 million.

• Adjusted net profit (excluding share-based payments) more than doubled to RMB1,700.1 million.

• Online music services revenue rose 23.1%, driven by a 22.2% increase in subscription-based memberships, while social entertainment revenue declined 26.2%.

• Gross margin improved to 33.7% from 26.7%, aided by cost optimization and a one-off content licensing fee adjustment.

• Focus remained on expanding premium content, user engagement, and community features, with significant growth in long-form audio and in-house music production.

Financial highlights

• Revenue: RMB7,950.1 million (+1.1% YoY); Gross profit: RMB2,681.5 million (+27.5% YoY).

• Net profit: RMB1,565.4 million (+113.2% YoY); Adjusted net profit: RMB1,700.1 million (+107.7% YoY).

• Online music services revenue: RMB5,354.5 million (+23.1% YoY); Social entertainment revenue: RMB2,595.6 million (-26.2% YoY).

• Gross margin: 33.7% (up from 26.7%); Selling and marketing expenses down 19.3%.

• Basic EPS: RMB7.48 (2023: RMB3.49); Diluted EPS: RMB7.40 (2023: RMB3.47).

Outlook and guidance

• Plans to further diversify content, deepen copyright collaborations, and enhance in-house music production.

• Continued focus on community engagement, premium offerings, and cost optimization for sustainable growth.