Netease completed 2014 with a 42.5% YoY increase in Q4 revenues, led by a 35.7% increase in online game services, a 22.7% increase in advertising services and a 224.2% increase from Netease expanding e-mail, e-commerce and others business.
Netease total revenues for Q4 2014 were RMB3,683.6 million ($593.7 million), compared to RMB3,325.9 million in Q3 2014 and RMB2,585.1 million in Q4 2013.
Online games revenues were RMB2,863.3 million ($461.5 million) for Q4 2014, compared to RMB2,459.6 million in Q3 2014 and RMB2,109.5 million in Q4 2013.
Advertising revenues were RMB439.5 million ($70.8 million) for Q4 2014, compared to RMB478.3 million and RMB358.2 million for Q3 2014 and the Q4 2013.
Revenues from e-mail, e-commerce and others were RMB380.8 million ($61.4 million) for Q4 2014, compared to RMB388.0 million in Q3 2014 and RMB117.5 million in Q4 2013.
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Netease gross profit was RMB2,485.4 million ($400.6 million), compared to RMB2,258.4 million in Q3 2014 (an increase of 10%) and RMB1,727.2 million in Q4 2013 (an increase of 43.9%). Net profit totaled RMB1.3 billion ($204.9 million), compared to RMB1.2 billion in both Q3 2014 and Q4 2013.
Netease Fiscal Year 2014 Financial Results
Total revenues for fiscal year 2014 were RMB12.5 billion (US$2.0 billion), compared to RMB9.8 billion for the preceding fiscal year.
- Revenues from online games were RMB9.8 billion (US$1.6 billion), compared to RMB8.3 billion in 2013
- Revenues from advertising services were RMB1.6 billion (US$250.1 million), compared to RMB1.1 billion
- Revenues from e-mail, e-commerce and others were RMB1.1 billion (US$179.5 million), compared to RMB368.0
Gross profit for fiscal year 2014 was RMB8.5 billion (US$1.4 billion), compared to RMB6.7 billion in 2013. The increase in gross profit for fiscal year 2014 was primarily driven by increased revenues from online game services, advertising services and e-commerce business.
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The increase in online game services gross profit in 2014 was primarily attributable to increased revenues from the Company’s self-developed games such as Fantasy Westward Journey II, New Westward Journey Online II and various mobile games, as well as from Blizzard’s Hearthstone®: Heroes of Warcraft™.
The increase in advertising services gross profit in 2014 was due to a rise in demand, mainly from the automobile, communication services and foods and beverages sectors, as well as from the increased monetization of the NetEase Mobile News Application and the impact of the 2014 FIFA World Cup.
The improvement in e-mail, e-commerce and others gross profit in 2014 was primarily attributable to an increase in revenue from NetEase’s e-commerce business.
Total operating expenses for fiscal year 2014 were RMB3.7 billion (US$594.1 million), compared to RMB2.4 billion for the preceding fiscal year. The increase in operating expenses in 2014 was primarily due to increased marketing expenses as a result of marketing and promotional activities for NetEase’s online games, e-commerce and advertising services businesses, mainly due to the 2014 FIFA World Cup, and increased research and development expenses resulting from increased headcount and average compensation.
Net profit for fiscal year 2014 totaled RMB4.8 billion (US$766.6 million), compared to RMB4.4 billion for the preceding fiscal year. For fiscal year 2014, Netease reported a net foreign exchange loss of RMB18.0 million (US$2.9 million), compared to a net foreign exchange loss of RMB15.3 million for the preceding fiscal year.
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