Netease increased its net revenues to RMB22.2 billion,and will repurchase up to 3 billion US dollars of shares

Netease announced its unaudited financial results for the third quarter ended September 30, 2021.The board of directors has approved an increase in the amount of the share repurchase program to no more than $3 billion.

Third Quarter 2021 Financial Highlights

• Net revenues were RMB22.2 billion(US$3.4 billion), an increase of 18.9% compared with the third quarter of 2020.

          - Online game services net revenues wereRMB15.9 billion(US$2.5 billion), an increase of 14.7% compared with the third quarter of 2020.

           -Youdaonet revenues were RMB1.4 billion(US$215.3 million), an increase of 54.8% compared with the third quarter of 2020.

            - Innovative businesses and others net revenues wereRMB4.9 billion(US$761.1 million), an increase of 25.7% compared with the third quarter of 2020.

• Gross profit was RMB11.8 billion(US$1.8 billion), an increase of 19.5% compared with the third quarter of 2020.
• Total operating expenses were RMB8.0 billion(US$1.2 billion), an increase of 14.5% compared with the third quarter of 2020.
• Net income attributable to the Company's shareholders was RMB3.2 billion(US$493.8 million). Non-GAAP net income attributable to the Company's shareholders wasRMB3.9 billion(US$598.7 million).
• Basic net income per share wasUS$0.15(US$0.74per ADS). Non-GAAP basic net income per share wasUS$0.18(US$0.90per ADS).

Third Quarter 2021 and Recent Operational Highlights

• Broadened games portfolio and strengthened global appeal with new games in diverse genres including:

          -Naraka: Bladepoint, which broke the sales record of buy-to-play games by Chinese developers and led the Steam top-sellers chart, remaining in the top 5 for weeks following its global launch in August.

          -Harry Potter: Magic Awakened, which ledChina'siOS top grossing chart and top download chart following its launch in September.

          - Exciting new titles inChinasuch asAce Racer,Infinite LagrangeandNightmare Breaker.

          - LaunchedThe Lord of the Rings: Rise to WarinEurope, theAmericas,OceaniaandSoutheast Asia.

• Extended solid popularity of franchise titles including theFantasy Westward JourneyandWestward Journey Onlineseries.
• Enriched dynamic game development pipeline with exciting advancements to upcoming games including The Showbiz: Dream Chaser, the console version of Naraka: Bladepoint,Diablo® Immortal™, as well as Ghost World Chronicle, and Harry Potter: Magic Awakened in international markets.
• Progressed Youdao's capabilities as an education technology provider, with steady advancements in STEAM courses, adult learning and smart learning hardware devices.
• Expanded NetEase Cloud Music's content ecosystem and product innovation capabilities to strengthen its highly-engaged music-enteric community, delivering a solid financial performance.

"With strong and steady contributions from our online game services, our total net revenues for the third quarter reached RMB22.2 billion, an increase of 18.9% year-over-year," said Mr.William Ding, Chief Executive Officer and Director of NetEase. "It was a very fruitful season of diversification for our online games. Our flagship titles remained strong, and we introduced several new successful hits for PC and mobile platforms. New games such as Naraka: Blade point and Harry Potter: Magic Awakened captured wide interest from passionate game players who appreciate high quality game design. We will continue to bring more masterpieces to both domestic and global players in upcoming quarters. In addition,Youdao,NetEase Cloud Music and Yanxuan maintain their diverse and differentiated offerings. As an innovation-driven content creator, we will continue to deliver thoughtful premium content and products to our users across each of our carefully cultivated disciplines,"Mr. Ding concluded.