On Thursday, NetEase, Inc NTES reported a fiscal fourth-quarter revenue decline of 1.4% year-on-year to $3.66 billion (26.7 billion Chinese yuan), missing the analyst consensus estimate of $3.74 billion.

The Chinese gaming player's adjusted EPADS of $2.07 beat the analyst consensus estimate of $1.77. The stock fell after the report.

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Segments and margins: Games and related value-added services revenues rose 1.5% year over year to $2.9 billion. The corresponding gross margin decreased by 280 bps to 67.5%, mainly attributable to higher revenue contributions from licensed games, which have comparatively lower gross profit margins.

Youdao, Inc.'s DAO revenue declined by 9.5% year over year to $183.6 million, and the corresponding gross margin declined by 210 bps to 47.8%, primarily due to decreased net revenues from its learning services.

Cloud Music's revenues were $257.6 million, down 5.3% year over year, and its gross margin expanded by 160 bps to 31.9%, mainly due to increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.

Innovative businesses and other revenue declined 17.0% year over year to $313.1 million, and the gross margin increased by 340 bps to 37.8%, mainly due to increased gross profit margins from Yanxuan.

As of December 31, 2024, NetEase held $18.0 billion in cash and equivalents and generated $1.78 billion in operating cash flow.

Dividend: The board of directors approved a dividend of $1.22025 per ADS for the fourth quarter of 2024 versus $0.4350 per ADS for the third quarter.

NetEase confirmed the laying off of the U.S.-based developers working on Marvel Rivals, the Verge cites the company. However, the development of Rivals would continue with a core group of developers based in China.

Price Action: NTES stock is down 5.91% at $98.01 at the last check on Thursday.

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