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NetEase, Inc.

Rank #192Capital Return

NTES · Nasdaq · Communication Services

NetEase, Inc. (NTES) — Rank #192 by gross profitability (GP/assets 0.33) · ROE 21.1% · Piotroski F-Score N/A.

As-of 2026-09-28 · CIK 0001110646 · all metrics point-in-time as of the filing date.

About

NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally.

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The company operates through Games and Related Value-Added Services; Youdao; NetEase Cloud Music; and Innovative Businesses and Others segments. It develops and operates mobile and PC games; and offers games licensed from other developers. The company also provides live streaming service, and other related or ancillary value-added services related to games, such as the sale of game-themed merchandise. In addition, it offers digital content services with interactive learning features, including Youdao Lingshi and Youdao Literature; STEAM courses consisting computer coding courses and other STEAM courses; and adult courses, such as China University massive open online course. Further, the company provides Youdao Dictionary, an online language tool; Confucius, a large language model for the education sector; Hi Echo, an AI-driven virtual English-speaking tutor; Mr. P AI Tutor, a conversation-based tool; Youdao Desktop Translation, a desktop dictionary tool; U-Dictionary, an online dictionary and translation app; iRecord, an audio transcription tool; LectMate, an interpretation software for study-abroad lecture scenarios; iArch, an AI home design software; Baby Genius, an AI baby generator; and One Translate Translator, a translation tool for travelers. It also offers online marketing services consisting of performance-based advertising services, and global marketing and promotion services through banners, text links, videos, logos, buttons, and rich media. Additionally, the company develops and offers smart devices, including Youdao Dictionary Pen, Youdao Listening Pod, and Youdao Smart Learning Pad. NetEase, Inc. was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012.

The company was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.

Industry
Electronic Gaming & Multimedia
Sector
Communication Services
State
E9
Filer Category
Large accelerated filer

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

25,382

Industry

Electronic Gaming & Multimedia

Exchange

Nasdaq

Signal Flags

4 green
Revenue growth acceleratingGrowth rate increasing year over year
Operating leverage expandingOperating income growing faster than revenue
Deferred revenue growingRevenue and deferred revenue both growing — retention signal
RPO outpacing revenueRemaining performance obligations growing faster than recognized revenue — forward demand building

Quality Profile

Profitability

1/1 pass
GP / assets
0.33
Return on equity
21.1%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.34
Current ratio
3.45×
Net cash
$88.01B

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
3.2%

Growth

2/2 pass
Revenue growth
7.0%
Piotroski F-Score
N/A
Share dilution
-0.4%

Terry Smith quality gate

Passes 4/5 Terry Smith thresholds

1 of 5 threshold not computable from filed data.

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Gross profitability (GP / assets)

0.33

Primary signal (Novy-Marx).

46th pctl of 36 SIC 7372 peers

Return on equity

21.1%

Gross margin

64.3%

37th pctl of 36 SIC 7372 peers

Revenue growth (YoY)

7.0%

RPO growth (YoY)

33.7%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2022202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

5.3%

Revenue CAGR (5Y)

8.9%

Earnings CAGR (3Y)

18.4%

FCF CAGR (3Y)

24.7%

Anti-fragile safety

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.34

74th pctl of 32 SIC 7372 peers (best = lowest)

Current ratio

3.45×

77th pctl of 36 SIC 7372 peers

Quick ratio

1.44×

Net cash

$88.01B

Cash & equivalents minus total debt.

Recession resistance

Revenue through recessions

Worst single-year YoY revenue decline, 17 years of history

Strong
2008-2009 (GFC)
N/AN/A
2020 (COVID)
24.4%Grew through it
Worst year on record(any fiscal year, not recession-limited)
-11.8%Significant decline

Cash-flow health

Free cash flow

$49.67B

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF / net income

0.47

Cash-backing of earnings.

FCF/NI divergence

Unfavorable divergence (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

3.2%

Stock-based comp intensity.

Dividend safety

Composite score

3.2 / 5

Good
Payout ratio
41.0%4/5 Strong
FCF coverage
3.59×5/5 Strong
Dividend growth streak
4 yr2/5 Fair
Balance-sheet health
D/E 0.34 · IC N/A2/5 Fair

Piotroski F-Score

F-Score

N/A

Only 8/9 components determinable.

Lifecycle Phase History

20202025
Op. Leverage
Capital Return
Value
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