China internet giant Netease reported total net revenues of RMB 15.7 billion (USD 2.26 billion) in the fourth quarter of 2019, up 9.2% from last year, per the company’s earnings report released on Wednesday, beating analysts’ average estimates of USD 2.18 billion.
Netease’s price per share increased 2.35% to USD 345.85 on Wednesday after releasing its earnings results.
The company has grown by expanding in various sectors including gaming, education, and online music streaming.
Netease’s online game services booked a revenue of RMB 11.6 billion, up 9.2% year-on-year (YoY), driven by the continuing success of popular titles such as Knives Out and Identity V, released in 2017 and 2018 respectively. The company’s gaming arm accounted for 73.7% of the company’s total revenue in the fourth quarter of 2019.
Netease’s education unit, Youdao, contributed a revenue of RMB 410.4 million, a 78.4% YoY growth. The business’ performance was driven by the increase in revenue from online courses. In particular, the number of paid K-12 student enrolments in the fourth quarter of 2019 increased 366.3% year-over-year to 161,100 students, and gross billings of online courses reached RMB 346.7 million, up 211.1% from the same period in 2018.
A third unit, which Netease calls “Innovative Business” that includes the company’s online music streaming platform Cloud Music and its domestic e-commerce platform Yanxuan, generated 3.7 billion in revenue, up 17.9% from the same period last year. Netease has ramped up the recruitment of musicians on Cloud Music, which now has over 100,000 artists and garnered 270 billion song playbacks in 2019, according to the firm’s financial report.
The results brought the firm’s net revenues for the fiscal year 2019 to RMB 59.2 billion (USD 8.5 billion), a 15.8% increase compared to the previous year’s RMB 51.1 billion.
Netease’s CEO William Ding acknowledged in the earnings report that the coronavirus outbreak in China might have some impact on the company’s business in the short-term. “NetEase is committed to providing support to affected communities and working together as we move through this challenging time,” he said.