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Research Alert: Netease Q1 2026: Steady Gaming Revenue Growth Amid Global Expansion

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

NetEase reported Q1 2026 net revenues of CNY30.6B, up 6.1% Y/Y and 11.1% sequentially, led by gaming segment growth to CNY25.7B (+6.9% Y/Y, +16.8% Q/Q). Gross margin improved significantly to 69.4% from 64.2% in Q1 2025, primarily due to lower revenue-sharing costs and reduced product costs. We believe the revenue growth is strong and are encouraged by global expansion through Where Winds Meet and Marvel Rivals, plus stable Blizzard operations in China providing revenue diversification. Management emphasized strategic priorities including strengthening gaming franchises, advancing global expansion, and leveraging in-house R&D capabilities, though it provided no specific numerical guidance for Q2 or full-year 2026. The company maintains exceptional financial strength with net cash of CNY167.5B and approved a dividend of USD0.144 per share. We expect continued operating leverage from favorable content mix shifts and global market penetration.

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