On August 22nd, NetEase released its Q2 2024 financial report. According to the financial report, NetEase's revenue in the second quarter was 25.5 billion yuan, a year-on-year increase of 6%. The net profit attributable to the company's shareholders under non GAAP accounting standards was 7.8 billion yuan, and the performance maintained steady growth. During the quarter, the R&D investment was 4.5 billion yuan, with a R&D investment intensity exceeding 17%.
In the second quarter, NetEase's gaming and related value-added services revenue was 20.1 billion yuan. In terms of products, NetEase stated that multiple products such as "Identity V" have ushered in a "second spring", with strong performance from new forces in segmented tracks, ranking among the top of the iOS bestseller list, and reaching new highs in DAU in July and August. The global cumulative registered users of "Egg Boy Party" have exceeded 600 million, and the number of creators has exceeded 40 million. The DAU of products such as "Leading the Land" and "Eternal Tribulation" has reached a new high. The mobile game "Fantasy Westward Journey" has achieved a new quarterly high in revenue. Shortly after its launch, the mobile game "Eternal Tribulation" quickly climbed to the third place on the domestic iOS bestseller list and remained at the top of the iOS download chart for over a week, breaking NetEase Games' 27 year record for daily new additions. According to a research report by JPMorgan, it is optimistic that the mobile game "Eternal Love" will become another flagship game of NetEase with a huge user base, in addition to "Egg Boy Party", and is expected to drive gaming revenue in the third quarter. It is worth mentioning that after the return of World of Warcraft, Hearthstone will officially return on September 25th. Marvel's Ultimate Reversal will be released in China on August 29th.
In terms of other business aspects, NetEase Cloud Music achieved a revenue of 2 billion yuan in the second quarter, with accelerated growth in membership subscriptions and a healthy trend in the commercialization of its core online music business; NetEase Youdao achieved a revenue of 1.3 billion yuan and a record high net inflow of operating cash flow, making positive progress in the commercialization of AI; The revenue of the innovation sector is 2.1 billion yuan, and NetEase Media continues to upgrade its AIGC capabilities, continuously producing phenomenon level popular products. In the second quarter, the UGC content of NetEase News client accounted for 31.9%; NetEase's strict selection focuses on explosive product strategy, with pet food, home cleaning fragrances, ergonomic chairs and other categories consistently ranking among the top sellers on multiple platforms.
In terms of research and development, as of the second quarter of this year, NetEase's R&D investment intensity has exceeded 15% for eight consecutive quarters. NetEase invested 4.5 billion yuan in R&D in the second quarter, with a R&D investment intensity of over 17%. Its major models such as "Ziyue" and "Yisheng Zhuxiang" are accelerating their sinking and deepening implementation, and have completed large-scale applications in core businesses and high-frequency scenarios.
In terms of the protection of minors, this summer, NetEase launched a "Special Action for the Protection of Minors", providing daily anti fraud reminders to over 80000 potential risk users. At the same time, in response to fraudulent information discovered during inspections outside the gaming industry, we have collaborated with third-party platforms to ban tens of thousands of live streaming rooms, short videos, and QQ groups. As of now, NetEase has conducted facial recognition on hundreds of thousands of users aged 70 and above, with an interception rate of over 90%, effectively curbing the behavior of minors impersonating elderly people in their homes to play games.
NetEase CEO Ding Lei stated that innovation has always been the primary goal of the company's development. NetEase will continue to expand its product line and domestic and international markets with strong research and development and operational capabilities, high-quality and diversified content, and bring exciting content and experiences to global users.