NetEase, Inc. (NASDAQ:NTES) Q4 2015 Earnings Conference Call - Final Transcript

Feb 25, 2016 • 10:00 am ET


NetEase, Inc. (NASDAQ:NTES) Q4 2015 Earnings Conference Call - Final Transcript


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Good day and welcome to the NetEase Fourth Quarter and Full Year 2015 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Brandi Piacente. Please go ahead.

Brandi Piacente

Thank you, operator. Please note the discussion today will contain forward-looking statements, regarding -- relating to future performance of the Company, and are intended to qualify for the Safe Harbor from liability, as established by the US Private Securities Litigation Reform Act.

Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the Company's control, and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect NetEase's business and financial results is included in certain filings of the Company with the Securities and Exchange Commission, including its annual report on Form 20-F. The Company does not undertake any obligation to update this forward-looking information, except as required by law.

During today's call, management will also discuss certain non-GAAP financial measures, for comparison purposes only. For a definition of non-GAAP financial measures, and a reconciliation of GAAP to non-GAAP financial results, please see the fourth-quarter and fiscal year 2015 financial results news release issued earlier today. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the NetEase corporate website, at

I will now turn the call over to Mr. Onward Choi, Acting Chief Financial Officer, who will read the prepared remarks on behalf of Mr. William Ding, Chief Executive Officer of NetEase.

Onward Choi

Thank you, Brandi. Before I begin, please note that for the purposes of this discussion, all percentages are based on renminbi. We accomplished a great deal in 2015, demonstrating growth and achievements throughout the Company. Our mobile games grew rapidly, captivating new players and reaching exemplary rankings. Our premium PC-client games continue to delight Chinese audiences and our advertising and other business lines thrive.

With each of our businesses flourishing, our total net revenues grew by 94.7% for the year, including a 128.2% increase in the fourth quarter compared to the same quarter of 2014. The combination of leading PC-client games along with our mobile games has proven vital to the success of our growth strategy. This winning combination is demonstrated in net revenue increase of 103.2% from our online game in the fourth quarter compared to the same quarter of 2014.

The popularity of mobile games continues to grow rapidly and over the last year we introduced a number of new mobile games that have resonated with Chinese audiences. We have now established ourselves as a formidable player in China's increasingly competitive mobile games market, with a diverse and growing portfolio of more than 80 games. Two of our most popular games, the Fantasy Westward Journey and the Westward Journey Online mobile games, continue to