NetEase, Inc. (NASDAQ:NTES) Q3 2019 Earnings Conference Call - Final Transcript

Nov 20, 2019 • 09:00 pm ET

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NetEase, Inc. (NASDAQ:NTES) Q3 2019 Earnings Conference Call - Final Transcript

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Operator
Operator

Good day and welcome to the NetEase 2019 Third Quarter Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Margaret Shi, IR Director of NetEase. Please go ahead.

Executive
Margaret Shi

Thank you, operator. Please note the discussion today will contain forward-looking statements relating to the 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 2019 third quarter financial results news release issued earlier today.

As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the NetEase corporate website at ir.netease.com.

Joining us today on the call from NetEase senior management is Mr. William Ding, Chief Executive Officer; and Mr. Charles Yang, Chief Financial Officer.

I will now turn the call over to Mr. Charles, who will read the prepared remarks on behalf of William.

Executive
Charles Zhaoxuan Yang

Thank you, Margaret, and thank you, everyone, for participating in today's call. Before we begin, I would like to remind everyone that all percentages are based on renminbi. Firstly, to assist better understanding and analysis of our quarterly results, I would like to remind everyone that based on the changes in this quarter, including the sale of Kaola and the NYSE listing of Youdao, we will now be reporting segment report as online games, Youdao and interactive businesses and others, which includes now Yanxuan, NetEase Cloud Music, Internet media, CC live streaming and others.

Kaola's financial results has been deconsolidated and listed as discontinued operations. This applies to the current quarter, as well as the historical comparative periods. This quarter, our total net revenue represents both year-over-year and quarter-over-quarter growth. You can also refer to Youdao's earnings release for more details about its quarterly results.

I will now read the prepared remarks on behalf of William. We have had quite a eventful third quarter with a number of strategic moves made across our business lines. Those moves allow us to realign our resources and sharpen our strengths in areas where we see the most potential for our sustainable long-term growth. During this