NetEase Cloud Music Inc. Reports First Half 2026 Financial Results

NetEase Cloud Music Inc. Reports First Half 2026 Financial Results

Financial highlights

NetEase Cloud Music announced total revenue of RMB4.0 billion for the six months ended 30 June 2026, a 3.4 % rise on the RMB3.8 billion recorded in the same period a year earlier, according to the Yahoo Finance UK summary. Revenue from online music services grew to RMB3.1 billion, up 3.4 % from RMB3.0 billion, while membership subscription revenue increased to RMB2.6 billion from RMB2.5 billion. Social‑entertainment and other services generated RMB891.3 million, a 3.7 % increase over the RMB859.8 million posted in 2025.

Media additions

Gross profit climbed to RMB1.5 billion, a 5.9 % improvement, pushing gross margin to 37.2 % from 36.4 % a year earlier. The margin gain was attributed to the stronger online‑music revenue mix. Operating profit fell to RMB746.2 million from RMB844.5 million, which the press release linked to higher promotion and advertising spend aimed at brand awareness and user acquisition. After adding back equity‑settled share‑based payments, adjusted operating profit stood at RMB796.7 million, down from RMB905.4 million.

Net profit for the first half of 2026 was RMB809.2 million, a sharp contrast with the RMB1,882.1 million earned in 2025. Adjusted net profit recorded RMB859.7 million, compared with RMB1,946.4 million a year earlier. Both reductions were explained by a deferred income‑tax credit of RMB849.4 million recognised in the 2025 period, arising from the initial recognition of deferred tax assets linked to cumulative tax losses of a wholly‑owned subsidiary.

Both releases define adjusted operating profit and adjusted net profit as the standard figures “adjusted by adding back equity‑settled share‑based payments as appropriate,” clarifying that these non‑IFRS measures are used to facilitate performance comparison.

User engagement and community health

The company highlighted a daily‑active‑user to monthly‑active‑user (DAU/MAU) ratio that stayed above the 30 % threshold, with year‑over‑year and sequential growth. Average daily mobile listening time continued its steady rise, and the proportion of users interacting with community content also increased noticeably. Retention and renewal rates improved across the expanded membership base, reinforcing the platform’s “vibrant music‑oriented community” narrative.

NetEase’s focus on younger audiences was reinforced through collaborations with NetEase Games and broader device integration, aiming to embed music experiences into everyday scenarios for Generation Z.

Content library expansion and label partnerships

During the reporting period the platform renewed key licences with major labels, including Universal Music Group, Warner Music and CJ Entertainment. It also added titles from Korean and Chinese independents such as DSP Media and Forward Music, expanding its catalogue with new OSTs, variety‑show music and signature‑genre tracks.

Original artist Gareth.T’s single “Glass” (《玻璃》) surpassed 100 million cumulative plays, a milestone cited by both sources. In‑house productions such as “12.31” received “widespread acclaim,” while collaborations with Western acts – for example a badge campaign with Bruno Mars and a stream‑boosting push for Kanye West – generated tens of millions of plays.

The independent‑artist ecosystem grew to more than 1.25 million registered creators, contributing over 7.3 million tracks, according to the Manila Times release. This surge underpins the platform’s “diverse and distinctive content library” strategy.

Product innovation and AI‑driven discovery

NetEase rolled out several new features aimed at personalising the listening journey. The AI‑generative recommendation engine, dubbed Climber, received a major upgrade and now powers the “AI‑inspired Playlist” (AI靈感歌單) function, allowing users to generate algorithmic mixes on demand.

Other notable additions include the “Diamond Player” style with extensive DIY customisation, a “Full‑Screen Cover” player on the Heartbeat page, and a new MV playback entrance on the vinyl player. The “Heartbeat Mode” page now explains the rationale behind song recommendations, enhancing transparency.

AI‑powered tools such as “AI Mood Tuner,” “Mood Player,” “AI Pet Player,” and “AIGC Personal Profile Backgrounds” were introduced to give users more emotive control over their music experience. Voice comments and an upgraded “Listen Together” (一起聽) feature deepened real‑time community interaction.

Audio‑video extensions, podcasts and IoT reach

Beyond music, the platform expanded its audiobook and radio‑drama catalogues, adding top‑tier IP titles like 《斗羅大陸》 and best‑selling works such as Mo Yan’s new novel 《人吶》. In‑house audiobooks such as 《靈境行者》 also gained traction.

Podcast production grew with over ten new music‑themed programmes, featuring personalities like Shan Jixiang and Japanese artist KOKIA. A dedicated video‑podcast segment, “Live Dialogues” (對話現場), delivered 13 high‑quality video programmes from labels such as “Midnightalks.”

Gaming collaborations

NetEase Cloud Music deepened its presence within the NetEase Games ecosystem, embedding music features into titles such as Identity V, Where Winds Meet, Minecraft and Sky. These cross‑scenario integrations aim to sustain brand affinity among younger gamers.

Strategic priorities ahead

Both releases outline a set of forward‑looking initiatives:

• Further diversify and enhance content offerings, with a focus on flagship genres and tighter label collaborations.
• Advance recommendation and listening technologies to deliver ever‑more precise user experiences.
• Strengthen the music‑oriented community through new interactive scenarios and feature upgrades.
• Cultivate willingness to pay by enriching membership benefits and expanding consumption contexts.
• Improve profitability via cost optimisation, operating‑efficiency gains and disciplined expense control.

What happens next

Management will host an earnings conference call at 7:00 p.m. Beijing/Hong Kong Time on Thursday, 20 August 2026 (7:00 a.m. U.S. Eastern Time). Participants must register online via the link provided in the press release. A telephone replay will be available through 27 August 2026 using the assigned passcode.