The stock in NetEase, Inc. (Nasdaq: NTES) and its intelligent learning arm Youdao, Inc. (NYSE: DAO) both gained in early trading Wednesday on generating strong revenue in the first quarter. The gains weren’t as high for NetEase, as it rose $1.31 to $397.00 per American depositary share, while Youdao soared nearly 7% to $28.18 per share.
NetEase said in a statement today that in the three months through March that its revenues hit $2.41 billion, up 18% year-over-year. The numbers beat the average projection of $2.21 billion from 13 analysts compiled by Yahoo Finance. The Beijing-based gaming giant’s net income rose to $557.94 million, or $3.83 per share compared with $347.12 million in the same period in 2019.
With people staying home during the coronavirus outbreak, NetEase attributed the growth to its online game services revenues, which hit $1.90 million in the quarter.
As for you Youdao, it reported that its revenue more than doubled to $76.5 million, representing a 140% year-over-year increase. However, the Hangzhou-headquartered company’s net loss widened to $23.96 million, or 21 cents per share compared with $12.96 million a year ago.
Both have also had strong performances in the stock market in 2020, as shares of NetEase are up nearly 27% year-to-date and Youdao has surged 100% YTD. Youdao made its public debut in October 2019, raising $95.2 million in its IPO.
"Our other core businesses are growing healthily. Both Youdao and NetEase Cloud Music are on track to reach their development goals for 2020,” William Ding, chief executive officer and director of NetEase, said in a statement today.
He added, “Moving forward, we remain committed to our mission to deliver innovative products and high-quality services that surprise and impress our users, and the larger community worldwide.”
Going forward, NetEase did not provide guidance, which could explain why the gain in its stock was minimal today.