HANGZHOU, China , Feb. 29, 2024 /PRNewswire/ — Cloud Music Inc. (HKEX: 9899, “NetEase Cloud Music” or the “Company”), a leading interactive music streaming service provider in China, today announced its financial results for the fiscal year 2023 ended December 31, 2023.
Summary of Key Financial and Operating Metrics
(RMB in thousands, unless otherwise stated)
Year ended 31 December
2023
2022
(Unaudited)
(Unaudited)
Financial Metrics
Revenue
7,866,992
8,992,221
Gross profit
2,102,670
1,293,118
Profit/(Loss) before income tax
767,679
(204,479)
Profit/(Loss) for the year
734,182
(221,494)
Non-IFRS measure:
Adjusted net profit/(loss) (1)
818,500
(114,573)
Operating Metrics
Online music services
-MAUs (million)
205.9
189.4
-Monthly paying users (thousand)
44,120.0
38,267.1
-Monthly ARPPU (RMB)
6.9
6.6
Social entertainment services
-Monthly paying users (thousand)
1,602.9
1,332.3
-Monthly ARPPU (RMB)
178.6
326.0
Fiscal Year 2023 Key Financial and Operating Highlights
Revenue was RMB7.9 billion, a decrease of 12.5% compared with RMB9.0 billion in 2022.
Online music services:
-Revenue from online music services was RMB4.4 billion, an increase of 17.6% compared with RMB3.7 billion in 2022. The increase was primarily due to the growth in revenue from sales of membership subscriptions.
-MAUs of online music services grew to 205.9 million from 189.4 million in 2022. The increase was primarily attributable to continued efforts to improve the user experience, innovate interactive features, and enrich content offerings.
-Monthly paying users of online music services expanded to 44.1 million from 38.3 million in 2022.
-Monthly ARPPU (average revenue per paying user) of online music services was RMB6.9 compared with RMB6.6 in 2022, resulting from optimised promotions.
Social entertainment services and others:
-Revenue from social entertainment services and others was RMB3.5 billion, a decrease of 33.6% from RMB5.3 billion in 2022, mainly due to a more cautious operating strategy we adopted, such as reducing the in-app exposure of certain functions and lowering the revenue sharing ratio, and a further strengthened internal control mechanism.
-Monthly paying users of social entertainment services increased to 1.6 million from 1.3 million in 2022.
-Monthly ARPPU of social entertainment services was RMB178.6 compared with RMB326.0 in 2022.
Gross profit was RMB2,102.7 million, an increase of 62.6% from RMB1,293.1 million in 2022, as a result of increased revenue from sales of membership subscriptions and continued improvement in cost control measures. Gross margin improved to 26.7% from 14.4% in 2022.
Net profit was RMB734.2 million, compared with net loss of RMB221.5 million in 2022.
Adjusted net profit was RMB818.5 million, compared with adjusted net loss of RMB114.6 million in 2022.
Note:
(1) Adjusted net profit/(loss) is defined as profit/(loss) for the year adjusted by adding back equity-settled share- based payments as appropriate.
Business Overview
Throughout 2023, we had continued with our quality development across our core music-centric ecosystem, considerably strengthening our music-centric monetisation capabilities and further improving our profitability. Our appeal to users has been enhanced as we bolstered our content ecosystem and broadened our differentiated offerings, including adding new innovative features and strengthening our community attributes. These successful efforts, combined with advanced membership privileges offered, drove notable growth in our subscription-based memberships. Having been backed by the solid monetisation momentum from our core online music business and our optimised operating efficiency and cost structure, we reached a record high on profitability for the full year of 2023 and achieved a profit making position for a financial year for the first time in our history.
We worked diligently to strengthen our music-centric monetisation capabilities throughout 2023. Our online music business has continued to show solid growth momentum on a year-over-year basis. Our revenue from subscription-based memberships grew by 20.2% year over year, mainly driven by a scale-up in the number of subscribers, along with moderate ARPPU improvement. We have …