Youdao Maintains Profitability for Five Consecutive Quarters, Operating Profit for the First Three Quarters of 2025 Grows Nearly 150% Year-over-Year
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 20 2025
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About DAO
Youdao Inc is a holding company principally engaged in the intelligent learning business, providing a variety of learning content, applications and solutions. The Company primarily operates its businesses through three segments. Learning Services segment mainly provides digital content services, science, technology, engineering, the arts and mathematics (STEAM) courses, and adult and vocational courses through the Youdao Lingshi, Youdao Literature, Youdao Premium Courses, NetEase Cloud Classroom and China University MOOC and others. Smart Devices segment mainly develops and offers smart devices, such as Youdao Dictionary Pen, Youdao Listening Pod, and Youdao Smart Learning Pad. The Company also provides education digitalization solutions, including Youdao Smart Learning Terminal, Youdao Smart Cloud, and Youdao Sports. Online Marketing Services segment mainly offers online marketing services, including performance-based advertising services and brand advertising services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Youdao Inc. Q1 2026 Earnings Report Analysis
- Revenue Growth: Youdao Inc. reported net revenues of RMB 1.3 billion for Q1 2026, reflecting a year-over-year increase of 3.8%, indicating stable growth in the education and online marketing sectors despite challenging market conditions.
- Sustained Operating Profit: The company achieved its seventh consecutive quarter of operating profitability with an operating profit of RMB 57.5 million, although this represents a 44.7% year-over-year decline, highlighting ongoing strategic investments.
- Strong Online Marketing Services: Online marketing services revenue surged by 20.9% year-over-year to RMB 611.1 million, driven by performance-based advertising and investments in AI technology, showcasing the company's competitive edge in digital advertising.
- Decline in Smart Devices Revenue: Revenue from smart devices plummeted by 42.6% year-over-year to RMB 109.4 million, reflecting weak market demand, with gross margins dropping from 52.3% to 39.9%, putting pressure on overall profitability.
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Youdao (DAO) Q4 2025 Earnings Transcript
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Youdao (DAO) Q1 2026 Earnings Call Transcript
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Youdao Reports Q1 2023 Earnings with Mixed Signals
- Earnings Highlights: Youdao's Q1 2023 Non-GAAP EPS stands at $0.05, showing year-over-year growth but falling short of market expectations, indicating pressure on the company's profitability.
- Revenue Performance: The revenue for the quarter reached $195.4 million, a 3.8% increase year-over-year, yet it missed expectations by $5.78 million, reflecting the impact of intensified market competition and fluctuating customer demand.
- Gross Margin Decline: The gross margin was reported at 44.7%, down from 47.3% in the same period of 2025, suggesting that rising costs may be affecting the company's profitability and pricing strategy in the market.
- Uncertain Future Outlook: Youdao's mixed signals in the earnings report challenge market confidence in its future direction, potentially impacting investors' long-term views on the company.
See More
Youdao to Report Q1 2026 Financial Results on May 21
- Earnings Release Schedule: Youdao, Inc. will report its Q1 2026 financial results on May 21 before the U.S. market opens, reflecting the company's commitment to transparency and investor communication.
- Conference Call Details: The earnings teleconference will take place at 6:00 a.m. Eastern Time, where management will discuss quarterly results and answer questions, enhancing interaction with investors.
- Webcast Availability: A live and archived webcast of the conference call will be available on the company's investor relations website, ensuring that investors can access information at their convenience and improving information accessibility.
- Company Background: Founded in 2006, Youdao specializes in AI solutions for learning and advertising as a subsidiary of NetEase, positioning itself strategically for future growth through its market focus and technological capabilities.
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NetEase Files Annual Report for FY 2025
- Annual Report Submission: On April 15, 2026, NetEase filed its annual report for the fiscal year ending December 31, 2025, which can be accessed on the company's investor relations website, showcasing its ongoing development in internet and gaming services.
- Financial Transparency: The company will provide hard copies of the annual report containing audited consolidated financial statements free of charge to shareholders and ADS holders upon request, reflecting its commitment to transparency and communication with investors.
- Business Diversification: Beyond gaming, NetEase has several subsidiaries, including Youdao, an intelligent learning and advertising solutions provider, and NetEase Cloud Music, a well-known online music platform, demonstrating its strategic positioning across multiple sectors.
- R&D Strength: With one of the largest in-house game R&D teams focused on mobile, PC, and console games, NetEase is dedicated to creating superior gaming experiences for players worldwide, further solidifying its market position.
See More
Youdao Inc. Q1 2026 Earnings Report Analysis
- Revenue Growth: Youdao Inc. reported net revenues of RMB 1.3 billion for Q1 2026, reflecting a year-over-year increase of 3.8%, indicating stable growth in the education and online marketing sectors despite challenging market conditions.
- Sustained Operating Profit: The company achieved its seventh consecutive quarter of operating profitability with an operating profit of RMB 57.5 million, although this represents a 44.7% year-over-year decline, highlighting ongoing strategic investments.
- Strong Online Marketing Services: Online marketing services revenue surged by 20.9% year-over-year to RMB 611.1 million, driven by performance-based advertising and investments in AI technology, showcasing the company's competitive edge in digital advertising.
- Decline in Smart Devices Revenue: Revenue from smart devices plummeted by 42.6% year-over-year to RMB 109.4 million, reflecting weak market demand, with gross margins dropping from 52.3% to 39.9%, putting pressure on overall profitability.
See More
Youdao (DAO) Q4 2025 Earnings Transcript
See More
Youdao (DAO) Q1 2026 Earnings Call Transcript
See More
Youdao Reports Q1 2023 Earnings with Mixed Signals
- Earnings Highlights: Youdao's Q1 2023 Non-GAAP EPS stands at $0.05, showing year-over-year growth but falling short of market expectations, indicating pressure on the company's profitability.
- Revenue Performance: The revenue for the quarter reached $195.4 million, a 3.8% increase year-over-year, yet it missed expectations by $5.78 million, reflecting the impact of intensified market competition and fluctuating customer demand.
- Gross Margin Decline: The gross margin was reported at 44.7%, down from 47.3% in the same period of 2025, suggesting that rising costs may be affecting the company's profitability and pricing strategy in the market.
- Uncertain Future Outlook: Youdao's mixed signals in the earnings report challenge market confidence in its future direction, potentially impacting investors' long-term views on the company.
See More
Youdao to Report Q1 2026 Financial Results on May 21
- Earnings Release Schedule: Youdao, Inc. will report its Q1 2026 financial results on May 21 before the U.S. market opens, reflecting the company's commitment to transparency and investor communication.
- Conference Call Details: The earnings teleconference will take place at 6:00 a.m. Eastern Time, where management will discuss quarterly results and answer questions, enhancing interaction with investors.
- Webcast Availability: A live and archived webcast of the conference call will be available on the company's investor relations website, ensuring that investors can access information at their convenience and improving information accessibility.
- Company Background: Founded in 2006, Youdao specializes in AI solutions for learning and advertising as a subsidiary of NetEase, positioning itself strategically for future growth through its market focus and technological capabilities.
See More
NetEase Files Annual Report for FY 2025
- Annual Report Submission: On April 15, 2026, NetEase filed its annual report for the fiscal year ending December 31, 2025, which can be accessed on the company's investor relations website, showcasing its ongoing development in internet and gaming services.
- Financial Transparency: The company will provide hard copies of the annual report containing audited consolidated financial statements free of charge to shareholders and ADS holders upon request, reflecting its commitment to transparency and communication with investors.
- Business Diversification: Beyond gaming, NetEase has several subsidiaries, including Youdao, an intelligent learning and advertising solutions provider, and NetEase Cloud Music, a well-known online music platform, demonstrating its strategic positioning across multiple sectors.
- R&D Strength: With one of the largest in-house game R&D teams focused on mobile, PC, and console games, NetEase is dedicated to creating superior gaming experiences for players worldwide, further solidifying its market position.
See More
