Youdao Reports Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results

Rhea-AI Summary

Youdao (NYSE: DAO) reported its Q4 and FY 2024 financial results, achieving its first-ever full-year profitability. In Q4 2024, total net revenues decreased 9.5% YoY to RMB1.3 billion (US$183.6 million), while income from operations increased 10.3% to RMB84.2 million.

For FY 2024, total revenues increased 4.4% to RMB5.6 billion, with online marketing services growing 48.3%. The company reported income from operations of RMB148.8 million, compared to a loss of RMB466.3 million in 2023. Learning services revenue declined 12.7% due to a more selective customer acquisition strategy.

The company's AI initiatives showed positive results, with Youdao Lingshi achieving over 70% retention rate in Q4. The company announced its 'AI Native' strategy to integrate AI across business lines. NetEase Group has committed to providing financial support for the next 36 months starting from May 2024.

Positive

• First-ever full-year profitability achieved in 2024
• Q4 2024 operating income increased 10.3% YoY to RMB84.2 million
• Online marketing services revenue grew 48.3% in FY 2024
• 70%+ customer retention rate for Youdao Lingshi in Q4
• NetEase Group committed financial support for next 36 months

Negative

• Q4 2024 total revenue decreased 9.5% YoY
• Learning services revenue declined 21.2% in Q4 2024
• FY 2024 gross margin decreased to 48.9% from 51.4% in 2023
• Net cash used in operating activities was RMB67.9 million for FY 2024

Insights

Financial Analyst

Youdao's transformation from loss-making to profitability in FY2024 marks a pivotal shift in its business trajectory. The company achieved an operating income of RMB148.8 million in 2024, compared to a RMB466.3 million loss in 2023, demonstrating successful execution of its efficiency-focused strategy.

The company's gross margin profile reveals interesting dynamics:

• Smart devices segment showed remarkable improvement, with Q4 gross margin increasing to 43.9% from 38.3% YoY, driven by the new Youdao Dictionary Pen launch
• Online marketing services achieved a 48.3% revenue growth in FY2024, with improved margins of 36.0% vs 31.7% in 2023, highlighting successful AI technology integration
• Learning services, despite revenue decline, maintained a healthy 60.0% gross margin in Q4

The strategic pivot to prioritize higher ROI customer acquisition, while causing a 21.2% decrease in learning services revenue, has strengthened the company's operational foundation. This is evidenced by the improved operating margin of 6.3% in Q4 2024, up from 5.2% in the previous year.

The company's 'AI Native' strategy represents a significant operational shift, with AI integration across business lines potentially creating new revenue streams and efficiency gains. The 70% retention rate for Youdao Lingshi and 130% year-over-year increase in AI-driven subscription services signal strong product-market fit.

Financial stability is underpinned by NetEase Group's commitment to provide support for the next 36 months, including RMB878.0 million in short-term loans and a US$300.0 million revolving facility. This backing provides important operational flexibility as Youdao continues its strategic transformation.

HANGZHOU, China, Feb. 20, 2025 /PRNewswire/ -- Youdao, Inc. ("Youdao" or the "Company") (NYSE: DAO), an intelligent learning company with industry-leading technology in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024.

Fourth Quarter 2024 Financial Highlights

• Total net revenues were RMB1.3 billion (US$183.6 million), representing a 9.5% decrease from the same period in 2023.
  - Net revenues from learning services were RMB617.7 million (US$84.6 million), representing a 21.2% decrease from the same period in 2023.
  - Net revenues from smart devices were RMB240.4 million (US$32.9 million), representing an 8.1% increase from the same period in 2023.
  - Net revenues from online marketing services were RMB481.7 million (US$66.0 million), representing a modest increase from the same period in 2023.
• Gross margin was 47.8%, compared with 49.9% for the same period in 2023.
• Income from operations was RMB84.2 million (US$11.5 million), representing a 10.3% increase from the same period in 2023.
• Basic and diluted net income per American depositary share ("ADS") attributable to ordinary shareholders was RMB0.71 (US$0.10) and RMB0.70 (US$0.10), respectively, compared with RMB0.47 for the same period of 2023.

Fiscal Year 2024 Financial Highlights

• Total net revenues were RMB5.6 billion (US$770.7 million), representing a 4.4% increase from 2023.
  - Net revenues from learning services were RMB2.7 billion (US$376.4 million), representing a 12.7% decrease from 2023.
  - Net revenues from smart devices were RMB903.7 million (US$123.8 million), remaining stable compared to 2023.
  - Net revenues from online marketing services were RMB2.0 billion (US$270.6 million), representing a 48.3% increase from 2023.
• Gross margin was 48.9%, compared with 51.4% for 2023.
• Income from operations was RMB148.8 million (US$20.4 million), compared with loss from operations of RMB466.3 million for 2023.
• Basic and diluted net income per ADS attributable to ordinary shareholders was RMB0.70 (US$0.10), compared with basic and diluted net loss per ADS attributable to ordinary shareholders of RMB4.53 for 2023.

"We achieved a significant milestone of first-ever full-year profitability in 2024. In terms of products and services, our AI-based and differentiated services enhanced customer loyalty, with retention rate surpassing 70% in the fourth quarter for Youdao Lingshi. In addition, we strengthened collaboration with NetEase in online marketing services, facilitating the long-term development of this segment. AI-driven subscription services continued to upgrade, leading to elevated customer satisfaction and over 130% year-over-year increase in total sales," said Dr. Feng Zhou, Chief Executive Officer and Director of Youdao.

"Looking ahead, we are launching our 'AI Native' strategy-integrating AI more comprehensively across our business lines, for example, automating our advertising platforms and introducing AI-driven tutoring for our course customers. We are excited by the rapid maturing of reasoning models and eager to deliver these innovative projects to our customers," Dr. Zhou concluded.

Fourth Quarter 2024 Financial Results

Net Revenues

Net revenues for the fourth quarter of 2024 were RMB1.3 billion (US$183.6 million), representing a 9.5% decrease from RMB1.5 billion for the same period of 2023.

Net revenues from learning services were RMB617.7 million (US$84.6 million) for the fourth quarter of 2024, representing a 21.2% decrease from RMB784.0 million for the same period of 2023. The year-over-year decrease was due to our continued strategic focus on a more selective customer acquisition approach, prioritizing higher ROI (return on investment) engagements. We believe despite the short-term revenue decline, this strategy has enhanced the overall resilience and operational efficiency of our business.

Net revenues from smart devices were RMB240.4 million (US$32.9 million) for the fourth quarter of 2024, representing an 8.1% increase from RMB222.4 million for the same period of 2023, primarily driven by the continued increase in sales of Youdao Dictionary Pen in 2024.

Net revenues from online marketing services were RMB481.7 million (US$66.0 million) for the fourth quarter of 2024, representing a modest increase from RMB474.1 million for the same period of 2023.

Gross Profit and Gross Margin

Gross profit for the fourth quarter of 2024 was RMB640.8 million (US$87.8 million), representing a 13.3% decrease from RMB738.8 million for the same period of 2023. Gross margin was 47.8% for the fourth quarter of 2024, compared with 49.9% for the same period of 2023.

Gross margin for learning services was 60.0% for the fourth quarter of 2024, compared with 63.6% for the same period of 2023. The decrease was mainly due to the decline in economies of scale as a result of the decreased revenues from learning services.

Gross margin for smart devices increased to 43.9% for the fourth quarter of 2024 from 38.3% for the same period of 2023. The improvement was mainly attributable to the higher gross margin arising from the newly launched Youdao Dictionary Pen in 2024.

Gross margin for online marketing services was 34.2% for the fourth quarter of 2024, compared with 32.7% for the same period of 2023. The increase was mainly attributable to improved gross margin profile of performance-based advertisements through third parties' internet properties compared with the same period of last year.

Operating Expenses

Total operating expenses for the fourth quarter of 2024 were RMB556.6 million (US$76.3 million), compared with RMB662.5 million for the same period of last year.

Sales and marketing expenses for the fourth quarter of 2024 were RMB381.8 million (US$52.3 million), representing a decrease of 13.5% from RMB441.4 million for the same period of 2023. This decrease was attributable to the reduced marketing expenditures, as well as declined outsourcing labor service fees and payroll related expenses in learning services.

Research and development expenses for the fourth quarter of 2024 were RMB120.7 million (US$16.5 million), representing a decrease of 28.2% from RMB168.1 million for the same period of 2023. The decrease was primarily due to the decreased headcount for research and development employees, leading to payroll savings in the fourth quarter of 2024.

General and administrative expenses for the fourth quarter of 2024 were RMB54.1 million (US$7.4 million), largely flat compared with RMB53.0 million for the same period of 2023.

Income from Operations

As a result of the foregoing, income from operations for the fourth quarter of 2024 was RMB84.2 million (US$11.5 million), representing a 10.3% increase from RMB76.3 million for the same period in 2023. The margin of income from operations was 6.3%, compared with 5.2% for the same period of last year.

Net Income Attributable to Youdao's Ordinary Shareholders

Net income attributable to Youdao's ordinary shareholders for the fourth quarter of 2024 was RMB83.0 million (US$11.4 million), representing a 47.0% increase from RMB56.5 million for the same period of last year. Non-GAAP net income attributable to Youdao's ordinary shareholders for the fourth quarter of 2024 was RMB91.8 million (US$12.6 million), representing a 32.5% increase from RMB69.3 million for the same period of last year.

Basic and diluted net income per ADS attributable to ordinary shareholders for the fourth quarter of 2024 was RMB0.71 (US$0.10) and RMB0.70 (US$0.10), respectively, compared with RMB0.47 for the same period of 2023. Non-GAAP basic and diluted net income per ADS attributable to ordinary shareholders was RMB0.78 (US$0.11) and RMB0.77 (US$0.11), respectively, compared with RMB0.58 for the same period of 2023.

Other Information

As of December 31, 2024, Youdao's cash, cash equivalents, current and non-current restricted cash, time deposits and short-term investments totaled RMB662.6 million (US$90.8 million), compared with RMB527.1 million as of December 31, 2023. For the fourth quarter of 2024, net cash provided by operating activities was RMB158.2 million (US$21.7 million). Youdao's ability to continue as a going concern is dependent on management's ability to implement an effective business plan amid a changing regulatory environment, generate operating cash flows, and secure external financing for future development. To support Youdao's future business, NetEase Group has agreed to provide financial support for ongoing operations in the next thirty-six months starting from May 2024. As of December 31, 2024, Youdao has received various forms of financial support from the NetEase Group, including, among others, RMB878.0 million in short-term loan, and US$126.1 million in long-term loans maturing on March 31, 2027 drawn from the US$300.0 million revolving loan facility.

As of December 31, 2024, the Company's contract liabilities, which mainly consisted of deferred revenues generated from Youdao's learning services, were RMB961.0 million (US$131.7 million), compared with RMB1.1 billion as of December 31, 2023.

Fiscal Year 2024 Financial Results

Net Revenues

Net revenues for 2024 were RMB5.6 billion (US$770.7 million), representing a 4.4% increase from RMB5.4 billion for 2023.

Net revenues from learning services were RMB2.7 billion (US$376.4 million) for 2024, representing a 12.7% decrease from RMB3.1 billion for 2023. The decrease reflects our commitment to a more selective customer acquisition approach, prioritizing higher ROI engagements. This strategy has contributed to the overall resilience and efficiency of our business.

Net revenues from smart devices were RMB903.7 million (US$123.8 million) for 2024, remaining stable compared to 2023.

Net revenues from online marketing services were RMB2.0 billion (US$270.6 million) for 2024, representing a 48.3% increase from RMB1.3 billion for 2023. The increase was mainly attributable to the increased demand for performance-based advertisements through third parties' internet properties, which was driven by our continued investments in cutting-edge AI technology.

Gross Profit and Gross Margin

Gross profit for 2024 was RMB2.7 billion (US$376.5 million), remaining stable compared to 2023. Gross margin for 2024 was 48.9%, compared with 51.4% for 2023.

Gross margin for learning services was 61.4% for 2024, compared with 63.2% for 2023. The decrease was mainly due to the decline in economies of scale as a result of the decreased revenues from learning services.

Gross margin for smart devices was 38.7% for 2024, remaining stable compared to 2023.

Gross margin for online marketing services increased to 36.0 % for 2024 from 31.7% for 2023. The increase was mainly attributable to improved gross margin profile of performance-based advertisements through third parties' internet properties compared with last year.

Operating Expenses

Total operating expenses for 2024 were RMB2.6 billion (US$356.2 million), representing a decrease of 19.6%, compared with RMB3.2 billion for 2023.

Sales and marketing expenses for 2024 were RMB1.9 billion (US$256.5 million), representing a decrease of 17.5%, compared with RMB2.3 billion for 2023. This decrease was primarily attributable to the reduced marketing expenditures, as well as declined outsourcing labor service fees and payroll related expenses in learning services.

Research and development expenses for 2024 were RMB540.0 million (US$74.0 million), representing a decrease of 27.4%, compared with RMB743.4 million for 2023. The decrease was primarily due to the decreased headcount for research and development employees, leading to payroll savings in 2024.

General and administrative expenses for 2024 were RMB187.1 million (US$25.6 million), representing a decrease of 15.7%, compared with RMB222.0 million for 2023. The decrease was primarily due to the decreased headcount for general and administrative employees, leading to payroll savings in 2024.

Income/(Loss) from Operations

Income from operations for 2024 was RMB148.8 million (US$20.4 million), compared with loss from operations of RMB466.3 million for 2023. The margin of income from operations was 2.6%, compared with margin of loss from operations of 8.7% for 2023.

Net Income/(Loss) Attributable to Youdao's Ordinary Shareholders

Net income attributable to Youdao's ordinary shareholders for 2024 was RMB82.2 million (US$11.3 million), compared with net loss attributable to Youdao's ordinary shareholders of RMB549.9 million for 2023. Non-GAAP net income attributable to Youdao's ordinary shareholders for 2024 was RMB104.8 million (US$14.4 million), compared with non-GAAP net loss attributable to Youdao's ordinary shareholders of RMB475.4 million for 2023.

Basic and diluted net income per ADS attributable to ordinary shareholders for 2024 was RMB0.70 (US$0.10), compared with basic and diluted net loss per ADS attributable to ordinary shareholders of RMB4.53 for 2023. Non-GAAP basic and diluted net income per ADS attributable to ordinary shareholders was RMB0.89 (US$0.12), compared with non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders of RMB3.92 for 2023.

Operating Cash Flow

For 2024, net cash used in operating activities was RMB67.9 million (US$9.3 million), compared with RMB438.1 million for 2023.

Share Repurchase Program

On November 17, 2022, the Company announced that its board of directors had authorized the Company to adopt a share repurchase program in accordance with applicable laws and regulations for up to US$20.0 million of its Class A ordinary shares (including in the form of ADSs) during a period of up to 36 months. This amount was subsequently increased to US$40.0 million in August 2023. As of December 31, 2024, the Company had repurchased a total of approximately 7.5 million ADSs for a total consideration of approximately US$33.8 million in the open market under the share repurchase program.

Conference Call

Youdao's management team will host a teleconference call with simultaneous webcast at 5:00 a.m. Eastern Time on Thursday, February 20, 2025 (Beijing/Hong Kong Time: 6:00 p.m., Thursday, February 20, 2025). Youdao's management will be on the call to discuss the financial results and answer questions.

Dial-in details for the earnings conference call are as follows:

United States (toll free):	+1-888-346-8982
International:	+1-412-902-4272
Mainland China (toll free):	400-120-1203
Hong Kong (toll free):	800-905-945
Hong Kong:	+852-3018-4992
Conference ID:	6589745

A live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.youdao.com.

A replay of the conference call will be accessible by phone one hour after the conclusion of the live call at the following numbers, until February 27, 2025:

United States:			+1-877-344-7529
International:			+1-412-317-0088
Replay Access Code:			6589745

About Youdao, Inc. 

Youdao, Inc. (NYSE: DAO) is an intelligent learning company with industry-leading technology in China dedicated to developing and using technologies to provide learning content, applications and solutions to users of all ages. Building on the popularity of its online knowledge tools such as Youdao Dictionary and Youdao Translation, Youdao now offers smart devices, STEAM courses, adult and vocational courses, and education digitalization solutions. In addition, Youdao has developed a variety of interactive learning apps. Youdao was founded in 2006 as part of NetEase, Inc. (NASDAQ: NTES; HKEX: 9999), a leading internet technology company in China.

For more information, please visit: http://ir.youdao.com.

Non-GAAP Measures

Youdao considers and uses non-GAAP financial measures, such as non-GAAP net income/(loss) attributable to the Company's ordinary shareholders and non-GAAP basic and diluted net income/(loss) per ADS, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Youdao defines non-GAAP net income/(loss) attributable to the Company's ordinary shareholders as net income/(loss) attributable to the Company's ordinary shareholders excluding share-based compensation expenses and impairment of long-term investments. Non-GAAP net income/(loss) attributable to the Company's ordinary shareholders enables Youdao's management to assess its operating results without considering the impact of these items, which are non-cash charges in nature. Youdao believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating the Company's current operating performance and prospects in the same manner as management does, if they so choose.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools, which possibly do not reflect all items of expense that affect our operations. In addition, the non-GAAP financial measures Youdao uses may differ from the non-GAAP measures uses by other companies, including peer companies, and therefore their comparability may be limited.

For more information on these non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this release.

The accompanying table has more details on the reconciliation between our GAAP financial measures that are mostly directly comparable to non-GAAP financial measures. Youdao encourages you to review its financial information in its entirety and not rely on a single financial measure.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.2993 to US$1.00, the exchange rate on December 31, 2024 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Further information regarding such risks, uncertainties or factors is included in the Company's filings with the SEC. The announced results of the fourth quarter and full year of 2024 are preliminary and subject to adjustments. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

For investor and media inquiries, please contact:

In China:
Jeffrey Wang
Youdao, Inc.
Tel: +86-10-8255-8163 ext. 89980
E-mail: IR@rd.netease.com 

Piacente Financial Communications
Helen Wu
Tel: +86-10-6508-0677
E-mail: youdao@thepiacentegroup.com 

In the United States:
Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: youdao@thepiacentegroup.com 

 

YOUDAO, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(RMB and USD in thousands)
		As of December 31,		As of December 31,		As of December 31,
		2023		2024		2024
		RMB		RMB		USD (1)
Assets
Current assets:
Cash and cash equivalents		454,536		592,721		81,202
Time deposits		277		-		-
Restricted cash		395		3,567		489
Short-term investments		71,848		63,064		8,640
Accounts receivable, net		354,006		418,644		57,354
Inventories		217,067		174,741		23,939
Amounts due from NetEase Group		26,117		79,700		10,919
Prepayment and other current assets		175,705		154,331		21,143
Total current assets		1,299,951		1,486,768		203,686
Non-current assets:
Property, equipment and software, net		70,906		46,725		6,401
Operating lease right-of-use assets, net		89,022		68,494		9,384
Long-term investments		51,396		72,380		9,916
Goodwill		109,944		109,944		15,062
Other assets, net		44,976		30,084		4,122
Total non-current assets		366,244		327,627		44,885
Total assets		1,666,195		1,814,395		248,571
Liabilities, Mezzanine Equity and Shareholders' Deficit
Current liabilities:
Accounts payables		159,005		145,148		19,885
Payroll payable		282,679		264,520		36,239
Amounts due to NetEase Group		82,430		21,997		3,014
Contract liabilities		1,052,622		961,024		131,660
Taxes payable		52,781		37,603		5,152
Accrued liabilities and other payables		591,770		638,660		87,495
Short-term loans from NetEase Group		878,000		878,000		120,286
Total current liabilities		3,099,287		2,946,952		403,731
Non-current liabilities:
Long-term lease liabilities		49,337		25,566		3,503
Long-term loans from NetEase Group		630,360		913,000		125,080
Other non-current liabilities		16,314		18,189		2,492
Total non-current liabilities		696,011		956,755		131,075
Total liabilities		3,795,298		3,903,707		534,806
Mezzanine equity		37,961		-		-
Shareholders' deficit:
Youdao's shareholders' deficit		(2,186,736)		(2,139,958)		(293,173)
Noncontrolling interests		19,672		50,646		6,938
Total shareholders' deficit		(2,167,064)		(2,089,312)		(286,235)
Total liabilities, mezzanine equity and shareholders' deficit		1,666,195		1,814,395		248,571
Note 1:
The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00=RMB7.2993 on the last trading day of December  (December 31, 2024) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.

 

 

YOUDAO, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(RMB and USD in thousands, except share and per ADS data)
		Three Months Ended								Year Ended
		December 31,		September 30,		December 31,		December 31,		December 31,		December 31,
		2023		2024		2024		2024		2023		2024
		RMB		RMB		RMB		USD (1)		RMB		RMB
Net revenues:
Learning services		784,012		767,859		617,673		84,621		3,148,114		2,747,290
Smart devices		222,407		315,305		240,444		32,941		909,192		903,669
Online marketing services		474,102		489,377		481,681		65,990		1,331,902		1,974,960
Total net revenues		1,480,521		1,572,541		1,339,798		183,552		5,389,208		5,625,919
Cost of revenues (2)		(741,720)		(783,085)		(699,045)		(95,769)		(2,621,746)		(2,877,428)
Gross profit		738,801		789,456		640,753		87,783		2,767,462		2,748,491
Operating expenses:
Sales and marketing expenses (2)		(441,399)		(519,620)		(381,815)		(52,308)		(2,268,428)		(1,872,586)
Research and development expenses (2)		(168,130)		(119,594)		(120,694)		(16,535)		(743,364)		(539,998)
General and administrative expenses (2)		(52,989)		(42,968)		(54,068)		(7,408)		(221,996)		(187,086)
Total operating expenses		(662,518)		(682,182)		(556,577)		(76,251)		(3,233,788)		(2,599,670)
Income/(Loss) from operations		76,283		107,274		84,176		11,532		(466,326)		148,821
Interest income		1,733		1,057		970		133		8,348		3,919
Interest expense		(18,869)		(15,112)		(16,828)		(2,305)		(69,472)		(73,090)
Others, net		(2,589)		(1,992)		1,594		218		(11,578)		1,585
Income/(Loss) before tax		56,558		91,227		69,912		9,578		(539,028)		81,235
Income tax (expenses)/benefits		(441)		(2,370)		2,386		327		(11,089)		(6,009)
Net income/(loss)		56,117		88,857		72,298		9,905		(550,117)		75,226
Net loss/(income) attributable to noncontrolling interests		365		(2,604)		10,705		1,466		182		6,987
Net income/(loss) attributable to ordinary shareholders of the Company		56,482		86,253		83,003		11,371		(549,935)		82,213
Basic net income/(loss) per ADS		0.47		0.74		0.71		0.10		(4.53)		0.70
Diluted net income/(loss) per ADS		0.47		0.74		0.70		0.10		(4.53)		0.70
Shares used in computing basic net income/(loss) per ADS		119,764,891		116,965,181		117,259,091		117,259,091		121,381,857		117,426,938
Shares used in computing diluted net income/(loss) per ADS		120,426,624		117,343,848		118,705,233		118,705,233		121,381,857		118,173,469
Note 1:
The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00=RMB7.2993 on the last trading day of December (December 31, 2024) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
Note 2:
Share-based compensation in each category:
Cost of revenues		(2,975)		(171)		1,025		140		1,645		2,359
Sales and marketing expenses		865		(1,359)		1,069		146		6,071		1,183
Research and development expenses		(312)		1,868		2,402		329		8,020		8,712
General and administrative expenses		5,224		2,072		4,285		588		15,061		10,342

 

 

YOUDAO, INC.
UNAUDITED ADDITIONAL INFORMATION
(RMB and USD in thousands)
		Three Months Ended								Year Ended
		December 31,		September 30,		December 31,		December 31,		December 31,		December 31,
		2023		2024		2024		2024		2023		2024
		RMB		RMB		RMB		USD		RMB		RMB
Net revenues
Learning services		784,012		767,859		617,673		84,621		3,148,114		2,747,290
Smart devices		222,407		315,305		240,444		32,941		909,192		903,669
Online marketing services		474,102		489,377		481,681		65,990		1,331,902		1,974,960
Total net revenues		1,480,521		1,572,541		1,339,798		183,552		5,389,208		5,625,919
Cost of revenues
Learning services		285,383		290,877		247,059		33,847		1,159,357		1,060,177
Smart devices		137,150		180,390		134,896		18,481		552,810		553,620
Online marketing services		319,187		311,818		317,090		43,441		909,579		1,263,631
Total cost of revenues		741,720		783,085		699,045		95,769		2,621,746		2,877,428
Gross margin
Learning services		63.6 %		62.1 %		60.0 %		60.0 %		63.2 %		61.4 %
Smart devices		38.3 %		42.8 %		43.9 %		43.9 %		39.2 %		38.7 %
Online marketing services		32.7 %		36.3 %		34.2 %		34.2 %		31.7 %		36.0 %
Total gross margin		49.9 %		50.2 %		47.8 %		47.8 %		51.4 %		48.9 %

 

 

YOUDAO, INC.
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(RMB and USD in thousands, except share and per ADS data)
		Three Months Ended								Year Ended
		December 31,		September 30,		December 31,		December 31,		December 31,		December 31,
		2023		2024		2024		2024		2023		2024
		RMB		RMB		RMB		USD		RMB		RMB
Net income/(loss) attributable to ordinary shareholders of the Company		56,482		86,253		83,003		11,371		(549,935)		82,213
Add: share-based compensation		2,802		2,410		8,781		1,203		30,797		22,596
impairment of long-term investments		10,000		-		-		-		43,740		-
Non-GAAP net income/(loss) attributable to ordinary shareholders of the Company		69,284		88,663		91,784		12,574		(475,398)		104,809
Non-GAAP basic net income/(loss) per ADS		0.58		0.76		0.78		0.11		(3.92)		0.89
Non-GAAP diluted net income/(loss) per ADS		0.58		0.76		0.77		0.11		(3.92)		0.89
Non-GAAP shares used in computing basic net income/(loss) per ADS		119,764,891		116,965,181		117,259,091		117,259,091		121,381,857		117,426,938
Non-GAAP shares used in computing diluted net income/(loss) per ADS		120,426,624		117,343,848		118,705,233		118,705,233		121,381,857		118,173,469

 

 

View original content:https://www.prnewswire.com/news-releases/youdao-reports-fourth-quarter-and-fiscal-year-2024-unaudited-financial-results-302381231.html

SOURCE Youdao, Inc.

FAQ

What were Youdao's (DAO) Q4 2024 revenue and profit figures?

In Q4 2024, Youdao reported total net revenues of RMB1.3 billion (US$183.6 million) and net income of RMB83.0 million (US$11.4 million).

How did Youdao's (DAO) learning services perform in FY 2024?

Learning services revenue declined 12.7% to RMB2.7 billion in FY 2024, due to a more selective customer acquisition strategy.

What was Youdao's (DAO) customer retention rate for Lingshi in Q4 2024?

Youdao Lingshi achieved a retention rate surpassing 70% in the fourth quarter of 2024.

How much financial support has Youdao (DAO) received from NetEase Group?

As of December 31, 2024, Youdao received RMB878.0 million in short-term loans and US$126.1 million in long-term loans from NetEase Group.

What is Youdao's (DAO) new AI strategy announced in Q4 2024?

Youdao announced its 'AI Native' strategy to integrate AI comprehensively across business lines, including automating advertising platforms and introducing AI-driven tutoring.