Youdao Reports Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results

Financial Performance Overview - Total net revenues for Q4 2024 were RMB1.3 billion (US$183.6 million), a 9.5% decrease from RMB1.5 billion in Q4 2023 [2][5] - For the fiscal year 2024, total net revenues reached RMB5.6 billion (US$770.7 million), representing a 4.4% increase from RMB5.4 billion in 2023 [21] Revenue Breakdown - Net revenues from learning services in Q4 2024 were RMB617.7 million (US$84.6 million), a 21.2% decrease from RMB784.0 million in Q4 2023 [2][6] - Net revenues from smart devices increased to RMB240.4 million (US$32.9 million) in Q4 2024, an 8.1% increase from RMB222.4 million in Q4 2023 [7] - Net revenues from online marketing services were RMB481.7 million (US$66.0 million) in Q4 2024, showing a modest increase from RMB474.1 million in Q4 2023 [7] Profitability Metrics - Gross profit for Q4 2024 was RMB640.8 million (US$87.8 million), a 13.3% decrease from RMB738.8 million in Q4 2023, with a gross margin of 47.8% compared to 49.9% in the same period last year [8][9] - Income from operations for Q4 2024 was RMB84.2 million (US$11.5 million), a 10.3% increase from RMB76.3 million in Q4 2023, with an operating margin of 6.3% [15] - Net income attributable to ordinary shareholders for Q4 2024 was RMB83.0 million (US$11.4 million), a 47.0% increase from RMB56.5 million in Q4 2023 [16] Strategic Initiatives - The company achieved its first-ever full-year profitability in 2024, with a retention rate exceeding 70% for Youdao Lingshi in Q4 [3] - An 'AI Native' strategy is being launched to integrate AI across business lines, including automating advertising platforms and introducing AI-driven tutoring [4] Operating Expenses - Total operating expenses for Q4 2024 were RMB556.6 million (US$76.3 million), down from RMB662.5 million in Q4 2023 [11] - Sales and marketing expenses decreased by 13.5% to RMB381.8 million (US$52.3 million) in Q4 2024 [12] - Research and development expenses were RMB120.7 million (US$16.5 million), a decrease of 28.2% from RMB168.1 million in Q4 2023 [13] Cash and Financial Position - As of December 31, 2024, the company's cash and cash equivalents totaled RMB662.6 million (US$90.8 million), up from RMB527.1 million a year earlier [19] - The company has received financial support from NetEase Group, including RMB878.0 million in short-term loans and US$126.1 million in long-term loans [19]