Youdao(US:DAO) Zheng Quan Shi Bao Wang·2025-05-15 12:13Core Insights - The company reported a total revenue of 1.3 billion RMB in Q1, a year-on-year decrease of 6.7%, but achieved an operating profit of 104 million RMB, marking a historical high for Q1 with a year-on-year increase of 247.7% [1] Revenue Breakdown - Learning services revenue was 602 million RMB (approximately 83 million USD), down 16.1% year-on-year, attributed to a strict customer acquisition strategy focusing on high return participation [1] - Smart devices revenue reached 191 million RMB (approximately 26 million USD), up 5.1% year-on-year, driven by continued sales growth of the Youdao Dictionary Pen [1] - Online marketing services revenue was 505 million RMB (approximately 70 million USD), reflecting a year-on-year increase of 2.6% [1] Profitability Metrics - The gross margin for learning services was 59.8%, down from 63.1% in the same period last year, primarily due to reduced revenue leading to decreased economies of scale [1] - The gross margin for smart devices improved from 32.6% in the previous year to 52.3%, attributed to higher margins from the newly launched Youdao Dictionary Pen [1] Expense Management - Total operating expenses for Q1 were 510 million RMB (approximately 70 million USD), a decrease from 652 million RMB in the same period last year [2] - Sales and marketing expenses were 358 million RMB (approximately 49 million USD), down 21.5% year-on-year due to reduced marketing spending and lower wage costs related to learning services and smart devices [2] - R&D expenses were 116 million RMB (approximately 16 million USD), a year-on-year decrease of 21.3%, mainly due to a reduction in the number of R&D staff [2] Cash Position - The company's total cash, cash equivalents, restricted cash, and short-term investments amounted to 425 million RMB (approximately 58.5 million USD), down from 663 million RMB as of December 31, 2024 [2] Business Highlights - The Youdao AI subscription service achieved sales of nearly 70 million RMB, with a year-on-year growth of over 40% [2] - The number of clients for performance advertising increased by over 20% year-on-year [2]