Youdao Reports Fourth Quarter and Fiscal Year 2025 Unaudited Financial Results

Core Viewpoint - Youdao, Inc. reported its unaudited financial results for the fourth quarter and fiscal year 2025, highlighting a mixed performance with increased total net revenues but declines in certain segments, particularly smart devices and learning services [1][2]. Financial Highlights Fourth Quarter 2025 - Basic and diluted net income per ADS attributable to ordinary shareholders were RMB0.41 (US$0.06) and RMB0.40 (US$0.06), down from RMB0.71 and RMB0.70 in Q4 2024 [1]. - Total net revenues reached RMB1.6 billion (US$223.7 million), a 16.8% increase from RMB1.3 billion in Q4 2024 [1]. - Net revenues from learning services were RMB727.2 million (US$104.0 million), up 17.7% from RMB617.7 million in Q4 2024 [1]. - Net revenues from smart devices were RMB176.5 million (US$25.2 million), down 26.6% from RMB240.4 million in Q4 2024 [1]. - Net revenues from online marketing services were RMB660.9 million (US$94.5 million), a 37.2% increase from RMB481.7 million in Q4 2024 [1]. Fiscal Year 2025 - Total net revenues for the year were RMB5.9 billion (US$845.0 million), a 5.0% increase from RMB5.6 billion in 2024 [2]. - Net revenues from learning services were RMB2.6 billion (US$376.2 million), down 4.2% from RMB2.7 billion in 2024 [2]. - Net revenues from smart devices were RMB739.6 million (US$105.8 million), down 18.2% from RMB903.7 million in 2024 [2]. - Net revenues from online marketing services were RMB2.5 billion (US$363.0 million), up 28.5% from RMB2.0 billion in 2024 [2]. Profitability Metrics - Gross margin for Q4 2025 was 45.1%, down from 47.8% in Q4 2024 [1]. - Gross profit for Q4 2025 was RMB705.4 million (US$100.9 million), a 10.1% increase from RMB640.8 million in Q4 2024 [1]. - For the fiscal year 2025, gross margin was 44.3%, compared to 48.9% in 2024 [2]. Operating Expenses - Total operating expenses for Q4 2025 were RMB645.2 million (US$92.3 million), compared to RMB556.6 million in Q4 2024 [2]. - Sales and marketing expenses for Q4 2025 were RMB437.1 million (US$62.5 million), up 14.5% from RMB381.8 million in Q4 2024 [2]. - Research and development expenses for Q4 2025 were RMB142.6 million (US$20.4 million), an increase of 18.2% from RMB120.7 million in Q4 2024 [2]. Cash Flow and Financial Position - As of December 31, 2025, Youdao's cash and short-term investments totaled RMB743.2 million (US$106.3 million), up from RMB662.6 million a year earlier [2]. - Net cash provided by operating activities for Q4 2025 was RMB184.2 million (US$26.3 million) [2]. - Youdao has received financial support from the NetEase Group, including RMB878.0 million in short-term loans and US$132.1 million in long-term loans [2]. Future Outlook - The company aims to focus on its AI-Native strategy, emphasizing learning services and advertising, with plans to advance vertical large language models and expand AI-driven applications [1].