Youdao, Inc. (NYSE: DAO) Surpasses Earnings Expectations with AI-Powered Solutions

Core Insights - Youdao, Inc. is an AI-powered solutions provider based in Hangzhou, China, focusing on learning and advertising verticals with products like Youdao Lingshi and AI-driven subscription services [1] - The company reported earnings per share of $0.05, surpassing the estimated $0.03, marking its sixth consecutive quarter of operating profitability [2][6] - Youdao's revenue for the fourth quarter reached approximately $223.7 million, a 16.8% increase year-over-year, driven by its AI-Native strategy [3][6] Financial Performance - The company's revenue exceeded the forecasted $211.5 million, showcasing strong operational momentum [3] - Despite a high price-to-earnings (P/E) ratio of 53.64, investors remain confident in Youdao's growth potential [4] - The price-to-sales ratio is 1.35 and the enterprise value to sales ratio is 1.59, indicating a reasonable valuation relative to its sales [4] Financial Ratios - Youdao has a negative debt-to-equity ratio of -0.89, suggesting more liabilities than equity, which could be a concern [4] - The current ratio of 0.54 indicates potential challenges in covering short-term liabilities with short-term assets [5] - The company achieved its first full year of positive operating cash flow in 2025, reflecting financial resilience, with an earnings yield of 1.86% [5][6]