Core Insights - The company reported a strong performance in Q4 2025, with net revenues of RMB 1.6 billion, reflecting a year-over-year increase of 16.8% and marking the sixth consecutive quarter of operating profitability [4][7] - Learning services net revenues grew 17.7% year over year to RMB 727.2 million, attributed to a return to growth following strategic restructuring [1][6] - Online marketing revenue surged 37.2% in Q4 to RMB 660.9 million, driven by demand from various sectors including gaming and AI applications [5][11] Financial Performance - For the full year 2025, total net revenues rose 5% year over year to RMB 5.9 billion, with operating profit increasing by 48.7% to RMB 221.3 million [3] - The company achieved its first annual positive operating cash flow of RMB 55.2 million in 2025, a significant improvement from cash used in 2024 [3][4] - Q4 net cash provided by operating activities was RMB 184.2 million, up 16.4% from the prior year [4][7] Growth Drivers - AI-driven subscription services were a key growth driver, with Q4 sales exceeding RMB 100 million, up more than 80% year over year [8] - The company plans to enhance its learning services with continued product innovation and expects to achieve "around double-digit" year-over-year growth in 2026 [9] - The launch of new AI tools, such as ScholarAI, contributed to significant sales growth, with fourth-quarter sales doubling quarter over quarter [9] Segment Performance - The smart devices segment saw a decline, with net revenues of RMB 176.5 million in Q4, down 26.6% year over year [16] - Despite the decline in smart devices, the Youdao Dictionary Pen remained a top-selling product during major shopping events [16][17] - The company highlighted the performance of Youdao Lingshi, which saw revenue growth of over 40% year over year and improved retention rates [7] Strategic Focus - Management emphasized a balanced approach to expenditures, focusing on strategic investments while maintaining cost discipline [2] - The company plans to continue investing in AI applications, gaming, and international KOL business as growth areas for 2026 [15][19] - The commitment to an "AI-native" strategy includes ongoing investment in vertical large language models and AI agents across various business lines [19]

Youdao (NYSE:DAO) Q4 2025 Earnings call February 11, 2026 05:00 AM ET Company ParticipantsFeng Zhou - CEOJeffrey Wang - Director of Investor RelationsJialong Shi - Head of China Internet Equity Research and Executive DirectorLei Jin - PresidentLinda Huang - Head of Asia Consumer ResearchPeng Su - SVPWei Li - VP of FinanceConference Call ParticipantsBo Zhang - Research AnalystBrenda Zhao - AnalystBrian Gong - Internet and Media Research AnalystOperatorGood day and welcome to Youdao's fourth quarter 2025 and ...

Youdao (NYSE:DAO) Q4 2025 Earnings call February 11, 2026 05:00 AM ET Company ParticipantsFeng Zhou - CEOJeffrey Wang - Director of Investor RelationsJialong Shi - Head of China Internet Equity Research and Executive DirectorLei Jin - PresidentLinda Huang - Head of Asia Consumer ResearchPeng Su - SVPWei Zhang - Investment Banking InternConference Call ParticipantsBrenda Zhao - AnalystBrian Gong - Internet and Media Research AnalystOperatorGood day and welcome to Youdao's fourth quarter 2025 and full year ea ...