Youdao, Inc. Achieves Profitability Milestone in Q1 2024

Youdao, Inc., a prominent intelligent learning company based in China, has recently unveiled its unaudited financial results for the first quarter of 2024. The company achieved a significant milestone by recording its first profitable first quarter and maintaining profitability for two consecutive quarters. One of the key contributors to this success was Youdao Lingshi, the company's educational platform, which implemented personalized teaching methods resulting in a remarkable net revenue of RMB492.7 million, marking a substantial 125.9% increase from the previous year.

Emphasizing digital content services, online marketing services, and AI-driven subscription services has been pivotal to Youdao's growth trajectory. By harnessing AI technology, the company witnessed a remarkable 140% year-over-year growth in total sales of AI-driven subscription services during the first quarter.

The total net revenues for Q1 2024 amounted to RMB1.4 billion, reflecting a 19.7% surge compared to the same period in 2023. While revenues from learning services and smart devices experienced minor declines, the revenue from online marketing services soared by 125.9%, primarily driven by increased sales of performance-based advertisements.

With a gross profit of RMB681.5 million and a gross margin of 49.0%, Youdao managed its operating expenses effectively. Sales and marketing expenses decreased by 19.4%, and research and development expenses were reduced by 19.7%, leading to an operating income of RMB29.9 million, a substantial improvement from the previous year's loss.

The net income attributable to Youdao's ordinary shareholders for Q1 2024 stood at RMB12.4 million, marking a positive shift from the net loss in the same period last year. The non-GAAP net income also exhibited growth, reaching RMB20.3 million. Basic and diluted net income per ADS attributable to ordinary shareholders were RMB0.11 and RMB0.10, respectively, showcasing a significant improvement from the previous year's losses.

Youdao, Inc.'s strong financial performance in the first quarter of 2024 underscores its commitment to innovation and growth in the intelligent learning sector. With a strategic focus on digital services and AI-driven solutions, the company has not only achieved profitability but also demonstrated resilience and adaptability in a competitive market landscape. The positive trajectory in revenues and income signifies a promising outlook for Youdao, positioning it as a key player in the evolving educational technology industry.