Youdao Inc Adr Class A ( (DAO) ) has released its Q2 earnings. Here is a breakdown of the information Youdao Inc Adr Class A presented to its investors.
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Youdao Inc, a subsidiary of NetEase, Inc., is an AI-powered solutions provider focusing on learning and advertising applications. The company offers learning services, online marketing services, and smart devices, leveraging advanced AI technologies to enhance user experience and engagement.
In its second quarter of 2025, Youdao reported a 7.2% increase in total net revenues, reaching RMB1.4 billion (US$197.9 million). The company achieved its first-ever profitable second quarter, driven by its AI Native Strategy and the release of new AI products, including the Large Language Model Confucius 3 and AI Ad Placement Optimizer.
Key financial highlights include a 23.8% increase in online marketing services revenues and a 2.2% rise in learning services revenues. However, smart devices revenues saw a 23.9% decline due to reduced consumer electronics demand. The gross margin decreased to 43.0% from 48.2% in the same period last year, while operating expenses were reduced by 18.1%.
Despite a net loss of RMB17.8 million (US$2.5 million), Youdao’s non-GAAP net income was RMB12.5 million (US$1.7 million). The company also continued its share repurchase program, having bought back approximately 7.5 million ADSs for US$33.8 million.
Looking forward, Youdao aims to further its AI Native Strategy, focusing on optimizing its AI models and enhancing technological innovations in learning and advertising to boost productivity and return on investment.