Youdao Q1 Revenue Rises 3.8% to RMB1.3B, Marketing Jumps 20.9%
Youdao’s Q1 revenue climbed 3.8% to RMB1.3 billion, led by a 20.9% surge in online marketing to RMB611.1 million and a 4.2% rise in learning services, while smart device sales dropped 42.6% to RMB109.4 million. Income declined 44.7% to RMB57.5 million, with gross margin narrowing to 44.7% from 47.3%.
1. Financial Highlights
Youdao’s total net revenue for the first quarter reached RMB1.3 billion, a 3.8% year-over-year increase driven by a 20.9% expansion in online marketing services to RMB611.1 million and a 4.2% rise in learning services. Smart device revenues fell 42.6% to RMB109.4 million due to weakened demand for smart learning devices.
2. Margin and Profit
Gross profit held at RMB602.3 million, resulting in a 44.7% gross margin down from 47.3% a year earlier, pressured by lower device margins. Income from operations declined 44.7% to RMB57.5 million as narrowing margins and higher credit loss provisions outweighed stable R&D spending.
3. AI Initiatives and Outlook
Youdao expanded its AI-native strategy with launches of LobsterAI and Youdao Baoku, applying its Confucius large language model to learning and productivity scenarios. Management plans to refine vertical LLMs and scale AI agent offerings to boost user engagement, profitability and operating cash flow.