Youdao Q4 2025 Revenue Jumps 27% While Gross Margin Compresses 340bps
Youdao's Q4 2025 revenue climbed 27.4% to RMB1.62 billion on record subscription sales, while its adjusted gross margin contracted 340 basis points to 48.6% due to higher content and AI R&D costs. Operating expenses jumped 30.2% year-over-year, narrowing operating income to RMB85 million from RMB122 million a year earlier.
1. Robust Revenue Growth
Youdao achieved RMB1.62 billion in Q4 2025 revenue, up 27.4% year-over-year, driven by record growth in its online learning subscription base and strong uptake of AI-powered educational tools.
2. Gross Margin Compression
Adjusted gross margin fell 340 basis points to 48.6% as the company increased spending on premium content licensing and accelerated AI R&D investments to enhance its platform.
3. Operating Expense Surge
Total operating expenses rose 30.2% to support marketing and product development initiatives, reducing operating income to RMB85 million, down from RMB122 million in Q4 2024.