Youdao (DAO) investor relations material

Executive summary

• Fourth quarter 2025 net revenues rose 16.8% year-over-year to RMB 1.6 billion, with all business segments contributing and learning services and online marketing leading growth.

• Full year 2025 net revenues reached RMB 5.9 billion, up 5% year-over-year, and income from operations rose 48.7% to RMB 221.3 million.

• Achieved first-ever full year net cash inflow from operating activities at RMB 55.2 million, marking a significant financial milestone.

• AI-driven strategy accelerated growth across learning, marketing, and smart device businesses, with a focus on sustainable growth and vertical large language models.

• Achieved sixth consecutive quarter of operating profitability in 2025, driven by AI-driven subscription products and online marketing services.

Financial highlights

• Q4 2025 net revenues reached RMB 1,564.7 million, up from RMB 1,339.8 million in Q4 2024.

• Q4 2025 gross profit was RMB 705.4 million, with a gross margin of 45.1%, and Q4 operating profit was RMB 60.2 million.

• Q4 2025 net income attributable to ordinary shareholders was RMB 48.2 million; full year 2025 net income was RMB 107.3 million, up 30.6%.

• Q4 2025 net cash provided by operating activities was RMB 184.2 million; full year 2025 net cash inflow was RMB 55.2 million.

• Q4 2025 basic/diluted net income per ADS: RMB 0.41/0.40; full year 2025: RMB 0.91/0.90.

Outlook and guidance

• 2026 focus on sustainable growth, leveraging AI-native strategy and generative AI applications across learning and advertising.

• Online marketing expected to benefit from AI-driven solutions and sector tailwinds, with new product launches and upgrades planned.

• Learning services segment expected to return to double-digit year-over-year growth in 2026, with expansion of AI-powered offerings.

• Continued investment in AI agents, vertical large language models, and new applications to drive user engagement and revenue.