Youdao Inc Adr Class A ( (DAO) ) has released its Q3 earnings. Here is a breakdown of the information Youdao Inc Adr Class A presented to its investors.
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Youdao Inc, an intelligent learning company in China, specializes in developing technology-driven learning content, applications, and solutions, catering to users across various age groups. In its latest earnings report for the third quarter of 2024, Youdao reported a modest 2.2% increase in total net revenues, reaching RMB1.6 billion. The company’s income from operations marked a significant milestone, turning positive at RMB107.3 million, compared to a loss in the previous year. This improvement was supported by substantial growth in their online marketing services and smart devices, despite a decline in learning services revenue.
Key financial highlights include a 45.6% increase in online marketing services revenue, driven by advancements in AI technology, and a 25.2% rise in smart devices revenue, attributed to the successful launch of new products. However, learning services saw a 19.2% decline, reflecting a strategic shift towards higher ROI engagements. The gross margin dipped to 50.2% from 55.9% the previous year, largely due to decreased learning services revenues.
Operating expenses experienced a notable reduction, with sales and marketing expenses dropping by 22.9%, and research and development expenses decreasing by 36.2%. This was mainly due to reduced marketing expenditures and payroll savings. Consequently, Youdao achieved a net income of RMB86.3 million, compared to a net loss in the same period last year, signaling a turnaround in its financial performance.
Looking forward, Youdao aims to further enhance its user experience and value through digital content services and AI-driven solutions. The company plans to explore new domestic and international opportunities in online marketing to support client success while maintaining a focus on profitability and prudent operations.
