China's Youdao Q4 revenue rises 16.8% yr/yr

Youdao

11/02/2026 08:41

Overview

China AI solutions provider's Q4 revenue rose 16.8% yr/yr

Gross margin for Q4 fell to 45.1% from 47.8% last year

Q4 operating income decreased 28.5% yr/yr

Outlook

Youdao remains committed to AI-Native strategy focusing on learning services and advertising

Company aims to deliver differentiated user experiences and drive sustainable long-term growth

Result Drivers

ONLINE MARKETING GROWTH - Revenue from online marketing services increased 37.2% yr/yr, driven by demand from NetEase group and overseas markets due to AI investments

LEARNING SERVICES INCREASE - Learning services revenue rose 17.7% yr/yr, driven by strong sales of AI-driven subscription services

SMART DEVICES DECLINE - Revenue from smart devices fell 26.6% yr/yr due to decreased demand for smart learning devices

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q4 Revenue
RMB 1.60 bln
Q4 Adjusted EPS
RMB 0.50
Q4 Gross Margin
45.10%
Q4 Gross Profit
RMB 705.40 mln
Q4 Income from Operations
RMB 60.20 mln
Q4 Operating Expenses
RMB 645.20 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the software peer group is "buy"

Wall Street's median 12-month price target for Youdao Inc is $12.20, about 24.1% above its February 10 closing price of $9.83

The stock recently traded at 30 times the next 12-month earnings vs. a P/E of 32 three months ago

Press Release: ID:nPn2gXMhpa

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)