Overview
Youdao Q2 2025 revenue rises 7.2% yr/yr to RMB 1.4 bln
Company achieves first-ever profitable Q2 with RMB 28.8 mln income from operations
Revenue from online marketing services up 23.8%, driven by gaming and overseas demand
Outlook
Company aims to advance AI Native Strategy through scenario-driven optimization
Youdao plans to boost learner productivity and advertising ROI
Company committed to sustainable customer value creation
Youdao focuses on strengthening financial metrics
Result Drivers
AI STRATEGY - Strong execution of AI Native Strategy, including release of Confucius 3, drove financial results, per CEO Dr. Feng Zhou
ONLINE MARKETING - 23.8% revenue increase driven by gaming industry and overseas demand, supported by AI investments
SMART DEVICES - 23.9% revenue decline due to decreased consumer electronics demand
Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
RMB 1.40 bln
Q2 Gross Margin
43.0%
Q2 Gross Profit
RMB 609.40 mln
Q2 Income from Operations
RMB 28.80 mln
Q2 Operating Expenses
RMB 580.60 mln
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "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 $11.71, about 24.1% above its August 13 closing price of $8.88
The stock recently traded at 29 times the next 12-month earnings vs. a P/E of 37 three months ago
Press Release: ID:nPn2QTKjGa
(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.)