Youdao Q2 revenue rises 7.2%, achieves first profitable Q2
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
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