DAONYSEServices-Educational ServicesUS GAAP · USD

Youdao, Inc.

Youdao, Inc. is a U.S.-listed Chinese company that develops AI-enabled products and services for learning and online advertising. Its business combines learning services, online marketing services, and smart devices, with operations centered in China and supported by a Hong Kong-listed parent company relationship through NetEase.

Revenue5,909m USD
+5.0 %y/y
Operating profit (EBIT)221m USD
+48.7 %y/y
EBIT margin3.7%
+1.1 ppy/y
Net income97.0m USD
+29.0 %y/y
Free cash flow29.6m USD
+137.1 %y/y

Fiscal year 2025 · change from previous year

Development 2020–2025

-2,00002,0004,0006,000m USD2020: 3,168 m USD2020: EBIT -1,806 m USD20202021: 4,016 m USD2021: EBIT -943 m USD20212022: 5,013 m USD2022: EBIT -775 m USD20222023: 5,389 m USD2023: EBIT -466 m USD20232024: 5,626 m USD2024: EBIT 149 m USD20242025: 5,909 m USD2025: EBIT 221 m USD20255,909221
RevenueOperating profit (EBIT)

Business

Share of revenue
Learning Services55 %

AI-enabled education products and services used for study, language learning, and academic support.

Online Marketing Services30 %

Advertising and marketing solutions sold to brands and commercial partners.

Smart Devices15 %

Consumer devices that support learning and other connected-use applications.

Products

Reported · share of revenue
44.5%43.0%12.5%FY2025100 %
  • Learning Services44.5 %
  • Online Marketing Services43.0 %
  • Smart Devices12.5 %

Source: 20-F FY2025, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.

Customers

Youdao serves learners and education users who buy digital study tools, devices, and services for academic and language support. It also sells advertising and marketing solutions to businesses, including related-party demand from the NetEase group and overseas customers. The mix links consumer education demand with commercial advertising monetization.

Students and self-learners

Buy learning services and tools for study, language, and exam preparation.

Advertising and marketing clients

Buy online marketing services to reach users and support campaign execution.

Consumer device buyers

Purchase smart devices that are positioned around learning and daily use.

NetEase group

Provides related demand for online marketing services and platform usage.

Overseas clients

Buy marketing services that benefit from AI technology and cross-border reach.

Strategy

Youdao’s strategy is built around applying AI to learning and advertising so it can improve product usefulness, user engagement, and monetization. The company also uses smart devices and software to broaden the learning ecosystem, while expanding marketing services beyond its core domestic base. This positioning is intended to connect consumer education usage with commercial advertising demand.

AI product developmentMedium term

AI is central to product differentiation in both learning and advertising.

Advertising monetizationShort term

Marketing services provide an important commercial engine alongside education products.

Learning ecosystem expansionMedium term

Smart devices and services can deepen user engagement and broaden product usage.

Geography

Youdao is organized around operations in China, where its headquarters and management functions are based in Hangzhou. Its reporting and capital-markets presence is global through the United States, but the commercial footprint is primarily tied to Chinese learning and advertising demand, with some overseas marketing activity. Geography matters because the business depends on Chinese consumer and enterprise demand while also serving international advertising customers.

Risks

Youdao is exposed to demand swings in education and advertising, both of which can be affected by consumer spending, platform traffic, and marketer budgets. Its business also depends on continued AI product execution and on the concentration of some advertising demand among related or closely linked customers. As a China-centered operator with U.S. listing exposure, it also faces regulatory and cross-border operating risk.

Sorted by severity
LowMediumHighLowMediumHighImpact →Likelihood →Advertising demand concentration1China regulatory exposure2Education market cyclicality3AI execution risk4
Impact is the risk’s severity and likelihood how probable it is over the next few years, both assessed from the company’s reports. Numbers match the list.
  1. Advertising demand concentrationImpact: HighLikelihood: High

    Online marketing services depend on a limited set of demand sources and platform traffic.

    Exposure: NetEase group and overseas markets

  2. China regulatory exposureImpact: HighLikelihood: Medium

    The company operates mainly in China and is subject to local platform, data, and education rules.

    Exposure: Mainland China operations

  3. Education market cyclicalityImpact: MediumLikelihood: Medium

    Learning services are tied to consumer willingness to spend and usage patterns.

    Exposure: Learning services

  4. AI execution riskImpact: MediumLikelihood: Medium

    The business model relies on AI to support product competitiveness and monetization.

    Exposure: Learning and advertising products

Accounting

Judgemental items
Non-GAAP adjustments

Management excludes share-based compensation, investment impairment, and fair value changes from non-GAAP results.

Impact: Can materially change profit trend analysis

Revenue recognition by product line

Learning services, marketing services, and smart devices may follow different recognition patterns.

Impact: Affects quarterly revenue timing and mix

Seasonality

Education demand and advertising activity can vary by quarter.

Impact: Impacts comparability across reporting periods

Publicly listed companies with a comparable business focus.

Last updated: 28/09/2026