Youdao, Inc. (“Youdao” or the “Company”) (NYSE: DAO), a leading technology-focused intelligent learning company in China, announced today its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2022.
For the fourth quarter 2022, total net revenues were RMB1.5 billion (US$210.8 million), representing a 38.6% increase from the same period in 2021. Net revenues from learning services were RMB806.3 million (US$116.9 million), representing a 39.2% increase from the same period in 2021. Net revenues from smart devices were RMB407.0 million (US$59.0 million), representing a 28.1% increase from the same period in 2021. Net revenues from online marketing services were RMB240.8 million (US$34.9 million), representing a 58.6% increase from the same period in 2021.
For the fiscal year 2022, the total net revenues were RMB5.0 billion (US$726.8 million), representing a 24.8% increase from 2021. Net revenues from learning services were RMB3.1 billion (US$447.2 million), representing a 26.3% increase from 2021. Net revenues from smart devices were RMB1.3 billion (US$182.2 million), representing a 28.2% increase from 2021. Net revenues from online marketing services were RMB672.4 million (US$97.5 million), representing a 13.2% increase from 2021.
“Our ongoing investment in AI technology facilitated our ability to consistently introduce and broaden our digital content services and smart device offerings throughout 2022. In both the third and fourth quarters, the net revenues from our digital content services covered its costs and operating expenses, showing the improved health of our business. Our new smart devices launched in the second half of 2022, including upgraded dictionary pens and smart learning pads, were highly recognized by customers, which led to strong sales growth during the November 11 Shopping Festival. As a result of the solid performance of our new services and smart devices, we achieved record-high net revenues and our first-ever income from operations in the fourth quarter. Our improved financial and operating indicators demonstrate that we have the right strategy in place to support our growth trajectory,” said Dr. Feng Zhou, Chief Executive Officer and Director of Youdao.
“Years of experience have taught us that the full value of AI cannot be realized on its own. To effectively support users, technologies must be integrated with sound business scenarios. Looking ahead, we will continue to prioritize our users. By leveraging our advanced technology and innovation, we will continue to introduce additional high-quality educational products and services to meet users’ diverse and personalized demands.” Dr. Zhou concluded.
During Q4 2022, Youdao has been exploring digitization of learning services, and has made significant progress. In Q4, the company upgraded Youdao Literature-Creative Writing, which was co-developed by Youdao and Minecraft Education Edition. The digitized content effectively enhances learners’ interaction and engagement, making learning materials easier to understand and more attractive. I encourage you to view the video on our IR website. In addition, the Champion Class of Youdao Go was released in Q4 with a teaching team led by Ke Jie, a Go world champion.
In terms of adult courses, Youdao released upgraded solutions to the postgraduate entrance exams. It offers comprehensive solutions from target consulting to hybrid tutoring by AI and humans. Meanwhile, gross billings from vocational courses, such as IT & internet and constructor courses, increased over 100% year-over-year in Q4.
Looking ahead, Youdao will continue leveraging cutting-edge technology and innovation to promote the sustainable development of smart devices, digital content services, and STEAM courses, further improving the business healthiness and financial performance.