Youdao (NYSE:DAO) Releases Quarterly Earnings Results

Youdao (NYSE:DAO) announced its quarterly earnings results on Thursday. The company reported $0.05 earnings per share (EPS) for the quarter, hitting the consensus estimate of $0.05, FiscalAI reports. Youdao had a negative return on equity of 6.41% and a net margin of 1.81%.The company had revenue of $195.52 million during the quarter, compared to the consensus estimate of $201.43 million.

Here are the key takeaways from Youdao’s conference call:

• Youdao posted RMB 1.3 billion in Q1 revenue, up 3.8% year over year, while operating profit was RMB 57.5 million, marking the company’s 7th consecutive quarter of operating profitability.
• Management said AI remains the core growth strategy, highlighted by new launches including Confucius 4, EmotiVoice 2, and Confucius Translation 4, alongside new AI applications like LobsterAI and Youdao Baoku.
• Learning services grew to RMB 627.5 million in revenue, supported by Youdao Lingshi gross billings growth of over 20% and early traction for AI Essay Grading, which has graded about 10,000 essays to date.
• Online marketing services was the standout segment, with revenue up 20.9% year over year to RMB 611.1 million and gross margin improving to 39.6%, driven by performance advertising and AI-enabled products.
• Smart devices revenue fell sharply by 42.6% year over year to RMB 109.4 million, as management continued to prioritize inventory discipline and profitability over near-term volume growth.

Youdao Stock Down 6.8%

DAO stock opened at $11.56 on Friday. The business has a 50 day moving average price of $10.74 and a two-hundred day moving average price of $10.33. The company has a market cap of $1.39 billion, a price-to-earnings ratio of 88.93 and a beta of 0.57. Youdao has a twelve month low of $8.00 and a twelve month high of $13.04.

Institutional Inflows and Outflows

A hedge fund recently raised its stake in Youdao stock. Public Employees Retirement System of Ohio raised its stake in Youdao, Inc. Unsponsored ADR (NYSE:DAO) by 35.9% in the third quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The institutional investor owned 29,286 shares of the company’s stock after purchasing an additional 7,729 shares during the quarter. Public Employees Retirement System of Ohio’s holdings in Youdao were worth $291,000 at the end of the most recent reporting period. 21.91% of the stock is owned by institutional investors.

Analyst Ratings Changes

Several equities research analysts have issued reports on the company. Wall Street Zen upgraded Youdao from a “hold” rating to a “buy” rating in a report on Saturday, April 18th. Citigroup upgraded Youdao from a “hold” rating to a “buy” rating in a report on Thursday, February 12th. One research analyst has rated the stock with a Buy rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, Youdao currently has a consensus rating of “Hold”.

About Youdao

Youdao, Inc (NYSE: DAO), established in 2006 as a subsidiary of NetEase, is headquartered in Beijing, China. The company went public on the New York Stock Exchange in October 2019, marking a significant milestone in its development as an intelligent learning and knowledge service provider. Since its inception, Youdao has combined cloud computing, artificial intelligence and big data analytics to create an adaptive learning ecosystem designed to meet the needs of individual learners and organizations.

At the core of Youdao’s offerings is its suite of digital dictionaries and translation tools, including the flagship Youdao Dictionary app and translation engine.