Youdao, Inc. announced its unaudited financial results for the first quarter ended March 31, 2025. The company reported a substantial increase in profitability, with income from operations surging 247.7% year-over-year to a first-quarter record high of RMB104.0 million (US$14.3 million). Non-GAAP net income attributable to ordinary shareholders quadrupled year-over-year to RMB81.7 million (US$11.3 million).
The company's 'AI-native strategy' was a key driver, with AI College Admission Advisers contributing to over 25% year-over-year growth in gross billings for Youdao Lingshi. Total sales of AI subscription services also grew over 40% year-over-year, expanding Youdao's portfolio with new offerings like Youdao AI Podcast Assistant. Despite a 6.7% year-over-year decrease in total net revenues to RMB1.3 billion (US$178.9 million) due to a disciplined customer acquisition approach in learning services, smart devices revenue increased by 5.1% and online marketing services by 2.6%.
Youdao aims to achieve full-year operating cash flow breakeven in 2025, building on its first full year of operating profit in 2024. The company continued its share repurchase program, having repurchased approximately 7.5 million ADSs for about US$33.8 million as of March 31, 2025, demonstrating a commitment to shareholder value.
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