Youdao, a subsidiary of NetEase, announced its unaudited financial results for the third quarter ended September 30, 2024. The company achieved an income from operations of RMB107.3 million (US$15.3 million), a significant improvement from a loss of RMB57.7 million in the same period last year. Non-GAAP net income attributable to Youdao's ordinary shareholders was RMB88.7 million (US$12.6 million), reversing a non-GAAP net loss of RMB67.3 million in Q3 2023.
Net revenues increased by 2.2% year-over-year to RMB1.6 billion (US$224.1 million). This growth was primarily fueled by robust performance in its online marketing services, which saw a 45.6% year-over-year increase to RMB489.4 million. Smart devices also contributed positively with a 25.2% revenue increase to RMB315.3 million, driven by newly launched products.
Youdao's proprietary Large Language Model (LLM) capabilities, including the upgraded Youdao Lingshi Intelligent Learning System and new AI translation features, were instrumental in enhancing personalized user experiences. These AI-driven initiatives led to a more than 150% year-over-year increase in total sales of AI-driven subscription services. The company's strategic focus on higher return on investment engagements in learning services, despite a 19.2% revenue decrease in that segment, contributed to overall business efficiency.
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