Youdao (NYSE:DAO) Announces Quarterly Earnings Results, Meets Estimates

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

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 4.2%

Shares of Youdao stock opened at $11.88 on Thursday. The firm has a market cap of $1.43 billion, a PE ratio of 91.39 and a beta of 0.57. Youdao has a twelve month low of $8.00 and a twelve month high of $13.04. The business has a 50-day moving average price of $10.71 and a 200 day moving average price of $10.33.

Analyst Ratings Changes

DAO has been the subject of a number of analyst reports. Citigroup raised Youdao from a “hold” rating to a “buy” rating in a report on Thursday, February 12th. Wall Street Zen raised shares of Youdao from a “hold” rating to a “buy” rating in a research note on Saturday, April 18th. One analyst has rated the stock with a Buy rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Hold”.

Institutional Trading of Youdao

An institutional investor recently raised its position in Youdao stock. Public Employees Retirement System of Ohio raised its position in Youdao, Inc. Unsponsored ADR (NYSE:DAO) by 35.9% during the 3rd quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The fund owned 29,286 shares of the company’s stock after buying an additional 7,729 shares during the period. 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 currently owned by hedge funds and other institutional investors.

Youdao Company Profile

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.