Youdao Inc. (DAO) shares jumped 5.99% in pre-market trading on Thursday following the release of its first quarter 2025 financial results, which showcased significant improvements in profitability despite a slight decline in revenue.

The AI-powered learning and advertising solutions provider reported a remarkable 247.7% year-over-year increase in income from operations, reaching RMB104.0 million (US$14.3 million). This surge in profitability came even as total net revenues decreased by 6.7% to RMB1.3 billion (US$178.9 million). Notably, Youdao's non-GAAP net income attributable to ordinary shareholders quadrupled from the same period last year, hitting RMB81.7 million (US$11.3 million).

Youdao's earnings per ADS of RMB0.68 (US$0.09) significantly outperformed analyst expectations of RMB0.21. CEO Dr. Feng Zhou expressed optimism about the company's future, stating, "Having achieved our first full year of operating profit in 2024, we are well-positioned to sustain this momentum and deliver stronger profit growth and full-year operating cash flow breakeven in 2025." This positive outlook, combined with the company's improving profitability metrics, appears to be driving investor enthusiasm in the pre-market session.