Youdao (DAO.US) announced its unaudited financial results for the fourth quarter and full year of 2025 on February 11. The financial report shows the company achieved annual net revenues of 5.91 billion yuan, a year-over-year increase of 5.0%. Operating profit reached 220 million yuan, surging 48.7% compared to the previous year. Notably, the company achieved positive net cash provided by operating activities for the full year for the first time, amounting to 55.2 million yuan. This milestone signifies a substantial improvement in the company's financial health and self-sustaining operational capability, successfully meeting the financial targets set at the beginning of the year.
In the fourth quarter of 2025, Youdao maintained its robust profitability. Net revenues for the quarter reached 1.56 billion yuan, representing a 16.8% year-over-year increase and marking the sixth consecutive quarter of profitability. The quarterly operating profit was 60.2 million yuan. The year-over-year change in operating profit was primarily attributable to the company's strategic increase in investment in high-growth areas such as the Youdao Lead the World program and its advertising business. During the same period, net cash provided by operating activities reached 180 million yuan, a 16.4% increase year-over-year.
Zhou Feng, CEO of Youdao, stated, "For the full year of 2025, we achieved positive net operating cash flow for the first time on an annual basis. Simultaneously, we delivered solid growth across our learning services, online marketing services, and AI subscription services, demonstrating the increasing resilience of our business."
The commercialization of AI applications has yielded significant results, driving comprehensive improvement in the learning business. Guided by its AI-native strategy, Youdao has focused on the two high-value sectors of "Learning" and "Advertising," leveraging AI technology to deeply innovate business efficiency and service experience. The company has been a pioneer in demonstrating the feasibility of large model implementation and sustainable profitability in practical scenarios. Throughout 2025, Youdao's new positioning as an "AI Application Service Provider for Learning and Advertising" became increasingly clear, contributing to positive trends across various business metrics.
In learning services, the empowering effect of AI was fully realized, driving a return to growth and stimulating product innovation. In the fourth quarter, net revenues from learning services reached 730 million yuan, a 17.7% year-over-year increase, signaling a return to growth following business adjustments. As a core growth engine, the Youdao Lead the World program saw its net revenues increase by over 40% year-over-year, achieving breakthroughs in both scale and reputation. Following the Chinese AI essay grading tool, the company revealed plans to launch an English AI essay grading tool powered by its "Ziyue" large model. Sales for the Xiaotuling course increased by over 50% year-over-year in the fourth quarter, and throughout the year, the program helped hundreds of students achieve top awards in the NOIP and CSP-J/S finals.
In the fourth quarter, sales from AI subscription services surpassed 100 million yuan, hitting a record high with a year-over-year growth exceeding 80%. For the entire 2025 fiscal year, total sales for this segment approached 400 million yuan, with an annual growth rate of over 50%. Regarding specific products, the all-in-one thesis solution "Academic Cha" entered an official partnership with the authoritative plagiarism detection platform Turnitin in the fourth quarter, becoming the only platform in China offering official Turnitin plagiarism and AI-generated content checks. Sales for Academic Cha grew 100% quarter-over-quarter during the reporting period, with the growth momentum expected to continue. Sales for the Youdao Dictionary AI Simultaneous Interpreter grew over 100% year-over-year in the fourth quarter, with its translation accuracy for professional fields and recognition precision reaching industry-leading levels. This product has become a key driver for the growth of Youdao Dictionary membership revenue.
While achieving continuous breakthroughs in AI applications, Youdao is also expanding the boundaries of AI implementation through Agent products. On February 11, Youdao officially launched its desktop-level Agent, "LobsterAI," positioned as a "full-scenario personal assistant Agent that works for you 24/7." It is currently accepting beta test applications on its official website. The company also revealed plans to launch a new version of Youdao Dictionary during the March back-to-school season, featuring Agent-level upgrades to core capabilities focused on learning and office scenarios.
The智能硬件 (smart hardware) business showed significant improvement in operational health during 2025, with fourth-quarter net revenues of 180 million yuan. The AI Tutoring Pen, Space X, achieved innovative breakthroughs in scanning and tutoring—adding a panoramic puzzle function and comprehensively upgrading its video explanation feature. The upgrade of the video explanation feature marks a transition for AI learning assistance from providing static answers or pre-set videos to a new stage capable of real-time generation and dynamic demonstration of problem-solving thought processes. The AI Tutoring Pen category achieved sales exceeding 100 million yuan within a year of its launch. The Youdao Dictionary Pen secured the top sales position on both JD.com and Tmall platforms during the "Double Eleven" shopping festival for the sixth consecutive year.
AI technology has facilitated the intelligent automation of advertising processes, contributing to steady growth in online marketing services. In the fourth quarter, net revenues from Youdao's online marketing services business were 660 million yuan, a 37.2% year-over-year increase. This growth was driven by rising demand in overseas markets and synergistic effects within the NetEase group, as well as benefits from the AI-driven intelligent transformation of the entire advertising process, which has comprehensively enhanced business efficiency. Youdao is leveraging AI technology as its core to drive transformation across the entire marketing industry chain. The Youdao Visual Magic Box (iMagicBox) innovates content production by integrating capabilities like image-to-video generation and connecting directly with the ad delivery system, forming a closed loop. Its "Hit Content Deconstruction" feature can intelligently analyze popular advertising materials and generate scripts and videos mimicking successful campaigns, significantly improving marketing efficiency. In the influencer marketing space, the InfunEase platform has automated the entire process, effectively addressing pain points in overseas marketing such as the difficulty in finding suitable influencers and poor matching. The platform currently connects over 30 million creators worldwide. Furthermore, Youdao Ads' "NetEase Smart Selection - AI Ad Optimizer" automatically executes strategies based on deep cognition, achieving increasingly accurate targeting through full-cycle data accumulation, thereby deepening partnerships within the client ecosystem.
Benefiting from the deep empowerment of AI across the entire advertising and marketing chain, Youdao has achieved significant growth in multiple sub-sectors and overseas markets. According to the financial report, the advertising business covers several high-growth verticals. Notably, net advertising revenue from both the gaming sector and the AI application sector grew over 50% year-over-year. International market performance was also strong, with net revenue from the overseas sector increasing over 50% year-over-year, thanks to the successful delivery of Youdao Ads' overseas KOL marketing projects in over 50 countries throughout 2025. TikTok for Business included Youdao Ads in its "2025 Pioneer List of Influencer Agencies in the Gaming Industry," further solidifying Youdao Ads' leading position in the global digital marketing landscape.
"Looking ahead, we will steadfastly execute our 'AI-native' strategy, focusing on learning and advertising businesses. By deepening our expertise in vertical-specific large models and continuously expanding the deployment of AI applications and agents, we will strive to create differentiated user experiences, thereby driving the company's long-term sustainable growth," Zhou Feng stated.