Overview
China AI solutions provider's Q4 revenue rose 16.8% yr/yr
Gross margin for Q4 fell to 45.1% from 47.8% last year
Q4 operating income decreased 28.5% yr/yr
Outlook
Youdao remains committed to AI-Native strategy focusing on learning services and advertising
Company aims to deliver differentiated user experiences and drive sustainable long-term growth
Result Drivers
ONLINE MARKETING GROWTH - Revenue from online marketing services increased 37.2% yr/yr, driven by demand from NetEase group and overseas markets due to AI investments
LEARNING SERVICES INCREASE - Learning services revenue rose 17.7% yr/yr, driven by strong sales of AI-driven subscription services
SMART DEVICES DECLINE - Revenue from smart devices fell 26.6% yr/yr due to decreased demand for smart learning devices
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q4 Revenue | RMB 1.60 bln | ||
Q4 Adjusted EPS | RMB 0.50 | ||
Q4 Gross Margin | 45.10% | ||
Q4 Gross Profit | RMB 705.40 mln | ||
Q4 Income from Operations | RMB 60.20 mln | ||
Q4 Operating Expenses | RMB 645.20 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy"
Wall Street's median 12-month price target for Youdao Inc is $12.20, about 24.1% above its February 10 closing price of $9.83
The stock recently traded at 30 times the next 12-month earnings vs. a P/E of 32 three months ago
Press Release: ID:nPn2gXMhpa
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)