Youdao Reports Third Quarter 2022 Unaudited Financial Results
Third Quarter 2022 Financial Highlights [1]
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Total net revenues were
RMB1.4 billion (US$197.2 million ), representing a 35.0% increase from the same period in 2021.
- Net revenues from learning services wereRMB888.5 million (US$124.9 million ), representing a 37.2% increase from the same period in 2021.
- Net revenues from smart devices wereRMB356.5 million (US$50.1 million ), representing a 40.1% increase from the same period in 2021.
- Net revenues from online marketing services wereRMB157.5 million (US$22.1 million ), representing a 14.9% increase from the same period in 2021. - Gross margin was 54.2%, compared to 52.6% for the same period in 2021.
"We achieved record-high revenues of
"Our transition from regulatory changes last year is mostly finished. Despite the many obstacles and the uncertain macro environment, we are seizing the bigger picture opportunity to evolve and make advancements in our company that solidify our sustainable growth over the long term,"
[1] As previously disclosed, in compliance with applicable regulatory requirements, the Company had ceased to offer the after-school tutoring services on academic subjects in |
Third Quarter 2022 Financial Results
Net Revenues
Net revenues for the third quarter of 2022 were
Net revenues from learning services were
Net revenues from smart devices were
Net revenues from online marketing services were
Gross Profit and Gross Margin
Gross profit for the third quarter of 2022 was
Gross margin for learning services was 64.5% for the third quarter of 2022, compared with 65.0% for the same period of 2021.
Gross margin for smart devices increased to 40.4% for the third quarter of 2022 from 33.7% for the same period of 2021. The improvement was mainly attributable to the popularity of
Gross margin for online marketing services was 27.1% for the third quarter of 2022, compared with 29.2% for the same period of 2021. The decrease was mainly attributable to the increase in performance-based advertisements through third parties' internet properties, which typically have a lower gross margin profile.
Operating Expenses
Total operating expenses for the third quarter of 2022 were
Sales and marketing expenses for the third quarter of 2022 were
Research and development expenses for the third quarter of 2022 were
General and administrative expenses for the third quarter of 2022 were
Loss from Operations
Loss from operations for the third quarter of 2022 was
Net Loss from Continuing Operations Attributable to
Net loss from continuing operations attributable to
Basic and diluted net loss per American depositary shares ("ADSs") of the Company from continuing operations attributable to ordinary shareholders for the third quarter of 2022 was
Balance Sheet
As of
As of
Share Repurchase Program
The Company today also announced that its board of directors has authorized the Company to adopt a share repurchase program in the near future in accordance with applicable laws and regulations for up to
Repurchases under the Company's share repurchase program, if adopted, may be made from time to time on the open market at prevailing market prices, in open-market transactions, privately negotiated transactions or block trades, and/or through other legally permissible means, depending on market conditions and in accordance with the applicable rules and regulations. The timing and conditions of the share repurchases will be subject to various factors including the requirements under Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.
Conference Call
Dial-in details for the earnings conference call are as follows:
|
+1-888-346-8982 |
International: |
+1-412-902-4272 |
Mainland |
400-120-1203 |
|
800-905-945 |
|
+852-3018-4992 |
Conference ID: |
7502413 |
A live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.youdao.com.
A replay of the conference call will be accessible by phone one hour after the conclusion of the live call at the following numbers, until
United States: |
+1-877-344-7529 |
International: |
+1-412-317-0088 |
Replay Access Code: |
7502413 |
About
For more information, please visit: http://ir.youdao.com.
Non-GAAP Measures
Non-GAAP financial measures are not defined under
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and non-GAAP Results" set forth at the end of this release.
The accompanying tables have more details on the reconciliations between our GAAP financial measures that are most directly comparable to non-GAAP financial measures.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
Safe Harbor Statement
This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the
For investor and media inquiries, please contact:
In
Tel: +86-10-8255-8163 ext. 89980
E-mail: IR@rd.netease.com
Tel: +86-21-6039-8363
E-mail: youdao@thepiacentegroup.com
In
The Piacente Group, Inc.
Tel: +1-212-481-2050
E-mail: youdao@thepiacentegroup.com
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
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(RMB and USD in thousands) |
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As of |
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As of |
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As of |
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2021 |
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2022 |
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2022 |
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RMB |
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RMB |
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USD (1) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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322,777 |
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712,115 |
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100,108 |
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Time deposits |
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268 |
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273 |
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38 |
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Restricted cash |
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749,770 |
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219,456 |
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30,851 |
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Short-term investments |
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503,831 |
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21,215 |
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2,982 |
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Accounts receivable, net |
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248,339 |
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332,331 |
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46,718 |
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Inventories, net |
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255,411 |
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170,393 |
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23,953 |
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Amounts due from |
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6,192 |
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7,388 |
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1,039 |
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Prepayment and other current assets |
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182,577 |
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212,605 |
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29,888 |
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Assets held for sale |
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497 |
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- |
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- |
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Total current assets |
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2,269,662 |
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1,675,776 |
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235,577 |
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Non-current assets: |
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Property, equipment and software, net |
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80,315 |
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104,884 |
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14,744 |
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Operating lease right-of-use assets, net |
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118,104 |
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80,822 |
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11,362 |
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Long-term investments |
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32,518 |
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67,032 |
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9,423 |
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109,944 |
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109,944 |
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15,456 |
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Other assets, net |
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22,436 |
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38,288 |
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5,382 |
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Assets held for sale |
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1,088 |
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- |
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- |
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Total non-current assets |
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364,405 |
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400,970 |
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56,367 |
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Total assets |
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2,634,067 |
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2,076,746 |
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291,944 |
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Liabilities, Mezzanine Equity and Shareholders' Deficit |
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Current liabilities: |
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Accounts payables |
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161,006 |
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179,756 |
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25,270 |
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Payroll payable |
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277,383 |
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176,003 |
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24,742 |
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Amounts due to |
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83,041 |
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74,476 |
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10,470 |
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Contract liabilities |
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1,065,639 |
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996,535 |
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140,091 |
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Taxes payable |
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53,323 |
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52,889 |
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7,435 |
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Accrued liabilities and other payables |
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515,567 |
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626,256 |
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88,038 |
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Short-term loans from |
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878,000 |
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878,000 |
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123,427 |
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Total current liabilities |
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3,033,959 |
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2,983,915 |
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419,473 |
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Non-current liabilities: |
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Long-term lease liabilities |
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73,070 |
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43,476 |
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6,112 |
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Long-term loans from |
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255,028 |
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496,986 |
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69,865 |
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Other non-current liabilities |
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2,411 |
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17,604 |
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2,475 |
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Total non-current liabilities |
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330,509 |
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558,066 |
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78,452 |
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Total liabilities |
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3,364,468 |
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3,541,981 |
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497,925 |
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Mezzanine equity |
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78,592 |
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72,959 |
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10,256 |
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Shareholders' deficit: |
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(807,067) |
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(1,532,313) |
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(215,410) |
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Noncontrolling interests |
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(1,926) |
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(5,881) |
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(827) |
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Total shareholders' deficit |
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(808,993) |
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(1,538,194) |
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(216,237) |
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Total liabilities, mezzanine equity and shareholders' deficit |
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2,634,067 |
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2,076,746 |
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291,944 |
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Note 1:
The conversion of Renminbi (RMB) into |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(RMB and USD in thousands, except share and per ADS data) |
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Three Months Ended |
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Nine Months Ended |
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2021 |
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2022 |
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2022 |
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2022 |
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2021 |
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2022 |
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RMB |
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RMB |
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RMB |
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USD (1) |
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RMB |
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RMB |
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Net revenues: |
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Learning services |
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647,522 |
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563,601 |
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888,493 |
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124,902 |
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1,862,162 |
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2,278,105 |
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Smart devices |
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254,513 |
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239,850 |
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356,480 |
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50,113 |
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662,722 |
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849,490 |
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Online marketing services |
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137,040 |
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152,774 |
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157,461 |
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22,136 |
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442,113 |
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431,605 |
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Total net revenues |
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1,039,075 |
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956,225 |
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1,402,434 |
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197,151 |
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2,966,997 |
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3,559,200 |
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Cost of revenues (2) |
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(492,176) |
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(546,498) |
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(642,254) |
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(90,287) |
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(1,423,452) |
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(1,747,471) |
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Gross profit |
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546,899 |
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409,727 |
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760,180 |
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106,864 |
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1,543,545 |
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1,811,729 |
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Operating expenses: |
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Sales and marketing expenses (2) |
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(553,407) |
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(595,997) |
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(709,769) |
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(99,778) |
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(1,657,201) |
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(1,812,151) |
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Research and development expenses (2) |
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(163,627) |
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(208,411) |
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(212,926) |
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(29,933) |
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(437,128) |
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(624,317) |
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General and administrative expenses (2) |
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(55,612) |
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(60,532) |
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(56,520) |
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(7,944) |
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(144,185) |
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(174,613) |
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Total operating expenses |
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(772,646) |
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(864,940) |
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(979,215) |
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(137,655) |
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(2,238,514) |
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(2,611,081) |
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Loss from operations |
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(225,747) |
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(455,213) |
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(219,035) |
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(30,791) |
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(694,969) |
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(799,352) |
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Interest income |
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5,959 |
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3,769 |
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4,033 |
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567 |
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15,768 |
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9,836 |
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Interest expense |
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(7,835) |
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(10,102) |
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(12,277) |
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(1,726) |
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(23,216) |
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(30,964) |
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Others, net |
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614 |
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1,567 |
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40,058 |
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5,631 |
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24,334 |
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77,678 |
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Loss before tax |
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(227,009) |
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(459,979) |
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(187,221) |
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(26,319) |
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(678,083) |
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(742,802) |
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Income tax (expense)/benefit |
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(2,590) |
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(553) |
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1,108 |
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156 |
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(7,204) |
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(11) |
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Net loss from continuing operations |
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(229,599) |
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(460,532) |
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(186,113) |
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(26,163) |
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(685,287) |
|
(742,813) |
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Net income/(loss) from discontinued operations |
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96,447 |
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- |
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- |
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- |
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(299,557) |
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(6,105) |
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Net loss |
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(133,152) |
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(460,532) |
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(186,113) |
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(26,163) |
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(984,844) |
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(748,918) |
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Net loss attributable to noncontrolling interests |
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4,254 |
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6,646 |
|
2,194 |
|
308 |
|
5,802 |
|
9,588 |
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Net loss attributable to ordinary shareholders of the Company |
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(128,898) |
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(453,886) |
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(183,919) |
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(25,855) |
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(979,042) |
|
(739,330) |
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Including: |
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|
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Net loss from continuing operations attributable to ordinary shareholders of the |
|
(225,345) |
|
(453,886) |
|
(183,919) |
|
(25,855) |
|
(679,485) |
|
(733,225) |
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|
Net income/(loss) from discontinued operations attributable to ordinary |
|
96,447 |
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- |
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- |
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- |
|
(299,557) |
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(6,105) |
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|
|
|
|
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|
|
|
|
|
|
|
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Basic net (loss)/income per ADS |
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(1.05) |
|
(3.67) |
|
(1.49) |
|
(0.21) |
|
(8.08) |
|
(5.98) |
|
|
-Continuing operations |
|
(1.84) |
|
(3.67) |
|
(1.49) |
|
(0.21) |
|
(5.61) |
|
(5.93) |
|
|
-Discontinued operations |
|
0.79 |
|
- |
|
- |
|
- |
|
(2.47) |
|
(0.05) |
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Diluted net (loss)/income per ADS |
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(1.05) |
|
(3.67) |
|
(1.49) |
|
(0.21) |
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(8.08) |
|
(5.98) |
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|
-Continuing operations |
|
(1.84) |
|
(3.67) |
|
(1.49) |
|
(0.21) |
|
(5.61) |
|
(5.93) |
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|
-Discontinued operations |
|
0.79 |
|
- |
|
- |
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- |
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(2.47) |
|
(0.05) |
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Shares used in computing basic net (loss)/income per ADS |
|
122,715,264 |
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123,703,353 |
|
123,767,013 |
|
123,767,013 |
|
121,131,136 |
|
123,602,039 |
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Shares used in computing diluted net (loss)/income per ADS |
|
122,715,264 |
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123,703,353 |
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123,767,013 |
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123,767,013 |
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121,131,136 |
|
123,602,039 |
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Note 1:
The conversion of Renminbi (RMB) into |
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Note 2: |
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Share-based compensation in each category: |
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Cost of revenues |
|
1,356 |
|
1,775 |
|
798 |
|
112 |
|
4,613 |
|
4,753 |
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|
Sales and marketing expenses |
|
2,678 |
|
3,451 |
|
2,879 |
|
405 |
|
7,721 |
|
9,420 |
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Research and development expenses |
|
7,641 |
|
8,428 |
|
7,586 |
|
1,066 |
|
25,040 |
|
24,876 |
|
|
General and administrative expenses |
|
5,984 |
|
4,448 |
|
4,801 |
|
675 |
|
14,594 |
|
14,633 |
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UNAUDITED ADDITIONAL INFORMATION |
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(RMB and USD in thousands) |
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Three Months Ended |
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Nine Months Ended |
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2021 |
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2022 |
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2022 |
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2022 |
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2021 |
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2022 |
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|
RMB |
|
RMB |
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RMB |
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USD |
|
RMB |
|
RMB |
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Net revenues |
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|
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Learning services |
|
647,522 |
|
563,601 |
|
888,493 |
|
124,902 |
|
1,862,162 |
|
2,278,105 |
Smart devices |
|
254,513 |
|
239,850 |
|
356,480 |
|
50,113 |
|
662,722 |
|
849,490 |
Online marketing services |
|
137,040 |
|
152,774 |
|
157,461 |
|
22,136 |
|
442,113 |
|
431,605 |
Total net revenues |
|
1,039,075 |
|
956,225 |
|
1,402,434 |
|
197,151 |
|
2,966,997 |
|
3,559,200 |
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Cost of revenues |
|
|
|
|
|
|
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|
|
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Learning services |
|
226,543 |
|
269,491 |
|
315,086 |
|
44,294 |
|
699,267 |
|
882,874 |
Smart devices |
|
168,637 |
|
166,503 |
|
212,365 |
|
29,854 |
|
399,222 |
|
546,672 |
Online marketing services |
|
96,996 |
|
110,504 |
|
114,803 |
|
16,139 |
|
324,963 |
|
317,925 |
Total cost of revenues |
|
492,176 |
|
546,498 |
|
642,254 |
|
90,287 |
|
1,423,452 |
|
1,747,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
|
|
|
|
|
|
|
|
|
|
Learning services |
|
65.0 % |
|
52.2 % |
|
64.5 % |
|
64.5 % |
|
62.4 % |
|
61.2 % |
Smart devices |
|
33.7 % |
|
30.6 % |
|
40.4 % |
|
40.4 % |
|
39.8 % |
|
35.6 % |
Online marketing services |
|
29.2 % |
|
27.7 % |
|
27.1 % |
|
27.1 % |
|
26.5 % |
|
26.3 % |
Total gross margin |
|
52.6 % |
|
42.8 % |
|
54.2 % |
|
54.2 % |
|
52.0 % |
|
50.9 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS |
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|
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||
(RMB and USD in thousands, except per ADS data) |
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|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
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|
2021 |
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
|
|
|
RMB |
|
RMB |
|
RMB |
|
USD |
|
RMB |
|
RMB |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operations attributable to ordinary shareholders of |
|
(225,345) |
|
(453,886) |
|
(183,919) |
|
(25,855) |
|
(679,485) |
|
(733,225) |
|
|
Add: share-based compensation |
|
17,659 |
|
18,102 |
|
16,064 |
|
2,258 |
|
51,968 |
|
53,682 |
|
|
amortization of intangible assets from business combination |
|
996 |
|
- |
|
- |
|
- |
|
996 |
|
- |
|
|
impairment of long-term investments |
|
7,000 |
|
- |
|
3,500 |
|
492 |
|
7,000 |
|
8,500 |
|
|
Less: tax effects on non-GAAP adjustments |
|
(149) |
|
- |
|
- |
|
- |
|
(149) |
|
- |
|
|
GAAP to non-GAAP reconciling items for the loss attributable to |
|
(381) |
|
- |
|
- |
|
- |
|
(381) |
|
- |
|
|
Non-GAAP net loss from continuing operations attributable to ordinary |
|
(200,220) |
|
(435,784) |
|
(164,355) |
|
(23,105) |
|
(620,051) |
|
(671,043) |
|
|
|
|
|
|
|
|
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|
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|
|
|
|
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|
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|
|
|
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|
Non-GAAP basic net loss from continuing operations per ADS |
|
(1.63) |
|
(3.52) |
|
(1.33) |
|
(0.19) |
|
(5.12) |
|
(5.43) |
|
|
Non-GAAP diluted net loss from continuing operations per ADS |
|
(1.63) |
|
(3.52) |
|
(1.33) |
|
(0.19) |
|
(5.12) |
|
(5.43) |
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View original content:https://www.prnewswire.com/news-releases/youdao-reports-third-quarter-2022-unaudited-financial-results-301681194.html
SOURCE