Youdao Reports Fourth Quarter and Fiscal Year 2023 Unaudited Financial Results
Fourth Quarter 2023 Financial Highlights
-
Total net revenues were
RMB1.5 billion (US$208.5 million ), representing a 1.8% increase from the same period in 2022.
- Net revenues from learning services wereRMB784.0 million (US$110.4 million ), representing a 2.8% decrease from the same period in 2022.
- Net revenues from smart devices wereRMB222.4 million (US$31.3 million ), representing a 45.3% decrease from the same period in 2022.
- Net revenues from online marketing services wereRMB474.1 million (US$66.8 million ), representing a 96.9% increase from the same period in 2022. - Gross margin was 49.9%, compared with 53.3% for the same period in 2022.
Fiscal Year 2023 Financial Highlights
-
Total net revenues were
RMB5.4 billion (US$759.1 million ), representing a 7.5% increase from 2022.
- Net revenues from learning services wereRMB3.1 billion (US$443.4 million ), representing a 2.1% increase from 2022.
- Net revenues from smart devices wereRMB909.2 million (US$128.1 million ), representing a 27.6% decrease from 2022.
- Net revenues from online marketing services wereRMB1.3 billion (US$187.6 million ), representing a 98.1% increase from 2022. - Gross margin was 51.4%, keeping flat as compared with 51.6% for 2022.
"Our financial performance was solid in the fourth quarter, producing all-time high income from operations and operating cash inflow. In terms of business operations, since the introduction of AI writing refinement, we have efficiently and effectively provided over 25,000 tailored recommendations. The integration of AI technology has further empowered our online marketing services, expanding the application of RTA (Real-Time API) technology and broadening our customer base, resulting in record high net revenues of this segment and over 50% year-over-year growth for five consecutive quarters. Additionally, the launch of the Mr. P AI Tutor, powered by our proprietary large language model Ziyue, has been well received by our users. In 2023,
"Looking ahead, I am confident in the further improvement of our fundamentals and long-term development. We will continue to leverage our AI advantages and upgrade our large language model Ziyue, further exploring applications in the areas of learning services, smart devices, and online marketing services. By accelerating the implementation of our products and applications, we are committed to better assisting users in enhancing their learning and work efficiency and effectiveness,"
Fourth Quarter 2023 Financial Results
Net Revenues
Net revenues for the fourth quarter of 2023 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 fourth quarter of 2023 was
Gross margin for learning services was 63.6% for the fourth quarter of 2023, largely flat as compared with 64.1% for the same period of 2022.
Gross margin for smart devices decreased to 38.3% for the fourth quarter of 2023 from 46.2% for the same period of 2022, which was mainly attributable to a lower revenue base of smart devices.
Gross margin for online marketing services increased to 32.7% for the fourth quarter of 2023, from 29.2% for the same period of 2022. The increase was mainly attributable to improved gross margin profile of performance-based advertisements through third parties' internet properties compared with the same period of last year.
Operating Expenses
Total operating expenses for the fourth quarter of 2023 were
Sales and marketing expenses for the fourth quarter of 2023 were
Research and development expenses for the fourth quarter of 2023 were
General and administrative expenses for the fourth quarter of 2023 were
Income from Operations
As a result of the foregoing, income from operations for the fourth quarter of 2023 was
Others, Net
Others, net for the fourth quarter of 2023 were
Net Income from Continuing Operations Attributable to
Net income from continuing operations attributable to
Basic and diluted net income from continuing operations per American depositary share ("ADS") attributable to ordinary shareholders for the fourth quarter of 2023 was
Other Information
As of
As of
Fiscal Year 2023 Financial Results [1]
Net Revenues
Net revenues for 2023 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 2023 was
Gross margin for learning services was 63.2% for 2023, compared with 62.0% for 2022.
Gross margin for smart devices was 39.2% for 2023, compared with 39.1% for 2022.
Gross margin for online marketing services increased to 31.7% for 2023 from 27.4% for 2022. The increase was mainly attributable to improved gross margin profile of performance-based advertisements through third parties' internet properties compared with last year.
Operating Expenses
Total operating expenses for 2023 were
Sales and marketing expenses for 2023 were
Research and development expenses for 2023 were
General and administrative expenses for 2023 were
Loss from Operations
Loss from operations for 2023 was
Others, Net
Others, net for 2023 were
Net Loss from Continuing Operations Attributable to
Net loss from continuing operations attributable to
Basic and diluted net loss from continuing operations per American depositary share ("ADS") attributable to ordinary shareholders for 2023 was
Operating Cash Flow from Continuing Operations
For 2023, net cash used in continuing operating activities was
[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 |
Share Repurchase Program
On
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: |
1578305 |
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: |
1578305 |
About
For more information, please visit: http://ir.youdao.com.
Non-GAAP Measures
Non-GAAP financial measures are not defined under
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 table has more details on the reconciliation between our GAAP financial measures that are mostly 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: +86-10-6508-0677
E-mail: youdao@thepiacentegroup.com
In
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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2022 |
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2023 |
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2023 |
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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 |
|
783,611 |
|
454,536 |
|
64,020 |
Time deposits |
|
273 |
|
277 |
|
39 |
Restricted cash |
|
873 |
|
395 |
|
56 |
Short-term investments |
|
232,152 |
|
71,848 |
|
10,120 |
Accounts receivable, net |
|
405,139 |
|
354,006 |
|
49,861 |
Inventories |
|
232,260 |
|
217,067 |
|
30,573 |
Amounts due from |
|
7,888 |
|
26,117 |
|
3,679 |
Prepayment and other current assets |
|
207,777 |
|
175,705 |
|
24,747 |
Total current assets |
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1,869,973 |
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1,299,951 |
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183,095 |
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Non-current assets: |
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Property, equipment and software, net |
|
92,116 |
|
70,906 |
|
9,987 |
Operating lease right-of-use assets, net |
|
78,405 |
|
89,022 |
|
12,538 |
Long-term investments |
|
90,703 |
|
51,396 |
|
7,239 |
|
|
109,944 |
|
109,944 |
|
15,485 |
Other assets, net |
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35,015 |
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44,976 |
|
6,335 |
Total non-current assets |
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406,183 |
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366,244 |
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51,584 |
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Total assets |
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2,276,156 |
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1,666,195 |
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234,679 |
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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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282,354 |
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159,005 |
|
22,395 |
Payroll payable |
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266,340 |
|
282,679 |
|
39,815 |
Amounts due to |
|
68,809 |
|
82,430 |
|
11,610 |
Contract liabilities |
|
1,067,285 |
|
1,052,622 |
|
148,259 |
Taxes payable |
|
50,908 |
|
52,781 |
|
7,434 |
Accrued liabilities and other payables |
|
564,922 |
|
591,770 |
|
83,349 |
Short-term loans from |
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878,000 |
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878,000 |
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123,664 |
Total current liabilities |
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3,178,618 |
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3,099,287 |
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436,526 |
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Non-current liabilities: |
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Long-term lease liabilities |
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43,635 |
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49,337 |
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6,949 |
Long-term loans from |
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522,345 |
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630,360 |
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88,784 |
Other non-current liabilities |
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8,832 |
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16,314 |
|
2,298 |
Total non-current liabilities |
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574,812 |
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696,011 |
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98,031 |
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Total liabilities |
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3,753,430 |
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3,795,298 |
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534,557 |
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Mezzanine equity |
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64,571 |
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37,961 |
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5,347 |
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Shareholders' deficit: |
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(1,535,089) |
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(2,186,736) |
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(307,996) |
Noncontrolling interests |
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(6,756) |
|
19,672 |
|
2,771 |
Total shareholders' deficit |
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(1,541,845) |
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(2,167,064) |
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(305,225) |
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Total liabilities, mezzanine equity and shareholders' deficit |
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2,276,156 |
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1,666,195 |
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234,679 |
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Note 1:
The conversion of Renminbi (RMB) into
December
(December
29, 2023) as set forth in the H.10 statistical release of the |
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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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Year Ended |
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2022 |
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2023 |
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2023 |
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2023 |
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2022 |
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2023 |
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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 |
|
RMB |
Net revenues: |
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Learning services |
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806,270 |
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950,761 |
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784,012 |
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110,426 |
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3,084,375 |
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3,148,114 |
Smart devices |
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406,956 |
|
251,879 |
|
222,407 |
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31,325 |
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1,256,446 |
|
909,192 |
Online marketing services |
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240,756 |
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336,143 |
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474,102 |
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66,776 |
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672,361 |
|
1,331,902 |
Total net revenues |
|
1,453,982 |
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1,538,783 |
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1,480,521 |
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208,527 |
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5,013,182 |
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5,389,208 |
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Cost of revenues (2) |
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(679,295) |
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(679,147) |
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(741,720) |
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(104,469) |
|
(2,426,766) |
|
(2,621,746) |
Gross profit |
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774,687 |
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859,636 |
|
738,801 |
|
104,058 |
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2,586,416 |
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2,767,462 |
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Operating expenses: |
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Sales and marketing expenses (2) |
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(515,944) |
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(674,173) |
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(441,399) |
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(62,170) |
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(2,328,095) |
|
(2,268,428) |
Research and development expenses (2) |
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(179,474) |
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(187,328) |
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(168,130) |
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(23,681) |
|
(803,791) |
|
(743,364) |
General and administrative expenses (2) |
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(54,597) |
|
(55,822) |
|
(52,989) |
|
(7,463) |
|
(229,210) |
|
(221,996) |
Total operating expenses |
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(750,015) |
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(917,323) |
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(662,518) |
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(93,314) |
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(3,361,096) |
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(3,233,788) |
Income/(Loss) from operations |
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24,672 |
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(57,687) |
|
76,283 |
|
10,744 |
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(774,680) |
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(466,326) |
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Interest income |
|
3,072 |
|
2,167 |
|
1,733 |
|
244 |
|
12,908 |
|
8,348 |
Interest expense |
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(14,643) |
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(17,753) |
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(18,869) |
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(2,658) |
|
(45,607) |
|
(69,472) |
Others, net |
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3,767 |
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(21,097) |
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(2,589) |
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(364) |
|
81,445 |
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(11,578) |
Income/(Loss) before tax |
|
16,868 |
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(94,370) |
|
56,558 |
|
7,966 |
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(725,934) |
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(539,028) |
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Income tax expenses |
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(13,833) |
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(2,557) |
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(441) |
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(62) |
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(13,844) |
|
(11,089) |
Net income/(loss) from continuing operations |
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3,035 |
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(96,927) |
|
56,117 |
|
7,904 |
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(739,778) |
|
(550,117) |
Net loss from discontinued operations |
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- |
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- |
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- |
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- |
|
(6,105) |
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- |
Net income/(loss) |
|
3,035 |
|
(96,927) |
|
56,117 |
|
7,904 |
|
(745,883) |
|
(550,117) |
Net loss/(income) attributable to noncontrolling interests |
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9,263 |
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(5,978) |
|
365 |
|
51 |
|
18,851 |
|
182 |
Net income/(loss) attributable to ordinary shareholders of the Company |
|
12,298 |
|
(102,905) |
|
56,482 |
|
7,955 |
|
(727,032) |
|
(549,935) |
Including: |
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Net income/(loss) from continuing operations attributable to ordinary shareholders of the Company |
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12,298 |
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(102,905) |
|
56,482 |
|
7,955 |
|
(720,927) |
|
(549,935) |
Net loss from discontinued operations attributable to ordinary shareholders of the Company |
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- |
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- |
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- |
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- |
|
(6,105) |
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- |
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Basic net income/(loss) per ADS |
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0.10 |
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(0.85) |
|
0.47 |
|
0.07 |
|
(5.88) |
|
(4.53) |
-Continuing operations |
|
0.10 |
|
(0.85) |
|
0.47 |
|
0.07 |
|
(5.83) |
|
(4.53) |
-Discontinued operations |
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- |
|
- |
|
- |
|
- |
|
(0.05) |
|
- |
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Diluted net income/(loss) per ADS |
|
0.10 |
|
(0.85) |
|
0.47 |
|
0.07 |
|
(5.88) |
|
(4.53) |
-Continuing operations |
|
0.10 |
|
(0.85) |
|
0.47 |
|
0.07 |
|
(5.83) |
|
(4.53) |
-Discontinued operations |
|
- |
|
- |
|
- |
|
- |
|
(0.05) |
|
- |
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|
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|
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Shares used in computing basic net income/(loss) per ADS |
|
123,584,460 |
|
121,275,391 |
|
119,764,891 |
|
119,764,891 |
|
123,597,604 |
|
121,381,857 |
Shares used in computing diluted net income/(loss) per ADS |
|
124,345,717 |
|
121,275,391 |
|
120,426,624 |
|
120,426,624 |
|
123,597,604 |
|
121,381,857 |
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|
Note 1:
The conversion of Renminbi (RMB) into
H.10 statistical release of the |
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Note 2: |
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Share-based compensation in each category: |
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Cost of revenues |
|
1,231 |
|
2,312 |
|
(2,975) |
|
(419) |
|
5,984 |
|
1,645 |
Sales and marketing expenses |
|
3,249 |
|
1,659 |
|
865 |
|
122 |
|
12,669 |
|
6,071 |
Research and development expenses |
|
5,702 |
|
(2,071) |
|
(312) |
|
(44) |
|
30,578 |
|
8,020 |
General and administrative expenses |
|
6,845 |
|
3,255 |
|
5,224 |
|
736 |
|
21,478 |
|
15,061 |
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UNAUDITED ADDITIONAL INFORMATION |
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(RMB and USD in thousands) |
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Three Months Ended |
|
Year Ended |
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2022 |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
|
RMB |
|
RMB |
|
RMB |
|
USD |
|
RMB |
|
RMB |
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Net revenues |
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Learning services |
|
806,270 |
|
950,761 |
|
784,012 |
|
110,426 |
|
3,084,375 |
|
3,148,114 |
Smart devices |
|
406,956 |
|
251,879 |
|
222,407 |
|
31,325 |
|
1,256,446 |
|
909,192 |
Online marketing services |
|
240,756 |
|
336,143 |
|
474,102 |
|
66,776 |
|
672,361 |
|
1,331,902 |
Total net revenues |
|
1,453,982 |
|
1,538,783 |
|
1,480,521 |
|
208,527 |
|
5,013,182 |
|
5,389,208 |
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Cost of revenues |
|
|
|
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|
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|
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Learning services |
|
289,829 |
|
305,694 |
|
285,383 |
|
40,195 |
|
1,172,703 |
|
1,159,357 |
Smart devices |
|
218,969 |
|
144,528 |
|
137,150 |
|
19,317 |
|
765,641 |
|
552,810 |
Online marketing services |
|
170,497 |
|
228,925 |
|
319,187 |
|
44,957 |
|
488,422 |
|
909,579 |
Total cost of revenues |
|
679,295 |
|
679,147 |
|
741,720 |
|
104,469 |
|
2,426,766 |
|
2,621,746 |
|
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Gross margin |
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|
|
|
|
|
|
Learning services |
|
64.1 % |
|
67.8 % |
|
63.6 % |
|
63.6 % |
|
62.0 % |
|
63.2 % |
Smart devices |
|
46.2 % |
|
42.6 % |
|
38.3 % |
|
38.3 % |
|
39.1 % |
|
39.2 % |
Online marketing services |
|
29.2 % |
|
31.9 % |
|
32.7 % |
|
32.7 % |
|
27.4 % |
|
31.7 % |
Total gross margin |
|
53.3 % |
|
55.9 % |
|
49.9 % |
|
49.9 % |
|
51.6 % |
|
51.4 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS |
|
|
|
|
|
|
|
|
|
|
||
(RMB and USD in thousands, except per ADS data) |
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|
|
|
|
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|
|
|
|
|
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|
|
|
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|
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|
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|
|
|
|
Three Months Ended |
|
Year Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
|
RMB |
|
RMB |
|
RMB |
|
USD |
|
RMB |
|
RMB |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) from continuing operations attributable to ordinary
|
|
12,298 |
|
(102,905) |
|
56,482 |
|
7,955 |
|
(720,927) |
|
(549,935) |
Add: share-based compensation |
|
17,027 |
|
5,155 |
|
2,802 |
|
395 |
|
70,709 |
|
30,797 |
impairment of long-term investments |
|
1,800 |
|
30,500 |
|
10,000 |
|
1,408 |
|
10,300 |
|
43,740 |
Non-GAAP net income/(loss) from continuing operations attributable to
|
|
31,125 |
|
(67,250) |
|
69,284 |
|
9,758 |
|
(639,918) |
|
(475,398) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net income/(loss) from continuing operations per ADS |
|
0.25 |
|
(0.55) |
|
0.58 |
|
0.08 |
|
(5.18) |
|
(3.92) |
Non-GAAP diluted net income/(loss) from continuing operations per ADS |
|
0.25 |
|
(0.55) |
|
0.58 |
|
0.08 |
|
(5.18) |
|
(3.92) |
View original content:https://www.prnewswire.com/news-releases/youdao-reports-fourth-quarter-and-fiscal-year-2023-unaudited-financial-results-302075189.html
SOURCE