Youdao (NYSE:DAO) Releases Quarterly Earnings Results, Meets Expectations

Youdao (NYSE:DAO) announced its quarterly earnings data on Thursday. The company reported $0.05 earnings per share (EPS) for the quarter, hitting the consensus estimate of $0.05, FiscalAI reports. The business had revenue of $195.52 million for the quarter, compared to the consensus estimate of $201.43 million. Youdao had a net margin of 1.19% and a negative return on equity of 4.50%.

Here are the key takeaways from Youdao’s conference call:

• Youdao posted RMB 1.3 billion in Q1 revenue, up 3.8% year over year, while operating profit was RMB 57.5 million, marking the company’s 7th consecutive quarter of operating profitability.
• Management said AI remains the core growth strategy, highlighted by new launches including Confucius 4, EmotiVoice 2, and Confucius Translation 4, alongside new AI applications like LobsterAI and Youdao Baoku.
• Learning services grew to RMB 627.5 million in revenue, supported by Youdao Lingshi gross billings growth of over 20% and early traction for AI Essay Grading, which has graded about 10,000 essays to date.
• Online marketing services was the standout segment, with revenue up 20.9% year over year to RMB 611.1 million and gross margin improving to 39.6%, driven by performance advertising and AI-enabled products.
• Smart devices revenue fell sharply by 42.6% year over year to RMB 109.4 million, as management continued to prioritize inventory discipline and profitability over near-term volume growth.

Youdao Price Performance

DAO opened at $13.07 on Friday. Youdao has a fifty-two week low of $8.00 and a fifty-two week high of $13.10. The firm’s fifty day moving average price is $10.80 and its two-hundred day moving average price is $10.35. The company has a market capitalization of $1.57 billion, a P/E ratio of 145.17 and a beta of 0.57.

Analyst Ratings Changes

Several brokerages have recently issued reports on DAO. Wall Street Zen downgraded shares of Youdao from a “buy” rating to a “hold” rating in a research note on Saturday. Citigroup upgraded shares of Youdao from a “hold” rating to a “buy” rating in a research note on Thursday, February 12th. One investment analyst has rated the stock with a Buy rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock currently has an average rating of “Hold”.

Institutional Investors Weigh In On Youdao

A hedge fund recently raised its stake in Youdao stock. Public Employees Retirement System of Ohio boosted its holdings in shares of Youdao, Inc. Unsponsored ADR (NYSE:DAO) by 35.9% during the third quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 29,286 shares of the company’s stock after buying an additional 7,729 shares during the period. Public Employees Retirement System of Ohio’s holdings in Youdao were worth $291,000 as of its most recent SEC filing. 21.91% of the stock is owned by institutional investors.

Youdao News Roundup

Here are the key news stories impacting Youdao this week:

• Positive Sentiment: First-quarter revenue rose 3.8% year over year to RMB1.3 billion ($195.4 million), showing that Youdao is still growing despite a competitive education and AI market. Youdao Reports First Quarter 2026 Unaudited Financial Results
• Positive Sentiment: Adjusted earnings met analyst expectations at $0.05 per share, which likely helped support the stock by signaling that profitability is holding up better than feared. Youdao earnings report and conference call
• Neutral Sentiment: Management highlighted its AI pivot and strategic investments, which may improve long-term growth but also keep near-term margins under pressure. Youdao Inc (DAO) Q1 2026 Earnings Call Highlights
• Neutral Sentiment: Several transcript-focused articles suggest investors are parsing management commentary for clues on how the AI strategy will balance growth and profitability. Earnings call transcript: Youdao Q1 2026 shows earnings miss, stock steady
• Negative Sentiment: Revenue came in below analyst expectations of $201.4 million, and headlines noted an earnings miss in some transcript coverage, which tempers the upbeat reaction. Youdao (DAO) Q4 2025 Earnings Transcript

About Youdao

Youdao, Inc (NYSE: DAO), established in 2006 as a subsidiary of NetEase, is headquartered in Beijing, China. The company went public on the New York Stock Exchange in October 2019, marking a significant milestone in its development as an intelligent learning and knowledge service provider. Since its inception, Youdao has combined cloud computing, artificial intelligence and big data analytics to create an adaptive learning ecosystem designed to meet the needs of individual learners and organizations.

At the core of Youdao’s offerings is its suite of digital dictionaries and translation tools, including the flagship Youdao Dictionary app and translation engine.