Youdao Q1 FY26 net income drops 49.7% to RMB 38.6 million; revenue rises 3.8% to RMB 1.3 billion

• Youdao posted Q1 net revenues of RMB 1.3 billion, up 3.8% from a year earlier, as online marketing services climbed 20.9% to RMB 611.1 million.
• Operating income fell 44.7% to RMB 57.5 million, while basic net income per ADS dropped to RMB 0.33 from RMB 0.65 a year earlier.
• Gross margin narrowed 2.6 percentage points to 44.7%, with smart devices revenue sliding 42.6% to RMB 109.4 million.
• CEO Feng Zhou said the company logged its fourth straight quarter of year-over-year revenue growth and seventh consecutive quarter of operating profitability, citing over-20% growth in Youdao Lingshi gross billings and online marketing services revenue.
• Youdao expanded its AI Agent lineup with the launches of LobsterAI and Youdao Baoku, extending its Confucius LLM into learning and productivity use cases.

Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Youdao Inc. published the original content used to generate this news brief via PR Newswire (Ref. ID: 202605210430PR_NEWS_USPR_____CN65097) on May 21, 2026, and is solely responsible for the information contained therein.