Youdao Reports Fourth Quarter and Fiscal Year 2022 Unaudited Financial Results
Youdao, Inc. (NYSE: DAO) reported its unaudited financial results for Q4 and FY 2022, highlighting strong growth across various segments. In Q4, total net revenues reached RMB1.5 billion (US$210.8 million), marking a 38.6% increase year-over-year. The learning services segment generated RMB806.3 million (US$116.9 million), up by 39.2%, while net revenues from smart devices rose to RMB407.0 million (US$59.0 million), up 28.1%. The company achieved a gross margin of 53.3%, compared to 42.5% in the same quarter of 2021. For FY 2022, total revenues were RMB5.0 billion (US$726.8 million), a 24.8% increase from 2021. Notably, Youdao reported its first income from operations in Q4, amounting to RMB24.7 million (US$3.6 million).
- Total net revenues increased 38.6% year-over-year to RMB1.5 billion (US$210.8 million) in Q4.
- Net income from continuing operations attributable to ordinary shareholders improved significantly to RMB12.3 million (US$1.8 million) in Q4, compared to a loss of RMB215.9 million in the previous year.
- Operating expenses increased to RMB750 million (US$108.7 million) in Q4, up from RMB693.6 million, impacting profitability.
- Net cash used in continuing operating activities was RMB531.4 million (US$77.0 million) for 2022, indicating cash flow challenges.
Fourth Quarter 2022 Financial Highlights[1]
- Total net revenues were
RMB1.5 billion (US ), representing a$210.8 million 38.6% increase from the same period in 2021.
- Net revenues from learning services wereRMB806.3 million (US ), representing a$116.9 million 39.2% increase from the same period in 2021.
- Net revenues from smart devices wereRMB407.0 million (US ), representing a$59.0 million 28.1% increase from the same period in 2021.
- Net revenues from online marketing services wereRMB240.8 million (US ), representing a$34.9 million 58.6% increase from the same period in 2021. - Gross margin was
53.3% , compared with42.5% for the same period in 2021.
[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 |
Fiscal Year 2022 Financial Highlights
- Total net revenues were
RMB5.0 billion (US ), representing a$726.8 million 24.8% increase from 2021.
- Net revenues from learning services wereRMB3.1 billion (US ), representing a$447.2 million 26.3% increase from 2021.
- Net revenues from smart devices wereRMB1.3 billion (US ), representing a$182.2 million 28.2% increase from 2021.
- Net revenues from online marketing services wereRMB672.4 million (US ), representing a$97.5 million 13.2% increase from 2021. - Gross margin was
51.6% , compared with49.5% for 2021.
"Our ongoing investment in AI technology facilitated our ability to consistently introduce and broaden our digital content services and smart device offerings throughout 2022. In both the third and fourth quarters, the net revenues from our digital content services covered its costs and operating expenses, showing the improved health of our business. Our new smart devices launched in the second half of 2022, including upgraded dictionary pens and smart learning pads, were highly recognized by customers, which led to strong sales growth during the
"Years of experience have taught us that the full value of AI cannot be realized on its own. To effectively support users, technologies must be integrated with sound business scenarios. Looking ahead, we will continue to prioritize our users. By leveraging our advanced technology and innovation, we will continue to introduce additional high-quality educational products and services to meet users' diverse and personalized demands."
Fourth Quarter 2022 Financial Results
Net Revenues
Net revenues for the fourth 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 fourth quarter of 2022 was
Gross margin for learning services increased to
Gross margin for smart devices increased to
Gross margin for online marketing services was
Operating Expenses
Total operating expenses for the fourth quarter of 2022 were
Sales and marketing expenses for the fourth quarter of 2022 were
Research and development expenses for the fourth quarter of 2022 were
General and administrative expenses for the fourth quarter of 2022 were
Impairment of intangible assets from business combination for the fourth quarter of 2021 reflected the impairment of the intangible assets related to a subsidiary acquired due to the adverse development of its business and change of the regulatory environment.
(Loss)/Income from Operations
As a result of the foregoing, income from operations for the fourth quarter of 2022 was
Net (Loss)/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 2022 was
Balance Sheet
As of
As of
Fiscal Year 2022 Financial Results
Net Revenues
Net revenues for 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 2022 was
Gross margin for learning services increased to
Gross margin for smart devices increased to
Gross margin for online marketing services was
Operating Expenses
Total operating expenses for 2022 were
Sales and marketing expenses for 2022 were
Research and development expenses for 2022 were
General and administrative expenses for 2022 were
Impairment of intangible assets from business combination for 2021 reflected the impairment of the intangible assets related to a subsidiary acquired due to the adverse development of its business and change of the regulatory environment.
Loss from Operations
Loss from operations for 2022 was
Net Loss from Continuing Operations Attributable to
Net loss from continuing operations attributable to
Basic and diluted net loss from continuing operations per ADS attributable to ordinary shareholders for 2022 was
Operating Cash Flow from Continuing Operations
For 2022, net cash used in continuing operating activities was
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: | 8917789 |
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: | 8917789 |
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: +86-21-6039-8363
E-mail: youdao@thepiacentegroup.com
In
The Piacente Group, Inc.
Tel: +1-212-481-2050
E-mail: youdao@thepiacentegroup.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(RMB and USD in thousands) | ||||||
As of | As of | As of | ||||
2021 | 2022 | 2022 | ||||
RMB | RMB | USD (1) | ||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | 322,777 | 783,611 | 113,613 | |||
Time deposits | 268 | 273 | 40 | |||
Restricted cash | 749,770 | 873 | 127 | |||
Short-term investments | 503,831 | 232,152 | 33,659 | |||
Accounts receivable, net | 248,339 | 405,139 | 58,740 | |||
Inventories, net | 255,411 | 232,260 | 33,675 | |||
Amounts due from | 6,192 | 7,888 | 1,144 | |||
Prepayment and other current assets | 182,577 | 207,777 | 30,124 | |||
Assets held for sale | 497 | - | - | |||
Total current assets | 2,269,662 | 1,869,973 | 271,122 | |||
Non-current assets: | ||||||
Property, equipment and software, net | 80,315 | 92,116 | 13,356 | |||
Operating lease right-of-use assets, net | 118,104 | 78,405 | 11,368 | |||
Long-term investments | 32,518 | 90,703 | 13,151 | |||
109,944 | 109,944 | 15,940 | ||||
Other assets, net | 22,436 | 35,015 | 5,075 | |||
Assets held for sale | 1,088 | - | - | |||
Total non-current assets | 364,405 | 406,183 | 58,890 | |||
Total assets | 2,634,067 | 2,276,156 | 330,012 | |||
Liabilities, Mezzanine Equity and Shareholders' Deficit | ||||||
Current liabilities: | ||||||
Accounts payables | 161,006 | 282,354 | 40,937 | |||
Payroll payable | 277,383 | 266,340 | 38,616 | |||
Amounts due to | 83,041 | 68,809 | 9,976 | |||
Contract liabilities | 1,065,639 | 1,067,285 | 154,742 | |||
Taxes payable | 53,323 | 50,908 | 7,381 | |||
Accrued liabilities and other payables | 515,567 | 564,922 | 81,907 | |||
Short-term loans from | 878,000 | 878,000 | 127,298 | |||
Total current liabilities | 3,033,959 | 3,178,618 | 460,857 | |||
Non-current liabilities: | ||||||
Long-term lease liabilities | 73,070 | 43,635 | 6,326 | |||
Long-term loans from | 255,028 | 522,345 | 75,733 | |||
Other non-current liabilities | 2,411 | 8,832 | 1,281 | |||
Total non-current liabilities | 330,509 | 574,812 | 83,340 | |||
Total liabilities | 3,364,468 | 3,753,430 | 544,197 | |||
Mezzanine equity | 78,592 | 64,571 | 9,362 | |||
Shareholders' deficit: | ||||||
(807,067) | (1,535,089) | (222,567) | ||||
Noncontrolling interests | (1,926) | (6,756) | (980) | |||
Total shareholders' deficit | (808,993) | (1,541,845) | (223,547) | |||
Total liabilities, mezzanine equity and shareholders' deficit | 2,634,067 | 2,276,156 | 330,012 | |||
Note 1: |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
(RMB and USD in thousands, except share and per ADS data) | ||||||||||||||
Three Months Ended | Year Ended | |||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | |||||||||
RMB | RMB | RMB | USD (1) | RMB | RMB | |||||||||
Net revenues: | ||||||||||||||
Learning services | 579,259 | 888,493 | 806,270 | 116,899 | 2,441,421 | 3,084,375 | ||||||||
Smart devices | 317,702 | 356,480 | 406,956 | 59,003 | 980,424 | 1,256,446 | ||||||||
Online marketing services | 151,836 | 157,461 | 240,756 | 34,906 | 593,949 | 672,361 | ||||||||
Total net revenues | 1,048,797 | 1,402,434 | 1,453,982 | 210,808 | 4,015,794 | 5,013,182 | ||||||||
Cost of revenues (2) | (603,504) | (642,254) | (679,295) | (98,489) | (2,026,956) | (2,426,766) | ||||||||
Gross profit | 445,293 | 760,180 | 774,687 | 112,319 | 1,988,838 | 2,586,416 | ||||||||
Operating expenses: | ||||||||||||||
Sales and marketing expenses (2) | (420,437) | (709,769) | (515,944) | (74,805) | (2,077,638) | (2,328,095) | ||||||||
Research and development expenses (2) | (170,245) | (212,926) | (179,474) | (26,021) | (607,373) | (803,791) | ||||||||
General and administrative expenses (2) | (46,112) | (56,520) | (54,597) | (7,916) | (190,297) | (229,210) | ||||||||
Impairment of intangible assets from business combination | (56,778) | - | - | - | (56,778) | - | ||||||||
Total operating expenses | (693,572) | (979,215) | (750,015) | (108,742) | (2,932,086) | (3,361,096) | ||||||||
(Loss)/Income from operations | (248,279) | (219,035) | 24,672 | 3,577 | (943,248) | (774,680) | ||||||||
Interest income | 3,012 | 4,033 | 3,072 | 445 | 18,780 | 12,908 | ||||||||
Interest expense | (8,428) | (12,277) | (14,643) | (2,123) | (31,644) | (45,607) | ||||||||
Others, net | 12,339 | 40,058 | 3,767 | 546 | 36,673 | 81,445 | ||||||||
(Loss)/Income before tax | (241,356) | (187,221) | 16,868 | 2,445 | (919,439) | (725,934) | ||||||||
Income tax benefit/(expense) | 556 | 1,108 | (13,833) | (2,006) | (6,648) | (13,844) | ||||||||
Net (loss)/income from continuing operations | (240,800) | (186,113) | 3,035 | 439 | (926,087) | (739,778) | ||||||||
Net income/(loss) from discontinued operations | 199,290 | - | - | - | (100,267) | (6,105) | ||||||||
Net (loss)/income | (41,510) | (186,113) | 3,035 | 439 | (1,026,354) | (745,883) | ||||||||
Net loss attributable to noncontrolling interests | 24,897 | 2,194 | 9,263 | 1,343 | 30,699 | 18,851 | ||||||||
Net (loss)/income attributable to ordinary shareholders of the Company | (16,613) | (183,919) | 12,298 | 1,782 | (995,655) | (727,032) | ||||||||
Including: | ||||||||||||||
Net (loss)/income from continuing operations attributable to ordinary | (215,903) | (183,919) | 12,298 | 1,782 | (895,388) | (720,927) | ||||||||
Net income/(loss) from discontinued operations attributable to ordinary | 199,290 | - | - | - | (100,267) | (6,105) | ||||||||
Basic net (loss)/income per ADS | (0.13) | (1.49) | 0.10 | 0.01 | (8.18) | (5.88) | ||||||||
-Continuing operations | (1.75) | (1.49) | 0.10 | 0.01 | (7.36) | (5.83) | ||||||||
-Discontinued operations | 1.62 | - | - | - | (0.82) | (0.05) | ||||||||
Diluted net (loss)/income per ADS | (0.13) | (1.49) | 0.10 | 0.01 | (8.18) | (5.88) | ||||||||
-Continuing operations | (1.75) | (1.49) | 0.10 | 0.01 | (7.36) | (5.83) | ||||||||
-Discontinued operations | 1.62 | - | - | - | (0.82) | (0.05) | ||||||||
Shares used in computing basic net (loss)/income per ADS | 123,193,273 | 123,767,013 | 123,584,460 | 123,584,460 | 121,650,907 | 123,597,604 | ||||||||
Shares used in computing diluted net (loss)/income per ADS | 123,193,273 | 123,767,013 | 124,345,717 | 124,345,717 | 121,650,907 | 123,597,604 | ||||||||
Note 1: | ||||||||||||||
Note 2: | ||||||||||||||
Share-based compensation in each category: | ||||||||||||||
Cost of revenues | 3,249 | 798 | 1,231 | 178 | 7,862 | 5,984 | ||||||||
Sales and marketing expenses | 2,800 | 2,879 | 3,249 | 471 | 10,521 | 12,669 | ||||||||
Research and development expenses | 8,735 | 7,586 | 5,702 | 828 | 33,775 | 30,578 | ||||||||
General and administrative expenses | 5,449 | 4,801 | 6,845 | 992 | 20,043 | 21,478 | ||||||||
UNAUDITED ADDITIONAL INFORMATION | |||||||||||||
(RMB and USD in thousands) | |||||||||||||
Three Months Ended | Year Ended | ||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | ||||||||
RMB | RMB | RMB | USD | RMB | RMB | ||||||||
Net revenues | |||||||||||||
Learning services | 579,259 | 888,493 | 806,270 | 116,899 | 2,441,421 | 3,084,375 | |||||||
Smart devices | 317,702 | 356,480 | 406,956 | 59,003 | 980,424 | 1,256,446 | |||||||
Online marketing services | 151,836 | 157,461 | 240,756 | 34,906 | 593,949 | 672,361 | |||||||
Total net revenues | 1,048,797 | 1,402,434 | 1,453,982 | 210,808 | 4,015,794 | 5,013,182 | |||||||
Cost of revenues | |||||||||||||
Learning services | 281,433 | 315,086 | 289,829 | 42,021 | 980,700 | 1,172,703 | |||||||
Smart devices | 219,703 | 212,365 | 218,969 | 31,748 | 618,925 | 765,641 | |||||||
Online marketing services | 102,368 | 114,803 | 170,497 | 24,720 | 427,331 | 488,422 | |||||||
Total cost of revenues | 603,504 | 642,254 | 679,295 | 98,489 | 2,026,956 | 2,426,766 | |||||||
Gross margin | |||||||||||||
Learning services | 51.4 % | 64.5 % | 64.1 % | 64.1 % | 59.8 % | 62.0 % | |||||||
Smart devices | 30.8 % | 40.4 % | 46.2 % | 46.2 % | 36.9 % | 39.1 % | |||||||
Online marketing services | 32.6 % | 27.1 % | 29.2 % | 29.2 % | 28.1 % | 27.4 % | |||||||
Total gross margin | 42.5 % | 54.2 % | 53.3 % | 53.3 % | 49.5 % | 51.6 % | |||||||
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS | |||||||||||||
(RMB and USD in thousands, except per ADS data) | |||||||||||||
Three Months Ended | Year Ended | ||||||||||||
2021 | 2022 | 2022 | 2022 | 2021 | 2022 | ||||||||
RMB | RMB | RMB | USD | RMB | RMB | ||||||||
Net (loss)/income from continuing operations attributable to ordinary | (215,903) | (183,919) | 12,298 | 1,782 | (895,388) | (720,927) | |||||||
Add: share-based compensation | 20,233 | 16,064 | 17,027 | 2,469 | 72,201 | 70,709 | |||||||
amortization of intangible assets from business combination | 1,976 | - | - | - | 2,972 | - | |||||||
impairment of long-term investments | - | 3,500 | 1,800 | 261 | 7,000 | 10,300 | |||||||
impairment of intangible assets from business combination | 56,778 | - | - | - | 56,778 | - | |||||||
Less: tax effects on non-GAAP adjustments | (8,813) | - | - | - | (8,962) | - | |||||||
GAAP to non-GAAP reconciling items for the loss attributable to | (22,473) | - | - | - | (22,854) | - | |||||||
Non-GAAP net (loss)/income from continuing operations attributable to | (168,202) | (164,355) | 31,125 | 4,512 | (788,253) | (639,918) | |||||||
Non-GAAP basic net (loss)/income from continuing operations per ADS | (1.37) | (1.33) | 0.25 | 0.04 | (6.48) | (5.18) | |||||||
Non-GAAP diluted net (loss)/income from continuing operations per ADS | (1.37) | (1.33) | 0.25 | 0.04 | (6.48) | (5.18) | |||||||
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FAQ
What were Youdao's total revenues for Q4 2022?
How did Youdao perform financially in FY 2022?
What was Youdao's gross margin for Q4 2022?
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