Youdao Inc. (DAO) shares surged 5.37% in pre-market trading on Thursday after the company reported better-than-expected Q4 earnings and announced plans to integrate AI more deeply into its business.
For the fourth quarter ended December 31, 2024, Youdao reported:
- Revenue of RMB1.34 billion ($183.6 million), down 9.5% year-over-year but beating analyst estimates.
- Net income of RMB83 million ($11.4 million), up 47% from a year ago.
- Non-GAAP net income of RMB91.8 million ($12.6 million), an increase of 32.5% year-over-year.
The company highlighted that it achieved its first-ever full-year operating profit in 2024, as revenue from online marketing services increased and it improved cost controls. Gross margins also improved across several business segments.
Looking ahead, Youdao plans to launch an "AI Native" strategy, integrating AI technology more comprehensively across its product lines. The company aims to automate advertising platforms and introduce AI-driven tutoring services, stating it is "eager to deliver these innovative projects to our customers."
Investors appear to be cheering Youdao's profit milestone and AI integration plans, sending shares higher in pre-market trading on Thursday.