Youdao reports Q2 2026 revenue growth and operating profit

Youdao, Inc., an AI solutions provider, reported its unaudited financial results for the second quarter of 2026. The company achieved total net revenues of RMB 1.5 billion (US$216.2 million), a 3.5% increase compared to the same period in 2025. Key drivers included learning services, which saw a 20.9% revenue increase to RMB 795.6 million. However, revenues from smart devices fell by 31.5%, and online marketing services decreased by 7.7%.

The company reported a significant increase in income from operations, which rose nearly 2.9 times year-over-year to RMB 111.5 million. CEO Dr. Feng Zhou noted that the results represent the company’s eighth consecutive quarter of operating profitability.

In related market news, Wall Street Zen upgraded Youdao from a ‘hold’ to a ‘buy’ rating. Additionally, the Public Employees Retirement System of Ohio increased its stake in the company by 35.9% during the third quarter.