The Hangzhou-based firm reported total net revenues of RMB 1.5 billion, a 3.5% year-over-year increase. Growth was anchored by the learning services division, which saw revenue jump 20.9% to RMB 795.6 million, bolstered by the company’s push into AI-driven subscription products and the Confucius 4 model. CEO Dr. Feng Zhou attributed the performance to the eighth consecutive quarter of operating profitability, noting that AI is increasingly becoming a tangible driver of business results.

While learning services thrived, the company saw a 31.5% decline in smart device revenue to RMB 86.8 million, reflecting a broader cooling in demand for hardware. Concurrently, online marketing services dipped 7.7% as Youdao deliberately shifted focus toward higher-ROI engagements to improve operational efficiency. The company also announced a management shuffle, with Jinhai Chen, formerly of Tencent, joining the Board of Directors following the resignation of William Lei Ding.