The gross margin of youdao in Q2 2024 was 48.2%, while it was 47.0% in the same period of 2023. CEO Zhou Feng said that it was correct not to adopt a low stock price strategy before and will not participate in price wars in the future.
On the 22nd, Youdao released its 2024 Q2 financial report, which showed a record-breaking net inflow of operating cash flow of 0.25 billion yuan, a year-on-year increase of 88.2%, and a significant narrowing of operating losses by 74.9% year-on-year.
1) Main financial data
○ Net income was 1.3 billion RMB (0.1819 billion USD), a 9.5% increase compared to the same period in 2023.
○ Gross profit was 0.6368 billion RMB (87.6 million USD), a 12.3% increase compared to the same period in 2023. The gross profit margin was 48.2%, while it was 47.0% in the same period in 2023.
○ Total operating expenses were 0.7093 billion RMB (97.6 million USD), compared to 0.8563 billion RMB in the same period last year.
○ Net cash provided by operating activities was 0.2502 billion RMB (34.4 million USD), and the total capital expenditure was 3.8 million RMB (0.5 million USD).
2) Business revenue data
Education service net revenue was RMB 0.6438 billion (USD 88.6 million), a decrease of 5.5% from the same period in 2023.
Asia vets equipment net revenue was RMB 0.1667 billion (USD 22.9 million), a decrease of 25.0% from the same period in 2023.
Online marketing services net revenue was RMB 0.5112 billion (USD 70.3 million), an increase of 68.4% from the same period in 2023.
In the first half of this year, NetEase Youdao achieved a net income of 2.71 billion yuan, a year-on-year increase of 14.5%. While maintaining revenue growth, major financial indicators such as operating losses and operating cash flow also significantly improved year-on-year, further enhancing the company's overall profitability.
Netease Youdao CEO Zhou Feng stated that in the past six months, the close integration of large-scale model technology with the company's business has not only promoted comprehensive business progress but also significantly improved the main financial indicators. The company will continue to push for the implementation of large-scale models and use technological innovation to support personalized education.
Regarding products, Zhou Feng stated in a conference call that in terms of performance, it was correct not to adopt a low stock price strategy in the past. "Our product prices are generally 50-100 yuan higher than competitors, and we will not engage in price wars in the future. However, with the further improvement of supply chain capabilities, a gross margin of 40% will be a reasonable range."
After the financial report was released, Netease Youdao's pre-market trading on the 22nd surged over 2.45%, but fell after the market opened, eventually closing down 8.9% at $3.35.
