Youdao, Inc. (DAO) experienced an incline of 5.57% in the aftermarket. However, the last trading session closed at $11.84 with an increase of 9.34%.
Second Quarter 2021 Unaudited Financial Results
DAO announced second-quarter 2021 financial results on 31 August 2021. The total net revenues were RMB1.3 billion (US$200.3 million), up 107.5 percent from the same time last year. The Learning services net sales totaled RMB921.1 million (US$142.7 million). Moreover, learning product net revenues totaled RMB206.3 million (US$32.0 million), up 138.8% from the same time last year.
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Online marketing service net sales totaled RMB166.0 million (US$25.7 million), up 60.8 percent from the same period in 2020. Gross billings for online courses rose 99.7% year over year to RMB1.1 billion. While gross billings for Youdao Premium Courses increased 124.1 percent to RMB1.0 billion (US$158.7 million). The gross margin was 52.3 percent in 2019, compared to 45.2 percent in 2020. As of June 30, 2021, deferred income from online courses was RMB1.3 billion (US$200.2 million), down from RMB1.4 billion as of December 31, 2020.
DAO Provides Further Update on Regulatory Development
On 19th August 2021, DAO announced that the Company is committed to fully complying with the Beijing AST Measures. The Company has discontinued offering Academic AST lessons on weekends, national holidays, and during Beijing’s current school vacation period. Such actions are likely to have a significant impact on the company’s existing K-12 course business. In the first quarter of the current year, revenues from K-12 Academic AST courses amounted to less than half of the Company’s overall revenues during these time periods.
DAO updates on PRC Regulatory Policy
On July 26, 2021, DAO stated that the Department of Education released a series of rules aimed at easing the strain of excessive homework. The Guidelines, among other things, mandate that all institutions providing online after-school tutoring on academic subjects. They are asked to obtain regulatory approval, and adhere to a number of operational requirements, including class hours, faculty qualifications, tuition standards, advertising, and so on.
The firm expects the Guidelines to have a significant impact on our K-12 course business, the financial situation. Lastly, they aim to continue to seek assistance from regulatory authorities to enhance their operations in strict accordance with all laws and regulations.
First Quarter 2021 Financial Results
DAO announced first-quarter results on 18th May 2021. Total net revenues were RMB1.3 billion (US$204.5 million), up 147.5 percent from the same period in the previous year. The learning services net sales totaled RMB998.9 million (US$152.5 million), up 156.8% from the same time last year. Moreover, learning product net revenues totaled RMB201.9 million (US$30.8 million), up 279.8% from the same time last year.
Online marketing service net sales totaled RMB139.1 million. Gross billings of online courses grew by 55.9% year over year to RMB808.7 million (US$123.4 million), while gross billings of Youdao Premium Courses increased by 66.2 percent to RMB741.5 million (US$113.2 million).
At the same time in 2020, the gross margin was 57.3 percent, compared to 43.5 percent. Online course revenue was RMB1.2 billion (US$176.4 million) deferred as of December 31, 2020, compared to RMB1.4 billion.