Youdao, Inc. (NYSE: DAO)

Youdao, Inc. is an AI solutions provider specializing in learning and advertising. The company offers online learning services, AI driven subscription products, online marketing services and smart hardware devices. It serves users of all ages in China and abroad by providing dictionary translation, course content, language practice tools and advertising solutions. Its core activities include developing large language models, optical character recognition, speech recognition and data analytics to power its products. As of December 31 2025 the firm employed 581 research and development staff and operated an AI lab focused on advancing its technology.

Revenue comes from tuition fees for online learning courses, subscription fees for dictionary and AI based tools, advertising fees from performance based and global marketing services, sales of smart devices such as dictionary pens and tutoring pens, and licensing fees for its technology to business customers. In the fiscal year ended December 31 2025 total net revenues were RMB 5,909,019 thousand, compared with RMB 5,625,919 thousand in 2024 and RMB 5,389,208 thousand in 2023. Tuition is collected in advance and recognized when service is delivered. Subscription models offer free basic access with paid upgrades for advanced features. Advertising is sold mainly on a cost per click basis or as fixed fees for campaigns. Smart device revenue is recognized upon delivery to distributors or end users. Licensing fees are charged for the use of its proprietary technology by enterprise clients.

Youdao, Inc. competes in the highly competitive intelligent learning and digital advertising markets. It faces competition from other online education platforms, dictionary apps, smart device makers and advertising networks. The company's competitive advantages stem from its proprietary AI technology including its self developed large language model called Confucius, strong optical character recognition and speech recognition capabilities, a large loyal user base that generates organic traffic, and its ability to integrate technology across products to create synergies. Its user base is highlighted by Youdao Dictionary which reported 39.1 million average monthly active users in 2025. These strengths help it maintain market position despite rivals with longer histories or greater brand recognition.

The company serves tens of millions of individual learners, professionals and advertisers in China and overseas. Its user base includes students using Youdao Dictionary, participants in online courses such as Youdao Lingshi, Youdao Premium Courses and China University MOOC, advertisers using its performance based and global marketing services, and business customers that license its technology for enterprise solutions. Specific partners noted in the filing include IELTS, Turnitin and Google. The company also works with NetEase on advertising initiatives and collaborates with educational institutions to expand its course offerings.