Youdao Reports Third Quarter 2019 Unaudited Financial Results

HANGZHOU, China, Nov. 20, 2019 /PRNewswire/ -- Youdao, Inc. ("Youdao" or the "Company") (NYSE: DAO), a leading intelligent learning company in China, today announced its unaudited financial results for the third quarter ended September 30, 2019.

Third Quarter 2019 Financial Highlights

  • Total net revenues were RMB345.9 million (US$48.4 million), a 98.4% increase from the same period in 2018.
    - Net revenues from learning services and products were RMB225.2 million (US$31.5 million), a 141.6% increase from the same period in 2018.
    - Net revenues from online marketing services were RMB120.8 million (US$16.9 million), a 48.8% increase from the same period in 2018.
  • Gross billings from online courses[1] increased 139.8% year-over-year to RMB290.9 million (US$40.7 million) and the gross billings of Youdao Premium Courses[2] increased 104.6% year-over-year to RMB214.6 million (US$30.0 million).
  • Gross margin was 25.8%, compared with 23.3% for the same period in 2018.
  • Deferred revenue from online courses was RMB296.7 million (US$41.5 million), compared with RMB129.1 million as of December 31, 2018.

Key Operating and Financial Data

 

For the three
months ended September 30

   
 

2018

 

2019

 

% of Increase

 (in millions, RMB)

         

Gross billings of online courses

121.3

 

290.9

 

139.8%

Gross billings of Youdao Premium Courses[3]

104.9

 

214.6

 

104.6%

Paid student enrollments of Youdao Premium Courses (in thousands)

172.2

 

237.1

 

37.6%

     K-12 paid student enrollments

33.2

 

92.7

 

179.2%

     Adult paid student enrollments

139.0

 

144.4

 

3.8%

Gross billings per paid student enrollment of Youdao Premium Courses (in RMB)

609

 

905

 

48.6%

"In the third quarter, we achieved strong financial and operational growth across our business, driven by our highly scalable online courses, increased intelligent learning devices sales, and strong performance from our online marketing services," said Dr. Feng Zhou, Chief Executive Officer and Director of Youdao. "Our strategic focus remains on improving product quality, strengthening our top-performing courses, expanding our subject offerings, and supplementing our course growth with our content development system. Our Youdao Premium Courses had 237,100 paid enrollments in the third quarter, up 37.6% year-over-year and gross billings reached RMB214.6 million. Paid enrollments from our core K-12 programs were particularly robust, increasing by 179.2% year-over-year with gross billings of RMB146.7 million.  The growing popularity of our new, early learning STEAM courses is also promising, both in its own regard and as a feeder program for seamless integration into our K-12 courses. We also saw exceptional growth from our intelligent learning products, which we consider to be an indispensable part of students' learning experience. As an increasing component to our growth strategy, we released Youdao Cloud Pen in June and the 2nd generation Youdao Dictionary Pen in August. Both received excellent reviews and rankings."

"We will continue investing in intelligent learning technology to encourage more interaction and engagement. By leveraging the insights we obtain from students' learning process via our intelligent technology, we can offer even more tailored learning experiences. We will also continue investing in student acquisition to grow our active student population. At the same time, we will work to leverage our massive organic traffic. Over time, more efficient student acquisition and conversion rates will positively impact our bottom line. Our goal for now will be to continue to increase our gross billings, paid student enrollments, and revenues.

"Our strategic initiatives are designed to support our growth over the long-term. By offering premium content, knowledge tools and technology, we are confident we can improve users' online learning experience, providing a personalized experience that combines the benefits of online and offline education to increase learning productivity and efficiency. The completion of our IPO in October gives us even more responsibilities, not only to our growing tribe of students, but to our partners, employees and investors," Dr. Zhou concluded.

Third Quarter 2019 Financial Results

Net Revenues

Net revenues for the third quarter of 2019 were RMB345.9 million (US$48.4 million), a 98.4% increase from RMB174.4 million for the third quarter of 2018.

Net revenues from learning services and products were RMB225.2 million (US$31.5 million) for the third quarter of 2019, a 141.6% increase from RMB93.2 million for the third quarter of 2018. The increase was primarily attributable to strong growth in K-12 paid student enrollments and increased gross billings per paid student. The number of K-12 paid student enrollments increased 179.2% year-over-year to 92,700 students in the third quarter of 2019. The gross billings per paid student enrollments of Youdao Premium Courses increased 48.6% year-over-year to RMB905 for the third quarter of 2019. In addition, revenues from Youdao's intelligent learning devices increased 706.7% year-over-year, primarily due to a significant increase in sales volume of Youdao Dictionary Pen and Youdao Pocket Translator as such products continued to gain popularity among users due to their premium product quality.

Net revenues from online marketing services were RMB120.8 million (US$16.9 million), a 48.8% increase from RMB81.2 million for the same period in 2018. The year-over-year increase in online marketing services revenues was attributable to the increased distribution of advertisement through third parties' internet properties.

Gross Profit and Gross Margin

Gross profit for the third quarter of 2019 was RMB89.2 million (US$12.5 million), compared with RMB40.6 million for the third quarter of 2018. Gross margin for the third quarter of 2019 was 25.8%, compared with 23.3% for the third quarter of 2018.

Gross margin for learning services and products increased to 27.5% for the third quarter of 2019 from 9.2% for the third quarter of 2018, primarily attributable to our success in achieving effects of economies of scale, along with the expansion of the business and faculty compensation structure optimization.

Gross margin for online marketing services was 22.6% for the third quarter of 2019, compared with 39.5% for the third quarter of last year. The decrease was mainly attributable to more revenue generated from increased distribution of advertisement through third parties' internet properties and international markets, which carry lower gross margin.

Operating Expenses

Total operating expenses for the third quarter of 2019 were RMB 324.0 million (US$45.3 million), compared with RMB126.2 million for the same period of last year. 

Sales and marketing expenses for the third quarter of 2019 were RMB231.0 million (US$32.3 million), compared with RMB65.0 million for the third quarter of 2018. The increase was primarily due to increased expenses associated with student acquisition, branding enhancement and sales and marketing staff compensation.

Research and development expenses for the third quarter of 2019 were RMB74.9 million (US$10.5 million), an increase of 42.1% compared with RMB52.7 million for the same period last year. The increase was primarily due to increased payroll-related expenses associated with an increased number of course-development and technology professionals.  

General and administrative expenses for the third quarter of 2019 increased to RMB18.1 million (US$2.5 million) from RMB8.5 million for the same period of last year. The increase was mainly attributable to increases in the number of Youdao's general and administrative staff and their increased compensation levels.

Loss from Operations

Loss from operations for the third quarter of 2019 was RMB234.7 million (US$ 32.8 million), compared with RMB85.7 million for the same period in 2018. The margin of loss from operations was 67.9%, down from 49.1% for the same period of last year.

Net Loss Attributable to Youdao's Ordinary Shareholders

Net loss attributable to Youdao's ordinary shareholders for the third quarter of 2019 was RMB 242.2 million (US$33.9 million), compared with RMB77.0 million for the same period of last year. Non-GAAP net loss attributable to Youdao's ordinary shareholders for the third quarter of 2019 was RMB238.8 million (US$33.4 million), compared with RMB75.0 million for the same period of last year.

Basic and diluted net loss per American Depositary Share ("ADS") attributable to ordinary shareholders for the third quarter of 2019 was RMB2.63 (US$0.37), compared with RMB0.84 for the third quarter of 2018. Non-GAAP basic and diluted net loss per ADS was RMB2.60 (US$0.36), compared with RMB0.82 for the third quarter of 2018.

Balance Sheet

As of September 30, 2019, Youdao's cash, cash equivalents, time deposits and short-term investments totaled RMB160.3 million (US$22.4 million), compared with RMB435.4 million as of December 31, 2018. The decrease mainly resulted from continued investment in daily operations, including student acquisition and brand enhancement. For the third quarter of 2019, net cash used in operating activities was RMB142.1 million (US$19.9 million), capital expenditures totaled RMB4.4 million, and depreciation and amortization expenses amounted to RMB2.8 million.

As of September 30, 2019, the Company's contract liabilities, which mainly consists of  deferred revenues, was RMB343.6 million (US$48.1 million), an increase of 93.5% from RMB177.5 million as of December 31, 2018.

Recent Developments

Initial Public Offering ("IPO")

On October 29, 2019, the Company completed its IPO on the New York Stock Exchange. In its IPO, the Company sold a total of 5,600,000 ADSs, each representing one of our Class A ordinary shares, par value US$0.0001 per share. In addition, the Company issued Class A ordinary shares for a total consideration of US$125 million in connection with concurrent private placements to certain investment funds managed by Orbis Investment Management Limited, based on the IPO price of US$17.00 per ADS. The Company received total net proceeds of approximately US$213 million after deducting underwriter commissions and relevant offering expenses.

NetEase Share Purchase Program for Youdao's ADSs

Youdao's controlling shareholder, NetEase, Inc. ("NetEase"), today announced that it has adopted a share purchase program of up to US$20.0 million of Youdao's outstanding ADSs in accordance with SEC Rule 10b-18 for a period not to exceed 12 months beginning on November 25, 2019.  Under the terms of this program, NetEase may purchase Youdao ADSs in open-market transactions on the New York Stock Exchange.  Such purchases may be effected pursuant to a plan in conformity with SEC Rule 10b5-1.  The purchase program may be suspended or discontinued by NetEase at any time.

Conference Call

Youdao's management team will host a teleconference call with simultaneous webcast at 8:00 p.m. Eastern Time on Wednesday, November 20, 2019 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, November 21, 2019). Youdao's management will be on the call to discuss the quarterly results and answer questions.

Dial-in details for the earnings conference call are as follows:

United States (toll free):

+1-888-346-8982

International:

+1-412-902-4272

Mainland China (toll free):

400-120-1203

Hong Kong (toll free):     

800-905-945

Hong Kong:

+852-3018-4992

Conference ID:

10136757

 
A live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.youdao.com.

A replay of the conference call will be accessible by phone one hour after the conclusion of the live call at the following numbers, until November 27, 2019:

United States:               

+1-877-344-7529

International:

+1-412-317-0088

Replay Access Code:       

10136757


About Youdao, Inc. 

Youdao, Inc. (NYSE: DAO) is a leading intelligent learning company in China dedicated to developing and using technologies to provide learning content, applications and solutions to users of all ages. Building on the popularity of its online knowledge tools such as Youdao Dictionary, Youdao Cloudnote and Youdao Translation, Youdao now offers online courses covering a wide spectrum of age groups, subject matters, learning goals and areas of interest. In addition, Youdao has developed a variety of interactive learning apps and smart learning devices. Youdao was founded in 2006 as part of NetEase, Inc. (NASDAQ: NTES), a leading internet technology company in China.

For more information, please visit: http://ir.youdao.com.

Non-GAAP Measures

Youdao considers and uses non-GAAP financial measures, such as gross billings and non-GAAP net income/(loss) attributable to the Company's ordinary shareholders and non-GAAP basic and diluted earnings/(loss) per ADS, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Youdao defines gross billings for a specific period as the total amount of consideration for online courses sold on Youdao Premium Courses, NetEase Cloud Classroom and China University MOOC, net of the total amount of refunds, in such period. The management uses gross billings as a performance measurement because the Company generally bills students for the entire course tuition at the time of sale of the courses and recognizes revenue proportionally over an average of the learning periods of different online courses. Youdao defines non-GAAP net income/(loss) attributable to the Company's ordinary shareholders as net income/(loss) attributable to the Company's ordinary shareholders excluding share-based compensation expenses. Non-GAAP net income/(loss) attributable to the Company's shareholders enables Youdao's management to assess its operating results without considering the impact of share-based compensation expenses, which are non-cash charges. Youdao believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating the Company's current operating performance and prospects in the same manner as management does, if they so choose.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools, which possibly does not reflect all items of expense that affect our operations. Share-based compensation expenses have been and may continue to be incurred in our business and are not reflected in the presentation of non-GAAP net income/(loss) attributable to the Company's ordinary shareholders. In addition, the non-GAAP financial measures Youdao uses may differ from the non-GAAP measures uses by other companies, including peer companies, and therefore their comparability may be limited.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from or as a substitute for the financial information prepared and presented in accordance with GAAP.  For more information on these non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of non-GAAP and GAAP Results" set forth at the end of this release.

The accompanying tables have more details on the reconciliations between our GAAP financial measures that are most directly comparable to non-GAAP financial measures. Youdao encourages you to review its financial information in its entirety and not rely on a single financial measure. 

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.1477 to US$1.00, the exchange rate on September 30, 2019 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding such risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

For investor and media inquiries, please contact:
In China:
Pei Du
Youdao, Inc.
Tel: +86-10-8255-8907
E-mail: ir.youdao@service.netease.com 

The Piacente Group, Inc.
Emilie Wu
Tel: +86-21-6039-8363
E-mail: youdao@thepiacentegroup.com

In the United States:
The Piacente Group, Inc. 
Brandi Piacente
Tel: +1-212-481-2050
E-mail: youdao@thepiacentegroup.com

 

 


 

 

[1] Gross billings is a non-GAAP financial measure. Gross billings for a specific period refers to the total amount of consideration for Youdao's online courses sold on Youdao Premium Courses, NetEase Cloud Classroom and China University MOOC, net of the total amount of refunds, in such period. See "Non-GAAP Measures" and "Unaudited Reconciliation of GAAP and non-GAAP Results" at the end of this press release.

[2] Youdao Premium Courses are Youdao's flagship online learning offerings primarily focused on K-12 students, covering a wide spectrum of subject matters, learning goals and areas of interest.

 

 

YOUDAO, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(RMB and USD in thousands)

                 
       

As of December 31,

 

As of September 30,

 

As of September 30,

       

2018

 

2019

 

2019

       

 RMB 

 

 RMB 

 

 USD (Note 1) 

 

 

Assets

 

Current assets:

           
   

Cash and cash equivalents

 

41,738

 

54,889

 

7,679

   

Time deposits

 

343,410

 

99,279

 

13,890

   

Short-term investments

 

50,215

 

6,133

 

858

   

Accounts receivable, net

 

80,562

 

165,473

 

23,151

   

Inventories, net

 

23,832

 

52,815

 

7,389

   

Amounts due from NetEase Group

 

11,240

 

14,961

 

2,093

   

Prepayment and other current assets

 

44,071

 

105,248

 

14,724

 

Total current assets

 

595,068

 

498,798

 

69,784

                 
 

Non-current assets:

           
 

Property and equipment, net

 

18,375

 

23,670

 

3,312

 

Operating lease right -of-use assets,net

 

-

 

15,889

 

2,223

 

Other assets, net

 

6,174

 

5,476

 

766

 

Total non-current assets

 

24,549

 

45,035

 

6,301

 

Total assets

 

619,617

 

543,833

 

76,085

                 
 

Liabilities, Mezzanine Equity and Shareholders' Deficits

         
 

Current liabilities:

           
   

Accounts payables

 

34,558

 

46,853

 

6,555

   

Payroll payable

 

69,988

 

44,506

 

6,227

   

Amounts due to NetEase Group

 

37,213

 

40,752

 

5,701

   

Contract liabilities

 

177,536

 

343,616

 

48,074

   

Taxes payable 

 

17,389

 

22,849

 

3,197

   

Accrued liabilities and other payables

 

85,714

 

157,900

 

22,090

   

Short-term loans from NetEase Group

 

878,000

 

878,000

 

122,837

 

Total current liabilities

 

1,300,398

 

1,534,476

 

214,681

                 
   

Long-term lease liabilities

 

-

 

13,552

 

1,896

 

Total liabilities

 

1,300,398

 

1,548,028

 

216,577

                 
 

Mezzanine equity

 

460,652

 

492,861

 

68,954

                 
 

Shareholders' deficit:

           
   

Youdao's shareholders' deficit

 

(1,142,321)

 

(1,498,879)

 

(209,701)

   

Non-controlling interests

 

888

 

1,823

 

255

 

Total shareholders' deficit

 

(1,141,433)

 

(1,497,056)

 

(209,446)

                 
 

Total liabilities, mezzanine equity and shareholders' deficit

619,617

 

543,833

 

76,085

                 

Note 1: 

           
 

The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00=RMB7.1477 on the last
trading day of September (Sept 30, 2019) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.

 

 

YOUDAO, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(RMB and USD in thousands, except share and per ADS data)

   
   

Three months ended

 

Nine months ended

 
   

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 
   

2018

 

2019

 

2019

 

2019

 

2018

 

2019

 
   

 RMB 

 

 RMB 

 

 RMB 

 

 USD (Note 1) 

 

 RMB 

 

 RMB 

 

Net revenues:

                       

    Learning services and products

93,196

 

179,347

 

225,155

 

31,500

 

292,277

 

539,957

 

    Online marketing services

81,156

 

143,465

 

120,753

 

16,894

 

209,230

 

354,494

 
   

174,352

 

322,812

 

345,908

 

48,394

 

501,507

 

894,451

 

Cost of revenues(1):

                       

    Learning services and products

(84,650)

 

(126,421)

 

(163,225)

 

(22,836)

 

(228,156)

 

(400,035)

 

    Online marketing services

(49,132)

 

(90,328)

 

(93,449)

 

(13,074)

 

(125,167)

 

(246,224)

 
   

(133,782)

 

(216,749)

 

(256,674)

 

(35,910)

 

(353,323)

 

(646,259)

 

Gross profit

40,570

 

106,063

 

89,234

 

12,484

 

148,184

 

248,192

 
                           

Operating expenses:

                       

    Sales and marketing expenses (1)

(65,002)

 

(122,174)

 

(230,975)

 

(32,315)

 

(159,303)

 

(417,111)

 

    Research and development expenses (1)

(52,727)

 

(56,318)

 

(74,929)

 

(10,483)

 

(133,424)

 

(186,113)

 

    General and administrative expenses (1)

(8,508)

 

(10,667)

 

(18,072)

 

(2,528)

 

(24,257)

 

(41,856)

 

 Total operating expenses

(126,237)

 

(189,159)

 

(323,976)

 

(45,326)

 

(316,984)

 

(645,080)

 

Loss from operations

(85,667)

 

(83,096)

 

(234,742)

 

(32,842)

 

(168,800)

 

(396,888)

 
                           

   Interest income/(expense), net

(5,083)

 

(6,425)

 

(4,071)

 

(570)

 

(18,140)

 

(16,433)

 

   Others, net

26,978

 

14,410

 

8,939

 

1,251

 

44,882

 

17,192

 
                           

Loss before tax

(63,772)

 

(75,111)

 

(229,874)

 

(32,161)

 

(142,058)

 

(396,129)

 

Income tax expenses

(3,636)

 

(833)

 

(802)

 

(112)

 

(8,101)

 

(2,441)

 
                           

Net loss

(67,408)

 

(75,944)

 

(230,676)

 

(32,273)

 

(150,159)

 

(398,570)

 

    Net (income)/ loss attributable to non-controlling interests shareholders

514

 

(553)

 

(454)

 

(64)

 

1,192

 

(935)

 

Net loss attributable to the Company

(66,894)

 

(76,497)

 

(231,130)

 

(32,337)

 

(148,967)

 

(399,505)

 

   Accretions of convertible redeemable preferred shares to redemption value

(10,103)

 

(11,053)

 

(11,053)

 

(1,546)

 

(20,208)

 

(32,209)

 

Net loss attributable to ordinary shareholders of the Company

(76,997)

 

(87,550)

 

(242,183)

 

(33,883)

 

(169,175)

 

(431,714)

 
                           
                           

Basic net loss per ADS

(0.84)

 

(0.95)

 

(2.63)

 

(0.37)

 

(2.03)

 

(4.69)

 

Diluted net loss per ADS

(0.84)

 

(0.95)

 

(2.63)

 

(0.37)

 

(2.03)

 

(4.69)

 
                           

Shares used in computing basic net loss per ADS

92,000,000

 

92,000,000

 

92,000,000

 

92,000,000

 

83,518,985

 

92,000,000

 
                           

Shares used in computing diluted net loss per ADS

92,000,000

 

92,000,000

 

92,000,000

 

92,000,000

 

83,518,985

 

92,000,000

 
                           

(1)  Share-based compensation in each category:

                       

 

         Cost of revenues

938

 

758

 

540

 

76

 

2,125

 

1,447

 

 

         Sales and marketing

132

 

39

 

(92)

 

(13)

 

388

 

688

 

 

         Research and development

882

 

334

 

1,020

 

143

 

2,056

 

1,061

 

 

         General and administrative

12

 

218

 

1,903

 

266

 

24

 

2,302

 
                           

Note 1: 

 

The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00=RMB7.1477 on the last trading day of September (Sept 30, 2019) as set
forth in the H.10 statistical release of the U.S. Federal Reserve Board.

 

 

YOUDAO, INC.

UNAUDITED ADDITIONAL INFORMATION

(RMB and USD in thousands)

                           
   

Three months ended

 

Nine months ended

 
   

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 
   

2018

 

2019

 

2019

 

2019

 

2018

 

2019

 
   

RMB

 

RMB

 

RMB

 

USD

 

RMB

 

RMB

 

Net revenues

                       

Learning services and products

93,196

 

179,347

 

225,155

 

31,500

 

292,277

 

539,957

 

Online marketing services

81,156

 

143,465

 

120,753

 

16,894

 

209,230

 

354,494

 

 Total net revenues

174,352

 

322,812

 

345,908

 

48,394

 

501,507

 

894,451

 
                           

Cost of revenues

                       

Learning services and products

84,650

 

126,421

 

163,225

 

22,836

 

228,156

 

400,035

 

Online marketing services

49,132

 

90,328

 

93,449

 

13,074

 

125,167

 

246,224

 

 Total cost of revenues

133,782

 

216,749

 

256,674

 

35,910

 

353,323

 

646,259

 
                           

Gross margin

                       

Learning services and products

9.2%

 

29.5%

 

27.5%

 

27.5%

 

21.9%

 

25.9%

 

Online marketing services

39.5%

 

37.0%

 

22.6%

 

22.6%

 

40.2%

 

30.5%

 

Total gross margin

23.3%

 

32.9%

 

25.8%

 

25.8%

 

29.5%

 

27.7%

 
                           

 

 

YOUDAO, INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(RMB and USD in thousands, except per ADS data)

                           
   

Three months ended

 

Nine months ended

 
   

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 
   

2018

 

2019

 

2019

 

2019

 

2018

 

2019

 
   

 RMB 

 

 RMB 

 

 RMB 

 

 USD 

 

 RMB 

 

 RMB 

 

Net revenues of online courses

71,724

 

129,425

 

163,389

 

22,859

 

229,690

 

391,622

 

Add: value-added tax

6,867

 

9,494

 

16,468

 

2,304

 

17,358

 

33,551

 

Add: ending deferred revenue

123,743

 

185,622

 

296,693

 

41,509

 

123,743

 

296,693

 

Less: beginning deferred revenue

(81,015)

 

(156,812)

 

(185,622)

 

(25,969)

 

(64,136)

 

(129,144)

 

Non-GAAP gross billings of online courses

121,319

 

167,729

 

290,928

 

40,703

 

306,655

 

592,722

 
                           

Net revenues of Youdao Premium Courses

61,434

 

108,522

 

116,529

 

16,303

 

198,494

 

307,818

 

Add: value-added tax

5,938

 

8,230

 

12,148

 

1,700

 

15,074

 

26,510

 

Add: ending deferred revenue

106,810

 

157,184

 

243,128

 

34,015

 

106,810

 

243,128

 

Less: beginning deferred revenue

(69,273)

 

(128,538)

 

(157,184)

 

(21,991)

 

(54,067)

 

(109,105)

 

Non-GAAP gross billings of Youdao Premium Courses

104,909

 

145,398

 

214,621

 

30,027

 

266,311

 

468,351

 
                           

Net loss attributable to ordinary shareholders of the Company

(76,997)

 

(87,550)

 

(242,183)

 

(33,883)

 

(169,175)

 

(431,714)

 

Add: share-based compensation

1,964

 

1,349

 

3,371

 

472

 

4,593

 

5,498

 

Non-GAAP net loss attributable to ordinary shareholders of the Company

(75,033)

 

(86,201)

 

(238,812)

 

(33,411)

 

(164,582)

 

(426,216)

 
                           

Non-GAAP basic net loss per ADS

(0.82)

 

(0.94)

 

(2.60)

 

(0.36)

 

(1.97)

 

(4.63)

 

Non-GAAP diluted net loss per ADS

(0.82)

 

(0.94)

 

(2.60)

 

(0.36)

 

(1.97)

 

(4.63)

 

 

SOURCE Youdao, Inc.