EarningsQ2 2026 Earnings Report
MX:DAON Q2 2026 EPS Results
Actual EPS$1.72
Consensus EPS$0.41
Beat/MissBeat by +$1.31
One Year Ago EPS-$0.38
MX:DAON Q2 2026 Revenue Results
Actual Revenue$3.65B
Expected Revenue$3.92B
Beat/MissMissed by -$270.66M
YoY Revenue Growth+9.96%
Earnings Announcement Details
QuarterQ2 2026
Date08/20/2026
TimeBefore Open
Conference CallThursday, August 20, 2026
MX:DAON Upcoming Earnings
Youdao's next earnings date is estimated for November 12, 2026, based on past reporting schedules.
Q2 2026 Earnings Call Audio
MX:DAON Q2 2026 Earnings Call
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Q2 2026 Earnings Slide Deck
Q2 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The earnings call conveyed a predominantly positive operational and financial trajectory: revenue and gross profit grew, the company delivered a clear net income turnaround, operating profit and cash flow strengthened materially, and AI product advances (Confucius 4, Confucius4-TTS, AI agents) drove meaningful user engagement and learning revenue growth. Key negatives included a steep decline and margin pressure in the smart devices segment and a year-over-year revenue decline in online marketing (offset partially by margin improvement). Overall, the positive improvements in profitability, cash generation, AI-driven learning growth and product momentum outweigh the device- and ad-revenue headwinds.Company Guidance
Solid Top-Line Growth
Total net revenues for Q2 2026 were RMB 1.5 billion, up 3.5% year-over-year; first-half 2026 net revenues were RMB 2.8 billion, up 3.6% year-over-year.
Operating Profitability and Margin Expansion
Q2 operating profit reached a record RMB 111.5 million (nearly fourfold year-over-year) and operating income margin improved to 7.6% in Q2 2026 versus 2.0% a year ago; company achieved its eighth consecutive quarter of operating profitability.
Strong Cash Generation
Net cash provided by operating activities in Q2 was RMB 334.2 million, up 80.7% year-over-year; first-half net operating cash flow improved to RMB 241.1 million from a RMB 70.5 million outflow in the prior-year period.
Learning Services Momentum
Learning services revenue in Q2 was RMB 795.6 million, up 20.9% year-over-year; retention for Youdao Lingshi exceeded 75% in Q2; AI-driven subscription products generated ~RMB 100 million in Q2 sales, up over 20% year-over-year.
Notable AI and Product Advances
Launched Confucius 4 with multimodal, voice and translation upgrades; translation inference speed improved by ~80% and inference costs reduced. Introduced Confucius4-TTS supporting 14-language accent-free voice cloning and open-sourced model weights to support adoption.
Rapid Growth in AI-Driven Offerings
Hi Echo gross billings and user engagement for AI simultaneous interpretation both increased by approximately 100% year-over-year; AI application and short-form drama advertising revenues grew over 50% year-over-year for the second consecutive quarter.
Improved Gross Profit and Segment Margins
Total gross profit for Q2 was RMB 716.9 million, up 17.6% year-over-year. Learning services gross margin expanded to 65.5% (from 59.8% YoY) and online marketing gross margin improved to 28.7% (from 25.8% YoY).
Net Income Turnaround
Q2 net income attributable to ordinary shareholders was RMB 73.8 million versus a RMB 17.8 million loss in the year-ago quarter; non-GAAP net income rose to RMB 90.6 million from RMB 12.5 million a year ago; basic EPS turned positive to RMB 0.62.
MX:DAON Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed