Youdao Sets New Records in Q2 2026 with Impressive Growth in Net Revenues and Operating Profit
Beijing, China – August 20, 2026 – Youdao, a leading Chinese technology company, has reported impressive growth in its second quarter (Q2) 2026 financial results. In an earnings conference call held on August 20, 2026, the company's management team provided an update on their recent highlights and strategic direction.
According to Dr. Feng Zhou, Chief Executive Officer of Youdao, the company maintained solid momentum in Q2, delivering robust results. Net revenues for the quarter reached RMB 1.5 billion, representing a 3.5% year-over-year increase. This marks the eighth consecutive quarter of operating profitability for the company.
In terms of profitability, Youdao achieved a record high in Q2, with operating profit reaching RMB 111.5 million, nearly fourfold year-over-year. The strong quarterly results also drove strong first half performance, with total net revenues reaching RMB 2.8 billion, up 3.6% year-over-year, while operating profits increased 27.3% to a record RMB 169 million.
Dr. Zhou emphasized that AI remains a key driver across the company's business. During the second quarter, Youdao continued to translate advances in its large language model (LM) capabilities into practical products and applications across its business lines. The new Confucius 4 model was rolled out with significant upgrades in multimodal voice and translation capabilities.
The improved Confucius 4 model delivers stronger performance in visual math and physics reasoning, particularly on complex diagrams. It also features an optimized acceleration mechanism that increased inference speed by approximately 80%. Beyond technological advances in user adoption, Youdao's AI capabilities continued to gain recognition and support from authoritative bodies.
The Beijing Key Laboratory of Artificial Intelligence for Multilingual Translation, co-funded by Youdao, was officially launched in Q2. Going forward, the company will continue advancing end-to-end multilingual translation models and accelerate their application across learning, international conferences, and cross-border trade.
Mr. Lei Jin, President of Youdao, highlighted that the company's strong cash generation capabilities are a testament to its operational efficiency. Net operating cash flow for the quarter was RMB 334.2 million, up 80.7% compared with the same period last year.
The conference call also provided an opportunity for investors and analysts to ask questions and engage with Youdao's senior management team. The webcast replay of the conference call is available on the company's corporate website at ir.youdao.com."
