Youdao (NYSE:DAO) reported a modest increase in first-quarter 2026 revenue while maintaining operating profitability for a seventh consecutive quarter, as management said the company continued to invest in artificial intelligence products and infrastructure.
CEO Feng Zhou said net revenue for the quarter was RMB 1.3 billion, up 3.8% from a year earlier. Operating profit was RMB 57.5 million, with operating margin improving sequentially by 0.5 percentage points to 4.3%. Zhou said operating profit declined 44.7% year over year, primarily due to investments in strategic initiatives including AI, as well as a high comparison base from the restructuring of learning services in the prior-year period.
