Youdao Reports Record Q3 2025 as AI Ads Become Top Revenue Source

Youdao announced in a press release its unaudited financial results for the third quarter of 2025, reporting net revenue of RMB 1.6 billion (approximately US$200 million) and an operating profit of RMB 28.3 million (US$3.93 million). The company has remained profitable for five consecutive quarters, with operating profit for the first three quarters rising nearly 150% year-over-year.

AI-powered advertising became Youdao's largest revenue segment for the first time, generating RMB 0.74 billion (US$101 million), a 51.1% increase year-over-year. This growth was supported by the company's proprietary AI tools, including iMagicBox for creative generation and the AI Ad Placement Optimizer for campaign management.

The company’s overseas business also showed strong performance, with revenue more than doubling compared to the previous year. Youdao Ads expanded globally, integrating AI features for influencer matching, content creation, and campaign analytics, now connecting with nearly 30 million influencers worldwide. The platform’s AI agents can automatically recommend suitable influencers and provide real-time sentiment analysis for campaign monitoring.

Youdao’s CEO Feng Zhou said the results validate the company’s AI-Native strategy and confirmed plans to continue applying its Confucius large model in learning and advertising scenarios, aiming for annual operating cash-flow breakeven for the first time.