Youdao Reports Record AI Subscription Growth and First Positive Annual Operating Cash Flow

Youdao Inc. (DAO) has reported strong earnings results, highlighted by record growth in AI-driven subscriptions and a solid acceleration in total revenue. A significant milestone was reached as the company achieved its first full year of positive operating cash flow in 2025. This performance is largely attributed to an AI-native strategy that has successfully diversified revenue streams across its digital platforms. Looking ahead, management projects double-digit growth for Learning Services and continued acceleration in the Online Marketing segment. While the smart device segment faced some headwinds, the overall growth in high-margin AI services helped offset these challenges. Investors are closely watching the stock as the company’s transition to profitability signals a successful pivot toward long-term AI integration.