Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2019shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | Youdao, Inc. |
Entity Central Index Key | 0001781753 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Voluntary Filers | No |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Entity Interactive Data Current | Yes |
Document Accounting Standard | U.S. GAAP |
Entity Address, Address Line One | No. 399, Wangshang Road |
Entity Address, City or Town | Hangzhou |
Entity Address, Country | CN |
Document Annual Report | true |
Document Transition Report | false |
Entity File Number | 001-39087 |
Document Shell Company Report | false |
Document Registration Statement | false |
American depositary shares [Member] | |
Document Information [Line Items] | |
Title of 12(b) Security | American depositary shares, each ADS represents one Class A ordinary share, par value US$0.0001 per share |
Trading Symbol | DAO |
Security Exchange Name | NYSE |
Ordinary shares [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 111,767,756 |
Class A ordinary share [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 22,635,396 |
No Trading Symbol Flag | true |
Title of 12(b) Security | Class A ordinary shares, par value US$0.0001 per share |
Security Exchange Name | NYSE |
Class B ordinary share [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 89,132,360 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Current assets: | |||
Cash and cash equivalents | $ 24,897 | ¥ 173,328 | ¥ 41,738 |
Time deposits | 190,430 | 1,325,737 | 343,410 |
Short-term investments | 17,399 | 121,126 | 50,215 |
Accounts receivable, net | 28,825 | 200,675 | 80,562 |
Inventories, net | 10,518 | 73,225 | 23,832 |
Amounts due from NetEase Group | 2,145 | 14,930 | 11,240 |
Prepayment and other current assets | 17,365 | 120,891 | 44,071 |
Total current assets | 291,579 | 2,029,912 | 595,068 |
Non-current assets: | |||
Property and equipment, net | 3,527 | 24,551 | 18,375 |
Operating lease right-of-use assets, net | 3,429 | 23,873 | |
Other assets, net | 1,167 | 8,128 | 6,174 |
Total non-current assets | 8,123 | 56,552 | 24,549 |
Total assets | 299,702 | 2,086,464 | 619,617 |
Current liabilities: | |||
Accounts payables (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB23,858 and RMB50,189 as of December 31, 2018 and 2019, respectively) | 9,003 | 62,675 | 34,558 |
Payroll payable (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB7,142 and RMB10,140 as of December 31, 2018 and 2019, respectively) | 13,572 | 94,488 | 69,988 |
Amounts due to NetEase Group (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB4,706 and RMB41,667 as of December 31, 2018 and 2019, respectively) | 6,913 | 48,126 | 37,213 |
Contract liabilities (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB140,556 and RMB434,114 as of December 31, 2018 and 2019, respectively) | 65,616 | 456,805 | 177,536 |
Taxes payable (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB12,012 and RMB15,290 as of December 31, 2018 and 2019, respectively) | 3,731 | 25,977 | 17,389 |
Accrued liabilities and other payables (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB15,247 and RMB22,519 as of December 31, 2018 and 2019, respectively) | 27,672 | 192,643 | 85,714 |
Short-term loans from NetEase Group | 126,117 | 878,000 | 878,000 |
Total current liabilities | 252,624 | 1,758,714 | 1,300,398 |
Non-current liabilities: | |||
Long-term lease liabilities | 3,046 | 21,206 | |
Other non-current liabilities | 792 | 5,517 | |
Total non-current liabilities | 3,838 | 26,723 | |
Total liabilities | 256,462 | 1,785,437 | 1,300,398 |
Commitments and contingencies | |||
Mezzanine equity: | |||
Pre-IPO Series A convertible redeemable preferred shares (US$0.0001 par value; 10,000,000 shares authorized, 6,814,815 issued and outstanding with redemption value of RMB460,652 as of December 31, 2018; nil shares authorized, nil shares issued and outstanding as of December 31, 2019)/Total mezzanine equity | 460,652 | ||
Shareholders' (deficit)/equity: | |||
Additional paid-in capital | 320,728 | 2,232,841 | 138,024 |
Accumulated deficit | (275,802) | (1,920,081) | (1,281,191) |
Accumulated other comprehensive income/(loss) | (2,087) | (14,527) | 496 |
Statutory reserves | 257 | 1,786 | 292 |
Non-controlling interests | 134 | 936 | 888 |
Total shareholders' (deficit)/equity | 43,240 | 301,027 | (1,141,433) |
Total liabilities, mezzanine equity and shareholders' (deficit)/equity | 299,702 | 2,086,464 | 619,617 |
Pre-IPO shares [Member] | |||
Shareholders' (deficit)/equity: | |||
Ordinary shares | 58 | ||
Series A convertible redeemable preferred shares [Member] | |||
Mezzanine equity: | |||
Pre-IPO Series A convertible redeemable preferred shares (US$0.0001 par value; 10,000,000 shares authorized, 6,814,815 issued and outstanding with redemption value of RMB460,652 as of December 31, 2018; nil shares authorized, nil shares issued and outstanding as of December 31, 2019)/Total mezzanine equity | 460,652 | ||
Series A convertible redeemable preferred shares [Member] | Pre-IPO shares [Member] | |||
Mezzanine equity: | |||
Pre-IPO Series A convertible redeemable preferred shares (US$0.0001 par value; 10,000,000 shares authorized, 6,814,815 issued and outstanding with redemption value of RMB460,652 as of December 31, 2018; nil shares authorized, nil shares issued and outstanding as of December 31, 2019)/Total mezzanine equity | ¥ 460,652 | ||
Class A ordinary shares [Member] | |||
Shareholders' (deficit)/equity: | |||
Ordinary shares | 2 | 16 | |
Total shareholders' (deficit)/equity | 16 | ||
Class B ordinary shares [Member] | |||
Shareholders' (deficit)/equity: | |||
Ordinary shares | $ 8 | 56 | |
Total shareholders' (deficit)/equity | ¥ 56 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2018$ / shares |
Accounts payables | $ 9,003 | ¥ 62,675 | ¥ 34,558 | |
Payroll payable | 13,572 | 94,488 | 69,988 | |
Amounts due to NetEase Group | 6,913 | 48,126 | 37,213 | |
Contract liabilities | 65,616 | 456,805 | 177,536 | |
Taxes payable | 3,731 | 25,977 | 17,389 | |
Accrued liabilities and other payables | $ 27,672 | ¥ 192,643 | ¥ 85,714 | |
Ordinary shares outstanding | 111,767,756 | 111,767,756 | 92,000,000 | |
Pre-IPO shares [Member] | ||||
Ordinary shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||
Ordinary shares authorized | 0 | 0 | 490,000,000 | |
Ordinary shares issued | 0 | 0 | 92,000,000 | |
Ordinary shares outstanding | 0 | 0 | 92,000,000 | |
Series A convertible redeemable preferred shares [Member] | ||||
Pre-IPO Series A preferred shares issued | 6,815,000 | |||
Pre-IPO Series A preferred shares outstanding | 6,815,000 | |||
Series A convertible redeemable preferred shares [Member] | Pre-IPO shares [Member] | ||||
Pre-IPO Series A preferred shares, par value | $ / shares | $ 0.0001 | 0.0001 | ||
Pre-IPO Series A preferred shares authorized | 0 | 0 | 10,000,000 | |
Pre-IPO Series A preferred shares issued | 0 | 0 | 6,814,815 | |
Pre-IPO Series A preferred shares outstanding | 0 | 0 | 6,814,815 | |
Preferred redemption value | ¥ | ¥ 460,652 | |||
Class A ordinary shares [Member] | ||||
Ordinary shares, par value | $ / shares | $ 0.0001 | 0.0001 | ||
Ordinary shares authorized | 200,000,000 | 200,000,000 | 0 | |
Ordinary shares issued | 22,635,396 | 22,635,396 | 0 | |
Ordinary shares outstanding | 22,635,396 | 22,635,396 | 0 | |
Class B ordinary shares [Member] | ||||
Ordinary shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||
Ordinary shares authorized | 100,000,000 | 100,000,000 | 0 | |
Ordinary shares issued | 89,132,360 | 89,132,360 | 0 | |
Ordinary shares outstanding | 89,132,360 | 89,132,360 | 0 | |
VIEs [Member] | ||||
Accounts payables | ¥ | ¥ 50,189 | ¥ 23,858 | ||
Payroll payable | ¥ | 10,140 | 7,142 | ||
Amounts due to NetEase Group | ¥ | 41,667 | 4,706 | ||
Contract liabilities | ¥ | 434,114 | 140,556 | ||
Taxes payable | ¥ | 15,290 | 12,012 | ||
Accrued liabilities and other payables | ¥ | ¥ 22,519 | ¥ 15,247 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Net revenues: (include transactions with related parties of RMB11,151, RMB27,248 and RMB37,580 for the years ended December 31, 2017, 2018 and 2019, respectively) | ||||
Net revenues | $ 187,435 | ¥ 1,304,883 | ¥ 731,598 | ¥ 455,746 |
Cost of revenues: (include transactions with related parties of RMB2,619, RMB34,963 and RMB36,688 for the years ended December 31, 2017, 2018 and 2019, respectively) | ||||
Cost of revenues | (134,198) | (934,261) | (515,133) | (293,807) |
Gross profit | 53,237 | 370,622 | 216,465 | 161,939 |
Operating expenses: | ||||
Sales and marketing expenses (include transactions with related parties of RMB7,101, RMB7,218 and RMB11,274 for the years ended December 31, 2017, 2018 and 2019, respectively) | (89,472) | (622,884) | (213,405) | (136,412) |
Research and development expenses (include transactions with related parties of RMB20,647, RMB18,992 and RMB19,594 for the years ended December 31, 2017, 2018 and 2019, respectively) | (39,554) | (275,367) | (184,020) | (133,092) |
General and administrative expenses (include transactions with related parties of RMB1,244, RMB5,921 and RMB4,075 for the years ended December 31, 2017, 2018 and 2019, respectively) | (10,527) | (73,289) | (38,177) | (22,476) |
Total operating expenses | (139,553) | (971,540) | (435,602) | (291,980) |
Loss from operations | (86,316) | (600,918) | (219,137) | (130,041) |
Interest (expense)/income, net (include interest expenses charged by related party of RMB29,523, RMB31,851 and RMB30,232 for the years ended December 31, 2017, 2018 and 2019, respectively) | (2,610) | (18,169) | (23,507) | (29,327) |
Others, net | 2,882 | 20,064 | 44,643 | 598 |
Loss before tax | (86,044) | (599,023) | (198,001) | (158,770) |
Income tax expenses | (349) | (2,432) | (11,294) | (5,162) |
Net loss | (86,393) | (601,455) | (209,295) | (163,932) |
Net loss/(income) attributable to non-controlling interests shareholders | (7) | (48) | 385 | 30,355 |
Net loss attributable to the Company | (86,400) | (601,503) | (208,910) | (133,577) |
Accretions of convertible redeemable preferred shares to redemption value | (5,156) | (35,893) | (30,311) | |
Net loss attributable to ordinary shareholders of the Company | (91,556) | (637,396) | (239,221) | (133,577) |
Net loss | (86,393) | (601,455) | (209,295) | (163,932) |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustment | (2,158) | (15,023) | 496 | |
Total other comprehensive income/(loss) | (2,158) | (15,023) | 496 | |
Total comprehensive loss | (88,551) | (616,478) | (208,799) | (163,932) |
Comprehensive loss/(income) attributable to non-controlling interests shareholders | (7) | (48) | 385 | 30,355 |
Comprehensive loss attributable to the Company | (88,558) | (616,526) | (208,414) | (133,577) |
Accretions of convertible redeemable preferred shares to redemption value | (5,156) | (35,893) | (30,311) | |
Comprehensive loss attributable to ordinary shareholders of the Company | $ (93,714) | ¥ (652,419) | ¥ (238,725) | ¥ (133,577) |
Net loss per ordinary share/ADS | ||||
Basic | (per share) | $ (0.96) | ¥ (6.68) | ¥ (2.80) | ¥ (2.04) |
Diluted | (per share) | $ (0.96) | ¥ (6.68) | ¥ (2.80) | ¥ (2.04) |
Weighted average number of ordinary shares/ADSs | ||||
Basic | 95,445,982 | 95,445,982 | 85,346,790 | 65,387,160 |
Diluted | 95,445,982 | 95,445,982 | 85,346,790 | 65,387,160 |
Learning services [Member] | ||||
Net revenues: (include transactions with related parties of RMB11,151, RMB27,248 and RMB37,580 for the years ended December 31, 2017, 2018 and 2019, respectively) | ||||
Net revenues | $ 100,524 | ¥ 699,826 | ¥ 398,186 | ¥ 143,243 |
Cost of revenues: (include transactions with related parties of RMB2,619, RMB34,963 and RMB36,688 for the years ended December 31, 2017, 2018 and 2019, respectively) | ||||
Cost of revenues | (73,696) | (513,060) | (314,625) | (135,336) |
Online marketing services [Member] | ||||
Net revenues: (include transactions with related parties of RMB11,151, RMB27,248 and RMB37,580 for the years ended December 31, 2017, 2018 and 2019, respectively) | ||||
Net revenues | 65,071 | 453,013 | 302,882 | 305,831 |
Cost of revenues: (include transactions with related parties of RMB2,619, RMB34,963 and RMB36,688 for the years ended December 31, 2017, 2018 and 2019, respectively) | ||||
Cost of revenues | (45,045) | (313,592) | (180,006) | (154,207) |
Learning products [Member] | ||||
Net revenues: (include transactions with related parties of RMB11,151, RMB27,248 and RMB37,580 for the years ended December 31, 2017, 2018 and 2019, respectively) | ||||
Net revenues | 21,840 | 152,044 | 30,530 | 6,672 |
Cost of revenues: (include transactions with related parties of RMB2,619, RMB34,963 and RMB36,688 for the years ended December 31, 2017, 2018 and 2019, respectively) | ||||
Cost of revenues | $ (15,457) | ¥ (107,609) | ¥ (20,502) | ¥ (4,264) |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related party transaction, net revenue | ¥ 37,580 | ¥ 27,248 | ¥ 11,151 |
Interest expense, related party | 30,232 | 31,851 | 29,523 |
Cost of revenues [Member] | |||
Related party transaction, cost of revenues and operating expenses | 36,688 | 34,963 | 2,619 |
Sales and marketing expenses [Member] | |||
Related party transaction, cost of revenues and operating expenses | 11,274 | 7,218 | 7,101 |
Research and development expenses [Member] | |||
Related party transaction, cost of revenues and operating expenses | 19,594 | 18,992 | 20,647 |
General and administrative expenses [Member] | |||
Related party transaction, cost of revenues and operating expenses | ¥ 4,075 | ¥ 5,921 | ¥ 1,244 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT)/EQUITY ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) | Class A ordinary shares [Member]CNY (¥)shares | Class B ordinary shares [Member]CNY (¥)shares | IPO [Member]CNY (¥) | IPO [Member]Class A ordinary shares [Member]CNY (¥)shares | Private placement [Member]CNY (¥) | Private placement [Member]Class A ordinary shares [Member]CNY (¥)shares | Ordinary shares [Member]CNY (¥)shares | Additional paid-in capital [Member]CNY (¥) | Additional paid-in capital [Member]IPO [Member]CNY (¥) | Additional paid-in capital [Member]Private placement [Member]CNY (¥) | Statutory reserves [Member]CNY (¥) | Accumulated deficit [Member]CNY (¥) | Accumulated other comprehensive income/(loss) [Member]CNY (¥) | Non-controlling interests [Member]CNY (¥) | Pre-IPO ordinary shares [Member]CNY (¥)shares | NetEase [Member]CNY (¥) | NetEase [Member]Additional paid-in capital [Member]CNY (¥) | Other shareholders [Member]CNY (¥) | Other shareholders [Member]Ordinary shares [Member]CNY (¥)shares | Other shareholders [Member]Accumulated deficit [Member]CNY (¥) | Other shareholders [Member]Non-controlling interests [Member]CNY (¥) |
Balance at Dec. 31, 2016 | ¥ (850,120) | ¥ 41 | ¥ 28,506 | ¥ (664,442) | ¥ (214,225) | ||||||||||||||||||
Balance (Shares) at Dec. 31, 2016 | shares | 65,387,160 | ||||||||||||||||||||||
Loss for the year | (163,932) | (133,577) | (30,355) | ||||||||||||||||||||
Share-based compensation expenses | 5,290 | 5,290 | |||||||||||||||||||||
Capital injection from a non-controlling interests shareholder | 1,500 | 1,500 | |||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control | 49,265 | 49,265 | |||||||||||||||||||||
Balance at Dec. 31, 2017 | (957,997) | ¥ 41 | 83,061 | (798,019) | (243,080) | ||||||||||||||||||
Balance (Shares) at Dec. 31, 2017 | shares | 65,387,160 | ||||||||||||||||||||||
Loss for the year | (209,295) | (208,910) | (385) | ||||||||||||||||||||
Share-based compensation expenses | 6,176 | 6,176 | |||||||||||||||||||||
Foreign currency translation adjustment | 496 | ¥ 496 | |||||||||||||||||||||
Appropriation to statutory reserves | ¥ 292 | (292) | |||||||||||||||||||||
Issuance of shares to NetEase | ¥ 41 | ¥ 41 | |||||||||||||||||||||
Issuance of shares to other shareholders | ¥ 711 | ¥ 17 | ¥ (243,659) | ¥ 244,353 | |||||||||||||||||||
Issuance of shares to other shareholders (in shares) | shares | 26,612,840 | ||||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control | 44,024 | 44,024 | |||||||||||||||||||||
Deemed contribution from NetEase Group related to issuance of preferred shares | 4,722 | ¥ 4,722 | ¥ 4,722 | ||||||||||||||||||||
Accretions of convertible redeemable preferred shares | (30,311) | (30,311) | |||||||||||||||||||||
Balance at Dec. 31, 2018 | (1,141,433) | ¥ 58 | 138,024 | 292 | (1,281,191) | 496 | 888 | ¥ 58 | |||||||||||||||
Balance (Shares) at Dec. 31, 2018 | shares | 92,000,000 | 92,000,000 | |||||||||||||||||||||
Loss for the year | $ (86,393) | (601,455) | (601,503) | 48 | |||||||||||||||||||
Share-based compensation expenses | 25,074 | 25,074 | |||||||||||||||||||||
Foreign currency translation adjustment | (2,158) | (15,023) | (15,023) | ||||||||||||||||||||
Appropriation to statutory reserves | 1,494 | (1,494) | |||||||||||||||||||||
Redesignation of Pre-IPO ordinary shares into Class A and Class B ordinary shares upon initial public offering ("IPO") | ¥ 2 | ¥ 56 | ¥ (58) | ||||||||||||||||||||
Redesignation of Pre-IPO ordinary shares into Class A and Class B ordinary shares upon initial public offering ("IPO") (shares) | shares | 2,867,640 | 89,132,360 | (92,000,000) | ||||||||||||||||||||
Share issuance upon IPO, net of issuance cost | ¥ 621,947 | ¥ 4 | ¥ 621,943 | ||||||||||||||||||||
Share issuance upon IPO, net of issuance cost (shares) | shares | 5,600,000 | ||||||||||||||||||||||
Share issuance upon concurrent private placement | ¥ 881,662 | ¥ 5 | ¥ 881,657 | ||||||||||||||||||||
Share issuance upon concurrent private placement (shares) | shares | 7,352,941 | ||||||||||||||||||||||
Conversion of convertible preferred shares into Class A shares upon IPO | ¥ 496,545 | ¥ 5 | ¥ 496,540 | ||||||||||||||||||||
Conversion of convertible preferred shares into Class A shares upon IPO (Shares) | shares | 6,814,815 | ||||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control | 69,603 | 69,603 | |||||||||||||||||||||
Accretions of convertible redeemable preferred shares | (35,893) | (35,893) | |||||||||||||||||||||
Balance at Dec. 31, 2019 | $ 43,240 | ¥ 301,027 | ¥ 16 | ¥ 56 | ¥ 2,232,841 | ¥ 1,786 | ¥ (1,920,081) | ¥ (14,527) | ¥ 936 | ||||||||||||||
Balance (Shares) at Dec. 31, 2019 | shares | 22,635,396 | 89,132,360 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Cash flows from operating activities: | ||||
Net loss | $ (86,393) | ¥ (601,455) | ¥ (209,295) | ¥ (163,932) |
Depreciation and amortization | 1,519 | 10,578 | 6,398 | 3,330 |
Share-based compensation | 3,602 | 25,074 | 6,176 | 5,290 |
Financing expense | 4,722 | |||
Fair value changes of short-term investments | (114) | (793) | (215) | |
Provision for allowance for doubtful accounts | 272 | 1,897 | 75 | |
Allowance for inventory | 454 | 3,162 | ||
Loss on disposal of property and equipment | 18 | 122 | 54 | 118 |
Unrealized exchange gains | (256) | (1,783) | (31,496) | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (17,526) | (122,010) | (15,516) | (20,106) |
Inventories | (7,549) | (52,555) | (22,290) | (1,542) |
Prepayment and other current assets | (11,034) | (76,817) | (15,044) | (17,327) |
Amounts due from NetEase Group | (530) | (3,690) | (2,030) | (6,028) |
Operating lease right-of-use assets | 292 | 2,035 | ||
Other assets | (1) | (6) | (2,417) | (1,120) |
Contract liabilities | 40,114 | 279,269 | 83,005 | 55,492 |
Accounts payables | 4,039 | 28,117 | 14,611 | 8,841 |
Payroll payable | 3,519 | 24,500 | 28,376 | 10,132 |
Taxes payable | 1,234 | 8,588 | 8,272 | 7,739 |
Accrued liabilities and other payables | 14,150 | 98,512 | 27,306 | 22,242 |
Amounts due to NetEase Group | 599 | 4,170 | 18,978 | 9,733 |
Long-term lease liabilities | (675) | (4,702) | ||
Other non-current liabilities | 792 | 5,517 | ||
Net cash used in operating activities | (53,474) | (372,270) | (100,330) | (87,138) |
Cash flows from investing activities: | ||||
Purchases of short-term investments | (31,026) | (216,000) | (87,000) | |
Proceeds of maturities of short-term investments | 20,955 | 145,882 | 37,000 | |
Placements of time deposits | (218,660) | (1,522,270) | (661,671) | (250) |
Proceeds from maturities of time deposits | 75,628 | 526,505 | 349,383 | |
Purchase of intangible assets | (4) | (29) | (276) | (25) |
Purchases of property and equipment | (2,607) | (18,147) | (13,688) | (10,631) |
Proceeds from disposal of property and equipment | 295 | 2,054 | 2,252 | 70 |
Payment for equity investment | (287) | (2,000) | ||
Net cash used in investing activities | (155,706) | (1,084,005) | (374,000) | (10,836) |
Cash flows from financing activities: | ||||
Proceeds received from Pre-IPO ordinary shareholders | 41 | |||
Proceeds received from preferred shareholders, net of issuance cost | 430,341 | |||
Proceeds from the issuance of IPO shares, net of issuance cost | 90,546 | 630,364 | ||
Proceeds from concurrent private placement | 126,643 | 881,662 | ||
Proceeds from non-controlling interests and other shareholders | 711 | 1,500 | ||
Funding from NetEase Group | 10,865 | 75,643 | 44,024 | 49,265 |
Proceeds from short-term loans from NetEase Group | 57,000 | |||
Net cash provided by financing activities | 228,054 | 1,587,669 | 475,117 | 107,765 |
Effect of exchange rate changes on cash and cash equivalents | 28 | 196 | 1,120 | |
Net increase in cash and cash equivalents | 18,902 | 131,590 | 1,907 | 9,791 |
Cash and cash equivalents at beginning of year | 5,995 | 41,738 | 39,831 | 30,040 |
Cash and cash equivalents at end of year | 24,897 | 173,328 | 41,738 | 39,831 |
Supplemental disclosures of cash flow information: | ||||
Cash paid for income tax expenses | 695 | 4,839 | 1,740 | 3,770 |
Cash paid for interest expenses | 4,278 | 29,786 | 28,579 | ¥ 26,848 |
Non-cash investing and financing activities: | ||||
Accretions of convertible redeemable preferred shares to redemption value | 5,156 | 35,893 | 30,311 | |
Deemed contribution from NetEase Group related to issuance of preferred shares | ¥ 4,722 | |||
Payables for offering expenses | $ 1,209 | ¥ 8,417 |
Operations and Reorganization
Operations and Reorganization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operations and Reorganization | 1. Operations and Reorganization (a) Principal activities and reorganization Youdao, Inc. (“Youdao” or the “Company”) was incorporated in the Cayman Islands on November 27, 2014. Youdao, Inc., its subsidiaries and consolidated variable interest entities (“VIEs”), together are referred to as “the Group” or “Youdao Group”. NetEase, Inc. (the “Parent” or “NetEase”) and its subsidiaries and consolidated VIEs, other than the Company and its subsidiaries and VIEs, are collectively referred to herein as the “NetEase Group”. The Group provides a variety of learning content, applications and solutions, which covers a wide spectrum of topics and targets people from broad age groups for their lifelong learning needs through its websites and mobile applications. The Group generates its revenues from learning services and products as well as online marketing services. The learning services mainly include online courses, fee-based As of December 31, 2019, the Company’s major subsidiaries and consolidated VIE, are as follows: Place and year of incorporation Percentage of Principal activities Subsidiaries Youdao (Hong Kong) Limited Hong Kong, China, 2016 100 % Holding company NetEase Youdao Information Technology (Beijing) Co., Ltd. (“Youdao Information”) Beijing, China, 2006 100 % Providing sales of smart devices and solutions, technical support to the VIEs NetEase Langsheng (Beijing) Technology Development Co., Ltd. (“Youdao Langsheng”) Beijing, China, 2017 85 % Providing consulting services NetEase Youdao Information Technology (Hangzhou) Co., Ltd. (“Youdao Hangzhou”) Hangzhou, China, 2019 100 % Providing technical support to the VIEs VIE Beijing NetEase Youdao Computer System Co., Ltd. (“Youdao Computer”) Beijing, China, 2007 100 % Providing online learning services as well as online marketing services Reorganization The Group started its business in 2006, through Youdao Information. Since the date of inception, Youdao Information was substantially owned by the NetEase Group and several employees and former employees of the Group, as non-controlling C E O In September 2007, after applying for an internet content provider license under the applicable Chinese telecommunication laws, Youdao Computer was established as a Chinese domestic company. Since the date of inception, Youdao Computer was majority-owned by Guangzhou NetEase Computer System Co., Ltd. (“Guangzhou NetEase”), which is a consolidated VIE of NetEase, and several employees of the Group are its non-controlling In September 2016, Guangzhou NetEase transferred its interest in Youdao Computer to William Lei Ding, NetEase’s chief executive officer, director and major shareholder. In December 2016, Youdao (Hong Kong) Ltd, which was incorporated in July 2016 and wholly owned by Youdao, Inc., acquired the majority interests in Youdao Information. Additionally, Youdao Information, Youdao Computer and all its legal shareholders entered into a series of VIE agreements, through which Youdao Information became the primary beneficiary of Youdao Computer. In March 2018, the non-controlling In May 2019, the Group acquired certain education businesses, including NetEase Cloud Classroom, China University MOOC and NetEase KADA from NetEase Group. Since these businesses were controlled by NetEase both before and after the acquisition, this transaction was accounted for as a business combination under common control. In accordance with ASC 805, Business Combination, Basis of presentation for the Reorganization There was no change in the basis of presentation of the financial statement resulting from these Reorganization transactions. The assets and liabilities have been stated at historical carrying amounts. The Group has been operating as separated entities since inception, the allocation from NetEase Group for the expenses incurred by NetEase Group but related to the Group was not material. For the years ended December 31, 2017, 2018 and 2019, the allocation was related to the share-based compensation expenses from award plan of NetEase Group, amounting to RMB 5,290 , and RMB4,356, respectively (Note 14). (b) VIE arrangements i) Contracts that give the Company effective control of the VIE Loan Agreements Each shareholder of Youdao Computer, William Lei Ding and Feng Zhou, entered into a loan agreement with Youdao Information under which, Youdao Information provided each of William Lei Ding and Feng Zhou with an interest-free loan in the principal amount of approximately RMB3.6 million and RMB1.4 million, respectively. These funds were used by each of William Lei Ding and Feng Zhou to pay the consideration to acquire his respective equity interest in Youdao Computer. Such loans can be repaid by transferring each of William Lei Ding and Feng Zhou’s respective equity interest in Youdao Computer to Youdao Information or its designee or through such other method as Youdao Information shall determine. The term of each of the Loan Agreements is 10 years from the date of loan agreement and will be automatically extended for a further 10-year Exclusive Purchase Option Agreements Under the Exclusive Purchase Option Agreements entered into by Youdao Information, Youdao Computer and each of William Lei Ding and Feng Zhou, Youdao Computer granted Youdao Information an option to purchase all or a portion of the respective equity interests in Youdao Computer at a price equal to the original capital and any additional paid-in Shareholder Voting Right Trust Agreements Under the Shareholder Voting Right Trust Agreements between Youdao Information and each of William Lei Ding and Feng Zhou, respectively, each of William Lei Ding and Feng Zhou, agreed to irrevocably entrust a person designated by Youdao Information to represent him to exercise all the voting right and other shareholders’ rights to which he is entitled as a shareholder of Youdao Computer. Each Shareholder Voting Right Trust Agreement shall remain effective for as long as William Lei Ding and Feng Zhou, as applicable, remains a shareholder of Youdao Computer unless Youdao Information unilaterally terminates the agreement by written notice. Equity Pledge Agreements Each of William Lei Ding and Feng Zhou entered into an Equity Pledge Agreement with Youdao Information. Under such Equity Pledge Agreements, each of William Lei Ding and Feng Zhou pledged his respective equity interest in Youdao Computer to Youdao Information to secure his obligations under the applicable Loan Agreement, Exclusive Purchase Option Agreement, Shareholder Voting Right Trust Agreement, and Operating Agreement. Each of William Lei Ding and Feng Zhou further agreed not to transfer or pledge his respective equity interest in Youdao Computer without the prior written consent of Youdao Information. Each of the Equity Pledge Agreements will remain binding until the respective pledger, William Lei Ding or Feng Zhou, as the case may be, discharges all his obligations under the above-mentioned agreements. ii) Contracts that enable the Company to receive substantially all of the economic benefits from the VIE Operating Agreements Each of Youdao Computer, William Lei Ding and Feng Zhou agreed that, except for transactions in the ordinary course of business, Youdao Computer will not enter into any transaction that would materially affect the assets, liabilities, rights or operations of Youdao Computer without the prior written consent of Youdao Information. Youdao Information also agreed that it would provide performance guarantees and, at Youdao Information’s discretion, guarantee loans for working capital purposes to the extent required by Youdao Computer for its operations. As counter-guarantee, Youdao Computer agreed to pledge the account receivable in its operations and all of its assets to Youdao Information, which pledge has not been implemented as of the date of the report. Furthermore, each of William Lei Ding and Feng Zhou agreed that, upon instruction from Youdao Information, he would appoint Youdao Computer’s board members, president, chief financial officer and other senior executive officers. The term of each Operating Agreements is 20 years from the date of execution and can be extended with the written consent of Youdao Information. Cooperation Agreement Under this cooperation agreement, Youdao Information has agreed to provide the following services to Youdao Computer: • the development of computer software (including, but not limited to, producing online advertisement and distribution and maintenance of software) and technical support and maintenance for computer software operation; • the design, development, update and upgrade of platforms for online advertisement; and • the provision of technology support, including, but not limited to, server maintenance, development of server software and related maintenance and updates. Youdao Computer has agreed to share a portion of its monthly income (after tax and expenses) with Youdao Information in accordance with certain formulas as specified in Cooperation Agreement, the amount of which shall be determined according to the Cooperation Agreement, to the extent permitted by applicable PRC laws as proposed by the Youdao Information, resulting in a transfer of substantially all of the profits from the VIE to the Youdao Information. The VIE has incurred RMB233.7 million, RMB395.2 million and RMB550.7 million non-breaching iii) Risks in relation to VIE structure The Company believes that its contractual arrangements with the VIEs are in compliance with PRC (the People’s Republic of China) law and are legally enforceable. William Lei Ding, who is NetEase’s chief executive officer, director and major shareholder, and Feng Zhou, who is the Chief Executive Officer of the Group, have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if William Lei Ding and Feng Zhou were to reduce their interests in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so. If the VIEs or their respective shareholder fails to perform their respective obligations under the current contractual arrangements, the Company may have to incur substantial costs and expend significant resources to enforce those arrangements and rely on legal remedies under Chinese laws. Because of the limited volume of published decisions and their non-binding In addition, many Chinese regulations are subject to extensive interpretive powers of governmental agencies and commissions, and there are substantial uncertainties regarding the interpretation and application of current and future Chinese laws and regulations. Accordingly, the Company cannot assure that Chinese regulatory authorities will not ultimately take a contrary view to its belief and will not take action to prohibit or restrict its business activities. The relevant regulatory authorities would have broad discretion in dealing with any deemed violations which may adversely impact the financial statements, operations and cash flows of the Company (including the restriction on the Company to carry out the business). It is unclear, however, how such restructuring could affect the Company’s business and operating results, as the Chinese government has not yet found any such contractual arrangements non-compliant. • revoke the Group’s business and operating licenses; • require the Group to discontinue or restrict operations; • restrict the Group’s right to collect revenues; • block the Group’s websites and mobile applications; • require the Group to restructure the operations in such a way as to compel the Group to establish a new enterprise, re-apply • impose additional conditions or requirements with which the Group may not be able to comply; or • take other regulatory or enforcement actions against the Group that could be harmful to its business. The imposition of any of these penalties may result in a material and adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the VIEs. The Group does not believe that any penalties imposed or actions taken by the PRC government would result in the liquidation of the Company, its subsidiaries or the VIEs. In accordance with VIE contractual agreements, the Company (1) could exercise all shareholder’s rights of the VIEs and has power to direct the activities that most significantly affects the economic performance of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs. Accordingly, the Company was considered as ultimate primary beneficiary of the VIEs and had consolidated the VIEs’ financial results of operations, assets and liabilities in the Company’s consolidated financial statements. Therefore, the Company considers that there are no assets in the VIEs that can be used only to settle obligations of the VIEs, except for the registered capital of the VIEs amounting to approximately RMB million and RMB million as of December 31, 2018 and 2019, as well as certain non-distributable statutory reserves amounting to approximately and RMB1,786, respectively, as of December 31, 2018 and 2019. As the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors do not have recourse to the general credit of the Company for the liabilities of the VIEs. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. As the Group is conducting certain businesses in the PRC through the VIEs, the Group may provide additional financial support on a discretionary basis in the future, which could expose the Group to a loss. There is no VIE in the Group where the Company or any subsidiary has a variable interest but is not the primary beneficiary. The following table sets forth the assets, liabilities, results of operations and cash flow of the VIE s As of December 31, 2018 2019 RMB RMB Assets Cash and cash equivalents 10,823 4,683 Short-term investments 50,215 116,125 Accounts receivable, net 69,661 145,570 Inventories, net 1,009 27,340 Amounts due from NetEase Group and Youdao Group 69,141 249,589 Prepayment and other current assets 8,161 56,228 Total current assets 209,010 599,535 Property and equipment, net 119 — Other assets, net 4,359 7,302 Total non-current 4,478 7,302 Total a 213,488 606,837 Liabilities Accounts payables 23,858 50,189 Payroll payable 7,142 10,140 Amounts due to NetEase Group and Youdao Group 4,706 41,667 Contract liabilities 140,556 434,114 Taxes payable 12,012 15,290 Accrued liabilities and other payables 15,247 22,519 Total liabilities 203,521 573,919 For the year ended December 31, 2017 2018 2019 RMB RMB RMB Net revenues 400,545 606,334 997,736 Net income 1,359 13,891 3,173 For the year ended December 31, 2017 2018 2019 RMB RMB RMB Net cash provided by operating activities 8,747 48,263 50,978 Net cash used in investing activities — (50,000 ) (67,118 ) Net cash provided by financing activities — — 10,000 Net increase/(decrease) in cash and cash equivalents 8,747 (1,737 ) (6,140 ) Liquidity The Group incurred net losses of RMB163.9 million, RMB209.3 million and RMB601.5 mil lion million b billion asset operating activities and attract additional capital and/or finance funding. Historically, the Group has relied principally on both operational sources of cash and non-operational sources of financing from NetEase Group and investors to fund its operations and business development. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenues while controlling operating expenses, as well as, generating operational cash flows and continuing to gain support from outside sources of financing. The Group has been continuously receiving financing support from NetEase Group and NetEase Group will continue to provide financial support in the next twelve months from the date of this financial statements. Refer to Note 18 for details of the Group’s relationship with NetEase Group for financing activities. In October 2019, the Company has completed its IPO on the New York Stock Exchange (“NYSE”) and the concurrent private placement (the “CPP”) to certain investment funds managed by Orbis Investment Management Limited, raising the net proceeds of US$88.2 million (or equivalent to RMB621.9 million) and US$125.0 million (or equivalent to RMB881.7 million), respectively. Moreover, the Group can adjust the pace of its operation expansion and control the operating expenses. Based on the above considerations, the Group believes the cash and cash equivalents , time deposits, short term investments and the operating cash flows are sufficient to meet the cash requirements to fund planned operations and other commitments for at least the next twelve months. The Group’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and on a going concern basis. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. (b) Principles of consolidation Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All significant intercompany balances and transactions within the Group have been eliminated upon consolidation. (c) Use of estimates The preparation of the Group’s consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the consolidated financial statements and accompanying notes. Significant accounting estimates include, but are not limited to, determination of the learning period of students, valuation allowance of deferred tax assets, determination of the fair value of ordinary shares and convertible redeemable preferred shares, valuation and recognition of share-based compensation expenses. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements. (d) Functional currency and foreign currency translation The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company is United States dollars (“US$” or “USD”). The functional currency of the Group’s PRC subsidiaries and VIEs and the subsidiary incorporated in Hong Kong is RMB. In the consolidated financial statements, the financial information of the Company has been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as foreign currency translation adjustments, and are shown as a component of other comprehensive income in the consolidated statements of operations and comprehensive loss. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in others, net in the consolidated statements of operations and comprehensive loss. (e) Convenience translation Translations of balances in the consolidated balance sheets, consolidated statements of operation and comprehensive loss and consolidated statements of cash flows from RMB into USD as of and for the year ended December 31, 2019 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.9618, representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 31, 2019. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into USD at that rate on December 31, 2019, or at any other rate. (f) Fair value measurements Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation techniques are observable or unobservable. The hierarchy is as follows: Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Accounting guidance also describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. Financial assets and liabilities of the Group primarily consist of cash and cash equivalents, time deposits, short-term investments, accounts receivable, other receivables, amounts due from/to NetEase Group, accounts payables, contract liabilities, accrued liabilities and other payables and short-term loans from NetEase Group of which the carrying values approximate their fair value. Please see Note 16 for additional information. (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand deposits, which have original maturities less than three months and are readily convertible to known amount of cash. (h) Time deposits Time deposits represent time deposits placed with banks with original maturities of three months or more than three months but less than one year. Interest earned is recorded as interest income in the consolidated statements of operations and comprehensive loss during the periods presented. (i) Short-term investments Short-term investments include investments in financial instruments with a variable interest rate indexed to performance of underlying assets. In accordance with ASC 825, Financial Instruments, (j) Inventories, net Inventories, consisting of smart devices and learning materials for online courses services, are stated at the lower of cost and net realizable value. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Group takes ownership, risks and rewards of the products purchased, but has arrangements to return unsold goods with certain vendors. Write downs are recorded in cost of revenues in the consolidated statements of operations and comprehensive loss. (k) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range as follows: Servers and computers 3 years Furniture, fixtures, office and other equipment 3-10 Leasehold improvements The shorter of the useful life or term of the lease Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations and comprehensive loss. (l) Impairment of long-lived assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will affect the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. No impairment charge was recognized during the years ended December 31, 2017 , (m) Revenue recognition The Group adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), for all periods presented. According to ASC 606, revenues from contracts with customers are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services, reduced by estimates for return allowances, promotional discounts, rebates and value added tax (“VAT”). Disaggregation of net revenues For the years ended December 31, 2017, 2018 and 2019, substantially all of the Group’s net revenues were generated in the PRC. The following table provides information about disaggregated revenue by types: For the year ended December 31, 2017 2018 2019 RMB RMB RMB Learning services 143,243 398,186 699,826 Online courses services 115,003 329,424 607,568 Fee-based 28,240 68,762 92,258 Online marketing services 305,831 302,882 453,013 Learning products 6,672 30,530 152,044 Total net revenues 455,746 731,598 1,304,883 i) Learning services Online courses services The Group offers various types of integrated learning services, which primarily cover a wide spectrum of topics and target people from broad age groups through its diverse offerings of K-12 The Group’s online courses services also consist of online pre-recorded The estimated weighted average duration of learning periods is approximately ranged from six to nine months for the years ended December 31, 2017, 2018 and 2019 for both live streaming courses and pre-recorded There is a refund policy provided to customers for online courses services, depending on whether the course had commenced at the time of the refund request, the length of the course, the number of sessions that the student has taken, among other criteria. The Group determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. The Group also provides discount coupons to its customers for use in purchases on online courses, which are treated as a reduction of revenue when the related transaction is recognized. Fee-based Fee-based Youdao Dictionary Youdao Cloudnote, Youdao Smart Cloud ii) Online marketing services The Group derives its online marketing revenues principally from short-term contracts. The online marketing services with display period, the contracts may consist of multiple performance obligations with a typical term of less than three months. Each performance obligation generally represents different formats of advertisement, including but not limited to banners, text-links, videos, logos, buttons and rich media. In arrangements where the Group has multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price. The Group generally determines stand-alone selling prices based on the prices charged to customers. If the performance obligation has not been sold separately, the Group estimates the stand-alone selling price by taking into consideration of the pricing for advertising areas of the Group’s platform with a similar popularities and advertisements with similar formats and quoted prices from competitors as well as other market conditions. Considerations allocated to each performance obligation is recognized as revenue over the individual advertisement display period, on a straightline basis, which is usually within three months. The Group also enters into cost-per-click The Group’s online marketing services expand distribution of advertisers’ promotional links and advertisements by leveraging traffic on third parties’ internet properties, including web content, software, and mobile applications. The Group is the primary obligor to its advertisers as it is primarily responsible to the customers, bears inventory risk and has the discretion in establishing pricing. Payments made to operators of third party internet properties are included in the traffic acquisition costs. Certain customers may receive volume rebates, which are accounted for as variable consideration. The Group estimates annual expected revenue volume with reference to their historical results and reduce revenues recognized. iii) Learning products Along with certain online courses, the Group also provides learning products such as smart pens to facilitate customers’ learnings. For such situation, the Group has determined that the learning products are a separate performance obligation under ASC 606, as customers can benefit from learning products on their own and the Group’s promises to deliver learning products is separately identifiable from online courses services. The Group determines stand-alone selling price to each performance obligation in the approach of expected cost plus margin. Revenue from learning products is recognized when they are delivered to customers. The Group also sells other learning products such as dictionary pens, translation devices to customers through retailers or distributors. The Group recognizes revenues when control of the goods is transferred to the customer, which generally occurs upon the delivery to the end customers as retailors or upon the delivery to distributors. Practical expedients The Group has used the following practical expedients as allowed under ASC 606: (i) The effects of a significant financing component has not been adjusted for contracts which the Group expects, at contract inception, that the period between when the Group transfers a promised good or service to the customer and when the customer pays for that good or service will be one year or less. (ii) The Group applied the portfolio approach in determining the learning period for the customer given that the effect of applying a portfolio approach to a group of students’ behaviors would not differ materially from considering each one of them individually. Contract balances Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenue recognized prior to invoicing, when the Group has satisfied its performance obligations and has the unconditional right to payment. Allowance for doubtful accounts The Group closely monitors the collection of its accounts receivables and records a reserve for doubtful accounts against aged accounts and for specifically identified non-recoverable Contract liabilities Contract liabilities refer to the deferred revenue and refund liability. Deferred revenue is relating to the learning tuition, online marketing services and fee-based premium services with fees received from customers for which the Group’s revenue recognition criteria have not been met. Revenue recognized that was included in the deferred revenue balance at January 1, 2018 and January 1, 2019 amounted to RMB94,297 and RMB166,153, respectively. As of December 31, 2019, the aggregate amount of transaction price allocated to unsatisfied performance obligations is RMB451,724 Refund liability represents the consideration collected by the Group which it expects to refund to its customers according to refund policy. Refund liability is estimated based on the historical refund ratio for each of the revenue streams. The refund liabilities were not material, as of December 31, 2018 and 2019. In the event that the actual amount of refund made exceeds the estimation, such excessive amount will be deducted from net revenues. (n) Cost of revenues Cost of revenues primarily consists of the revenue sharing and payroll expenses to instructors and tutors, traffic acquisition costs, content costs, servers and bandwidth service fees and other direct costs of providing these services as well as costs of smart devices sold. (o) Sales and marketing expenses Sales and marketing expenses mainly consist of marketing and promotional expenses and payroll related expenses. The Group expenses all advertising costs as incurred and classifies these costs under sales and marketing expenses. For the years ended December 31, 2017, 2018 and 2019, advertising expenses were RMB85,309, RMB138,028 and RMB499,164, respectively. (p) Research and development expenses Research and development expenses mainly consist of personnel related expenses and technology service costs incurred for the learning courses and its development, as well as development and enhancement of the Group’s websites and applications platforms. For internal use software, the Group expenses all costs incurred for the preliminary project stage and post implementation-operation stage of development, and costs associated with repair or maintenance of the existing platforms. Costs incurred in the application development stage are capitalized and amortized over the estimated useful life. Since the amount of the Group’s research and development expenses qualifying for capitalization has been immaterial, as a result, all development costs incurred for development of internal used software have been expensed as incurred. For external use software, costs incurred for development of external use software have not been capitalized since the inception of the Group, because the period after the date technical feasibility is reached and the time when the software is marketed is short historically, and the amount of costs qualifying for capitalization has been immaterial. No costs incurred for development of learning content, products and advertising services have been capitalized because the period after the date technical feasibility is reached and the time when relevant products and services are marketed is historically short. (q) Share-based compensation The Group grants options to its employees, directors and consultants with performance conditions and service conditions. In accordance with ASC 718, Compensation-Stock Compensation , the Group determines grants of options to directors, employees and consultants, which are classified as equity awards and are measured at the grant date based on the fair value of the awards. The Group adopts the binomial option pricing model to determine the fair value of stock options. The determination of the fair value of stock options is affected by the fair value of ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee share option exercise behavior, risk free interest rates and expected dividends. The fair value of the ordinary shares is assessed using the income approach/discounted cash flow method, with a discount for lack of marketability, given that the shares underlying the awards were not publicly traded at the time of grant. Share-based compensation expenses for share options granted with service conditions are recorded net of estimated forfeitures using graded-vesting method during the service period requirement, such that expenses are recorded only for those share-based awards that are expected to ultimately vest. For share options granted with service conditions and the occurrence of an IPO as performance condition, cumulative share-based compensation expenses for the options that have satisfied the service conditions are In the fourth quarter of 2019, due to the completion of the IPO, the total expenses of RMB18.4 million were recorded accordingly. The Group also recognizes compensation expenses on restricted share units, or RSUs, granted by the Parent to the employees of the Group. RSUs are measured based on the fair market value of the underlying stock on the dates of grant. Share-based compensation expenses related are then recorded for the number of RSUs expected to vest on a graded-vesting basis, net of estimated forfeitures, over the requisite service period. (r) Employee benefits PRC Contribution Plan Full-time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries and the VIE s (s) Taxation Income taxes Current income taxes are provided on the basis of income/(loss) for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of operations and comprehensive loss in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. Uncertain tax positions In order to assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step two-step and for the years ended 2017, (t) Operating leases The Group has operating leases primarily for office space. The determination of whether an arrangement is a lease or contains a lease is made at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Group obtains substantially all of the economic benefits from and has the ability to direct the use of the asset. The Group elects not to apply the recognition requirements of ASC 842 to short-term leases. Variable lease payments are the payments made by a lessee to a lessor for the right to use an underlying asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. Variable lease payments is recorded in the period in which the obligation for the payment is incurred. Other operating leases are included in operating lease right-of-use assets, accrued liabilities and other payables, and long-term lease liabilities on the consolidated balance sheets. The Group uses the implicit rate when readily determinable, or its incremental borrowing rate based on the information available, at the commencement date in determining the present value of lease payments. Certain leases include renewal options and/or termination options. Renewal options are included in the lease term if the Group is reasonably certain to exercise those options while options to terminate the lease are only included in the lease term if the Group is reasonably certain not to exercise those options. Lease expense is recorded on a straight-line basis over the lease term. (u) Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation. (v) Non-controlling For the Company’s majority-owned subsidiaries and VIE s non-controlling The non-controlling non-controlling (w) Net loss per share Net loss per share is computed in accordance with ASC 260, Earnings per Share . Basic net loss per share is computed by dividing net loss attributable to ordinary shareholders, considering the accretions of convertible redeemable preferred shares, by the weighted average number of ordinary shares outstanding during the year. Diluted net loss per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options to purchase ordinary shares and preferred shares, unless they were anti dilutive. The computation of diluted net loss per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net loss per share. (x) Statutory reserves The Company’s subsidiaries and VIE established in the PRC are required to make appropriations to certain non-distributable s after-tax non-distributable after-tax Pursuant to the laws applicable to China’s Foreign Investment Enterprises, the Company’s subsidiaries registered as majority-owned or wholly-owned foreign investment enterprise (“FIE”) in China make appropriations from their annual after-tax : after-tax (y) Comprehensive loss Comprehensive loss is defined to include all changes in equity deficit of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive loss includes net loss and foreign currency translation adjustment of the Group. (z) Segment reporting In accordance with ASC 280, Segment Reporti n , operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Group’s CODM is the Chief Executive Officer. The Group’s organizational structure is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but are not limited to, customer base, homogeneity of products and technology. The Group’s operating segments are based on this organizational structure and infor m t The Group reports two reportable segments - expen s (aa) Recently adopted accounting pronouncements In February 2016, the FASB issued a new standard on leases, ASU 2016-2, which requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize a liability to make lease payments (the Lease Liability) and a right-of-use representing its right to use the underlying asset for the lease term in the statements of financial position. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In July 2018, the FASB issued an amendment on leases, ASU 2018-11, which provides another transition method in addition to the existing transition methods by allowing entities to initially apply the new leases standard at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new lease standard in the first quarter of 2019 using the transition method provided by ASU 2018-11 and did not retrospectively adjust the prior comparative periods. (bb) Recently issued accounting pronouncements not yet adopted In June 2016, the FASB issued of ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for the Group in the fiscal year of 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which an entity recognizes an allowance based on the estimate of expected credit loss. In November 2018, the FASB issued an amendment of Topic 326, ASU No. 2018-19, which clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20 and should be accounted for in accordance with Topic 842, Leases. The Company will adopt the amendments beginning from does not expect any material impact of adopting ASU No. 2016-13 on its consolidat e statements . |
Concentration and Risks
Concentration and Risks | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentration and Risks | 3. Concentration and Risks Financial instruments that potentially expose the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, time deposits and short-term investments. As of December 31, 2018 and 2019, substantially all of the Group’s cash and cash equivalents, time deposits and short term investments were held in major financial institutions located in Mainland China and Hong Kong, which management considered being of high credit quality. There we w as year ended December 31, 2018. In 2017 and 2019, there was no instructor, through whom the Company’s net learning services and products revenue earned was more than 10% of the Company’s net learning services and products revenue. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables, Net, Current [Abstract] | |
Accounts Receivable, Net | 4. Accounts Receivable, N As of December 31, 2018 2019 RMB RMB Accounts receivable, net: Accounts receivable 81,361 202,953 Allowance for doubtful accounts: Balance at the beginning of year (724 ) (799 ) Additional provision charged to expenses (75 ) (1,897 ) Write-off — 418 Balance at the end of year (799 ) (2,278 ) 80,562 200,675 |
Prepayment and Other Current As
Prepayment and Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepayment and Other Current Assets | 5. Prepayment and Other Current Assets The following is a summary of prepayment and other current assets: As of December 31, 2018 2019 RMB RMB Deferred expenses for learning services 20,267 48,185 Deferred charges 2,879 12,472 Prepayment for promotion fees 5,892 20,777 Prepayment for value-added taxes 4,894 18,034 Interest receivable 4,200 6,252 Prepaid insurance fee for directors and officers — 5,568 Others 5,939 9,603 Total 44,071 120,891 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 6. Property and Equipment, Net Property and equipment, net as of December 31, 2018 and 2019 are as follows: As of December 31, 2018 2019 RMB RMB Servers and computers 59,709 53,428 Furniture, fixtures and office equipment 1,971 3,259 Leasehold improvements 1,157 1,645 Total 62,837 58,332 Less: accumulated depreciation (44,462 ) (33,781 ) Net book value 18,375 24,551 Depreciation expenses recognized for the years ended December 31, 2017, 2018 and 2019 were RMB3,274, RMB6,349 and RMB10,524, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Lease | 7. Leases The Group has operating leases for office space, with lease terms from within one year to around seven years. Additionally, certain lease agreements with NetEase Group contain variable payments, which are determined based on actual NetEase Group’s spaces occupied by the Group and are expensed as incurred and not included in the operating lease assets and liabilities. A summary related to operating leases as of December 31, 2019 is as follows: As of December 31, 2019 RMB Operating lease right-of-use 23,873 Operating lease liabilities - current 4,166 Operating lease liabilities - non-current 21,206 Total operating lease liabilities 25,372 Weighted average remaining lease term 5.0 years Weighted average discount rate 4.35 % For the year ended RMB Operating lease expenses 2,157 Short-term lease expenses 2,510 Variable lease expenses 20,813 Total lease expenses 25,480 Right-of-use assets obtained in exchange for operating lease liabilities 26,030 The lease expenses w e re and s and 8 A summary of maturity of operating lease liabilities under the Group’s non-cancelable As of December 31, 2019 RMB 2020 4,288 2021 6,935 2022 5,024 2023 4,782 2024 4,426 Thereafter 2,970 Total operating lease liabilities 28,425 Less: interest (3,053 ) Present value of operating lease liabilities 25,372 As of December 31, 2018, prior to the adoption of Topic 842, future minimum payments under non-cancelable operating lease agreements, which are mostly within one year, is as follows: As of December 31, 2018 RMB 2019 16,634 2020 60 2021 and thereafter — Total minimum payments 16,694 |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Taxation | 8. Taxation (a) Value-added tax (“VAT”) Pursuant to the provision regulation of the PRC on VAT and its implementation rules, the Company’s subsidiaries and VIEs are generally subject to VAT at a rate of from revenues earned from services provided or 17% from sales of general goods. Effective from 1 May, 2018, the 17% VAT rate was reduced to 16% and effective from 1 April, 2019, the 16% VAT rate was further reduced to 13% . The Group is also subject to cultural development fee on the provision of advertising services in China. The applicable tax rate is 3% of the advertising revenue and subject to a 50% reduction which was effective from 1 July, 2019. (b) Income tax Composition of income tax The following table presents the composition of income tax expenses for the years ended December 31, 2017, 2018 and 2019: For the year ended December 31, 2017 2018 2019 RMB RMB RMB Current income tax expenses 5,162 11,294 2,432 Income tax expenses 5,162 11,294 2,432 Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company in the Cayman Islands to their shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong The subsidiary incorporated in Hong Kong was subject to Hong Kong profits tax at a rate of 16.5% for taxable income earned in Hong Kong before April 1, 2018. Starting from the financial year commencing on April 1, 2018, the two-tiered China Under the PRC Enterprise Income Tax Law, or EIT Law, the standard enterprise income tax rate (“EIT rate”) is 25%. Entities qualifying as High and New Technology Enterprises (“HNTE”) qualify for a preferential tax rate of 15% subject to a requirement that they re-apply Youdao Information was qualified as a n All other PRC incorporated entities of the Group were subject to a 25% income tax rate for all the periods presented. The following table presents a reconciliation of the differences between the statutory income tax rate and the Group’s effective income tax rate for the years ended December , 2017, and : For the year ended December 31, 2017 2018 2019 Statutory income tax rate 25 % 25 % 25 % Permanent differences 1 % 5 % 0 % Tax rate difference from tax holiday and statutory rate in other jurisdictions (7 % (5 % (9 % Change in valuation allowance (22 % (31 % (16 % Effective income tax rate (3 % (6 % 0 % (c) Deferred tax assets The following table presents the tax impact of significant temporary differences that give rise to the deferred tax assets as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB Deferred tax assets Net operating tax loss carry forwards 144,050 160,743 Advertising and promotion expenses in excess of deduction limit 2,018 60,883 Payroll and expense accrued 549 29,739 Others — 704 Less: valuation allowance (146,617 ) (252,069 ) Total deferred tax assets, net — — The following table sets forth the movement of the valuation allowances for deferred tax assets for the periods presented: 2018 2019 RMB RMB Balance as of January 1 116,606 146,617 Change of valuation allowance 30,011 105,452 Balance as of December 31 146,617 252,069 The tax losses of the Group expire over different time intervals depending on local jurisdiction. Certain HNTE entity’s expiration period for tax losses has been extended from five years to ten years in 2018 , other entities’ expiration period for tax losses maintains as five years. As of December 31, 2019, certain entities of the Group had net operating tax loss carry forwards, if not utilized, would expire as follows: RMB Loss expiring in 2020 — Loss expiring in 2021 — Loss expiring in 2022 — Loss expiring in 2023 139,465 Loss expiring in 2024 137,645 Loss expiring in 2025 108,483 Loss expiring in 2026 111,357 Loss expiring in 2027 112,069 Loss expiring in 2028 201,070 Loss expiring in 2029 261,516 1,071,605 (d) Withholding income tax The EIT Law also imposes a withholding income tax of 10% on dividends distributed by a FIE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident To the extent that subsidiaries and VIE s |
Taxes Payable
Taxes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Taxes Payable, Current [Abstract] | |
Taxes Payable | 9. Taxes Payable The following is a summary of taxes payable as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB Enterprise income taxes payable 10,357 7,952 Withholding individual income taxes for employees 1,622 5,679 VAT payable 3,482 10,925 Others 1,928 1,421 Total 17,389 25,977 |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities and Other Payables | 10. Accrued Liabilities and Other Payables The following is a summary of accrued liabilities and other payables as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB Accrued liabilities for learning services and online marketing services 39,042 85,598 Accrued marketing expenses 19,981 43,765 Accrued professional fee 7,863 28,499 Accrued administrative expenses 5,126 8,169 Accrued technical expenses 4,315 8,960 Deposits payable to service providers 2,995 2,542 Operating lease liabilities-current portion — 4,166 Others 6,392 10,944 Total 85,714 192,643 |
Ordinary Shares
Ordinary Shares | 12 Months Ended |
Dec. 31, 2019 | |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
Ordinary Shares | 11. Ordinary Shares The Company was incorporated in the Cayman Islands on November 27, 2014 by NetEase. Upon its incorporation, 1 ordinary share was issued at a par value of US$1 per share. On February 3, 2015, the Company performed a share split to 10,000 shares at a par value of US$0.0001 per share. On March 7, 2018, the Company issued 65,377,160 shares to NetEase with a total consideration of US$7. This issuance to NetEase was treated as an in substance 10,000 to 65,387,160 share split. All ordinary shares and per share information are adjusted retroactively for all periods presented to reflect the share split in March 2018. On March 28, 2018, the Company issued 26,612,840 shares to the holding vehicle of previous non-controlling In October 2019, the Company completed the IPO on NYSE, by which, the Company sold a total of 5,600,000 ADSs, each representing one of our Class A ordinary shares, par value US$0.0001 per share. In addition, the Company issued 7,352,941 Class A ordinary shares for a total consideration of US$125.0 million in connection with concurrent private placements to certain investment funds managed by Orbis Investment Management Limited, at share. As of December 31, 2018 and 2019, the Company had 92,000,000 and 111,767,756 ordinary shares issued and outstanding, respectively. |
Convertible Redeemable Preferre
Convertible Redeemable Preferred Shares | 12 Months Ended |
Dec. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Redeemable Preferred Shares | 12. Convertible Redeemable Preferred Shares On April 1 7 $10 .27 two $ The key terms of the preferred shares are as follows: Conversion right Each preferred share is convertible into an ordinary share, at the option of the holder thereof, at any time on a one-for-one The initial conversion price will be the preferred share issue price (i.e., a one-to-one Redemption right If the Company has not completed a QIPO prior to April 12, 2022, the Purchasers shall have the right to sell to the Company all or a portion of preferred shares they own at a price equal to 140% of the purchase consideration plus all declared but unpaid dividends on such preferred shares. A notice of redemption by the requesting Purchaser shall be delivered to the Company, within ninety days after but not including April 12, 2022. If the put right is not exercised within the ninety days, it will be irrevocably forfeited. In the event that the Company does not have sufficient funds to redeem all of the preferred shares requested to be redeemed, the Parent shall repurchase the requested preferred shares at a price reflecting an annual compounded rate of 6% of the purchase consideration plus all declared but unpaid dividends on such preferred shares. The redemption option provided by the Parent is considered an in substance guarantee provided by NetEase Group over the Company’s redemption obligation. The Company recognized the initial fair value of the guarantee as financing expense and capital contribution from the Parent with the amount of RMB4,722. Liquidation In the event of liquidation, the holders of preferred shares shall be entitled to receive, prior to the holders of ordinary shares, the relevant amount per preferred share equal to (i) 100% of the applicable preferred share issue price, plus (ii) an amount accruing thereon at an annual rate of 10% of the applicable preferred share issue price, plus (iii) all declared but unpaid dividends thereon. In the event of insufficient funds available to pay in full the preference amount in respect of preferred shares, the entire assets and funds of the Company legally available for distribution to the holders of preferred shares shall be distributed on a pro rata basis among the holders of preferred shares in proportion to issued price. Voting r The holders of preferred shares and ordinary shares shall vote together based on their shareholding ratio. Dividend Each preferred shareholder shall be entitled to receive dividends and distributions on an as-converted Accounting of p s The Company has classified the preferred shares in the mezzanine equity of the consolidated balance sheets. In addition, the Company records accretions on the preferred shares to the redemption value from the issuance date to the earliest redemption date. The accretions using the effective interest method, are recorded against retained earnings, or in the absence of retained earnings, by charges against additional paid-in paid-in The Company’s preferred shares activities for the year ended December 31, 2018 are summarized as below: Balance as of Issuance of Accretions of Balance as of Series A p s Number of shares (in thousands) — 6,815 — 6,815 Amount — 430,341 30,311 460,652 All of the preferred shares were converted to Class A ordinary shares upon the completion of the Group’s IPO in October 2019. Balance as of Accretions of Conversion Balance as of Series A p s Number of shares (in thousands) 6,815 — (6,815 ) — Amoun t 460,652 35,893 (496,545 ) — |
Others, Net
Others, Net | 12 Months Ended |
Dec. 31, 2019 | |
Other Nonoperating Income (Expense) [Abstract] | |
Others, Net | 13. Others, N For the year ended December 31, 2017 2018 2019 RMB RMB RMB Financing expense (Note 1 2 — (4,722 ) — Fair value changes of short-term investments 32 382 863 Government grants — 10,330 18,087 Foreign exchange gains 78 38,620 3,279 Others 488 33 (2,165 ) Total 598 44,643 20,064 |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation | 14. Share-based Compensation The table below sets forth the allocation of share-based compensation expenses: For the year ended December 31, 2017 2018 2019 RMB RMB RMB Cost of revenues 2,220 3,055 4,407 Sales and marketing expenses 289 350 2,107 Research and development expenses 2,773 2,735 9,432 General and administrative expenses 8 36 9,128 Total 5 ,2 90 6 ,1 76 25 ,0 74 NetEase Plan (a) Description of restricted share units plan In November 2009, NetEase adopted a restricted share units plan for NetEase’s employees, directors and consultants (the “2009 RSU Plan”). NetEase has reserved 323,694,050 ordinary shares for issuance under the plan. The 2009 RSU Plan was adopted by a resolution of the board of directors on November 17, 2009 and became effective for a term of ten (b) Share-based compensation expenses NetEase recognizes share-based compensation expenses in its consolidated statements of operations and comprehensive income based on awards ultimately expected to vest, after considering estimated forfeitures. Forfeitures are estimated based on the NetEase’s historical experience over the last five years and revised in subsequent periods if actual forfeitures differ from those estimates. The corresponding share-based compensation expenses were allocated to the Group based on grants to the Group’s employees, amounting to RMB5,290 , and RMB4,356 which is treated as deemed contribution from NetEase Group and recorded in additional paid-in capital, for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, total unrecognized compensation expenses of the Group’s employees related to unvested awards under the 2009 RSU Plan, adjusted for estimated forfeitures, were US$670 (RMB4,667 ) 1.8 years. The aggregate intrinsic value of 178,425 restricted share units outstanding for the Group’s employees as of December 31, 2019 was US$2.2 million (RMB15.2 million). The intrinsic value was calculated based on NetEase’s closing share price of US$306.64 per ADS, or US$12.2656 per ordinary share as of December 31, 2019. Youdao Plan (a) Description of share incentive plan On February 3, 2015, the Company adopted an option and restricted share unit plan for the Company’s employees, directors and consultants (the “2015 Share Incentive Plan” or “2015 Plan”). The 2015 Plan was adopted in February 2015 and became effective for a term of ten , initially 8,000,000 ordinary shares of the Company was reserved. In April 2018, the Company further reserved an additional 2,222,222 ordinary shares for the 2015 Plan, which resulted in the total number of ordinary shares reserved under the 2015 Plan to be 10,222,222. (b) Valuation The Group uses binomial option pricing model to determine fair value of the share-based awards. The fair value of each option granted for the years ended December 31, 2017 , 2018 and 2019 For the year ended December 31, 2017 2018 2019 Expected volatility 48.00%-51.00 % 48.10 % 46.50%-46.90 % Expected dividends yield 0 % 0 % 0 % Risk-free interest rate 1.99%-2.01 % 2.50 % 2.10%-2.60 % Expected term (in years) 6 6 6 Fair value of underlying ordinary share (US$) 0.59-0.84 1.39 6.35-7.29 The expected volatility at the grant date and each option valuation date was estimated based on the annualized standard deviation of the daily return embedded in historical share prices of comparable peer companies with a time horizon close to the expected expiry of the term of the options. The Company has not declared or paid any cash dividends on its capital stock, and the Company does not anticipate any dividend payments in the foreseeable future. Expected term is the contract life of the options. The Company estimated the risk-free interest rate based on the yield to maturity of U.S. treasury bonds denominated in USD at the option valuation date. The following table presents a summary of the Company’s options activities for the years ended December 31, 2017, 2018 and 2019: Number of Weighted Weighted average Aggregate (in thousands) US$ Years US$ Outstanding as of January 1, 2017 5,357 1.68 4.59 — Granted 1,979 2.53 Forfeited (931 ) 1.94 Outstanding as of December 31, 2017 6,405 1.91 4.01 — Granted 1,592 3.00 Forfeited (1,006 ) 2.16 Outstanding as of December 31, 2018 6,991 2.13 3.40 29,468 Granted 2,072 3.50 Forfeited (734 ) 2.60 Outstanding as of December 31, 2019 8,329 2.43 3.06 97,000 Vested and exercisable as of December 31, 2018 — 2.13 Vested and exercisable as of December 31, 2019 3,584 1.87 The weighted average grant date fair value of share options granted during the years ended December 31, 2017, 2018 and 2019 were US$0.08, US$0.33 and US$4.12, respectively. The total fair value of options vested during the years ended December 31, 2017, 2018 and 2019 were nil, nil and RMB2,771 (US$398), respectively. Under the option plan, options are only exercisable subject to the grantee’s continuous service and completion of the Company’s IPO, and options for which the service condition has been satisfied are forfeited should employment terminate before the Company’s public listing. As the effectiveness of an IPO is not within the control of the Company, it is not deemed probable to occur for accounting purposes until the effective date of the IPO which was on October 24, 2019. Therefore, for the years ended December 31, 2017 and 2018, no and is expected to be recognized through the remaining vesting period of each grant. As of December 31, 2019, the weighted average remaining vesting period was 2.53 years. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 15. Net Loss per Share The following table sets forth the computation of basic net For the year ended December 31, 2017 2018 2019 RMB RMB RMB Numerator: Net loss (163,932 ) (209,295 ) (601,455 ) Net loss/(income) attributable to non-controlling interests shareholders 30,355 385 (48 ) Accretions of preferred shares to redemption value (Note 12 — (30,311 ) (35,893 ) Net loss attributable to ordinary shareholders of the Company (133,577 ) (239,221 ) (637,396 ) Denominator: Weighted average number of ordinary shares/ADSs outstanding, basic 65,387,160 85,346,790 95,445,982 Weighted average number of ordinary shares/ADSs outstanding, diluted 65,387,160 85,346,790 95,445,982 Net loss per share /ADS , basic (2.04 ) (2.80 ) (6.68 ) Net loss per share /ADS , diluted (2.04 ) (2.80 ) (6.68 ) Basic and diluted loss per share are computed using the weighted average number of ordinary shares /ADS outstanding during the period. Options for the purchase of 6,405,000 ordinary shares, as of December 31, 2017, 6,814,815 preferred shares and options for the purchase of 6,991,000 ordinary shares as of December 31, 2018, and options for the purchase of 5,047,330 ordinary shares as of December 31, 2019, respectively, were excluded from the computation of diluted net loss per share for the years then ended because of their anti-dilutive effect. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | 16. Financial Instruments Fair v The following table sets forth the major financial instruments, measured at fair value, by level within the fair value hierarchy as of December 31, 2018 and 2019: Fair value measurements Total Quoted prices in Significant other RMB RMB RMB As of December 31, 2018 Time deposits 343,410 343,410 — Short-term investments 50,215 — 50,215 Total 393,625 343,410 50,215 As of December 31, 2019 Time deposits 1,325,737 1,325,737 — Short-term investments 121,126 — 121,126 Total 1,446,863 1,325,737 121,126 The rates of interest under the loan agreements from NetEase Group with the lending banks were determined based on the prevailing interest rates in the market. The Group classifies the valuation techniques that use these inputs as Level 2 of fair value measurements of short-term loans. For other financial assets and liabilities with carrying values that approximate fair value, if measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. Commitments and Contingencies (a) Commitments As of December 31, 2019, the Group’ s non-cancelable Less than o y One to t y More than t y As of December 31, RMB RMB RMB RMB Purchase commitments 45,076 3,021 245 48,342 Total 45,076 3,021 245 48,342 Purchase commitments mainly include commitments for content, marketing activities and purchase of smart devices. Upon the adoption of ASC 842 on January 1, 2019, future minimum lease payments for operating lease as of December 31, 2019 are disclosed in Note 7. ( From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, is reasonably possible to have a material adverse effect on the Group’s financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and the Group’s view of these matters may change in the future. The Group records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Group reviews the need for any such liability on a regular basis. The Group has not recorded any material liabilities in this regard as of December 31, 2018 2019 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related party transactions | 18. Related Party Transactions During the years ended December 31, 2017, 2018 and 2019, other than disclosed elsewhere, the Company had the following material related party transactions: Name of entity or individual Relationships with the Group NetEase Group Control or under common control (a) Transactions with related parties For the year ended December 31, 2017 2018 2019 RMB RMB RMB Services and products provided to NetEase Group Learning services provided to NetEase Group 4,854 10,485 2,913 Learning products provided to NetEase Group — — 11,418 Online marketing services provided to NetEase Group 6,297 16,763 23,249 Services and products purchased from NetEase Group Services purchased from NetEase Group 31,611 67,094 71,631 Fixed assets and inventories purchased from NetEase Group — 6,647 18,222 Loan related transactions Addition of short-term loans from NetEase Group 57,000 — — Interest expenses on short-term loans from NetEase Group 29,523 31,851 30,232 Equity related transactions Deemed contribution related to acquisition of businesses under common control (Note 1) 49,265 44,024 69,603 Deemed contribution from NetEase Group related to issuance of preferred shares (Note 12 — 4,722 — Share-based compensation under NetEase Plan 5,290 6,176 4,356 Learning services provided to NetEase Group mainly refer to the translation services provided to the entities within NetEase Group. Learning products provided to NetEase Group mainly refer to the arrangements where entities within NetEase Group acts as the distributor to sell smart devices, the revenues of which are recognized upon the delivery to the customer. Online marketing services provided to NetEase Group mainly refer to the performance-based advertising arrangement provided to the entities within NetEase Group to promote their own services and products. Service purchased from NetEase Group mainly consists of the human resource which the employees are with employment contracts with the entities within NetEase Group but provide services to the Group , office leasing and purchase of server custody service Deemed contribution related to acquisition of businesses under common control represents a contribution from NetEase Group during the years ended December 31, 2017, 2018 and 2019. (b) Balances with related parties As of December 31, 2018 2019 RMB RMB Amounts due from NetEase Group 11,240 14,930 Amounts due to NetEase Group 37,213 48,126 Short-term loans from NetEase Group 878,000 878,000 Short-term loans as of December 31, 2018 and 2019 amounted to RMB878,000 , the years ended December 31, 2018 and 2019 ranged from approximately 3.5% to 3.9% per annum. The interest expense was RMB29,523 , and RMB30,232 for the year ended December 31, 2017 , and 2019 , respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment information | 19. Segment Information As disclosed in Note 2(z), operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Group’s CODM is the Chief Executive Officer. The Group’s organizational structure is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but are not limited to, customer base, homogeneity of products and technology. The Group’s operating segments are based on this organizational structure and information reviewed by the Group’s CODM to evaluate the operating segment results. The Group reports two reportable segments-learning services and products and online marketing services. The Group currently does not allocate operating expenses or assets to its segments, as its CODM does not use such information to allocate resources or evaluate the performance of the operating segments. The table below provides a summary of the Group’s segment results for the years ended December 31, 2017, 2018 and 2019. For the year ended December 31, 2017 2018 2019 RMB RMB RMB Net revenues Learning services and products 149,915 428,716 851,870 Online marketing services 305,831 302,882 453,013 Total net revenues 455,746 731,598 1,304,883 Cost of revenues Learning services and products 139,600 335,127 620,669 Online marketing services 154,207 180,006 313,592 Total cost of revenues 293,807 515,133 934,261 Gross margin Learning services and products 7 % 22 % 27 % Online marketing services 50 % 41 % 31 % Total gross margin 36 % 30 % 28 % |
Restricted Net Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2019 | |
Restricted Net Assets [Abstract] | |
Restricted Assets | 20. Restricted Net Assets Relevant PRC laws and regulations permit PRC companies to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, the Company’s PRC subsidiaries and VIEs can only distribute dividends upon approval of the shareholders after they have met the PRC requirements for appropriation to the general reserve fund and the statutory surplus fund respectively. The general reserve fund and the statutory surplus fund require that annual appropriations of 10% of net after-tax |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent events | 21. Subsequent Events After the outbreak of Coronavirus Disease 2019 (“COVID-19 outbreak”) in early 2020, a series of precautionary and control measures have been and continued to be implemented across the country. The Group prioritizes the health and safety of its employees, and has taken various preventative and quarantine measures across the Group soon after the outbreak. The Group will pay close attention to the development of the COVID-19 outbreak and evaluate its impact on the financial position and operating results of the Group. As at the date on which this form 20-F was filed, the Group was not aware of any material adverse effects on the financial statements as a result of the COVID-19 outbreak. The Group has performed an evaluation of subsequent events through the date of this report, which is the date the financial statements were issued, no other material events or transactions needing recognition or disclosure found. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and on a going concern basis. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. |
Principles of consolidation | (b) Principles of consolidation Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All significant intercompany balances and transactions within the Group have been eliminated upon consolidation. |
Use of estimates | (c) Use of estimates The preparation of the Group’s consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the consolidated financial statements and accompanying notes. Significant accounting estimates include, but are not limited to, determination of the learning period of students, valuation allowance of deferred tax assets, determination of the fair value of ordinary shares and convertible redeemable preferred shares, valuation and recognition of share-based compensation expenses. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements. |
Functional currency and foreign currency translation | (d) Functional currency and foreign currency translation The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company is United States dollars (“US$” or “USD”). The functional currency of the Group’s PRC subsidiaries and VIEs and the subsidiary incorporated in Hong Kong is RMB. In the consolidated financial statements, the financial information of the Company has been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as foreign currency translation adjustments, and are shown as a component of other comprehensive income in the consolidated statements of operations and comprehensive loss. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in others, net in the consolidated statements of operations and comprehensive loss. |
Convenience translation | (e) Convenience translation Translations of balances in the consolidated balance sheets, consolidated statements of operation and comprehensive loss and consolidated statements of cash flows from RMB into USD as of and for the year ended December 31, 2019 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.9618, representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 31, 2019. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into USD at that rate on December 31, 2019, or at any other rate. |
Fair value measurements | (f) Fair value measurements Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation techniques are observable or unobservable. The hierarchy is as follows: Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Accounting guidance also describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. Financial assets and liabilities of the Group primarily consist of cash and cash equivalents, time deposits, short-term investments, accounts receivable, other receivables, amounts due from/to NetEase Group, accounts payables, contract liabilities, accrued liabilities and other payables and short-term loans from NetEase Group of which the carrying values approximate their fair value. Please see Note 16 for additional information. |
Cash and cash equivalents | (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand deposits, which have original maturities less than three months and are readily convertible to known amount of cash. |
Time deposits | (h) Time deposits Time deposits represent time deposits placed with banks with original maturities of three months or more than three months but less than one year. Interest earned is recorded as interest income in the consolidated statements of operations and comprehensive loss during the periods presented. |
Short-term investments | (i) Short-term investments Short-term investments include investments in financial instruments with a variable interest rate indexed to performance of underlying assets. In accordance with ASC 825, Financial Instruments, |
Inventories, net | (j) Inventories, net Inventories, consisting of smart devices and learning materials for online courses services, are stated at the lower of cost and net realizable value. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Group takes ownership, risks and rewards of the products purchased, but has arrangements to return unsold goods with certain vendors. Write downs are recorded in cost of revenues in the consolidated statements of operations and comprehensive loss. |
Property and equipment, net | (k) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range as follows: Servers and computers 3 years Furniture, fixtures, office and other equipment 3-10 Leasehold improvements The shorter of the useful life or term of the lease Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations and comprehensive loss. |
Impairment of long-lived assets | (l) Impairment of long-lived assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will affect the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. No impairment charge was recognized during the years ended December 31, 2017 , |
Revenue recognition | (m) Revenue recognition The Group adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), for all periods presented. According to ASC 606, revenues from contracts with customers are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services, reduced by estimates for return allowances, promotional discounts, rebates and value added tax (“VAT”). Disaggregation of net revenues For the years ended December 31, 2017, 2018 and 2019, substantially all of the Group’s net revenues were generated in the PRC. The following table provides information about disaggregated revenue by types: For the year ended December 31, 2017 2018 2019 RMB RMB RMB Learning services 143,243 398,186 699,826 Online courses services 115,003 329,424 607,568 Fee-based 28,240 68,762 92,258 Online marketing services 305,831 302,882 453,013 Learning products 6,672 30,530 152,044 Total net revenues 455,746 731,598 1,304,883 i) Learning services Online courses services The Group offers various types of integrated learning services, which primarily cover a wide spectrum of topics and target people from broad age groups through its diverse offerings of K-12 The Group’s online courses services also consist of online pre-recorded The estimated weighted average duration of learning periods is approximately ranged from six to nine months for the years ended December 31, 2017, 2018 and 2019 for both live streaming courses and pre-recorded There is a refund policy provided to customers for online courses services, depending on whether the course had commenced at the time of the refund request, the length of the course, the number of sessions that the student has taken, among other criteria. The Group determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. The Group also provides discount coupons to its customers for use in purchases on online courses, which are treated as a reduction of revenue when the related transaction is recognized. Fee-based Fee-based Youdao Dictionary Youdao Cloudnote, Youdao Smart Cloud ii) Online marketing services The Group derives its online marketing revenues principally from short-term contracts. The online marketing services with display period, the contracts may consist of multiple performance obligations with a typical term of less than three months. Each performance obligation generally represents different formats of advertisement, including but not limited to banners, text-links, videos, logos, buttons and rich media. In arrangements where the Group has multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price. The Group generally determines stand-alone selling prices based on the prices charged to customers. If the performance obligation has not been sold separately, the Group estimates the stand-alone selling price by taking into consideration of the pricing for advertising areas of the Group’s platform with a similar popularities and advertisements with similar formats and quoted prices from competitors as well as other market conditions. Considerations allocated to each performance obligation is recognized as revenue over the individual advertisement display period, on a straightline basis, which is usually within three months. The Group also enters into cost-per-click The Group’s online marketing services expand distribution of advertisers’ promotional links and advertisements by leveraging traffic on third parties’ internet properties, including web content, software, and mobile applications. The Group is the primary obligor to its advertisers as it is primarily responsible to the customers, bears inventory risk and has the discretion in establishing pricing. Payments made to operators of third party internet properties are included in the traffic acquisition costs. Certain customers may receive volume rebates, which are accounted for as variable consideration. The Group estimates annual expected revenue volume with reference to their historical results and reduce revenues recognized. iii) Learning products Along with certain online courses, the Group also provides learning products such as smart pens to facilitate customers’ learnings. For such situation, the Group has determined that the learning products are a separate performance obligation under ASC 606, as customers can benefit from learning products on their own and the Group’s promises to deliver learning products is separately identifiable from online courses services. The Group determines stand-alone selling price to each performance obligation in the approach of expected cost plus margin. Revenue from learning products is recognized when they are delivered to customers. The Group also sells other learning products such as dictionary pens, translation devices to customers through retailers or distributors. The Group recognizes revenues when control of the goods is transferred to the customer, which generally occurs upon the delivery to the end customers as retailors or upon the delivery to distributors. Practical expedients The Group has used the following practical expedients as allowed under ASC 606: (i) The effects of a significant financing component has not been adjusted for contracts which the Group expects, at contract inception, that the period between when the Group transfers a promised good or service to the customer and when the customer pays for that good or service will be one year or less. (ii) The Group applied the portfolio approach in determining the learning period for the customer given that the effect of applying a portfolio approach to a group of students’ behaviors would not differ materially from considering each one of them individually. Contract balances Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenue recognized prior to invoicing, when the Group has satisfied its performance obligations and has the unconditional right to payment. Allowance for doubtful accounts The Group closely monitors the collection of its accounts receivables and records a reserve for doubtful accounts against aged accounts and for specifically identified non-recoverable Contract liabilities Contract liabilities refer to the deferred revenue and refund liability. Deferred revenue is relating to the learning tuition, online marketing services and fee-based premium services with fees received from customers for which the Group’s revenue recognition criteria have not been met. Revenue recognized that was included in the deferred revenue balance at January 1, 2018 and January 1, 2019 amounted to RMB94,297 and RMB166,153, respectively. As of December 31, 2019, the aggregate amount of transaction price allocated to unsatisfied performance obligations is RMB451,724 Refund liability represents the consideration collected by the Group which it expects to refund to its customers according to refund policy. Refund liability is estimated based on the historical refund ratio for each of the revenue streams. The refund liabilities were not material, as of December 31, 2018 and 2019. In the event that the actual amount of refund made exceeds the estimation, such excessive amount will be deducted from net revenues. |
Cost of revenues | (n) Cost of revenues Cost of revenues primarily consists of the revenue sharing and payroll expenses to instructors and tutors, traffic acquisition costs, content costs, servers and bandwidth service fees and other direct costs of providing these services as well as costs of smart devices sold. |
Sales and marketing expenses | (o) Sales and marketing expenses Sales and marketing expenses mainly consist of marketing and promotional expenses and payroll related expenses. The Group expenses all advertising costs as incurred and classifies these costs under sales and marketing expenses. For the years ended December 31, 2017, 2018 and 2019, advertising expenses were RMB85,309, RMB138,028 and RMB499,164, respectively. |
Research and development expenses | (p) Research and development expenses Research and development expenses mainly consist of personnel related expenses and technology service costs incurred for the learning courses and its development, as well as development and enhancement of the Group’s websites and applications platforms. For internal use software, the Group expenses all costs incurred for the preliminary project stage and post implementation-operation stage of development, and costs associated with repair or maintenance of the existing platforms. Costs incurred in the application development stage are capitalized and amortized over the estimated useful life. Since the amount of the Group’s research and development expenses qualifying for capitalization has been immaterial, as a result, all development costs incurred for development of internal used software have been expensed as incurred. For external use software, costs incurred for development of external use software have not been capitalized since the inception of the Group, because the period after the date technical feasibility is reached and the time when the software is marketed is short historically, and the amount of costs qualifying for capitalization has been immaterial. No costs incurred for development of learning content, products and advertising services have been capitalized because the period after the date technical feasibility is reached and the time when relevant products and services are marketed is historically short. |
Share-based compensation | (q) Share-based compensation The Group grants options to its employees, directors and consultants with performance conditions and service conditions. In accordance with ASC 718, Compensation-Stock Compensation , the Group determines grants of options to directors, employees and consultants, which are classified as equity awards and are measured at the grant date based on the fair value of the awards. The Group adopts the binomial option pricing model to determine the fair value of stock options. The determination of the fair value of stock options is affected by the fair value of ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee share option exercise behavior, risk free interest rates and expected dividends. The fair value of the ordinary shares is assessed using the income approach/discounted cash flow method, with a discount for lack of marketability, given that the shares underlying the awards were not publicly traded at the time of grant. Share-based compensation expenses for share options granted with service conditions are recorded net of estimated forfeitures using graded-vesting method during the service period requirement, such that expenses are recorded only for those share-based awards that are expected to ultimately vest. For share options granted with service conditions and the occurrence of an IPO as performance condition, cumulative share-based compensation expenses for the options that have satisfied the service conditions are In the fourth quarter of 2019, due to the completion of the IPO, the total expenses of RMB18.4 million were recorded accordingly. The Group also recognizes compensation expenses on restricted share units, or RSUs, granted by the Parent to the employees of the Group. RSUs are measured based on the fair market value of the underlying stock on the dates of grant. Share-based compensation expenses related are then recorded for the number of RSUs expected to vest on a graded-vesting basis, net of estimated forfeitures, over the requisite service period. |
Employee benefits | (r) Employee benefits PRC Contribution Plan Full-time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries and the VIE s |
Taxation | (s) Taxation Income taxes Current income taxes are provided on the basis of income/(loss) for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of operations and comprehensive loss in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. Uncertain tax positions In order to assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step two-step and for the years ended 2017, |
Operating leases | (t) Operating leases The Group has operating leases primarily for office space. The determination of whether an arrangement is a lease or contains a lease is made at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Group obtains substantially all of the economic benefits from and has the ability to direct the use of the asset. The Group elects not to apply the recognition requirements of ASC 842 to short-term leases. Variable lease payments are the payments made by a lessee to a lessor for the right to use an underlying asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. Variable lease payments is recorded in the period in which the obligation for the payment is incurred. Other operating leases are included in operating lease right-of-use assets, accrued liabilities and other payables, and long-term lease liabilities on the consolidated balance sheets. The Group uses the implicit rate when readily determinable, or its incremental borrowing rate based on the information available, at the commencement date in determining the present value of lease payments. Certain leases include renewal options and/or termination options. Renewal options are included in the lease term if the Group is reasonably certain to exercise those options while options to terminate the lease are only included in the lease term if the Group is reasonably certain not to exercise those options. Lease expense is recorded on a straight-line basis over the lease term. |
Related parties | (u) Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation. |
Non-controlling interests | (v) Non-controlling For the Company’s majority-owned subsidiaries and VIE s non-controlling The non-controlling non-controlling |
Net loss per share | (w) Net loss per share Net loss per share is computed in accordance with ASC 260, Earnings per Share . Basic net loss per share is computed by dividing net loss attributable to ordinary shareholders, considering the accretions of convertible redeemable preferred shares, by the weighted average number of ordinary shares outstanding during the year. Diluted net loss per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options to purchase ordinary shares and preferred shares, unless they were anti dilutive. The computation of diluted net loss per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net loss per share. |
Statutory reserves | (x) Statutory reserves The Company’s subsidiaries and VIE established in the PRC are required to make appropriations to certain non-distributable s after-tax non-distributable after-tax Pursuant to the laws applicable to China’s Foreign Investment Enterprises, the Company’s subsidiaries registered as majority-owned or wholly-owned foreign investment enterprise (“FIE”) in China make appropriations from their annual after-tax : after-tax |
Comprehensive loss | (y) Comprehensive loss Comprehensive loss is defined to include all changes in equity deficit of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive loss includes net loss and foreign currency translation adjustment of the Group. |
Segment reporting | (z) Segment reporting In accordance with ASC 280, Segment Reporti n , operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Group’s CODM is the Chief Executive Officer. The Group’s organizational structure is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but are not limited to, customer base, homogeneity of products and technology. The Group’s operating segments are based on this organizational structure and infor m t The Group reports two reportable segments - expen s |
Recently adopted accounting pronouncements | (aa) Recently adopted accounting pronouncements In February 2016, the FASB issued a new standard on leases, ASU 2016-2, which requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize a liability to make lease payments (the Lease Liability) and a right-of-use representing its right to use the underlying asset for the lease term in the statements of financial position. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In July 2018, the FASB issued an amendment on leases, ASU 2018-11, which provides another transition method in addition to the existing transition methods by allowing entities to initially apply the new leases standard at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new lease standard in the first quarter of 2019 using the transition method provided by ASU 2018-11 and did not retrospectively adjust the prior comparative periods. |
Recently issued accounting pronouncements not yet adopted | (bb) Recently issued accounting pronouncements not yet adopted In June 2016, the FASB issued of ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for the Group in the fiscal year of 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which an entity recognizes an allowance based on the estimate of expected credit loss. In November 2018, the FASB issued an amendment of Topic 326, ASU No. 2018-19, which clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20 and should be accounted for in accordance with Topic 842, Leases. The Company will adopt the amendments beginning from does not expect any material impact of adopting ASU No. 2016-13 on its consolidat e statements . |
Operations and Reorganization (
Operations and Reorganization (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of subsidiaries and variable interest entities | As of December 31, 2019, the Company’s major subsidiaries and consolidated VIE, are as follows: Place and year of incorporation Percentage of Principal activities Subsidiaries Youdao (Hong Kong) Limited Hong Kong, China, 2016 100 % Holding company NetEase Youdao Information Technology (Beijing) Co., Ltd. (“Youdao Information”) Beijing, China, 2006 100 % Providing sales of smart devices and solutions, technical support to the VIEs NetEase Langsheng (Beijing) Technology Development Co., Ltd. (“Youdao Langsheng”) Beijing, China, 2017 85 % Providing consulting services NetEase Youdao Information Technology (Hangzhou) Co., Ltd. (“Youdao Hangzhou”) Hangzhou, China, 2019 100 % Providing technical support to the VIEs VIE Beijing NetEase Youdao Computer System Co., Ltd. (“Youdao Computer”) Beijing, China, 2007 100 % Providing online learning services as well as online marketing services |
Schedule of variable interest entities | The following table sets forth the assets, liabilities, results of operations and cash flow of the VIE s As of December 31, 2018 2019 RMB RMB Assets Cash and cash equivalents 10,823 4,683 Short-term investments 50,215 116,125 Accounts receivable, net 69,661 145,570 Inventories, net 1,009 27,340 Amounts due from NetEase Group and Youdao Group 69,141 249,589 Prepayment and other current assets 8,161 56,228 Total current assets 209,010 599,535 Property and equipment, net 119 — Other assets, net 4,359 7,302 Total non-current 4,478 7,302 Total a 213,488 606,837 Liabilities Accounts payables 23,858 50,189 Payroll payable 7,142 10,140 Amounts due to NetEase Group and Youdao Group 4,706 41,667 Contract liabilities 140,556 434,114 Taxes payable 12,012 15,290 Accrued liabilities and other payables 15,247 22,519 Total liabilities 203,521 573,919 For the year ended December 31, 2017 2018 2019 RMB RMB RMB Net revenues 400,545 606,334 997,736 Net income 1,359 13,891 3,173 For the year ended December 31, 2017 2018 2019 RMB RMB RMB Net cash provided by operating activities 8,747 48,263 50,978 Net cash used in investing activitie s — (50,000 ) (67,118 ) Net cash provided by financing activitie s — — 10,000 Net increase/(decrease) in cash and cash equivalents 8,747 (1,737 ) (6,140 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment are stated at cost less accumulated and impairment | Property and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range as follows: Servers and computers 3 years Furniture, fixtures, office and other equipment 3-10 Leasehold improvements The shorter of the useful life or term of the lease |
Schedule of disaggregation of revenue | For the years ended December 31, 2017, 2018 and 2019, substantially all of the Group’s net revenues were generated in the PRC. The following table provides information about disaggregated revenue by types: For the year ended December 31, 2017 2018 2019 RMB RMB RMB Learning services 143,243 398,186 699,826 Online courses services 115,003 329,424 607,568 Fee-based 28,240 68,762 92,258 Online marketing services 305,831 302,882 453,013 Learning products 6,672 30,530 152,044 Total net revenues 455,746 731,598 1,304,883 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables, Net, Current [Abstract] | |
Schedule of accounts receivable | As of December 31, 2018 2019 RMB RMB Accounts receivable, net: Accounts receivable 81,361 202,953 Allowance for doubtful accounts: Balance at the beginning of year (724 ) (799 ) Additional provision charged to expenses (75 ) (1,897 ) Write-off — 418 Balance at the end of year (799 ) (2,278 ) 80,562 200,675 |
Prepayment and Other Current _2
Prepayment and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Summary of prepayment and other current assets | The following is a summary of prepayment and other current assets: As of December 31, 2018 2019 RMB RMB Deferred expenses for learning services 20,267 48,185 Deferred charges 2,879 12,472 Prepayment for promotion fees 5,892 20,777 Prepayment for value-added taxes 4,894 18,034 Interest receivable 4,200 6,252 Prepaid insurance fee for directors and officers — 5,568 Others 5,939 9,603 Total 44,071 120,891 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net as of December 31, 2018 and 2019 are as follows: As of December 31, 2018 2019 RMB RMB Servers and computers 59,709 53,428 Furniture, fixtures and office equipment 1,971 3,259 Leasehold improvements 1,157 1,645 Total 62,837 58,332 Less: accumulated depreciation (44,462 ) (33,781 ) Net book value 18,375 24,551 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Summary of supplemental information related to operating leases | As of December 31, 2019 RMB Operating lease right-of-use 23,873 Operating lease liabilities - current 4,166 Operating lease liabilities - non-current 21,206 Total operating lease liabilities 25,372 Weighted average remaining lease term 5.0 years Weighted average discount rate 4.35 % |
Lease, Cost | For the year ended RMB Operating lease expenses 2,157 Short-term lease expenses 2,510 Variable lease expenses 20,813 Total lease expenses 25,480 Right-of-use assets obtained in exchange for operating lease liabilities 26,030 |
Future minimum lease payments | A summary of maturity of operating lease liabilities under the Group’s non-cancelable As of December 31, 2019 RMB 2020 4,288 2021 6,935 2022 5,024 2023 4,782 2024 4,426 Thereafter 2,970 Total operating lease liabilities 28,425 Less: interest (3,053 ) Present value of operating lease liabilities 25,372 |
Future minimum payments under non-cancelable operating lease agreements | As of December 31, 2018, prior to the adoption of Topic 842, future minimum payments under non-cancelable operating lease agreements, which are mostly within one year, is as follows: As of December 31, 2018 RMB 2019 16,634 2020 60 2021 and thereafter — Total minimum payments 16,694 |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (Benefit) | The following table presents the composition of income tax expenses for the years ended December 31, 2017, 2018 and 2019: For the year ended December 31, 2017 2018 2019 RMB RMB RMB Current income tax expenses 5,162 11,294 2,432 Income tax expenses 5,162 11,294 2,432 |
Schedule of effective income tax rate reconciliation | The following table presents a reconciliation of the differences between the statutory income tax rate and the Group’s effective income tax rate for the years ended December , 2017, and : For the year ended December 31, 2017 2018 2019 Statutory income tax rate 25 % 25 % 25 % Permanent differences 1 % 5 % 0 % Tax rate difference from tax holiday and statutory rate in other jurisdictions (7 % (5 % (9 % Change in valuation allowance (22 % (31 % (16 % Effective income tax rate (3 % (6 % 0 % |
Schedule of deferred tax assets and liabilities | The following table presents the tax impact of significant temporary differences that give rise to the deferred tax assets as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB Deferred tax assets Net operating tax loss carry forwards 144,050 160,743 Advertising and promotion expenses in excess of deduction limit 2,018 60,883 Payroll and expense accrued 549 29,739 Others — 704 Less: valuation allowance (146,617 ) (252,069 ) Total deferred tax assets, net — — |
Summary of valuation allowance | The following table sets forth the movement of the valuation allowances for deferred tax assets for the periods presented: 2018 2019 RMB RMB Balance as of January 1 116,606 146,617 Change of valuation allowance 30,011 105,452 Balance as of December 31 146,617 252,069 |
Summary of operation loss carry forwards | As of December 31, 2019, certain entities of the Group had net operating tax loss carry forwards, if not utilized, would expire as follows: RMB Loss expiring in 2020 — Loss expiring in 2021 — Loss expiring in 2022 — Loss expiring in 2023 139,465 Loss expiring in 2024 137,645 Loss expiring in 2025 108,483 Loss expiring in 2026 111,357 Loss expiring in 2027 112,069 Loss expiring in 2028 201,070 Loss expiring in 2029 261,516 1,071,605 |
Taxes Payable (Tables)
Taxes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Taxes Payable, Current [Abstract] | |
Summary of taxes payable | The following is a summary of taxes payable as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB Enterprise income taxes payable 10,357 7,952 Withholding individual income taxes for employees 1,622 5,679 VAT payable 3,482 10,925 Others 1,928 1,421 Total 17,389 25,977 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Summary of accrued liabilities and other payable | The following is a summary of accrued liabilities and other payables as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB Accrued liabilities for learning services and online marketing services 39,042 85,598 Accrued marketing expenses 19,981 43,765 Accrued professional fee 7,863 28,499 Accrued administrative expenses 5,126 8,169 Accrued technical expenses 4,315 8,960 Deposits payable to service providers 2,995 2,542 Operating lease liabilities-current portion — 4,166 Others 6,392 10,944 Total 85,714 192,643 |
Convertible Redeemable Prefer_2
Convertible Redeemable Preferred Shares (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of company's preferred shares activities | The Company’s preferred shares activities for the year ended December 31, 2018 are summarized as below: Balance as of Issuance of Accretions of Balance as of Series A p s Number of shares (in thousands) — 6,815 — 6,815 Amount — 430,341 30,311 460,652 All of the preferred shares were converted to Class A ordinary shares upon the completion of the Group’s IPO in October 2019. Balance as of Accretions of Conversion Balance as of Series A p s Number of shares (in thousands) 6,815 — (6,815 ) — Amoun t 460,652 35,893 (496,545 ) — |
Others, Net (Tables)
Others, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Nonoperating Income (Expense) [Abstract] | |
Schedule of Other Nonoperating Income Expense | For the year ended December 31, 2017 2018 2019 RMB RMB RMB Financing expense (Note 1 2 — (4,722 ) — Fair value changes of short-term investments 32 382 863 Government grants — 10,330 18,087 Foreign exchange gains 78 38,620 3,279 Others 488 33 (2,165 ) Total 598 44,643 20,064 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of allocation of share-based compensation expenses | The table below sets forth the allocation of share-based compensation expenses: For the year ended December 31, 2017 2018 2019 RMB RMB RMB Cost of revenues 2,220 3,055 4,407 Sales and marketing expenses 289 350 2,107 Research and development expenses 2,773 2,735 9,432 General and administrative expenses 8 36 9,128 Total 5,290 6,176 25,074 |
Schedule of share based payment award stock options valuation assumptions | The fair value of each option granted for the years ended December 31, 2017 , 2018 and 2019 For the year ended December 31, 2017 2018 2019 Expected volatility 48.00%-51.00 % 48.10 % 46.50%-46.90 % Expected dividends yield 0 % 0 % 0 % Risk-free interest rate 1.99%-2.01 % 2.50 % 2.10%-2.60 % Expected term (in years) 6 6 6 Fair value of underlying ordinary share (US$) 0.59-0.84 1.39 6.35-7.29 |
Schedule of share based compensation stock option activity | The following table presents a summary of the Company’s options activities for the years ended December 31, 2017, 2018 and 2019: Number of Weighted Weighted average Aggregate (in thousands) US$ Years US$ Outstanding as of January 1, 2017 5,357 1.68 4.59 — Granted 1,979 2.53 Forfeited (931 ) 1.94 Outstanding as of December 31, 2017 6,405 1.91 4.01 — Granted 1,592 3.00 Forfeited (1,006 ) 2.16 Outstanding as of December 31, 2018 6,991 2.13 3.40 29,468 Granted 2,072 3.50 Forfeited (734 ) 2.60 Outstanding as of December 31, 2019 8,329 2.43 3.06 97,000 Vested and exercisable as of December 31, 2018 — 2.13 Vested and exercisable as of December 31, 2019 3,584 1.87 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earning per shares basic and diluted | The following table sets forth the computation of basic net For the year ended December 31, 2017 2018 2019 RMB RMB RMB Numerator: Net loss (163,932 ) (209,295 ) (601,455 ) Net loss/(income) attributable to non-controlling interests shareholders 30,355 385 (48 ) Accretions of preferred shares to redemption value (Note 12 — (30,311 ) (35,893 ) Net loss attributable to ordinary shareholders of the Company (133,577 ) (239,221 ) (637,396 ) Denominator: Weighted average number of ordinary shares/ADSs outstanding, basic 65,387,160 85,346,790 95,445,982 Weighted average number of ordinary shares/ADSs outstanding, diluted 65,387,160 85,346,790 95,445,982 Net loss per share /ADS , basic (2.04 ) (2.80 ) (6.68 ) Net loss per share /ADS , diluted (2.04 ) (2.80 ) (6.68 ) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets measured on recurring basis | The following table sets forth the major financial instruments, measured at fair value, by level within the fair value hierarchy as of December 31, 2018 and 2019: Fair value measurements Total Quoted prices in Significant other RMB RMB RMB As of December 31, 2018 Time deposits 343,410 343,410 — Short-term investments 50,215 — 50,215 Total 393,625 343,410 50,215 As of December 31, 2019 Time deposits 1,325,737 1,325,737 — Short-term investments 121,126 — 121,126 Total 1,446,863 1,325,737 121,126 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Group's future minimum commitments under non-cancelable agreements | As of December 31, 2019, the Group’ s non-cancelable Less than o y One to t y More than t y As of December 31, RMB RMB RMB RMB Purchase commitments 45,076 3,021 245 48,342 Total 45,076 3,021 245 48,342 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party | Name of entity or individual Relationships with the Group NetEase Group Control or under common control |
Schedule of related party transactions | For the year ended December 31, 2017 2018 2019 RMB RMB RMB Services and products provided to NetEase Group Learning services provided to NetEase Group 4,854 10,485 2,913 Learning products provided to NetEase Group — — 11,418 Online marketing services provided to NetEase Group 6,297 16,763 23,249 Services and products purchased from NetEase Group Services purchased from NetEase Group 31,611 67,094 71,631 Fixed assets and inventories purchased from NetEase Group — 6,647 18,222 Loan related transactions Addition of short-term loans from NetEase Group 57,000 — — Interest expenses on short-term loans from NetEase Group 29,523 31,851 30,232 Equity related transactions Deemed contribution related to acquisition of businesses under common control (Note 1) 49,265 44,024 69,603 Deemed contribution from NetEase Group related to issuance of preferred shares (Note 12 — 4,722 — Share-based compensation under NetEase Plan 5,290 6,176 4,356 |
Schedule of related party balances | As of December 31, 2018 2019 RMB RMB Amounts due from NetEase Group 11,240 14,930 Amounts due to NetEase Group 37,213 48,126 Short-term loans from NetEase Group 878,000 878,000 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information by segment | The table below provides a summary of the Group’s segment results for the years ended December 31, 2017, 2018 and 2019. For the year ended December 31, 2017 2018 2019 RMB RMB RMB Net revenues Learning services and products 149,915 428,716 851,870 Online marketing services 305,831 302,882 453,013 Total net revenues 455,746 731,598 1,304,883 Cost of revenues Learning services and products 139,600 335,127 620,669 Online marketing services 154,207 180,006 313,592 Total cost of revenues 293,807 515,133 934,261 Gross margin Learning services and products 7 % 22 % 27 % Online marketing services 50 % 41 % 31 % Total gross margin 36 % 30 % 28 % |
Operations and Reorganization -
Operations and Reorganization - Additional Information (Detail) ¥ in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Oct. 31, 2019USD ($) | Oct. 31, 2019CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Operations and Organization [Line Items] | ||||||||
The allocation related to share-based compensation expenses | ¥ 18,400 | |||||||
Net loss | $ (86,393) | ¥ (601,455) | ¥ (209,295) | ¥ (163,932) | ||||
Net cash used in operating activities | (53,474) | (372,270) | (100,330) | (87,138) | ||||
Accumulated deficit | (275,802) | (1,281,191) | ¥ (1,920,081) | |||||
Net current asset | 271,200 | |||||||
Proceeds received from ordinary shareholders | 41 | |||||||
Proceeds from concurrent private placement | $ 126,643 | 881,662 | ||||||
IPO [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Proceeds received from ordinary shareholders | $ 88,200 | ¥ 621,900 | ||||||
Private placement [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Proceeds from concurrent private placement | $ 125,000 | ¥ 881,700 | ||||||
VIE [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Registered capital | 5,000 | 15,000 | ||||||
Non-distributable statutory reserves | 292 | 1,786 | ||||||
Net cash used in operating activities | 50,978 | 48,263 | 8,747 | |||||
VIE [Member] | Cooperation Agreement [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Service fee | 550,700 | 395,200 | 233,700 | |||||
NetEase Group [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
The allocation related to share-based compensation expenses | ¥ 4,356 | ¥ 6,176 | ¥ 5,290 | |||||
William Lei Ding [Member] | Loan Agreements [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Interest-free loan in the principal amount | 3,600 | |||||||
William Lei Ding [Member] | Youdao Information [Member] | Loan Agreements [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Variable interest entity principal agreement term period | 10 years | 10 years | ||||||
Variable interest entity principal agreement term extend period | 10 years | 10 years | ||||||
William Lei Ding [Member] | Youdao Information [Member] | Operating Agreements [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Variable interest entity principal agreement term period | 20 years | 20 years | ||||||
Feng Zhou [Member] | Loan Agreements [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Interest-free loan in the principal amount | ¥ 1,400 | |||||||
Feng Zhou [Member] | Youdao Information [Member] | Loan Agreements [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Variable interest entity principal agreement term period | 10 years | 10 years | ||||||
Variable interest entity principal agreement term extend period | 10 years | 10 years | ||||||
Feng Zhou [Member] | Youdao Information [Member] | Operating Agreements [Member] | ||||||||
Operations and Organization [Line Items] | ||||||||
Variable interest entity principal agreement term period | 20 years | 20 years |
Operations and Reorganization_2
Operations and Reorganization - Schedule Of Subsidiaries And Variable Interest Entities (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Youdao (Hong Kong) Limited [Member] | |
Subsidiaries And Variable Interest Entity [Line Items] | |
Place and year of incorporation | Hong Kong, China, 2016 |
Percentage of direct or indirect economic ownership | 100.00% |
Principal activities | Holding company |
NetEase Youdao Information Technology Beijing Co.,Ltd. [Member] | |
Subsidiaries And Variable Interest Entity [Line Items] | |
Place and year of incorporation | Beijing, China, 2006 |
Percentage of direct or indirect economic ownership | 100.00% |
Principal activities | Providing sales of smart devices and solutions, technical support to the VIEs |
NetEase Langsheng (Beijing) Technology Development Co., Ltd. [Member] | |
Subsidiaries And Variable Interest Entity [Line Items] | |
Place and year of incorporation | Beijing, China, 2017 |
Percentage of direct or indirect economic ownership | 85.00% |
Principal activities | Providing consulting services |
NetEase Youdao Information Technology (Hangzhou) Co., Ltd. [Member] | |
Subsidiaries And Variable Interest Entity [Line Items] | |
Place and year of incorporation | Hangzhou, China, 2019 |
Percentage of direct or indirect economic ownership | 100.00% |
Principal activities | Providing technical support to the VIEs |
Beijing NetEase Youdao Computer System Co., Ltd. [Member] | |
Subsidiaries And Variable Interest Entity [Line Items] | |
Place and year of incorporation | Beijing, China, 2007 |
Percentage of direct or indirect economic ownership | 100.00% |
Principal activities | Providing online learning services as well as online marketing services |
Operations and Reorganization_3
Operations and Reorganization - Schedule Of Variable Interest Entities (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Assets | |||||
Cash and cash equivalents | $ 24,897 | ¥ 41,738 | ¥ 173,328 | ||
Short-term investments | 17,399 | 50,215 | 121,126 | ||
Accounts receivable, net | 28,825 | 80,562 | 200,675 | ||
Inventories, net | 10,518 | 23,832 | 73,225 | ||
Amounts due from NetEase Group and Youdao Group | 2,145 | 11,240 | 14,930 | ||
Prepayment and other current assets | 17,365 | 44,071 | 120,891 | ||
Total current assets | 291,579 | 595,068 | 2,029,912 | ||
Property and equipment, net | 3,527 | 18,375 | 24,551 | ||
Other assets, net | 1,167 | 6,174 | 8,128 | ||
Total non-current assets | 8,123 | 24,549 | 56,552 | ||
Total assets | 299,702 | 619,617 | 2,086,464 | ||
Liabilities | |||||
Accounts payables | 9,003 | 34,558 | 62,675 | ||
Payroll payable | 13,572 | 69,988 | 94,488 | ||
Amounts due to NetEase Group and Youdao Group | 6,913 | 37,213 | 48,126 | ||
Contract liabilities | 65,616 | 177,536 | 456,805 | ||
Taxes payable | 3,731 | 17,389 | 25,977 | ||
Accrued liabilities and other payables | 27,672 | 85,714 | 192,643 | ||
Total liabilities | 256,462 | 1,300,398 | 1,785,437 | ||
Statements of operations and comprehensive loss [Abstract] | |||||
Net revenues | 187,435 | ¥ 1,304,883 | 731,598 | ¥ 455,746 | |
Net income | (86,400) | (601,503) | (208,910) | (133,577) | |
Statement of cash flows [Abstract] | |||||
Net cash provided by operating activities | (53,474) | (372,270) | (100,330) | (87,138) | |
Net cash used in investing activities | (155,706) | (1,084,005) | (374,000) | (10,836) | |
Net cash provided by financing activities | 228,054 | 1,587,669 | 475,117 | 107,765 | |
Net increase/(decrease) in cash and cash equivalents | $ 18,902 | 131,590 | 1,907 | 9,791 | |
VIEs [Member] | |||||
Assets | |||||
Cash and cash equivalents | 10,823 | 4,683 | |||
Short-term investments | 50,215 | 116,125 | |||
Accounts receivable, net | 69,661 | 145,570 | |||
Inventories, net | 1,009 | 27,340 | |||
Amounts due from NetEase Group and Youdao Group | 69,141 | 249,589 | |||
Prepayment and other current assets | 8,161 | 56,228 | |||
Total current assets | 209,010 | 599,535 | |||
Property and equipment, net | 119 | 0 | |||
Other assets, net | 4,359 | 7,302 | |||
Total non-current assets | 4,478 | 7,302 | |||
Total assets | 213,488 | 606,837 | |||
Liabilities | |||||
Accounts payables | 23,858 | 50,189 | |||
Payroll payable | 7,142 | 10,140 | |||
Amounts due to NetEase Group and Youdao Group | 4,706 | 41,667 | |||
Contract liabilities | 140,556 | 434,114 | |||
Taxes payable | 12,012 | 15,290 | |||
Accrued liabilities and other payables | 15,247 | 22,519 | |||
Total liabilities | 203,521 | ¥ 573,919 | |||
Statements of operations and comprehensive loss [Abstract] | |||||
Net revenues | 997,736 | 606,334 | 400,545 | ||
Net income | 3,173 | 13,891 | 1,359 | ||
Statement of cash flows [Abstract] | |||||
Net cash provided by operating activities | 50,978 | 48,263 | 8,747 | ||
Net cash used in investing activities | (67,118) | (50,000) | |||
Net cash provided by financing activities | 10,000 | ||||
Net increase/(decrease) in cash and cash equivalents | ¥ (6,140) | ¥ (1,737) | ¥ 8,747 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019CNY (¥)segment | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Statutory Reserves [Line Items] | ||||
Exchange rate | 6.9618 | 6.9618 | ||
Impairment charge | ¥ 0 | ¥ 0 | ¥ 0 | |
Revenue recognized that was included in the deferred revenue balance at the beginning of the year | 166,153,000 | 94,297,000 | ||
The aggregate amount of transaction price allocated to unsatisfied performance obligations | ¥ 451,724,000 | 451,724,000 | ||
Advertising expenses | 499,164,000 | 138,028,000 | 85,309,000 | |
Share-based compensation due to the completion of the IPO | ¥ 18,400,000 | |||
Employee benefit expenses | ¥ 92,273,000 | ¥ 61,618,000 | ¥ 41,122,000 | |
Number of reportable segments | segment | 2 | |||
China Foreign Investment Enterprises Law [Member] | ||||
Statutory Reserves [Line Items] | ||||
General reserve reached capital rate | 50.00% | 50.00% | ||
China Foreign Investment Enterprises Law [Member] | Minimum [Member] | ||||
Statutory Reserves [Line Items] | ||||
General reserve appropriation | 10.00% | |||
China Company Law [Member] | ||||
Statutory Reserves [Line Items] | ||||
Statutory surplus fund appropriation | 10.00% | |||
Statutory surplus fund reached capital rate | 50.00% | 50.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of useful lives of property plant and equipment (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Servers and computers [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Furniture, fixtures, office and other equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Furniture, fixtures, office and other equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | The shorter of the useful life or term of the lease |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of disaggregated Revenue (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 187,435 | ¥ 1,304,883 | ¥ 731,598 | ¥ 455,746 |
Learning services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 100,524 | 699,826 | 398,186 | 143,243 |
Online courses services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 607,568 | 329,424 | 115,003 | |
Fee-based premium services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 92,258 | 68,762 | 28,240 | |
Online marketing services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 65,071 | 453,013 | 302,882 | 305,831 |
Learning products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 21,840 | ¥ 152,044 | ¥ 30,530 | ¥ 6,672 |
Concentration and Risks - Addit
Concentration and Risks - Additional Information (Detail) - Revenue Benchmark [Member] | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Customer concentration risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk number of customers | 0 | 0 | 0 |
Concentration risk percentage | 10.00% | 10.00% | 10.00% |
Instructor concentration risk [Member] | Learning services and products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk number of instructors | 1 | ||
Concentration risk percentage | 10.00% | 10.00% | 10.00% |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of accounts receivable (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | |
Accounts receivable, net: | ||||
Accounts receivable | ¥ 81,361 | ¥ 202,953 | ||
Allowance for doubtful accounts: | ||||
Balance at the beginning of year | ¥ (799) | (724) | ||
Additional provision charged to expenses | $ (272) | (1,897) | (75) | |
Write-off | 418 | |||
Balance at the end of year | ¥ (2,278) | (799) | ||
Total | $ 28,825 | ¥ 80,562 | ¥ 200,675 |
Prepayment and Other Current _3
Prepayment and Other Current Assets - Schedule of prepaid expenses and other current assets (Detail) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Prepaid Expense and Other Assets, Current [Abstract] | |||
Deferred expenses for learning services | ¥ 48,185 | ¥ 20,267 | |
Deferred charges | 12,472 | 2,879 | |
Prepayment for promotion fees | 20,777 | 5,892 | |
Prepayment for value-added taxes | 18,034 | 4,894 | |
Interest receivable | 6,252 | 4,200 | |
Prepaid insurance fee for directors and officers | 5,568 | ||
Others | 9,603 | 5,939 | |
Total | $ 17,365 | ¥ 120,891 | ¥ 44,071 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of property and equipment, net (Detail) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Property, Plant and Equipment [Line Items] | |||
Property,plant and equipment, gross | ¥ 58,332 | ¥ 62,837 | |
Less: accumulated depreciation | (33,781) | (44,462) | |
Net book value | $ 3,527 | 24,551 | 18,375 |
Servers and computers [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property,plant and equipment, gross | 53,428 | 59,709 | |
Furniture, fixtures and office equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property,plant and equipment, gross | 3,259 | 1,971 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property,plant and equipment, gross | ¥ 1,645 | ¥ 1,157 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expenses | ¥ 10,524 | ¥ 6,349 | ¥ 3,274 |
Leases - Summary of supplementa
Leases - Summary of supplemental information related to operating leases (Detail) - Dec. 31, 2019 ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) |
Leases [Abstract] | ||
Operating lease right-of-use assets, net | $ 3,429 | ¥ 23,873 |
Operating lease liabilities - current | 4,166 | |
Operating lease liabilities - non-current | $ 3,046 | 21,206 |
Total operating lease liabilities | ¥ 25,372 | |
Weighted average remaining lease term | 5 years | 5 years |
Weighted average discount rate | 4.35% | 4.35% |
Leases - Summary of Lease Expen
Leases - Summary of Lease Expenses (Detail) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lease, Cost [Abstract] | |||
Operating lease expenses | ¥ 2,157 | ||
Short-term lease expenses | 2,510 | ||
Variable lease expenses | 20,813 | ||
Total lease expenses | 25,480 | ¥ 14,825 | ¥ 10,342 |
Right-of-use assets obtained in exchange for operating lease liabilities | ¥ 26,030 |
Leases - Summary of Lease Exp_2
Leases - Summary of Lease Expenses (Parenthetical) (Detail) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lease, Cost [Abstract] | |||
Lease expenses | ¥ 25,480 | ¥ 14,825 | ¥ 10,342 |
Lease - Schedule of maturity of
Lease - Schedule of maturity of operating lease liabilities under non-cancelable operating leases (Detail) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2019CNY (¥) | |
Leases [Abstract] | |
2020 | ¥ 4,288 |
2021 | 6,935 |
2022 | 5,024 |
2023 | 4,782 |
2024 | 4,426 |
Thereafter | 2,970 |
Total operating lease liabilities | 28,425 |
Less: interest | (3,053) |
Present value of operating lease liabilities | ¥ 25,372 |
Leases - Summary of future mini
Leases - Summary of future minimum payments under non-cancelable operating lease agreements (Detail) ¥ in Thousands | Dec. 31, 2018CNY (¥) |
Lease, Cost [Abstract] | |
2019 | ¥ 16,634 |
2020 | 60 |
2021 and thereafter | |
Total minimum payments | ¥ 16,694 |
Taxation - Additional Informati
Taxation - Additional Information (Detail) - HKD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | 16 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 30, 2018 | Jul. 01, 2019 | |
Income Tax Examination [Line Items] | ||||||||
Cultural Development Fee rate on advertising services revenue | 3.00% | |||||||
Percent of tax rate reduction on cultural development fee | 50.00% | |||||||
Income tax rate | 25.00% | 25.00% | 25.00% | |||||
High And New Technology Enterprises [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
Expiration period for tax losses | 5 years | |||||||
High And New Technology Enterprises [Member] | New tax legislation [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
Expiration period for tax losses | 10 years | |||||||
Product [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
VAT rate | 13.00% | 16.00% | 17.00% | |||||
Service [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
VAT rate | 6.00% | |||||||
Hong Kong [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
Income tax rate | 16.50% | |||||||
Tax rate below threshold | 8.25% | |||||||
Threshold limit | $ 2 | |||||||
Tax rate above threshold | 16.50% | |||||||
China [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
Income tax rate | 25.00% | |||||||
Withholding tax rate | 10.00% | |||||||
Beneficial withholding tax rate | 5.00% | |||||||
China [Member] | High And New Technology Enterprises [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
Preferential tax rate | 15.00% | |||||||
China [Member] | High And New Technology Enterprises [Member] | Youdao Information [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
Preferential tax rate | 15.00% |
Taxation - Schedule of composit
Taxation - Schedule of composition of income tax expense benefit (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income Tax Disclosure [Abstract] | ||||
Current income tax expenses | ¥ 2,432 | ¥ 11,294 | ¥ 5,162 | |
Income tax expenses | $ 349 | ¥ 2,432 | ¥ 11,294 | ¥ 5,162 |
Taxation - Schedule of effectiv
Taxation - Schedule of effective income tax rate reconciliation (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory income tax rate | 25.00% | 25.00% | 25.00% |
Permanent differences | 0.00% | 5.00% | 1.00% |
Tax rate difference from tax holiday and statutory rate in other jurisdictions | (9.00%) | (5.00%) | (7.00%) |
Change in valuation allowance | (16.00%) | (31.00%) | (22.00%) |
Effective income tax rate | 0.00% | (6.00%) | (3.00%) |
Taxation - Schedule of deferred
Taxation - Schedule of deferred tax assets and liabilities (Detail) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets | |||
Net operating tax loss carry forwards | ¥ 160,743 | ¥ 144,050 | |
Advertising and promotion expenses in excess of deduction limit | 60,883 | 2,018 | |
Payroll and expense accrued | 29,739 | 549 | |
Others | 704 | ||
Less: valuation allowance | (252,069) | (146,617) | ¥ (116,606) |
Total deferred tax assets, net | ¥ 0 | ¥ 0 |
Taxation - Schedule of valuatio
Taxation - Schedule of valuation allowance (Detail) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Balance as of January 1 | ¥ 146,617 | ¥ 116,606 |
Change of valuation allowance | 105,452 | 30,011 |
Balance as of December 31 | ¥ 252,069 | ¥ 146,617 |
Taxation - Schedule of operatin
Taxation - Schedule of operating loss carryforwards (Detail) ¥ in Thousands | Dec. 31, 2019CNY (¥) |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | ¥ 1,071,605 |
Loss expiring in 2020 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 0 |
Loss expiring in 2021 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 0 |
Loss expiring in 2022 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 0 |
Loss expiring in 2023 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 139,465 |
Loss expiring in 2024 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 137,645 |
Loss expiring in 2025 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 108,483 |
Loss expiring in 2026 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 111,357 |
Loss expiring in 2027 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 112,069 |
Loss expiring in 2028 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 201,070 |
Loss expiring in 2029 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | ¥ 261,516 |
Taxes Payable - Summary of taxe
Taxes Payable - Summary of taxes payable (Detail) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Taxes Payable, Current [Abstract] | |||
Enterprise income taxes payable | ¥ 7,952 | ¥ 10,357 | |
Withholding individual income taxes for employees | 5,679 | 1,622 | |
VAT payable | 10,925 | 3,482 | |
Others | 1,421 | 1,928 | |
Total | $ 3,731 | ¥ 25,977 | ¥ 17,389 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables - Schedule of accrued liabilities and other payable (Detail) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Payables and Accruals [Abstract] | |||
Accrued liabilities for learning services and online marketing services | ¥ 85,598 | ¥ 39,042 | |
Accrued marketing expenses | 43,765 | 19,981 | |
Accrued professional fee | 28,499 | 7,863 | |
Accrued administrative expenses | 8,169 | 5,126 | |
Accrued technical expenses | 8,960 | 4,315 | |
Deposits payable to service providers | 2,542 | 2,995 | |
Operating lease liabilities-current portion | 4,166 | ||
Others | 10,944 | 6,392 | |
Total | $ 27,672 | ¥ 192,643 | ¥ 85,714 |
Ordinary Shares - Additional In
Ordinary Shares - Additional Information (Detail) $ / shares in Units, ¥ in Thousands, $ in Thousands | Mar. 28, 2018shares | Mar. 07, 2018USD ($)shares | Feb. 03, 2015$ / sharesshares | Oct. 31, 2019USD ($)$ / sharesshares | Oct. 31, 2019CNY (¥)shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥) | Dec. 31, 2018$ / sharesshares | Nov. 27, 2014$ / sharesshares |
Number of shares split | 10,000 | ||||||||
Total consideration connection with concurrent private placements | $ 126,643 | ¥ 881,662 | |||||||
Net proceeds | $ | $ 213,200 | ||||||||
Underwriter commissions and relevant offering expenses | $ | $ 7,000 | ||||||||
Ordinary shares outstanding | 111,767,756 | 92,000,000 | |||||||
NetEase [Member] | |||||||||
Number of shares issued | 65,377,160 | ||||||||
Total consideration of share issued | $ | $ 7 | ||||||||
Description of share split | This issuance to NetEase was treated as an in substance 10,000 to 65,387,160 share split. | ||||||||
Youdao Information [Member] | |||||||||
Number of shares issued | 26,612,840 | ||||||||
Class A ordinary shares [Member] | |||||||||
Number of ordinary shares issued | 22,635,396 | 0 | |||||||
Common stock par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Number of shares issued on conversion | 6,814,815 | 6,814,815 | |||||||
Voting right | one vote per share | one vote per share | |||||||
Ordinary shares outstanding | 22,635,396 | 0 | |||||||
Ordinary shares [Member] | NetEase [Member] | |||||||||
Number of ordinary shares issued | 1 | ||||||||
Common stock par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 1 | ||||||
Class B ordinary shares [Member] | |||||||||
Number of ordinary shares issued | 89,132,360 | 0 | |||||||
Common stock par value | $ / shares | $ 0.0001 | $ 0.0001 | |||||||
Voting right | three vote per share | three vote per share | |||||||
Conversion ratio | 1 | 1 | |||||||
Ordinary shares outstanding | 89,132,360 | 0 | |||||||
IPO [Member] | American depositary shares [Member] | |||||||||
Number of shares issued | 5,600,000 | 5,600,000 | |||||||
Class A ordinary shares represented | 1 | 1 | |||||||
Private Placement [Member] | |||||||||
Total consideration connection with concurrent private placements | $ 125,000 | ¥ 881,700 | |||||||
Private Placement [Member] | Class A ordinary shares [Member] | Orbis Investment Management Limited [Member] | |||||||||
Common stock par value | $ / shares | $ 17 | ||||||||
Number of shares issued | 7,352,941 | 7,352,941 | |||||||
Total consideration connection with concurrent private placements | $ | $ 125,000 |
Convertible Redeemable Prefer_3
Convertible Redeemable Preferred Shares - Additional Information (Detail) $ / shares in Units, ¥ in Thousands, $ in Millions | Apr. 17, 2018USD ($)investors$ / sharesshares | Apr. 17, 2018CNY (¥) | Dec. 31, 2019 | Dec. 31, 2018CNY (¥)shares | Apr. 12, 2022 |
Temporary Equity [Line Items] | |||||
Financing expense and capital contribution | ¥ 4,722 | ||||
Liquidation plan | (i) 100% of the applicable preferred share issue price, plus (ii) an amount accruing thereon at an annual rate of 10% of the applicable preferred share issue price, plus (iii) all declared but unpaid dividends thereon. | ||||
Pro Forma [Member] | |||||
Temporary Equity [Line Items] | |||||
Share price percent on purchase consideration plus unpaid dividend | 140.00% | ||||
Compounded rate on purchase consideration plus unpaid dividend | 6.00% | ||||
Series A convertible redeemable preferred shares [Member] | |||||
Temporary Equity [Line Items] | |||||
Shares issued | shares | 6,814,815 | 6,815,000 | |||
Shares price per shares | $ / shares | $ 10.27 | ||||
Number of purchasers | investors | 2 | ||||
Total cash consideration | $ 70 | ¥ 440,000 | |||
Series A preferred shares issuance costs | ¥ 9,826 |
Convertible Redeemable Prefer_4
Convertible Redeemable Preferred Shares - Schedule of company's preferred shares activities (Detail) ¥ in Thousands, $ in Thousands | 10 Months Ended | 12 Months Ended | |||
Oct. 31, 2019CNY (¥)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | Apr. 17, 2018shares | |
Series A Preferred Shares | |||||
Amount, Beginning balance | ¥ 460,652 | ¥ 460,652 | |||
Amount, Accretions of preferred shares to redemption value | $ 5,156 | ¥ 35,893 | ¥ 30,311 | ||
Amount, Ending balance | ¥ 460,652 | ||||
Series A convertible redeemable preferred shares [Member] | |||||
Series A Preferred Shares | |||||
Number of shares (in thousands), Beginning balance | shares | 6,815,000 | 6,815,000 | 6,815,000 | ||
Number of shares (in thousands), Issuance of preferred shares | shares | 6,815,000 | 6,814,815 | |||
Number of shares (in thousands), Ending balance | shares | 6,815,000 | ||||
Amount, Beginning balance | ¥ 460,652 | ¥ 460,652 | |||
Amount, Issuance of preferred shares | ¥ 430,341 | ||||
Amount, Accretions of preferred shares to redemption value | ¥ 35,893 | 30,311 | |||
Amount, Ending balance | ¥ 460,652 | ||||
IPO [Member] | Series A convertible redeemable preferred shares [Member] | |||||
Series A Preferred Shares | |||||
Number of shares (in thousands), Conversion into Class A ordinary shares upon IPO | shares | (6,815,000) | ||||
Amount, Conversion into Class A ordinary shares upon IPO | ¥ (496,545) |
Others, Net - Schedule of other
Others, Net - Schedule of other nonoperating income expense (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Other Nonoperating Income (Expense) [Abstract] | ||||
Financing expense | ¥ (4,722) | |||
Fair value changes of short-term investments | ¥ 863 | 382 | ¥ 32 | |
Government grants | 18,087 | 10,330 | ||
Foreign exchange gains | 3,279 | 38,620 | 78 | |
Others | (2,165) | 33 | 488 | |
Total | $ 2,882 | ¥ 20,064 | ¥ 44,643 | ¥ 598 |
Share-based Compensation - Sche
Share-based Compensation - Schedule of share-based compensation expenses (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | $ 3,602 | ¥ 25,074 | ¥ 6,176 | ¥ 5,290 |
Cost of revenues [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | 4,407 | 3,055 | 2,220 | |
Sales and marketing expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | 2,107 | 350 | 289 | |
Research and development expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | 9,432 | 2,735 | 2,773 | |
General and administrative expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | ¥ 9,128 | ¥ 36 | ¥ 8 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands | Feb. 03, 2015shares | Nov. 30, 2009shares | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018$ / shares | Dec. 31, 2017CNY (¥) | Dec. 31, 2017$ / shares | Dec. 31, 2019CNY (¥)shares | Apr. 30, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares-based compensation expense | ¥ | ¥ 18,400,000 | ||||||||||
2009 RSU Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total unrecognized compensation expense | $ 670 | ¥ 4,667,000 | |||||||||
Weighted average remaining vesting period | 1 year 9 months 18 days | 1 year 9 months 18 days | |||||||||
NetEase Group [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares-based compensation expense | ¥ | ¥ 4,356,000 | ¥ 6,176,000 | ¥ 5,290,000 | ||||||||
NetEase Group [Member] | Restricted share units [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares outstanding on other than options share-based compensation | 178,425 | 178,425 | |||||||||
Aggreagate intrinsic value outstanding on share-based compensation other than options | $ 2,200 | ¥ 15,200,000 | |||||||||
NetEase Group [Member] | Ordinary shares [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Other than options outstanding intrinsic value per share | $ / shares | $ 12.2656 | ||||||||||
NetEase Group [Member] | American Depositary Shares [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Other than options outstanding intrinsic value per share | $ / shares | 306.64 | ||||||||||
NetEase Group [Member] | 2009 RSU Plan [Member] | Restricted share units [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares reserved for future issuance | 323,694,050 | ||||||||||
Term of compensation plan | 10 years | ||||||||||
Youdao, Inc. [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Weighted average grant date fair value of share options granted | $ / shares | $ 4.12 | $ 0.33 | $ 0.08 | ||||||||
Fair value of options vested | $ 398 | ¥ 2,771,000 | 0 | 0 | |||||||
Youdao, Inc. [Member] | 2015 Incentive Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares reserved for future issuance | 8,000,000 | 10,222,222 | |||||||||
Term of compensation plan | 10 years | ||||||||||
Shares-based compensation expense | ¥ | ¥ 0 | ¥ 0 | |||||||||
Total unrecognized compensation expense | $ 4,049 | ¥ 28,188,000 | |||||||||
Weighted average remaining vesting period | 2 years 6 months 10 days | 2 years 6 months 10 days | |||||||||
Additional number of shares reserved for future issuance | 2,222,222 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of share based payment award stock options valuation assumptions (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 48.10% | ||
Expected dividends yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 2.50% | ||
Expected term (in years) | 6 years | 6 years | 6 years |
Fair value of underlying ordinary share(US$) | $ 1.39 | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 46.50% | 48.00% | |
Risk-free interest rate | 2.10% | 1.99% | |
Fair value of underlying ordinary share(US$) | $ 6.35 | $ 0.59 | |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 46.90% | 51.00% | |
Risk-free interest rate | 2.60% | 2.01% | |
Fair value of underlying ordinary share(US$) | $ 7.29 | $ 0.84 |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of share based compensation stock option activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Payment Arrangement [Abstract] | ||||
Number of options - Beginning balance | 6,991 | 6,405 | 5,357 | |
Number of options - Granted | 2,072 | 1,592 | 1,979 | |
Number of options - Forfeited | (734) | (1,006) | (931) | |
Number of options - Ending balance | 8,329 | 6,991 | 6,405 | 5,357 |
Number of options - Vested and exercisable | 3,584 | |||
Weighted average exercise price per share - Beginning balance | $ 2.13 | $ 1.91 | $ 1.68 | |
Weighted average exercise price per share - Granted | 3.50 | 3 | 2.53 | |
Weighted average exercise price per share - Forfeited | 2.60 | 2.16 | 1.94 | |
Weighted average exercise price per share - Ending balance | 2.43 | 2.13 | $ 1.91 | $ 1.68 |
Weighted average exercise price per share - Vested and exercisable | $ 1.87 | $ 2.13 | ||
Weighted average remaining contractual life | 3 years 21 days | 3 years 4 months 24 days | 4 years 3 days | 4 years 7 months 2 days |
Aggregate intrinsic value | $ 97,000 | $ 29,468 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of earning per shares basic and diluted (Detail) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net loss | $ (86,393) | ¥ (601,455) | ¥ (209,295) | ¥ (163,932) |
Net loss/(income) attributable to non-controlling interests shareholders | (7) | (48) | 385 | 30,355 |
Accretions of convertible redeemable preferred shares to redemption value | (5,156) | (35,893) | (30,311) | |
Net loss attributable to ordinary shareholders of the Company | $ (91,556) | ¥ (637,396) | ¥ (239,221) | ¥ (133,577) |
Denominator: | ||||
Weighted average number of ordinary shares/ADSs outstanding, basic | 95,445,982 | 95,445,982 | 85,346,790 | 65,387,160 |
Weighted average number of ordinary shares/ADSs outstanding, diluted | 95,445,982 | 95,445,982 | 85,346,790 | 65,387,160 |
Net loss per share/ADS, basic | (per share) | $ (0.96) | ¥ (6.68) | ¥ (2.80) | ¥ (2.04) |
Net loss per share/ADS, diluted | (per share) | $ (0.96) | ¥ (6.68) | ¥ (2.80) | ¥ (2.04) |
Net Loss per Share - Additional
Net Loss per Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Preferred shares [Member] | |||
Net Loss per Share [Line Items] | |||
Anti dilutive securities excluded in calculation of earnings per share | 6,814,815 | ||
Options for purchase of ordinary shares [Member] | |||
Net Loss per Share [Line Items] | |||
Anti dilutive securities excluded in calculation of earnings per share | 5,047,330 | 6,991,000 | 6,405,000 |
Financial Instruments - Schedul
Financial Instruments - Schedule of fair value (Detail) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Fair Value, by Balance Sheet Grouping [Line Items] | |||
Time deposits | $ 190,430 | ¥ 1,325,737 | ¥ 343,410 |
Short-term investments | $ 17,399 | 121,126 | 50,215 |
Fair Value Recurring [Member] | |||
Fair Value, by Balance Sheet Grouping [Line Items] | |||
Time deposits | 1,325,737 | 343,410 | |
Short-term investments | 121,126 | 50,215 | |
Total | 1,446,863 | 393,625 | |
Fair Value Recurring [Member] | Quoted prices in active market for identical assets (Level 1) [Member] | |||
Fair Value, by Balance Sheet Grouping [Line Items] | |||
Time deposits | 1,325,737 | 343,410 | |
Total | 1,325,737 | 343,410 | |
Fair Value Recurring [Member] | Significant other observable inputs (Level 2) [Member] | |||
Fair Value, by Balance Sheet Grouping [Line Items] | |||
Short-term investments | 121,126 | 50,215 | |
Total | ¥ 121,126 | ¥ 50,215 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Group's future minimum commitments under non-cancelable agreements (Detail) ¥ in Thousands | Dec. 31, 2019CNY (¥) |
Future minimum commitments [Line Items] | |
Purchase commitments | ¥ 48,342 |
Total | 48,342 |
Less than one year [Member] | |
Future minimum commitments [Line Items] | |
Purchase commitments | 45,076 |
Total | 45,076 |
One to three years [Member] | |
Future minimum commitments [Line Items] | |
Purchase commitments | 3,021 |
Total | 3,021 |
More than three years [Member] | |
Future minimum commitments [Line Items] | |
Purchase commitments | 245 |
Total | ¥ 245 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | |
Related Party Transaction [Line Items] | |||||
Short-term loans | ¥ 878,000 | $ 126,117 | ¥ 878,000 | ||
Interest expense | ¥ 30,232 | 31,851 | ¥ 29,523 | ||
NetEase Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Short-term loans | 878,000 | ¥ 878,000 | |||
Interest expense | ¥ 30,232 | ¥ 31,851 | ¥ 29,523 | ||
NetEase Group [Member] | Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Effective interest rate | 3.90% | 3.90% | |||
NetEase Group [Member] | Minimum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Effective interest rate | 3.50% | 3.50% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of related party (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
NetEase Group [Member] | |
Related Party Transaction [Line Items] | |
Nature of Common Ownership or Management Control Relationships | Control or under common control |
Related Party Transactions - _2
Related Party Transactions - Schedule of related party transactions (Detail) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Services and products provided to NetEase Group [Member] | Learning services provided to NetEase Group [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | ¥ 2,913 | ¥ 10,485 | ¥ 4,854 |
Services and products provided to NetEase Group [Member] | Learning products provided to NetEase Group [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 11,418 | ||
Services and products provided to NetEase Group [Member] | Online marketing services provided to NetEase Group [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 23,249 | 16,763 | 6,297 |
Services and products purchased from NetEase Group [Member] | Services purchased from NetEase Group [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 71,631 | 67,094 | 31,611 |
Services and products purchased from NetEase Group [Member] | Fixed assets and inventories purchased from NetEase Group [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 18,222 | 6,647 | |
Loan related transactions [Member] | Addition of Short-term Loans from NetEase Group [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 57,000 | ||
Loan related transactions [Member] | Interest expenses on short-term loans from NetEase Group [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 30,232 | 31,851 | 29,523 |
Equity related transactions [Member] | Deemed contribution related to acquisition of businesses under common control [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 69,603 | 44,024 | 49,265 |
Equity related transactions [Member] | Deemed contribution from NetEase Group related to issuance of preferred Shares [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 4,722 | ||
Equity related transactions [Member] | Share-based compensation under NetEase Plan [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | ¥ 4,356 | ¥ 6,176 | ¥ 5,290 |
Related Party Transactions - _3
Related Party Transactions - Schedule of related party balances (Detail) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Amounts due from NetEase Group | $ 2,145 | ¥ 14,930 | ¥ 11,240 |
Amounts due to NetEase Group | 6,913 | 48,126 | 37,213 |
Short-term loans from NetEase Group | $ 126,117 | 878,000 | 878,000 |
NetEase Group [Member] | |||
Amounts due from NetEase Group | 14,930 | 11,240 | |
Amounts due to NetEase Group | 48,126 | 37,213 | |
Short-term loans from NetEase Group | ¥ 878,000 | ¥ 878,000 |
Segment Information - Schedule
Segment Information - Schedule of segment reporting information by segment (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)segment | Dec. 31, 2019CNY (¥)segment | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | 2 | ||
Net revenues | ||||
Total net revenues | $ 187,435 | ¥ 1,304,883 | ¥ 731,598 | ¥ 455,746 |
Cost of revenues | ||||
Total cost of revenues | $ 134,198 | ¥ 934,261 | ¥ 515,133 | ¥ 293,807 |
Gross margin | ||||
Total gross margin | 28.00% | 28.00% | 30.00% | 36.00% |
Learning services and products [Member] | ||||
Net revenues | ||||
Total net revenues | ¥ 851,870 | ¥ 428,716 | ¥ 149,915 | |
Cost of revenues | ||||
Total cost of revenues | ¥ 620,669 | ¥ 335,127 | ¥ 139,600 | |
Gross margin | ||||
Total gross margin | 27.00% | 27.00% | 22.00% | 7.00% |
Online marketing services [Member] | ||||
Net revenues | ||||
Total net revenues | $ 65,071 | ¥ 453,013 | ¥ 302,882 | ¥ 305,831 |
Cost of revenues | ||||
Total cost of revenues | $ 45,045 | ¥ 313,592 | ¥ 180,006 | ¥ 154,207 |
Gross margin | ||||
Total gross margin | 31.00% | 31.00% | 41.00% | 50.00% |
Restricted Net Assets - Summary
Restricted Net Assets - Summary Of Additional Information (Detail) ¥ in Millions | 12 Months Ended |
Dec. 31, 2019CNY (¥) | |
Restricted Net Assets [Abstract] | |
Percentage of annual appropriations set aside for Payments of divindends | 10.00% |
Restricted portion of net asset | ¥ 14.2 |
Percentage of restricted portion of net asset | 4.70% |