DAO - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to the Youdao 2024 First Quarter Earnings Conference Call. Today's conference is being recorded.At this time, I would like to turn the conference over to Mr. Jeffrey Wang, Investor Relations Director of Youdao. Please go ahead.

Jeffrey Wang

Thank you, operator. from today of forward-looking intended the for Safe discussion the related to the by the performance established future company, Harbor note will statements contain to qualify the Please U.S. as liability which are Reform Private Securities Litigation Act. guarantees are future the certain not subject other factors. performance assumptions and uncertainties, Such and are to of statements and risks

today's release general from Some actual in does management certain discuss U.S. results cause of financial of and not certain those Securities will these in measures factors affect control mentioned the could obligation non-GAAP that these discussion.A included company for risks any financial Youdao's law.During company's are The update and to today's Commission. as risk call, company undertake the except with forward-looking also business press differ and purpose filings discussion only. results beyond materially comparison this the could to information, Exchange by is and required

non-GAAP reconciliations ir.youdao.com. today.As webcast a first this conference the news will of earlier quarter issued financial XXXX on call For being corporate available recorded. release Youdao's is measures, be financial the conference to of of non-GAAP reminder, at results, see and replay definitions results please financial website A GAAP this

direction. Mr. review Su, strategic highlights now Joining VP Dr. Zhou Dr. from Executive Peng Capital us our our over turn to some of today Chief Youdao's on Strategy the of recent the are Li, Zhou, our and Feng of Jin, Markets; Mr. call Wayne VP President; our senior to Finance.I and management call Officer; Lei and our Mr. will

Feng Zhou

participating you, Jeffrey, for in call. today's and Thank you thank all

This stated.We on otherwise X.X operations of marks billion, a remind quarter and I'd all amounted from ever loss the everyone begin, first profitable XXXX. period our numbers marking Net million year. quarter specifically million, X from are from first the our like RMB Renminbi, RMB based a same that year-over-year XX.X% profitability. to quarters of significant in Income reached QX operations in last Before ever growth. XX.X turnaround solid revenues first RMB to XXX.X consecutive unless had we

In QX Services XXX low in renewals. improvement XXX used seasonally revenue in on was RMB as This our flow let's Learning million flat with compared of same across operating of year. the first reached is RMB represents review cost quarter period year-over-year.Now terms cash business the developments last XX.X% largely million, lines. the an activities

content strong and Youdao QX, upgraded XX% the revenues consecutive with Gross of digital we segment, QX million for this tiered by high margin while points individual than higher for teaching and capabilities. the remarkably to students, age historic concluded over more introducing approach a rate tailored growth. the digital content and cost product the year-over-year. spring offline maintained in has high renewals year-over-year operating XX and marking is expenses a momentum, needs Youdao with retention the consistently rate XX% reached a services by and revenues services yielded generated retention quarters. net in Within up profits.In RMB This services, we exceeded enhancements, net percentage covered Furthermore, XXX.X gross Lingshi meaningful terms More XX%, competitive of X of for margins. group recently, Lingshi offering

reading Language] Tour improve designed their new to and we abilities. Literature writing "Virtual help called students a Cities", of Youdao Additionally, Four Twenty launched for product [Foreign

our have fast quarter.Next more subscription our AI-driven initiatives, services that QX, time countries, increase of discussed model the this AI pleased we approach, representing share a is experiences than simultaneously users pace.I'm to capabilities, we large RMB due first develop writing XXX%. total million China sales XX,XXX and at AI a and to last lot and user positioned applications refinement, our a refinements over projects. in remarkable language reached other models to base XX efficiently calls, Hi believe AI the multiple X our approximately over in we through Actually, AI-driven experience lean include XX% grown uniquely Dictionary, in the a of our multiple are other for in extensively high-quality services the leveraging particularly algorithm-driven language On apps that and international provide has Desktop primarily Lastly, our AI-driven translation, writing Echo consecutive previous services subscription and learning to learning trend year-over-year quarter Adopting of first segment apps services. products. by over in continue. Youdao services. XX% and AI expect These business bring offered Youdao our large for We to long-standing growth driving Translation, Youdao and we year-over-year quarters,

we route models natural the the a and opportunity largest AI are the products. growth still consumer-facing subscriptions language of early While are at looks believe very future promising.We and for present, firmly days, combination the in are products large incredibly that growing AI for

instance, driving approximately increased subscriptions. For translations our language model XX%, more of to proprietary Ziyue, leveraging have Chinese-English accuracy we large the

as segment momentum, Chinese largely launched XXX.X% of XXX% Quest (KOL) net recognized upgraded Real-Time the and the industry Hi segment Management experienced with consecutive organization, learning quarter, expansion Echo Key Group. as strength an domestic teaching to ahead, avenues in with for of introducing has like and to (RTA) needs. with emerging driven growth, a well Hi impressive of speaking by year-over-year modules marketing (DMP), including online and underscoring growth API the as our trends robust recently Mobile ability users' see advertising of our quarters, an for IELTS Platforms This multiple Opinion million collaboration IELTS growth, we segment's the X mode the for version on a sustained first quarter, demonstrate marking performance industry year-over-year reaching strong NetEase XXX.X of practice, trends.Looking both we capitalize simulated in bilingual the content.Our Additionally, first and Leader RMB rapid year-over-year the strengthening services revenues for to in which collaboration Furthermore, remarkable Echo over cater historic better a pioneer growth. continues growth further education the exams. verticals, achieving in AI-generated application high leveraging XX% over Data synergy to

NetEase Our benefit us our more that a revenues time, potential At devices efficiently lines, year-over-year we the quarter, brings and creating our the revenues first NetEase, for vast across parties.Regarding the AI less group. the and partnership of future business placements from the growth In quarter, million deepen significant smart than reflecting first originates their net customers with growth to the as indicating partnership. the advertising more ad within traffic to XX% RMB same of conduct sources, the XXX.X both capabilities decline. beneficial accurately synergy were segment, will empower XX.X% drives group in a mutually access

has points encouraging the However, XX rate of previous decline to to narrowed percentage by stabilization. note that quarter, the compared a indicating it is

SX the On Youdao launch. sales the product front, we volume terms quickly dictionary Pro, released on in which pen of Pen recently top-selling JD.com Dictionary became after its

this underpinned thoughts of long-term me our let product deep usual, we the and While our to segment, to some our the in devices, by with share understanding continue medium face to we our innovation remain commitment learning you outlook technology for about in educational overall confident market.As headwinds strategy.

resources. cross strategic business how recent achievement sustainable we nearing question of highly for threshold we Our the competitive key advantages.Currently, high strategy focus identified is have and profitability. growth As A competitive where are discipline us on is, technology growth our long-term areas financial key businesses do sector? maintain our and is build concentrating we profitability sustainable strong the in energy with indicate, financials to and and a this more education and few X

students. high is focus Lingshi digital our particular on Youdao services, First, in content for school

Lingshi We Over us. player believe for front the as in is of emerged in has few there healthy segment. years, multi-line leading Lingshi growth past the a trajectory its

online tech-driven including on DMP in Secondly, as and and XXX RMB achieve as AI of growth we subscription trend product total approaching on see applications sales. acquisition particularly advertisement product innovations, in industry, is quarterly drivers our scale our million revenues. larger leadership.Thirdly, is opportunities we wide in around RMB of quarterly AI-driven generating which favor: currently services, untapped million in well are focus as the XX the main generative customer services, marketing X We working RTA, focusing

-- Although the relatively robust for high growing concurrently future Su holds AI-driven a turn segment services, to online discipline. into we conduit conclusion, a and pleased P a in is investment AI learning, and It advertisement the which are speed, it feedback quarter. that provide The at offering in provide launching this growth is June. with us immense in app spearheading AI to "Mr. it's premium mobile I'm financial call services first Thank laser-focused share at free will present, AI growth key consumers, insights driving by for promise performance. pay once online and you. our try small year-over-year over more off. we innovations with this will our I services.With on maintaining detailed Tutor", over while We you with all-subject as through to Peng encourage XXX% China, out AI you available.In financial learning consumer will tutor to be that,

Peng Su

and for the expenses quarter, XXXX. USD today RMBX.X the compared for XXX.X of which decrease XX.X XX.X% through XXXX.For hello, XXX.X of million, for quarter expenses our issued driven by quarter from Gross XX.X% USD marketing million, a increase first XXXX.Net the quarter, were of with compared the to the of USD a for advertisements total Gross representing period from that, revenues the the from XXX.X was quarter, XXXX. representing XXX.X were Research net million, services XX.X XX.X the XX.X% Zhou, devices RMB Today decreased XXX.X% for of devices XXX.X quarter first performance-based details.For X% of or our for our investments from the same XXXX. a XXXX. representing were first XXX.X from gross the increase Net in XX.X the quarter RMB RMB RMB XX.X% were technology.For We a the due year.With was encourage learning our RMB of from XXX.X XX.X% quarter for were be billion, XX.X% margin learning XXXX, of sales due of primarily same our compared period or same revenues the and million, million, or first quarter, development XXXX. quarter operating XXXX. first revenues million, XXX.X RMB XXXX. learning with XXX.X or to revenues the in smart online the of million margin I Internet was first XX.X% last the USD period same was The some presenting first of XX.X Thank our services Net margin compared profit XXXX. of sales of from cutting-edge our primarily million, online increase from were same period XX% for XXXX, RMB was total the with increase million compared XX.X% first RMB further year-over-year demands expenses million, parties' of marketing third in of million, XXXX, the or for online you, for RMB or with services same were same USD million, continued release products with was from first everyone. first period the of marketing XXXX, first services million increase for and AI down total period same in in through quarter read revenues of quarter million, smart properties, marketing the in period RMB the USD with to million, highlights million, for for earlier first the the XXX.X financial Dr. services from representing will you period compared press Gross XXX XXXX.

our X.XX, net Our net X.X RMB loss operating net the year.For to the Non-GAAP with for first operating ordinary of period for X.XX. quarter XX.X same X.X% XXX.X compared or compared same shareholders attributable million, attributable USD per margin X.XX, attributable ordinary RMB quarter ordinary the basic first year.Basic quarter for of first of margin last shareholders same income income shareholders Non-GAAP was loss USD period X.X attributable income RMB USD of million RMB X.XX, income for per X.XX. the net with million, RMB to to were the and period USD year. shareholders shareholders XXXX or first was of to ordinary ordinary diluted RMB was of XXX.X was quarter of attributable X.XX of quarter or RMB and shareholders non-GAAP last and million the million, to net million, or ordinary with or for USD XX.X% XX.X XXXX, attributable loss diluted income ADS to the the for last the compared of in first net the XXXX, the ADS

Our you quarter.Looking liabilities, were March net operating at million, RMB as USD USD in consist first concludes now XX.X or time to XX, the your XX.X compared go and XXXX, At December would which XXX.X the short-term your Operator, ahead. to mainly of end million, activities deposits, X.X the prepared the for cash our XXX sheet, XXX remarks. equivalents, or learning deferred million.This RMB RMB generated Thank questions. revenue for of USD cash, open of million, used our XXXX. like XX, million, We was billion our totaled contract with our restricted as period, please investments balance our of services, from cash, RMB attention. XXX.X cash million, or call

Operator

comes Instructions] of Our Brian first from [Operator line Gong the Citigroup. with question

Brian Gong

is the past demonstrated My growth affirmed question quarters. several digital services, had revenue -- Yes. decent content regarding Congratulations on over results. which

future the growth share are So driving the what management factors primary again?

Peng Su

-- from are Thank net you, the our most the services RMB this is content around about Youdao services, about the first are digital for content particularly Su with financial our Peng. in robust services. up We year, Brian. X is year-over-year. it's billion, XX% and think parts the learning demand the This In last revenue Lingshi digital --

services to services level not growth we the not significantly do last profitability the year.In revenue improve this XX% content reflecting at digital of -- but keep the we well. for XXX generated and first the around same same our at reached do some as net RMB year-over-year content growth full profit time, Additionally, at from the And the year quarter only million, year, digital close revenue the time.

year, that's in demand we driven expect the very quickly definitely the of from We growth the services the can of unique the this because selection provide college this of these the that's the admissions expand policy of diagnostics, content for digital We strong just example, first we AI and assistance, see the year.I continue That's customers with the the we learning following -- access we profitabilities services, will services our college has to is product. and provided which value as think we out the regarding we such the call advice, digital content factors as from guidance. our pretty unique second market. pretty we content application think AI capabilities, part a for think the the Language] consumption our we products.I I our video we college services. can in the what well -- think And profitability think about each focus X advisor, the as the the from offer the test customers comprehensive about, to -- the also the And our admissions [Foreign from users' is -- best to personal market our academic recommend quarters see of core provided definitely, plan that's products. based signals remaining values

a For Through significant efforts off-line the this find year. services. for provide these we consulting allocate will the we and more services and a service range fast potential Lingshi, striving the students such aim of And to as key secondly, and more high-quality as we growth for well. in broader reach products resources initiatives,

the well. think students of learnings content about integration to we is as content pretty With and and that of is are delivered the full that better of believe year -- services. see will confident is services profitability services expected confident While we to we online, digital our the customers in all a offer our improvement that, XXXX. We primarily online digital off-line the rapid

in in the In rapid product the addition, growth is forecast core Youdao Lingshi, expect a to remain foreseeable future. our

Feng Zhou

[ Zhou Feng to one want point. add this I Yes, Brian, just is ].

are just Lingshi services as Peng So working Yes. Su on now. right we for of said, off-line as

XX we right yes. cities So already in service now, some about have --

is an So team. the initiative this important for

want about bit So we of think online to add lot, I a just -- this. thinking so to little and offline want about a

So are online we think great. courses really

are fundamentally, efficient. So more they

their at more the how if schedule and freedom look they business lot good content with like -- course users pre-recorded delivered time. It is a a we video. is Lingshi, the And So a allows format. very of for actually because the this this in thing really

students it's the also business to and we of AI provide and for lot potential pre-recorded -- parents, students. students So good prefer that students service. because of face-to-face efficient A and however, reach they also -- high recognize to of for the of content.So kind offline and videos consultation nature

think is we we actually be combining values for with really lot So opening -- will kind to and of the new and bring a great, will of will users avenues growth business. and that also online -- future the kind the complement is of of X offline the

Operator

of Wang, Our next the question comes Caini from line CICC.

Caini Wang

So our services. Difficulty] about I just have online question [Technical marketing one

been online rapid for marketing consecutive have Our experiencing growth quarters. services X

So how the could sustainable in we growth achieve future? a

Lei Jin

is Jin. Lei This

net Both year, the skills. a services of record XX.X%. are of business of a highs. this revenue and XXX quarter our skills We advertising And RMB the a during call discussed from the we ad Youdao aggregate outside traffic our to both ad of platform. both quarter, and within competitive Youdao's business margin gross the first technology operation from customers' lies -- In these combination Youdao is the nearly strength customer and of the the marketing As and needs. unique is achieved last of serve performance-based million in

profit.Looking to the are this the drive key growth sustainable in segment future. factors Additionally, there generates X ahead, meaningful

of real-time proportion include technological By implementation analysis, diverse ] to revenue through media XX and in ahead, entertainment, data improve expanded the RTA cover ] has clients.Looking RTA RTA continued to and first as continuously it AI quarter, The clients the some the expected XX% and social further revenue and the improved can of our Covering improvement. sectors In advertising to needs has first increase. increased meet [ industries over e-commerce. RTA effectiveness. efficiency by we for QX. strategy automotive we better algorithm ad over The of data such XX% API conversion now. The is optimizing around [

platform, DMP designed In management This of application target multiple advertisers processing deep addition, data the a and understanding data gain their from sources. user enable collecting, preference. our storing is for repository and centralized audience to behaviors a

significant Our DMP future optimization, user improving expansion of was the the opportunities, thereby in enhances guide audience and target by functionalities integrating the advertising and acquisition Group this effectiveness.And future. from tags and advertising proportion small, of package efficiency and revenue indicating customer advertising traffic the the growth -- second, development the potential the management relatively NetEase further with from

the will forward, within into client purely the in third, NetEase Moving better NetEase sector.The we us the more overseas Group. is relatively resources from of base deeper the our the the users, marketing help the with gain predictable Compared Furthermore, needs traffic we external which Group, and the utilize expansion. our collaboration insight strengthening will by will expand industry gaming gaming NetEase the traffic, controllable. to traffic

including In of marketing, over ones. Opinion exclusive more access X,XXX global global Leader, X Internet we celebrities, million terms have Key KOL than to

solutions, as planning with strategy performance. a as marketing client optimization the selection, of provide well KOL content and KOL mounting KOL development, can content video personalized including You marketing

global enterprises. Our extension efforts to rapid the empower support marketing further leading to international of AI Chinese technology KOL

marketing X-star QX. first Youdao ADS China's launched platform overseas in

including Anker substantial companies [ early expansion already like presenting still will the ADS the in potential business Chinese future. ] global the stages, NetEase several marketing global assessed and Youdao KOL effort. in Shein growth in Currently, BRD, have overseas, Games, their just

Operator

Chong The Thomas next comes from question the with line of Jefferies.

Thomas Chong

is services? about AI-driven what main question are subscription the for My products our

Feng Zhou

subscriptions including apps. courses We apply heavily in model multiple AI business in and large language and lines, advertising

last AI category. cover subscriptions the So

XXX% remarks, rapidly, in As up year-over-year, million. prepared been quarter this have discussed XX RMB about subscription we AI sales reaching growing

the products So for bit to you, a major to are that break contributes that.Yes. it here down little

Desktop Youdao Translation. First is Youdao Dictionary and

Dictionary Translation Quest the in PCs is Mobile, active and translation million Macs. our XXX Desktop combined China. flagship apps our So monthly mobile for app users and over popular is app are According to and they most have top

translation Chinese, Chinese of to translation to English accuracy enjoy quality, model demanding it In English So more powered and we to users the significantly rate subscription our charge.So users paid more the feature, out free to of last quotas. for AI usage users. all year, scenarios, to XX% language so last we by reaching wrote translation Dictionary QX, they Youdao for large improved introduced year web

human with first the the preparation, apps is our feedback the our personalized Council. expect a collaboration to So large prepare assists Currently, there's has It contributors introduced language exam to are world's in user new substantial gained a subscriptions. Echo. simulated mock coach, users scenarios.Second, sales, more through expand launched positive, and growth a been We subscription, X and a digital through separate capabilities feedback customized largest better module these IELTS, for usage exams. new model of overwhelmingly recently leading and IELTS for into available tailored Hi the to This exercises, as the language lot subscription module last IELTS we year. Yes. British

of to in recognition iRecord recording for and its It shared language capture technologies. Hi we transcribe further the through to it the offering places designed several is new in using the recognition. that is the voice students, app innovative voice that's overseas more college time ranks America. North an expect users, voice we first perfect comprehend apps North them for apps Echo.So in the recordings boost at high-quality is #X America.LectMate large in app of have speech effectively the accuracy power the lectures is popular. Currently, international model looking iRecord sales with category So help so and the by high category to automatic we top those X

AI finally, So P there's Tutor. Mr.

of of we the language Mr. year, of remarks, Accuracy Compared our AI we in version P K-XX, with has June. app As model will by last solving. further launching end our optimized be increased XX%. Tutor X%, decreased has the in and by improved in solving over for cost accuracy serving achieving our have problem discussed prepared problem

very language main models. AI services.Subscription is So these our for AI natural offerings approach X monetization subscription are for large apps and a

are we experiencing have growth, So pipeline rapid new and new currently, a of development. products and subscriptions under features

So for this see year, a I trajectory. we clear hope already answers growth questions. can that your Yes,

Operator

comes question ], line next The the Bo from Huatai Securities. [ Zhang of

Unknown Analyst

[ Zhang My Bo This we view on segment? do is ] question from devices future Huatai. of is basis. the to continued How the net year-over-year development revenue smart decline from this a

Feng Zhou

in the Yes, last of that learning channels the end sales at we call our year. concluded devices shared we of last optimization of our

return low some exited sales investment we channels. So of

While significantly year-over-year the of decline to line bottom a sales. it improved hardware of segment, the also led this has

products The online XXX points XXX. is build Pad. off-line SX are our release dictionary Pro dictionary AX new X pen Pen, released decline dictionary the we surpassed we and and the recovery QX, launched. affordable which Pro QX, healthier AX process Pro we to result the became new into sales new quickly the that we over most business.In decreased is of As #X are Learning this the Pro products: after the RMB are sales year, AX pens Pro percentage of again actually year-over-year mid-priced and and Pro that XXX Douyin new channels XX affordable in pen SX Listening and AX pen.AX the expanded at on the More Dictionary the the JD.com. became Pro, of and The less and QX. top-selling The and channels EX Pod XX.X% dictionary recently, driving than and launched RMB that

expensive are priced which more XXX. RMB than However, it the in peers RMB is even market, at or XXX its

a products made conscious the we at affordable made So build even prices. choice choice high-quality We here. to

just to and as in #X the we Pro, So swiftly releases. their race prices.So lower after each undercutting lower SX other and became Pro by positively. is And bottom customers discussed engage the a result responded the to with that the we AX intend seller not do

So -- is is excellent I this news. believe this

Pro product.In price the Pro dictionary school And expanding are about established pen that product very mid-priced the like products there we is the SX year. not summer, in best-selling in products. innovative range were the positions favor. some our top-selling their serving One as in before pipeline our optimistic working AX Now the is I'm a factors covering leadership customer our base. we outlook new for is several that new are categories our have

Second is our ability large devices. these in to models apply to the language AI

So are now they in which channels and us mature that become interested and parents more before. tell these our sales and have marketing established features, are than increasingly helpful.Third, very more efficient

So the of we obviously products. ahead device team has of launch are we And work them. new to these a lot eager are

updates. So yes, more for tuned stay

Operator

comes the Jiang of question next The from line Ya [ ], CITIC.

Unknown Analyst

into the My the question XXXX? is insights outlook for some about outlook. Could share the management

Peng Su

for for and dedicate think XXXX, in online services the as This for this services, the speech, prepared you. Peng. AI-driven Dr. services. content outlook the Zhou Su marketing And on year, is digital full the discussed I will Thank subscription year definitely

the digital for our Firstly, is business top our for priorities development. services, content definitely

increased by that demand our ensure offline the improve the seizing our expanding presence Zhou market, as with products Dr. and our AI mentioned. and develop will capabilities and continuously in We

the improvement year.And a the made We for this have significant profit further year. content we the confidence digital has services, as services online it secondly, since strides think that marketing in last in from in

the are technology by and generate RTA focused applications. of our our growth long-term advertising AI deepen on business We

some time. have and the knew, investment we we advertisement long more about to year.And our I sales can invested throughout a think And in the develop results from iterate share are with AI momentum services subscription NetEase color process traffic, of keep well. expect We think -- as Group subscription strengthen will as we will continue the finally, know, we this year. AI in products, a advancing addition, already definitely as AI well be rapid in more the In -- monetization Total other in as this the in perspective. maybe for services you AI is and areas.Our will growth partnership the placements financial we we to AI-driven the -- we new of generate expect AI you subscription from as will

making a endeavors achieve full to in the great profitabilities been year have We near the future.

since expand by costs expect as This has already on controlling focusing operating effort have consecutive same increased operational improving the last maintain we quarters an profitability diligently [ significant evidenced striving our first yielded for revenue time expense efficiency. our will X the the been costs achieved time. results We moving while the the and we ]. at management forward, And for as we are year,

our that's full for of outlook the year think XXXX. I

Operator

The last Macquarie. line Linda today the for of question from comes Huang,

Linda Huang

I this want and Huang. well operating Macquarie, sales Management, as decent is ask decline noticed about the as to we marketing because and that the have I R&D. the for expenses Linda

just I ratio? how we the of about should to how think that rest for is for know the the And year, about trend to want revenue the this to expense the item? the So OpEx

Yongwei Li

for Thank the efficiency question. crucial profitability. question. This our metric I a is indicator will key of you is a and Marketing Wayne. take your

leverage competition.I innovations the improve not our creating diversified these limited intense most to the improving X to customer to online challenges above. market rising more and of the technology mentioned efficiency, to continuously as content product various continuously costs efficiency acquisition. enrich to add optimize on to acquisition to due Thereby, areas marketing We dedicated are such experience. will color AI We explore marketing includes advanced channels which

to learning source of acquisition.In Online and KOL, streaming as service constraints, compared limited thereby reach Online institutions and Opinion innovation contract, increasingly customer institutions. education channel In recent Leader, Such education user companies reducing lead us and advantages physical to versus rates. conversion high-traffic integrated acquisition geographic audience, years, an boundaries us example. for on have have in environment. become influenced or location their customer education beyond diversified, Key broader the diversification relevant acquisition including channel capture channel, acquisition innovations take offline by actively costs reach to online education First, improving enable offline more inherent acquisition of platforms. traffic a off-line allows

user preparations and The and increased of AI experience, can product our conversion cost leverage AI reduce attracting rates. into products. of capability Second, enhance application thereby technology the material

the on user lessons enhancing we to product that of content. innovation For to Innovative an of language We efficiency.Third, a AISC our a satisfying get the advertising. to instance, technology this competitor results enhance experience employed models through ecosystem, during the marketing key needs through conversion excellent attention customers. function can pays by and by forms get providing lot is content user lesson. good thus premium of advanced help feedback Each us experience certain refinement of rate build AI efficiency of trial enhancing believe further lesson, and timely premium to large try stronger an conversion improving

Let me give example. another you

results sales of one by pre-recorded which bank, transitioned our experience. In for Lingshi, to and and mentioned transformation successful of XXXX offer important Zhou, time This XX%. streaming in traditional most Youdao AI Dr. XX% and and to process of embedded online question decreased adaptive just needs XXXX, content learning XXXX, proved as and revenue, with the to the further schedule on And total approximately innovative marketing the quarter your in the has from widespread concerns personalized the question. meeting technology services accounts lead user has such user user gathering first our inflexible XX% respectively. their clearance.Back expense enriching experience,

trend we are long maintaining in run. very confident this the in So optimization

Operator

to I comments. closing the additional to And back would turn any that conference or concludes management over like for question-and-answer session. the

Jeffrey Wang

again us Thank today. you joining once for

the directly If Communications you or a to great any day. Financial or free China have at U.S. questions, please to feel Pearson contact out reach further us Have Youdao in

Youdao (DAO) 23 May 242024 Q1 Earnings call transcript