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Youdao Reports Q2 2026 Revenue of RMB 1.47 Billion, AI-Native Strategy Drives Growth

Youdao's Q2 net revenue rose 3.5% to RMB 1.47 billion, marking the eighth straight quarter of positive operating profit as AI agents scale.

AI News Feed · 2026-08-21 20:38

In the first half of the year, net revenue totaled RMB 2.81 billion, a year-on-year increase of 3.6%. The company said the results demonstrate that its AI-native strategy is moving from the "investment phase" into a "harvest phase," with AI agents driving product adoption and business efficiency.

The AI agent matrix continued to expand. LobsterAI, a desktop personal assistant launched in the first quarter, surpassed one million users, entering what the company calls the "scaled growth" stage. Across learning scenarios, AI-powered personalization helped drive learning services net revenue to RMB 800 million in the second quarter, up 20.9% year over year. AI subscription services generated sales of about RMB 100 million, up more than 20%, with usage of AI simultaneous interpretation in Youdao Dictionary and Youdao Translate jumping about 100% and sales of AI speaking practice product Hi Echo rising over 100%.

Online marketing services recorded net revenue of RMB 580 million, with gross margin improving to 28.7%, about three percentage points higher year over year. Youdao said it focused on higher-margin segments; advertising revenue from AI applications and short-drama industries grew more than 50% for the second consecutive quarter. During the period, the company launched Youdao AI Ad Optimization Specialist 2.0, adding features for unified management, automatic delivery, and intelligent alerts.

In smart hardware, Youdao introduced the dictionary pen X8 series during the quarter. The dictionary pen maintained the top sales spot on Tmall and JD.com during the 618 shopping festival for the seventh consecutive year. Its AI answer pen was named an "AI for Safety and Good" education case by the Ministry of Education and the Cyberspace Administration of China, and was also cited as a typical AI application case by the Ministry of Industry and Information Technology.

Youdao said its AI agent products now span scenarios including office collaboration, knowledge management, cross-language communication, hardware, marketing, and content creation. The company released an industry-first "simultaneous interpretation agent" that connects with common earphones for real-time translation and meeting summaries. Its advertising platform iMagicBox integrates over 2,000 localized digital human avatars and reduces content production costs by about 70%. Another platform, InfunEase, connects more than 30 million creators across over 250 countries, with the YODA agent automating influencer screening and proposal generation. The company also launched Youdao OpenPods, an AI earphone supporting real-time translation between more than ten languages and transcription with 98% accuracy across scenarios.

On the model side, Youdao upgraded its "Zi Yue" large model to version 4, enhancing visual mathematics and complex reasoning while improving inference efficiency. The Zi Yue 4-TTS system added cross-lingual voice cloning, emotion transfer, and streaming speech generation. CEO Zhou Feng said the company will continue its AI-native strategy, deepen large-model applications in learning and advertising, and use an expanding AI agent product matrix to improve user experience and profitability in the second half of the year.