1Q 2021 Investor Presentation - Seeking Alpha
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1Q 2021 Investor Presentation
Disclaimer This presentation has been prepared by Youdao, Inc. (the “Company”) solely for informational purposes and has not been independently verified. No representations, warranties or undertakings, express or implied, are made by the Company or any of its affiliates, advisers or representatives or the underwriters as to, and no reliance should be placed upon, the accuracy, fairness, completeness or correctness of the information or opinions presented or contained in this presentation. None of the Company nor any of its affiliates, advisers, or representatives or the underwriters accept any responsibility whatsoever (in negligence or otherwise) for any loss howsoever arising from any information presented or contained in this presentation or otherwise arising in connection with the presentation. The information presented or contained in this presentation is subject to change without notice and its accuracy is not guaranteed. Certain statements in this presentation, and other statements that the Company may make, are forward-looking statements. These statements reflect the Company’s intent, beliefs or current expectations about the future. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” “anticipates,” “believes,” “confident” or words of similar meaning. These forward-looking statements are not guarantees of future performance and are based on a number of assumptions about the Company’s operations and other factors, many of which are beyond the Company’s control, and accordingly, actual results may differ materially from these forward-looking statements. Neither the Company nor any of its affiliates, advisers or representatives or the underwriters have any obligation and they do not undertake to revise forward-looking statements to reflect future events or circumstances. This presentation does not constitute an offer to sell or issue or an invitation to purchase or subscribe for any securities of the Company for sale in the United States or anywhere else. No securities of the Company may be sold in the United States without registration with the United States Securities and Exchange Commission (the “SEC”) or an exemption from such registration pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations thereunder. No part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Specifically, these materials do not constitute a “prospectus” within the meaning of the Securities Act. This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company and is qualified in its entirety by reference to the detailed information in the prospectus relating to the proposed offering. In evaluating our business, we use certain non-GAAP measures as supplemental measures to review and assess our operating performance. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performances, investors should not consider them in isolation, or as a substitute for net income attributable to the Company or other consolidated statement of operations data prepared in accordance with U.S. GAAP. THE INFORMATION CONTAINED IN THIS DOCUMENT IS HIGHLY CONFIDENTIAL AND IS BEING GIVEN SOLELY FOR YOUR INFORMATION AND ONLY FOR YOUR USE IN CONNECTION WITH THIS PRESENTATION. THE INFORMATION CONTAINED HEREIN MAY NOT BE COPIED, REPRODUCED, REDISTRIBUTED, OR OTHERWISE DISCLOSED, IN WHOLE OR IN PART, TO ANY OTHER PERSON IN ANY MANNER. Any forwarding, distribution or reproduction of this presentation in whole or in part is unauthorized. By viewing, accessing or participating in this presentation, participants hereby acknowledge and agree to keep the contents of this presentation and these materials confidential. Participants agree not to remove these materials, or any materials provided in connection herewith, from the conference room where such documents are provided. Participants agree further not to photograph, copy or otherwise reproduce this presentation in any form or pass on this presentation to any other person for any purpose, during the presentation or while in the conference room. Participants must return this presentation and all other materials provided in connection herewith to the Company upon completion of the presentation. By viewing, accessing or participating in this presentation, participants agree to be bound by the foregoing limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. 1
Company Overview
• We are the leading intelligent learning company in China. In 2007, we launched our flagship Youdao Dictionary, which is China’s leading language app. For
over a decade, Youdao has developed and used technologies to provide learning content, application, and solutions to users of all ages.
• Starting from online knowledge tools, we currently offer a comprehensive suite of learning products and services that are accessible, reliable, and trustworthy,
including:
Notes：Youdao was founded in 2006 as part of NetEase, a leading internet technology company in China dedicated to providing online services centered around content, community, communication, and
commerce.
2
Recent Development – 1Q2021
Online Courses Youdao Premium Revenue Growth
Courses
1Q21 Gross Billings 1Q21 Paid Student 1Q21 Net Revenues Learning Products
Enrollments
Over 297k Units
RMB809MM RMB442MM 484K 306K RMB1,340MM Dictionary Pens
Total K-12 Total K-12
Sales volume in 1Q21
56% 130% 76% 100% 148% 198%
YoY Growth YoY Growth YoY Growth YoY Growth YoY Growth YoY Growth
Notes: “Gross billings” refers to the total amount of consideration for our online courses sold on Youdao Premium Courses, net of the total amount of refunds.
3
Recent Development – 1Q2021
Gross Profit Margin & Operating Loss Margin both reached the best levels
since our public listing
Gross Profit Margin Operating Loss Margin
0.0%
60.0% 57.3%
-23.9%
55.0% -20.0%
-32.5%
50.0% 47.5% -40.0%
45.9% -49.7% -40.9%
45.2%
45.0% 43.5% -45.4%
-60.0%
40.0%
-80.0%
35.0%
29.8%
-100.0%
30.0%
-99.8%
25.0% -120.0%
4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
4
Recent Development on Business
Localized Version of Junior High School Chinese
• Officially launched in 2021 spring semester
• Attracting the majority of enrolled students
Youdao Dictionary Pen 3.0 Pro
• Supporting translation to and from 4 languages: Chinese,
English, Japanese and Korean
• Providing personal study reports and vocabulary notebooks in
Youdao Dictionary app
5
Recent Development on Business
Youdao Weiqi
• Over 100% quarter-over-quarter
growth in gross billing
• Sponsor of Jiangsu Weiqi Youth
Team
Youdao Dictionary App
• Short learning video sharing
sector: “WOW Community”
• Users staying much longer
6
Awards and Public Services
01. NetEase's Donation
Awards and
03.
RMB66 million to Yau Shing-tung Science
Foundation（丘成桐科学基金会） Awards
Public Services
Youdao to cooperate with Yau’s team in AI
and basic education areas
“Top ten annual brands of
Education” in 2020-2021
by Beijing Daily and Beijing
Evening News.
02. Youdao’s Donations
Donation to Leibo Middle
School（四川雷波中学）
7
Youdao Makes Learning Happen 8
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