Youdao, Inc. (NYSE: DAO) reported unaudited second-quarter 2026 revenue of RMB1.4669 billion (US$216.2 million), up 3.5% from a year earlier but below the RMB1.56 billion analyst estimate. Adjusted earnings per ADS were RMB0.76 (US$0.11), above the RMB0.26 consensus, and shares rose 1.86% in premarket trading after the results. Operating income rose nearly 2.9 times to RMB111.5 million, while net income attributable to ordinary shareholders reached RMB73.8 million, compared with a loss of RMB17.8 million a year earlier. Learning-services revenue increased 20.9% to RMB795.6 million, offsetting declines in smart devices and online marketing services. Gross margin improved to 48.9% from 43.0%, and operating cash flow reached RMB334.2 million. Chief Executive Officer and Director Dr. Feng Zhou said the company had achieved its eighth consecutive quarter of operating profitability and that AI was producing tangible results across learning and advertising. Youdao said it would continue developing Confucius 4 and its AI Agent portfolio. The company also disclosed financial support from NetEase Group, changes to its board, and an extension of its share-repurchase program to November 17, 2027.