On November 16th, NetEase Youdao released its unaudited financial report for the third quarter of 2023. In the third quarter, NetEase Youdao's net income reached 1.54 billion yuan, reaching a historic high, with a year-on-year increase of 9.7%.
Since the third quarter, benefiting from the continuous upgrading of the product system by AI technology, sales and user reputation of multiple businesses in Youdao have significantly improved, and have driven improvements in multiple financial indicators. The financial report shows that Youdao's gross profit margin rose to 55.9% in the third quarter, reaching a new high in the past two years. And quarterly operating losses narrowed by 73.7% year-on-year, total operating expenses also decreased year-on-year, and operational efficiency further improved.
AI continues to promote the development of our learning services, intelligent hardware, and online marketing services, improving product quality and user satisfaction. In the early stages of the implementation of the Confucius Education Big Model, positive feedback from users has also been received. Looking ahead, Youdao will continue to communicate with users, accelerate the implementation of products and applications, continuously improve user experience, and strive to achieve a win-win situation of improving user learning efficiency, effectiveness, and sustainable development of the company Youdao CEO Zhou Feng said.
The reporter noticed that in July this year, Youdao released the first education model in China, "Ziyue", and launched six major application achievements. Recently, "Ziyue" has made new progress, becoming one of the first batch of approved educational models. The Ziyue educational model and its application products can be officially opened to the public.
With the support of AI technology, multiple businesses in Youdao have received positive feedback from the market. For example, the virtual human oral private teaching Hi Echo, which was launched on the mobile app in October, has had over 100000 users so far. In addition, the upgrade of AIBox and the launch of AI writing function have driven a year-on-year increase of over 160% in membership fees for Youdao Dictionary and Youdao Translation in the third quarter.