On February 24, Netease Youdao released its unaudited financial reports for the fourth quarter of 2021 and fiscal year 2021.
The financial report shows that in the fourth quarter of 2021, after excluding K9 discipline training business, Netease Youdao’s Q4 net income in 2021 reached 1.049 billion yuan, an increase of 22.6% over the same period in 2020; The gross profit margin is 42.5% and 46.7% in the same period in 2020; The net loss attributable to Netease Youdao common shareholders from continuing operations was 215.9 million yuan, and the net loss for the same period in 2020 was 251.2 million yuan; Under non GAAP, the net loss from continuing operations attributable to Netease Youdao common shareholders was 168.2 million yuan, compared with 238.1 million yuan in the same period last year; The basic and diluted net loss per share of continuing operations was 1.37 yuan, compared with 2.09 yuan in the same period in 2020.
marketing expenses increased by more than 40% year-on-year
In terms of annual performance, Netease Youdao achieved a net income of 4.016 billion yuan in 2021, a year-on-year increase of 58.9%, excluding K9 discipline training business; The gross profit margin is 49.5% and 43.8% in 2020; The net loss attributable to the company’s common shareholders from continuing operations was RMB 895.4 million and RMB 798.5 million in 2020.
In terms of revenue composition, Netease Youdao’s net revenue reached 4.016 billion yuan in 2021, a year-on-year increase of 58.9%. This data is supported by two major businesses: the net income of course services was 2.441 billion yuan, a year-on-year increase of 61.3%; The net income of intelligent hardware was 980 million yuan, a year-on-year increase of 81.6%. In addition to online marketing services, the net income increased by 2.55% year-on-year to RMB 9.4 billion; The sales volume was 2.52 billion yuan, a year-on-year increase of 26.5%.
In 2020, Netease Youdao’s marketing expenses were nearly 2.7 billion yuan, a sharp increase of 333% compared with 620 million yuan in 2019, which means a full four times increase compared with 2019.
After a year, does the marketing cost remain high? The reporter of Securities Daily saw in the financial report that in the fourth quarter of 2021, Netease Youdao’s marketing expenses were 420 million yuan, compared with 511 million yuan in the same period last year. The sales and marketing expenses in 2021 were RMB 2.1 billion, an increase of 41.0% over RMB 1.5 billion in 2020.
“The high cost of getting customers has always been a pain point in the online education industry, but from the situation of Netease Youdao in the past few quarters, enterprises are obviously doing burden reduction. With the narrowing of marketing expenses, losses are also declining. At present, it belongs to better market expectations.” Zhang Yi, founder and CEO of AI media consulting group, told the reporter of Securities Daily.
intelligent hardware devices become an important engine
After the “double reduction” policy, intelligent hardware, quality courses and intelligent education services for tob have become new outlets and the transformation direction of most online education companies.
“Insight into the trend of educational intelligent hardware in China in 2021” shows that with the entry of leading enterprises in the field of Internet and artificial intelligence into the track, the market scale is expected to further improve, and the track scale is expected to be nearly 100 billion yuan in three years.
In August 2021, Zhou Feng, CEO of Netease Youdao, said publicly that the four businesses of intelligent learning hardware, quality education, adult education and educational informatization have become the future growth pillars of Youdao. Now, the transformation may have achieved results. Among the four businesses of Netease, intelligent hardware has also become an important engine.
Netease Youdao said in its financial report that the relatively strong growth of intelligent hardware revenue is mainly driven by the sharp growth of Youdao dictionary pen sales. In the third quarter of last year, Netease Youdao expanded the content of intelligent learning hardware products, reached a strategic cooperation with the Commercial Press, exclusively included the Xinhua Dictionary, and launched a new hardware product Youdao hearing treasure, which focuses on solving students’ listening and speaking problems. In the near future, it will launch a new hardware product intelligent learning lamp
In this regard, industry insiders commented that, “Netease Youdao is easier to transform and upgrade than other education enterprises. The reason is that it is not a pure online education enterprise, but a technology-based company. For example, it started with search, explored step by step, and finally found various strategies such as online education and intelligent hardware. In this case, Netease Youdao’s transformation and upgrading will have more room for maneuver.”
Zhang Yi believes that if educational hardware products are to be done well, We need to build a huge barrier space: “first, the level of intelligence, which needs to really help and assist students to solve their learning problems; second, the brand effect. At present, the market competition of educational intelligent hardware track is not easy, and how to build a good reputation is very important; third, the channel construction, the products of intelligent hardware market as a whole will not rely solely on online products, usually Wuxi Online Offline Communication Information Technology Co.Ltd(300959) combination, especially offline channels, is particularly important. ” In Zhang Yi’s view, these are not only the threshold for entering the field of educational intelligent devices, but also the key for players to build a strong “moat”.
In his opinion, “the education hardware market is worth looking forward to. From the perspective of market demand, students in the Chinese market need some tools and learning aids. For example, Iflytek Co.Ltd(002230) has also launched similar products. From the perspective of market feedback, it is still worth affirming.” He predicted that “the second half of this year to next year will be the golden period for the initial formation of the pattern.”
