Youdao Inc (DAO) 2024 Q4 法說會逐字稿

Good day, and welcome to the Youdao 2024 fourth quarter and full year earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jeffrey Wang, Investor Relations Director of Yudao. Please go ahead.

大家好，歡迎參加有道2024年第四季及全年獲利電話會議。今天的會議正在錄製。現在，我想將會議交給宇道投資者關係總監 Jeffrey Wang 先生。請繼續。

Thank you, operator. Please note the discussion today will contain forward looking statements related to the future performance of the company, which are intended to qualify for the safe harbor from liability as established by the US Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors.

謝謝您，接線生。請注意，今天的討論將包含與公司未來業績相關的前瞻性陳述，旨在符合美國私人證券訴訟改革法案規定的免於責任的安全港規定。此類聲明並非對未來績效的保證，並且受某些風險和不確定性、假設和其他因素的影響。

Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Youdao's business and financial results is included in certain company's filings with the US Securities and Exchange Commission. The company does not undertake any obligation to update these forward looking information, except as required by law.

其中一些風險超出了公司的控制範圍，可能會導致實際結果與今天的新聞稿和本討論中提到的結果有重大差異。某些公司向美國證券交易委員會提交的文件中包含對可能影響有道業務和財務業績的風險因素的一般性討論。除法律要求外，本公司不承擔更新這些前瞻性資訊的任何義務。

During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For the definitions of non-GAAP financial measures and reconciliations of GAAP to non GAAP financial results, please see the 2024 fourth quarter and full year financial results news release issued earlier today.

在現今的電話會議上，管理階層還將討論某些非 GAAP 財務指標，僅供比較之用。有關非 GAAP 財務指標的定義以及 GAAP 與非 GAAP 財務結果的對賬，請參閱今天早些時候發布的 2024 年第四季度和全年財務業績新聞稿。

As a reminder, this conference is being recorded. A webcast replay of this conference call will be available on Youdao's corporate website at ir.yudao.com. Joining us today on the call from Yudao's senior management are Dr. Feng Zhou, our Chief Executive Officer; Mr. Lei Jin, our President; Mr. Peng Xu, our VP of Strategy and Capital Markets; and Mr. Wayne Li, our VP of Finance.

提醒一下，本次會議正在錄音。本次電話會議的網路重播將在有道公司網站ir.yudao.com上提供。今天參加御道高層電話會議的有我們的執行長週峰博士；我們的總裁雷勁先生；我們的策略與資本市場副總裁徐鵬先生；以及我們的財務副總裁 Wayne Li 先生。

I will now turn the call over to Dr. Zhou to review some of our recent highlights and strategic direction.

現在，我將請週博士回顧我們最近的一些亮點和策略方向。

Thank you, Jeffrey, and thank you all for participating in today's call. Before we begin, I would like to remind everyone that all numbers are based on RMB unless otherwise specifically stated. In the fourth quarter, our profitability further improved. Net revenues reached RMB1.3 billion, a 9.5% decline compared to the same period last year, primarily driven by a decrease in revenues from learning services. Since the summer, we have proactively focused on courses and services with strong demand and maintained a rational approach to customer acquisition.

謝謝傑弗裡，謝謝大家參加今天的電話會議。在開始之前，我想提醒大家，除非另有特別說明，所有數字都是以人民幣為基礎的。第四季度，我們的獲利能力進一步提升。淨收入達13億元人民幣，較上年同期下降9.5%，主要由於學習服務收入下降。自夏季以來，我們積極關注需求旺盛的課程和服務，並保持理性的客戶獲取方式。

This strategy has enhanced our overall health. Income of operations for the fourth quarter reached RMB84.2 million, representing an increase of 10.3% year-over-year. Operating cash inflow was RMB158.2 million, largely stable compared with the same period of last year. For the full year 2024, our key financial indicators demonstrated significant improvement with record profitability and cash flow performance. Net revenues totaled RMB5.6 billion, up 4.4% year-over-year.

這項策略增強了我們的整體健康。第四季營業利潤達8,420萬元，較去年同期成長10.3%。經營性現金流入為1.582億元，與去年同期相比基本穩定。2024年全年，我們的關鍵財務指標顯著改善，獲利能力和現金流表現創下歷史新高。營業淨收入達56億元人民幣，較去年同期成長4.4%。

Income from operations amounted to RMB148.8 million, a remarkable turnaround from loss of operations of RMB466.3 million in 2023, marking a substantial improvement in financial health and achieving our first ever operating profit from a full year basis. Operating cash outflow narrowed to RMB67.9 million, representing an improvement of 84.5% year over year.

營業利潤達1.488億元人民幣，較2023年4.663億元的營業虧損大幅扭轉，財務狀況大幅改善，首次實現全年營業利潤。經營現金流出收窄至6,790萬元，較去年同期改善84.5%。

Now let's review the major progresses across our business lines. In the fourth quarter, net revenues from learning services reached RMB617.7 million, down by 21.2% year over year. By maintaining financial disciplines and focusing on courses like we enhanced our financial health and long term competitiveness significantly.

現在讓我們回顧一下我們各業務線的主要進展。第四季，學習服務淨收入為人民幣6.177億元，較去年同期下降21.2%。透過保持財務紀律並專注於此類課程，我們顯著提高了財務健康和長期競爭力。

Within the Learning Services segment, net revenues from digital content services reached RMB388.8 million in the fourth quarter, which covered the cost and operating expenses, generating meaningful profits. We are committed to fostering long term growth with top priorities centered on elevating customer satisfaction, optimizing operational vitality and driving forward looking innovation initiatives.

學習服務板塊中，第四季數位內容服務的淨收入達到3.888億元人民幣，覆蓋了成本和營運費用，產生了可觀的利潤。我們致力於促進長期成長，首要任務是提高客戶滿意度、優化營運活力和推動前瞻性創新計畫。

Lingshi has pioneered a customer acquisition path by focusing on operations on directors IP, leading to over 10% year over year growth in gross billings for the fourth quarter. Additionally, our flagship product, which integrates AI tiered learning videos, comprehensive learning counseling and small class study experiences has enhanced customer loyalty with retention rates surpassing 70% in the fourth quarter, an improvement of more than 5-percentage-points year-over-year. This rise in customer loyalty gives us a greater confidence in the future developments of --

凌石透過專注於導演IP的運營，開闢了一條客戶獲取之路，導致第四季度的總營業收入年增超過10％。此外，我們的旗艦產品融合了AI分層學習影片、全方位學習輔導和小班學習體驗，提升了客戶忠誠度，第四季留存率超過70%，較去年同期成長超過5個百分點。客戶忠誠度的提升讓我們對未來發展更有信心--

In terms of steam courses, our franchise programming courses focused on informatics programming and have continuously iterated our products about transitioning from large class to smaller classes. This approach has driven more than 20% year-over-year increase in gross billings during the fourth quarter with retention rates exceeding 70%.

在Steam課程方面，我們的特許經營程式設計課程以資訊學程式設計為重點，不斷迭代由大班向小班過渡的產品。這種方法使得第四季的總營業額年增超過 20%，保留率超過 70%。

Next within the Learning Services segment, we see strong growth in our AI driven subscription services. Total sales witnessed an impressive streak of eight consecutive quarters with over 50% year-over-year growth. For the full year of 2024, AI driven subscription services generated sales of over RMB200 million, representing an increase of over 130% year-over-year.

接下來在學習服務領域，我們看到人工智慧驅動的訂閱服務強勁成長。總銷售額連續八個季度年增超過 50%，表現令人印象深刻。2024年全年，AI驅動的訂閱服務創造銷售額超過2億元，較去年同期成長超過130%。

Recently, we launched an open source to China's First step by step exposition reasoning model, Confucius one, As a 14 billion parameter lightweight single model, Confucius O1 supports deployments on consumer grade GPUs and utilizes chain of thought technology to provide detailed problem solving processes.

近期我們向開源了中國首個分步闡述推理模型Confucius one。

It achieves high accuracy in problem solving with strong logic and reasoning capabilities and offers reasoning in Chinese. Notably, Confucius O1 has officially been open sourced to encourage broader use and innovation of reasoning models in the education sector. Currently, Confucius O1 has been implemented in our AI learning assistant, Mr. P AI tutor, which received positive feedback with over 100 million cumulative users since the product launched.

其解題準確率高，邏輯推理能力強，能用中文進行推理。值得一提的是，孔子O1已正式開源，以鼓勵教育領域推理模型的更廣泛使用和創新。目前，孔子O1已應用於我們的人工智慧學習助理P老師，產品上線以來獲得了正面反響，累計用戶數超過1億。

Youdao Desktop Translation has won the Best Online Education App Award at the Microsoft Store 2024 Annual App Awards. Furthermore, we are continuing to develop the Hi Echo ecosystem. In the fourth quarter, we partnered with Rokid to deliver an immersive AI-powered English learning experience through AI plus AR technology. Hi Echo, alongside Youdao Dictionary, was named one of the top nine apps of 2024 by LeiTech.

有道桌面翻譯榮獲微軟商店2024年度應用程式頒獎盛典最佳線上教育應用獎。此外，我們也持續開發 Hi Echo 生態系統。第四季度，我們與Rokid合作，透過AI加AR技術，提供沉浸式的AI英語學習體驗。Hi Echo 與有道字典一起被 LeiTech 評為 2024 年度九大應用程式之一。

We quickly embraced the recent DeepSeek wave by integrating both Confucius models and DeepSeek-R1 across many of our products. Our teams rapidly experimented with blending the best of both worlds: DeepSeek-R1 delivers robust reasoning and intelligence, while our domain-specific Confucius models are optimized for high-traffic scenarios unique to our offerings.

我們透過在許多產品中整合孔子模型和 DeepSeek-R1，迅速擁抱了最近的 DeepSeek 浪潮。我們的團隊迅速嘗試融合兩全其美的優勢：DeepSeek-R1 提供強大的推理和智能，而我們特定領域的孔子模型針對我們獨有的高流量場景進行了優化。

This powerful combination already enhances products like Mr. P AI Tutor, providing users with smarter, friendlier chat experiences, deeper insights into learning materials, and more effective support for challenging problems. Additionally, it enables us to offer faster, more responsive, and cost-efficient service.

這種強大的組合已經增強了P先生AI Tutor等產品的功能，為用戶提供更聰明、更友善的聊天體驗、更深入的學習材料洞察以及更有效的挑戰性問題支援。此外，它使我們能夠提供更快、更快回應、更具成本效益的服務。

For online marketing services, net revenues reached RMB481.7 million in Q4, representing an increase of 1.6% year-over-year. Gross margin increased to 34.2%, up 1.5-percentage-points year-over-year. In terms of domestic performance-based advertising, industries such as gaming, and AI tools, have seen record-breaking revenues.

網路行銷服務第四季淨收入達人民幣4.817億元，年增1.6%。毛利率上升至34.2%，較去年同期上升1.5個百分點。國內成效廣告方面，遊戲、AI工具等產業收入不斷刷新歷史新高。

On the international advertising front, we recently established an official partnership with Google. This milestone lays a solid foundation for the further growth of our overseas advertising. Additionally, in the field of overseas KOL Key Opinion Leader marketing, we have leveraged our extensive database of global influencers and advanced technologies, such as large language models and image recognition.

在國際廣告方面，我們最近與Google建立了正式合作夥伴關係。這一里程碑為我們海外廣告的進一步發展奠定了堅實的基礎。此外，在海外KOL關鍵意見領袖行銷領域，我們利用我們廣泛的全球影響力人士資料庫和先進技術，例如大型語言模型和圖像識別。

With these tools, we have developed an evaluation model for KOL video conversion effectiveness. This model comprehensively analyzes trends in influencer videos and their comment sections, allowing us to identify which creators possess strong virality and widespread reach, thereby driving high conversion rates.

利用這些工具，我們開發了KOL視訊轉換效果的評估模型。該模型全面分析了網紅影片及其評論部分的趨勢，使我們能夠識別哪些創作者俱有強大的病毒式傳播力和廣泛的影響力，從而推動高轉換率。

By using commercial conversion effectiveness as a key metric, the model assigns ratings to each influencer and uses existing data to predict their conversion potential. Furthermore, we played a pivotal role in the global promotion of the game Marvel Rivals. In the first two weeks after the game's launch, we successfully facilitated the release of nearly 200 pieces of KOL content, resulting in over 80 million impressions across the internet.

該模型以商業轉換效果作為關鍵指標，為每個影響者分配評級，並利用現有數據預測他們的轉換潛力。此外，我們在《Marvel Rivals》遊戲的全球推廣中發揮了關鍵作用。在遊戲上線後的前兩週，我們成功促成了近200條KOL內容的發布，全網閱讀量超過8000萬次。

Looking ahead, we are optimistic about the long-term prospects of our online marketing services. We are committed to strengthening collaboration with clients in the gaming sector, particularly through enhanced synergy with NetEase Group in both traffic side and demand side.

展望未來，我們對我們的線上行銷服務的長期前景感到樂觀。我們致力於加強與遊戲領域客戶的合作，特別是透過加強與網易集團在流量側和需求側的協同。

Turning to our smart devices segment, net revenues reached RMB240.4 million in Q4, marking an 8.1% year-over-year increase, with significantly improved financial health. Our flagship product, the Youdao Dictionary Pen, performed exceptionally well during the Nov 11, Shopping Festival, maintaining its position as the top-seller in its category on both jd.com and Tmall for five consecutive years.

智慧設備板塊，第四季淨收入達2.404億元人民幣，較去年同期成長8.1%，財務狀況顯著改善。我們的旗艦產品有道字典筆在「雙十一」購物節期間表現優異，連續五年蟬聯京東、天貓同品類暢銷榜首。

The X7 Pro also earned the top spot in single-item sales for dictionary pens on both platforms. These successes contributed to an around 20% year-over- year increase of revenues for the dictionary pen. In addition, we are thrilled to announce that cumulative sales of our dictionary pen have surpassed 10 million units since its market debut.

X7 Pro也榮登雙平台字典筆單品銷售榜首。這些成功使得字典筆的收入年增了約20％。此外，我們很高興地宣布，我們的字典筆自上市以來累計銷量已超過 1000 萬支。

In terms of product, we recently launched the Youdao Dictionary Pen A7 Pro, featuring an instant scan and translation -- The product offers top-tier performance at an accessible price point. Earlier this week, we launched the SpaceOne, a brand-new dictionary pen, incorporating the DeepSeek reasoning model, delivering in-depth analytical reasoning capabilities, and providing clearer guidance for complex problem-solving scenarios.

產品方面，我們近期推出了有道字典筆A7 Pro，具有即掃即譯的功能，性能一流，價格也十分實惠。本週早些時候，我們推出了一款全新的字典筆SpaceOne，它融入了DeepSeek推理模型，提供深度的分析推理能力，為複雜的問題解決場景提供更清晰的指導。

Moving forward, we are committed to continuing to pioneer innovations in smart devices, particularly for dictionary pen, enhancing personalized educational experiences for our users and strengthening our leadership in this product.

展望未來，我們致力於持續開拓智慧設備領域的創新，特別是字典筆的創新，為使用者增強個人化的教育體驗，並加強我們在該產品領域的領導地位。

In 2024, we executed a focused business strategy that combined rapid generative AI implementation with a steadfast drive toward operational profitability. It was a breakthrough year, during which several of our business units-such as Youdao Ads, Youdao Lingshi, our dictionary pens, and our AI-powered English learning and translation apps-emerged as clear leaders in their respective segments.

2024 年，我們實施了重點業務策略，將快速生成式 AI 實施與堅定不移地追求營運獲利相結合。這是突破性的一年，我們的多個業務部門，如有道廣告、有道靈視、字典筆以及人工智慧英語學習和翻譯應用程式等，在各自的領域中成為明顯的領導者。

Looking ahead, 2025 has started with the explosive popularity of DeepSeek, a trend that is reshaping the Chinese tech industry. As we discussed on this call, we anticipated that open- source and reasoning models would revolutionize how people learn and market, and that transformation is now underway.

展望2025年，DeepSeek的熱門開啟了中國科技產業的格局。正如我們在這次電話會議上所討論的那樣，我們預計開源和推理模型將徹底改變人們的學習和行銷方式，而這種轉變正在進行中。

Our response has been swift: over the past few weeks, we have seamlessly integrated DeepSeek into our apps, courses, ad platforms, and hardware devices. Yet, this is just the beginning. We believe that large AI models should serve not merely as additional features, but as autonomous agents that drive outcomes.

我們的反應非常迅速：在過去的幾周里，我們已將 DeepSeek 無縫整合到我們的應用程式、課程、廣告平台和硬體設備中。但這只是一個開始。我們相信大型人工智慧模型不應該僅僅作為附加功能，而應該作為推動結果的自主代理。

They should be deeply embedded into our learning and work processes to unlock higher productivity. Accordingly, we are launching our AI Native strategy-integrating AI more comprehensively across our business lines by, for example, automating our advertising platforms and introducing AI-driven tutoring for our course customers. We are excited by the rapid maturing of reasoning models and eager to deliver these innovative projects to our customers.

它們應該深深融入我們的學習和工作流程中，以提高生產力。因此，我們正在推出我們的 AI Native 策略，在我們的業務線中更全面地整合 AI，例如，自動化我們的廣告平台和為我們的課程客戶引入 AI 驅動的輔導。我們對推理模型的快速成熟感到興奮，並渴望將這些創新項目交付給我們的客戶。

Another significant milestone from 2024 was achieving full-year operating profitability for the first time. For 2025, given the current economic conditions and our ongoing progress, we are targeting moderate revenue growth alongside fast-paced improvements in our bottom line.

2024 年的另一個重要里程碑是首次實現全年營運獲利。對於 2025 年，考慮到當前的經濟狀況和我們正在不斷取得的進步，我們的目標是實現收入適度增長，同時快速改善我們的盈利水平。

With that, I will turn the call over to Su Peng to provide you with more detailed insights into our financial performance.

說到這裡，我將把電話轉給蘇鵬，讓他為您提供有關我們財務表現的更詳細資訊。

Thank you, Dr. Zhou, and hello everyone. Today I will be presenting some financial highlights from the fourth quarter and full year of 2024. We encourage you to read through our press release issued earlier today for further details. For the fourth quarter, total net revenues were RMB1.3 billion, or USD183.6 million, representing a 9.5% decrease from the same period of 2023.

謝謝週醫生，大家好。今天，我將介紹 2024 年第四季和全年的一些財務亮點。我們鼓勵您閱讀我們今天早些時候發布的新聞稿以了解更多詳細資訊。第四季，淨收入總額為 13 億元，約 1.836 億美元，較 2023 年同期下降 9.5%。

Net revenues from our learning services were RMB617.7 million, or USD84.6 million, representing a 21.2% decrease from the same period of 2023. The year-over-year decrease was due to our continued strategic focus on a more selective customer acquisition approach, prioritizing higher ROI return on investment engagements. We believe despite the short-term revenue decline, this strategy has enhanced the overall resilience and operational efficiency of our business.

我們學習服務的淨收入為人民幣 6.177 億元，即 8,460 萬美元，比 2023 年同期下降 21.2%。與去年同期相比，下降的原因是，我們繼續將策略重點放在更有選擇性的客戶獲取方法上，優先考慮更高的投資報酬率。我們相信，儘管短期收入有所下降，但這項策略增強了我們業務的整體彈性和營運效率。

Net revenues from our smart devices were RMB240.4 million, or USD32.9 million, up 8.1% from the same period of 2023, primarily driven by the continued increase in sales of Youdao Dictionary Pen in 2024. Net revenues from our online marketing services were RMB481.7 million, or USD66.0 million, representing a modest increase from the same period of 2023.

我們智慧型裝置的淨收入為人民幣 2.404 億元，或 3,290 萬美元，較 2023 年同期成長 8.1%，主要得益於 2024 年有道字典筆銷售的持續成長。我們在線上行銷服務的淨收入為 4.817 億元（約 6,600 萬美元），較 2023 年同期小幅增長。

For the fourth quarter, our total gross profit was RMB640.8 million, or USD87.8 million, representing a 13.3% decrease from the fourth quarter of 2023. Gross margin for learning services was 60.0% for the fourth quarter of 2024, compared with 63.6% for the same period of 2023. Gross margin for smart devices was 43.9% for the fourth quarter of 2024, compared with 38.3% for the same period of 2023.

第四季度，我們的總毛利為人民幣 6.408 億元，或 8,780 萬美元，較 2023 年第四季下降 13.3%。2024 年第四季學習服務的毛利率為 60.0%，而 2023 年同期為 63.6%。2024 年第四季智慧型設備毛利率為 43.9%，而 2023 年同期為 38.3%。

Gross margin for online marketing services was 34.2% for the fourth quarter of 2024, compared with 32.7% for the same period of 2023. For the fourth quarter, we reduced our total operating expenses to RMB556.6 million, or USD76.3 million, compared with RMB662.5 million for the same period of last year.

2024 年第四季網路行銷服務的毛利率為 34.2%，而 2023 年同期為 32.7%。第四季度，我們將總營運費用削減至 5.566 億元，約 7,630 萬美元，去年同期為 6.625 億元。

Looking at our expenses in more detail. Sales and marketing expenses declined to RMB381.8 million, compared with RMB441.4 million in the fourth quarter of 2023. Research and development expenses were decreased to RMB120.7 million, compared with RMB168.1 million in the fourth quarter of 2023.

更詳細地了解我們的開支。銷售和行銷費用下降至人民幣 3.818 億元，而 2023 年第四季為人民幣 4.414 億元。研發費用減少至 1.207 億元，而 2023 年第四季為 1.681 億元。

Our operating income margin was 6.3% in the fourth quarter of 2024, compared with 5.2% for the same period of last year. For the fourth quarter of 2024, our net income attributable to ordinary shareholders was RMB83.0 million, or USD11.4 million, compared with RMB56.5 million for the same period of last year.

2024 年第四季度，我們的營業收入利潤率為 6.3%，而去年同期為 5.2%。2024年第四季，我們歸屬於普通股股東的淨利為人民幣8,300萬元，約合1,140萬美元，去年同期為人民幣5,650萬元。

Non-GAAP net income attributable to ordinary shareholders for the fourth quarter was RMB91.8 million, or USD12.6 million, compared with RMB69.3 million for the same period of last year. Basic and diluted net income per ADS attributable to ordinary shareholders for the fourth quarter of 2024 were RMB0.71, or USD0.10 and RMB0.70, or USD0.10, respectively. Non- GAAP basic and diluted net income per ADS attributable to ordinary shareholders for the fourth quarter was RMB0.78, or USD0.11 and RMB0.77, or USD0.11, respectively.

第四季非美國通用會計準則下歸屬於普通股股東的淨利為9,180萬元人民幣，約合1,260萬美元，去年同期為6,930萬元。2024年第四季歸屬於普通股股東的每股美國存託憑證基本淨利為0.71元人民幣，合0.10美元；每股美國存託憑證攤薄淨利潤為0.70元人民幣，合0.10美元。第四季非美國通用會計準則下歸屬於普通股股東的每股美國存託憑證基本及攤薄淨利分別為0.78元人民幣（合0.11美元）及0.77元人民幣（合0.11美元）。

Our net cash provided by operating activities was RMB158.2 million, or USD21.7 million, for the fourth quarter. Turning to our full-year results, our total revenues for 2024 increased by 4.4% to RMB5.6 billion, or USD770.7 million. Net revenues from our learning services for 2024 down by 12.7% year-over-year to RMB2.7 billion, or USD376.4 million.

第四季度，我們經營活動產生的淨現金為 1.582 億元，約 2,170 萬美元。回顧我們的全年業績，我們 2024 年的總收入成長 4.4% 至 56 億元，即 7.707 億美元。2024年，我們學習服務淨收入年減12.7%至人民幣27億元，即3.764億美元。

Net revenues from our smart devices for 2024 were RMB903.7 million, or USD123.8 million, remaining stable compared to 2023. Net revenues from our online marketing services for 2024 were up 48.3% year-over- year to RMB2 billion, or USD270.6 million. Total gross profit for 2024 was RMB2.7 billion, or USD376.5 million, remaining stable compared to 2023.

2024 年，我們智慧型設備的淨收入為人民幣 9.037 億元，即 1.238 億美元，與 2023 年相比保持穩定。2024年，我們在網路行銷服務的淨收入年增48.3%至人民幣20億元，即2.706億美元。2024年總毛利為人民幣27億元，約3.765億美元，與2023年相比維持穩定。

Total operating expenses for 2024 decreased to RMB2.7 billion, or USD356.2 million, compared with RMB3.2 billion in 2023. Net income attributable to ordinary shareholders for 2024 was RMB82.2 million, or USD11.3 million, and basic and diluted net income per ADS attributable to ordinary shareholders for 2024 was RMB0.7 or USD0.1.

2024年總營業費用從2023年的32億元下降至27億元人民幣，或3.562億美元。2024年歸屬於普通股股東的淨利為8,220萬元人民幣，約合1,130萬美元；2024年歸屬於普通股股東的每股美國存託憑證基本及攤薄淨利潤為0.7元人民幣，約合0.1美元。

Looking at our balance sheet, as of December 31, 2024, our contract liabilities, which mainly consist of deferred revenues generated from our learning services, were RMB961.0 million, or USD131.7 million, compared with RMB1.1 billion as of December 31, 2023. At the end of the period, our cash, cash equivalents, current and non-current restricted cash, and short-term investments totaled RMB662.6 million, or USD90.8 million.

從我們的資產負債表來看，截至 2024 年 12 月 31 日，我們的合約負債（主要包括我們學習服務產生的遞延收入）為人民幣 9.61 億元（或 1.317 億美元），而截至 2023 年 12 月 31 日為人民幣 11 億元。期末，我們的現金、現金等價物、流動和非流動受限現金以及短期投資總計人民幣6.626億元，或9080萬美元。

This concludes our prepared remarks. Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead.

我們的準備好的演講到此結束。感謝您的關注。我們現在想開始回答你們的問題。接線員，請繼續。

(Operator Instructions) Brian Gong, CITI Group.

(操作員指示) 花旗集團 (CITI Group) 的 Brian Gong。

Thanks management for taking my question and congrats on decent profitability achieved for this quarter. Just a very quick question. Can management elaborate on the outlook for this year 2025, like for different business lines and our overall strategies?

感謝管理層回答我的問題，並祝賀本季度取得了可觀的盈利能力。這只是一個簡單的問題。管理階層能否詳細說明 2025 年的展望，例如不同業務線和我們的整體策略？

Thank you, Brian. So, our company is focused on two key areas. One is AI-driven education technology. The other is AI-driven online marketing technologies. So, I'll talk about our strategy in 2025 along these two lines. And we see significant opportunities in both areas.

謝謝你，布萊恩。因此，我們公司專注於兩個關鍵領域。一是人工智慧驅動的教育科技。另一個是人工智慧驅動的線上行銷技術。所以，我會從這兩個想法來談談我們2025年的戰略。我們在這兩個領域都看到了巨大的機會。

So one, our strategy is to enhance our offering by leveraging cutting-edge AI, improving our content quality, gaining deeper insights into customer needs and we try to establish leadership positions in each of our key product segments. So as we discussed earlier, reasoning models have become very important for the education segment and also marketing segment.

因此，我們的策略是利用尖端的人工智慧來增強我們的服務，提高我們的內容質量，深入了解客戶需求，並嘗試在每個關鍵產品領域確立領導地位。正如我們之前討論的，推理模型對於教育領域和行銷領域變得非常重要。

So, we anticipated rapid advancement in this area. And the actual pace actually exceeded our expectations. Today, not only do we have models that are really good at reasoning at solving problems, but also they are very affordable. So, I think if you look at history, so breakthroughs in infrastructure technology has often lead to explosive growth in applications.

因此，我們預計該領域將取得快速進展。而實際速度也確實超出了我們的預期。今天，我們不僅擁有真正善於推理解決問題的模型，而且它們的價格也非常實惠。所以，我認為如果你回顧歷史，基礎設施技術的突破往往會導致應用程式的爆炸性增長。

So, we believe this year, 2025 and likely next year will be very important pivotal for the widespread developing of large language model applications in education and advertising. So, that's where we will be focusing on the product and tech side.

因此，我們相信今年、2025年以及很可能明年將是大型語言模型應用在教育和廣告領域廣泛發展的關鍵一年。因此，我們將重點放在產品和技術方面。

And on the financial side, 2024 was a milestone year for us as we achieved profitability. And looking ahead to 2025, so we plan to maintain a drive towards a modest revenue growth while keeping profitability a key focus for us, particularly in today's challenging economic environment.

從財務方面來看，2024 年對我們來說是一個里程碑，因為我們已經獲利了。展望 2025 年，我們計劃繼續努力實現適度的收入成長，同時將獲利能力作為我們的關注重點，尤其是在當今充滿挑戰的經濟環境中。

So, we will remain financially disciplined, balancing growth and profitability. So looking at the separate businesses. So for Learning Services, we remain focused on high-demand products like Youdao Lingshi. So as we talked about, we think this is the right strategy. This is good for the -- for our financial health, and this is also good for long-term growth.

因此，我們將保持財務紀律，平衡成長和獲利。因此看一下不同的業務。因此，對於學習服務，我們仍然專注於有道靈石等高需求產品。正如我們所討論的，我們認為這是正確的策略。這對我們的財務健康有好處，對長期成長有好處。

And we -- for this year, for courses, AI is going to be more important for us compared to past years because the technology is finally -- we believe it's ready. It's in place to introduce features like AI tutoring as a core element of our course offerings. So, that's a major project we are working on right now. So combined with our high-quality video learning content and expert service teams, so we believe AI tutoring will provide an enhanced -- much enhanced learning experiences for our customers.

就今年的課程而言，與過去幾年相比，人工智慧對我們來說將變得更加重要，因為我們相信這項技術終於準備好了。它將引入人工智慧輔導等功能作為我們課程的核心元素。所以，這是我們目前正在進行的一個重大項目。因此，結合我們的高品質視訊學習內容和專家服務團隊，我們相信人工智慧輔導將為我們的客戶提供增強的學習體驗。

Additionally, we are also working on other AI features like AI-driven college and mission adviser. So, we believe that will be important, too. We're also expanding our AI subscription services, which we offer as affordable and interactive learning experiences. So, we recently upgraded Hi Echo. So with a much better conversation experience, much lower conversation latency. So, that's an example of what we will do down the line. So, we will enhance a lot of our services and release new subscription services this year.

此外，我們也正在開發其他 AI 功能，如 AI 驅動的大學和任務顧問。因此我們認為這也很重要。我們也正在擴展我們的人工智慧訂閱服務，以提供價格實惠且互動的學習體驗。因此，我們最近升級了 Hi Echo。因此，對話體驗會更好，對話延遲也會更低。所以，這就是我們將來要做的事情的一個例子。因此，我們今年將增強許多服務並發布新的訂閱服務。

And as regard to Smart Devices, we see continued opportunities in 2025. Our focus remains on maintaining market leadership with the dictionary pen category. And also, at the same time, we'd like to introduce new category products. So, we have a very good product pipeline for 2025.

至於智慧型設備，我們認為 2025 年仍將存在機會。我們的重點仍然是保持字典筆類別的市場領先地位。同時，我們也想推出新類別的產品。因此，我們為 2025 年制定了非常好的產品線。

So just two days ago, we launched our first high-end product of this year, the Youdao SpaceOne Pen. So, this device represents our vision for what a next-generation AI tutoring learning device should look like. So it's a very different product as our dictionary pens. So it is a very good example of how we continue to differentiate through this kind of innovation, so especially in terms of enhanced personalized learning experiences for home learners.

所以就在兩天前，我們推出了今年的第一款高階產品－有道SpaceOne Pen。所以，這個設備代表了我們對下一代人工智慧輔導學習設備的願景。所以它和我們的字典筆是非常不同的產品。因此，這是一個很好的例子，說明我們如何透過這種創新繼續實現差異化，特別是在為家庭學習者增強個人化學習體驗方面。

So finally, but also very importantly, in online marketing services, the key trend continued to be -- we see to be twofold. One important trend is the shift of the multi-trillion yuan ad industry towards performance-based advertising. And the second trend is the growing application of AI of large language models in advertising.

因此，最後，但同樣非常重要的一點是，網路行銷服務的關鍵趨勢仍然是——我們認為具有雙重性。一個重要趨勢是數兆元的廣告產業正在轉向效果廣告。第二個趨勢是大型語言模型的人工智慧在廣告中的應用越來越廣泛。

So, we are still a relatively small player in this space, but we see significant growth opportunities in 2025 by leveraging these trends. So, we plan to deepen our strategic collaboration with NetEase to integrate more traffic ecosystems and advertiser resources. The partnership, which began last year 2024, currently represents less than 10% of our ad revenue, and we expect this to grow considerably in 2025.

因此，我們在這個領域仍然是一個相對較小的參與者，但透過利用這些趨勢，我們看到 2025 年存在巨大的成長機會。因此，我們計劃深化與網易的策略合作，整合更多的流量生態系統和廣告商資源。該合作關係於去年 2024 年開始，目前占我們廣告收入的不到 10%，我們預計這筆收入將在 2025 年大幅成長。

So in parallel, we will also continue to expand globally, with a focus on key opinion leader marketing and performance-based advertising. So moreover, we are actively exploring AI and LLM-driven projects that will enhance platform capabilities for our ad clients. So, our goal is to replicate the step growth we achieved in Q4 last year, Q4 2023.

因此，同時，我們也將繼續全球擴張，重點關注關鍵意見領袖行銷和基於績效的廣告。此外，我們也正在積極探索由人工智慧和法學碩士驅動的項目，以增強我們廣告客戶的平台能力。因此，我們的目標是，在 2023 年第四季複製去年第四季實現的階梯式成長。

While this kind of step growth is challenging to attain, we are committed to find them and pursue them. So at the same time, we continue to optimize and expand our business on a day-to-day basis. So, we think that will ensure more stable and sustainable growth. So as our AI technology matures, we will accumulate more customers, develop more experienced teams contributing to our ad business growth. Yes, that's all from me.

儘管這種逐步成長很難實現，但我們致力於尋找並追求它。因此，同時，我們每天都在不斷優化和擴展我們的業務。因此，我們認為這將確保更加穩定和可持續的成長。因此，隨著我們的人工智慧技術的成熟，我們將累積更多的客戶，發展更有經驗的團隊，為我們的廣告業務成長做出貢獻。是的，我要說的就這些。

Thank you, Dr. Zhou. And this is Wayne. I'd like to add more color from the financial perspective. There was remarkable financial progress in 2024, and we will continue to monitor the key financial metrics to track our progress in 2025, particularly in profitability and cash flow improvement aspect.

謝謝週醫生。這是韋恩。我想從財務角度來補充更多內容。2024 年的財務取得了顯著進展，我們將繼續監控關鍵財務指標，以追蹤 2025 年的進展，特別是在獲利能力和現金流改善方面。

First, from the profitability front, as mentioned by Dr. Zhou, 2024 marks the first year to achieve the scalable profit. The net income attributable to Youdao's ordinary shareholders for 2024 was over RMB80 million compared with the loss of around RMB550 million in 2023. The significant improvement in our bottom line primarily stepped from our focus on strategic projects and the streamline of loss-making operating units.

第一，從獲利能力來看，正如周博士所說，2024年是實現規模獲利的第一年。2024年歸屬於有道普通股股東的淨利超過8,000萬元人民幣，而2023年的虧損約為5.5億元。我們獲利的顯著改善主要得益於我們對策略項目的關注和虧損營運部門的精簡。

We believe AI and LLM-driven technology, as mentioned by Dr. Zhou, such as AI tutoring, will enhance our advantages of our business. It will further drive the improvement in financial performance in 2025. Looking ahead to 2025, with AI technology become more mature and cost effective, we will further leverage this advancement and implement new cost optimization measures to enhance business profitability.

我們相信，正如周博士所提到的，由人工智慧和法學碩士驅動的技術，例如人工智慧輔導，將增強我們的業務優勢。將進一步推動2025年財務表現的提升。展望2025年，隨著人工智慧技術日趨成熟及成本效益更高，我們將進一步利用這項進步並實施新的成本優化措施，以提高業務獲利能力。

Second, from a cash flow perspective, we have dramatically improved our net cash outflow from a substantial improvement from RMB440 million net outflow in 2023 to around RMB70 million in 2024. Such improvements step from both enhanced profitability and rapid growth of our AI subscription business.

第二，從現金流角度，我們的淨現金流出大幅改善，從2023年的淨流出4.4億元人民幣大幅改善到2024年的淨流出約7000萬元人民幣。這些改進源自於我們獲利能力的增強和 AI 訂閱業務的快速成長。

In 2025, we will continue our efforts in revenue expansion and cost control, aiming to achieve historical breakeven in annual operating cash flow for further improvement. Regarding revenue growth, as mentioned by Dr. Zhou, we anticipate continued moderate growth considering today's challenging economic environment while keeping profitability a key focus. While we face significant challenges from competitors and business uncertainty, we remain confident in delivering better business and financial performance in 2025. Thank you.

2025年，我們將繼續致力於收入擴張和成本控制，目標是年度經營現金流量達到歷史損益平衡，並取得進一步的改善。關於收入成長，正如周博士所說，考慮到當今充滿挑戰的經濟環境，我們預計收入將繼續適度增長，同時仍將盈利能力作為重點關注對象。儘管我們面臨來自競爭對手和業務不確定性的重大挑戰，但我們仍然有信心在 2025 年實現更好的業務和財務表現。謝謝。

Brenda Zhao, CICC.

Brenda Zhao，中國國際金融公司

Good evening, Zhou Zhong and Suzhongg. Thanks for taking my question and congrats on the improvement in your progress in your AI products, both in education and in ad sector. So, my question is about the online marketing business because we saw that the Q4 growth of this business is kind of like flattish.

周忠、蘇忠，晚上好。感謝您回答我的問題，並祝賀你們在教育和廣告領域的人工智慧產品方面取得了進展。所以，我的問題是關於網路行銷業務，因為我們發現該業務第四季的成長有點持平。

What kind of opportunities will arise for this business in 2025? Are we going to expand our -- because previously, we are mainly in the domestic market, are we going to expand in the overseas market? And what's our strategy?Thank you.

2025年這個產業會出現什麼樣的機會？我們要擴大嗎？我們的策略是什麼？你。

Hi, This is Jin Lei. Thank you for your questions. In 2025, Youdao's advertising strategy will focus on three interconnected growth drivers. The first, we are intensifying our collaboration with NetEase Group through both technological integration and ecosystem expansion.

你好，我是金磊。感謝您的提問。2025年，有道的廣告策略將聚焦三大互聯互通的成長動力。第一，我們正在透過技術整合和生態系統擴展加強與網易集團的合作。

By developing Youdao's proprietary data analytics and AI algorithm across NetEase platforms, they are driving measurable improvement in advertising efficiency, building on our successful partnership with NetEase Cloud Music, news and mailbox -- mail services. We are now identifying new high-potential traffic channels with the ecosystem to create additional advertiser touch points.

透過在網易平台上開發有道專有的數據分析和人工智慧演算法，他們在與網易雲音樂、新聞和郵箱郵件服務的成功合作的基礎上，推動了廣告效率的顯著提升。我們現在正在利用生態系統識別新的高潛力流量管道，以創建額外的廣告商接觸點。

Notably, our ad services for NetEase Group achieved over 200% year-over-year revenue growth in 2024, yet they still account for less than 10% of our total ad revenue, demonstrating substantial untapped potential.

值得注意的是，我們為網易集團提供的廣告服務在 2024 年實現了超過 200％的同比收入增長，但仍占我們總廣告收入的不到 10％，顯示出巨大的未開發潛力。

Second, as you mentioned, our global expansion is gaining strong momentum. Last year, marked two strategic breakthroughs, becoming one Tier 1 TikTok partner, helped us surpass RMB100 million in international ad revenue with over 100% year-over-year growth, while our recent Google partnership certification established a sustainable foundation for cross-border growth. This alliance strategically position us to capture the emerging opportunities in global digital marketing through 2025 and beyond.

第二，正如您所說，我們的全球擴張勢頭強勁。去年，我們實現了兩項策略突破：成為TikTok一級合作夥伴；國際廣告收入突破1億元，年增超過100%；最近獲得Google合作夥伴認證，為跨國成長奠定了可持續的基礎。這項聯盟將為我們在 2025 年及以後抓住全球數位行銷的新興機會提供策略定位。

Finally, we are revolutionizing our advertising tech stack through AI innovation, following the successful integration of our advertising LLM with DeepSeek's capabilities. We are now developing an AI advertising optimizer. This solution automates campaign strategy generation aligned with marketing objectives, enable dynamic budget optimization and execute real-time speed adjustment, significantly enhance both position and operational efficiency in ad delivery.

最後，繼我們的廣告法學碩士 (LLM) 與 DeepSeek 的功能成功整合之後，我們正在透過人工智慧創新徹底改變我們的廣告技術堆疊。我們現在正在開發一個人工智慧廣告優化器。此解決方案可自動產生符合行銷目標的行銷活動策略，實現動態預算優化並執行即時速度調整，顯著提高廣告投放的位置和營運效率。

Thank you.

謝謝。

Thomas Chong of Jefferies.

傑富瑞 (Jefferies) 的 Thomas Chong。

Hi, good evening. Thanks management for taking my question. My question is about the priority for Learning Services this year. Thank you.

嗨，晚上好。感謝管理層回答我的問題。我的問題是關於今年學習服務的優先事項。謝謝。

Thank you, Thomas. This is Su Peng. I will handle the question first. And I think the last year, we initiated the structured adjustments in our Learning Services product portfolios. We intensified the focus on the courses with robust demand, especially in the Youdao Lingshi. We are phasing out non-essentials programs at the same time.

謝謝你，托馬斯。我是蘇鵬。我先來處理一下這個問題。我認為去年我們啟動了學習服務產品組合的結構化調整。我們加強了對需求旺盛的課程的關注，尤其是有道靈石課程。我們同時正在逐步淘汰非必要的項目。

This restructuring remains ongoing, I think, and it's projected to conclude in the second half of this year. Upon completion, revenue from the Learning Services is expected to stabilize in the latter half of this year. I think Youdao Lingshi will serve as the strategic priority for Learning Services in this year 2025.

我認為，重組仍在進行中，預計將在今年下半年完成。該計畫完成後，學習服務收入預計將在今年下半年穩定下來。我認為有道靈石將成為2025年學習服務的策略重點。

We commit to the advance, following the key initiatives to deliver the more personalized and efficient learning experience for our customers. And at the same time, we expect the revenue and the gross billings of the Lingshi will keep growing in 2025 as well.

我們致力於不斷進步，遵循關鍵舉措，為客戶提供更個人化、更有效率的學習體驗。同時，我們預計2025年靈石的營收和毛利率也將持續成長。

But first, we think we will leverage the advanced capability of the DeepSeek, the large language models. We will comprehensively upgrade the AI services within the Youdao Lingshi intelligent learning system. Post upgrade of the enhancement, will include -- the first is for more precisely the identification of knowledge gaps, optimize the learning class design, enhanced clarify in QA and explanations, a more comprehensive college application planning solutions.

但首先，我們認為我們將利用 DeepSeek 的先進功能，即大型語言模型。我們將全面升級有道靈視智能學習體系中的AI服務。後期升級的增強，將包括－第一是對知識缺口的更精準的識別，學習課堂設計的優化，問答環節的講解增強，大學申請規劃解決方案更加全面。

Secondly, we are implementing the data-driven updates to the instructional videos beyond routine updates aligned with the curriculum revisions. Our primary update criteria will be derived from the students exercise accuracy rates within the intelligent learning system. When the error rates exceeds the threshold, our dedicated adviser will proactively engage the students to collect feedback on the specific video content, expediate the consolidated feedback to the content managers and our R&D teams, facilitate media -- video update and system redevelopments.

其次，除了配合課程修訂的常規更新外，我們還在實施基於數據驅動的教學視訊更新。我們的主要更新標準將來自學生在智慧學習系統中的練習準確率。當錯誤率超過閾值時，我們的專門顧問將主動與學生聯繫，收集有關特定視訊內容的回饋，並將綜合回饋盡快發送給內容經理和我們的研發團隊，促進媒體—視訊更新和系統重新開發。

And we think that will be the things we did in the 2025 on the Learning Services, and we feel confident about the business and the content, and we expect to keep delivering the high-quality products and services to our students. Thank you, Thomas. I hope that answers your questions.

我們認為這將是我們在 2025 年在學習服務方面所做的事情，我們對業務和內容充滿信心，我們期望繼續為我們的學生提供高品質的產品和服務。謝謝你，托馬斯。我希望這能回答你的問題。

Thank you.

謝謝。

[Bo Zhang] of Huatai Securities.

華泰證券的[張博]。

This is Zhang Bo from Huatai. My question is after the integration of Youdao large language model, Confucius, with DeepSeek, what positive impact can we expect on the business operation?

我是華泰的張波。我的問題是，有道大型語言模式Confucius和DeepSeek整合之後，能對業務運作產生什麼正面的影響？

Yes. Thank you, Zhang Bo, for the question. Yes, I will take it. So, I think there are 3 points. So first, building on DeepSeek, particularly DeepSeek R1, the reasoning models, it opens up a lot of exciting opportunities for us. So, we're one of the first teams in the education and advertising area to integrate DeepSeek into our including Mr. P AI Tutor, Youdao Dictionary, Youdao Dictionary Pen, Chinese -- China University, MOOC, and Youdao Smart Cloud. So, we're doing it first.

是的。感謝張波的提問。是的，我會接受。所以，我認為有3點。首先，基於 DeepSeek，特別是 DeepSeek R1 推理模型，它為我們開闢了許多令人興奮的機會。因此，我們是教育和廣告領域首批將DeepSeek 整合到我們的產品中的團隊之一，包括P先生AI導師、有道詞典、有道詞典筆、中文-中國大學、MOOC和有道智能雲。因此，我們先做這件事。

However, what's more powerful is enhancing these models with domain-specific business-specific knowledge. So, one key technology that you can enhance the base model, the base DeepSeek model is to augment it with a retrieval augmented generation RAG technology.

然而，更強大的是利用特定領域的特定業務知識來增強這些模型。因此，增強基礎模型（基礎 DeepSeek 模型）的一項關鍵技術是使用檢索增強生成 RAG 技術來增強它。

So, this integrates the model with knowledge bases and vector databases to combine general capabilities with domain-specific expertise. So, our team has significant experience with RAG and our QAnything framework. It is actually one of China's leading RAG platform.

因此，這將模型與知識庫和向量資料庫結合，將一般能力與特定領域的專業知識結合起來。因此，我們的團隊在 RAG 和 QAnything 框架方面擁有豐富的經驗。它實際上是中國領先的 RAG 平台之一。

So, that's a good example. So, we've also developed popular RAG applications in education, such as our AI college application assistant last year. So now with DeepSeek, we will strengthen these RAG applications, making them more effective.

這是一個很好的例子。因此，我們也開發了教育領域流行的 RAG 應用程序，例如去年我們的 AI 大學申請助理。所以現在有了DeepSeek，我們將加強這些RAG應用，讓它們更有效。

So from a competitive standpoint, the deeper integration of strong models into applications is, I think it's quite similar to developing apps for mobile platforms like iPhone and Android. So, those teams with better app building experiences, I think right now, we will have an edge here. So, these teams will develop AI applications better just as we have been able to develop mobile applications very well. So, that's one.

因此，從競爭的角度來看，將強大的模型更深入地整合到應用程式中，我認為這與為 iPhone 和 Android 等行動平台開發應用程式非常相似。因此，我認為，那些擁有更好的應用程式建置經驗的團隊現在將具有優勢。所以這些團隊會更好地開發AI應用程序，就像我們能夠很好地開發行動應用程式一樣。那麼，這是其中之一。

So second point is -- so agents are a newer, very promising application model of large language models. So instead of just answering single questions, so agents solve multistep tasks. So, AI agents have already seen success in areas like programming, and I expect education and advertising to be the next major area where agents will be very successful.

第二點是－代理人是大型語言模型的一個較新的、非常有前景的應用模型。因此，代理不僅回答單一問題，還可以解決多步驟任務。因此，人工智慧代理已經在程式設計等領域取得了成功，我預計教育和廣告將成為代理商取得巨大成功的下一個主要領域。

So Jin Lei just talked about AI ad optimizing optimizers. Yes, these are agent applications that we are already exploring, and we already see very good early results for these AI agents. So, there are a lot of very highly frequent scenarios where we see that a strong model, combined with agent technology can automate tasks with a very high success rate, such as tutoring on specific topics, such as optimizing advertising assets and performing ad attribution analysis, [Gongo Qwen].

所以金磊剛才講了AI廣告優化優化器。是的，這些是我們正在探索的代理應用程序，並且我們已經看到這些 AI 代理非常好的早期成果。因此，在許多非常常見的場景中，我們看到一個強大的模型與代理技術相結合，可以以非常高的成功率自動執行任務，例如針對特定主題的輔導，例如優化廣告資產和執行廣告歸因分析，[貢戈 Qwen]。

Third, we are enhancing general purpose large-scale models with smaller, more domain-specific vertical models. So, this is different from RAG. So essentially, RAG is you combine a model with knowledge base. So, vertical model is you develop new smaller and more specialized models.

第三，我們正在用更小、更特定領域的垂直模型來增強通用的大規模模型。所以，這與 RAG 不同。因此本質上，RAG 就是將模型與知識庫結合。因此，垂直模型就是開發新的更小、更專業的模型。

This actually has been our strategy since 2023, and it's proving to be highly effective. So for instance, we recently open-sourced the Confucius-O1-14B reasoning model I talked about. So, this one is optimized to run on a consumer-grade GPU like the 3090 or 4090. So it actually outperforms the skilled version of DeepSeek R1 of the same size, of the same 14B size in mass tasks.

這實際上一直是我們自 2023 年以來一直在推行的策略，而且事實證明它非常有效。比方說，我們最近開源了我剛才提到的Confucius-O1-14B推理模型。因此，該版本針對 3090 或 4090 等消費級 GPU 進行了最佳化。因此，它在海量任務中實際上表現優於同等大小、同等 14B 大小的 DeepSeek R1 技能版。

So basically, we developed a model for mass tasks that's more effective than DeepSeek of the same size. So, I think that's very exciting. And what's also exciting is that Confucius-o1 was developed in -- by our teams in just a month, just under a month. So, that showcases how rapid open-source models development has empowered our team and others in the industry to create competitive vertical models.

所以基本上，我們開發了一個針對大規模任務的模型，它比同等規模的 DeepSeek 更有效。所以我認為這非常令人興奮。同樣令人興奮的是，我們的團隊僅用一個月，不到一個月的時間就開發了Confucius-o1。這顯示了開源模型的快速發展如何幫助我們的團隊和業內其他人創建具有競爭力的垂直模型。

So alongside Confucius- O1, we've actually also developed a Confucius translation model with just 10% of the parameters of larger-sized general models. And -- also -- and we also have Confucius edge model with fewer than 1 billion parameters that delivers offline translation quality better than many online NMT translation models.

因此，除了孔子-O1 之外，我們實際上還開發了一個孔子翻譯模型，其參數僅為大型通用模型的 10%。而且——此外——我們還有少於 10 億個參數的孔子邊緣模型，其離線翻譯品質比許多線上 NMT 翻譯模型更好。

So as we continue to understand and anticipate usage scenario in the coming quarters, we will quickly upgrade these models and develop new vertical models. So keeping R&D and compute cost efficient while delivering valuable results to our users and business, yes. So, I hope that answers your question. Thank you.

因此，隨著我們繼續了解和預測未來幾季的使用場景，我們將快速升級這些模型並開發新的垂直模型。因此，在為我們的用戶和企業提供有價值的成果的同時，保持研發和計算成本的高效，是的。我希望這能回答你的問題。謝謝。

That's right. Okay, thank you.

這是正確的。好的，謝謝。

This concludes our question-and-answer session. And I would like to turn the conference back over to management for any closing remarks.

我們的問答環節到此結束。我希望將會議交還給管理階層，請他們作最後發言。

Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Youdao directly or reach out to Piacente Financial Communications in China or the US Have a nice day.

再次感謝您今天的參與。如果您還有其他問題，請隨時直接透過有道聯絡我們，或聯絡中國或美國的Piacente Financial Communications 祝您有美好的一天。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。