☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||
American depositary shares, each ADS represents one Class A ordinary share, par value US$0.0001 per share | DAO | The New York Stock Exchange | ||||
Class A ordinary shares, par value US$0.0001 per share* | N/A | The New York Stock Exchange |
* | Not for trading, but only in connection with the listing of the American depositary shares on the New York Stock Exchange. |
Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | Non-accelerated Filer | ☐ | |||||
Emerging Growth Company | ☐ |
U.S. GAAP ☒ | International Financial Reporting Standards as issued | Other ☐ | ||||||
by the International Accounting Standards Board | ☐ |
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iv | ||||||||
1 | ||||||||
1 | ||||||||
1 | ||||||||
KEY INFORMATION | 1 | |||||||
INFORMATION ON THE COMPANY | ||||||||
UNRESOLVED STAFF COMMENTS | 122 | |||||||
FINANCIAL INFORMATION | 162 | |||||||
ADDITIONAL INFORMATION | 163 | |||||||
176 | ||||||||
CONTROLS AND PROCEDURES | 177 | |||||||
CODE OF ETHICS | 178 | |||||||
CORPORATE GOVERNANCE | 180 | |||||||
MINE SAFETY DISCLOSURE | 180 | |||||||
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. | 180 | |||||||
FINANCIAL STATEMENTS | 180 | |||||||
FINANCIAL STATEMENTS | 180 | |||||||
EXHIBITS | 180 |
competition in the intelligent learning industry, particularly the segments of learning services and smart devices in China; |
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. | KEY INFORMATION |
(1) | Youdao HK currently operates our overseas knowledge tool and related businesses, including U-Dictionary. |
(2) | Shareholders of Linjiedian Education are William Lei Ding, our director (who is also the chief executive officer, a director and a major shareholder of NetEase, our controlling shareholder), and Feng Zhou, our Chief Executive Officer and director, each holding 99% and 1%, respectively, of Linjiedian Education’s equity interests. |
(3) | Shareholders of Youdao Computer are William Lei Ding, our director (who is also the chief executive officer, a director and a major shareholder of NetEase, our controlling shareholder), and Feng Zhou, our Chief Executive Officer and director, each holding approximately 71% and 29%, respectively, of Youdao Computer’s equity interests. |
ITEM 4. | INFORMATION ON THE COMPANY |
Taxation Scenario (1) | ||||
Statutory Tax and Standard Rates | ||||
Hypothetical pre-tax earnings(2) | 100 | % | ||
Tax on earnings at statutory rate of 25% | -25 | % | ||
Net earnings available for distribution | 75 | % | ||
Withholding tax at standard rate of 10% (3) | -7.5 | % | ||
Net distribution to Parent/Shareholders | 67.5 | % |
(1) | The tax calculation has been simplified for the purpose of this example. The hypothetical book pre-tax earnings amount, which does not consider timing differences, is assumed to equal the taxable income in the PRC. |
(2) | Under the terms of the VIE agreements, sales service fees are charged by our PRC subsidiaries to the VIEs. For all the periods presented, these fees are recognized as cost of revenues of the VIEs, with a corresponding amount as service income by our PRC subsidiaries and eliminated in consolidation. For income tax purposes, our PRC subsidiaries and VIEs file income taxes on a separate company basis. The fees paid are recognized as a tax deduction by the VIEs and as income by our PRC subsidiaries and are tax neutral. |
(3) | China’s Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a Foreign Invested Enterprises (“FIE”) to its immediate holding company outside of China. A lower withholding income tax rate of 5% is applied if the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China, subject to a qualification review at the time of the distribution. For the purpose of this hypothetical example, this table has been prepared based on a taxation scenario under which the full withholding tax would be applied. |
As of December 31, 2020 | ||||||||||||||||||||||||
Youdao, Inc. | Other Subsidiaries | Primary beneficiary of VIEs | VIEs and their subsidiaries | Eliminations | Total | |||||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||||||
Cash and cash equivalents | 117,400 | 184,995 | 299,113 | 7,691 | — | 609,199 | ||||||||||||||||||
Time deposits | — | — | 263 | — | — | 263 | ||||||||||||||||||
Short-term investments | — | 524,526 | 50,119 | 10,354 | — | 584,999 | ||||||||||||||||||
Accounts receivable, net | — | 38,606 | 85,012 | 145,212 | — | 268,830 | ||||||||||||||||||
Amounts due from NetEase Group | — | 2,231 | 1,705 | 145 | — | 4,081 | ||||||||||||||||||
Amounts due from Youdao Group Companies (1) | 1,011,360 | 127,259 | 2,127 | 1,242,980 | (2,383,726 | ) | — | |||||||||||||||||
Other assets | 9,277 | 52,303 | 370,509 | 170,787 | — | 602,876 | ||||||||||||||||||
Total assets | 1,138,037 | 929,920 | 808,848 | 1,577,169 | (2,383,726 | ) | 2,070,248 | |||||||||||||||||
Contract liabilities | — | 16,105 | 35,817 | 842,296 | — | 894,218 | ||||||||||||||||||
Amounts due to NetEase Group | 2,059 | 9,945 | 28,498 | 26,728 | — | 67,230 | ||||||||||||||||||
Amounts due to Youdao Group Companies (1) | — | 629,070 | 1,754,656 | — | (2,383,726 | ) | — | |||||||||||||||||
Short-term loans from NetEase Group | — | — | 878,000 | — | — | 878,000 | ||||||||||||||||||
Other current liabilities | 3,655 | 144,773 | 754,702 | 650,987 | — | 1,554,117 | ||||||||||||||||||
Investments in subsidiaries and VIEs (3) | 2,536,385 | 2,656,830 | (171,895 | ) | — | (5,021,320 | ) | — | ||||||||||||||||
Total liabilities | 2,546,142 | 3,465,308 | 3,350,718 | 1,520,234 | (7,405,046 | ) | 3,477,356 | |||||||||||||||||
Youdao’s shareholders’ (deficit)/equity (3) | (1,408,105 | ) | (2,536,385 | ) | (2,541,870 | ) | 56,935 | 5,021,320 | (1,408,105 | ) | ||||||||||||||
Noncontrolling interests | — | 997 | — | — | — | 997 | ||||||||||||||||||
Total shareholders’ (deficit)/equity | (1,408,105 | ) | (2,535,388 | ) | (2,541,870 | ) | 56,935 | 5,021,320 | (1,407,108 | ) | ||||||||||||||
Total liabilities and shareholders’ (deficit)/equity | 1,138,037 | 929,920 | 808,848 | 1,577,169 | (2,383,726 | ) | 2,070,248 |
As of December 31, 2021 | ||||||||||||||||||||||||
Youdao, Inc. | Other Subsidiaries | Primary beneficiary of VIEs | VIEs and their subsidiaries | Eliminations | Total | |||||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||||||
Cash and cash equivalents | 122,765 | 27,172 | 38,201 | 134,639 | — | 322,777 | ||||||||||||||||||
Time deposits | — | — | 268 | — | — | 268 | ||||||||||||||||||
Restricted cash | — | — | — | 749,770 | — | 749,770 | ||||||||||||||||||
Short-term investments | — | 490,214 | — | 13,617 | — | 503,831 | ||||||||||||||||||
Accounts receivable, net | — | 77,637 | 24,445 | 146,257 | — | 248,339 | ||||||||||||||||||
Amounts due from NetEase Group | — | 2,389 | 3,627 | 176 | — | 6,192 | ||||||||||||||||||
Amounts due from Youdao Group Companies (1) | 2,658,772 | 72,465 | 536,080 | 442,110 | (3,709,427 | ) | — | |||||||||||||||||
Other assets | 229 | 318,149 | 202,851 | 281,661 | — | 802,890 | ||||||||||||||||||
Total assets | 2,781,766 | 988,026 | 805,472 | 1,768,230 | (3,709,427 | ) | 2,634,067 | |||||||||||||||||
Contract liabilities | — | 40,678 | 13,227 | 1,011,734 | — | 1,065,639 | ||||||||||||||||||
Amounts due to NetEase Group | 221 | 19,174 | 39,662 | 23,984 | — | 83,041 | ||||||||||||||||||
Amounts due to Youdao Group Companies (1) | — | 488,385 | 2,740,421 | 480,621 | (3,709,427 | ) | — | |||||||||||||||||
Short-term loans from NetEase Group | — | — | 878,000 | — | — | 878,000 | ||||||||||||||||||
Other current liabilities | 2,573 | 366,896 | 510,562 | 127,248 | — | 1,007,279 | ||||||||||||||||||
Long-term loans from NetEase Group | 255,028 | — | — | — | — | 255,028 | ||||||||||||||||||
Investments in subsidiaries and VIEs (3) | 3,328,600 | 3,354,116 | (113,250 | ) | — | (6,569,466 | ) | — | ||||||||||||||||
Total liabilities | 3,588,833 | 4,318,552 | 4,076,586 | 1,659,390 | (10,278,893 | ) | 3,364,468 | |||||||||||||||||
Total mezzanine equity | — | — | — | 78,592 | — | 78,592 | ||||||||||||||||||
Youdao’s shareholders’ (deficit)/equity (3) | (807,067 | ) | (3,328,600 | ) | (3,271,114 | ) | 30,248 | 6,569,466 | (807,067 | ) | ||||||||||||||
Noncontrolling interests | — | (1,926 | ) | — | — | — | (1,926 | ) | ||||||||||||||||
Total shareholders’ (deficit)/equity | (807,067 | ) | (3,330,526 | ) | (3,271,114 | ) | 30,248 | 6,569,466 | (808,993 | ) | ||||||||||||||
Total liabilities, mezzanine equity and shareholders’ (deficit)/equity | 2,781,766 | 988,026 | 805,472 | 1,768,230 | (3,709,427 | ) | 2,634,067 |
For the Year Ended December 31, 2019 | ||||||||||||||||||||||||
Youdao, Inc. | Other Subsidiaries | Primary beneficiary of VIEs | VIEs and their subsidiaries | Eliminations | Total | |||||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||
Third-party net revenues | — | 119,672 | 187,475 | 900,263 | — | 1,207,410 | ||||||||||||||||||
Intra-Group net revenues related to technical consulting and related services (4) | — | 62,040 | 478,790 | — | (540,830 | ) | — | |||||||||||||||||
Other intra-Group net revenues (5) | — | 35,275 | 2,806 | — | (38,081 | ) | — | |||||||||||||||||
Total net revenues | — | 216,987 | 669,071 | 900,263 | (578,911 | ) | 1,207,410 | |||||||||||||||||
Cost and expenses: | ||||||||||||||||||||||||
Third-party cost and expenses | (17,255 | ) | (294,495 | ) | (997,182 | ) | (358,318 | ) | — | (1,667,250 | ) | |||||||||||||
Intra-Group cost and expenses related to technical consulting and related services (4) | — | — | — | (540,830 | ) | 540,830 | — | |||||||||||||||||
Other intra-Group cost and expenses (5) | — | (416 | ) | (35,430 | ) | (2,235 | ) | 38,081 | — | |||||||||||||||
Total cost and expenses | (17,255 | ) | (294,911 | ) | (1,032,612 | ) | (901,383 | ) | 578,911 | (1,667,250 | ) | |||||||||||||
Loss from operations | (17,255 | ) | (77,924 | ) | (363,541 | ) | (1,120 | ) | — | (459,840 | ) | |||||||||||||
Share of (loss)/income of subsidiaries and VIEs (3) | (585,152 | ) | (533,417 | ) | 5,161 | — | 1,113,408 | — | ||||||||||||||||
Net (loss)/income from continuing operations | (601,503 | ) | (594,055 | ) | (380,293 | ) | 2,066 | 1,113,408 | (460,377 | ) | ||||||||||||||
Net loss from discontinued operations | (141,078 | ) | ||||||||||||||||||||||
Net (loss)/income attributable to ordinary shareholders of the Company | (637,396 | ) | (585,152 | ) | (531,429 | ) | 3,173 | 1,113,408 | (637,396 | ) |
For the Year Ended December 31, 2020 | ||||||||||||||||||||||||
Youdao, Inc | Other Subsidiaries | Primary beneficiary of VIEs | VIEs and their subsidiaries | Eliminations | Total | |||||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||
Third-party net revenues | — | 145,698 | 588,146 | 1,792,962 | — | 2,526,806 | ||||||||||||||||||
Intra-Group net revenues related to technical consulting and related services (4) | — | 126,418 | 1,275,953 | — | (1,402,371 | ) | — | |||||||||||||||||
Other intra-Group net revenues (5) | — | 166,863 | 3,584 | 552 | (170,999 | ) | — | |||||||||||||||||
Total net revenues | — | 438,979 | 1,867,683 | 1,793,514 | (1,573,370 | ) | 2,526,806 | |||||||||||||||||
Cost and expenses: | ||||||||||||||||||||||||
Third-party cost and expenses | (13,008 | ) | (486,182 | ) | (2,457,259 | ) | (421,814 | ) | — | (3,378,263 | ) | |||||||||||||
Intra-Group cost and expenses related to technical consulting and related services (4) | — | — | — | (1,402,371 | ) | 1,402,371 | — | |||||||||||||||||
Other intra-Group cost and expenses (5) | — | (3,753 | ) | (166,139 | ) | (1,107 | ) | 170,999 | — | |||||||||||||||
Total cost and expenses | (13,008 | ) | (489,935 | ) | (2,623,398 | ) | (1,825,292 | ) | 1,573,370 | (3,378,263 | ) | |||||||||||||
Loss from operations | (13,008 | ) | (50,956 | ) | (755,715 | ) | (31,778 | ) | — | (851,457 | ) | |||||||||||||
Share of (loss)/income of subsidiaries and VIEs (3) | (1,762,633 | ) | (1,634,507 | ) | 24,161 | — | 3,372,979 | — | ||||||||||||||||
Net (loss)/income from continuing operations | (1,752,789 | ) | (1,724,766 | ) | (714,932 | ) | 20,483 | 3,372,979 | (799,025 | ) | ||||||||||||||
Net loss from discontinued operations | (954,327 | ) | ||||||||||||||||||||||
Net (loss)/income attributable to ordinary shareholders of the Company | (1,752,789 | ) | (1,762,633 | ) | (1,634,558 | ) | 24,212 | 3,372,979 | (1,752,789 | ) |
For the Year Ended December 31, 2021 | ||||||||||||||||||||||||
Youdao, Inc. | Other Subsidiaries | Primary beneficiary of VIEs | VIEs and their subsidiaries | Eliminations | Total | |||||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||
Third-party net revenues | — | 233,070 | 1,032,114 | 2,750,610 | — | 4,015,794 | ||||||||||||||||||
Intra-Group net revenues related to technical consulting and related services (4) | — | 128,974 | 2,092,225 | — | (2,221,199 | ) | — | |||||||||||||||||
Other intra-Group net revenues (5) | — | 549,236 | 46,851 | 941 | (597,028 | ) | — | |||||||||||||||||
Total net revenues | — | 911,280 | 3,171,190 | 2,751,551 | (2,818,227 | ) | 4,015,794 | |||||||||||||||||
Cost and expenses: | ||||||||||||||||||||||||
Third-party cost and expenses | (13,048 | ) | (873,420 | ) | (3,511,302 | ) | (561,272 | ) | — | (4,959,042 | ) | |||||||||||||
Intra-Group cost and expenses related to technical consulting and related services (4) | — | — | — | (2,221,199 | ) | 2,221,199 | — | |||||||||||||||||
Other intra-Group cost and expenses (5) | — | (34,756 | ) | (551,599 | ) | (10,673 | ) | 597,028 | — | |||||||||||||||
Total cost and expenses | (13,048 | ) | (908,176 | ) | (4,062,901 | ) | (2,793,144 | ) | 2,818,227 | (4,959,042 | ) | |||||||||||||
(Loss)/Income from operations | (13,048 | ) | 3,104 | (891,711 | ) | (41,593 | ) | — | (943,248 | ) | ||||||||||||||
Share of loss of subsidiaries and VIEs (3) | (989,148 | ) | (806,306 | ) | (55,055 | ) | — | 1,850,509 | — | |||||||||||||||
Net loss from continuing operations | (995,655 | ) | (791,025 | ) | (931,396 | ) | (58,520 | ) | 1,850,509 | (926,087 | ) | |||||||||||||
Net loss from discontinued operations | (100,267 | ) | ||||||||||||||||||||||
Net loss attributable to ordinary shareholders of the Company | (995,655 | ) | (989,148 | ) | (834,408 | ) | (26,953 | ) | 1,850,509 | (995,655 | ) |
For the Year Ended December 31,2019 | ||||||||||||||||||||||||
Youdao, Inc. | Other Subsidiaries | Primary beneficiary of VIEs | VIEs and their subsidiaries | Eliminations | Total | |||||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net cash (used in)/provided by transactions with external parties | (782 | ) | (543,748 | ) | (683,455 | ) | 855,715 | — | (372,270 | ) | ||||||||||||||
Net cash provided by/(used in) transactions with intra-Group companies related to technical consulting and related services | — | 50,150 | 754,979 | (805,129 | ) | — | — | |||||||||||||||||
Net cash provided by/(used in) other transactions with intra-Group companies | — | 35,825 | (36,217 | ) | 392 | — | — | |||||||||||||||||
Net cash (used in)/provided by operating activities | (782 | ) | (457,773 | ) | 35,307 | 50,978 | — | (372,270 | ) | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net cash (used in)/provided by transactions with external parties | (1,270,536 | ) | 269,757 | (16,108 | ) | (67,118 | ) | — | (1,084,005 | ) | ||||||||||||||
Capital injection to VIE (3) | — | — | (10,000 | ) | — | 10,000 | — | |||||||||||||||||
Loan made to subsidiaries (2) | (132,062 | ) | — | — | — | 132,062 | — | |||||||||||||||||
Net cash (used in)/provided by investing activities | (1,402,598 | ) | 269,757 | (26,108 | ) | (67,118 | ) | 142,062 | (1,084,005 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Net cash provided by transactions with external parties | 1,512,026 | 75,643 | — | — | — | 1,587,669 | ||||||||||||||||||
Proceeds received from ordinary shareholders (3) | — | — | — | 10,000 | (10,000 | ) | — | |||||||||||||||||
Loan received from Parent Company (2) | — | 132,062 | — | — | (132,062 | ) | — | |||||||||||||||||
Net cash provided by financing activities | 1,512,026 | 207,705 | — | 10,000 | (142,062 | ) | 1,587,669 |
For the Year Ended December 31,2020 | ||||||||||||||||||||||||
Youdao, Inc. | Other Subsidiaries | Primary beneficiary of VIEs | VIEs and their subsidiaries | Eliminations | Total | |||||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net cash provided by/(used in) transactions with external parties | 14,409 | (472,888 | ) | (2,897,799 | ) | 3,034,716 | — | (321,562 | ) | |||||||||||||||
Net cash provided by/(used in) transactions with intra-Group companies related to technical consulting and related services | — | 840,100 | 2,258,731 | (3,098,831 | ) | — | — | |||||||||||||||||
Net cash provided by/(used in) other transactions with intra-Group companies | — | 43,979 | (45,592 | ) | 1,613 | — | — | |||||||||||||||||
Net cash provided by/(used in) operating activities | 14,409 | 411,191 | (684,660 | ) | (62,502 | ) | — | (321,562 | ) | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net cash provided by/(used in) transactions with external parties | 1,236,356 | (454,859 | ) | (86,036 | ) | 65,510 | — | 760,971 | ||||||||||||||||
Loan made to subsidiaries (2) | (1,236,543 | ) | — | — | — | 1,236,543 | — | |||||||||||||||||
Net cash (used in)/provided by investing activities | (187 | ) | (454,859 | ) | (86,036 | ) | 65,510 | 1,236,543 | 760,971 | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Net cash provided by transactions with external parties | 26,559 | — | — | — | — | 26,559 | ||||||||||||||||||
Loan received from Parent Company (2) | — | 183,359 | 1,053,184 | — | (1,236,543 | ) | — | |||||||||||||||||
Net cash provided by financing activities | 26,559 | 183,359 | 1,053,184 | — | (1,236,543 | ) | 26,559 |
For the Year Ended December 31, 2021 | ||||||||||||||||||||||||
Youdao, Inc. | Other Subsidiaries | Primary beneficiary of VIEs | VIEs and their subsidiaries | Eliminations | Total | |||||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net cash (used in)/provided by transactions with external parties | (7,763 | ) | (868,319 | ) | (3,748,495 | ) | 3,278,167 | — | (1,346,410 | ) | ||||||||||||||
Net cash provided by/(used in) transactions with intra-Group companies related to technical consulting and related services | — | 19,500 | 2,389,800 | (2,409,300 | ) | — | — | |||||||||||||||||
Net cash (used in)/provided by other transactions with intra-Group companies | (1,277 | ) | 573,599 | (571,623 | ) | (699 | ) | — | — | |||||||||||||||
Net cash (used in)/provided by operating activities | (9,040 | ) | (275,220 | ) | (1,930,318 | ) | 868,168 | — | (1,346,410 | ) | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net cash provided by transactions with external parties | 9,843 | 12,655 | 16,026 | 8,550 | — | 47,074 | ||||||||||||||||||
Loan made to subsidiaries (2) | (1,759,925 | ) | — | — | — | 1,759,925 | — | |||||||||||||||||
Net cash (used in)/provided by investing activities | (1,750,082 | ) | 12,655 | 16,026 | 8,550 | 1,759,925 | 47,074 | |||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Net cash provided by transactions with external parties | 1,783,713 | — | — | — | — | 1,783,713 | ||||||||||||||||||
Loan received from Parent Company (2) | — | 105,480 | 1,654,445 | — | (1,759,925 | ) | — | |||||||||||||||||
Net cash provided by financing activities | 1,783,713 | 105,480 | 1,654,445 | — | (1,759,925 | ) | 1,783,713 |
(1) | It represents the elimination of intercompany balances among Youdao, Inc., other subsidiaries, primary beneficiary of VIEs, and VIEs and their subsidiaries. |
(2) | It represents the elimination of loans from Youdao, Inc. to other subsidiaries and primary beneficiary of VIEs. |
(3) | It represents the elimination of the investments among Youdao, Inc., other subsidiaries, primary beneficiary of VIEs, and VIEs and their subsidiaries. |
(4) | It represents the elimination of the intercompany technical consulting and related services at the consolidation level. |
(5) | It represents the elimination of other intercompany transactions at the consolidation level. |
License | Entity Holding the License | Type of the Entity | Regulatory Authority | |||
ICP License | Youdao Computer | VIE | Beijing Communications Administration | |||
ICP License | Linjiedian Education | VIE | Zhejiang Communications Administration | |||
Publication Operation Permit (for retail and wholesale) | Youdao Information | WFOE | Beijing Municipal Bureau of Press and Publication | |||
Publication Operation Permit (for retail) | Youdao Computer | VIE | Beijing Haidian District Culture Commission | |||
Publication Operation Permit (for wholesale) | Youdao Computer | VIE | Beijing Municipal Bureau of Press and Publication | |||
Permit for Production and Operation of Radio and TV Program | Youdao Computer | VIE | Beijing Municipal Radio and Television Bureau |
(1) | Youdao HK currently operates our overseas knowledge tool and related businesses, including U-Dictionary. |
(2) |
Shareholders of Linjiedian Education are William Lei Ding, our director (who is also the chief executive officer, a director and a major shareholder of NetEase, our controlling shareholder), and Feng Zhou, our Chief Executive Officer and director, each holding 99% and 1%, respectively, of Linjiedian Education’s equity interests. |
Shareholders of Youdao Computer are William Lei Ding, our director (who is also the chief executive officer, a director and a major shareholder of NetEase, our controlling shareholder), and Feng Zhou, our Chief Executive Officer and director, each holding approximately 71% and 29%, respectively, of Youdao Computer’s equity interests. |
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
For the Year Ended December 31, | For the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 2019 | 2020 | 2019 | 2020 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
RMB | % | RMB | % | RMB | US$ | % | RMB | % | RMB | % | RMB | US$ | % | |||||||||||||||||||||||||||||||||||||||||||
(in thousands, except for percentages) | (in thousands, except for percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Learning services | 398,186 | 54.4 | 699,826 | 53.6 | 2,154,669 | 330,217 | 68.1 | 602,353 | 49.9 | 1,513,960 | 59.9 | 2,441,421 | 383,112 | 60.8 | ||||||||||||||||||||||||||||||||||||||||||
Learning products | 30,530 | 4.2 | 152,044 | 11.7 | 539,962 | 82,753 | 17.0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Smart devices | 152,044 | 12.6 | 539,962 | 21.4 | 980,424 | 153,850 | 24.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Online marketing services | 302,882 | 41.4 | 453,013 | 34.7 | 472,884 | 72,473 | 14.9 | 453,013 | 37.5 | 472,884 | 18.7 | 593,949 | 93,204 | 14.8 | ||||||||||||||||||||||||||||||||||||||||||
Total net revenues | 731,598 | 100.0 | 1,304,883 | 100.0 | 3,167,515 | 485,443 | 100.0 | 1,207,410 | 100.0 | 2,526,806 | 100.0 | 4,015,794 | 630,166 | 100.0 | ||||||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||||
RMB | % of total cost of revenues | % of total net revenues | RMB | % of total cost of revenues | % of total net revenues | RMB | US$ | % of total cost of revenues | % of total net revenues | |||||||||||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||||||||||||||||||
Learning services | 314,625 | 61.1 | 43.0 | 513,060 | 54.9 | 39.4 | 1,010,364 | 154,845 | 59.0 | 31.9 | ||||||||||||||||||||||||||||||
Learning products | 20,502 | 4.0 | 2.8 | 107,609 | 11.5 | 8.2 | 355,970 | 54,555 | 20.8 | 11.2 | ||||||||||||||||||||||||||||||
Online marketing services | 180,006 | 34.9 | 24.6 | 313,592 | 33.6 | 24.0 | 346,895 | 53,164 | 20.2 | 11.0 | ||||||||||||||||||||||||||||||
Total cost of revenues | 515,133 | 100.0 | 70.4 | 934,261 | 100.0 | 71.6 | 1,713,229 | 262,564 | 100.0 | 54.1 | ||||||||||||||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||||||||||||||||||||
RMB | % of total cost of revenues | % of total net revenues | RMB | % of total cost of revenues | % of total net revenues | RMB | US$ | % of total cost of revenues | % of total net revenues | |||||||||||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||||||||||||||||||
Learning services | 451,164 | 51.8 | 37.4 | 716,504 | 50.5 | 28.4 | 980,700 | 153,893 | 48.4 | 24.5 | ||||||||||||||||||||||||||||||
Smart devices | 107,609 | 12.3 | 8.9 | 355,970 | 25.1 | 14.1 | 618,925 | 97,123 | 30.5 | 15.4 | ||||||||||||||||||||||||||||||
Online marketing services | 313,592 | 35.9 | 26.0 | 346,895 | 24.4 | 13.7 | 427,331 | 67,058 | 21.1 | 10.6 | ||||||||||||||||||||||||||||||
Total cost of revenues | 872,365 | 100.0 | 72.3 | 1,419,369 | 100.0 | 56.2 | 2,026,956 | 318,074 | 100.0 | 50.5 | ||||||||||||||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, | 2019 | 2020 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 2019 | 2020 | RMB | % of total operating expenses | % of total net revenues | RMB | % of total operating expenses | % of total net revenues | RMB | US$ | % of total operating expenses | % of total net revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB | % of total operating expenses | % of total net revenues | RMB | % of total operating expenses | % of total net revenues | RMB | US$ | % of total operating expenses | % of total net revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except for percentages) | (in thousands, except for percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales and marketing expenses | 213,405 | 49.0 | 29.2 | 622,884 | 64.2 | 47.7 | 2,697,018 | 413,336 | 82.8 | 85.1 | 455,748 | 57.3 | 37.7 | 1,473,604 | 75.2 | 58.3 | 2,077,638 | 326,027 | 70.9 | 51.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and development expenses | 184,020 | 42.2 | 25.1 | 275,367 | 28.3 | 21.1 | 424,593 | 65,072 | 13.0 | 13.4 | 269,895 | 34.0 | 22.4 | 372,184 | 19.0 | 14.7 | 607,373 | 95,310 | 20.7 | 15.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | 38,177 | 8.8 | 5.2 | 73,289 | 7.5 | 5.6 | 138,459 | 21,220 | 4.2 | 4.4 | 69,242 | 8.7 | 5.7 | 113,106 | 5.8 | 4.5 | 190,297 | 29,862 | 6.5 | 4.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of intangible assets from business combination | — | — | — | — | — | — | 56,778 | 8,911 | 1.9 | 1.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | 435,602 | 100.0 | 59.5 | 971,540 | 100.0 | 74.4 | 3,260,070 | 499,628 | 100.0 | 102.9 | 794,885 | 100.0 | 65.8 | 1,958,894 | 100.0 | 77.5 | 2,932,086 | 460,110 | 100.0 | 72.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(i) | The effects of a significant financing component have not been adjusted for contracts for which we expect, at contract inception, that the period between when we transfer a promised good or service to the customer and when the customer pays for that good or service will be one year or less. |
(ii) | We applied the portfolio approach in determining the learning period for the customer given that the effect of applying a portfolio approach to a group of students’ behaviors would not differ materially from considering each one of them individually. |
For the Year Ended December 31, | For the Year Ended December 31, | |||||||||||||||||
2018 | 2019 | 2020 | 2019 | 2020 | 2021 | |||||||||||||
Expected volatility | 48.10 | % | 46.50%-46.90 | % | 48.90%-52.20 | % | 46.50%-46.90% | 48.90%-52.20% | 52.40%-62.40% | |||||||||
Expected dividends yield | 0 | % | 0 | % | 0 | % | 0% | 0% | 0% | |||||||||
Risk-free interest rate | 2.50 | % | 2.10%-2.60 | % | 0.30%-1.69 | % | 2.10%-2.60% | 0.30%-1.69% | 0.58%-0.87% | |||||||||
Expected term (in years) | 6 | 6 | 6 | 6 | 6 | 6 | ||||||||||||
Fair value of underlying ordinary share (US$) | 1.39 | 6.35-7.29 | 16.00-42.31 | 6.35-7.29 | 16.00-42.31 | 9.44-35.99 |
For the Year Ended December 31, | ||||||||||||||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||||||||||||||
RMB | % | RMB | % | RMB | US$ | % | ||||||||||||||||||||||
(in thousands, except for percentages, shares and per share/ADS data) | ||||||||||||||||||||||||||||
Net revenues | 731,598 | 100.0 | 1,304,883 | 100.0 | 3,167,515 | 485,443 | 100.0 | |||||||||||||||||||||
Cost of revenues (1) | (515,133 | ) | (70.4 | ) | (934,261 | ) | (71.6 | ) | (1,713,229 | ) | (262,564 | ) | (54.1 | ) | ||||||||||||||
Gross profit | 216,465 | 29.6 | 370,622 | 28.4 | 1,454,286 | 222,879 | 45.9 | |||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||
Sales and marketing expenses (1) | (213,405 | ) | (29.2 | ) | (622,884 | ) | (47.7 | ) | (2,697,018 | ) | (413,336 | ) | (85.1 | ) | ||||||||||||||
Research and development expenses (1) | (184,020 | ) | (25.1 | ) | (275,367 | ) | (21.1 | ) | (424,593 | ) | (65,072 | ) | (13.4 | ) | ||||||||||||||
General and administrative expenses (1) | (38,177 | ) | (5.2 | ) | (73,289 | ) | (5.6 | ) | (138,459 | ) | (21,220 | ) | (4.4 | ) | ||||||||||||||
Total operating expenses | (435,602 | ) | (59.5 | ) | (971,540 | ) | (74.4 | ) | (3,260,070 | ) | (499,628 | ) | (102.9 | ) | ||||||||||||||
Loss from operations | (219,137 | ) | (29.9 | ) | (600,918 | ) | (46.0 | ) | (1,805,784 | ) | (276,749 | ) | (57.0 | ) | ||||||||||||||
Interest income | 8,344 | 1.1 | 12,063 | 0.9 | 25,524 | 3,912 | 0.8 | |||||||||||||||||||||
Interest expense | (31,851 | ) | (4.3 | ) | (30,232 | ) | (2.3 | ) | (31,215 | ) | (4,784 | ) | (1.0 | ) | ||||||||||||||
Others, net | 44,643 | 6.1 | 20,064 | 1.5 | 61,052 | 9,357 | 1.9 | |||||||||||||||||||||
Loss before tax | (198,001 | ) | (27.0 | ) | (599,023 | ) | (45.9 | ) | (1,750,423 | ) | (268,264 | ) | (55.3 | ) | ||||||||||||||
Income tax expenses | (11,294 | ) | (1.6 | ) | (2,432 | ) | (0.2 | ) | (2,929 | ) | (449 | ) | (0.1 | ) | ||||||||||||||
Net loss | (209,295 | ) | (28.6 | ) | (601,455 | ) | (46.1 | ) | (1,753,352 | ) | (268,713 | ) | (55.4 | ) | ||||||||||||||
Net loss/(income) attributable to noncontrolling interests | 385 | 0.0 | (48 | ) | 0.0 | 563 | 86 | 0.1 | ||||||||||||||||||||
Net loss attributable to the Company | (208,910 | ) | (28.6 | ) | (601,503 | ) | (46.1 | ) | (1,752,789 | ) | (268,627 | ) | (55.3 | ) | ||||||||||||||
Accretions of convertible redeemable preferred shares to redemption value | (30,311 | ) | (4.1 | ) | (35,893 | ) | (2.8 | ) | — | — | — | |||||||||||||||||
Net loss attributable to ordinary shareholders of the Company | (239,221 | ) | (32.7 | ) | (637,396 | ) | (48.9 | ) | (1,752,789 | ) | (268,627 | ) | (55.3 | ) | ||||||||||||||
Net loss per ordinary share/ADS | ||||||||||||||||||||||||||||
Basic | (2.80 | ) | (6.68 | ) | (15.53 | ) | (2.38 | ) | ||||||||||||||||||||
Diluted | (2.80 | ) | (6.68 | ) | (15.53 | ) | (2.38 | ) | ||||||||||||||||||||
Weighted average number of ordinary shares/ADSs used in calculating net loss per ordinary share/ADS | ||||||||||||||||||||||||||||
Basic | 85,346,790 | 95,445,982 | 112,864,452 | 112,864,452 | ||||||||||||||||||||||||
Diluted | 85,346,790 | 95,445,982 | 112,864,452 | 112,864,452 |
For the Year Ended December 31, | ||||||||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||||||||
RMB | % | RMB | % | RMB | US$ | % | ||||||||||||||||||||||
(in thousands, except for percentages, shares and per share/ADS data) | ||||||||||||||||||||||||||||
Net revenues | 1,207,410 | 100.0 | 2,526,806 | 100.0 | 4,015,794 | 630,166 | 100.0 | |||||||||||||||||||||
Cost of revenues (1) | (872,365 | ) | (72.3 | ) | (1,419,369 | ) | (56.2 | ) | (2,026,956 | ) | (318,074 | ) | (50.5 | ) | ||||||||||||||
Gross profit | 335,045 | 27.7 | 1,107,437 | 43.8 | 1,988,838 | 312,092 | 49.5 | |||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||
Sales and marketing expenses (1) | (455,748 | ) | (37.7 | ) | (1,473,604 | ) | (58.3 | ) | (2,077,638 | ) | (326,027 | ) | (51.7 | ) | ||||||||||||||
Research and development expenses (1) | (269,895 | ) | (22.4 | ) | (372,184 | ) | (14.7 | ) | (607,373 | ) | (95,310 | ) | (15.1 | ) | ||||||||||||||
General and administrative expenses (1) | (69,242 | ) | (5.7 | ) | (113,106 | ) | (4.5 | ) | (190,297 | ) | (29,862 | ) | (4.7 | ) | ||||||||||||||
Impairment of intangible assets from business combination | — | — | — | — | (56,778 | ) | (8,911 | ) | (1.4 | ) | ||||||||||||||||||
Total operating expenses | (794,885 | ) | (65.8 | ) | (1,958,894 | ) | (77.5 | ) | (2,932,086 | ) | (460,110 | ) | (72.9 | ) | ||||||||||||||
Loss from operations | (459,840 | ) | (38.1 | ) | (851,457 | ) | (33.7 | ) | (943,248 | ) | (148,018 | ) | (23.4 | ) | ||||||||||||||
Interest income | 12,063 | 1.0 | 25,524 | 1.0 | 18,780 | 2,947 | 0.5 | |||||||||||||||||||||
Interest expense | (30,232 | ) | (2.5 | ) | (31,215 | ) | (1.2 | ) | (31,644 | ) | (4,966 | ) | (0.8 | ) | ||||||||||||||
Others, net | 20,064 | 1.7 | 61,052 | 2.4 | 36,673 | 5,756 | 0.9 | |||||||||||||||||||||
Loss before tax | (457,945 | ) | (37.9 | ) | (796,096 | ) | (31.5 | ) | (919,439 | ) | (144,281 | ) | (22.8 | ) | ||||||||||||||
Income tax expenses | (2,432 | ) | (0.2 | ) | (2,929 | ) | (0.1 | ) | (6,648 | ) | (1,043 | ) | (0.2 | ) | ||||||||||||||
Net loss from continuing operations | (460,377 | ) | (38.1 | ) | (799,025 | ) | (31.6 | ) | (926,087 | ) | (145,324 | ) | (23.0 | ) | ||||||||||||||
Net loss from discontinued operations | (141,078 | ) | (11.7 | ) | (954,327 | ) | (37.8 | ) | (100,267 | ) | (15,734 | ) | (2.6 | ) | ||||||||||||||
Net loss | (601,455 | ) | (49.8 | ) | (1,753,352 | ) | (69.4 | ) | (1,026,354 | ) | (161,058 | ) | (25.6 | ) | ||||||||||||||
Net (income)/loss attributable to noncontrolling interests | (48 | ) | — | 563 | — | 30,699 | 4,817 | 0.8 | ||||||||||||||||||||
Net loss attributable to the company | (601,503 | ) | (49.8 | ) | (1,752,789 | ) | (69.4 | ) | (995,655 | ) | (156,241 | ) | (24.8 | ) | ||||||||||||||
Accretions of convertible redeemable preferred shares to redemption value | (35,893 | ) | (3.0 | ) | — | — | — | — | — | |||||||||||||||||||
Net loss attributable to ordinary shareholders of the company | (637,396 | ) | (52.8 | ) | (1,752,789 | ) | (69.4 | ) | (995,655 | ) | (156,241 | ) | (24.8 | ) | ||||||||||||||
Including: | ||||||||||||||||||||||||||||
Net loss from continuing operations attributable to ordinary shareholders of the Company | (496,318 | ) | (41.1 | ) | (798,462 | ) | (31.6 | ) | (895,388 | ) | (140,507 | ) | (22.3 | ) | ||||||||||||||
Net loss from discontinued operations attributable to ordinary shareholders of the Company | (141,078 | ) | (11.7 | ) | (954,327 | ) | (37.8 | ) | (100,267 | ) | (15,734 | ) | (2.5 | ) | ||||||||||||||
Net loss per ordinary share/ADS | ||||||||||||||||||||||||||||
Basic | (6.68 | ) | (15.53 | ) | (8.18 | ) | (1.28 | ) | ||||||||||||||||||||
—Continuing operations | (5.20 | ) | (7.07 | ) | (7.36 | ) | (1.15 | ) | ||||||||||||||||||||
—Discontinued operations | (1.48 | ) | (8.46 | ) | (0.82 | ) | (0.13 | ) | ||||||||||||||||||||
Diluted | (6.68 | ) | (15.53 | ) | (8.18 | ) | (1.28 | ) | ||||||||||||||||||||
—Continuing operations | (5.20 | ) | (7.07 | ) | (7.36 | ) | (1.15 | ) |
For the Year Ended December 31, | ||||||||||||||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||||||||||||||
RMB | % | RMB | % | RMB | US$ | % | ||||||||||||||||||||||
(in thousands, except for percentages, shares and per share/ADS data) | ||||||||||||||||||||||||||||
-Discontinued operations | (1.48 | ) | (8.46 | ) | (0.82 | ) | (0.13 | ) | ||||||||||||||||||||
Weighted average number of ordinary shares/ADSs used in calculating net loss per ordinary share/ADS | ||||||||||||||||||||||||||||
Basic | 95,445,982 | 112,864,452 | 121,650,907 | 121,650,907 | ||||||||||||||||||||||||
Diluted | 95,445,982 | 112,864,452 | 121,650,907 | 121,650,907 |
(1) | The following table sets forth our share-based compensation expenses, including the share-based compensation expenses allocated to us based on awards granted to our employees pursuant to NetEase’s RSU incentive plans. See also “Item 7. Major shareholders and Related Party Transactions-7.B. Related Party |
For the Year Ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Cost of revenues | 3,642 | 4,641 | 7,862 | 1,233 | ||||||||||||
Sales and marketing expenses | 2,007 | 4,821 | 10,521 | 1,651 | ||||||||||||
Research and development expenses | 9,241 | 19,738 | 33,775 | 5,301 | ||||||||||||
General and administrative expenses | 8,446 | 7,225 | 20,043 | 3,145 | ||||||||||||
Total | 23,336 | 36,425 | 72,201 | 11,330 | ||||||||||||
For the Year Ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Cost of revenues | 3,055 | 4,407 | 5,892 | 903 | ||||||||||||
Sales and marketing expenses | 350 | 2,107 | 5,868 | 899 | ||||||||||||
Research and development expenses | 2,735 | 9,432 | 20,898 | 3,203 | ||||||||||||
General and administrative expenses | 36 | 9,128 | 8,920 | 1,367 | ||||||||||||
Total | 6,176 | 25,074 | 41,578 | 6,372 | ||||||||||||
For the Year Ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Net revenues of online courses | 329,424 | 607,568 | 2,009,719 | 308,003 | ||||||||||||
Add: value-added tax | 23,666 | 53,178 | 177,474 | 27,199 | ||||||||||||
Add: ending deferred revenue | 129,144 | 407,861 | 1,356,041 | 207,822 | ||||||||||||
Less: beginning deferred revenue | (64,136 | ) | (129,144 | ) | (407,861 | ) | (62,507 | ) | ||||||||
Gross billings of online courses (non-GAAP) | 418,098 | 939,463 | 3,135,373 | 480,517 | ||||||||||||
For the Year Ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Net revenues of tutoring services | 510,095 | 1,369,010 | 2,271,036 | 356,375 | ||||||||||||
Add: value - added tax | 41,600 | 112,759 | 142,615 | 22,379 | ||||||||||||
Add: ending deferred revenue | 299,460 | 809,770 | 973,947 | 152,834 | ||||||||||||
Less: beginning deferred revenue | (116,229 | ) | (299,460 | ) | (809,770 | ) | (127,070 | ) | ||||||||
deferred revenue from acquired subsidiaries | — | — | (58,295 | ) | (9,148 | ) | ||||||||||
Non-GAAP gross billings | 734,926 | 1,992,079 | 2,519,533 | 395,370 | ||||||||||||
For the Year Ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Net revenues of Youdao Premium Courses | 284,160 | 471,943 | 1,747,941 | 267,884 | ||||||||||||
Add: value-added tax | 20,352 | 42,416 | 159,442 | 24,435 | ||||||||||||
Add: ending deferred revenue | 109,105 | 344,111 | 1,253,527 | 192,111 | ||||||||||||
Less: beginning deferred revenue | (54,067 | ) | (109,105 | ) | (344,111 | ) | (52,737 | ) | ||||||||
Gross billings of Youdao Premium Courses (non-GAAP) | 359,550 | 749,365 | 2,816,799 | 431,693 | ||||||||||||
For the Year Ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Net loss attributable to ordinary shareholders of the Company | (239,221 | ) | (637,396 | ) | (1,752,789 | ) | (268,627 | ) | ||||||||
Add: share-based compensation | 6,176 | 25,074 | 41,578 | 6,372 | ||||||||||||
Non-GAAP net loss attributable to ordinary shareholders of the Company | (233,045 | ) | (612,322 | ) | (1,711,211 | ) | (262,255 | ) | ||||||||
Non-GAAP basic net loss per share/ADS | (2.73 | ) | (6.42 | ) | (15.16 | ) | (2.32 | ) | ||||||||
Non-GAAP diluted net loss per share/ADS | (2.73 | ) | (6.42 | ) | (15.16 | ) | (2.32 | ) | ||||||||
For the Year Ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Net loss from continuing operations attributable to ordinary shareholders of the company | (496,318 | ) | (798,462 | ) | (895,388 | ) | (140,507 | ) | ||||||||
Add: share - based compensation | 23,336 | 36,425 | 72,201 | 11,330 | ||||||||||||
amortization of intangible assets from business combination | — | — | 2,972 | 467 | ||||||||||||
impairment of long - term investments | — | — | 7,000 | 1,098 | ||||||||||||
impairment of intangible assets from business combination | — | — | 56,778 | 8,911 | ||||||||||||
Less: tax effects on non - GAAP adjustments | — | — | (8,962 | ) | (1,406 | ) | ||||||||||
GAAP to non - GAAP reconciling items for the loss attributable to noncontrolling interests | — | — | (22,854 | ) | (3,586 | ) | ||||||||||
Non-GAAP net loss from continuing operations attributable to ordinary shareholders of the company | (472,982 | ) | (762,037 | ) | (788,253 | ) | (123,693 | ) | ||||||||
Non-GAAP basic net loss from continuing operations per share/ADS | (4.96 | ) | (6.75 | ) | (6.48 | ) | (1.02 | ) | ||||||||
Non-GAAP diluted net loss from continuing operations per share/ADS | (4.96 | ) | (6.75 | ) | (6.48 | ) | (1.02 | ) | ||||||||
For the Year Ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Net cash used in operating activities | (100,330 | ) | (372,270 | ) | (321,562 | ) | (49,282 | ) | ||||||||
Net cash (used in)/provided by investing activities | (374,000 | ) | (1,084,005 | ) | 760,971 | 116,624 | ||||||||||
Net cash provided by financing activities | 475,117 | 1,587,669 | 26,559 | 4,070 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,120 | 196 | (30,097 | ) | (4,612 | ) | ||||||||||
Net increase in cash and cash equivalents | 1,907 | 131,590 | 435,871 | 66,800 | ||||||||||||
Cash and cash equivalents at beginning of the year | 39,831 | 41,738 | 173,328 | 26,564 | ||||||||||||
Cash and cash equivalents at end of the year | 41,738 | 173,328 | 609,199 | 93,364 | ||||||||||||
For the Year Ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Net cash used in continuing operating activities | (282,033 | ) | (9,868 | ) | (623,566 | ) | (97,851 | ) | ||||||||
Net cash (used in)/provided by continuing investing activities | (1,083,939 | ) | 767,055 | 42,699 | 6,699 | |||||||||||
Net cash provided by continuing financing activities | 1,587,669 | 26,559 | 1,783,713 | 279,904 |
Payments Due by | ||||||||||||||||||||
Less than One Year | One to Three Years | Three to Five Years | More than Five Years | Total | ||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||
Repayment of short-term/long-term loans from NetEase (1) | 878,000 | 255,028 | — | — | 1,133,028 | |||||||||||||||
Operating lease commitments (2) | 47,525 | 52,429 | 22,506 | 3,200 | 125,660 | |||||||||||||||
Purchase commitments (3) | 187,548 | 700 | — | — | 188,248 | |||||||||||||||
Capital commitments (4) | 6,070 | — | — | — | 6,070 | |||||||||||||||
Total | 1,119,143 | 308,157 | 22,506 | 3,200 | 1,453,006 | |||||||||||||||
(1) | Consists of short-term loans from NetEase, as well as long-term loans from NetEase drawn down from the US$300.0 million revolving loan facility provided by NetEase with maturity dated March 31, 2024. |
(2) | Consist of the commitments under non-cancelable operating lease agreements for our office premises. For the years ended December 31, 2019, 2020 and 2021, our rental expenses were RMB24.2 million, RMB39.9 million and RMB52.8 million (US$8.3 million), respectively. |
(3) | Consist primarily of minimum commitments for purchases of content, marketing services and smart devices. |
(4) | Consist primarily of commitments on purchase of fixed assets and the payment on leasehold improvements. |
Payments Due by | ||||||||||||||||||||
Less than One Year | One to Three Years | Three to Five Years | More than Five Years | Total | ||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||
Operating lease commitments (1) | 30,672 | 57,330 | 23,082 | 8,705 | 119,789 | |||||||||||||||
Purchase commitments (2) | 338,910 | 5,090 | 3,160 | — | 347,160 | |||||||||||||||
Capital commitments (3) | 25,947 | — | — | — | 25,947 | |||||||||||||||
Total contractual obligations | 395,529 | 62,420 | 26,242 | 8,705 | 492,896 | |||||||||||||||
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Directors and Executive Officers | Age | Position/Title | ||
William Lei Ding | Director | |||
Feng Zhou | Director, Chief Executive Officer | |||
Harry Heung Yeung Shum | Independent Director | |||
Jimmy Lai | Independent Director |
Vice President | ||||
Lei Jin | Vice President | |||
Renlei Liu | Vice President | |||
Peng Su | Vice President | |||
Yongwei Li | Vice President |
Ordinary Shares Underlying Options | Exercise Price (US$/Share) | Date of Grant | Date of Expiration | |||||
William Lei Ding | — | — | — | — | ||||
Feng Zhou | — | — | — | — | ||||
Harry Heung Yeung Shum | * | US$4.0 to US$4.5 | February 25, 2020 and January 18, 2022 | February 25, 2026, and January 18, 2028 | ||||
Jimmy Lai | * | US$ | and January 18, 2022 | and January 18, 2028 | ||||
Yinghui Wu | * | US$4.5 | January 25, 2021 | January 25, 2027 | ||||
Lei Jin | * | US$4.5 | January 25, 2021 | January 25, 2027 | ||||
Renlei Liu | * | US$1.5 to US$4.5 | February 11, 2015, January 17, 2017 and January 25, 2021 | January 17, 2023 and January 25, 2027 | ||||
Peng Su | * | US$3.5 to US$4.5 | May 30, 2019 and | May 30, 2025 and | ||||
Yongwei Li | * | US$3.5 to US$4.5 | May 30, 2019, January 14, 2020 and January 25, 2021 | May 30, 2025, January 14, 2026 and January 25, 2027 | ||||
All directors and executive officers as a group | * | US$1.5 to US$4.5 | February 11, 2015, January 17, 2017, May 30, 2019, January 14, 2020, February 25, 2020, January 25, 2021 and January 18, 2022 | January 17, 2023, May 30, 2025, January 14, 2026, February 25, 2026, and January 18, 2028 |
* | Less than 1% of our total outstanding shares. |
Function | Number of Full-time Employees | Percentage | Number of Full-Time Employees | Percentage | ||||||||||||
Teaching staff (1) and product and service operations | 3,086 | 62 | % | 3,026 | 49.6 | % | ||||||||||
R&D and related | 966 | 20 | % | 1,227 | 20.1 | % | ||||||||||
Sales and marketing | 680 | 14 | % | 1,393 | 22.9 | % | ||||||||||
General and administrative | 217 | 4 | % | 450 | 7.4 | % | ||||||||||
Total | 4,949 | 100.0 | % | 6,096 | 100.0 | % |
(1) | Our teaching staff consists of (i) instructors; and (ii) teaching assistants focused on providing students with academic and administrative support. |
Ordinary Shares Beneficially Owned as of March 31, 2022 | ||||||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Ordinary Shares | Ordinary Shares | Total Ordinary Shares | Voting Power | |||||||||||||||||||||||||
Number | % | Number | % | Number | % | %*** | ||||||||||||||||||||||
Directors and Executive Officers: † | ||||||||||||||||||||||||||||
William Lei Ding (1) | 1,772,528 | 4.7 | 28,901,125 | 32.7 | 30,673,653 | 24.4 | 29.2 | |||||||||||||||||||||
Feng Zhou (2) | — | — | 20,341,200 | 23.0 | 20,341,200 | 16.1 | 20.2 | |||||||||||||||||||||
Harry Heung Yeung Shum | * | * | — | — | * | * | * | |||||||||||||||||||||
Jimmy Lai | * | * | — | — | * | * | * | |||||||||||||||||||||
Yinghui Wu (3) | * | * | 1,640,000 | 1.9 | 1,644,000 | 1.3 | 1.6 | |||||||||||||||||||||
Lei Jin (4) | * | * | 920,000 | 1.0 | * | * | * | |||||||||||||||||||||
Renlei Liu (5) | 594,000 | 1.6 | — | — | * | * | * | |||||||||||||||||||||
Peng Su | * | * | — | — | * | * | * | |||||||||||||||||||||
Yongwei Li | * | * | — | — | * | * | * | |||||||||||||||||||||
All directors and executive officers as a group | 2,583,308 | 6.7 | 51,802,325 | 58.7 | 54,386,133 | 43.0 | 52.1 | |||||||||||||||||||||
Principal Shareholders: | ||||||||||||||||||||||||||||
NetEase, Inc. (6) | 1,351,873 | 3.6 | 65,387,160 | 74.1 | 66,739,033 | 53.0 | 65.3 | |||||||||||||||||||||
Peng Ke Holdings Inc. (2) | — | — | 20,341,200 | 23.0 | 20,341,200 | 16.1 | 20.2 | |||||||||||||||||||||
Orbis (7) | 14,737,380 | 39.1 | — | — | 14,737,380 | 11.7 | 4.9 |
Ordinary Shares Beneficially Owned as of March 31, 2021 | ||||||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Ordinary Shares | Ordinary Shares | Total ordinary shares | Voting Power | |||||||||||||||||||||||||
Number | % | Number | % | Number | % | %*** | ||||||||||||||||||||||
Directors and Executive Officers: † | ||||||||||||||||||||||||||||
William Lei Ding (1) | 1,260,603 | 3.4 | 28,247,253 | 31.7 | 29,507,856 | 23.4 | 28.3 | |||||||||||||||||||||
Feng Zhou (2) | — | — | 20,341,200 | 22.8 | 20,341,200 | 16.1 | 20.1 | |||||||||||||||||||||
Harry Heung Yeung Shum | * | * | — | — | * | * | * | |||||||||||||||||||||
Jimmy Lai | * | * | — | — | * | * | * | |||||||||||||||||||||
Yinghui Wu (3) | — | — | 1,840,000 | 2.1 | 1,840,000 | 1.5 | 1.8 | |||||||||||||||||||||
Lei Jin | — | — | 920,000 | 1.0 | * | * | * | |||||||||||||||||||||
Renlei Liu | * | * | * | * | * | * | * | |||||||||||||||||||||
Peng Su | * | * | — | — | * | * | * | |||||||||||||||||||||
Yongwei Li | * | * | — | — | * | * | * | |||||||||||||||||||||
All directors and executive officers as a group | 1,755,789 | 4.7 | 51,532,453 | 57.8 | 53,288,242 | 42.1 | 51.3 | |||||||||||||||||||||
Principal Shareholders: | ||||||||||||||||||||||||||||
NetEase, Inc. (4) | * | * | 65,387,160 | 73.4 | 65,585,316 | 52.1 | 64.5 | |||||||||||||||||||||
Peng Ke Holdings Inc. (2) | — | — | 20,341,200 | 22.8 | 20,341,200 | 16.1 | 20.1 | |||||||||||||||||||||
Orbis (5) | 11,950,081 | 32.4 | — | — | 11,950,081 | 9.5 | 3.9 |
* | Less than 1% of our total issued and outstanding shares on an as-converted basis. |
** | For each person and group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of (i) 125,969,446, being the number of ordinary shares on an as-converted basis issued and outstanding as of March 31, |
*** | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our ordinary shares as a single class. |
† | The business address of our directors and executive officers, except William Lei Ding, Harry Heung Yeung Shum, and Jimmy Lai, is No. 399 Wangshang Road, Binjiang District, Hangzhou 310051, People’s Republic of China. |
(1) | Represents (i) 1,175,000 ADSs, representing 1,175,000 Class A ordinary shares, held of record by Dragon Creation Technology Limited, a company incorporated under the laws of the British Virgin Islands, (ii) |
(2) | Represents 20,341,200 Class B ordinary shares held of record by Peng Ke Holdings Inc., a British Virgin Islands company ultimately wholly owned by Cititrust Private Trust (Cayman) Limited as the trustee of a discretionary and revocable trust constituted under the laws of the Cayman Islands, with Dr. Zhou as the settlor and the sole beneficiary. The registered address of Peng Ke Holdings Inc. is Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands. The business address of Dr. Zhou is the same as the address of our principal executive offices. |
(3) | Represents |
(4) | Represents 920,000 Class B ordinary shares held of record by JinLei Quark Tech, Inc., a British Virgin Islands company wholly owned by Mr. Jin. The registered address of JinLei Quark Tech, Inc. is Kingston Chambers, PO Box 173, Road Town, Tortola, Virgin Islands (British). The business address of Mr. Jin is the same as the address of our principal executive offices. |
(5) | Represents 100,000 Class A ordinary shares and 84,000 ADSs, each representing one Class A ordinary shares held of record by Taersi, Inc., a British Virgin Islands company wholly owned by Mr. Liu. with a registered address at Kingston Chambers, PO Box 173, Road Town, Tortola, Virgin Islands (British) and 410,000 Class A ordinary shares underlying share options exercisable within 60 days after March 31, 2022. The business address of Mr. Liu is the same as the address of our principal executive offices. |
(6) | The business address of NetEase, Inc., a Cayman Islands company, is NetEase Building, No. 599 Wangshang Road, Binjiang District, Hangzhou 310052, People’s Republic of China. NetEase is a reporting company under the Exchange Act and is listed on the NASDAQ Global Select Market and the Main Board of the Hong Kong Stock Exchange. |
Represents |
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
For the Year Ended December 31, | ||||||||||||||||||||||||||||||||
For the Year Ended December 31, | 2019 | 2020 | 2021 | |||||||||||||||||||||||||||||
2018 | 2019 | 2020 | RMB | RMB | RMB | US$ | ||||||||||||||||||||||||||
RMB | RMB | RMB | US$ | (in thousands) | ||||||||||||||||||||||||||||
Services and products provided to NetEase Group | ||||||||||||||||||||||||||||||||
Learning services provided to NetEase Group (1) | 10,485 | 2,913 | 5,826 | 893 | 2,913 | 5,826 | 7,360 | 1,155 | ||||||||||||||||||||||||
Learning products provided to NetEase Group (2) | — | 11,418 | 7,607 | 1,166 | ||||||||||||||||||||||||||||
Smart devices provided to NetEase Group (2) | 11,418 | 7,607 | 6,607 | 1,037 | ||||||||||||||||||||||||||||
Online marketing services provided to NetEase Group (3) | 16,763 | 23,249 | 15,860 | 2,431 | 23,249 | 15,860 | 9,823 | 1,541 | ||||||||||||||||||||||||
Services and products purchased from NetEase Group | ||||||||||||||||||||||||||||||||
Services purchased from NetEase Group (4) | 67,094 | 71,631 | 172,437 | 26,427 | 66,280 | 163,487 | 143,186 | 22,469 | ||||||||||||||||||||||||
Fixed assets and inventories purchased from NetEase Group (5) | 6,647 | 18,222 | 2,198 | 337 | 18,222 | 2,198 | 2,489 | 391 | ||||||||||||||||||||||||
Loan related transactions | ||||||||||||||||||||||||||||||||
Interest expenses on short-term loans from NetEase Group (6) | 31,851 | 30,232 | 31,215 | 4,784 | ||||||||||||||||||||||||||||
Equity related transactions | ||||||||||||||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control (7) | 44,024 | 69,603 | — | — | ||||||||||||||||||||||||||||
Deemed contribution from NetEase Group related to issuance of preferred shares (8) | 4,722 | — | — | — | ||||||||||||||||||||||||||||
Loan-related transactions | ||||||||||||||||||||||||||||||||
Interest expenses on loans from NetEase Group (6) | 30,232 | 31,215 | 31,644 | 4,966 | ||||||||||||||||||||||||||||
Long-term loans from NetEase Group (7) | — | — | 257,522 | 40,411 | ||||||||||||||||||||||||||||
Equity-related transactions | ||||||||||||||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control (8) | 69,603 | — | — | — | ||||||||||||||||||||||||||||
Share-based compensation under NetEase Plan (9) | 6,176 | 4,356 | 2,682 | 411 | 4,356 | 2,682 | 1,043 | 164 | ||||||||||||||||||||||||
Deemed distribution to NetEase (10) | — | — | 2,060 | 316 | — | 2,060 | 4,171 | 655 | ||||||||||||||||||||||||
Other transactions | — | — | ||||||||||||||||||||||||||||||
Disposal of Youdao Cloudnote business to NetEase Group (11) | — | — | 670 | 103 | — | 670 | — | — |
(1) | Mainly refer to the translation services provided to the entities within NetEase Group. |
(2) | Mainly refer to the arrangements where entities within NetEase Group act as the distributors to sell our smart devices. |
(3) | Mainly refer to the advertising services we provide to the other members of NetEase Group to promote their services and products. |
(4) | Mainly consist of the human resource functions performed by employees of other members of NetEase Group, office leasing and the purchase of sever custody service. |
(5) | Mainly consist of certain fixed assets and hardware purchased by us from NetEase Group. |
(6) | Represent |
(7) | Represent the long-term loans we borrowed from NetEase Group. |
(8) | Represent the costs and expenses incurred by the businesses acquired by us from NetEase Group which were paid by NetEase on behalf of such acquired business. See “—Acquisition of Online Learning Businesses from NetEase.” |
(9) | Represent the share-based compensation under NetEase’s RSU Plan allocated to us based on grants under such plan to our employees. For more information about NetEase’s RSU Plan, see “Item 5. Operating and Financial Review and Prospects—Critical Accounting Policies, Judgments and Estimates—Share-based compensation and fair value of ordinary shares—NetEase’s RSU Plan.” |
(10) | Represent the deemed distribution to NetEase Group by purchasing restricted share units for Youdao’s employees under NetEase’s RSU Plan. |
(11) | Disposal of Youdao Cloudnote |
As of December 31, | As of December 31, | |||||||||||||||||||||||
2019 | 2020 | 2020 | 2021 | |||||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
Amounts due from NetEase Group | 14,930 | 4,081 | 625 | 4,081 | 6,192 | 972 | ||||||||||||||||||
Amounts due to NetEase Group | 48,126 | 67,230 | 10,303 | 67,230 | 83,041 | 13,031 | ||||||||||||||||||
Short-term loans from NetEase Group | 878,000 | 878,000 | 134,559 | 878,000 | 878,000 | 137,777 | ||||||||||||||||||
Long-term loans from NetEase Group | — | 255,028 | 40,019 |
ITEM 8. | FINANCIAL INFORMATION |
ITEM 9. | THE OFFER AND LISTING |
ITEM 10. | ADDITIONAL INFORMATION |
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
12.A. Debt Securities |
Persons depositing or withdrawing shares or ADS holders must pay: | For: | |
• US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | • Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property | |
• Cancelation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates | ||
• US$0.05 (or less) per ADS | • Any cash distribution to ADS holders | |
• A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs | • Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders | |
• US$0.05 (or less) per ADS per calendar year | • Depositary services | |
• Registration or transfer fees | • Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares | |
• Expenses of the depositary | • Cable and facsimile transmissions (when expressly provided in the deposit agreement) | |
• Converting foreign currency to U.S. dollars |
• Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | • As necessary | ||
• Any charges incurred by the depositary or its agents for servicing the deposited securities | • As necessary |
ITEM 13. |
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. | CONTROLS AND PROCEDURES |
ITEM 16.A. |
ITEM 16.B. |
ITEM 16.C. |
Year Ended December 31, | ||||||||||||||||
Year Ended December 31, | 2020 | 2021 | ||||||||||||||
2019 | 2020 | RMB | RMB | |||||||||||||
RMB | RMB | |||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Services | ||||||||||||||||
Audit Fees (1) | 14,920 | 8,000 | 8,000 | 8,500 | ||||||||||||
Other Fees (2) | 425 | 536 | 536 | 2,832 | ||||||||||||
Total | 15,345 | 8,536 | 8,536 | 11,332 | ||||||||||||
(1) | Audit Fees |
(2) | Other Fees |
ITEM 16.D. |
ITEM 16.E. |
Total Number of ADSs Purchased | Average Price Paid Per ADS | Total Number of ADSs Purchased as Part of the Publicly Announced Plan | Approximate Dollar Value of ADSs that May Yet Be Purchased Under the Plan | |||||||||||||
Period | ||||||||||||||||
September 2021 | 140,000 | 13.14 | 140,000 | 48,159,790 | ||||||||||||
October 2021 | 169,500 | 12.49 | 169,500 | 46,041,889 | ||||||||||||
November 2021 | 141,512 | 14.19 | 141,512 | 44,034,464 | ||||||||||||
December 2021 | 184,200 | 11.91 | 184,200 | 41,840,189 | ||||||||||||
January 2022 | 158,005 | 12.83 | 158,005 | 39,813,227 | ||||||||||||
February 2022 | 145,500 | 13.31 | 145,500 | 37,876,639 | ||||||||||||
March 2022 | 215,000 | 9.07 | 215,000 | 35,925,724 | ||||||||||||
Total | 1,153,717 | 12.20 | 1,153,717 |
ITEM 16.F. |
ITEM 16.G. |
ITEM 16.H. |
ITEM 16.I. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. |
ITEM 17. | FINANCIAL STATEMENTS |
ITEM 18. | FINANCIAL STATEMENTS |
ITEM 19. | EXHIBITS |
Number | |||
13.2** | Certification by Principal Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
15.1* | Consent of Tian Yuan Law Firm | ||
15.2* | Consent of Maples and Calder (Hong Kong) LLP | ||
15.3* | Consent of PricewaterhouseCoopers Zhong Tian LLP, Independent Registered Public Accounting Firm | ||
101.INS* | XBRL Instance Document—this instance document does not appear on the Interactive Data File because its XBRL tags are | ||
101.SCH* | XBRL Taxonomy Extension Schema Document | ||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Filed herewith |
** | Furnished herewith |
† | Portions of this exhibit have been omitted in reliance of the revised Item 601 of Regulation S-K. |
Youdao, Inc. | ||||
By: | /s/ Feng Zhou | |||
Name: | Feng Zhou | |||
Title: | Chief Executive Officer |
F-2 | ||||
F-4 | ||||
F-6 | ||||
F-8 | ||||
F-11 | ||||
F-14 |
As of December 31, | ||||||||||||
2019 | 2020 | 2020 | ||||||||||
RMB | RMB | US$ | ||||||||||
Note 2(e) | ||||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 173,328 | 609,199 | 93,364 | |||||||||
Time deposits | 1,325,737 | 263 | 40 | |||||||||
Short-term investments | 121,126 | 584,999 | 89,655 | |||||||||
Accounts receivable, net | 200,675 | 268,830 | 41,200 | |||||||||
Inventories, net | 73,225 | 148,662 | 22,783 | |||||||||
Amounts due from NetEase Group | 14,930 | 4,081 | 625 | |||||||||
Prepayment and other current assets | 120,891 | 235,532 | 36,098 | |||||||||
Total current assets | 2,029,912 | 1,851,566 | 283,765 | |||||||||
Non-current assets: | ||||||||||||
Property and equipment, net | 24,551 | 45,636 | 6,994 | |||||||||
Operating lease right-of-use | 23,873 | 105,865 | 16,225 | |||||||||
Long-term investments | 2,000 | 42,484 | 6,510 | |||||||||
Other assets, net | 6,128 | 24,697 | 3,785 | |||||||||
Total non-current assets | 56,552 | 218,682 | 33,514 | |||||||||
Total assets | 2,086,464 | 2,070,248 | 317,279 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT) | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payables (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB50,189 and RMB62,438 as of December 31, 2019 and 2020, respectively) | 62,675 | 141,304 | 21,656 | |||||||||
Payroll payable (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB10,140 and RMB6,863 as of December 31, 2019 and 2020, respectively) | 94,488 | 209,603 | 32,123 | |||||||||
Amounts due to NetEase Group (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB41,667 and RMB26,728 as of December 31, 2019 and 2020, respectively) | 48,126 | 67,230 | 10,303 | |||||||||
Contract liabilities (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB434,114 and RMB1,388,567 as of December 31, 2019 and 2020, respectively) | 456,805 | 1,440,489 | 220,765 | |||||||||
Taxes payable (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB15,290 and RMB394 as of December 31, 2019 and 2020, respectively) | 25,977 | 54,895 | 8,413 | |||||||||
Accrued liabilities and other payables (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB22,519 and RMB35,244 as of December 31, 2019 and 2020, respectively) | 192,643 | 602,044 | 92,267 | |||||||||
Short-term loans from NetEase Group | 878,000 | 878,000 | 134,559 | |||||||||
Total current liabilities | 1,758,714 | 3,393,565 | 520,086 | |||||||||
Non-current liabilities: | ||||||||||||
Long-term lease liabilities | 21,206 | 79,748 | 12,222 | |||||||||
Other non-current liabilities | 5,517 | 4,043 | 620 | |||||||||
Total non-current liabilities | 26,723 | 83,791 | 12,842 | |||||||||
Total liabilities | 1,785,437 | 3,477,356 | 532,928 | |||||||||
As of December 31, | ||||||||||||
2020 | 2021 | 2021 | ||||||||||
RMB | RMB | US$ | ||||||||||
Note 2(f) | ||||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 609,199 | 322,777 | 50,651 | |||||||||
Time deposits | 263 | 268 | 42 | |||||||||
Restricted cash (Note 2(j)) | — | 749,770 | 117,655 | |||||||||
Short-term investments | 584,999 | 503,831 | 79,062 | |||||||||
Accounts receivable, net | 268,830 | 248,339 | 38,970 | |||||||||
Inventories, net | 118,963 | 255,411 | 40,080 | |||||||||
Amounts due from NetEase Group | 4,081 | 6,192 | 972 | |||||||||
Prepayment and other current assets | 199,642 | 182,577 | 28,650 | |||||||||
Assets held for sale (Note 2(c)) | 65,589 | 497 | 78 | |||||||||
Total current assets | 1,851,566 | 2,269,662 | 356,160 | |||||||||
Non-current assets: | ||||||||||||
Property, equipment and software, net | 40,173 | 80,315 | 12,603 | |||||||||
Operating lease right-of-use | 105,865 | 118,104 | 18,533 | |||||||||
Long-term investments | 42,484 | 32,518 | 5,103 | |||||||||
Goodwill (Note 5) | 6,938 | 109,944 | 17,253 | |||||||||
Other assets, net | 17,759 | 22,436 | 3,520 | |||||||||
Assets held for sale (Note 2(c)) | 5,463 | 1,088 | 171 | |||||||||
Total non-current assets | 218,682 | 364,405 | 57,183 | |||||||||
Total assets | 2,070,248 | 2,634,067 | 413,343 | |||||||||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payables (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB62,438 and RMB45,756 as of December 31, 2020 and 2021, respectively) | 141,304 | 161,006 | 25,265 | |||||||||
Payroll payable (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB6,863 and RMB11,873 as of December 31, 2020 and 2021, respectively) | 209,603 | 277,383 | 43,527 | |||||||||
Amounts due to NetEase Group (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB26,728 and RMB23,984 as of December 31, 2020 and 2021, respectively) | 67,230 | 83,041 | 13,031 | |||||||||
Contract liabilities (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB842,296 and RMB1,011,734 as of December 31, 2020 and 2021, respectively) | 894,218 | 1,065,639 | 167,222 | |||||||||
Taxes payable (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB394 and RMB4,072 as of December 31, 2020 and 2021, respectively) | 54,895 | 53,323 | 8,368 | |||||||||
Accrued liabilities and other payables (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB35,021 and RMB65,547 as of December 31, 2020 and 2021, respectively) | 602,044 | 515,567 | 80,904 | |||||||||
Short-term loans from NetEase Group | 878,000 | 878,000 | 137,777 | |||||||||
Liabilities held for sale (Note 2(c)) | 546,271 | — | — | |||||||||
Total current liabilities | 3,393,565 | 3,033,959 | 476,094 | |||||||||
Non-current liabilities: | ||||||||||||
Long-term lease liabilities (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB223 and RMB15,803 as of December 31, 2020 and 2021, respectively) | 79,748 | 73,070 | 11,466 | |||||||||
Other non-current liabilities | 4,043 | 2,411 | 378 | |||||||||
Long-term loans from NetEase Group | — | 255,028 | 40,019 | |||||||||
Total non-current liabilities | 83,791 | 330,509 | 51,863 | |||||||||
Total liabilities | 3,477,356 | 3,364,468 | 527,957 | |||||||||
As of December 31, | ||||||||||||
2019 | 2020 | 2020 | ||||||||||
RMB | RMB | US$ | ||||||||||
Note 2(e) | ||||||||||||
Commitments and contingencies (Note 18) | 0 | 0 | 0 | |||||||||
Shareholders’ equity/(deficit): | ||||||||||||
Class A ordinary shares (US$0.0001 par value; 200,000,000 shares authorized; 22,635,396 shares issued and outstanding as of December 31, 2019; 25,597,106 shares issued and outstanding as of December 31, 2020) | 16 | 18 | 3 | |||||||||
Class B ordinary shares (US$0.0001 par value; 100,000,000 shares authorized; 89,132,360 shares issued and outstanding as of December 31, 2019 and 2020, respectively) | 56 | 56 | 9 | |||||||||
Additional paid-in capital | 2,232,841 | 2,309,963 | 354,017 | |||||||||
Accumulated deficit | (1,920,081 | ) | (3,674,034 | ) | (563,070 | ) | ||||||
Accumulated other comprehensive loss | (14,527 | ) | (47,058 | ) | (7,213 | ) | ||||||
Statutory reserves | 1,786 | 2,950 | 452 | |||||||||
Noncontrolling interests | 936 | 997 | 153 | |||||||||
Total shareholders’ equity/(deficit) | 301,027 | (1,407,108 | ) | (215,649 | ) | |||||||
Total liabilities and shareholders’ equity/(deficit) | 2,086,464 | 2,070,248 | 317,279 | |||||||||
As of December 31, | ||||||||||||
2020 | 2021 | 2021 | ||||||||||
RMB | RMB | US$ | ||||||||||
Note 2(f) | ||||||||||||
Commitments and contingencies (Note 19) | 0 | |||||||||||
Mezzanine equity: | ||||||||||||
Redeemable noncontrolling interests (Note 5) | — | 78,592 | 12,333 | |||||||||
Total mezzanine equity | — | 78,592 | 12,333 | |||||||||
Shareholders’ deficit: | ||||||||||||
Class A ordinary shares (US$0.0001 par value; 200,000,000 shares authorized; 25,597,106 shares issued and outstanding as of December 31, 2020; 34,979,425 shares issued and outstanding as of December 31, 2021) | 18 | 24 | 4 | |||||||||
Class B ordinary shares (US$0.0001 par value; 100,000,000 shares authorized; 89,132,360 shares issued and outstanding as of December 31, 2020; 88,288,360 shares issued and outstanding as of December 31, 2021, respectively) | 56 | 56 | 9 | |||||||||
Additional paid-in capital | 2,309,963 | 3,913,946 | 614,184 | |||||||||
Accumulated deficit | (3,674,034 | ) | (4,671,195 | ) | (733,012 | ) | ||||||
Accumulated other comprehensive loss | (47,058 | ) | (54,354 | ) | (8,529 | ) | ||||||
Statutory reserves | 2,950 | 4,456 | 699 | |||||||||
Noncontrolling interests | 997 | (1,926 | ) | (302 | ) | |||||||
Total shareholders’ deficit | (1,407,108 | ) | (808,993 | ) | (126,947 | ) | ||||||
Total liabilities, mezzanine equity and shareholders’ deficit | 2,070,248 | 2,634,067 | 413,343 | |||||||||
For the year ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | 2020 | |||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Note 2(e) | ||||||||||||||||
Net revenues: | ||||||||||||||||
Learning services | 398,186 | 699,826 | 2,154,669 | 330,217 | ||||||||||||
Learning products | 30,530 | 152,044 | 539,962 | 82,753 | ||||||||||||
Online marketing services | 302,882 | 453,013 | 472,884 | 72,473 | ||||||||||||
Total net revenues | 731,598 | 1,304,883 | 3,167,515 | 485,443 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Learning services | (314,625 | ) | (513,060 | ) | (1,010,364 | ) | (154,845 | ) | ||||||||
Learning products | (20,502 | ) | (107,609 | ) | (355,970 | ) | (54,555 | ) | ||||||||
Online marketing services | (180,006 | ) | (313,592 | ) | (346,895 | ) | (53,164 | ) | ||||||||
Total cost of revenues | (515,133 | ) | (934,261 | ) | (1,713,229 | ) | (262,564 | ) | ||||||||
Gross profit | 216,465 | 370,622 | 1,454,286 | 222,879 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing expenses (include transactions with related parties of RMB7,218, RMB11,274 and RMB12,283 for the years ended December 31, 2018, 2019 and 2020, respectively) | (213,405 | ) | (622,884 | ) | (2,697,018 | ) | (413,336 | ) | ||||||||
Research and development expenses (include transactions with related parties of RMB18,992, RMB19,594 and RMB27,768 for the years ended December 31, 2018, 2019 and 2020, respectively) | (184,020 | ) | (275,367 | ) | (424,593 | ) | (65,072 | ) | ||||||||
General and administrative expenses (include transactions with related parties of RMB5,921, RMB4,075 and RMB13,818 for the years ended December 31, 2018, 2019 and 2020, respectively) | (38,177 | ) | (73,289 | ) | (138,459 | ) | (21,220 | ) | ||||||||
Total operating expenses | (435,602 | ) | (971,540 | ) | (3,260,070 | ) | (499,628 | ) | ||||||||
Loss from operations | (219,137 | ) | (600,918 | ) | (1,805,784 | ) | (276,749 | ) | ||||||||
Interest income | 8,344 | 12,063 | 25,524 | 3,912 | ||||||||||||
Interest expense (include interest expense charged by related party of RMB31,851, RMB30,232 and RMB31,215 for the years ended December 31, 2018, 2019 and 2020, respectively) | (31,851 | ) | (30,232 | ) | (31,215 | ) | (4,784 | ) | ||||||||
Others, net | 44,643 | 20,064 | 61,052 | 9,357 | ||||||||||||
Loss before tax | (198,001 | ) | (599,023 | ) | (1,750,423 | ) | (268,264 | ) | ||||||||
Income tax expenses | (11,294 | ) | (2,432 | ) | (2,929 | ) | (449 | ) | ||||||||
Net loss | (209,295 | ) | (601,455 | ) | (1,753,352 | ) | (268,713 | ) | ||||||||
Net loss/(income) attributable to noncontrolling interests | 385 | (48 | ) | 563 | 86 | |||||||||||
Net loss attributable to the Company | (208,910 | ) | (601,503 | ) | (1,752,789 | ) | (268,627 | ) | ||||||||
Accretions of convertible redeemable preferred shares to redemption value (Note 13) | (30,311 | ) | (35,893 | ) | — | — | ||||||||||
Net loss attributable to ordinary shareholders of the Company | (239,221 | ) | (637,396 | ) | (1,752,789 | ) | (268,627 | ) | ||||||||
For the year ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | 2021 | |||||||||||||
RMB | RMB | RMB | US$ Note 2(f) | |||||||||||||
Net revenues: | ||||||||||||||||
Learning services | 602,353 | 1,513,960 | 2,441,421 | 383,112 | ||||||||||||
Smart devices | 152,044 | 539,962 | 980,424 | 153,850 | ||||||||||||
Online marketing services | 453,013 | 472,884 | 593,949 | 93,204 | ||||||||||||
Total net revenues | 1,207,410 | 2,526,806 | 4,015,794 | 630,166 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Learning services | (451,164 | ) | (716,504 | ) | (980,700 | ) | (153,893 | ) | ||||||||
Smart devices | (107,609 | ) | (355,970 | ) | (618,925 | ) | (97,123 | ) | ||||||||
Online marketing services | (313,592 | ) | (346,895 | ) | (427,331 | ) | (67,058 | ) | ||||||||
Total cost of revenues | (872,365 | ) | (1,419,369 | ) | (2,026,956 | ) | (318,074 | ) | ||||||||
Gross profit | 335,045 | 1,107,437 | 1,988,838 | 312,092 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing expenses (include transactions with related parties of RMB10,432, RMB11,670 and RMB17,182 for the years ended December 31, 2019, 2020 and 2021, respectively) | (455,748 | ) | (1,473,604 | ) | (2,077,638 | ) | (326,027 | ) | ||||||||
Research and development expenses (include transactions with related parties of RMB18,130, RMB24,699 and RMB32,839 for the years ended December 31, 2019, 2020 and 2021, respectively) | (269,895 | ) | (372,184 | ) | (607,373 | ) | (95,310 | ) | ||||||||
General and administrative expenses (include transactions with related parties of RMB3,771, RMB11,887 and RMB9,264 for the years ended December 31, 2019, 2020 and 2021, respectively) | (69,242 | ) | (113,106 | ) | (190,297 | ) | (29,862 | ) | ||||||||
Impairment of intangible assets from business combination (Note 5) | — | — | (56,778 | ) | (8,911 | ) | ||||||||||
Total operating expenses | (794,885 | ) | (1,958,894 | ) | (2,932,086 | ) | (460,110 | ) | ||||||||
Loss from operations | (459,840 | ) | (851,457 | ) | (943,248 | ) | (148,018 | ) | ||||||||
Interest income | 12,063 | 25,524 | 18,780 | 2,947 | ||||||||||||
Interest expense (include interest expense charged by related part ies of RMB30,232, RMB31,215 and RMB31,644 for the years ended December 31, 2019, 2020 and 2021, respectively) | (30,232 | ) | (31,215 | ) | (31,644 | ) | (4,966 | ) | ||||||||
Others, net (Note 15) | 20,064 | 61,052 | 36,673 | 5,756 | ||||||||||||
Loss before tax | (457,945 | ) | (796,096 | ) | (919,439 | ) | (144,281 | ) | ||||||||
Income tax expense s | (2,432 | ) | (2,929 | ) | (6,648 | ) | (1,043 | ) | ||||||||
Net loss from continuing operations | (460,377 | ) | (799,025 | ) | (926,087 | ) | (145,324 | ) | ||||||||
Net loss from discontinued operations | (141,078 | ) | (954,327 | ) | (100,267 | ) | (15,734 | ) | ||||||||
Net loss | (601,455 | ) | (1,753,352 | ) | (1,026,354 | ) | (161,058 | ) | ||||||||
Net (income)/loss attributable to noncontrolling interests | (48 | ) | 563 | 30,699 | 4,817 | |||||||||||
Net loss attributable to the Company | (601,503 | ) | (1,752,789 | ) | (995,655 | ) | (156,241 | ) | ||||||||
Accretions of convertible redeemable preferred shares to redemption value (Note 14) | (35,893 | ) | — | — | — | |||||||||||
Net loss attributable to ordinary shareholders of the Company | (637,396 | ) | (1,752,789 | ) | (995,655 | ) | (156,241 | ) | ||||||||
Including: | ||||||||||||||||
Net loss from continuing operations attributable to ordinary shareholders of the Company | (496,318 | ) | (798,462 | ) | (895,388 | ) | (140,507 | ) | ||||||||
Net loss from discontinued operations attributable to ordinary shareholders of the Company | (141,078 | ) | (954,327 | ) | (100,267 | ) | (15,734 | ) |
For the year ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | 2020 | |||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Note 2(e) | ||||||||||||||||
Net loss | (209,295 | ) | (601,455 | ) | (1,753,352 | ) | (268,713 | ) | ||||||||
Other comprehensive income/(loss): | ||||||||||||||||
Foreign currency translation adjustment | 496 | (15,023 | ) | (32,531 | ) | (4,986 | ) | |||||||||
Total other comprehensive income/(loss) | 496 | (15,023 | ) | (32,531 | ) | (4,986 | ) | |||||||||
Total comprehensive loss | (208,799 | ) | (616,478 | ) | (1,785,883 | ) | (273,699 | ) | ||||||||
Comprehensive loss/(income) attributable to noncontrolling interests | 385 | (48 | ) | 563 | 86 | |||||||||||
Comprehensive loss attributable to the Company | (208,414 | ) | (616,526 | ) | (1,785,320 | ) | (273,613 | ) | ||||||||
Accretions of convertible redeemable preferred shares to redemption value (Note 13) | (30,311 | ) | (35,893 | ) | — | — | ||||||||||
Comprehensive loss attributable to ordinary shareholders of the Company | (238,725 | ) | (652,419 | ) | (1,785,320 | ) | (273,613 | ) | ||||||||
Net loss per ordinary share/ADS | ||||||||||||||||
Basic | (2.80 | ) | (6.68 | ) | (15.53 | ) | (2.38 | ) | ||||||||
Diluted | (2.80 | ) | (6.68 | ) | (15.53 | ) | (2.38 | ) | ||||||||
Weighted average number of ordinary shares/ADSs | ||||||||||||||||
Basic | 85,346,790 | 95,445,982 | 112,864,452 | 112,864,452 | ||||||||||||
Diluted | 85,346,790 | 95,445,982 | 112,864,452 | 112,864,452 |
For the year ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | 2021 | |||||||||||||
RMB | RMB | RMB | US$ Note 2(f) | |||||||||||||
Net loss | (601,455 | ) | (1,753,352 | ) | (1,026,354 | ) | (161,058 | ) | ||||||||
Other comprehensive loss: | ||||||||||||||||
Foreign currency translation adjustment | (15,023 | ) | (32,531 | ) | (7,296 | ) | (1,145 | ) | ||||||||
Total other comprehensive loss | (15,023 | ) | (32,531 | ) | (7,296 | ) | (1,145 | ) | ||||||||
Total comprehensive loss | (616,478 | ) | (1,785,883 | ) | (1,033,650 | ) | (162,203 | ) | ||||||||
Comprehensive (income)/loss attributable to noncontrolling interests | (48 | ) | 563 | 30,699 | 4,817 | |||||||||||
Comprehensive loss attributable to the Company | (616,526 | ) | (1,785,320 | ) | (1,002,951 | ) | (157,386 | ) | ||||||||
Accretions of convertible redeemable preferred shares to redemption value (Note 14) | (35,893 | ) | — | — | — | |||||||||||
Comprehensive loss attributable to ordinary shareholders of the Company | (652,419 | ) | (1,785,320 | ) | (1,002,951 | ) | (157,386 | ) | ||||||||
Net loss per ordinary share/ADS | ||||||||||||||||
Basic | (6.68 | ) | (15.53 | ) | (8.18 | ) | (1.28 | ) | ||||||||
-Continuing operations | (5.20 | ) | (7.07 | ) | (7.36 | ) | (1.15 | ) | ||||||||
-Discontinued operations | (1.48 | ) | (8.46 | ) | (0.82 | ) | (0.13 | ) | ||||||||
Diluted | (6.68 | ) | (15.53 | ) | (8.18 | ) | (1.28 | ) | ||||||||
-Continuing operations | (5.20 | ) | (7.07 | ) | (7.36 | ) | (1.15 | ) | ||||||||
-Discontinued operations | (1.48 | ) | (8.46 | ) | (0.82 | ) | (0.13 | ) | ||||||||
Weighted average number of ordinary shares/ADSs | ||||||||||||||||
Basic | 95,445,982 | 112,864,452 | 121,650,907 | 121,650,907 | ||||||||||||
Diluted | 95,445,982 | 112,864,452 | 121,650,907 | 121,650,907 |
Pre-IPO ordinary shares | Class A ordinary shares | Class B ordinary shares | Additional paid-in capital | Statutory reserves | Accumulated deficit | Accumulated other comprehensive income/(loss) | Noncontrolling interests | Total shareholders’ (deficit)/ equity | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 | 92,000,000 | 58 | — | — | — | — | 138,024 | 292 | (1,281,191 | ) | 496 | 888 | (1,141,433 | ) | ||||||||||||||||||||||||||||||||||
Loss for the year | — | — | — | — | — | — | — | — | (601,503 | ) | — | 48 | (601,455 | ) | ||||||||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | — | — | — | — | 25,074 | — | — | — | — | 25,074 | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | (15,023 | ) | — | (15,023 | ) | ||||||||||||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | — | — | — | — | 1,494 | (1,494 | ) | — | — | — | |||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO ordinary shares into Class A and Class B ordinary shares upon initial public offering (“IPO”) | (92,000,000 | ) | (58 | ) | 2,867,640 | 2 | 89,132,360 | 56 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Share issuance upon IPO, net of issuance cost | — | — | 5,600,000 | 4 | — | — | 621,943 | — | — | — | — | 621,947 | ||||||||||||||||||||||||||||||||||||
Share issuance upon concurrent private placement | — | — | 7,352,941 | 5 | — | — | 881,657 | — | — | — | — | 881,662 | ||||||||||||||||||||||||||||||||||||
Conversion of convertible preferred shares into Class A shares upon IPO | — | — | 6,814,815 | 5 | — | — | 496,540 | — | — | — | — | 496,545 | ||||||||||||||||||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control (Note 1) | — | — | — | — | — | — | 69,603 | — | — | — | — | 69,603 | ||||||||||||||||||||||||||||||||||||
Accretions of convertible redeemable preferred shares (Note 14) | — | — | — | — | — | — | — | — | (35,893 | ) | — | — | (35,893 | ) | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | — | — | 22,635,396 | 16 | 89,132,360 | 56 | 2,232,841 | 1,786 | (1,920,081 | ) | (14,527 | ) | 936 | 301,027 | ||||||||||||||||||||||||||||||||||
Class A ordinary shares | Class B ordinary shares | Additional paid-in capital | Statutory reserves | Accumulated deficit | Accumulated other comprehensive loss | Noncontrolling interests | Total shareholders’ equity/ (deficit) | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | 22,635,396 | 16 | 89,132,360 | 56 | 2,232,841 | 1,786 | (1,920,081 | ) | (14,527 | ) | 936 | 301,027 | ||||||||||||||||||||||||||||
Loss for the year | — | — | — | — | — | — | (1,752,789 | ) | — | (563 | ) | (1,753,352 | ) | |||||||||||||||||||||||||||
Share issuance pursuant to incentive plan | 2,961,710 | 2 | — | — | 37,604 | — | — | — | — | 37,606 | ||||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | — | — | 41,578 | — | — | — | — | 41,578 | ||||||||||||||||||||||||||||||
Deemed distribution to NetEase (Note 20) | — | — | — | — | (2,060 | ) | — | — | — | — | (2,060 | ) | ||||||||||||||||||||||||||||
Noncontrolling interests arising from business combination (Note 5) | — | — | — | — | — | — | — | — | 624 | 624 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | (32,531 | ) | — | (32,531 | ) | ||||||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | — | — | 1,164 | (1,164 | ) | — | — | — | |||||||||||||||||||||||||||||
Balance as of December 31, 2020 | 25,597,106 | 18 | 89,132,360 | 56 | 2,309,963 | 2,950 | (3,674,034 | ) | (47,058 | ) | 997 | (1,407,108 | ) | |||||||||||||||||||||||||||
Class A ordinary shares | Class B ordinary shares | Additional paid-in capital | Statutory reserves | Accumulated deficit | Accumulated other comprehensive loss | Noncontrolling interests | Total shareholders’ deficit | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | �� | RMB | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | 25,597,106 | 18 | 89,132,360 | 56 | 2,309,963 | 2,950 | (3,674,034 | ) | (47,058 | ) | 997 | (1,407,108 | ) | |||||||||||||||||||||||||||
Loss for the year | — | — | — | — | — | — | (995,655 | ) | — | (2,923 | ) | (998,578 | ) | |||||||||||||||||||||||||||
Share issuance pursuant to incentive plan | 1,538,319 | 1 | — | — | 24,549 | — | — | — | — | 24,550 | ||||||||||||||||||||||||||||||
Share issuance upon follow-on offering, net of issuance cost (Note 13) | 7,000,000 | 5 | — | — | 1,498,622 | — | — | — | — | 1,498,627 | ||||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | — | — | 84,983 | — | — | — | — | 84,983 | ||||||||||||||||||||||||||||||
Conversion of Class B shares into Class A shares | 844,000 | — | (844,000 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Deemed distribution to NetEase (Note 20) | — | — | — | — | (4,171 | ) | — | — | — | — | (4,171 | ) | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | (7,296 | ) | — | (7,296 | ) | ||||||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | — | — | 1,506 | (1,506 | ) | — | — | — | |||||||||||||||||||||||||||||
Balance as of December 31, 2021 | 34,979,425 | 24 | 88,288,360 | 56 | 3,913,946 | 4,456 | (4,671,195 | ) | (54,354 | ) | (1,926 | ) | (808,993 | ) | ||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | 2021 | |||||||||||||
RMB | RMB | RMB | US$ Note 2(f) | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | (601,455 | ) | (1,753,352 | ) | (1,026,354 | ) | (161,058 | ) | ||||||||
Net loss from discontinued operations | (141,078 | ) | (954,327 | ) | (100,267 | ) | (15,734 | ) | ||||||||
Depreciation and amortization | 10,525 | 15,462 | 30,098 | 4,723 | ||||||||||||
Share-based compensation | 23,336 | 36,425 | 72,201 | 11,330 | ||||||||||||
Fair value changes of short-term investments | (793 | ) | (873 | ) | 668 | 105 | ||||||||||
Allowance/(Reversal) for doubtful accounts/expected credit losses | 1,897 | 12,120 | (4,523 | ) | (710 | ) | ||||||||||
Provision/(Reversal) of allowance for inventory | 3,162 | (3,162 | ) | 10,176 | 1,597 | |||||||||||
Impairment of long-term investments | — | — | 7,000 | 1,098 | ||||||||||||
Impairment of intangible assets from business combination (Note 5) | — | — | 56,778 | 8,911 | ||||||||||||
Remeasured loss from previously held interest (Note 15) | — | — | 2,456 | 385 | ||||||||||||
Deferred income taxes (Note 10) | — | — | (8,963 | ) | (1,406 | ) | ||||||||||
Unrealized exchange (gains)/loss | (1,783 | ) | 16,252 | 1,391 | 217 | |||||||||||
Others | 122 | 879 | 3,048 | 478 | ||||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||
Accounts receivable | (122,010 | ) | (80,057 | ) | 24,841 | 3,898 | ||||||||||
Inventories | (40,484 | ) | (54,647 | ) | (146,709 | ) | (23,022 | ) | ||||||||
Prepayment and other current assets | (27,617 | ) | (120,778 | ) | 25,880 | 4,061 | ||||||||||
Amounts due from NetEase Group | (3,690 | ) | 10,849 | (2,111 | ) | (331 | ) | |||||||||
Operating lease right-of-use | 2,035 | 9,901 | 29,022 | 4,554 | ||||||||||||
Other assets | (6 | ) | (6,670 | ) | (6,327 | ) | (993 | ) | ||||||||
Contract liabilities | 183,783 | 545,814 | 115,462 | 18,119 | ||||||||||||
Accounts payables | 28,117 | 78,629 | 12,453 | 1,954 | ||||||||||||
Payroll payable | 20,917 | 68,249 | 85,423 | 13,405 | ||||||||||||
Taxes payable | 8,588 | 28,842 | (2,156 | ) | (338 | ) | ||||||||||
Accrued liabilities and other payables | 87,260 | 249,703 | 34,344 | 5,389 | ||||||||||||
Amounts due to NetEase Group | 4,170 | 17,044 | 11,640 | 1,827 | ||||||||||||
Long-term lease liabilities | (4,702 | ) | (33,351 | ) | (47,939 | ) | (7,523 | ) | ||||||||
Other non-current liabilities | 5,517 | (1,474 | ) | (1,632 | ) | (255 | ) | |||||||||
Net cash used in continuing operating activities | (282,033 | ) | (9,868 | ) | (623,566 | ) | (97,851 | ) | ||||||||
Net cash used in discontinued operating activities | (90,237 | ) | (311,694 | ) | (722,844 | ) | (113,430 | ) | ||||||||
Net cash used in operating activities | (372,270 | ) | (321,562 | ) | (1,346,410 | ) | (211,281 | ) | ||||||||
Ordinary shares | Additional paid-in capital | Statutory reserves | Accumulated deficit | Accumulated other comprehensive income | Noncontrolling interests | Total shareholders’ deficits | ||||||||||||||||||||||||||
Shares | Amount RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||
Balance as of January 1, 2018 | 65,387,160 | 41 | 83,061 | — | (798,019 | ) | — | (243,080 | ) | (957,997 | ) | |||||||||||||||||||||
Loss for the year | — | — | — | — | (208,910 | ) | — | (385 | ) | (209,295 | ) | |||||||||||||||||||||
Share-based compensation expenses | — | — | 6,176 | — | — | — | — | 6,176 | ||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | 496 | — | 496 | ||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | 292 | (292 | ) | — | — | — | |||||||||||||||||||||||
Issuance of shares to NetEase | — | — | 41 | — | — | — | — | 41 | ||||||||||||||||||||||||
Issuance of shares to other shareholders | 26,612,840 | 17 | — | — | (243,659 | ) | — | 244,353 | 711 | |||||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control (Note 1) | — | — | 44,024 | — | — | — | — | 44,024 | ||||||||||||||||||||||||
Deemed contribution from NetEase Group related to issuance of preferred shares (Note 13) | — | — | 4,722 | — | — | — | — | 4,722 | ||||||||||||||||||||||||
Accretions of convertible redeemable preferred shares (Note 13) | — | — | — | — | (30,311 | ) | — | — | (30,311 | ) | ||||||||||||||||||||||
Balance as of December 31, 2018 | 92,000,000 | 58 | 138,024 | 292 | (1,281,191 | ) | 496 | 888 | (1,141,433 | ) | ||||||||||||||||||||||
Pre-IPO ordinary shares | Class A ordinary shares | Class B ordinary shares | Additional paid-in capital | Statutory reserves | Accumulated deficit | Accumulated other comprehensive income/(loss) | Noncontrolling interests | Total shareholders’ (deficit)/ equity | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount RMB | Shares | Amount RMB | Shares | Amount RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | 92,000,000 | 58 | — | — | — | — | 138,024 | 292 | (1,281,191 | ) | 496 | 888 | (1,141,433 | ) | ||||||||||||||||||||||||||||||||||
Loss for the year | — | — | — | — | — | — | — | — | (601,503 | ) | — | 48 | (601,455 | ) | ||||||||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | — | — | — | — | 25,074 | — | — | — | — | 25,074 | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | (15,023 | ) | — | (15,023 | ) | ||||||||||||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | — | — | — | — | 1,494 | (1,494 | ) | — | — | — | |||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO ordinary shares into Class A and Class B ordinary shares upon initial public offering (“IPO”) | (92,000,000 | ) | (58 | ) | 2,867,640 | 2 | 89,132,360 | 56 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Share issuance upon IPO, net of issuance cost | — | — | 5,600,000 | 4 | — | — | 621,943 | — | — | — | — | 621,947 | ||||||||||||||||||||||||||||||||||||
Share issuance upon concurrent private placement | — | — | 7,352,941 | 5 | — | — | 881,657 | — | — | — | — | 881,662 | ||||||||||||||||||||||||||||||||||||
Conversion of convertible preferred shares into Class A shares upon IPO | — | — | 6,814,815 | 5 | — | — | 496,540 | — | — | — | — | 496,545 | ||||||||||||||||||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control (Note 1) | — | — | — | — | — | — | 69,603 | — | — | — | — | 69,603 | ||||||||||||||||||||||||||||||||||||
Accretions of convertible redeemable preferred shares (Note 13) | — | — | — | — | — | — | — | — | (35,893 | ) | — | — | (35,893 | ) | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | — | — | 22,635,396 | 16 | 89,132,360 | 56 | 2,232,841 | 1,786 | (1,920,081 | ) | (14,527 | ) | 936 | 301,027 | ||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | 2021 | |||||||||||||
RMB | RMB | RMB | US$ Note 2(f) | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of short-term investments | (216,000 | ) | (1,683,000 | ) | (779,500 | ) | (122,321 | ) | ||||||||
Proceeds of maturities of short-term investments | 145,882 | 1,220,000 | 860,000 | 134,953 | ||||||||||||
Placements of time deposits | (1,522,270 | ) | (20,663 | ) | (897,916 | ) | (140,903 | ) | ||||||||
Proceeds from maturities of time deposits | 526,505 | 1,327,451 | 907,759 | 142,447 | ||||||||||||
Cash paid for business combinations, net of cash acquired (Note 5) | — | (6,398 | ) | 43,216 | 6,782 | |||||||||||
Purchase of intangible assets | (29 | ) | — | (596 | ) | (94 | ) | |||||||||
Purchases of property, equipment and software | (18,081 | ) | (30,770 | ) | (63,477 | ) | (9,961 | ) | ||||||||
Proceeds from disposal of property, equipment and software | 2,054 | 925 | 2,114 | 332 | ||||||||||||
Impact on cash and cash equivalents from an entity disposed | — | — | (1,521 | ) | (239 | ) | ||||||||||
Payment for long-term investments | (2,000 | ) | (40,490 | ) | (27,380 | ) | (4,297 | ) | ||||||||
Net cash (used in)/provided by continuing investing activities | (1,083,939 | ) | 767,055 | 42,699 | 6,699 | |||||||||||
Net cash (used in)/provided by discontinued investing activities | (66 | ) | (6,084 | ) | 4,375 | 687 | ||||||||||
Net cash (used in)/provided by investing activities | (1,084,005 | ) | 760,971 | 47,074 | 7,386 | |||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from the issuance of IPO shares, net of issuance cost | 630,364 | — | — | — | ||||||||||||
Proceeds from concurrent private placement | 881,662 | — | — | — | ||||||||||||
Proceeds from the issuance of follow-on offering shares, net of issuance cost (Note 13) | — | — | 1,498,627 | 235,167 | ||||||||||||
Payment of offering expenses | — | (7,909 | ) | — | — | |||||||||||
Funding from NetEase Group | 75,643 | — | — | — | ||||||||||||
Proceeds from long-term loans from NetEase Group | — | — | 257,522 | 40,411 | ||||||||||||
Proceeds from issuance of ordinary shares pursuant to incentive plan | — | 34,468 | 27,564 | 4,326 | ||||||||||||
Net cash provided by financing activities* | 1,587,669 | 26,559 | 1,783,713 | 279,904 | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 196 | (30,097 | ) | (21,029 | ) | (3,300 | ) | |||||||||
Net increase in cash, cash equivalents and restricted cash | 131,590 | 435,871 | 463,348 | 72,709 | ||||||||||||
Cash, cash equivalents and restricted cash at the beginning of the year | 41,738 | 173,328 | 609,199 | 95,597 | ||||||||||||
Cash, cash equivalents and restricted cash at the end of the year | 173,328 | 609,199 | 1,072,547 | 168,306 | ||||||||||||
* | There was no financing activity from discontinued operations. |
Class A ordinary shares | Class B ordinary shares | Additional paid-in capital | Statutory reserves | Accumulated deficit | Accumulated other comprehensive loss | Noncontrolling interests | Total shareholders’ equity/(deficit) | |||||||||||||||||||||||||||||||||
Shares | Amount RMB | Shares | Amount RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | 22,635,396 | 16 | 89,132,360 | 56 | 2,232,841 | 1,786 | (1,920,081 | ) | (14,527 | ) | 936 | 301,027 | ||||||||||||||||||||||||||||
Loss for the year | — | — | — | — | — | — | (1,752,789 | ) | 0— | (563 | ) | (1,753,352 | ) | |||||||||||||||||||||||||||
Share issuance pursuant to incentive plan | 2,961,710 | 2 | — | — | 37,604 | — | — | — | — | 37,606 | ||||||||||||||||||||||||||||||
Share-based compensation expenses | — | — | — | — | 41,578 | — | — | 0— | — | 41,578 | ||||||||||||||||||||||||||||||
Deemed distribution to NetEase (Note 19) | — | — | — | — | (2,060 | ) | — | — | — | — | (2,060 | ) | ||||||||||||||||||||||||||||
Noncontrolling interests arising from business combination (Note 4) | — | — | — | — | — | — | — | — | 624 | 624 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | (32,531 | ) | — | (32,531 | ) | ||||||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | — | — | 1,164 | (1,164 | ) | — | — | — | |||||||||||||||||||||||||||||
Balance as of December 31, 2020 | 25,597,106 | 18 | 89,132,360 | 56 | 2,309,963 | 2,950 | (3,674,034 | ) | (47,058 | ) | 997 | (1,407,108 | ) | |||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | 2021 | |||||||||||||
RMB | RMB | RMB | US$ Note 2(f) | |||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid for income tax expenses | 4,839 | 8,372 | 9,686 | 1,520 | ||||||||||||
Cash paid for interest expense | 29,786 | 28,597 | 28,567 | 4,483 | ||||||||||||
Non-cash investing and financing activities: | ||||||||||||||||
Accretions of convertible redeemable preferred shares to redemption value | 35,893 | — | — | — | ||||||||||||
Payables for offering expenses | 8,417 | — | — | — | ||||||||||||
Unpaid consideration for business combination (Note 12) | — | — | 5,129 | 805 | ||||||||||||
Changes in accrued liabilities and other payables related to property, equipment and software addition | — | 7,068 | 5,531 | 868 | ||||||||||||
Receivable from agent for issuance of ordinary shares pursuant to incentive plan | — | 3,138 | — | — |
For the year ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | 2020 | |||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Note 2(e) | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | (209,295 | ) | (601,455 | ) | (1,753,352 | ) | (268,713 | ) | ||||||||
Depreciation and amortization | 6,398 | 10,578 | 16,105 | 2,468 | ||||||||||||
Share-based compensation | 6,176 | 25,074 | 41,578 | 6,372 | ||||||||||||
Financing expense ( Note 13) | 4,722 | — | — | — | ||||||||||||
Fair value changes of short-term investments | (215 | ) | (793 | ) | (873 | ) | (134 | ) | ||||||||
Allowance for doubtful accounts/expected credit losses | 75 | 1,897 | 12,120 | 1,857 | ||||||||||||
Provision/(Reversal) of allowance for inventory | — | 3,162 | (3,162 | ) | (485 | ) | ||||||||||
Unrealized exchange (gains)/loss | (31,496 | ) | (1,783 | ) | 16,252 | 2,491 | ||||||||||
Others | 54 | 122 | 879 | 135 | ||||||||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||||||||||
Accounts receivable | (15,516 | ) | (122,010 | ) | (80,057 | ) | (12,269 | ) | ||||||||
Inventories | (22,290 | ) | (52,555 | ) | (72,275 | ) | (11,077 | ) | ||||||||
Prepayment and other current assets | (15,044 | ) | (76,817 | ) | (111,521 | ) | (17,091 | ) | ||||||||
Amounts due from NetEase Group | (2,030 | ) | (3,690 | ) | 10,849 | 1,663 | ||||||||||
Operating lease right-of-use | — | 2,035 | 9,901 | 1,517 | ||||||||||||
Other assets | (2,417 | ) | (6 | ) | (6,670 | ) | (1,022 | ) | ||||||||
Contract liabilities | 83,005 | 279,269 | 983,684 | 150,756 | ||||||||||||
Accounts payables | 14,611 | 28,117 | 78,629 | 12,050 | ||||||||||||
Payroll payable | 28,376 | 24,500 | 115,059 | 17,634 | ||||||||||||
Taxes payable | 8,272 | 8,588 | 28,842 | 4,420 | ||||||||||||
Accrued liabilities and other payables | 27,306 | 98,512 | 410,231 | 62,871 | ||||||||||||
Amounts due to NetEase Group | 18,978 | 4,170 | 17,044 | 2,612 | ||||||||||||
Long-term lease liabilities | — | (4,702 | ) | (33,351 | ) | (5,111 | ) | |||||||||
Other non-current liabilities | — | 5,517 | (1,474 | ) | (226 | ) | ||||||||||
Net cash used in operating activities | (100,330 | ) | (372,270 | ) | (321,562 | ) | (49,282 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of short-term investments | (87,000 | ) | (216,000 | ) | (1,683,000 | ) | (257,931 | ) | ||||||||
Proceeds of maturities of short-term investments | 37,000 | 145,882 | 1,220,000 | 186,973 | ||||||||||||
Placements of time deposits | (661,671 | ) | (1,522,270 | ) | (20,663 | ) | (3,167 | ) | ||||||||
Proceeds from maturities of time deposits | 349,383 | 526,505 | 1,327,451 | 203,441 | ||||||||||||
Cash paid for business combination, net of cash acquired (Note 4) | — | — | (6,398 | ) | (981 | ) | ||||||||||
Purchase of intangible assets | (276 | ) | (29 | ) | — | — | ||||||||||
Purchases of property and equipment | (13,688 | ) | (18,147 | ) | (36,854 | ) | (5,648 | ) | ||||||||
Proceeds from disposal of property and equipment | 2,252 | 2,054 | 925 | 142 | ||||||||||||
Payment for equity investments | — | (2,000 | ) | (40,490 | ) | (6,205 | ) | |||||||||
Net cash (used in)/provided by investing activities | (374,000 | ) | (1,084,005 | ) | 760,971 | 116,624 | ||||||||||
For the year ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | 2020 | |||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Note 2(e) | ||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds received from Pre-IPO ordinary shareholders | 41 | — | — | — | ||||||||||||
Proceeds received from preferred shareholders, net of issuance cost | 430,341 | — | — | — | ||||||||||||
Proceeds from the issuance of IPO shares, net of issuance cost | — | 630,364 | — | — | ||||||||||||
Proceeds from concurrent private placement | — | 881,662 | — | — | ||||||||||||
Proceeds from noncontrolling interests and other shareholders | 711 | — | — | — | ||||||||||||
Funding from NetEase Group | 44,024 | 75,643 | ||||||||||||||
Payment of offering expenses | — | — | (7,909 | ) | (1,212 | ) | ||||||||||
Proceeds from issuance of ordinary shares pursuant to incentive plan | — | — | 34,468 | 5,282 | ||||||||||||
Net cash provided by financing activities | 475,117 | 1,587,669 | 26,559 | 4,070 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,120 | 196 | (30,097 | ) | (4,612 | ) | ||||||||||
Net increase in cash and cash equivalents | 1,907 | 131,590 | 435,871 | 66,800 | ||||||||||||
Cash and cash equivalents at the beginning of the year | 39,831 | 41,738 | 173,328 | 26,564 | ||||||||||||
Cash and cash equivalents at the end of the year | 41,738 | 173,328 | 609,199 | 93,364 | ||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid for income tax expenses | 1,740 | 4,839 | 8,372 | 1,283 | ||||||||||||
Cash paid for interest expense | 28,579 | 29,786 | 28,597 | 4,383 | ||||||||||||
Non-cash investing and financing activities: | ||||||||||||||||
Accretions of convertible redeemable preferred shares to redemption value | 30,311 | 35,893 | — | — | ||||||||||||
Deemed contribution from NetEase Group related to issuance of preferred shares (Note 13) | 4,722 | — | — | — | ||||||||||||
Payables for offering expenses | — | 8,417 | — | — | ||||||||||||
Changes in accrued liabilities and other payables related to property and equipment addition | — | — | 7,068 | 1,083 | ||||||||||||
Receivable from agent for issuance of ordinary shares pursuant to incentive plan | — | — | 3,138 | 481 |
Place and year of | Percentage of direct or indirect economic ownership | Principal activities | ||||||||
Subsidiaries | ||||||||||
Youdao (Hong Kong) Limited | Hong Kong, China, 2016 | Holding company | ||||||||
Youdao Education Technology (Hong Kong) Limited | Hong Kong, China, 2021 | 100% | Providing sales of smart devices | |||||||
NetEase Youdao Information Technology (Beijing) Co., Ltd. (“Youdao Information”) | Beijing, China, 2006 | Providing sales of smart devices and solutions, technical support to the VIEs | ||||||||
NetEase | ||||||||||
Ltd. (“Youdao Hangzhou”) | Hangzhou, China, 2019 | Providing technical support to the VIEs | ||||||||
NetEase Technology Co., Ltd. (“Youdao Smart Technology”) | Hangzhou, China, 2021 | 100% | Providing sales of smart devices | |||||||
VIE | ||||||||||
Beijing System Co., Ltd. (“Youdao Computer”) | Beijing, China, 2007 | Providing online learning services as well as online marketing services |
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Assets | ||||||||
Cash and cash equivalents | 4,683 | 7,691 | ||||||
Short-term investments | 116,125 | 10,354 | ||||||
Accounts receivable, net | 145,570 | 145,212 | ||||||
Inventories, net | 27,340 | 54,545 | ||||||
Amounts due from NetEase Group and Youdao Group | 249,589 | 1,243,125 | ||||||
Prepayment and other current assets | 56,228 | 69,610 | ||||||
Total current assets | 599,535 | 1,530,537 | ||||||
Property and equipment, net | — | 148 | ||||||
Operating lease right-of-use | — | 988 | ||||||
Other assets, net | 7,302 | 45,496 | ||||||
Total non-current assets | 7,302 | 46,632 | ||||||
Total assets | 606,837 | 1,577,169 | ||||||
Liabilities | ||||||||
Accounts payables | 50,189 | 62,438 | ||||||
Payroll payable | 10,140 | 6,863 | ||||||
Amounts due to NetEase Group and Youdao Group | 41,667 | 26,728 | ||||||
Contract liabilities | 434,114 | 1,388,567 | ||||||
Taxes payable | 15,290 | 394 | ||||||
Accrued liabilities and other payables | 22,519 | 35,244 | ||||||
Total liabilities | 573,919 | 1,520,234 | ||||||
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Assets | ||||||||
Cash and cash equivalents | 7,691 | 134,639 | ||||||
Restricted cash (Note 2(j)) | — | 749,770 | ||||||
Short-term investments | 10,354 | 13,617 | ||||||
Accounts receivable, net | 145,212 | 146,257 | ||||||
Inventories, net | 26,556 | 48,477 | ||||||
Amounts due from NetEase Group and Youdao Group | 1,243,125 | 442,286 | ||||||
Prepayment and other current assets | 45,065 | 64,005 | ||||||
Assets held for sale | 52,534 | 204 | ||||||
Total current assets | 1,530,537 | 1,599,255 | ||||||
Property , equipment and software , net | 148 | 3,244 | ||||||
Operating lease right-of-use | 988 | 26,320 | ||||||
Goodwill | — | 103,006 | ||||||
Other assets, net | 45,496 | 36,405 | ||||||
Total non-current assets | 46,632 | 168,975 | ||||||
Total assets | 1,577,169 | 1,768,230 | ||||||
Liabilities | ||||||||
Accounts payables | 62,438 | 45,756 | ||||||
Payroll payable | 6,863 | 11,873 | ||||||
Amounts due to NetEase Group and Youdao Group | 26,728 | 504,605 | ||||||
Contract liabilities | 842,296 | 1,011,734 | ||||||
Taxes payable | 394 | 4,072 | ||||||
Accrued liabilities and other payables | 35,021 | 65,547 | ||||||
Liabilities held for sale | 546,271 | 0 | ||||||
Total current liabilities | 1,520,011 | 1,643,587 | ||||||
Long-term lease liabilities | 223 | 15,803 | ||||||
Total non-current liabilities | 223 | 15,803 | ||||||
Total liabilities | 1,520,234 | 1,659,390 | ||||||
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
Net revenues | 606,334 | 997,736 | 2,434,223 | |||||||||
Net income | 13,891 | 3,173 | 24,212 |
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
Net cash provided by/(used in) operating activities | 48,263 | 50,978 | (62,502 | ) | ||||||||
Net cash (used in)/provided by investing activities | (50,000 | ) | (67,118 | ) | 65,510 | |||||||
Net cash provided by financing activities | — | 10,000 | — | |||||||||
Net (decrease)/increase in cash and cash equivalents | (1,737 | ) | (6,140 | ) | 3,008 | |||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Net revenues: | ||||||||||||
Third-party net revenues | 900,263 | 1,792,962 | 2,750,610 | |||||||||
Intra-Group net revenues | — | 552 | 941 | |||||||||
Total net revenues | 900,263 | 1,793,514 | 2,751,551 | |||||||||
Cost and expenses: | ||||||||||||
Third-party cost and expenses | (358,318 | ) | (421,814 | ) | (561,272 | ) | ||||||
Intra-Group cost and expenses related to technical consulting and related service s | (540,830 | ) | (1,402,371 | ) | (2,221,199 | ) | ||||||
Other intra-Group cost and expenses | (2,235 | ) | (1,107 | ) | (10,673 | ) | ||||||
�� | ||||||||||||
Total cost and expenses | (901,383 | ) | (1,825,292 | ) | (2,793,144 | ) | ||||||
Net income/(loss) from continuing operations | 2,066 | 20,483 | (58,520 | ) | ||||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net cash provided by transactions with external parties | 855,715 | 3,034,716 | 3,278,167 | |||||||||
Net cash used in transactions with intra-Group companies related to technical consulting and related service s | (805,129 | ) | (3,098,831 | ) | (2,409,300 | ) | ||||||
Net cash provided by/(used in) other transactions with intra-Group companies | 392 | 1,613 | (699 | ) | ||||||||
Net cash provided by/(used in) operating activities | 50,978 | (62,502 | ) | 868,168 | ||||||||
Cash flows from investing activities: | ||||||||||||
Net cash (used in)/provided by transactions with external parties | (67,118 | ) | 65,510 | 8,550 | ||||||||
Net cash (used in)/provided by investing activities | (67,118 | ) | 65,510 | 8,550 | ||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds received from ordinary shareholders | 10,000 | — | — | |||||||||
Net cash provided by financing activities | 10,000 | — | — |
Servers and computers | 3 years | |
Furniture, fixtures, office and other equipment | 3-10 years | |
Leasehold improvements | The shorter of the useful life or term of the lease | |
Software and others | 3-5 years |
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
Learning services | 398,186 | 699,826 | 2,154,669 | |||||||||
Online courses services | 329,424 | 607,568 | 2,009,719 | |||||||||
Fee-based premium services | 68,762 | 92,258 | 144,950 | |||||||||
Learning products | 30,530 | 152,044 | 539,962 | |||||||||
Online marketing services | 302,882 | 453,013 | 472,884 | |||||||||
Total net revenues | 731,598 | 1,304,883 | 3,167,515 | |||||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Learning services | 602,353 | 1,513,960 | 2,441,421 | |||||||||
Tutoring services | 510,095 | 1,369,010 | 2,271,036 | |||||||||
Fee-based premium services | 92,258 | 144,950 | 170,385 | |||||||||
Smart devices | 152,044 | 539,962 | 980,424 | |||||||||
Online marketing services | 453,013 | 472,884 | 593,949 | |||||||||
Total net revenues | 1,207,410 | 2,526,806 | 4,015,794 | |||||||||
(i) | The effects of a significant financing component have not been adjusted for contracts which the Group expects, at contract inception, that the period between when the Group transfers a promised good or service to the customer and when the customer pays for that good or service will be one year or less. |
(ii) | The Group applied the portfolio approach in determining the learning period of the customers given that the effect of applying a portfolio approach to a group of students’ behaviors would not differ materially from considering each one of them individually. |
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Inventories, net | 29,699 | 204 | ||||||
Prepayment and other current assets | 35,890 | 293 | ||||||
Total current assets | 65,589 | 497 | ||||||
Property, equipment and software, net | 5,463 | 1,088 | ||||||
Total non-current assets | 5,463 | 1,088 | ||||||
Total assets | 71,052 | 1,585 | ||||||
Contract liabilities | 546,271 | — | ||||||
Total current liabilities | 546,271 | — | ||||||
Total liabilities | 546,271 | — | ||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Net revenues | 97,473 | 640,709 | 1,338,563 | |||||||||
Cost of revenues | (61,896 | ) | (293,860 | ) | (421,190 | ) | ||||||
Gross profit | 35,577 | 346,849 | 917,373 | |||||||||
Operating expenses: | ||||||||||||
Sales and marketing expenses | (167,136 | ) | (1,223,414 | ) | (862,153 | ) | ||||||
Research and development expenses | (5,472 | ) | (52,409 | ) | (97,521 | ) | ||||||
General and administrative expense s | (4,047 | ) | (25,353 | ) | (57,966 | ) | ||||||
Total operating expenses | (176,655 | ) | (1,301,176 | ) | (1,017,640 | ) | ||||||
Loss from operations | (141,078 | ) | (954,327 | ) | (100,267 | ) | ||||||
Net loss from discontinued operations | (141,078 | ) | (954,327 | ) | (100,267 | ) | ||||||
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
Instructor A | 16 | % | 11 | % | 13 | % | ||||||
Instructor B | * | * | 14 | % |
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Instructor A | 13 | % | 18 | % | * | |||||||
Instructor B | * | * | 16 | % |
* | The percentage was below 10% for the year. |
As of the acquisition date | ||||
RMB | ||||
Consideration | 7,700 | |||
Noncontrolling interests | 624 | |||
Total | 8,324 | |||
Cash and cash equivalents | 1,302 | |||
Other tangible assets | 156 | |||
Liabilities assumed | (72 | ) | ||
Goodwill | 6,938 | |||
Total | 8,324 | |||
As of the acquisition date | ||||
RMB | ||||
Cash consideration | 6,050 | |||
Total | 6,050 | |||
Cash and cash equivalents | 354 | |||
Other tangible assets | 470 | |||
Liabilities assumed | (11,869 | ) | ||
Goodwill | 17,095 | |||
Total | 6,050 | |||
As of the acquisition date | Amortization Period | |||||||
RMB | ||||||||
Previously held equity interest | 27,544 | |||||||
Redeemable noncontrolling interests | 106,368 | |||||||
Total | ||||||||
Cash and cash equivalents | 165,783 | |||||||
Other tangible assets | 18,040 | |||||||
Identifiable intangible assets : | ||||||||
10 years | ||||||||
6,500 | 10 years | |||||||
Copyright | 4,000 | 5 years | ||||||
Students base | 3,250 | 3 years | ||||||
Deferred tax liabilities | (8,963 | ) | ||||||
Liabilities assumed | (64,609 | ) | ||||||
Goodwill | 85,911 | |||||||
Total | ||||||||
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Accounts receivable, net: | ||||||||
Accounts receivable | 202,953 | 283,159 | ||||||
Allowance for doubtful accounts/expected credit losses: | ||||||||
Balance at the beginning of the year | (799 | ) | (2,278 | ) | ||||
Additional provision charged to expenses | (1,897 | ) | (12,051 | ) | ||||
Write-off | 418 | 0 | ||||||
Balance at the end of the year | (2,278 | ) | (14,329 | ) | ||||
200,675 | 268,830 | |||||||
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Accounts receivable, net: | ||||||||
Accounts receivable | 283,159 | 258,156 | ||||||
Allowance for expected credit losses: | ||||||||
Balance at the beginning of the year | (2,278 | ) | (14,329 | ) | ||||
Additional provision charged to expenses | (12,051 | ) | 667 | |||||
Write-off | — | 3,845 | ||||||
Balance at the end of the year | (14,329 | ) | (9,817 | ) | ||||
268,830 | 248,339 | |||||||
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Prepayment for promotion fees | 44,575 | 42,696 | ||||||
Prepayment for value-added taxes | 40,950 | 38,315 | ||||||
Deferred expenses for learning services | 28,752 | 34,457 | ||||||
Prepayment for content fees | 2,206 | 9,543 | ||||||
Deferred charges | 8,857 | 8,745 | ||||||
Prepayment for rental expenses | 4,900 | 7,247 | ||||||
Prepaid sales commission | 1,158 | 2,263 | ||||||
Receivable for withholding individual income taxes of option exercise | 39,371 | 1,700 | ||||||
Interest receivable | 51 | 281 | ||||||
Prepaid insurance fee for directors and officers | 5,329 | — | ||||||
Others | 23,493 | 37,330 | ||||||
Total | 199,642 | 182,577 | ||||||
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Deferred expenses for learning services | 48,185 | 46,810 | ||||||
Prepayment for promotion fees | 20,777 | 46,012 | ||||||
Prepayment for value-added taxes | 18,034 | 40,950 | ||||||
Receivable for withholding individual income taxes of option exercise | — | 39,371 | ||||||
Deferred charges | 12,472 | 15,344 | ||||||
Prepaid sales commission | — | 9,552 | ||||||
Prepayment for rental expenses | 1,237 | 5,958 | ||||||
Prepayment for content fees | 3,201 | 2,206 | ||||||
Interest receivable | 6,252 | 51 | ||||||
Prepaid insurance fee for directors and officers | 5,568 | 5,329 | ||||||
Others | 5,165 | 23,949 | ||||||
Total | 120,891 | 235,532 | ||||||
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Servers and computers | 53,428 | 73,090 | ||||||
Furniture, fixtures and office equipment | 3,259 | 4,463 | ||||||
Leasehold improvements | 1,645 | 11,119 | ||||||
Total | 58,332 | 88,672 | ||||||
Less: accumulated depreciation | (33,781 | ) | (43,036 | ) | ||||
Net book value | 24,551 | 45,636 | ||||||
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Servers and computers | 68,895 | 84,425 | ||||||
Furniture, fixtures and office equipment | 4,419 | 14,053 | ||||||
Leasehold improvements | 6,723 | 38,120 | ||||||
Software and others | 2,425 | 5,067 | ||||||
Total | 82,462 | 141,665 | ||||||
Less: accumulated depreciation | (42,289 | ) | (61,350 | ) | ||||
Net book value | 40,173 | 80,315 | ||||||
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Operating lease right-of-use | 105,865 | 118,104 | ||||||
Operating lease liabilities - current | 29,982 | 46,688 | ||||||
Operating lease liabilities - non-current | 79,748 | 73,070 | ||||||
Total operating lease liabilities | 109,730 | 119,758 | ||||||
Weighted average remaining lease term | 4.4 years | 3.6 years | ||||||
Weighted average discount rate | 4.10 | % | 3.99 | % |
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Operating lease right-of-use | 23,873 | 105,865 | ||||||
Operating lease liabilities—current | 4,166 | 29,982 | ||||||
Operating lease liabilities—non-current | 21,206 | 79,748 | ||||||
Total operating lease liabilities | 25,372 | 109,730 | ||||||
Weighted average remaining lease term | 5.0 years | 4.4 years | ||||||
Weighted average discount rate | 4.35 | % | 4.10 | % |
For the year ended December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Operating lease expenses | 2,157 | 11,729 | ||||||
Short-term lease expenses | 2,510 | 6,947 | ||||||
Variable lease expenses | 20,813 | 39,282 | ||||||
Total lease expenses | 25,480 | 57,958 | ||||||
Cash paid for amounts included in the measurement of operating lease liabilities | 658 | 12,431 | ||||||
Right-of-use | 26,030 | 91,893 |
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Operating lease expenses | 1,885 | 5,924 | 25,449 | |||||||||
Short-term lease expenses | 2,493 | 2,306 | 3,381 | |||||||||
Variable lease expenses | 19,841 | 31,684 | 24,008 | |||||||||
Total lease expenses | 24,219 | 39,914 | 52,838 | |||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | 658 | 12,431 | 37,756 | |||||||||
Right-of-use | 26,030 | 91,893 | 85,731 | |||||||||
Lease liabilities decrease due to early termination | — | — | 44,469 |
As of December 31, 2020 | ||||
RMB | ||||
2021 | 30,672 | |||
2022 | 30,620 | |||
2023 | 26,710 | |||
2024 | 13,566 | |||
2025 | 9,516 | |||
Thereafter | 8,705 | |||
Total operating lease liabilities | 119,789 | |||
Less: interest | (10,059 | ) | ||
Present value of operating lease liabilities | 109,730 | |||
As of December 31, 2021 | ||||
RMB | ||||
2022 | 47,525 | |||
2023 | 36,115 | |||
2024 | 16,314 | |||
2025 | 11,855 | |||
2026 | 10,651 | |||
Thereafter | 3,200 | |||
Total operating lease liabilities | 125,660 | |||
Less: interest | (5,902 | ) | ||
Present value of operating lease liabilities | 119,758 | |||
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
Current income tax expenses | 11,294 | 2,432 | 2,929 | |||||||||
Income tax expenses | 11,294 | 2,432 | 2,929 | |||||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Current income tax expenses | 2,432 | 2,929 | 15,611 | |||||||||
Deferred tax benefit | — | — | (8,963 | ) | ||||||||
Income tax expenses | 2,432 | 2,929 | 6,648 | |||||||||
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
Statutory income tax rate | 25% | 25% | 25% | |||||||||
Permanent differences | 5% | 0% | 3% | |||||||||
Tax effect of preferential tax treatment and tax difference of statutory rate in other jurisdictions | (5%) | (9%) | (11%) | |||||||||
Change in valuation allowance | (31%) | (16%) | (17%) | |||||||||
Effective income tax rate | (6%) | 0% | 0% | |||||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Statutory income tax rate | 25% | 25% | 25% | |||||||||
Permanent differences | 0% | 3% | 3% | |||||||||
Tax effect of preferential tax treatment and tax difference of statutory rate in other jurisdictions | (9% | ) | (11% | ) | (9% | ) | ||||||
Change in valuation allowance | (16% | ) | (17% | ) | (21% | ) | ||||||
Effective income tax rate | 0% | 0% | (2% | ) | ||||||||
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Deferred tax assets | ||||||||
Net operating tax loss carry forwards | 160,743 | 137,550 | ||||||
Advertising and promotion expenses in excess of deduction limit | 60,883 | 315,708 | ||||||
Payroll and expense accrued | 29,739 | 98,889 | ||||||
Others | 704 | 2,085 | ||||||
Less: valuation allowance | (252,069 | ) | (554,232 | ) | ||||
Total deferred tax assets, net | 0 | 0 | ||||||
�� |
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Deferred tax assets | ||||||||
Net operating tax loss carry forwards | 137,550 | 382,409 | ||||||
Advertising and promotion expenses in excess of deduction limit | 315,708 | 334,697 | ||||||
Payroll and expense accrued | 98,889 | 99,007 | ||||||
Others | 2,085 | 3,612 | ||||||
Less: valuation allowance | (554,232 | ) | (819,725 | ) | ||||
Total deferred tax assets, net | 0 | 0 | ||||||
For the year ended December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Balance as of January 1 | 146,617 | 252,069 | ||||||
Change of valuation allowance | 105,452 | 302,163 | ||||||
Balance as of December 31 | 252,069 | 554,232 | ||||||
For the year ended December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Balance as of January 1 | 252,069 | 554,232 | ||||||
Change of valuation allowance | 302,163 | 265,493 | ||||||
Balance as of December 31 | 554,232 | 819,725 | ||||||
RMB | ||||
Loss expiring in 2022 | ||||
Loss expiring in | ||||
Loss expiring in | ||||
Loss expiring in | ||||
Loss expiring in 2026 | 240,483 | |||
Loss expiring in 2027 | 112,069 | |||
Loss expiring in 2028 | 201,070 | |||
Loss expiring in 2029 | ||||
Loss expiring in 2030 and thereafter | 1,126,120 | |||
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Withholding individual income taxes for employees | 5,679 | 48,692 | ||||||
VAT payable | 10,925 | 3,325 | ||||||
Enterprise income taxes payable | 7,952 | 2,503 | ||||||
Others | 1,421 | 375 | ||||||
Total | 25,977 | 54,895 | ||||||
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
VAT payable | 3,325 | 30,582 | ||||||
Withholding individual income taxes for employees | 48,692 | 14,724 | ||||||
Enterprise income taxes payable | 2,503 | 7,656 | ||||||
Others | 375 | 361 | ||||||
Total | 54,895 | 53,323 | ||||||
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Accrued marketing expenses | 43,765 | 257,216 | ||||||
Accrued liabilities for learning services and online marketing services | 85,598 | 136,605 | ||||||
Accrued outside labor service fee | 10,488 | 64,799 | ||||||
Operating lease liabilities-current portion | 4,166 | 29,982 | ||||||
Accrued technical expenses | 8,960 | 24,000 | ||||||
Accrued administrative expenses | 7,846 | 23,777 | ||||||
Deferred government grant | — | 21,376 | ||||||
Accrued professional fee | 18,334 | 11,811 | ||||||
Warehousing and logistics fee | 3,469 | 8,034 | ||||||
Payables for property and equipment | — | 7,068 | ||||||
Deposits payable to service providers | 2,542 | 1,823 | ||||||
Others | 7,475 | 15,553 | ||||||
Total | 192,643 | 602,044 | ||||||
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Accrued marketing expenses | 257,216 | 173,944 | ||||||
Accrued liabilities for learning services and online marketing services | 136,605 | 141,521 | ||||||
Operating lease liabilities-current portion | 29,982 | 46,688 | ||||||
Accrued technical expenses | 24,000 | 29,890 | ||||||
Accrued administrative expenses | 23,777 | 26,717 | ||||||
Accrued outside labor service fee | 64,799 | 22,975 | ||||||
Payables for property, equipment and software | 7,068 | 14,088 | ||||||
Deferred government grant | 21,376 | 11,503 | ||||||
Warehousing and logistics fee | 8,034 | 11,323 | ||||||
Accrued professional fee | 11,811 | 10,177 | ||||||
Unpaid consideration for business combination | — | 5,129 | ||||||
Deposits payable to service providers | 1,823 | 1,762 | ||||||
Others | 15,553 | 19,850 | ||||||
Total | 602,044 | 515,567 | ||||||
Balance as of January 1, 2019 | Accretions of preferred shares to redemption value | Conversion into Class A ordinary shares upon IPO upon IPO | Balance as of December 31, 2019 | |||||||||||||
Series A preferred shares | ||||||||||||||||
Number of shares (in thousands) | 6,815 | — | (6,815 | ) | — | |||||||||||
Amount (RMB in thousands) | 460,652 | 35,893 | (496,545 | ) | — |
Balance as of January 1, 2019 | Accretions of preferred shares to redemption value | Conversion into Class A ordinary shares upon IPO | Balance as of December 31, 2019 | |||||||||||||
Series A preferred shares | ||||||||||||||||
Number of shares (in thousands) | 6,815 | — | (6,815 | ) | — | |||||||||||
Amount (RMB in thousands) | 460,652 | 35,893 | (496,545 | ) | — |
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
VAT exemption due to the COVID-19 | — | — | 51,889 | |||||||||
Government grants | 10,330 | 18,087 | 28,644 | |||||||||
Financing expense (Note 13) | (4,722 | ) | — | — | ||||||||
Fair value changes of short-term investments | 382 | 863 | 9,396 | |||||||||
Foreign exchange gains/(losses) | 38,620 | 3,279 | (23,935 | ) | ||||||||
Others | 33 | (2,165 | ) | (4,942 | ) | |||||||
Total | 44,643 | 20,064 | 61,052 | |||||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Government grants | 18,087 | 28,644 | 42,202 | |||||||||
Fair value changes of short-term investments | 863 | 9,396 | 28,810 | |||||||||
Donation | (1,620 | ) | (1,459 | ) | (9,801 | ) | ||||||
Impairment of long-term investments | — | — | (7,000 | ) | ||||||||
VAT exemption due to the COVID-19 (Note 10) | — | 51,889 | (5,353 | ) | ||||||||
Foreign exchange gains/(losses) | 3,279 | (23,935 | ) | (5,005 | ) | |||||||
Loss from lease termination | — | — | (2,809 | ) | ||||||||
Remeasured loss from previously held interest (Note 5) | — | — | (2,456 | ) | ||||||||
Others | (545 | ) | (3,483 | ) | (1,915 | ) | ||||||
Total | 20,064 | 61,052 | 36,673 | |||||||||
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
Cost of revenues | 3,055 | 4,407 | 5,892 | |||||||||
Sales and marketing expenses | 350 | 2,107 | 5,868 | |||||||||
Research and development expenses | 2,735 | 9,432 | 20,898 | |||||||||
General and administrative expenses | 36 | 9,128 | 8,920 | |||||||||
Total | 6,176 | 25,074 | 41,578 | |||||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Cost of revenues | 3,642 | 4,641 | 7,862 | |||||||||
Sales and marketing expenses | 2,007 | 4,821 | 10,521 | |||||||||
Research and development expenses | 9,241 | 19,738 | 33,775 | |||||||||
General and administrative expenses | 8,446 | 7,225 | 20,043 | |||||||||
Total | 23,336 | 36,425 | 72,201 | |||||||||
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
Expected volatility | 48.10 | % | 46.50%-46.90 | % | 48.90%-52.20 | % | ||||||
Expected dividends yield | 0 | % | 0 | % | 0 | % | ||||||
Risk-free interest rate | 2.50 | % | 2.10%-2.60 | % | 0.30%-1.69 | % | ||||||
Expected term (in years) | 6 | 6 | 6 | |||||||||
Fair value of underlying ordinary share (US$) | 1.39 | 6.35-7.29 | 16.00-42.31 |
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Expected volatility | 46.50%-46.90% | 48.90%-52.20% | 52.40%-62.40% | |||||||||
Expected dividends yield | 0% | 0% | 0% | |||||||||
Risk-free interest rate | 2.10%-2.60% | 0.30%-1.69% | 0.58%-0.87% | |||||||||
Expected term (in years) | 6 | 6 | 6 | |||||||||
Fair value of underlying ordinary share (US$) | 6.35-7.29 | 16.00-42.31 | 9.44-35.99 |
Number of options | Weighted average exercise price per share | Weighted average remaining contractual life | Aggregate intrinsic value | |||||||||||||
(in thousands) | US$ | Years | US$ | |||||||||||||
Outstanding as of January 1, 2018 | 6,405 | 1.91 | 4.01 | — | ||||||||||||
Granted | 1,592 | 3.00 | ||||||||||||||
Forfeited | (1,006 | ) | 2.16 | |||||||||||||
Outstanding as of December 31, 2018 | 6,991 | 2.13 | 3.40 | 29,468 | ||||||||||||
Granted | 2,072 | 3.50 | ||||||||||||||
Forfeited | (734 | ) | 2.60 | |||||||||||||
Outstanding as of December 31, 2019 | 8,329 | 2.43 | 3.06 | 97,000 | ||||||||||||
Granted | 888 | 4.00 | ||||||||||||||
Exercised | (2,962 | ) | 1.84 | |||||||||||||
Forfeited | (353 | ) | 3.14 | |||||||||||||
Outstanding as of December 31, 2020 | 5,902 | 2.92 | 3.07 | 139,326 | ||||||||||||
Vested and exercisable as of December 31, 2019 | 3,584 | 1.87 | 1.95 | 43,749 | ||||||||||||
Vested and exercisable as of December 31, 2020 | 2,182 | 2.32 | 1.89 | 52,828 |
Number of options | Weighted average exercise price per share | Weighted average remaining contractual life | Aggregate intrinsic value | |||||||||||||
(in thousands) | US$ | Years | US$ | |||||||||||||
Outstanding as of January 1, 2019 | 6,991 | 2.13 | 3.40 | 29,468 | ||||||||||||
Granted | 2,072 | 3.50 | ||||||||||||||
Forfeited | (734 | ) | 2.60 | |||||||||||||
Outstanding as of December 31, 2019 | 8,329 | 2.43 | 3.06 | 97,000 | ||||||||||||
Granted | 888 | 4.00 | ||||||||||||||
Exercised | (2,962 | ) | 1.84 | |||||||||||||
Forfeited | (353 | ) | 3.14 | |||||||||||||
Outstanding as of December 31, 2020 | 5,902 | 2.92 | 3.07 | 139,326 | ||||||||||||
Granted | 1,095 | 4.50 | ||||||||||||||
Exercised | (1,538 | ) | 2.45 | |||||||||||||
Forfeited | (554 | ) | 3.75 | |||||||||||||
Outstanding as of December 31, 2021 | 4,905 | 3.33 | 2.94 | 44,871 | ||||||||||||
Vested and exercisable as of December 31, 2020 | 2,182 | 2.32 | 1.89 | 52,828 | ||||||||||||
Vested and exercisable as of December 31, 2021 | 1,841 | 2.66 | 1.71 | 18,085 |
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
Numerator: | ||||||||||||
Net loss | (209,295 | ) | (601,455 | ) | (1,753,352 | ) | ||||||
Net loss/(income) attributable to noncontrolling interests | 385 | (48 | ) | 563 | ||||||||
Accretions of preferred shares to redemption value (Note 13) | (30,311 | ) | (35,893 | ) | — | |||||||
Net loss attributable to ordinary shareholders of the Company | (239,221 | ) | (637,396 | ) | (1,752,789 | ) | ||||||
Denominator: | ||||||||||||
Weighted average number of ordinary shares/ADSs outstanding, basic | 85,346,790 | 95,445,982 | 112,864,452 | |||||||||
Weighted average number of ordinary shares/ADSs outstanding, diluted | 85,346,790 | 95,445,982 | 112,864,452 | |||||||||
Net loss per share/ADS, basic | (2.80 | ) | (6.68 | ) | (15.53 | ) | ||||||
Net loss per share/ADS, diluted | (2.80 | ) | (6.68 | ) | (15.53 | ) | ||||||
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Numerator: | ||||||||||||
Net loss from continuing operations attributable to ordinary shareholders of the Company | (496,318) | (798,462) | (895,388) | |||||||||
Net loss from discontinued operations attributable to ordinary shareholders of the Company | (141,078) | (954,327) | (100,267) | |||||||||
Net loss attributable to ordinary shareholders of the Company | (637,396) | (1,752,789) | (995,655) | |||||||||
Denominator: | ||||||||||||
Weighted average number of ordinary shares/ADSs outstanding, basic | 95,445,982 | 112,864,452 | 121,650,907 | |||||||||
Weighted average number of ordinary shares/ADSs outstanding, diluted | 95,445,982 | 112,864,452 | 121,650,907 | |||||||||
Net loss per share/ADS from continuing operations attributable to ordinary shareholders of the Company, basic | (5.20) | (7.07) | (7.36) | |||||||||
Net loss per share from discontinued operations attributable to ordinary shareholders of the Company, basic | (1.48) | (8.46) | (0.82) | |||||||||
Net loss per share/ADS, basic | (6.68) | (15.53) | (8.18) | |||||||||
Net loss per share/ADS from continuing operations attributable to ordinary shareholders of the Company, diluted | (5.20) | (7.07) | (7.36) | |||||||||
Net loss per share from discontinued operations attributable to ordinary shareholders of the Company, diluted | (1.48) | (8.46) | (0.82) | |||||||||
Net loss per share/ADS, diluted | (6.68) | (15.53) | (8.18) | |||||||||
Fair value measurements | ||||||||||||
Total | Quoted prices in active market for identical assets (Level 1) | Significant other observable inputs (Level 2) | ||||||||||
RMB | RMB | RMB | ||||||||||
As of December 31, 2019 | ||||||||||||
Time deposits | 1,325,737 | 1,325,737 | — | |||||||||
Short-term investments | 121,126 | — | 121,126 | |||||||||
Total | 1,446,863 | 1,325,737 | 121,126 | |||||||||
As of December 31, 2020 | ||||||||||||
Time deposits | 263 | 263 | — | |||||||||
Short-term investments | 584,999 | — | 584,999 | |||||||||
Total | 585,262 | 263 | 584,999 | |||||||||
Fair value measurements | ||||||||
Total | Significant other observable inputs (Level 2) | |||||||
RMB | RMB | |||||||
As of December 31, 2020 | ||||||||
Short-term investments | 584,999 | 584,999 | ||||||
Total | 584,999 | 584,999 | ||||||
As of December 31, 2021 | ||||||||
Short-term investments | 503,831 | 503,831 | ||||||
Total | 503,831 | 503,831 | ||||||
Less than one year | One to three years | More than three years | Total | |||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Purchase commitments | 338,910 | 5,090 | 3,160 | 347,160 | ||||||||||||
Capital commitments | 25,947 | — | — | 25,947 | ||||||||||||
Total | 364,857 | 5,090 | 3,160 | 373,107 | ||||||||||||
Less than one year | One to three years | More than three years | Total | |||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Purchase commitments | 187,548 | 700 | — | 188,248 | ||||||||||||
Capital commitments | 6,070 | — | — | 6,070 | ||||||||||||
Total | 193,618 | 700 | — | 194,318 | ||||||||||||
Name of entity or individual | Relationships with the Group | |
NetEase Group | Control or under common control |
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
Services and products provided to NetEase Group | ||||||||||||
Learning services provided to NetEase Group | 10,485 | 2,913 | 5,826 | |||||||||
Learning products provided to NetEase Group | — | 11,418 | 7,607 | |||||||||
Online marketing services provided to NetEase Group | 16,763 | 23,249 | 15,860 | |||||||||
Services and products purchased from NetEase Group | ||||||||||||
Services purchased from NetEase Group | 67,094 | 71,631 | 172,437 | |||||||||
Fixed assets and inventories purchased from NetEase Group | 6,647 | 18,222 | 2,198 | |||||||||
Loan related transactions | ||||||||||||
Interest expenses on short-term loans from NetEase Group | 31,851 | 30,232 | 31,215 | |||||||||
Equity related transactions | ||||||||||||
Deemed contribution related to acquisition of businesses under common control (Note 1) | 44,024 | 69,603 | — | |||||||||
Deemed contribution from NetEase Group related to issuance of preferred shares (Note 13) | 4,722 | — | — | |||||||||
Deemed distribution to NetEase | — | — | 2,060 | |||||||||
Share-based compensation under NetEase Plan | 6,176 | 4,356 | 2,682 | |||||||||
Other transactions | ||||||||||||
Disposal of Youdao Cloudnote business to NetEase Group | — | — | 670 |
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Services and products provided to NetEase Group | ||||||||||||
Learning services provided to NetEase Group | 2,913 | 5,826 | 7,360 | |||||||||
Smart devices provided to NetEase Group | 11,418 | 7,607 | 6,607 | |||||||||
Online marketing services provided to NetEase Group | 23,249 | 15,860 | 9,823 | |||||||||
Services and products purchased from NetEase Group | ||||||||||||
Services purchased from NetEase Group | 66,280 | 163,487 | 143,186 | |||||||||
Fixed assets and inventories purchased from NetEase Group | 18,222 | 2,198 | 2,489 | |||||||||
Loan related transactions | ||||||||||||
Interest expenses on loans from NetEase Group | 30,232 | 31,215 | 31,644 | |||||||||
Addition of long-term loans from NetEase Group | — | — | 257,522 | |||||||||
Equity related transactions | ||||||||||||
Deemed contribution related to acquisition of businesses under common control (Note 1) | 69,603 | — | — | |||||||||
Deemed distribution to NetEase | — | 2,060 | 4,171 | |||||||||
Share-based compensation under NetEase Plan | 4,356 | 2,682 | 1,043 | |||||||||
Other transactions | ||||||||||||
Disposal of Youdao Cloudnote business to NetEase Group | — | 670 | — |
As of December 31, | ||||||||
2019 | 2020 | |||||||
RMB | RMB | |||||||
Amounts due from NetEase Group | 14,930 | 4,081 | ||||||
Amounts due to NetEase Group | 48,126 | 67,230 | ||||||
Short-term loans from NetEase Group | 878,000 | 878,000 |
As of December 31, | ||||||||
2020 | 2021 | |||||||
RMB | RMB | |||||||
Amounts due from NetEase Group | 4,081 | 6,192 | ||||||
Amounts due to NetEase Group | 67,230 | 83,041 | ||||||
Short-term loans from NetEase Group | 878,000 | 878,000 | ||||||
Long-term loans from NetEase Group | — | 255,028 |
For the year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
RMB | RMB | RMB | ||||||||||
Net revenues | ||||||||||||
Learning services | 398,186 | 699,826 | 2,154,669 | |||||||||
Learning products | 30,530 | 152,044 | 539,962 | |||||||||
Online marketing services | 302,882 | 453,013 | 472,884 | |||||||||
Total net revenues | 731,598 | 1,304,883 | 3,167,515 | |||||||||
Cost of revenues | ||||||||||||
Learning services | 314,625 | 513,060 | 1,010,364 | |||||||||
Learning products | 20,502 | 107,609 | 355,970 | |||||||||
Online marketing services | 180,006 | 313,592 | 346,895 | |||||||||
Total cost of revenues | 515,133 | 934,261 | 1,713,229 | |||||||||
Gross margin | ||||||||||||
Learning services | 21 | % | 27 | % | 53 | % | ||||||
Learning products | 33 | % | 29 | % | 34 | % | ||||||
Online marketing services | 41 | % | 31 | % | 27 | % | ||||||
Total gross margin | 30 | % | 28 | % | 46 | % |
For the year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
RMB | RMB | RMB | ||||||||||
Net revenues: | ||||||||||||
Learning services | 602,353 | 1,513,960 | 2,441,421 | |||||||||
Smart devices | 152,044 | 539,962 | 980,424 | |||||||||
Online marketing services | 453,013 | 472,884 | 593,949 | |||||||||
Total net revenues | 1,207,410 | 2,526,806 | 4,015,794 | |||||||||
Cost of revenues: | ||||||||||||
Learning services | 451,164 | 716,504 | 980,700 | |||||||||
Smart devices | 107,609 | 355,970 | 618,925 | |||||||||
Online marketing services | 313,592 | 346,895 | 427,331 | |||||||||
Total cost of revenues | 872,365 | 1,419,369 | 2,026,956 | |||||||||
Gross margin: | ||||||||||||
Learning services | 25 | % | 53 | % | 60 | % | ||||||
Smart devices | 29 | % | 34 | % | 37 | % | ||||||
Online marketing services | 31 | % | 27 | % | 28 | % | ||||||
Total gross margin | 28 | % | 44 | % | 50 | % |
As of December 31, | ||||||||||||
2019 | 2020 | 2020 | ||||||||||
RMB | RMB | US$ | ||||||||||
Note 2(e) | ||||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 111,310 | 117,400 | 17,992 | |||||||||
Time deposits | 1,255,716 | — | — | |||||||||
Prepayment and other current assets | 9,819 | 1,020,637 | 156,419 | |||||||||
Total current assets | 1,376,845 | 1,138,037 | 174,411 | |||||||||
Total assets | 1,376,845 | 1,138,037 | 174,411 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT) | ||||||||||||
Current liabilities: | ||||||||||||
Amounts due to NetEase Group | — | 2,059 | 315 | |||||||||
Investments in subsidiaries and VIEs | 1,060,693 | 2,536,385 | 388,717 | |||||||||
Accrued liabilities and other payables | 10,544 | 3,655 | 561 | |||||||||
Total current liabilities | 1,071,237 | 2,542,099 | 389,593 | |||||||||
Non-current liabilities: | ||||||||||||
Other non-current liabilities | 5,517 | 4,043 | 620 | |||||||||
Total non-current liabilities | 5,517 | 4,043 | 620 | |||||||||
Total liabilities | 1,076,754 | 2,546,142 | 390,213 | |||||||||
Shareholders’ equity/(deficit): | ||||||||||||
Class A ordinary shares, US$0.0001 par value | 16 | 18 | 3 | |||||||||
Class B ordinary shares, US$0.0001 par value | 56 | 56 | 9 | |||||||||
Additional paid-in capital | 2,232,841 | 2,309,963 | 354,017 | |||||||||
Accumulated deficit | (1,920,081 | ) | (3,674,034 | ) | (563,070 | ) | ||||||
Accumulated other comprehensive loss | (14,527 | ) | (47,058 | ) | (7,213 | ) | ||||||
Statutory reserves | 1,786 | 2,950 | 452 | |||||||||
Total shareholders’ equity/(deficit) | 300,091 | (1,408,105 | ) | (215,802 | ) | |||||||
Total liabilities and shareholders’ equity/(deficit) | 1,376,845 | 1,138,037 | 174,411 | |||||||||
As of December 31, | ||||||||||||
2020 | 2021 | 2021 | ||||||||||
RMB | RMB | US$ | ||||||||||
Note 2(f) | ||||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | 117,400 | 122,765 | 19,265 | |||||||||
Amounts due from Youdao Group Companies | 1,011,360 | 2,658,772 | 417,219 | |||||||||
Prepayment and other current assets | 9,277 | 229 | 36 | |||||||||
Total assets | 1,138,037 | 2,781,766 | 436,520 | |||||||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||||||
Amounts due to NetEase Group | 2,059 | 221 | 35 | |||||||||
Accrued liabilities and other payables | 3,655 | 2,573 | 403 | |||||||||
Investments in subsidiaries and VIEs | 2,536,385 | 3,328,600 | 522,330 | |||||||||
Other non-current liabilities | 4,043 | 2,411 | 378 | |||||||||
Long-term loans from NetEase Group | — | 255,028 | 40,019 | |||||||||
Total liabilities | 2,546,142 | 3,588,833 | 563,165 | |||||||||
Shareholders’ deficit: | ||||||||||||
Class A ordinary shares, US$0.0001 par value | 18 | 24 | 4 | |||||||||
Class B ordinary shares, US$0.0001 par value | 56 | 56 | 9 | |||||||||
Additional paid-in capital | 2,309,963 | 3,913,946 | 614,184 | |||||||||
Accumulated deficit | (3,674,034 | ) | (4,671,195 | ) | (733,012 | ) | ||||||
Accumulated other comprehensive los s | (47,058 | ) | (54,354 | ) | (8,529 | ) | ||||||
Statutory reserves | 2,950 | 4,456 | 699 | |||||||||
Total shareholders’ deficit | (1,408,105 | ) | (807,067 | ) | (126,645 | ) | ||||||
Total liabilities and shareholders’ deficit | 1,138,037 | 2,781,766 | 436,520 | |||||||||
For the year ended December 31, | |||||||||||||||
2018 | 2019 | 2020 | 2020 | ||||||||||||
RMB | RMB | RMB | US$ | ||||||||||||
Note 2(e) | |||||||||||||||
Operating expenses: | |||||||||||||||
General and administrative expenses | (1,263 | ) | (17,255 | ) | (13,008 | ) | (1,994 | ) | |||||||
Total operating expenses | (1,263 | ) | (17,255 | ) | (13,008 | ) | (1,994 | ) | |||||||
Loss from operations | (1,263 | ) | (17,255 | ) | (13,008 | ) | (1,994 | ) | |||||||
Interest income | — | 5,396 | 22,060 | 3,381 | |||||||||||
Others, net | (4,774 | ) | (4,492 | ) | 792 | 121 | |||||||||
Share of loss of subsidiaries and VIEs | (202,873 | ) | (585,152 | ) | (1,762,633 | ) | (270,135 | ) | |||||||
Loss before tax | (208,910 | ) | (601,503 | ) | (1,752,789 | ) | (268,627 | ) | |||||||
Net loss | (208,910 | ) | (601,503 | ) | (1,752,789 | ) | (268,627 | ) | |||||||
Accretions of convertible redeemable preferred shares to redemption value (Note 13) | (30,311 | ) | (35,893 | ) | — | — | |||||||||
Net loss attributable to ordinary shareholders of the Company | (239,221 | ) | (637,396 | ) | (1,752,789 | ) | (268,627 | ) | |||||||
Net loss | (208,910 | ) | (601,503 | ) | (1,752,789 | ) | (268,627 | ) | |||||||
Other comprehensive income/(loss): | |||||||||||||||
Foreign currency translation adjustment | 496 | (15,023 | ) | (32,531 | ) | (4,986 | ) | ||||||||
Total other comprehensive income/(loss) | 496 | (15,023 | ) | (32,531 | ) | (4,986 | ) | ||||||||
Total comprehensive loss | (208,414 | ) | (616,526 | ) | (1,785,320 | ) | (273,613 | ) | |||||||
Accretions of convertible redeemable preferred shares to redemption value (Note 13) | (30,311 | ) | (35,893 | ) | — | — | |||||||||
Comprehensive loss attributable to ordinary shareholders of the Company | (238,725 | ) | (652,419 | ) | (1,785,320 | ) | (273,613 | ) | |||||||
For the year ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | 2021 | |||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Note 2(f) | ||||||||||||||||
Operating expenses: | ||||||||||||||||
General and administrative expenses | (17,255 | ) | (13,008 | ) | (13,048 | ) | (2,048 | ) | ||||||||
Total operating expenses | (17,255 | ) | (13,008 | ) | (13,048 | ) | (2,048 | ) | ||||||||
Loss from operations | (17,255 | ) | (13,008 | ) | (13,048 | ) | (2,048 | ) | ||||||||
Interest income | 5,396 | 22,060 | 5,246 | 823 | ||||||||||||
Interest expense | — | — | (616 | ) | (97 | ) | ||||||||||
Others, net | (4,492 | ) | 792 | 2,289 | 359 | |||||||||||
Share of loss of subsidiaries and VIEs | (585,152 | ) | (1,762,633 | ) | (989,148 | ) | (155,219 | ) | ||||||||
Loss before tax | (601,503 | ) | (1,752,789 | ) | (995,277 | ) | (156,182 | ) | ||||||||
Income tax expenses | — | — | (378 | ) | (59 | ) | ||||||||||
Net loss | (601,503 | ) | (1,752,789 | ) | (995,655 | ) | (156,241 | ) | ||||||||
Accretions of convertible redeemable preferred shares to redemption value (Note 14) | (35,893 | ) | — | — | — | |||||||||||
Net loss attributable to ordinary shareholders of the Company | (637,396 | ) | (1,752,789 | ) | (995,655 | ) | (156,241 | ) | ||||||||
Net loss | (601,503 | ) | (1,752,789 | ) | (995,655 | ) | (156,241 | ) | ||||||||
Other comprehensive loss: | ||||||||||||||||
Foreign currency translation adjustment | (15,023 | ) | (32,531 | ) | (7,296 | ) | (1,145 | ) | ||||||||
Total other comprehensive los s | (15,023 | ) | (32,531 | ) | (7,296 | ) | (1,145 | ) | ||||||||
Total comprehensive loss | (616,526 | ) | (1,785,320 | ) | (1,002,951 | ) | (157,386 | ) | ||||||||
Accretions of convertible redeemable preferred shares to redemption value (Note 14) | (35,893 | ) | — | — | — | |||||||||||
Comprehensive loss attributable to ordinary shareholders of the Company | (652,419 | ) | (1,785,320 | ) | (1,002,951 | ) | (157,386 | ) | ||||||||
For the year ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | 2020 | |||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Note 2(e) | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net cash provided by/(used in) operating activities | 405 | (782 | ) | 14,409 | 2,208 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Placement of time deposits | — | (1,270,536 | ) | (20,663 | ) | (3,166 | ) | |||||||||
Proceeds from maturities of time deposits | — | — | 1,257,689 | 192,749 | ||||||||||||
Capital injection to a subsidiary | (1,592 | ) | — | — | — | |||||||||||
Loans to subsidiaries | (427,591 | ) | (132,062 | ) | (1,236,543 | ) | (189,509 | ) | ||||||||
Payment for equity investment | — | — | (670 | ) | (103 | ) | ||||||||||
Net cash used in investing activities | (429,183 | ) | (1,402,598 | ) | (187 | ) | (29 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds received from Pre-IPO ordinary shareholders | 41 | — | — | — | ||||||||||||
Proceeds received from preferred shareholders, net of issuance cost | 430,341 | — | — | — | ||||||||||||
Proceeds from the issuance of IPO shares, net of issuance cost | — | 630,364 | — | — | ||||||||||||
Proceeds from concurrent private placement | — | 881,662 | — | — | ||||||||||||
Proceeds from noncontrolling interests and other shareholders | 711 | — | — | — | ||||||||||||
Payment of offering expenses | — | — | (7,909 | ) | (1,212 | ) | ||||||||||
Proceeds from issuance of ordinary shares pursuant to incentive plan | — | — | 34,468 | 5,282 | ||||||||||||
Net cash provided by financing activities | 431,093 | 1,512,026 | 26,559 | 4,070 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,120 | (771 | ) | (34,691 | ) | (5,317 | ) | |||||||||
Net increase in cash and cash equivalents | 3,435 | 107,875 | 6,090 | 932 | ||||||||||||
Cash and cash equivalents at the beginning of the year | — | 3,435 | 111,310 | 17,060 | ||||||||||||
Cash and cash equivalents at the end of the year | 3,435 | 111,310 | 117,400 | 17,992 | ||||||||||||
For the year ended December 31, | ||||||||||||||||
2019 | 2020 | 2021 | 2021 | |||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Note 2(f) | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net cash (used in)/provided by operating activities | (782 | ) | 14,409 | (9,040 | ) | (1,419 | ) | |||||||||
Cash flows from investing activities: | ||||||||||||||||
Placement s of time deposits | (1,270,536 | ) | (20,663 | ) | (897,916 | ) | (140,903 | ) | ||||||||
Proceeds from maturities of time deposits | — | 1,257,689 | 907,759 | 142,447 | ||||||||||||
Loans to subsidiaries | (132,062 | ) | (1,236,543 | ) | (1,759,925 | ) | (276,171 | ) | ||||||||
Payment for long-term investment | — | (670 | ) | — | — | |||||||||||
Net cash used in investing activities | (1,402,598 | ) | (187 | ) | (1,750,082 | ) | (274,627 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from the issuance of IPO shares, net of issuance cost | 630,364 | — | — | — | ||||||||||||
Proceeds from concurrent private placement | 881,662 | — | — | — | ||||||||||||
Proceeds from long-term loans from NetEase Group | — | — | 257,522 | 40,411 | ||||||||||||
Proceeds from the issuance of follow-on offering shares, net of issuance cost (Note 13) | — | — | 1,498,627 | 235,167 | ||||||||||||
Payment of offering expenses | — | (7,909 | ) | — | — | |||||||||||
Proceeds from issuance of ordinary shares pursuant to incentive plan | — | 34,468 | 27,564 | 4,326 | ||||||||||||
Net cash provided by financing activities | 1,512,026 | 26,559 | 1,783,713 | 279,904 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (771 | ) | (34,691 | ) | (19,226 | ) | (3,016 | ) | ||||||||
Net increase in cash and cash equivalents | 107,875 | 6,090 | 5,365 | 842 | ||||||||||||
Cash and cash equivalents at the beginning of the year | 3,435 | 111,310 | 117,400 | 18,423 | ||||||||||||
Cash and cash equivalents at the end of the year | 111,310 | 117,400 | 122,765 | 19,265 | ||||||||||||