F-2 |
||||
F-4 |
||||
F-6 |
||||
F-7 |
||||
F-9 |
As of |
||||||||||||
December 31, 2019 |
September 30, 2020 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
Note 2(d) |
||||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
||||||||||||
Time deposits |
||||||||||||
Short-term investments |
||||||||||||
Accounts receivable, net |
||||||||||||
Inventories, net |
||||||||||||
Amounts due from NetEase Group |
||||||||||||
Prepayment and other current assets |
||||||||||||
Total current assets |
||||||||||||
Non-current assets: |
||||||||||||
Property and equipment, net |
||||||||||||
Operating lease right-of-use |
||||||||||||
Other assets, net |
||||||||||||
Total non-current assets |
||||||||||||
Total assets |
||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT) |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payables |
||||||||||||
Payroll payable |
||||||||||||
Amounts due to NetEase Group |
||||||||||||
Contract liabilities |
||||||||||||
Taxes payable |
||||||||||||
Accrued liabilities and other payables |
||||||||||||
Short-term loans from NetEase Group |
||||||||||||
Total current liabilities |
||||||||||||
Non-current liabilities: |
||||||||||||
Long-term lease liabilities |
||||||||||||
Other non-current liabilities |
||||||||||||
Total non-current liabilities |
||||||||||||
Total liabilities |
||||||||||||
As of |
||||||||||||
December 31, 2019 |
September 30, 2020 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
Note 2(d) |
||||||||||||
Contingencies (Note 14) |
||||||||||||
Shareholders’ equity/(deficit): |
||||||||||||
Class A ordinary shares (US$ |
||||||||||||
Class B ordinary shares (US$ |
||||||||||||
Additional paid-in capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
Statutory reserves |
||||||||||||
Noncontrolling interests |
||||||||||||
Total shareholders’ equity/(deficit) |
( |
) |
( |
) | ||||||||
Total liabilities and shareholders’ equity/(deficit) |
||||||||||||
For the nine months ended September 30, |
||||||||||||
2019 |
2020 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
Note 2(d) |
||||||||||||
Net revenues: |
||||||||||||
Learning services |
||||||||||||
Online marketing services |
||||||||||||
Learning products |
||||||||||||
|
|
|
|
|
|
|||||||
Total net revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Cost of revenues: |
||||||||||||
Learning services |
( |
) | ( |
) | ( |
) | ||||||
Online marketing services |
( |
) | ( |
) | ( |
) | ||||||
Learning products |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total cost of revenues |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Gross profit |
||||||||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Sales and marketing expenses (include transactions with related parties of RMB |
( |
) | ( |
) | ( |
) | ||||||
Research and development expenses (include transactions with related parties of RMB |
( |
) | ( |
) | ( |
) | ||||||
General and administrative expenses (include transactions with related parties of RMB |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Loss from operations |
( |
) |
( |
) |
( |
) | ||||||
Interest (expense)/income, net (include interest expenses charged by related party of RMB |
( |
) | ( |
) | ( |
) | ||||||
Others, net |
||||||||||||
|
|
|
|
|
|
|||||||
Loss before tax |
( |
) |
( |
) |
( |
) | ||||||
Income tax expenses |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||
Net (income)/loss attributable to noncontrolling interests |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net loss attributable to the Company |
( |
) |
( |
) |
( |
) | ||||||
Accretions of convertible redeemable preferred shares to redemption value |
( |
) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Net loss attributable to ordinary shareholders of the Company |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
For the nine months ended September 30, |
||||||||||||
2019 |
2020 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
Note 2(d) |
||||||||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||
Other comprehensive income: |
||||||||||||
Foreign currency translation adjustment |
( |
) | ( |
) | ||||||||
Total other comprehensive income/(loss) |
( |
) | ( |
) | ||||||||
Total comprehensive loss |
( |
) |
( |
) |
( |
) | ||||||
Comprehensive (income)/loss attributable to noncontrolling interests |
( |
) | ||||||||||
Comprehensive loss attributable to the Company |
( |
) |
( |
) |
( |
) | ||||||
Accretions of convertible redeemable preferred shares to redemption value |
( |
) | — | — | ||||||||
Comprehensive loss attributable to ordinary shareholders of the Company |
( |
) |
( |
) |
( |
) | ||||||
Net loss per ordinary share/ADS |
||||||||||||
Basic |
( |
) | ( |
) | ( |
) | ||||||
Diluted |
( |
) | ( |
) | ( |
) | ||||||
Weighted average number of ordinary shares/ADSs |
||||||||||||
Basic |
||||||||||||
Diluted |
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) |
Non-controlling interests |
Total shareholders’ (deficit)/ equity |
||||||||||||||||||||||||||||||||||||||||
Shares |
Amount RMB |
Shares |
Amount RMB |
Shares |
Amount RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||
Share-based compensation expenses |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Deemed contribution related to acquisition of businesses under common control |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Accretions of convertible redeemable preferred shares |
— | — | — | — | — | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2019 |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2020 |
— |
— |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
Issuance of ordinary shares pursuant to incentive plans |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Share-based compensation expenses |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Deemed distribution to NetEase |
— | — | — | — | — | — | ( |
) | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||||||||
Noncontrolling interests arising from business combination |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2020 |
— |
— |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||||||||||
For the nine months ended September 30, |
||||||||||||
2019 |
2020 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
Note 2(d) |
||||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||
Depreciation and amortization |
||||||||||||
Share-based compensation |
||||||||||||
Fair value changes of short-term investments |
( |
) | ( |
) | ( |
) | ||||||
Provision for allowance for doubtful accounts |
||||||||||||
Reversal of inventory allowance |
— | ( |
) | ( |
) | |||||||
Loss on disposal of property and equipment |
— | |||||||||||
Unrealized exchange (gain)/loss |
( |
) | ||||||||||
Changes in operating assets and liabilities, net of acquisition: |
||||||||||||
Accounts receivable |
( |
) | ( |
) | ( |
) | ||||||
Inventories |
( |
) | ( |
) | ( |
) | ||||||
Prepayment and other current assets |
( |
) | ( |
) | ( |
) | ||||||
Amounts due from NetEase Group |
( |
) | ||||||||||
Operating lease right-of-use |
||||||||||||
Other assets |
( |
) | ( |
) | ||||||||
Contract liabilities |
||||||||||||
Accounts payables |
||||||||||||
Payroll payable |
( |
) | ||||||||||
Taxes payable |
||||||||||||
Accrued liabilities and other payables |
||||||||||||
Amounts due to NetEase Group |
( |
) | ( |
) | ( |
) | ||||||
Long-term lease liabilities |
( |
) | ( |
) | ( |
) | ||||||
Other non-current liabilities |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Net cash used in operating activities |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Cash flows from investing activities: |
||||||||||||
Purchases of short-term investments |
( |
) | ( |
) | ( |
) | ||||||
Proceeds of maturities of short-term investments |
||||||||||||
Placements of time deposits |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from maturities of time deposits |
||||||||||||
Cash paid for business combination, net of cash acquired (Note 4) |
— | ( |
) | ( |
) | |||||||
Purchase of intangible assets |
( |
) | — | — | ||||||||
Purchases of property and equipment |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from disposal of property and equipment |
||||||||||||
Payment for equity investment |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by investing activities |
||||||||||||
|
|
|
|
|
|
For the nine months ended September 30, |
||||||||||||
2019 |
2020 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
Note 2(d) |
||||||||||||
Cash flows from financing activities: |
||||||||||||
Funding from NetEase Group |
— | — | ||||||||||
Payment of offering expenses |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from issuance of ordinary shares pursuant to incentive plans |
— | |||||||||||
Net cash provided by financing activities |
||||||||||||
Effect of exchange rate changes on cash and cash equivalents |
( |
) | ( |
) | ||||||||
Net increase/(decrease) in cash and cash equivalents |
( |
) | ( |
) | ||||||||
Cash and cash equivalents at beginning of the period |
||||||||||||
Cash and cash equivalents at end of the period |
||||||||||||
Supplemental disclosures of cash flow information: |
||||||||||||
Cash paid for income tax expenses |
||||||||||||
Cash paid for interest expenses |
||||||||||||
Non-cash investing and financing activities: |
||||||||||||
Accretions of convertible redeemable preferred shares to redemption value |
— | — | ||||||||||
Changes in accrued liabilities and other payables related to property and equipment addition |
— |
Place and year of incorporation |
Percentage of direct or indirect economic ownership |
Principal activities | ||||
Subsidiaries |
||||||
Youdao (Hong Kong) Limited |
||||||
NetEase Youdao Information Technology (Beijing) Co., Ltd. (“Youdao Information”) |
||||||
NetEase Langsheng (Beijing) Technology Development Co., Ltd. (“Youdao Langsheng”) |
||||||
NetEase Youdao Information Technology (Hangzhou) Co., Ltd. (“Youdao Hangzhou”) |
||||||
VIE |
||||||
Beijing NetEase Youdao Computer System Co., Ltd. (“Youdao Computer”) |
For the nine months ended September 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Learning services |
||||||||
Online courses services |
||||||||
Fee-based premium services |
||||||||
Online marketing services |
||||||||
Learning products |
||||||||
Total net revenues |
||||||||
As of acquisition date |
||||
RMB |
||||
Consideration |
||||
Noncontrolling interests |
||||
Total |
||||
Cash and cash equivalents |
||||
Other tangible assets |
||||
Liabilities assumed |
( |
) | ||
Goodwill |
||||
Total |
||||
As of |
||||||||
December 31, |
September 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Accounts receivable, net: |
||||||||
Accounts receivable |
||||||||
Allowance for doubtful accounts /expected credit losses: |
||||||||
Balance at the beginning of year |
( |
) | ( |
) | ||||
Additional provision charged to expenses |
( |
) | ( |
) | ||||
Write-off |
— | |||||||
Balance at the end of year/period |
( |
) | ( |
) | ||||
As of |
||||||||
December 31, |
September 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Deferred expenses for learning services |
||||||||
Prepayment for value-added taxes |
||||||||
Prepayment for promotion fees |
||||||||
Deferred charges |
||||||||
Interest receivable |
||||||||
Prepaid sales commission |
— | |||||||
Prepayment for rental expenses |
||||||||
Prepayment for content fees |
||||||||
Others |
||||||||
Total |
||||||||
As of |
||||||||
December 31, |
September 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Servers and computers |
||||||||
Leasehold improvements |
||||||||
Furniture, fixtures and office equipment |
||||||||
Total |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
Net book value |
||||||||
As of |
||||||||
December 31, |
September 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Withholding individual income taxes for employees |
||||||||
VAT payable |
||||||||
Enterprise income taxes payable |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
As of |
||||||||
December 31, |
September 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Accrued marketing expenses |
||||||||
Accrued liabilities for learning services and online marketing services |
||||||||
Accrued outside labor service fee |
||||||||
Accrued administrative expenses |
||||||||
Accrued technical expenses |
||||||||
Deferred government grant |
— | |||||||
Operating lease liabilities-current portion |
||||||||
Warehousing and logistics fees |
||||||||
Accrued professional fee |
||||||||
Payables for property and equipment |
— | |||||||
Deposits payable to service providers |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
For the nine months ended September 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Value-added tax exemption due to the COVID-19 |
— | |||||||
Government grants |
||||||||
Fair value changes of short-term investments |
||||||||
Foreign exchange gain/(loss) |
( |
) | ||||||
Others |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
For the nine months ended September 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Research and development expenses |
||||||||
General and administrative expenses |
||||||||
Cost of revenues |
||||||||
Sales and marketing expenses |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
For the nine months ended September 30, |
||||||||
2019 |
2020 |
|||||||
Expected volatility |
||||||||
Expected dividends yield |
||||||||
Risk-free interest rate |
||||||||
Expected term (in years) |
||||||||
Fair value of underlying ordinary share (US$) |
Number of options |
Weighted average exercise price per share |
Weighted average remaining contractual life |
Aggregate intrinsic value |
|||||||||||||
(in thousands) |
US$ |
Years |
US$ |
|||||||||||||
Outstanding as of January 1, 2019 |
||||||||||||||||
Granted |
||||||||||||||||
Forfeited |
( |
) | ||||||||||||||
|
|
|||||||||||||||
Outstanding as of September 30, 2019 |
||||||||||||||||
|
|
|||||||||||||||
Outstanding as of January 1, 2020 |
||||||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) | ||||||||||||||
Forfeited |
( |
) | ||||||||||||||
|
|
|||||||||||||||
Outstanding as of September 30, 2020 |
||||||||||||||||
|
|
|||||||||||||||
Vested and exercisable as of September 30, 2019 |
||||||||||||||||
Vested and exercisable as of September 30, 2020 |
For the nine months ended September 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Numerator: |
||||||||
Net loss |
( |
) | ( |
) | ||||
Net (income)/loss attributable to noncontrolling interests |
( |
) | ||||||
Accretions of preferred shares to redemption value |
( |
) | — | |||||
Net loss attributable to ordinary shareholders of the Company |
( |
) |
( |
) | ||||
Denominator: |
||||||||
Weighted average number of ordinary shares/ADSs outstanding, basic |
||||||||
Weighted average number of ordinary shares/ADSs outstanding, diluted |
||||||||
Net loss per share/ADS, basic |
( |
) | ( |
) | ||||
Net loss per share/ADS, diluted |
( |
) | ( |
) | ||||
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 |
— | |||||||||||
Short-term investments |
— | |||||||||||
Total |
||||||||||||
As of September 30, 2020 |
||||||||||||
Time deposits |
— | |||||||||||
Short-term investments |
— | |||||||||||
Total |
||||||||||||
Name of entity or individual |
Relationships with the Group | |
NetEase Group |
For the nine months ended September 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Services and products provided to NetEase Group |
||||||||
Learning services provided to NetEase Group |
||||||||
Learning products provided to NetEase Group |
||||||||
Online marketing services provided to NetEase Group |
||||||||
Services and products purchased from NetEase Group |
||||||||
Services purchased from NetEase Group |
||||||||
Fixed assets and inventories purchased from NetEase Group |
||||||||
Loan related transactions |
||||||||
Interest expenses on short-term loans from NetEase Group |
||||||||
Equity related transactions |
||||||||
Deemed contribution related to acquisition of businesses under common control (Note 1) |
— | |||||||
Share-based compensation under NetEase Plan |
||||||||
Deemed distribution to NetEase |
— |
As of |
||||||||
December 31, |
September 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Amounts due from NetEase Group |
||||||||
Amounts due to NetEase Group |
||||||||
Short-term loans from NetEase Group |
For the nine months ended September 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Net revenues |
||||||||
Learning services and products |
||||||||
Online marketing services |
||||||||
|
|
|
|
|||||
Total net revenues |
||||||||
|
|
|
|
|||||
Cost of revenues |
||||||||
Learning services and products |
||||||||
Online marketing services |
||||||||
|
|
|
|
|||||
Total cost of revenues |
||||||||
|
|
|
|
|||||
Gross margin |
||||||||
Learning services and products |
% | % | ||||||
Online marketing services |
% | % | ||||||
Total gross margin |
% |
% |