NetEase Financial Overview

YOUDAO 1 USD million Note: 1 2 Youdao Net Revenues and Gross Margin Gross Margin Net Revenues 53.1% 52.3% 42.8% 193 179 2Q21 1Q22 143 2Q222 Achieved positive operating cash flow of RMB104 million, despite the challenges faced during the COVID resurgence and business transition • • Total net revenues for Youdao were RMB956 million in the second quarter Released diversified new products to cover a broader range of learning scenarios, such as Youdao Smart Learning Pad, which has been sold out shortly after the distribution of the initial batch • Continued to diversify the STEAM course offering in which it achieved sustainable growth, with gross billings expanding by more than nine-fold year-over-year. Some of the fastest growing courses include Youdao Chess (F) and Youdao Go(有道纵横) US$1.00 RMB 6.6981 on June 30, 2022. Same exchange rate is applied to all years for illustrative purpose The year-over-year decline of Youdao's net revenues was primarily due to the conclusion of Youdao's after-school tutoring services for academic subjects under China's compulsory education system 網易 NETEASE

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