Good day and welcome to the Youdao 2021 Third Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jeffrey Wang, Investor Relations Director of Youdao. Please go ahead, sir.
Thank you, operator. Please note the discussion today will contain forward-looking statements related to future performance of the company, which are intended to qualify for the Safe Harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of the future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Youdao's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information except as required by law.
During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only. For the definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial results, please see the 2021 third quarter financial results news release issued earlier today. As a reminder, the conference is being recorded. Besides, a webcast replay of this conference call will be available on Youdao's corporate website at ir.youdao.com. Joining us today on the call from Youdao senior management is Dr. Feng Zhou, our Chief Executive Officer, Mr. Lei Jin, VP of Operations, Mr. Peng Su, our VP of Strategy and Capital Markets, and Mr. Wayne Li, our VP of Finance. I will now turn the call over to Dr. Zhou to review some of our recent highlights and strategic direction.
Thank you, Jeffrey, and thank you all for participating in today's call. Before we begin, I would like to remind everyone that all numbers are based on renminbi. The third quarter was a good quarter for us with some development of our non-tutoring business. With the announcement of sweeping industry changes in late July, we quickly evaluated our business and set out steps to better align with the PRC's latest regulations. On September the 30th, we anticipated to terminate and announce a plan to dispose of the After-School Tutoring services for academic subjects included in China's compulsory education system and applied to the competent local governments to approve the proposed disposal. We expect the disposal to be completed by the end of 2021, subject to regulatory approval. There can be no assurance regarding the ultimate timing or that the transaction will be completed.
Due to the execution of Double Reduction policy, gross billings from academic subjects included in China's compulsory education system decreased by approximately 70% year-over-year in the third quarter. Gross billings, including adult courses, decreased by 33.9% year-over-year to RMB 631 million in the third quarter. Total net revenues for third quarter were RMB 1.4 billion, representing a 54% increase year-over-year, with approximately 25% of our total revenue derived from academic tutoring for compulsory education. Operating loss decreased significantly to RMB 129 million, and the operating loss margin was 9.3%. A sharp narrowing compared with 99% for the same period of last year.
As we mentioned in the last call, Learning Product, Adult and Vocational Courses, Theme Courses, and Education Digitization Solutions are the four core pillars for our future growth. Now, let me walk you through the progress of each segment. First, our Learning Product segment maintained strong growth momentum. Q3 Learning Product revenue reached a record RMB 254 million, a 56% increase year-over-year and 23% increase quarter-over-quarter, led by our industry-leading Dictionary Pen. We continued to upgrade the Dictionary Pen and launched the People's Education version in collaboration with People's Education Electronic & Audiovisual Press in September. The product marks our first significant partnership with PEEAP, whose parent company publishes basic education textbooks directly under China's Ministry of Education.
Through the upgraded Youdao Dictionary Pen, we provide over 4,000 recordings of listening and speaking training textbook content. In Q3, we shipped approximately 400,000 Dictionary Pens. We also launched Youdao Listening Pod, Youdao Tingli Bao , powered by our new generation adaptive AI learning technology. Features like AI subtitles, real-time speech scoring, and pronunciation correction facilitate students more effective English learning. The first batch of Youdao Listening Pod were sold out within one week, reflecting strong demand. We encourage you to view a related video on our IR website to get a more complete picture of Youdao Listening Pod. Now let's look at our STEAM courses. Youdao Weiqi or Youdao Go is becoming more and more popular each quarter. In Q3, revenue from Youdao Weiqi again increased by more than 30% quarter-over-quarter.
Now we upgraded our Weiqi AI system and launched a WeChat mini program, which supports assessments and interactive features so that students can check their learning progress at any time. As for our youth programming product, iCode, we launched a new Python course, which our users have asked for a lot. Also, a lot of middle school and high school students are learning coding to participate in programming contests like the CSP or NOIP, the most popular youth programming contests in China. Youdao iCode provides a CSP assessment tool, allowing students to better understand how well they are doing. It has become quite popular and is now used by more than 1/3 of all CSP contestants.
Finally, China Computer Federation, the organizing body of CSP/NOIP contest, officially announced that Youdao iCode has become a Programming Trainer Accreditation PTA member in the third quarter, combining efforts in promoting programming teacher training. Overall, STEAM is already a very active area for us, and we are seeing good results. Moving on to Adult and Vocational Courses. Gross billings were RMB 182 million, with a slight decline of 9% year-over-year. The decrease is mainly due to relative weakness in English learning courses for reasons including COVID. The memory training course, Extraordinary Memory, Feichang JiYi, is doing very well. It retained the leading position in the segment, with gross billings approaching RMB 100 million in Q3. Recently, NetEase Cloud Classroom officially launched about 100 digital training courses of Amazon Web Services in Chinese.
It is created by Amazon Web Services experts, and we promise to provide these courses complimentary to the whole society to help learners improve their cloud-related skills. On a more general level, there are increasing consumer needs for adult learning and vocational training courses. It is also an area supported by government policies going forward. Our teams have a lot of experience in creating popular learning content, like the Extraordinary Memory courses. We will release more self-developed courses in the coming quarters and drive growth in this area. As for Education Digitization Solutions, the Ministry of Education and other departments jointly issued guidelines on this initiative called New Infrastructure for Education in Q3. The guidelines proposed constructing an intensive, efficient, safe, and reliable national new education infrastructure by 2025.
The initiative requires the comprehensive application of new technologies such as 5G, artificial intelligence, big data, cloud computing, and blockchains. We believe our products and expertise fit this and other recent policies very well. In Q3, we launched Youdao Smart Learning Terminal 2.0, an AI-driven appliance that helps classrooms process homework and learning materials digitally. It supports high-speed scanning of paper-based homework and tests, automatic grading of the students' work, and generation of in-depth analytics for students, teachers, schools, and school districts. It is a first of its kind product that seamlessly bridges paper-based learning and digital intelligence, which we believe is both easy to deploy and truly helps teaching a lot. Since last year, the first generation of Youdao Smart Learning Terminal 2.0 Has been deployed in many schools. We look forward to working with more schools and educators on the adoption of the second generation.
Looking at other parts of our business. In Q3, Youdao Dictionary launched an academic search function in its mobile app, supporting searching for academic papers and one-click translation. We also extended its search functionality to content like learning videos. Youdao Dictionary reached a milestone of 900 million cumulative users in Q3. Moreover, as an intelligent learning company with a mission to help all learners achieve more efficient learning, Youdao Dictionary started to provide accessible features and services for visually challenged users. This feature aims to support users with disabilities to enjoy the benefits of technological advancements and expand their learning boundaries equitably. We also help those in need when we can. In Q3, we helped the customers of some tutoring companies going out of business by exchanging course hours on these companies for Youdao's.
Youdao was commended by the China Association for NGO Cooperation for these industry mutual assistance efforts. So far, we have helped customers from over a dozen AST institutions. The last few months have been a period of introspection, planning, and implementation for us. In July, we started on a journey in transforming our company to a new growth trajectory. As we finish Q3, we have made good progress. As always, we are committed to running the business within the scope of laws and regulations, and taking on corporate responsibilities for our community and the society at large. We believe we have a solid growth plan and the right teams to execute it. We look forward to helping a lot more users learn better through all of our efforts and products. With that, I will hand over to Su Peng to give you more updates on our financials. Thank you.
Thank you, Dr. Zhou, and hello, everyone. Today, I will be presenting some financial highlights from our 2021 third quarter. We encourage you to read through our press release issued earlier today for further details. As for tutoring service, gross billing and paid student enrollments decreased due to the execution of Double Reduction policy. gross billing from academic subjects included in China's compulsory education system decreased by approximately 70% year-over-year in the third quarter. Total gross billing, including adult courses, decreased by 33.9% year-over-year to RMB 631.6 million in the third quarter. Paid student enrollments included in China's compulsory education system decreased by approximately 70% year-over-year in the third quarter as well. Total paid enrollments, including adult and premium courses, decreased by 40.9% year-over-year.
Paid student enrollments from our K-12 and adult segments account for 64% and 36% of the paid student enrollments for premium courses respectively. For third quarter, total net revenue reached a record RMB 1.4 billion or $215.3 million. This represent an increase of 64.8% from the third quarter of 2020. Looking at this growth by segment, net revenue from our learning services were RMB 995.7 million or $154.45 million, up 65.9% from the same period in 2020. We attribute this growth to the increased revenue generated from our tutoring services, which were further driven by the growth in paid student enrollments during the period in the second quarter of 2021.
Net revenue for our Learning Products were RMB 254.5 million or $39.5 million, up 56% from the same period in 2020, driven by the substantial increase in sales volume of Youdao Dictionary Pen. Net revenue from our online marketing services were RMB 137 million or $21.3 million, representing a 3.4% increase from the same period in 2020. For the third quarter, our total gross profit reached RMB 785.6 million or $121.9 million, up 90.9% compared with the third quarter of 2020. Gross margin for learning services increased to 66.2% for the third quarter of 2021, up from the 53.9% for the third quarter of 2020.
The increase was driven by the improved economy of scale and the ongoing optimization of Youdao's faculty compensation structure. Gross margin for Learning Products increased to 33.7% for the third quarter of 2021, from 29.8% for the same period in 2020. The improvement was mainly attributable to a substantial rise in the sales volume of Youdao Dictionary Pen version 3, which carry a higher gross margin than other Learning Products. Gross margin for online marketing services was 29.2% for the third quarter of 2021, compared with 29.5% for the same period in 2020. For the third quarter, total operating expense was RMB 914.9 million or $142 million, down 29.9% from RMB 1.3 billion for the same period last year.
With that, for the third quarter, our sales and marketing expense were RMB 650.2 million, significantly decreased from RMB 1.1 billion in the third quarter of 2020. Research and development expense were RMB 193.3 million, compared with RMB 121 million in the third quarter of 2020. Our operating loss margin was 9.3% in the third quarter of 2021 compared with 99.8% for the same period of last year. For the third quarter of 2021, our net loss attributable to ordinary shareholder was RMB 128.9 million or $20 million, compared with RMB 877.8 million for the same period last year.
Non-GAAP net loss attributable to ordinary shareholders for the third quarter was RMB 101 million or $15.7 million, compared with RMB 865.7 million for the same period last year. Basic and diluted net loss per ADS for the third quarter was RMB 1.05 or $0.16. Non-GAAP basic and diluted net loss per ADS for the third quarter was RMB 0.82 or $0.13.
Our net cash used in operating activity for the third quarter was RMB 628.7 million, or $97.6 million. Looking at our balance sheet, as of September 30, 2021, our contract liabilities, which mainly consists of deferred revenue for our tutoring services, were RMB 1.1 billion, or $175.8 million, compared with RMB 1.4 billion as of December 31, 2020. At the end of the period, our cash equivalents, restricted share, cash, time deposit and short-term investment, total RMB 1.3 billion or $201.7 million. This conclude our prepared remarks. Thank you for your attention. We would now like to open the call to our questions. Operator, please go ahead.
Thank you. We will now begin the question- and- answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from the line of Sheng Zhong of Morgan Stanley. Please go ahead.
Thank you for taking my question, and congratulations for the good result. Like I said, after the Double Reduction, I think all the eyes are on the potential of the non-K-12 business. I would like to start my question from the learning devices. Can you please give more color on the learning devices sales momentum and what's the product pipeline and any management target for the learning devices next year? Also, Q3, we see the gross margin of learning devices is a bit lower than last quarter. Any particular reason for this, and what is the normalized margin should be for the learning devices? Thank you very much.
Thank you, Zhong, for the question. This is Feng Zhou. Learning Products revenue comes in at RMB 255 million. It is 56% year-over-year growth. We're happy with it. It is positively impacted by new product launches like the People's Education Dictionary Pen in collaboration with People's Education. It is negatively impacted by COVID episodes in August and September. Within the quarter, September sales were the strongest in Q3. This is the start of the new school year and September, the start of this new school year. Parents and students shop for new learning gears.
Our lineup of products this year turned out to be performing very well despite more competition. Last year, we didn't have any competition. This year, we have more competition, and despite the COVID episodes. More recently, last Thursday was the conclusion of Double Eleven shopping festival. Our learning devices sales were up 57% compared to 2020's Double Eleven. We have been the leading electronic dictionary seller for three consecutive years on the JD platform.
Talking about new products, the People's Education Dictionary Pen was released on September 1, and it includes the full text and the audio materials from all the official elementary school English textbooks. As we said, this is the number one asked for feature for the Dictionary Pen since the Dictionary Pen's release. Now finally, the students can enjoy a more convenient and canonical textbook experience. We also have another new product, the Youdao Listening Pod. It is also released in Q3. Let me talk a little bit about its performance. It is our first new category product since 2020.
It focuses on enhancing students' English listening and also speaking capabilities. It provides over 4,000 listening material, employs an adaptive AI-driven learning technology and solves key challenges students face in standardized English tests. It really solves students' key problem. Perhaps more importantly, it provides all these features without using the cell phone. The students enjoy a learning experience without the distraction from cell phones. Once it's released, it actually turns out to be quite popular. As we said, the first batch of several thousand was sold out in a week. It was off to a great start.
Let me quickly comment on the competitive landscape here. The key thing is that for every Learning Product, we always leverage our proprietary AI technology and our deep understanding of students' learning habits. This comes from many years of R&D and working on these education products. We believe these are our advantages against other hardware companies and also internet companies entering this space. Also, as we talked about in Q2, we are doubling down on Learning Products R&D. We believe now we have the strongest ever product pipeline in the next few quarters. Yeah. New products will come out in the next few quarters, and we'll share more information about them as we get close.
Our teams are very confident about these future products, so we cannot wait. Talking about the margins, gross margins for Learning Products, it's actually increased compared to the same period last year, from 29% to 33%. Compared to Q2, it's a little bit down from 43%. It is mainly due to the timing because we are now at the end of the life cycle of the Dictionary Pen 2. We are selling more Dictionary Pens 3 than the Dictionary Pen 2 . As we get close to the end of life for Dictionary Pen 2 , naturally we lower the price to clean the inventory.
We expect this to be a temporary situation. After cleaning up the Dictionary Pen 2 inventory, the gross margin we expect to start to increase. Yeah. I hope that answers your question. Thanks a lot.
Yeah, that's very helpful. Thank you.
The next question is from Brian Gong of Citi. Please go ahead. Mr. Gong, your line is open. Is your telephone on mute? Mr. Gong, your line is open. If you want you can proceed. The next question is from Brenda Zhao of CICC. Please go ahead.
Hi. Thanks for taking my question. Following the government's opinion, many other leading AST companies also plan to transform their business to STEM courses such as coding or art, et cetera, in the future. What do you think about the competition in this sector and what is our competitive advantage? Thanks.
Thank you, Brenda. This is Feng Zhou. STEM courses or STEAM courses. It's a lot of companies are focusing on this segment now. I can share with you several thoughts we have right now on competition. First, we always try to focus on large verticals that we really think we have a competitive advantage. STEM and STEAM they are actually quite large areas, segments. When we talk about STEM or STEAM courses, we're actually talking about specific vertical. For example, a lot of people ask us why do we focus on Weiqi?
When we start doing the Weiqi course, yeah, it's a very small area, so not a lot of people pay attention to it. If you look at how many people are actually interested in learning Weiqi and why they actually have a hard time learning it themselves, then you can understand that it is a good choice for online courses. For example, according to the president of the Chinese Weiqi Association, there are over 60 million Weiqi players in China. Every year, 3 million new learners actually go about learning Weiqi.
We think it potentially has a lot of users and it is hard actually for people to learn Weiqi by themselves because it's a hard game. In Q3, Weiqi revenue grew 30% sequentially. We think we chose the right product. We expect it to continue to grow quickly. First we focus on large verticals, potentially large verticals. The second one, principle we have is that we think quality and depth are key for kind of long-lasting and highly satisfied courses or products. Quality and depth.
Both Weiqi and coding, our top products right now, have been in development for more than two years. We involve our self-developed AI systems, interactive learning techniques, or even hardware products. We have a hardware product for our coding course. Yeah, it's got good feedback. Overall we think product excellence is more important than the marketing, yeah, as always. Especially so given that Double Reduction limits marketing. We think our teams are very good at building excellent products and also grow the products with word of mouth.
We think we have a very good shot at STEM courses because we focus on quality and depth. Lastly, I think the students' needs are increasing. For example, a lot of young students have more time. They now have more time to pursue their STEAM interests after Double Reduction. We will also work with the schools and other institutions on these courses. Again, we expect the market to be more organic and rational after Double Reduction. No money burning or promotion wars. We think the high quality and really good products they will win in the end. Yeah. Thank you.
Thank you. The next question is from Thomas Chong of Jefferies. Please go ahead. Mr. Chong, your line is open.
Thanks, management, for taking my questions. I have a question regarding our adult education. Can management comment about our strategies in light of the competition as well as our competitive edge in this segment? Thank you.
Thank you, Thomas. This is Peng Su, and I will handle your questions. The first is about. I will probably ask your second question first. I think it's about the intensive competitive landscape. Yes, indeed, it's because of the regulation change, more and more players enter into the adult education business. We just want to highlight for this issue is because we are not start our business just now, and we have already start our business back to 2016 when we start our education business. We restart our business from our, that's College English Test, level 1, level 6 test for the education business started in the, for the adult.
We think about we have already collected a lot of the cumulative experience about how to operate about the adult business and how to build up the high quality online courses content for the adult education for different SKU. Especially we have very successfully built up the SKU for the English education as well as for the Extraordinary Memory courses for the adults. We think in the long run, we will definitely follow with our experience to how we are, how we build up the content and how we operate about those successful courses for the adults and to offer more content and services to the adults for their upcoming needs in the long run. In addition, we think we strengthen our planning to invest in the vocational training as well, and especially in the third quarter, after the quarter.
Because there's a lot of support from the different level of the government to encourage all the investments as well as more resources into this sector to help to promote the vocational education in China. We think there's a lot of great potential for this area. We think about that ever brighter futures for this business. Go back to your first questions about the progress of our courses. Yeah, we are right now in the build up our SKU pipeline and we expect, besides our English courses and also our extraordinary courses, we expect to offer more vocational training, especially for the IT training and also the other courses in the next few quarters. We expect to share more information with you and when it get close. I hope that will answer your question. Thank you so much.
Thank you.
The next question is from Candis Chan of Daiwa. Please go ahead.
Hi. Good evening, Dr. Feng Zhou, Peng Su, and also the team. Thank you for taking my question. My question is about the education digitalization. Can you share the progress in this business? Will you further increase the investments in this segment? Finally, may I ask one more question as well? Who are the key competitors in this area? Thank you.
Hi. This is Lei Jin. We believe that it's a huge potential for different digitalization solutions. According to the high authorities, expected market size is over RMB 650 billion in 2023. We build a new team, intelligent education department in our company, which we targeted to further the development of Education Digitalization Solutions. The policy encourages companies with advantages technology to help the universities and the public schools to establish the education infrastructure. Youdao have AI and the related technology, hardware design, and integration experience and digital content creation ability. We have a deep understanding of education. Therefore, we believe we have advantage to meet the demand of education infrastructure building.
In this quarter, we launched the Youdao Smart Learning Terminal 2.0. This is the first to create a high-speed scanning and high-speed printing two-in-one functions. With big data, AI, and other technologies effectively create a teaching loop that spans before, during, and after class to comprehensively collect the data in school's daily teaching process. Through the hardware, software, and the content trinity of both sides learning data collection and analysis, we achieved a targeted teaching and scientific decision with data intelligence and help educators and students learn more effectively and efficiently using our technology. Thank you.
Let me add a few words on the competition. Yeah. Education Digitalization Solutions, so this is a quite large area, RMB 400 billion-RMB 500 billion kind of total market. There are a lot of actually companies doing this. More traditional companies doing this for a longer time, not necessarily traditional. Companies doing this for a longer time, these include iFLYTEK and Seewo. There are also new companies entering this space, including more familiar names like ByteDance and Tencent. Yeah. A lot of companies are interested in doing this. We think we have been doing education products for a long time, and we can combine, as our product has shown, we combine hardware, artificial intelligence and education content. We think we can have a different way of doing these products in better way. Yeah. Thank you.
Great. Thank you. Very helpful.
As a reminder, if you wish to ask a question, please press star and one on your telephone. The next question is from Linda Huang of Macquarie. Please go ahead.
Hello, management. Thank you for taking my questions. My question is about the spinning off of the K-9 business. What is the progress of it and what do you project it’s all finished in a more specific time? My second question is, how about the business license application? What is the progress of that? Thank you.
Hi. Thank you for your question. This is Wayne. I will take your question. We are still in the process of disposing of our K-9 academic AST business, or K-9 business for compulsory education. As mentioned, with the revenues from our K-9 business accounted for approximately 25% of our total revenues in third quarter.
Up to now, the government authority is actively assessing the material related to the business license application for the non-profit organization. There's still no clear timetable on this. We will continue to work constructively with the government authority in connection with the proposed deal and still expect the K-9 business to be disposed or be terminated by the end of this year. As disclosed in our official announcement on September 30, for Youdao this time, we reminded all of you again that there's no any assurance regarding the ultimate timing of the proposed deal or that the transaction will be completed. We will update the status of the deal or the status of business license application to the market if any material progress was made. Thank you.
Okay, thank you.
The next question is from Brian Gong of Citi. Please go ahead.
Thank you, management, for taking my question. I'm very sorry about the technical error just happened earlier. My question is that it has been a few months since we proposed some new directions on the business, which includes adult educations, STEAM courses and also smart devices. Can management give us some updates on the latest progress and whether there are any modifications to our new strategies? Thank you very much.
This is Feng Zhou. You're asking about whether there's any change to the new strategy after the Double Reduction. Let me-
Yeah.
Let me talk about a few key things. Yeah. The short answer is that we think we have the right strategy, and we are executing it, and we are making good progress. Let me talk about a few things about actually more thinking about our four pillar. We call it Four Pillar Strategy. The first point I wanna make is that our business always will have a strong core that is the AI and learning content creation. Yeah. We talk about the four directions for businesses. It's actually centered around a single core. The core is artificial intelligence and learning content.
Around this core, we have built these four different products or services. Right now, we thought about whether we want to focus on one of them or two of them, but we do think that they all represent good growth opportunities. We will put efforts into each of them right now. Down the road, we may find that one of them is more so compelling that we will just focus on that. That could be the case. Now we think this is a good setup for us. The second point I wanna make is that the importance of good products.
I've always had the view that if you can build one differentiated focused product that solves a lot of people's problems, then you can already build a very strong business around the product. Product progress is key for future growth of all business. Yeah. At this particular time, when some of these two or four businesses are relatively small in scale, it is more important to actually look at product progress. That's why we spent more time talking about products during the last two calls. Yeah. We will watch for sign of success from these products.
For example, I talked about Youdao Listening Pod, Youdao Tingli Bao , selling out the first batch in a week. It's an early sign that shows that we've actually likely achieved product market fit for this product after many months of R&D. We think this is the key. As long as we have product market fit for products, then we can relentlessly iterate and improve and spend more energy on marketing and sales. Then we can scale the business. But before all that, achieving product market fit is the key. We will pay more attention and talk to you more about product progress.
Let me also share with you that another example is that we launched a Weiqi course in September. I think it's a pretty special course because it uses innovative teaching methods combining Chinese and English and also it's bilingual and also interactive AI-based teaching. So, the first month we watched for its trajectory, and we found out that the Weiqi course was actually multiple times better compared with for the first month. So, we think that's another way, another sign that we are doing something right. The third and last point I wanna make is what about the financial ramifications of this new strategy for going forward.
Yeah, as the academic tutoring side of our business quickly goes down, that's to be expected. Non-tutoring business, they actually keep growing. They have been growing for some time, for many quarters now, but they keep growing. Overall, we expect our top line growth to see a deceleration in the short term, and after that, accelerated growth again, because the non-tutoring business will take more part, be a larger part at that time. In terms of bottom line, we expect to see a relatively stable or slightly improving bottom line, as sales and marketing S&M costs expense quickly go down in the short term.
I would like to highlight that in Q3, operating loss has substantially shrunk. It's RMB 130 million versus RMB 890 million year-over-year or compared with RMB 540 million last quarter. I think we're making good progress. That's the three points. I hope that answers your question. Thank you very much.
Thank you very much.
That concludes the question-and-answer session. I would like to turn the conference back over to the management for any additional or closing comments.
Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Youdao directly or reach out to TPG Investor Relations in China or the U.S. Have a great day.