Welcome to Youdao 2021 Annual General Meeting of Shareholders. 2021 was an extraordinary year for the entire online education industry, because a lot has changed in our industry and in the country. We believe that this is not only a challenging year for us, but also this is a critical year and for new opportunities for Youdao since the double reduction policy was implemented. Mr. Zhou Feng, the CEO, plus other managerial management team has identified our new orientation of business. We have also released the performance results of the quarter two and quarter three. We have worked with the analysts and shareholders on communication issues.
We believe that in this changing world, it is more necessary for us to have good communication with you guys, because this is a way to show our responsibility for the shareholders, and our attitude has been recognized by the friends, shareholders, and analysts. I believe that you would like to know our development in 2021 and what will be the 2022 like. Now, let's give the floor to CEO Mr. Feng Zhou of Youdao.
Thank you very much, Mr. Wang. Welcome to our company. First of all, I would like to thank all of the shareholders, analysts, as well as friends from the media, for taking your time out of your busy schedule to come to the site or participate in our annual general meeting of shareholders online.
This year, I would like to give you a review of the financial and operational results in 2021, as well as our outlook for 2022. 2021 will be an extraordinary year for the entire online education industry. First of all, I would like to sincerely thank all of the guests for your trust and support with which Youdao can have the confidence to embrace the changes, and we can be convinced our leadership in our cutting-edge technologies. It is our hope that we can make use of our philosophy, empowering education through science and technology, to provide more and smarter high-quality products and services to create better returns for shareholders in the mid and long term. In 2021, I think we can sum it up by one sentence, especially the work in the second half of this year.
Against the background of rapid industrial changes, we have experienced some turbulences. Inevitably, we have to talk about the policy change. In June, July, and August, the government has issued what we call the Double Reduction Policy. We have been committed to compliance operation, and we have swiftly identified our business orientation in the future, which we have elaborated in our financial statement. In general, our feedback is that the shareholders have recognized and accepted our business plans for the future. In September, based on the requirements of Beijing Education Commission, we have suspended or stopped the recruitment of students in the compulsory education stage. We have launched the fund supervision. At the same time, in September thirtieth, we have released the announcement to, in which we plan to divest the off-campus subject training in the compulsory education stage.
In general, we will complete our job based on compliance. In terms of the business results, after the policy change, in the third quarter after this policy change, we have restructured our business portfolio. As a result, our business has been growing pretty decently. Our revenue grew rapidly, gross profit margin increased steadily, and the operating loss narrowed significantly. From Q1, Q2, and Q3, according to our results, we can see that our Youdao's net income totaled CNY 4.02 billion, year-on-year increase of 95%. Learning services revenue was CNY 2.92 billion, year-on-year increase of 105%. This includes the well-rounded education, subject-based training, and adult education. For the learning products, it's more of those hardware products.
We have created a revenue of CNY 650 million in the first three quarters, year-on-year increase of 119%. Because we have a diversified business portfolio, we can generate such a good result in spite of the policy change. In the first three quarters, we have achieved rapid growth. I believe that this is a pretty good result in terms of our business revenue generation. In the first three quarters, Youdao's total gross profit margin was 55%, an increase of 10% over the same period last year. The number for learning service exceeded 60%, reaching 63%, an increase of 10% over the same period last year. In Q3, the gross profit margin of learning service reached 66%, a record high. That means our gross profit margin has been improving consistently.
In the first three quarters, Youdao's operating loss totaled CNY 1 billion, a year-on-year decline of 26.5%. In the third quarter, the operating loss fell sharply to CNY 130 million. The rate was 9.3%, and the same period of last year it was 99.8%. That means in Q3, our operating loss has significantly narrowed, so our business is getting much healthier. To sum up, we believe that our financial state performance has been pretty decent, thanks to our steady operation. As a result, we have made some good achievement. We have gained tremendously in our business, and we have narrowed our loss. I believe that our achievement are attributed to our business philosophy.
Our business is centered around the ability to create AI and learning content by improving our product and technologies, providing our client with learning content and learning product. This kind of innovation and creativity is the philosophy behind what we've been doing. Our business philosophy is to learn efficiently. I think this can help us remain competitive or increase our competitive edge. For the whole society and for the economy, the growth and development depends on efficient learning. For knowledge-based economy, we need to rapidly acquire the knowledge and abilities and skill sets that are needed to remain competitive. For our society and schools, we need to cultivate talent that can meet the needs of the economy. This is the mission of our company. Based on the mission, we will work hard to produce products of various kinds and innovate to meet this demand.
What we need to do is to create a sci-tech company of diversified business, committed to empowering education through science and technology, create the new ecosystem of smart education to do something beneficial for society with scientific innovation. I would like to take one example to talk about our mission and positioning. This is our key product, the dictionary pen. AI technology, the core technology of ours, has been applied in our product. In this pen, it's. Well, the pen has been sold pretty well. The reason is because it includes four driving forces to empower education through sci-technology. First of all, we have the OCR technology, the optical character recognition. It supports 102 languages with an accuracy rate of 99.6%, far exceeding the recognition quality and accuracy of the industry peers. Another one is the YNMT.
YNMT, the Youdao neural network translation. In our test sets, our quality of translation, the BLEU indicators, is superior than many other international translation engines, and we got awards and championship in multiple competitions. Another one is TTS, text-to-speech technology, including the ASR, the automatic speech recognition technology. Actually, a few weeks ago, we have upgraded the pronunciation engines. If you listen to it, you will find that the pronunciation is pretty natural and emotional. For learners, we can properly handle those characters with multiple pronunciations. Lastly is our self-adaptive learning data analysis. We can track and analyze the learning result and process to help the students to learn better. Since we applied the AI into learning process, we can constantly innovate something new in the industry. This is our notion and our business, how we combine them together.
Having talked about our business philosophy and performance in 2021, we would like to talk about our outlook for 2022. After the introduction of the double reduction policy, we have positioned ourselves based on our cutting-edge technologies and the core business strength. We have identified the pillars of future growth. These four pillars include smart hardware, adult and vocational education, well-rounded education, and education informatization. In our financial statements, they have been mentioned. We have implemented those business plans in one quarter, but what we need to do is to overcome the challenges and pressures, and focus on the execution and operation. We are confident that after weather the storms of policy changes at the end of 2021, we can grow stronger out of the policy change. Let's continue to see our plan.
First is the smart hardware. We hope that we can consolidate and expand our dictionary pen, which is our leading edge. Apart from consolidate our strength, we will also increase our SKU to enrich the metrics of our hardware products. In 2021, in the Double 11 sales campaign, our sales revenue of learning products has increased by 57.5%, which is number one in the sales of the same category on JD.com as well as on Tmall.com. The reason for our rapid growth can be attributed to the fact that the product is original. We don't face any competitors for the same kind of products because there is no similar product, 'cause we understand education and the students' learning habit. That's why we can create highly popular products.
By leveraging our capacities, we can further develop more products to meet different learning scenarios and provide more solutions. We will create something original rather than to copy someone else. Because of this original innovation, we are going to create more new products in the future. The Dictionary Pen has been undergoing constant upgrade. For instance, in September this year, we have launched the People's Education version of the Dictionary Pen because People's Education Press is the publishing house for basic education directly affiliated to the Ministry of Education. We also worked with a Commercial Press, and the flagship version of Youdao Dictionary Pen includes the Xinhua Dictionary and also 18 Chinese and English dictionaries with copyrights. Apart from that, we also have a listening pod to practice oral English listening and English speaking and listening.
This includes the AI subtitles, scoring of the reading, and correcting the pronunciations. We also include another function module, which is to have mock exams. We included the mock exam for several cities and regions. After the launch of the first week, our product has been sold out. This means that the product has been well-accepted by the market. First of all, let's take a look at this video about this Listening Pod. We're going to develop more learning scenarios to produce more smart products for learning. Now let's talk about the adult and vocational education. Against the background of rapid economic and social changes and growth, for adults, lifelong learning is an inevitable topic. We believe that adult and vocational education has a very promising market. Our core competitive edge is to create constantly popular products and courses.
In the past few years, in English learning for adults, our ability has been verified by the market. In recent year, Lu Feifei's Extraordinary Memory Training course, the sales revenue is close to CNY 100 million, a very popular course. In English learning, in Q3, we have released another course by Mr. Yang Liang. It's called Enjoy English for All. This is an immersive English environment created to practice English in real-life scenarios. Recently, the NetEase Cloud Classroom officially introduced nearly 100 Chinese language digital training course of Amazon Web Services. In the future couple of quarters, we're going to produce more high-quality courses to meet the needs for lifelong learning. Now let's take a look at this, the video, the Enjoy English for All.
I wake up in the morning. Wow, it's very dark. I go to my wardrobe. What should I wear today? I scope the suit. I decide to go with the blue suit. I take my umbrella. I get a hurried cab. I unlock my front door. I walk to the bus stop. Oh, my bus is here. I'm ready to work. I go to the building where Youdao is the company. Leo, what's on my to-do list? He is an English teacher. How useful. Oh, what a nice office.
Yes, it is. My team is nice and friendly, and Doris is great to work with.
I like working here too. I wake up in the morning.
In 2022, we will continue to accelerate our deployment on adult education and strive to create more high-quality courses to meet the needs of adult users for lifelong learning. Well-rounded education courses are another pillar of our growth. We will further increase the development and investment in this field. As you know, we have our Youdao Go. The Youdao Go, since its launch last year, the quarterly compounded growth rate has reached about 100%. In the third quarter, the Youdao Go has been upgraded with the AI learning system and launched Youdao Go WeChat mini program, which supports a variety of intelligent evaluation and interactive functions to help the students keep track of their learning process. Apart from the Go, we also launched a chess course in September. This course uses bilingual animations and interactive topics to teach the chess.
Of course, we also have our proprietary research and development AI practice platform to help children with after-class training. Thanks to AI, such kind of training becomes more interesting, and it can help to correct the mistakes or the errors you make in the learning. Apart from that, we have also launched the Youdao Go Academy app, so you can evaluate your skills and can compete with others. Apart from the academy, apart from the Go, we can also support chess. This is gonna be a great place to play chess or play Go. Another growth point is informatization. In Q3, six ministries have jointly launched the recommendations on new education infrastructure.
The guiding opinions put forward that by 2025, a new type of national education infrastructure system with optimized structure, centralized efficiency, high-level safety, and reliability will be established, which will have in-depth application of technologies such as 5G, AI, big data, cloud computing, and blockchain. Youdao's technology advantages and abilities empower education with science and technology will be implemented on the ground. Thanks to our competitive edge in technology, we have created some products which have been widely recognized. For instance, we have signed an agreement with Institute of Educational Sciences of Beijing Haidian District, in which we are going to carry out cooperation on informatization of primary and secondary schools. We also helped Hangzhou Binjiang District to realize smart education. In Xiamen, we also helped them to create education informatization campaign.
In Q3, thanks to, b ased on our Youdao Smart Learning Terminal, based on our products, we have launched the Youdao Smart Learning Terminal 2.0. This can help address the homework-based learning scenarios. For instance, we can support the high-speed scanning of paper-based homework and routine practice, automatically grade the student's homework and provide in-depth analysis report. This terminal 2.0 will have a better performance in the future. Now let's take a look at a video on this terminal. In the shareholder meeting on site, we have some in-kind products where you can experience by yourself. Youdao Dictionary is our earliest and most popular product. The accumulative number of users exceeded 900 million threshold in the Q3 of this year. This is a milestone for us. It reflects the recognition by our users. Our efforts focus on providing a one-stop service for work and learning.
We have been optimizing search, translation, sharing, and other functions, so as to upgrade the experience of the users in using the product. To be more specific, we have included a lot of video products. Video is a focus of our efforts, and we have a short video community called Wow Community. This is a social community in which a lot of creators are attracted to share a lot of knowledge-based short videos. Apart from that, recently, we have launched the academic search, which is pretty popular and useful for the postgraduate students or the researchers. You can search a lot of papers on it. We have optimized our search engine, but we still have some efforts to make, and we're going to optimize that in 2022.
While we are creating high-quality courses and product services for users, we do not forget the original ambition of education and always actively fulfill our corporate social responsibilities. For instance, we have responded to the calls of the Beijing Municipal Education Commission and Zhejiang and so on, to apply our advantages in well-rounded products. We're helping other offline organizations, training organizations to transition themselves. We have taken over the courses of other training institutions to help them address their unused courses. So far, we have helped VIPKid, Landi English, these kind of institutions to take over their classes. We have a total of nearly 30,000 classes. This has addressed the concerns of the parents. There are other cases of CSR. For instance, Youdao Foreign Language Reading Corner donated Youdao Dictionary Pens to schools in the impoverished mountainous areas.
In the face of the storm disasters that occurred in Hainan and Shanxi Province this year, we actively assisted in the restoration of schools after the disaster. Youdao Dictionary information accessibility provides customized learning services for those hearing-impaired or visually impaired and elderly. We also have invested high-quality educational resources in Southwest region through charity activities such as One Screen Changes the Fate. In addition, we have worked with Qiu Chengtong's Science Foundation to support national mathematical research and talent development. In general, we also have implemented charity projects in 30 provinces and municipalities, including Qinghai, Xinjiang, Gansu, and so on, with a total investment of nearly CNY 100 million, benefiting nearly 300,000 students. Now let's talk about MSCI. This MSCI China All Shares Small Cap Index includes Youdao into it. This has been used as a benchmark index commonly used by global investors as a stock selection criteria.
Youdao has been included in that. When they are selecting the shares, they are pretty selective and stringent. This represents their recognition of our potential and our abilities. In 2021, this is the last month of this year, and I would like to thank you again, the shareholders, the analysts, and media friends for your support. We are going to stick to our original ambition for education, and we will strive to develop better products for education to serve our customers, to create more share returns for the shareholders, and thank you very much.
Thank you very much, Mr. Zhou, for your presentation. I'm sure that after his presentation, you will have better understanding of NetEase's advantage in empowering education through science and technology.
I'm sure that in 2020 you will have a better understanding of Youdao in 2022 and even the years ahead. I'm sure you will have more confidence in ours, in us. Thank you very much for your support, and in the future, we hope that you can continue to support us and follow our development. The 2021 shareholders meeting has now ended.