Crystal Li

Crystal Li asked about Gaotu Techedu's 2026 top-line growth expectations across business lines, bottom-line plans, and strategies to balance growth with loss reduction.

Answer

CFO Shannon Shen detailed Gaotu Techedu's revenue growth of 53.8% in 2024 and a projected 35% in 2025, driven by student growth and product enhancements. Shen emphasized a shift to profitability as the major focus for 2026, anticipating approximately 15% year-over-year revenue growth and aiming for sustainable net profitability.

Crystal Li asked about Gaotu Techedu's 2026 top-line growth expectations across its various business lines and the company's strategy for balancing growth with loss reduction to improve the bottom line.

Answer

Shannon Shen (CFO, Gaotu Techedu Inc) outlined the company's strong revenue growth in 2024 (53.8%) and projected 35% growth for 2025, driven by increased student numbers, product portfolio strength, and brand influence. For 2026, she anticipated approximately 15% year-over-year revenue growth, emphasizing profitability as the major strategic focus and expecting further improvements in operating cash flows to achieve sustainable net profitability.

Crystal Li asked for details on the drivers behind Gaotu's strong Q1 margin expansion and for color on the company's full-year guidance.

Answer

CFO Nan Shen explained that profitability is subject to seasonality, with Q1 and Q4 being key periods for profit release. Shen attributed the strong Q1 margin to improved teaching quality boosting retention, more efficient customer acquisition channels, and enhanced operating leverage from AI integration. For the full year, Shen noted that H1 2025 revenue growth is on track for 44% YoY, driven by high double-digit growth in core businesses, and expects profitability for every quarter in 2025 to improve significantly year-over-year.

Crystal Li from China Merchants Securities asked for details on how Gaotu is integrating AI into its core operations and what measurable business improvements have been observed.

Answer

CFO Nan Shen explained that Gaotu is strategically integrating AI to reshape education through personalized learning, automated content generation, and intelligent tutoring. Shen noted that AI is already embedded across all operational aspects, from content creation to internal processes, aiming to enhance efficiency and create more effective, personalized learning experiences. She emphasized that AI will augment teachers, not replace them, and the company is focused on developing innovative AI-driven educational products.

Crystal Li inquired about the Q4 revenue growth breakdown by business segment and requested an outlook for Gaotu's growth and profitability in 2025.

Answer

CFO Nan Shen explained that 2024 results deviated from expectations due to challenges in the psychological consulting segment and a cautious consumer environment, leading to a wider loss. For 2025, Shen stated the company will focus on balancing growth with profitability, aiming for steady growth in gross billings and revenue alongside a significant reduction in losses. This will be achieved by optimizing fixed costs, improving operating margins, and continuing the share repurchase program.

Crystal Li from CMS asked about the main drivers behind the exceptional new student enrollment during the summer, the retention of these new students, and Gaotu's marketing strategy going forward.

Answer

CFO Nan Shen attributed the strong summer enrollment to proactive planning, including early recruitment and comprehensive training for tutors. She also highlighted a diversified customer acquisition strategy, with live streaming channels being a major contributor. Shen noted that retention rates are improving, especially for new students. The go-forward strategy is to continue optimizing the channel mix toward low-cost and proprietary channels to maintain industry-leading acquisition efficiency.

Crystal Li asked about the long-term outlook for the paying ratio of Duolingo Max versus Super and inquired about the competitive landscape for AI-powered video call products.

Answer

CEO Luis von Ahn Arellano stated that it is too early to predict the final subscriber mix between Max and Super, as it will likely vary by country. Regarding competition, he emphasized Duolingo's key differentiators: a relentless focus on user motivation and engagement, a massive data advantage from its large user base, and an efficient marketing engine driven by its popular free tier.