Gaotu Techedu - Earnings Call - Q3 2025

Transcript

Operator (participant)

The first question today comes from Crystal Liu with CMS (China Merchants Securities). Please go ahead.

Crystal Li (Analyst)

Thanks, for taking my questions. Congratulations on strong results. Could you give us some color on your 2026 upline growth and your expectations on each business line? In terms of the bottom line, how's your plan? Maybe could you share more about your plan to balance your growth and loss reduction? Thank you.

Shannon Shen (CFO)

Thanks, Crystal, for your question. Looking back at 2024 and 2025, our revenue grew 53.8% year-over-year in 2024. Based on our latest guidance, we expect close to 35% year-over-year growth of our top line in 2025. Over the past two years, our revenue actually more than doubled. We achieved relatively strong top line expansion in the past two years. Behind this growth is the steady increase in the number of students and parents we serve, the continued strengthening of our product portfolio, and also the growing influence of our brand. As of today, our offerings cover the key needs of users with strong learning demand and learning motivation. Also from a product perspective, the integration of our online and offline solutions, along with the use of AI to enhance the user experience in our courses, is progressing steadily and continuously improving.

As our scale expands, we are seeing sustained operating leverage, which adds a solid foundation for achieving full profitability at our target scale. In 2026, we expect our growth trajectory to become more balanced, with profitability as the major focus guiding the execution of our overall strategy, which means in 2026, profitability will play the most important role. Based on our expected gross billings in 2025 in Q4, together with our operating plans and upcoming initiatives, we anticipate approximately 15% year-over-year revenue growth in 2026. We also expect to see further improvements in our operating cash flows with ongoing efforts aimed at moving the company towards sustainable net profitability in 2026. Hope that addressed your question. Thanks.

Operator (participant)

Thanks, Shannon. This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks.

Catherine Chen (Head of Investor Relations)

Thank you, Operator, and thank you, everyone, for joining the call today. If you have any further questions, please don't hesitate to contact our Investor Relations Department or our management via email at [email protected] directly. You are also welcome to subscribe to our news alert on the company's IR website. Thank you very much again for your time. Have a great night.

Operator (participant)

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.