Gaotu Techedu Inc Reports Second Quarter 2024 Financial Results
Intellectia.AI Updated: 2024-08-27
Gaotu Techedu Inc. Reports Second Quarter 2024 Financial Results
BEIJING, Aug. 27, 2024 /PRNewswire/ -- Gaotu Techedu Inc. (NYSE: GOTU) ("Gaotu" or the "Company"), a technology-driven education company and online large-class tutoring service provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2024.
Key Financial Metrics
| Metric | Q2 2024 (RMB) | Q2 2023 (RMB) | Year-over-Year % Change | Consensus Estimates (USD) |
|---|---|---|---|---|
| Net Revenues | 1,009.8M | 703.1M | +43.6% | $137.6M |
| Earnings Per Share (EPS) | -1.65 ADS | 0.28 ADS | N/A | -0.21 ADS |
| Loss from Operations | 464.8M | -43.3M | N/A | N/A |
| Net Loss | 429.6M | -56.2M | N/A | N/A |
| Net Operating Cash Inflow | 386.2M | 288.5M | +33.8% | N/A |
Interpretation : Gaotu demonstrated significant year-over-year growth in net revenues for the second quarter of 2024, with a notable 43.6% increase. However, the company posted a substantial net loss in this quarter, shifting from net income in the same period last year. Earnings per share were below the consensus estimates, reflecting operational challenges, despite strong revenue growth.
Segment Revenue Performance
| Segment | Q2 2024 (RMB) | Previous Guidance (RMB) | Performance vs. Guidance |
|---|---|---|---|
| Total Net Revenues | 1,009.8M | N/A | Met |
Interpretation : The company managed to achieve robust revenue growth driven by increasing gross billings, suggesting strength in core business operations and effective responses to market demand. However, detailed segment-specific data and comparison to previous guidance are not available for further granular analysis.
Key Developments and Operational Highlights
- Continued growth momentum with a 43.6% increase in net revenues, reaching RMB1.0 billion.
- Gross billings surged by 87.4% year-over-year, totaling RMB1,653.7 million.
- Significant operational expenses increase due to workforce expansion and higher marketing outlays.
- Share repurchase program update: repurchased approximately 7.9 million ADSs worth around $27.0 million.
Comments from Company Officers
Larry Xiangdong Chen, Founder, Chairman and CEO : u3000- Highlighted the company's decade-long focus on teaching quality and learning services as key competitive advantages. u3000- Confirmed strong deferred revenue at RMB1.6 billion, setting a sturdy base for further growth.
Shannon Shen, CFO : u3000- Emphasized continued operational scalability and efficiency, laying a strong foundation for future revenue growth. u3000- Focus on core education business and market demand responsiveness remains steadfast.
Share Repurchase Program
- The Company has announced modifications to its share repurchase program, increasing the total value of shares permitted for repurchase from $30 million to $80 million, effective until November 22, 2025.
- As of August 26, 2024, approximately 7.9 million ADSs have been repurchased at a cost of about $27.0 million.
Forward Guidance
- Gaotu expects total net revenues for the third quarter of 2024 to be between RMB1,188 million and RMB1,208 million, projecting a year-over-year increase of 50.5% to 53.0%.
Stock Price Movement
- Following the earnings release, Gaotu's stock price declined by 7.1%.
Conclusion
Gaotu Techedu Inc. has showcased substantial revenue growth for the second quarter of 2024, reflecting strong market demand and effective operational strategies. However, the shift to operational loss and net loss poses challenges. Moving forward, Gaotu remains optimistic about revenue growth in the subsequent quarter, backed by robust deferred revenue and strategic investments in operational efficiency and market demand responsiveness.
Please note all financial data is provided by the earnings release and converted data where necessary.
