Gaotu Techedu Inc. (GOTU) Q2 2025 Earnings Call Transcript

Revenue Revenue increased by 37.6% year-over-year to nearly RMB 1.4 billion. This growth was attributed to solid growth momentum in the core business and improved operational execution.

Gross Billings Gross billings grew by 36.2% year-over-year to approximately RMB 2.3 billion. This was driven by high student demand and effective resource allocation.

Net Loss Net loss narrowed by 50.5% year-over-year on a non-GAAP basis. This improvement was due to refined operational execution and improved organizational efficiency.

Net Operating Cash Inflow Net operating cash inflow was RMB 588.8 million, an increase of RMB 202.6 million from the same period last year. This reflects strong operational quality and cash flow management.

Deferred Revenue Deferred revenue increased by 38.9% year-over-year to about RMB 2.2 billion, providing a solid foundation for sustained future growth.

Cash Position Cash, cash equivalents, restricted cash, and short-term and long-term investments totaled over RMB 3.8 billion as of June 30, 2025. Excluding share buybacks, the cash position increased by RMB 135.6 million year-over-year.

Selling Expenses Selling expenses decreased by 1.7% year-over-year, and selling expenses ROI increased by 38.6%, reaching its highest level in 4 years. This was due to improved customer acquisition efficiency and resource allocation.

Gross Profit Gross profit increased by 31.6% year-over-year to RMB 916.5 million, with a gross margin of 66.0%. The decrease in gross margin was primarily due to changes in the product mix.

Operating Expenses Total operating expenses decreased by 0.2% year-over-year to approximately RMB 1.2 billion. This was achieved through reductions in selling, R&D, and G&A expenses as a percentage of net revenues.

Nonacademic Tutoring Services Revenue Revenue from nonacademic tutoring services increased by 50% year-over-year, contributing over 85% of total revenues. Gross billings from this segment grew by over 100% year-over-year.

Traditional Learning Services Revenue Revenue from traditional learning services increased by 12.1% year-over-year, contributing to nearly 25% growth in total revenues for the first half of 2025. This was driven by higher enrollment despite fewer class sessions due to the early Spring Festival.

Educational Services for College Students Revenue Revenue from educational services for college students contributed over 10% of total revenues. Gross billings from this segment increased by more than 50% year-over-year, with operating cash flow growing over 4x.