#China #Beijing #financial results #Gaotu Techedu #online education

Overview

Gaotu Techedu Inc. (NYSE: GOTU), a leading technology-driven education firm in China, has released its unaudited financial results for the third quarter of 2024, highlighting a remarkable growth trajectory.

Financial Highlights

In Q3 2024, Gaotu reported net revenues of RMB 1,208.3 million, marking a staggering 53.1% increase from RMB 789.4 million during the same period in 2023. This growth in revenue is attributable to an impressive rise in gross billings, which reached RMB 1,069.2 million—up 67.2% compared to RMB 639.3 million in Q3 2023.

Despite this revenue growth, the company incurred a net loss of RMB 471.3 million, significantly higher than the net loss of RMB 57.7 million in Q3 2023. The sharp increase in operational losses, from RMB 99.5 million loss previously to RMB 490.1 million, signals the company’s aggressive investment strategy aimed at scaling up its core business operations and enhancing service delivery.

Key Financial Metrics

• - Net Revenues: RMB 1,208.3 million
• - Gross Billings: RMB 1,069.2 million
• - Net Loss: RMB 471.3 million
• - Loss from Operations: RMB 490.1 million

Management's Commentary

Larry Xiangdong Chen, the founder, Chairman, and CEO of Gaotu, expressed optimism over the company's growth strategy. He noted the sharp increase in gross billings indicates strong market response and reflects the team's efforts to adapt to market demands effectively. Chen emphasized that the company has invested heavily in enhancing its educational systems and improving operational efficiency with strategic hiring and training initiatives.

Additionally, he highlighted that over RMB 120 million has been set aside for share buybacks, demonstrating a strong commitment to delivering value to shareholders. As of September 30, 2024, the company reported total liquidity exceeding RMB 3.3 billion, providing a sound financial foundation for future growth.

Performance Metrics

For the nine months ending September 30, 2024, Gaotu's financial performance included:

• - Total Net Revenues: RMB 3,164.9 million, a 43.9% increase year-over-year.
• - Gross Billings: RMB 3,452.2 million, which represented a 67.5% increase from the previous year.
• - The company's operational losses reached RMB 1,032.6 million, a stark contrast to a modest profit in the same time frame last year.

Future Outlook

Looking ahead, Gaotu anticipates total net revenues for Q4 2024 to range between RMB 1,288 million and RMB 1,308 million, projecting substantial year-over-year growth. This forecast positions Gaotu to solidify its market presence and enhance future performance.

Conclusion

Gaotu Techedu continues to assert its leadership in China’s education sector with a focus on leveraging technology to enhance learning experiences. The latest financial results reflect a dynamic growth strategy that, despite operational losses, indicates solid demand for innovative educational products. The company's forward-looking strategies and significant financial investments suggest a bright trajectory as it aims to further capture market share and improve operational efficiencies.

Earnings Call

The company will host an earnings call on December 4, 2024, to further discuss these results and answer questions from investors and analysts.

For more information, visit Gaotu's Investor Relations.