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Gaotu Techedu Reports Positive Financial Growth in Q2 2025

On August 26, 2025, Gaotu Techedu Inc. (NYSE: GOTU), a prominent Chinese education technology company, announced its unaudited financial results for the second quarter of 2025. The company, known for its innovative AI-powered learning solutions, showcased remarkable growth compared to the same period last year, emphasizing its commitment to enhancing educational innovation and service quality.

Financial Highlights

The second quarter of 2025 marked a significant leap for Gaotu, with net revenues reaching RMB 1,389.4 million—a 37.6% increase from RMB 1,009.8 million in Q2 2024. Additionally, gross billings also surged, reported at RMB 2,252.4 million, showcasing an impressive 36.2% rise from the previous year.

Despite these gains, Gaotu experienced a loss from operations amounting to RMB 241.9 million, although this represents a significant improvement, narrowing the loss by nearly half compared to RMB 464.8 million in Q2 2024. The net loss declined as well, falling to RMB 216.0 million from RMB 429.6 million a year earlier, indicating effective operational execution and cost management strategies.

Non-GAAP Measures

The company reported a non-GAAP net loss of RMB 206.8 million, down from RMB 418.0 million in the same quarter of 2024. These results demonstrate Gaotu's refining of its operational efficiencies and a focus on sustainable growth.

The net operating cash inflow for Q2 2025 reached RMB 588.8 million, reflecting a solid 52.5% increase from RMB 386.2 million in the prior year, further underscoring the company's robust financial health.

Strategic Insights from Leadership

Larry Xiangdong Chen, the Founder, Chairman, and CEO, commented on the results, stating that Gaotu has successfully harnessed the power of AI to enhance service models and drive innovation. He noted, "Our revenue growth of 37.6% year-over-year and the improved operational efficiency we achieved underscore our commitment to providing exceptional education experiences to lifelong learners."

CFO Shannon Shen highlighted that the company's strategic focus on healthy growth has paid off as net revenues surpassed guidance by 5.4%. The operational efficiency and resource allocation did not only improve the financial metrics but also enhanced customer acquisition strategies, achieving the best level of efficiency in the past four years.

Cost Management and Operational Efficiency

Gaotu's cost of revenues also reported an increase of 50.9% to RMB 472.8 million from RMB 313.4 million a year prior, primarily due to an expanded workforce of instructors and increased rental costs. However, gross profit rose by 31.6% to RMB 916.5 million, though the gross margin slightly tapered to 66.0%, compared to 69.0% last year.

Operating expenses remained relatively stable with a minor decrease, while specific expenditure areas such as selling expenses decreased, reflecting enhanced efficiency measures.

Road Ahead: Business Outlook

Looking ahead, Gaotu projects that total net revenues for Q3 2025 will range between RMB 1,558 million and RMB 1,578 million, marking an expected year-over-year growth of 28.9% to 30.6%. This optimistic forecast aligns with the ongoing strategic implementations to reinforce Gaotu's market presence and uphold a strong brand reputation.

In conclusion, Gaotu Techedu's financial performance in Q2 2025 highlights a turning point for the company as it continues to innovate and provide exceptional educational products to its users. The commitment to lifelong learning coupled with a strong financial foundation reaffirms Gaotu's robustness in the evolving landscape of educational technology.

Earnings Conference Call

Gaotu will host an earnings conference call on August 26, 2025, at 800 AM U.S. Eastern Time, where executives will further discuss the financial results and projected business strategies. Interested stakeholders are encouraged to join this important interaction to understand the company's direction more comprehensively.