Gaotu Techedu Inc. Q3 FY2025 earnings call

• User-centric approach driving progress, enriching product portfolio, deepening user insights, enhancing teacher pipeline, and integrating AI for efficiency gains.
• Solidifying strategic edge by extending learner journey coverage, diversifying service scenarios; offline learning services' revenue contribution exceeded 10% of total revenues this quarter.
• Building high-quality educator pipeline through partnerships with thousands of leading domestic universities, talent development programs, and improved incentive systems.
• Leveraging AI internally (via AI Paxons) and externally (collaborations with governments/universities) for innovation and efficiency.
• Focus on strengthening execution, operational efficiency, and profitable growth, with operational metric tracking and agile organizational framework.
• Fulfilling social responsibilities, e.g., Rural Teacher Empowerment Program and AI-powered mental health training lab.

Learning services contributed over 95% of net revenues. Traditional learning services and non-academic learning services, the core segments, contributed more than 80% of total revenues and recorded over 55% year-over-year growth. Revenue from new initiatives in non-academic tutoring services (online and offline) increased by around 60% year over year. The online segment for traditional and non-academic learning services is on track to achieve a double-digit profit margin for the full year of 2025. Traditional learning services saw revenue increase by 15% year over year in the third quarter. Educational services for college students and adults contributed more than 15% of total revenue in the third quarter, returned to positive growth trajectory, with revenues increasing nearly 50% year over year and net profit showing high double-digit growth year over year.

• Total net revenue for 2025 is expected to be between 2,628 million RMB and 1,648,000,000 RMB, representing an increase of 17.2% to 18.7% year over year.
• 2026 is expected to have approximately 15% year-over-year revenue growth, with focus on profitability and aiming for sustainable net profitability in 2026.

Risks and uncertainties beyond the company's control that may cause actual results to differ materially from forward-looking statements, further information included in the company's public filing with the U.S. SEC.

Q: Could you give us some color on your 2026 top line growth and your expectations on each business line, and in terms of the bottom line, how's your plan?

A: 2026 is expected to have approximately 15% year-over-year revenue growth. 2026 will focus on profitability, with ongoing efforts aimed at moving the company toward sustainable net profitability in 2026. Hope that address your question. Thanks.