If I have been to summarize this 12 months’s achievements in a single phrase, it will be refinement, representing not only a sharpening of our instructing high quality however a scientific elevation of our operational granularity. All year long, we not solely exceeded our development targets however, extra importantly, bolstered our organizational basis, strengthening our core capabilities whereas persevering with to scale quickly. As we enter 2026, our method to development continues to evolve and mature. We’re deliberately refining the best way we develop, prioritizing worthwhile development with the development of AI capabilities on the core of our operations—“all with AI, all with AI.” That is how we’re driving enhancements in enterprise well being, operational effectivity, and long-term viability.
Our fourth quarter efficiency represents an early validation of this strategic focus on the operational stage. Within the fourth quarter, we maintained regular top-line growth whereas realizing significant working leverage. Income elevated by 21.4% 12 months over 12 months to RMB 1.7 billion, and the underside line improved by 38%, pushed by continued effectivity positive factors. Over the complete 12 months of 2025, income grew by 35% to RMB 100 million, exceeding our preliminary expectations in the beginning of 2025. Internet working money influx reached RMB 416 million, a web improve of RMB 158 million 12 months over 12 months, reflecting continued enchancment in operational high quality and effectivity.
After excluding the affect of share repurchases, our money place elevated by RMB 221 million 12 months over 12 months, offering robust assist for our ongoing investments in merchandise, know-how, expertise, and sustained long-term development. We stay firmly dedicated to enhancing long-term shareholder worth, and underneath our aggregated share repurchase authorization, we have now repurchased a complete of RMB 670 million of shares, representing 12.8% of our complete excellent shares, together with RMB 343 million in buybacks in 2025. As our enterprise fundamentals proceed to strengthen, we’re nicely positioned to stability long-term strategic investments with a steady, predictable shareholder return framework.
By way of constant and prudent capital allocation, we search to construct sturdy worth, enabling traders who develop alongside Gaotu Techedu Inc. to learn from each our capital returns and the intrinsic worth we generate. Most encouragingly, our operational positive factors are more and more translating into tangible monetary efficiency. We’re shaping a extra resilient, sustainable, and worthwhile enterprise mannequin—a virtuous development flywheel—anchored in wholesome unit economics, pushed by robust operational excellence, and steered by our unwavering dedication to long-term person worth. Guided by this framework, in 2026 we are going to concentrate on advancing strategic priorities throughout 5 fronts. First, in catapulting development tempo, profitability will stay a core strategic precedence.
Over the previous 12 months, we have now comprehensively optimized our value construction, useful resource allocation, and working processes to fortify our enterprise mannequin and reinforce its financial basis. All through 2025, our core enterprise delivered steady profitability, validating the strategic path we set within the prior interval. In the meantime, our strategic initiatives have progressed nicely and are steadily rising as new development engines. Whereas near-term income tendencies might not absolutely seize our underlying momentum, we assess efficiency based mostly on the standard, construction, and sustainability of our development, that are the pillars of lasting worth creation. Second, in product improvement, we stay relentlessly user-centric, driving steady innovation in academic merchandise and studying providers.
The essence is that they assist learners make actual progress fairly than merely finishing course supply. We’ll proceed deepening our understanding of customers’ actual studying wants and pathways, systematically embedding these insights into curriculum design, instructing strategies, and repair experiences. We firmly consider that actually beneficial development stems from superior studying outcomes, larger person satisfaction, and stronger model belief. Third, with respect to know-how, we’re integrating innovation throughout our enterprise, operations, and group, making it a structural driver for enhancing operational effectivity and the person expertise. Expertise should allow instructing effectiveness, service excellence, and operational priority. In instructing eventualities, we’re proactively combining high-quality teacher sources with AI-powered instruments to make studying extra partaking and efficient.
On the operations aspect, we’re leveraging know-how and knowledge evaluation to optimize useful resource allocation and allow extra knowledgeable, data-driven decision-making. On the organizational stage, we’re fostering extra seamless collaborations via know-how, empowering our staff to concentrate on high-impact initiatives that drive significant worth creation. Fourth, when it comes to the expertise technique, we proceed to bolster our aggressive moat constructed round high-caliber educators. Educators are our most dear property and central to sustaining our long-term aggressive benefit. We’ll maintain refining our tighter choice, improvement, and incentive mechanisms, constructing a sturdy pipeline of educators and fostering an setting that helps educators’ skilled development and long-term careers.
A steady, high-caliber instructing staff is a cornerstone for efficiently scaling product innovation and know-how upgrades. Fifth, to boost our enterprise portfolio, we’re architecting a complete lifelong studying service platform. Private improvement is an ongoing journey, and studying wants at totally different phases are inherently linked fairly than remoted. By way of systematic integration of product codecs and supply fashions, we guarantee learners have entry to tailor-made options inside Gaotu Techedu Inc.’s ecosystem throughout each crucial developmental stage. By cultivating deep connections with customers, we additional strengthen our cross-business synergies and prolong the person lifecycle, considerably enhancing our working mannequin’s resilience and long-term return potential.
After almost a decade of improvement and achievement, Gaotu Techedu Inc. will have a good time its twelfth anniversary in February 2026. Standing at this necessary milestone, we really feel immense pleasure and a robust sense of duty. By way of an ever-deepening understanding of our customers, we have now cultivated a core management staff with a robust sense of possession and long-term imaginative and prescient, assembled an excellent, well-trained expertise pool, distilled a set of cultural rules that form our path, and most significantly, earned the dear belief of tens of thousands and thousands of scholars and oldsters.
Since day one, Gaotu Techedu Inc.’s authentic aspiration has remained unchanged: to construct a very distinctive know-how training enterprise—one the place each staff member can obtain each materials and non secular productiveness, the place each scholar enjoys distinctive studying experiences and accelerated private development, and the place we accompany learners on a lifelong journey of progress whereas contributing enduring worth to the event of the training trade and society. Wanting forward, we are going to stay dedicated to disciplined, prudent administration, strictly management threat, and proceed to strengthen our organizational and cultural basis.
By way of unwavering strategic focus and highly effective execution, I firmly consider that so long as we uphold long-termism, insist on worth creation, and stay true to the essence of training, Gaotu Techedu Inc. will advance steadily, producing lasting worth for our shareholders, staff, customers, and society at massive. Thanks very a lot, everybody. This concludes my ready remarks. I’ll now flip the decision over to our CFO, Shannon Shen, to stroll you thru this quarter’s monetary and operational particulars.
Shannon Shen: Thanks, Larry, and thanks everybody for becoming a member of our name as we speak. I’ll now stroll you thru our working and monetary efficiency for the fourth quarter and monetary 12 months 2025. Please observe that each one monetary knowledge are in RMB phrases except in any other case said. In 2025, we systematically optimized our product portfolio and channel combine, constructing fixed enhancements in our income high quality. We stay firmly dedicated to advancing our deep integration technique of AI plus training, considerably enhancing each our academic merchandise and end-to-end operational effectivity. By way of the systematic optimization of our product portfolio and channel construction, leveraging AI as our basis, studying options as our core worth, and AI-powered digitalization as our operational assist.
From a structural perspective, after years of centered investments and refinements, we have now established a staged development roadmap that gives nice visibility into future improvement. Our core companies delivered strong development with larger enrollments, optimized unit economics, and ongoing profitability enhancements, serving as the elemental pillar supporting the corporate’s revenue growth. On the similar time, our strategic initiatives are gaining traction and demonstrating upward momentum, serving as new engines for our scale growth and worthwhile development. In 2026, we are going to sharpen our concentrate on person expertise and studying outcomes, pivoting from scale-oriented development towards a extra efficiency-led mannequin pushed by each income scale growth and working effectivity positive factors.
We’ve realized working leverage for 5 consecutive quarters, constantly elevating our backside line. Specifically, on the person acquisition entrance, we leveraged AI-driven capabilities and a dynamic useful resource allocation mechanism to spice up person acquisition effectivity. Measured as gross billings divided by promoting bills, person acquisition effectivity improved by 10.8% 12 months over 12 months in 2025. Turning to our fourth quarter efficiency, income grew by 21.4% 12 months over 12 months to RMB 1.7 billion. Working bills as a share of income declined by 4.1 share factors 12 months over 12 months, contributing to a 20.9% discount in our working loss.
As of December 31, 2025, our deferred income stability rose by 23% 12 months over 12 months to RMB 2.6 billion, offering strong visibility for our future income development. In the meantime, our money, money equivalents, restricted money, short-term, and long-term investments totaled RMB 4.0 billion. With these sturdy money reserves, we’re nicely funded to deepen our organizational capabilities and enhance shareholders’ pursuits all through 2026. Subsequent, an outline of this quarter’s gross progress by enterprise phase. Studying providers contributed over 95% of web revenues. Non-academic tutoring providers and conventional studying providers, as our core segments, contributed over 80% of our complete revenues. Our new initiatives, centered on on-line and offline non-academic tutoring providers, sustained robust development momentum.
Within the fourth quarter, gross billings elevated by over 30% 12 months over 12 months, whereas income grew by 45%. On a full-year foundation, income rose by 9% 12 months over 12 months. Inside this phase, as our on-line enterprise benefited from increasing enrollments and enhanced product competitiveness, it demonstrated constant margin growth, attaining a mid-single-digit margin for the complete 12 months. By way of ongoing academic content material innovation and refined operations, we elevated each product worth and the training expertise, driving the retention price of current college students, which exceeded 75% this quarter. In the meantime, we continued to step up funding in content material improvement centered on cultivating learners’ complete capabilities and cloud competencies.
Our newest choices, together with AI-related programs, have additional enriched and refined our product and content material portfolio, enabling us to extra successfully handle the evolving calls for for holistic, long-term improvement. Within the fourth quarter, our conventional enterprise maintained steady development in enrollments whereas persevering with to boost service high quality and effectivity to spice up ongoing operational positive factors. We comprehensively upgraded tutor service requirements, deepening our concentrate on studying course of administration and learner engagement via clearly outlined key procedures and measurable efficiency indicators, which additional bolstered our systematic service supply capabilities. On the product entrance, we centered on optimizing our programs to higher align with college students’ studying processes and proficiency ranges, whereas strengthening our modular, needs-based content material to allow extra focused and efficient instruction.
The parallel strengthening of our instructing providers and academic merchandise contributed to continued enchancment within the general studying expertise at Gaotu Techedu Inc. The retention price for brand spanking new college students additionally rose meaningfully 12 months over 12 months this quarter, reflecting stronger person stickiness. For the complete 12 months 2025, income from our conventional enterprise grew almost 15% 12 months over 12 months, pushed by operational effectivity positive factors and enhanced organizational capabilities. Profitability for each on-line massive courses and one-on-one tutoring improved 12 months over 12 months. Our ongoing refinement of product competitiveness and optimization of operational high quality has laid a robust basis supporting our conventional enterprise’s sustainable development.
One other key element of our studying providers is academic providers for school college students and adults, the place gross billings grew over 15% 12 months over 12 months within the fourth quarter, contributing over 15% of complete revenues. By prioritizing person wants, optimizing the product combine, and sharpening our refined administration capabilities, this phase has entered a consecutive development trajectory and achieved full-year profitability throughout its on-line choices in 2025. In our academic providers for school college students, by leveraging deeper insights into college students’ life cycle, we have now pivoted from promoting standalone merchandise to growing revolutionary stage-aligned options. These choices are built-in with adaptive studying that may modify based mostly on real-time suggestions and efficiency, successfully extending the person studying cycle.
In the meantime, we continued deepening the mixing of on-line programs and AI applied sciences, fostering personalised studying assist and planning capabilities, concurrently enhancing each studying expertise and outcomes. For the complete 12 months, our academic providers for school college students delivered mid-double-digit development whereas reaching profitability on the enterprise line stage. Lastly, I’ll stroll you thru our monetary knowledge. Our value of income this quarter was RMB 540.9 million. Gross revenue elevated 20.7% 12 months over 12 months to over RMB 1.1 billion, with a gross margin of 67.9%. Whole working bills throughout the quarter elevated 15% 12 months over 12 months to just about RMB 1.3 billion.
Breaking it down, promoting bills elevated 20.3% 12 months over 12 months this quarter to RMB 885.3 million, accounting for 52.5% of web revenues. Analysis and improvement bills elevated 14% 12 months over 12 months to RMB 165.4 million, accounting for 1.8% of web revenues. Normal and administrative bills decreased 2.1% 12 months over 12 months to RMB 211.8 million, accounting for 12.6% of web revenues. Loss from operations was RMB 118.0 million; working loss margin was 7%. Internet GAAP loss from operations was RMB 110.7 million, and non-GAAP working loss margin was 6.6%. Internet loss was RMB 84.2 million, and web loss margin was 5%. Non-GAAP web loss was RMB 76.8 million, and web GAAP web loss margin was 4.6%.
Our web working money influx elevated 23.1% 12 months over 12 months to RMB 954.8 million. Now turning to our stability sheet. As of December 31, 2025, we held RMB 712.0 million in money, money equivalents, and restricted money, together with RMB 2.7 billion in short-term investments and RMB 551.6 million in long-term investments. This involves a complete of almost RMB 4.0 billion. As of December 31, 2025, our deferred income stability was round RMB 2.6 billion, primarily consisting of tuition acquired prematurely. As of March 4, 2026, we have now repurchased an combination of round 30.6 million ADSs on the open marketplace for almost RMB 670.0 million.
Earlier than I present our enterprise outlook for subsequent quarter, please enable me to remind everybody that this incorporates forward-looking statements, which embrace dangers and uncertainties which might be past our management and will trigger the precise outcomes to vary materially from our predictions. Primarily based on our present estimates, complete web income for the primary quarter of 2026 is anticipated to be between RMB 1.578 billion and RMB 1.598 billion, representing a rise of 5.7% to 7% on a year-over-year foundation. This single-digit improve price is because of seasonality. We count on the rise price to return to double digits within the second quarter in 2026. This concludes my ready remarks. Operator, we at the moment are prepared for the Q&A piece.
Thanks everybody for listening.
Operator: Thanks. We’ll now start the question-and-answer session. For the advantage of all contributors on as we speak’s name, in the event you want to ask your query to administration in Chinese language, for the sake of readability and order, please ask one query at a time. Administration will reply, after which be at liberty to comply with up along with your subsequent query. At the moment, we are going to pause momentarily to assemble our roster. The primary query comes from Crystal Li with CMS. Please go forward.
Crystal Li: Thanks. Congratulations on the robust outcomes, and thanks for the chance to ask a query. I simply need possibly extra shade on the event of your offline enterprise, and possibly elaborate extra in your future plan on this offline enterprise? Thanks.
Shannon Shen: Thanks, Crystal, in your query. We launched the growth of our offline studying facilities again in 2023. First, from a strategic perspective, our offline enterprise represents a transparent second development curve for us and one of many high strategic priorities on the group stage. The combination of on-line and offline is a extremely efficient method to enhancing studying effectivity and the general studying expertise, and likewise makes our product matrix extra holistic. It’s also a crucial step in constructing our long-term aggressive benefits. This initiative is led immediately by our founder, with prioritization in useful resource allocation, decision-making effectivity, and cross-sector collaboration.
By capturing a good window of robust person demand in 2023, we moved shortly to scale our footprint over the previous three years. We’ve attracted excellent trade professionals with experience in native operations, academic product design, and instructor sourcing and cultivation, and so on., constructing an expert staff that’s actually necessary for offline operations and that may successfully assist scalable development. This has already laid a really strong basis for our offline companies. When it comes to the present progress and outcomes, our offline enterprise has achieved clear economies of scale. Since 2023, with steady funding and operational refinement, our offline studying heart community and income scale have grown steadily and usually.
Primarily based on our present growth tempo and working plan, we count on the general scale—that means the highest line, the income—of our offline enterprise to surpass that of a number of independently listed friends within the coming 12 months. This isn’t only a easy improve within the variety of studying facilities. It additionally represents wholesome development pushed by confirmed unit economics, robust model fame, and a well-developed provide chain for high-quality lecturers. After almost three years of market penetration, our model has established strong credibility and affect amongst college students in regional markets. Person satisfaction and retention charges proceed to enhance, and our model moat is step by step taking form.
Merely put, we have now developed from a pure on-line service supplier to a completely built-in platform, and that is the elemental and most definitive end result of our transformation. That stated, the offline enterprise has comparatively excessive limitations to entry, together with these associated to administration effectiveness, organizational alignment, and likewise system processes, and most significantly, the provision of top-tier lecturers. We nonetheless have some areas that we have to additional optimize and combine. We’re systematically reviewing and refining, and frequently increase a system to assist the expansion of this phase.
Our upfront investments are centered on strengthening our community footprint, fame, and operational capabilities, and we’re dedicated to capturing higher long-term market area and worth and progressing steadily in the direction of sustainable profitability. We foresee that on the college stage, we will obtain profitability this 12 months, and subsequent 12 months we foresee our offline enterprise to be worthwhile together with the headquarter overhead. I hope that addresses your query, Crystal.
Crystal Li: Thanks, Shannon. That could be very useful.
Operator: As there are not any additional questions, I want to flip the decision again over to the corporate for closing remarks.
Catherine Chen: Thanks, operator, and thanks everybody for becoming a member of the decision as we speak. When you’ve got any additional questions, please don’t hesitate to contact our Investor Relations division through e mail at ir@gaotu.cn immediately. You might be additionally welcome to subscribe to our information alerts on the corporate’s IR web site at ir.gaotu.cn. Thanks very a lot once more in your time. Have an ideal night time.
Operator: This concludes as we speak’s convention name. Thanks.
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Gaotu (GOTU) This fall 2025 Earnings Name Transcript was initially printed by The Motley Idiot
