On June 2, 2026, Gaotu Techedu Inc. (NYSE: GOTU) announced its unaudited financial results for the first quarter ended March 31, 2026. The company's management expressed optimism regarding full-year performance during the subsequent earnings conference call.
Solid Financial Performance Continues Q1 Profitability Trend
The financial report indicates that Gaotu continues to advance steadily on its path of profitable growth. The company's core business segments demonstrated strong performance, with further consolidation of operational quality and long-term capability building.
For Q1 2026, Gaotu generated revenue of RMB 1.69 billion, representing a 13.2% increase year-over-year. This growth was primarily driven by the company's effective capture of robust market demand and the continuous enhancement of product recognition for its teaching products and services. Cash revenue for the same period was RMB 996 million, up 12.1% from the prior year.
In terms of profitability, Gaotu maintained its profitable status this quarter. Operating profit was RMB 6.87 million, and net profit reached RMB 34.51 million. On a non-GAAP basis, net profit for the quarter was RMB 41.42 million. This marks the second consecutive year Gaotu has achieved profitability in the first quarter, demonstrating the company's resilient operations in a complex market environment.
As of March 31, 2026, Gaotu held a total of RMB 3.2648 billion in cash and cash equivalents, restricted funds, short-term investments, and long-term investments, indicating ample cash reserves.
Core Businesses Shine with High School and Non-Academic Segments Advancing Together
Looking at the revenue composition, learning services revenue, which includes non-academic training, traditional learning services, and services for university students and adults, contributed over 95% of total revenue. This highlights the strong revenue-generating capacity of the core education business. Among these, the non-academic business and the traditional learning services for high school students serve as the company's two main pillars, together contributing over 85% of total revenue.
For the non-academic business, Q1 revenue was nearly RMB 670 million, a year-over-year increase exceeding 15%, accounting for nearly 40% of total revenue. Cash revenue for this segment grew over 20% year-over-year, representing more than 35% of total cash revenue. With expanding user scale and maturing operational capabilities, the online segment of this business has remained profitable for two consecutive years. Gaotu continues to deepen the development and refinement of localized courses.
For the traditional high school learning services, Q1 revenue exceeded RMB 760 million, accounting for over 45% of total revenue, and this segment successfully achieved profitability during the quarter. To better address personalized learning needs, Gaotu High School innovatively launched a "1-on-1 exclusive tutoring service" in addition to its existing online large-class model, precisely matching the different learning paces of students. In Q1, the company's 1-on-1 personalized learning business achieved year-over-year growth exceeding 20% in both revenue and cash revenue.
Furthermore, the business targeting university students and adults also performed well, with Q1 cash revenue growing over 15% and accounting for more than 25% of total cash revenue. Within this, the university student learning business saw both cash revenue and revenue grow over 20% year-over-year. The public service exam preparation business also achieved double-digit growth in both revenue and cash revenue, with per capita efficiency steadily improving.
Management Expresses Optimism for Full Year and Offline Expansion
During the earnings call, founder, Chairman, and CEO Larry Chen, COO Bin Luo, Strategy Head Buqing Xu, and Senior Finance Director Jia Yao engaged in in-depth discussions with investors regarding the company's strategy and business progress.
Larry Chen stated, "This quarter, Gaotu continues to progress on the path of profitable growth, with further consolidation of operational quality and long-term capability building."
Commenting on the Q1 performance, COO Bin Luo noted that the education business is significantly influenced by seasonal factors, and the later timing of the Lunar New Year this year had some impact on Q1 teaching models and spring course arrangements.
He emphasized, "We believe that evaluating the company's performance for the first half of the year, as a more complete operational cycle, can more clearly demonstrate our underlying development trend. Based on current execution progress, our profitability and operational efficiency continue to improve, and we remain optimistic about the full-year operational performance."
Positive progress was also reported in offline business expansion. Strategy Head Buqing Xu revealed that the offline business is a crucial component of Gaotu's long-term learning services strategy. It not only helps build deeper local trust but also creates a meaningful second growth curve. Entering 2026, user retention rates for the offline business have steadily increased, and classroom utilization is trending positively. Based on data from the first five months, Gaotu expects cash revenue and revenue from the offline business to maintain relatively strong growth in the first half of the year.
Additionally, Gaotu is actively expanding offline education services for university students. Following the successful validation of the integrated service model at the Zhengzhou Dream Center, the Wuhan Gaotu Dream Center officially opened on April 18, 2026. The company plans to continue its methodical offline expansion to enhance service delivery capabilities across all business lines.
Based on current business performance and the market environment, Gaotu provided the following guidance for Q2 2026: revenue is expected to be between RMB 1.578 billion and RMB 1.598 billion, representing a year-over-year increase of 13.6% to 15%. The company stated it will continue to focus on product adaptation, delivery quality, and resource allocation to drive healthier and higher-quality growth across all business segments.
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