Gaotu Techedu Inc. (GOTU.US) recently released its Q3 2025 financial results, showcasing robust performance and multi-business synergy, redefining market expectations for the high-quality development of the education and training sector.
Key financial highlights include total revenue of RMB 1.58 billion for Q3, marking a 30.7% year-over-year (YoY) increase, with cash revenue reaching RMB 1.19 billion, up 11.2% YoY. Notably, the company achieved cumulative revenue of RMB 4.46 billion in the first nine months, surging 41% YoY, reflecting sustained, healthy, and high-quality growth.
Gaotu also made a breakthrough in profitability, with adjusted operating losses and adjusted net losses narrowing significantly by 64.6% and 69.9% YoY, respectively. Operating expenses as a percentage of revenue dropped by 27.6 percentage points, while net operating cash outflow decreased by approximately RMB 54.16 million YoY. These metrics collectively outline a clear "efficiency-driven" growth trajectory.
Transforming from a single-subject tutoring provider into a comprehensive education platform catering to lifelong learning needs, Gaotu leverages its "Education + AI" strategy to build a diversified business matrix. This includes K-12 quality education, high school academic planning, university and adult education, international exam and study-abroad consulting, and book publishing. The quarter marked a pivotal inflection point:
- **Youth Quality Education**: The online segment achieved profitability for the first time in a single quarter, with full-year expectations for "meaningful profit margins." Offline channels expanded simultaneously, with the OMO model contributing stable cash flow. - **University & Adult Education**: Revenue grew nearly 50% YoY, with net profit posting high double-digit growth and significant improvements in service satisfaction and user reputation. - **Traditional High School Business**: New student refund rates declined by double digits, labor efficiency rose 20%, and localized course responsiveness strengthened, reinforcing operational resilience.
"We focus on the unit economics of each business while maintaining steady growth," emphasized Gaotu CFO Shen Nan during the earnings call. This "layered management, targeted investment" strategy signals the company’s entry into a refined operational phase.
**AI-Driven Efficiency** Gaotu has deeply integrated AI into teaching, services, and operations. Through intelligent matching, personalized recommendations, and automated scheduling, overall team efficiency improved by 20%, customer acquisition efficiency rose 12.8%, and refund rates declined notably. AI has evolved from a marketing buzzword into a core engine enhancing user experience and operational efficiency.
**Shareholder Value Enhancement** While delivering steady growth, Gaotu continues to strengthen shareholder returns. The company completed its $80 million stock repurchase plan ahead of schedule and launched a new $100 million buyback program in May 2025. As of November 25, Gaotu had repurchased approximately 27.52 million ADSs, totaling nearly RMB 620 million. By the end of Q3, cash and equivalents, along with short- and long-term investments, exceeded RMB 3.04 billion, providing a solid foundation for R&D, faculty development, and business expansion.
**Outlook: Sustainable Growth Over Speed** For Q4 2025, Gaotu projects revenue between RMB 1.628 billion and RMB 1.648 billion, representing 17.2%–18.7% YoY growth. More strikingly, the company has proactively lowered its FY2026 revenue growth target to around 15%, prioritizing "profit quality" over "growth speed."
"Education’s essence lies in service and outcomes, not traffic or valuation," stated Chen Xiangdong, Founder, Chairman, and CEO of Gaotu. "We are creating sustainable long-term value for users, employees, and shareholders by building a strong teacher supply chain, enhancing execution, and leveraging data-driven mechanisms."
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