At the recent "2025 Influential Entrepreneurs Annual Meeting," Gaotu Techedu Inc. founder, chairman, and CEO Chen Xiangdong delivered a keynote speech titled "Resilient Growth," outlining his core philosophy on how businesses can navigate cycles and achieve sustainable growth. The speech not only aligned with Gaotu's recently announced strategic direction during its earnings call—prioritizing "profitability" as the core goal for fiscal year 2026—but also revealed the deeper logic behind the edtech company's shift from rapid expansion to high-quality development.
**From "Seeing" to "Believing": Strategic Resolve Amid Change** Chen emphasized that resilience is not just the ability to persevere through adversity but also the wisdom to maintain recovery and intrinsic joy during prosperous times. Reflecting on Gaotu's journey, he acknowledged that fluctuations prompted the team to repeatedly ask: "What do we truly want in this lifetime?" During his address, Chen reconsidered the widely cited entrepreneurial mantra "Believe it to see it," advocating instead for a simpler yet more pragmatic logic: "See it to believe it." True strategic resolve, he argued, stems not from blind faith but from a clear "vision" of trends, technological shifts, and market dynamics. This ability to "see farther and more accurately" defines an entrepreneur's core insight. Looking back at Gaotu's founding, Chen noted that such "vision" drove action. In 2014, as mobile internet surged and audio-video technology matured, his background in electronics and over a decade in education enabled him to spot the transformative potential of tech-ed integration. Rather than waiting for belief to inspire a vision, he swiftly assembled a livestreaming team and pioneered the online large-class model—a move that propelled Gaotu from near-payroll crises to a U.S. IPO within five years. Chen observed that today’s "unprecedented transformation," marked by AI disruption and China’s push for "high-quality development," has rendered traffic- and scale-driven growth obsolete. Businesses must reassess their era’s foundational structures. "Without mobile internet, no matter how skilled I was, Gaotu wouldn’t exist," he remarked, urging entrepreneurs to ask: "What defines our current era? Has your growth paradigm been reinvented?"
**Six Pillars: The Framework for High-Quality Growth** Expanding on "resilient growth," Chen detailed his framework. True resilience, he asserted, stems not from slogans but from clear-eyed realism and systemic capability-building. First, businesses must acknowledge outdated models and embrace new paradigms. AI, he stressed, is not merely a tool but a structural revolution demanding holistic adjustments in products, organization, and operations. Second, foresight is rooted in continuous learning. For most, "Believe it to see it" is self-delusion; reality follows "See it to believe it." "Seeing" hinges on deeper, sharper insights into trends, tech, and user needs. Third, companies should adopt Sun Tzu’s "victorious warriors win first" philosophy. Gaotu’s breakout during education’s hyper-competition came from pioneering livestreamed large-classes and channel innovation to sidestep red oceans. Chen cautioned, however, that direction outweighs effort. Misaligned goals compound errors, even with top talent. Leaders must first "clarify objectives" before "hiring people"—a reinterpretation of "people first." Leadership, he added, is not about authority but authenticity, service, and learning. Only honesty reveals flaws; humility builds trust; continuous learning steers organizations through uncertainty. Finally, ideas must yield results. Chen highlighted "accounting" as critical—essentially "fair profit-sharing." Employees join firms for above-market returns. Granular, AI-powered unit-level accounting energizes organizations for sustainable profits. These six interlinked pillars form Gaotu’s blueprint from survival to prosperity.
**Earnings Validation: Triple Profitability, OMO Gains Traction** Chen’s vision aligns with Gaotu’s latest results. Its Q3 2025 revenue hit ¥1.58 billion (up 30.7% YoY), with nine-month revenue at ¥4.46 billion (up 41%). Crucially, the firm now prioritizes profitability for FY2026. Gaotu has transitioned from K12-only to a diversified education ecosystem. Learning services (95% of revenue) saw non-academic youth programs and high school planning surge 55%, with online non-academic courses turning profitable this quarter. Adult education revenue exceeded ¥237 million, with cash income and net profit posting double-digit growth. College-focused revenue jumped nearly 50%, with high double-digit profit gains. Offline learning revenue surpassed 10% of total income (¥158 million), aided by localized curricula, AI-enhanced teaching, and operational maturity. Refund rates fell by double digits, and per-capita efficiency rose 20%.
**From Survival to Thriving: Resilient Growth in Action** "The future’s ‘fruit’ depends on today’s ‘seeds,’" Chen reiterated. Gaotu now executes this "begin-with-the-end" mindset: scaling back growth-at-all-costs for unit economics, swapping cash burns for product excellence, organizational strength, and profit discipline. By 2025’s close, Gaotu has evolved from a K12 leader to a multi-faceted platform spanning youth development, high school planning, adult education, and international programs. FY2026 will test its "high-quality profitability" strategy. Management targets 15% revenue growth for FY2026, emphasizing sustainable net profits and operating cash flow. "Mature businesses focus on scalable delivery and margins; early-stage ones refine products and user experience," Gaotu explained. As Chen concluded: "Next year, you’ll see a different Gaotu; the year after, even clearer." What’s emerging is not just a business map but cycle-proof, long-term resilience—a testament to rational, authentic, and systemic "resilient growth" in uncertain times.
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