Gaotu Techedu (GOTU) investor relations material

Executive summary

• Net revenues grew 13.2% year-over-year to approximately RMB 1.7 billion in Q1 2026, reflecting strong market demand and improved product recognition.

• Non-GAAP net profit reached RMB 41.4 million, with a non-GAAP net profit margin of 2.5%, and adjusted net profit was RMB 93 million for Q1 2026.

• Cash, cash equivalents, and investments totaled nearly RMB 3.3 billion as of March 31, 2026, supporting ongoing investments and share repurchases.

• Share repurchases totaled RMB 704 million (13.9% of outstanding shares or 33.1 million ADSs) as of June 1, 2026.

• AI integration enhanced operational efficiency, user experience, and scalable growth, with a focus on profitable growth, operational efficiency, and long-term value creation.

Financial highlights

• Gross profit rose 12.9% year-over-year to nearly RMB 1.2 billion, with a gross margin of 69.5%.

• Total operating expenses increased 16.1% year-over-year to nearly RMB 1.2 billion, mainly due to higher marketing and workforce costs.

• Net income was RMB 34.5 million (2.0% margin); non-GAAP net income was RMB 41.4 million (2.5% margin), both down year-over-year.

• Deferred revenue reached nearly RMB 1.8 billion, up 24.1% year-over-year, providing visibility for future quarters.

• Net operating cash outflow increased 73.6% year-over-year to RMB 828.4 million.

Outlook and guidance

• Q2 2026 net revenue expected between RMB 1,578 million and RMB 1,598 million, up 13.6%-15.0% year-over-year.

• Management remains confident in continued operational quality improvement and sustainable, high-quality growth driven by technology, AI, and personalized learning.

• Continued investment in product diversification and smart learning tools to address broad-based user needs.