Gaotu Techedu (GOTU) Q1 2025 earnings summary

Executive summary

• Revenue grew 58% year-over-year to nearly RMB 1.5 billion in Q1 2025, surpassing expectations and driven by strong market demand and improved product recognition.

• Net income reached RMB 124.0 million, reversing a prior year loss, with non-GAAP net income at RMB 137.3 million and a 9.2% margin.

• Operating profit was RMB 34.8 million, and non-GAAP net income surged 4,419.2% year-over-year.

• Significant progress in AI integration, product innovation, and organizational efficiency fueled user growth and profitability.

• Board approved a new $100 million share repurchase program over three years, following RMB 136 million in Q1 buybacks.

Financial highlights

• Revenue increased 58% year-over-year to nearly RMB 1.5 billion in Q1 2025.

• Gross profit rose 54% year-over-year to over RMB 1.0 billion, with a gross margin of 69.7%.

• Operating profit reached RMB 34.8 million, compared to a loss of RMB 77.7 million a year ago.

• Deferred revenue exceeded RMB 1.4 billion, up 44% year-over-year.

• Cash, cash equivalents, and investments totaled about RMB 3.5 billion as of March 31, 2025.

Outlook and guidance

• Q2 2025 net revenues expected between RMB 1,298 million and RMB 1,380 million, up 28.5% to 33.5% year-over-year.

• Full-year 2025 expected to deliver industry-leading growth and improved profitability, supported by a larger user base and offline business expansion.

• Profitability in each quarter of 2025 projected to improve significantly over the prior year.