Gaotu Techedu Inc. (NYSE: GOTU) gained 4.05% in pre-market trading on Thursday after reporting second-quarter revenue that exceeded analyst expectations, despite posting a wider-than-expected loss.
The Beijing-based education technology company posted an adjusted loss of RMB0.57 per American Depositary Share (ADS) for the three months ended June 30, missing the consensus estimate of a RMB0.46 loss. Revenue rose 20.2% year-over-year to RMB1.67 billion, topping the RMB1.62 billion forecast and up from RMB1.39 billion in the same period last year.
The company’s adjusted net loss narrowed 37.6% year-over-year to RMB129.1 million, while its non-GAAP loss from operations declined 38.5% over the same period. Gross billings increased 19.4% to RMB2.69 billion, and net operating cash inflow surged 46.3% to RMB861.2 million. Operating expenses as a percentage of net revenue fell by 7.9 percentage points year-over-year, driven by expanded AI integration across operations.
Gaotu guided third-quarter revenue to a range of RMB1.838 billion to RMB1.858 billion, with a midpoint of RMB1.848 billion, slightly above implied growth expectations for the period. As of August 26, the company had repurchased RMB741.8 million in shares under its ongoing buyback program.
Larry Xiangdong Chen, founder, chairman and CEO, said the company’s investments in educational products, learning services and operational efficiency were improving unit economics. “In the second quarter, net revenues increased by 20.2% year over year to nearly RMB1.7 billion, and non-GAAP loss from operations narrowed significantly by 38.5%,” he stated.
