Gaotu Techedu Inc. (NYSE: GOTU) posted third‑quarter 2025 results that show a 30.7% year‑over‑year rise in net revenues to RMB1.579 billion, driven largely by a 40% contribution from its non‑academic tutoring segment and a 10% increase in traditional learning services. The company’s gross billings climbed 11.2% to RMB1.188 billion, reflecting higher enrollment volumes and a shift toward higher‑margin AI‑enhanced courses.
The quarter ended with a non‑GAAP net loss of RMB137.7 million, a 69.9% improvement over the RMB457.2 million loss reported in Q3 2024. Basic and diluted net loss per ADS was RMB0.61, while the non‑GAAP loss per ADS was RMB0.57. The narrowing loss is largely attributable to a 3.7% reduction in operating expenses to RMB1.221 billion, a result of disciplined cost control and the operational efficiencies generated by the company’s “Always AI” platform.
Operating expenses fell 3.7% from RMB1.2686 billion in Q3 2024, driven by a 5% cut in marketing spend and a 7% reduction in research and development costs. The AI‑driven automation of content creation and teacher‑assignment processes has lowered per‑student support costs, allowing the company to maintain a gross margin of 66.1%—up from 64.6% in the same quarter last year. This margin expansion signals that the company’s AI investments are translating into higher profitability even as it continues to invest in growth initiatives.
Management guided for Q4 2025 net revenues of RMB1.628 billion to RMB1.648 billion, a 17.2%–18.7% year‑over‑year increase, and reiterated confidence in sustaining accelerated growth. The guidance reflects expectations of continued demand for AI‑powered tutoring and a modest expansion of offline learning services, which now contribute over 10% of total revenue. The company also reaffirmed its commitment to a share‑repurchase program, having completed an $80 million buyback and launched a new $100 million program.
"For the first time, revenue from offline learning services exceeded 10% of total revenue," said CEO Larry Xiangdong Chen. "Our AI‑driven platform has accelerated user acquisition and improved teacher productivity, enabling us to scale while tightening costs. We remain focused on expanding our omni‑channel strategy and deepening AI monetization across all segments," he added. CFO Nan Shen highlighted that the company’s cost‑control measures and AI efficiencies are key to moving toward profitability, noting that operating expenses as a percentage of net revenues fell by 27.6 percentage points year‑over‑year.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.