Gaotu 2025 Q3 Earnings Report: Continuous Improvement in Operating Quality, Revenue Grows by 30.7%, New $100 Million Share Repurchase Program Initiated

On November 26, 2025, Gaotu Group (NYSE: GOTU) released its financial report for the third quarter of the fiscal year 2025.

The earnings report shows that, as of September 30, 2025, Gaotu achieved revenue ofRMB 1.58 billion, representing a year-over-year increase of30.7%; cash revenueRMB 1.19 billion, representing a year-over-year increase of11.2%。

Meanwhile, as of September 30, 2025, Gaotu achieved revenue of RMB 4.46 billion in the first nine months, with cash receipts ofRMB 4.46 billion, representing a year-over-year increase of41.0%cash receiptsRMB 4.33 billion, representing a year-over-year increase of25.4%。

Gaotu announced the early completion of its original USD 80 million share repurchase plan and has initiated the use of a new USD 100 million repurchase program.USD 100 millionrepurchase plan. As of November 25, 2025, the company has cumulatively repurchased approximately27.52 millionAmerican Depositary Shares under the two aforementioned share repurchase plans, with a total amount close toRMB 620 million。

Chen Xiangdong, founder, chairman, and CEO of Gaotu Group, stated: 'We continue to focus on user needs as our core, building a product and service system that covers the entire life cycle,promoting the deep integration of online and offline services, and accelerating the implementation of AI across the entire process of teaching, services, and operations. This creates differentiated value that combines scale efficiency with personalized experiences.This quarter, revenue increased by 30.7% year-over-year to RMB 1.58 billion, while adjusted operating loss and adjusted net loss narrowed significantly by 64.6% and 69.9% respectively, demonstrating steady improvements in growth quality and profitability. The financial position remains robust; after excluding stock repurchase expenditures, cash reserves still achieved year-over-year growth. In terms of shareholder returns, the share repurchase program approved in 2022 and increased to USD 80 million in 2023 has been successfully completed, and the new USD 100 million repurchase plan approved by the board in May this year has also been officially launched.Gaotu is continuously enhancing its growth and profitability certainty by creating a more competitive supply chain of excellent teachers, strengthening execution capabilities, and adopting data-driven management mechanisms, thereby delivering sustainable long-term value to users, employees, and shareholders.”

CFO of Gaotu Group, Shen Nan, stated, 'While achieving solid revenue growth, we have further strengthened our operational quality. Operating expenses as a percentage of revenue significantly decreased by 27.6 percentage points, customer acquisition efficiency improved by 12.8%, and net operating cash outflow narrowed by approximately RMB 54.16 million year-over-year. Structural efficiency gains are beginning to show consistent results. Deferred revenue reached RMB 1.77 billion, up 23.2% year-over-year, providing visibility for revenue in subsequent quarters.'We will always adhere to driving growth through the improvement of unit economic model health and enhance operational quality and resilience by refining teaching products, building teacher resources systems, and strengthening brand perception.'”

Highlights of the financial report: sustained healthy revenue growth, improved operational efficiency and quality

Sustained healthy revenue growth:Revenue reached RMB 1.58 billion, a 30.7% increase from the same period last year, driven by an efficient and full response to robust market demand, achieving continuous year-on-year growth; meanwhile, high-quality teaching products and services further enhanced market recognition of the products.

Significant narrowing of losses:Adjusted operating loss and adjusted net loss narrowed significantly by 64.6% and 69.9% respectively year-over-year, with the adjusted net loss ratio improving by 29.1 percentage points year-over-year, demonstrating steady improvement in growth quality and profitability, laying a solid foundation for sustainable growth.

Improved operational efficiency and quality:The proportion of operating expenses to revenue narrowed significantly by 27.6 percentage points, summer customer acquisition efficiency increased by 12.8% year-over-year; net cash outflow from operations narrowed by nearly RMB 54.16 million year-over-year. This marks a continuous improvement in the company's level of operational management and service delivery precision, significantly enhancing customer satisfaction and brand reputation.

Adequate cash reserves:As of September 30, 2025, the company holds a total of over RMB 3.04 billion in cash and cash equivalents, restricted cash, short-term investments, and long-term investments. The abundant cash reserves provide strong financial support for attracting top industry talent, deepening investment in technology R&D and curriculum innovation, and accelerating business expansion, continuously empowering the enhancement of the company’s core competitiveness and innovation capabilities.

Deferred Revenue Growth:Deferred revenue reached RMB 1.77 billion, representing a year-on-year increase of 23.2%. This reflects the sustained market demand for educational services and provides visibility for revenue in subsequent quarters.

Launch of New Share Repurchase Program:In May 2025, the company's board of directors approved a new share repurchase program (“2025 Repurchase Program”). Under this program, the company is authorized to repurchase up to USD 100 million worth of shares over a three-year period starting from the conclusion of the previous repurchase program, which was initially approved in 2022 and increased to USD 80 million in 2023. As of November 25, 2025, the company has cumulatively repurchased approximately 27.52 million American Depositary Shares under these two repurchase programs, amounting to nearly RMB 620 million.

Performance Outlook:Based on current forecast data, revenue for the fourth quarter of 2025 is expected to range between RMB 1.628 billion and RMB 1.648 billion, with a year-on-year growth rate estimated to be between 17.2% and 18.7%.

Remarkable achievements across multiple business segments

Driven by the core engine of “Education + AI,” Gaotu has built a diversified business matrix covering K-12 quality education, high school academic planning, college student and adult learning, international examination and study abroad consulting, and book publishing through the deep integration of online and offline platforms. Leveraging intelligent technologies, Gaotu delivers personalized learning experiences to meet the needs of users across all age groups.

After continuous cultivation and development, Gaotu’s various business segments have entered a phase of high-quality growth. Empowered comprehensively by AI, teaching outcomes and service experiences across all business lines have significantly improved, forming unique competitive advantages and demonstrating sustained growth potential.

Among these, the youth-focused quality education business provides a diverse range of courses through dual delivery channels of online and offline services, aiming to comprehensively develop children’s overall capabilities. This business has maintained positive momentum, with its online operations achieving profitability for the first time in the third quarter. It is expected to achieve meaningful profitability for the full year.

In its traditional business areas, Gaotu remains committed to addressing the genuine needs of users by actively investing in localized courses and services. This quarter, the new student refund rate decreased by double digits; driven by enhanced team maturity and AI empowerment, overall labor efficiency improved by 20%.

In the college student and adult education business segment, both revenue and collections have achieved dual growth while attaining profitability for a single quarter. Taking the college student learning business as an example, through continuous optimization of teaching quality and service experience, as well as comprehensive measures such as increasing the proportion of postgraduate-level instructors, overall service satisfaction and user reputation have significantly improved. This quarter's revenue grew nearly 50% year-over-year, with profits achieving high double-digit growth, markedly enhancing overall operational efficiency.

Gaotu places high importance on the cultivation of educational talent, regarding 'good teachers' as the core of quality. The company continues to build a systematic 'good teacher supply chain' to ensure teaching quality from the source. Through an integrated mechanism of rigorous selection, systematic training, scientific certification, and continuous empowerment, Gaotu comprehensively enhances teachers’ professional capabilities and innovative potential, strengthening the core competitiveness essential for sustainable enterprise development.

Unwavering commitment: Continuous investment and empowerment in AI

Amidst the wave of deep integration between AI and education, Gaotu is advancing the “All with AI, Always AI” strategy with firm steps, deeply embedding artificial intelligence into the entire process of Gaotu’s educational services.

AI technology is applied across various business scenarios, ranging from customer acquisition, consultation conversion, classroom instruction, to after-class Q&A. Whether online or offline, large classes, small classes, or one-on-one sessions, AI has comprehensively enhanced the efficiency and quality of Gaotu’s educational services.

Currently, Gaotu has launched several mature AI products. 'MaoDou AI Classroom' achieves a high degree of integration between AI and human interaction; the new IP 'Gao Xiao Tu' delivers high-quality teaching content via AIGC; it provides 'human-level' AI diagnostics and explanations to enhance teaching outcomes; tailored to the preparation needs of adult learners, 'AI Smart Study Exam Planner' designs study schedules; 'Whale AI Context Vocabulary Learning' adopts a human-machine collaborative learning model, helping students understand and memorize words in context.

On the infrastructure front, Gaotu collaborates with Feishu, utilizing its intelligent agent development platform to optimize business systems, and partners with Tencent Cloud to enhance data processing capabilities. Additionally, Gaotu has established an AI Education Research and Development Center in Shanghai to drive innovation in large-scale educational models and implement smart learning centers.

To deepen industry-academia-research cooperation, Gaotu has established a joint laboratory with the Gaoling School of Artificial Intelligence at Renmin University of China and is collaborating with the AI Innovation and Industry Research Institute at Fudan University to develop personalized large language model agents for education, aiming to improve teaching quality. Regarding talent cultivation, Gaotu has initiated its 2026 Global Campus Recruitment campaign, covering world-renowned institutions such as the University of Hong Kong, the Chinese University of Hong Kong, the Hong Kong University of Science and Technology, Tsinghua University, and Peking University, focusing on recruiting AI technical talent to strengthen its AI talent pool.

Today, AI has become a powerful tool for all Gaotu employees. To promote mastery of AI skills across the organization, Gaotu hosts multi-season AI application competitions, encouraging employees to utilize AI tools. This not only boosts organizational efficiency but also fosters a corporate culture of AI-driven innovation.

While advancing its AI strategy, Gaotu consistently adheres to the principle of 'education as the foundation, technology as the tool,' emphasizing the role of technology in supporting teaching. The company maintains a balance between technological innovation and the essence of education, providing valuable practices for the exploration of AI in the education sector.

Collaborating to continuously expand the business ecosystem

Gaotu has consistently expanded its industry partnerships by building diversified 'circles of friends' and 'business networks,' enriching the educational ecosystem and driving service innovation and upgrades.

In the field of sports, Gaotu has become the official learning partner of China's national gymnastics, rhythmic gymnastics, and trampoline teams, extending the ecosystem of national team learning partnerships to six teams and covering both aquatic and land-based sports scenarios. Gaotu will provide athletes with language, literacy, and psychological teaching services to support their comprehensive development. The original program 'Champions at Gaotu,' launched between July and September, authentically documents the learning conditions of athletes, emphasizing the concept of balancing training and learning, thereby enhancing brand influence.

In international education, starting from July, Gaotu has collaborated with multiple official test centers of Cambridge University Press and Assessment, achieving deep synergy in language evaluation and educational resource integration. To date, Gaotu has signed an agreement with the Standardized Comprehensive Scholastic Aptitude Test (CSSAT) organizing committee to jointly build an ecosystem of 'scientific assessment and quality teaching,' offering students a more comprehensive growth solution.

In cross-sector collaborations, in September, Gaotu partnered with Wolverhampton Wanderers Esports Club to pioneer an 'education plus esports' model for cultivating international talent, supporting the rise of Chinese esports on the global stage.

Meanwhile, in mental health services, in August, Gaotu Psychology co-hosted a youth mental health seminar with Jingxin Healthcare, addressing four core issues to explore solutions and enhance the mental health service system for adolescents.

Through a series of strategic partnerships, Gaotu is expanding its business boundaries with a more open mindset, constructing an educational ecosystem that spans sports competition, international education, mental health, and more, continuously driving innovation and development in the 'education+' model.

Walking alongside with warmth, education builds the future through philanthropy

Education and philanthropy are inherently connected. With the mission of 'empowering more people,' Gaotu deeply integrates philanthropy into its corporate development, actively fulfilling social responsibilities and conveying the warmth of education.

In terms of supporting rural education, in August, the Gaotu Public Welfare Foundation, in collaboration with the Beijing Normal University Education Foundation, launched the 'The Making of a Good Class' rural teacher empowerment project. The initiative brought together 50 rural teachers from 12 provinces across China for an intensive four-day training program at Beijing Normal University, focusing on enhancing teaching capabilities and promoting educational equity and quality improvement.

In terms of emergency disaster relief, during the critical flood prevention period at the end of July, the Gaotu Public Welfare Foundation, in partnership with the China Rural Development Foundation, delivered the first batch of emergency relief supplies overnight to Yanqi Town in Huairou, Beijing, providing timely assistance and psychological support to affected residents.

Through these pragmatic actions, Gaotu has not only extended high-quality educational resources to a broader population but also earned user trust and societal recognition, achieving a positive interaction between public welfare value and corporate development.

Looking ahead, the integration of 'education + AI' is driving profound transformations in education. Gaotu actively embraces this trend by leveraging AI technology to empower personalized learning and enhance teaching efficiency, making high-quality education more accessible and efficient.

As we look to the future, Gaotu will remain committed to its original mission in education, using technology as the oar and responsibility as the sail. Through continuous technological innovation and value回馈, it aims to advance educational progress while achieving greater commercial and social value, moving toward a future that is more creative, inclusive, and vibrant.

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