Summary of Gaotu Techedu Inc. Q2 2026 Earnings Call

1Key Financial Results and Metrics

Net Revenues: Increased by 20.2% year-over-year to approximately CNY 1.7 billion.

Gross Billings: Grew by 19.4% year-over-year to about CNY 2.7 billion.

Adjusted Operating Loss: Narrowed by 38.5% year-over-year to CNY 149.8 million.

Net Loss: Reported at CNY 135.8 million, with a net loss margin of 8.1%.

Cash Flow: Net operating cash inflow rose by 46.3% year-over-year to CNY 861.2 million.

Deferred Revenue: Reached CNY 2.6 billion, an 18.9% increase year-over-year.

Cash Reserves: Totaled nearly CNY 4.0 billion as of June 30, 2026.

2Strategic Updates and Business Highlights

User-Centric Focus: Gaotu emphasized building a comprehensive learning ecosystem that integrates both online and offline services, enhancing user experience and retention.

AI Integration: AI capabilities are being embedded across various business processes, improving efficiency in curriculum development and service delivery.

Offline Business Growth: The offline segment showed strong growth, with a focus on improving operational quality and classroom utilization.

Retention Rates: Improved retention rates for online enrollments, attributed to enhanced service personalization and AI integration.

Share Repurchase Program: The company repurchased nearly 36.5 million ADSs for RMB 741.8 million, signaling confidence in its long-term value.

3Forward Guidance and Outlook

Q3 2026 Revenue Forecast: Expected to be between CNY 1,838 million and CNY 1,858 million, reflecting a year-over-year increase of 16.4% to 17.7%.

Continued Focus: Gaotu plans to prioritize profitable growth, resource allocation, and maintaining high-quality services while leveraging technology for operational efficiency.

4Bad News, Challenges, or Points of Concern

Operating Loss: Despite narrowing, the company continues to report operating losses, which may raise concerns about profitability.

Investment Risks: The offline expansion strategy is cautious, with management indicating that investments are front-loaded and dependent on local demand and operational efficiency.

Market Competition: The education sector remains competitive, and maintaining user trust and brand loyalty is crucial amid evolving market dynamics.

5Notable Q&A Insights

Offline Expansion Strategy: Management highlighted a selective approach to offline expansion, focusing on profitable growth rather than rapid footprint growth. They emphasized the importance of local brand recognition and operational quality in driving profitability.

Resource Allocation: The company is committed to optimizing resources based on performance metrics, potentially eliminating underperforming projects to concentrate on more promising opportunities.

Long-Term Vision: Management reiterated the importance of building user trust through quality education and maintaining a disciplined approach to growth and investment. This summary encapsulates the essential financial metrics, strategic initiatives, future outlook, and challenges faced by Gaotu Techedu Inc. as discussed in the Q2 2026 earnings call.