Financial Data and Key Metrics Changes - The gross billings increased by 67.2% year-over-year to approximately RMB 1.1 billion, while revenue grew by 53.1% year-over-year to over RMB 1.2 billion [10] - As of September 30, 2024, the deferred revenue balance increased by 89.0% year-over-year to over RMB 1.4 billion [25] - The company held over RMB 3.3 billion in cash, cash equivalents, restricted cash, and short-term and long-term investments [13][39] - The net loss for the quarter was RMB 471.3 million, with a net income margin of negative 39.0% [38] Business Line Data and Key Metrics Changes - Learning services contributed 95% of net revenues, with over 75% coming from non-academic children's services and other traditional learning services, representing a 70% increase year-over-year [28] - New initiatives in non-academic tutoring services saw gross billings surge by over 200% year-over-year [30] - Educational services for college students achieved high double-digit year-over-year revenue growth, contributing under 20% of total revenues [34] Market Data and Key Metrics Changes - The company reported significant growth in customer acquisition capabilities, maintaining industry-leading efficiency through live streaming and other channels [16] - The referral rate of educational services for college students achieved a significant breakthrough, indicating growing brand recognition [15] Company Strategy and Development Direction - The company is focused on enhancing educational products and services through advanced technology integration and talent development [11][14] - A multi-tiered educational support system has been established to meet diverse student needs, alongside the rollout of the Dream Coach program [15] - The company aims to build a robust traffic acquisition system to support long-term growth while maintaining social responsibility [18][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the psychological consulting segment and the impact of subdued economic growth on consumer spending [46][48] - The company plans to balance investment scaling and profitability, focusing on expanding the profit base and improving operating profit margins in 2025 [49][50] - Revenue growth is expected to peak in the fourth quarter of 2024, with total net revenues projected between RMB 1,288 million and RMB 1,308 million, representing a year-over-year increase of 69.2% to 71.9% [42] Other Important Information - The company allocated over RMB 120 million for share buybacks, demonstrating commitment to shareholder returns [12] - Total operating expenses increased by 89.1% year-over-year to approximately RMB 1.3 billion, with selling expenses accounting for 73.3% of net revenues [36] Q&A Session Summary Question: Growth guidance for different business segments and 2025 outlook - Management noted deviations from initial expectations due to adjustments in the psychological consulting segment and challenges in traditional education services [46] - Looking ahead to 2025, the company will focus on balancing investments and profitability, expecting steady growth in gross billings and revenues with reduced losses [50]

Revenue Growth - Net revenues increased by 53.1% to RMB1,208.3 million in Q3 2024 compared to RMB789.4 million in Q3 2023[3] - Net revenues for the three months ended September 30, 2024, were RMB1,208,253 thousand, a 53.1% increase compared to RMB789,413 thousand in the same period of 2023[41] - Net revenues for the nine months ended September 30, 2024, were RMB3,164,935 thousand, a 43.9% increase compared to RMB2,199,799 thousand in the same period of 2023[41] - Net revenues for the three months ended September 30, 2024, increased to RMB 1,208,253 (USD 172,175), up from RMB 789,413 in 2023[43] - Total net revenues for Q4 2024 are expected to be between RMB1,288 million and RMB1,308 million, representing a year-over-year increase of 69.2% to 71.9%[26] Gross Billings - Gross billings increased by 67.2% to RMB1,069.2 million in Q3 2024 compared to RMB639.3 million in Q3 2023[3] - Gross billings for the nine months ended September 30, 2024, reached RMB 3,452,211 (USD 491,936), compared to RMB 2,060,618 in 2023[43] Profit and Loss - Net loss widened to RMB471.3 million in Q3 2024 from RMB57.7 million in Q3 2023[3] - Non-GAAP net loss increased to RMB457.2 million in Q3 2024 from RMB41.7 million in Q3 2023[4] - Net loss for the three months ended September 30, 2024, was RMB471,273 thousand, compared to a net loss of RMB57,663 thousand in the same period of 2023[41] - Net loss for the nine months ended September 30, 2024, was RMB913,120 thousand, compared to a net income of RMB112,351 thousand in the same period of 2023[41] - Non-GAAP net loss for the three months ended September 30, 2024, was RMB 457,195 (USD 65,150), compared to a loss of RMB 41,729 in 2023[44] - Non-GAAP income from operations for the nine months ended September 30, 2024, showed a loss of RMB 991,635 (USD 141,307), compared to a profit of RMB 81,583 in 2023[44] Gross Profit - Gross profit margin decreased to 64.4% in Q3 2024 from 72.4% in Q3 2023[11] - Gross profit for the three months ended September 30, 2024, was RMB778,462 thousand, a 36.3% increase from RMB571,287 thousand in the same period of 2023[41] - Gross profit for the nine months ended September 30, 2024, increased to RMB 2,150,297 (USD 306,415), up from RMB 1,637,311 in 2023[44] - Non-GAAP gross profit for the three months ended September 30, 2024, was RMB 780,727 (USD 111,253), up from RMB 572,809 in 2023[44] Operating Expenses - Operating expenses increased by 89.1% to RMB1,268.6 million in Q3 2024 from RMB670.8 million in Q3 2023[12] - Total operating expenses for the three months ended September 30, 2024, were RMB1,268,569 thousand, an 89.1% increase compared to RMB670,828 thousand in the same period of 2023[41] Cash Flow and Liquidity - Net operating cash outflow increased to RMB714.4 million in Q3 2024 from RMB209.9 million in Q3 2023[4] - Cash and cash equivalents increased from RMB636,052 thousand in December 2023 to RMB855,815 thousand in September 2024, representing a 34.5% increase[37] - Total current assets decreased from RMB3,586,707 thousand in December 2023 to RMB2,954,739 thousand in September 2024, a 17.6% decline[37] Deferred Revenue - Deferred revenue balance increased by 89.0% year-over-year to over RMB1.4 billion as of September 30, 2024[8] - Ending deferred revenue for the three months ended September 30, 2024, increased to RMB 1,439,217 (USD 205,087), up from RMB 761,301 in 2023[43] Cost of Revenues - Cost of revenues increased by 97.1% to RMB429.8 million in Q3 2024 from RMB218.1 million in Q3 2023[10] Non-GAAP Metrics - Non-GAAP gross profit, non-GAAP income (loss) from operations, and non-GAAP net income (loss) exclude share-based compensation expenses, providing meaningful supplemental information for assessing performance and liquidity[32] - Share-based compensation expenses for the nine months ended September 30, 2024, were RMB 40,924 (USD 5,832), up from RMB 42,674 in 2023[44] Exchange Rate - The exchange rate used for RMB to USD conversion is RMB7.0176 to USD1.0000, based on the effective noon buying rate for September 30, 2024[35] Other Revenues and Taxes - Other revenues for the nine months ended September 30, 2024, were RMB 117,081 (USD 16,684), compared to RMB 62,675 in 2023[43] - VAT and surcharges for the nine months ended September 30, 2024, increased to RMB 192,049 (USD 27,367), up from RMB 134,492 in 2023[43]

Core Viewpoint - Gaotu Techedu Inc. reported significant growth in net revenues and gross billings for the third quarter of 2024, despite increasing operational losses, indicating a strong market demand and strategic investments in educational services [1][2][4]. Financial Performance - Net revenues for Q3 2024 reached RMB 1,208.3 million, a 53.1% increase from RMB 789.4 million in Q3 2023 [2][3]. - Gross billings for Q3 2024 were RMB 1,069.2 million, up 67.2% from RMB 639.3 million in the same period last year [2][3]. - The company reported a loss from operations of RMB 490.1 million, compared to a loss of RMB 99.5 million in Q3 2023, marking a 392.4% increase in operational losses [2][3][12]. - Net loss for Q3 2024 was RMB 471.3 million, a significant increase from a net loss of RMB 57.7 million in Q3 2023, reflecting a 717.3% rise in losses [2][3][15]. - Non-GAAP net loss was RMB 457.2 million, compared to a non-GAAP net loss of RMB 41.7 million in the same quarter of 2023, indicating a 995.6% increase [2][3][16]. - Net operating cash outflow was RMB 714.4 million, compared to RMB 209.9 million in Q3 2023, representing a 240.3% increase in cash outflow [2][3][17]. Operational Insights - The company allocated over RMB 120 million for share buybacks, demonstrating a commitment to shareholder returns [6]. - As of September 30, 2024, Gaotu had over RMB 3.3 billion in cash and equivalents, providing a solid foundation for future growth [6][20]. - The deferred revenue balance increased by 89.0% year-over-year to over RMB 1.4 billion, indicating strong future revenue potential [6]. Strategic Outlook - The company anticipates Q4 2024 net revenues to be between RMB 1,288 million and RMB 1,308 million, reflecting a year-over-year increase of 69.2% to 71.9% [23]. - The growth in revenues is attributed to a robust market demand, particularly during the summer vacation period, leading to increased student enrollments and market share [6][23].

Investment Rating - The report maintains a **Buy** rating for Gaotu Techedu (GOTU US) with a target price of **$4.60**, representing a potential upside of **76.9%** from the current price of **$2.60** [1][4] Core Views - Gaotu Techedu's business restructuring and marketing strategy adjustments are expected to show results by **2025**, with potential cost savings of **RMB 100 million** from operational efficiency improvements [1][2] - The company's **K12 business** is expected to maintain a strong growth trajectory, with **70%+ YoY growth** in Q3 2024, driven by strong demand and effective student retention strategies [1] - The **adult education segment** is undergoing strategic downsizing, with revenue expected to remain flat in Q3 2024, a downgrade from the previously expected **10%+ growth**, resulting in a **RMB 30 million reduction** in revenue [1] - The company's **K9 business** is projected to grow by **150%+** in 2024, exceeding previous expectations, while the adult education segment is expected to see a **low single-digit decline** in Q4 2024 [2] - Despite strong revenue growth, the company is expected to face **operating losses** of **RMB 1.27 billion** in 2024, with a **loss margin of 28%**, due to increased marketing expenses and ongoing business adjustments [2] Financial Performance - **Revenue** is expected to grow by **50% YoY** in 2024, reaching **RMB 4.454 billion**, driven by strong performance in the K12 and K9 segments [2][3] - **Net loss** is projected to widen to **RMB 1.075 billion** in 2024, compared to a net profit of **RMB 51 million** in 2023, due to higher operating costs and business restructuring [3] - The company's **gross margin** is expected to decline to **64%** in Q3 2024, down **8 percentage points YoY**, primarily due to the impact of reduced revenue from the adult education segment [1] - By **2025**, the company expects to achieve a **profit margin** of **10-15%**, driven by improved operational efficiency and reduced marketing expenses [2] Valuation - The target price of **$4.60** is based on a **15x P/E ratio** for the online education business, reflecting the company's expected profitability recovery by 2025 [2] - The valuation has been adjusted downward from the previous target of **$6.50** due to ongoing business restructuring and increased marketing investments [2] Market Performance - Gaotu Techedu's stock has experienced a **28.18% decline** year-to-date, with a **52-week high of $8.35** and a **52-week low of $2.35** [6] - The company's **market capitalization** stands at **$386.10 million**, with an average daily trading volume of **0.67 million shares** [6]

BEIJING, Nov. 19, 2024 /PRNewswire/ -- Gaotu Techedu Inc. ("Gaotu" or the "Company") (NYSE: GOTU), a technology-driven education company and online large-class tutoring service provider in China, today announced that it will report its financial results for the third quarter ended September 30, 2024, before U.S. markets open on Wednesday, December 4, 2024.Gaotu's management will hold an earnings conference call at 8:00 AM U.S. Eastern Time on Wednesday, December 4, 2024 (9:00 PM on the same day, Beijing/Hon ...

I published my initial investment thesis on Gaotu Techedu (NYSE: GOTU ) in September of 2023. It has been more than a year since the publication of the thesis. GOTU’s investors have gone through a roller-coaster ride since then. TheI am the co-founder and portfolio manager for a multi-family office with a focus on U.S and Asia markets. I have a bachelor's and master's degree in accounting and finance from one of the top programs in the U.S. I am a CFA Charterholder. Prior to starting on my own, I worked as ...

资料来源:公司资料,第一上海预测 资料来源:彭博 高途（GOTU.US） 更新报告 收入增长超预期，投入加大利润承压 FY24Q2 业绩概览：截止 24 年 6 月 30 日，公司 FY24Q2 同比+38.7% 至 10.09 亿人民币（下同），高于此前公司业绩指引（9.08-9.28 亿 元）。Non-GAAP 经营利润-4.53 亿元，去年同期为盈利 0.50 亿元； Non-GAAP 净 利 润 为 -4.18 亿 元 ， 去年同 期 -4.15 亿 元 。 截 至 FY2024Q2，公司在现金储备为 41 亿元，无有息负债。按可比口径现金 收款同比增长超过 87%，达 16.5 亿元。 K9 业务实现高增长，占比首次超 20%：分业务看，FY24Q1 公司 非学科培训及高中业务（K12 业务）占比总体超 75%，占据主要地位， 收入同比超过 55%，其中 K9 非学科辅导的收入和可比口径现金收款同 比增长均超 100%，来自新生的可比口径现金收款同比增长超过 200%， K9 业务收入占比首次超过 20%；成人及大学生业务收入占比少于 20%， 收入同比增长约为 10%。 FY24Q3 公司指引：F ...

Tom Werner I last wrote about Gauto Techedu in August after Chinese government issued a guideline aimed at boosting consumption and services including tutoring services. What’s interesting is that GOTU’s Q2 earnings results, which were released on Tuesday, August 27th before the bell, actually validated my thesis. However, the stock nosedived almost 19% after the earnings release for two days in a row, most likely due to the much wider-than-expected adjusted net losses. I think the price action could als ...

交银国际研究 公司更新 | --- | --- | --- | |-----------|------------|----------| | 收盘价 | 目标价 | 潜在涨幅 | | 美元 3.31 | 美元 6.50↓ | +96.4% | 高途 (GOTU US) 2 季度收入超预期，行业需求仍将继续拉动收入增长 2024 年 2 季度业绩：收入同比增 44%至 10 亿元（人民币，下同），高于 我们/彭博市场预期2%/3%。因收入结构变化，毛利率同比下降5个百分点 至 69%。调整后运营亏损 4.5 亿元，亏损率 45%，与我们预期基本一致。 调整后营销费用跟随强劲的收款增长和暑期获客投入同比增 158%，占收 比提升至 37%，行政费用同比增 209%，因低基数以及加速开设校区和拓 展业务导致相关人员薪酬上升，均符合我们此前预期。调整后净亏损 4.2 亿元，对比我们/彭博市场预期的 3.8 亿元亏损。 2 季度业绩要点：1）现金收款同比增 87%，高于我们预期的增速 82%， K12 占比 85%+，实现翻倍增长；2）K12 收入同比增 55%+，其中非学科三 位数增长，贡献总收入 20%+，同比提 ...

Gaotu Techedu Inc. (NYSE:GOTU) Q2 2024 Earnings Conference Call August 27, 2024 8:00 AM ET Company Participants Catherine Chen - Head, Investor Relations Larry Chen - Founder, Chairman & Chief Executive Officer Shannon Shen - Chief Financial Officer Conference Call Participants Alice Cai - Citibank Timothy Zhao - Goldman Sachs Crystal Li - CMS Operator Ladies and gentlemen, thank you for standing by, and welcome to the Gaotu Techedu Second Quarter 2024 Earnings Conference Call. All participants will be in a ...