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Mar 31, 2025
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Gaotu Q1 2025 Earnings Report
Gaotu reported strong revenue and profitability growth, achieving a net income of RMB124.0 million and a 57.7% increase in revenue year-over-year.
Key Takeaways
In Q1 2025, Gaotu delivered robust financial performance with a 57.7% YoY increase in revenue, a return to profitability with RMB124.0 million in net income, and continued operational improvements. The company also announced a new share repurchase program worth $100 million.
Revenue rose 57.7% YoY to RMB1.493 billion.
Net income reached RMB124.0 million, reversing a loss from the prior year.
Non-GAAP net income surged to RMB137.3 million, up over 4400% YoY.
Operating income turned positive at RMB34.8 million versus a RMB77.7 million loss in Q1 2024.
Forward Guidance
Gaotu expects Q2 2025 net revenue to grow by 28.5% to 30.5% YoY, driven by strong demand and strategic investments in product and technology.
Positive Outlook
- Q2 revenue guidance of 28.5–30.5% growth YoY.
- Continued strong momentum in gross billings and user growth.
- High-margin structure supports ongoing profitability.
- AI-driven learning solutions fueling product differentiation.
- Deferred revenue provides strong visibility into future earnings.
Challenges Ahead
- Operating cash outflow increased significantly YoY.
- Cost of revenue grew faster than revenue.
- Gross margin slightly decreased YoY.
- R&D spending remains flat despite business growth.
- Overall liquidity declined compared to December 2024.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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