管理層發言
Hello, ladies and gentlemen. Thank you for standing by, and welcome to the Gaotu Techedu Inc. First Quarter 2026 Earnings Conference Call. Today's conference call is being recorded. I would now like to turn the conference over to your first speaker today, Ms. Catherine Chen, Head of Investor Relations. Please go ahead, Catherine.
Thank you, operator. Good evening, everyone. Thank you for joining Gaotu's First Quarter 2026 Earnings Conference Call. My name is Catherine, and I'll help host the earnings call today. Gaotu's earnings release for the quarter was distributed earlier, and is available on the company's IR website at ir.gaotu.cn as well as through PR Newswire services. Joining the call with me tonight from Gaotu's senior management is Mr. Larry Chen, Gaotu's Founder, Chairman and Chief Executive Officer; Mr. Robin Luo, Gaotu's Chief Operating Officer; Mr. Mike Xu, Gaotu's Head of Strategy; and Ms. Willa Yao, Gaotu's Senior Finance Director. Larry will first begin with the quarter's business highlights and strategy followed by Robin's overview of our operational performance and we will finish with a detailed discussion of our financial performance by Willa. Following their prepared remarks, we will open the floor to questions from analysts.
Robin and Mike will address analyst questions during the Q&A session. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current beliefs and expectations as well as the current market and operating conditions, and they involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control and may cause the company's actual results, performance or achievements to differ materially from those contained in any forward-looking statements. Further information regarding this and other risks is included in the company's public filings with the U.S. SEC. The company does not undertake any obligation to update any forward-looking statements except as required under applicable law.
During today's call, management will also discuss certain non-GAAP measures for comparison purposes only. For a definition of non-GAAP financial measures and reconciliation of GAAP to non-GAAP financial results, please refer to the 2026 earnings release published earlier today. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this conference call will be available on Gaotu's IR website. It is now my pleasure to introduce our Founder, Chairman and Chief Executive Officer, Larry. Larry, please?
Good evening, and good morning, everyone. Thank you for joining us on Gaotu's First Quarter 2026 Earnings Conference Call. I would like to take this opportunity to thank each of you for your interest and support for Gaotu. Before I start, please be reminded that all financial figures discussed today are in RMB unless stated otherwise. The first quarter of 2026 marked another important step in strengthening Gaotu's operational quality and long-term capabilities under our profitable growth strategy. Revenue grew by 13.2% year-over-year to approximately RMB 1.7 billion with non-GAAP operating profit and net profit reaching RMB 13.8 million and RMB 41.4 million, respectively. After excluding the impact of share repurchases, our cash position increased by RMB 69.7 million year-over-year, providing strong support for our ongoing investments in product, technology and talent to drive sustainable long-term growth.
The value of education is not limited to short-term outcomes but rather compounds over time through sustained engagement, consistent efforts and incremental progress. The same is true in business. What drives long-term resilience through cycles is not scale alone, but the organizational capabilities, product strength and the user trust built over time. With this in mind, while we remain focused on delivering near-term results, we are equally committed to advancing user value, organizational efficiency and operational resilience across our business fundamentals. Next, I would like to walk you through our strategic priorities and key developments this quarter across five areas. First, profitable growth is moving beyond periodic results toward a more sustainable operational capability. In recent quarters, we have continued to optimize our operating structure, focusing on balancing business health, reach, efficiency and long-term returns.
Our mature online business has built robust, scalable capabilities across offerings, teaching services, user engagement and organizational collaboration and continued to demonstrate resilient profitability this quarter. As we navigate a dynamic market environment in 2026, we will maintain our disciplined operational approach, improving resource allocation efficiency and execution precision so that growth is built on an increasingly healthy and sustainable foundation. Based on our current business momentum and operating performance, we remain confident in delivering continued improvement in operational quality throughout the year. Second, AI is evolving from a mere productivity tool into a key fundamental capability, powering Gaotu's scalable growth and organizational transformation. In the recent period, we have progressively integrated AI across curriculum development, content creation, regional collaboration and learning services.
Within our curriculum development system, for example, AI is enhancing our question banks and the knowledge graphs supporting teaching and formative assessment and assisting curriculum development and learning teams with repetitive standardized tasks. We are weaving AI into our business workflows, operational processes and organizational systems to serve as core infrastructure for operational decision-making and cross-functional collaboration. On the user side, we continue to explore a spectrum of AI-powered product formats tailored to diverse learning needs, including learning tools, AI-enhanced one-on-one tutoring scenarios and AI-integrated online large classes. As AI becomes more deeply embedded in our core business, we are establishing a scalable AI framework that allows our best teachers to codify expertise and proven service models to scale with greater efficiency, enhancing user experience while unlocking organizational and operational leverage.
Third, user needs and the learning experience remain the fundamental drivers behind our continuous product and service integration and guide our efforts to strengthen talent development initiatives on the teaching service side and brand. We continue to optimize our feedback mechanisms and service framework. Take our online large class as an example. By deepening collaboration across instructors, tutors and the curriculum learning team, we have formed a weekly feedback loop that captures student pain points, progress variations and classroom feedback in real time. These learning insights flow directly back into course iteration and service support, keeping content closely aligned with students' actual learning pace. At the same time, we continue to reinforce our talent pipeline. This spring, we expanded our campus recruitment and early career talent development efforts with campus engagements at prestigious domestic and international universities, including Oxford, Cambridge, Tsinghua and Peking University.
By attracting individuals who are genuinely passionate about education and demonstrate the motivation and the potential to grow with us, we are building a strong talent foundation to support our long-term capabilities in product innovation, teaching excellence and organizational development. Fourth, our offline service offerings are progressing in line with expectations and are increasingly demonstrating their value in enhancing user engagement, building brand equity and driving long-term value creation. For example, our offline educational services for college students now span seven cities where we have developed durable service and engagement capabilities centered around college students' evolving needs. Our Zhengzhou Dream Center has spent the past year validating an integrated service model that brings blended learning, video live services and personal development, achieving notably high utilization rates in the project.
These enriched service touch points have also driven meaningful improvements in user satisfaction and brand awareness. We plan to expand this model to Wuhan in 2026. Additionally, we will further expand our offline presence across all business segments, sharpening our service delivery capabilities to better align with cohorts at diverse learning stages, growth objectives and service needs. This will comprehensively elevate the learning experience, deepen user trust and enhance brand value throughout the user's lifelong learning journey. Fifth, we believe long-term value goes beyond financial results and is equally reflected in our ability to create lasting social impact for our shareholders and society. Through efficient, disciplined capital allocation, we remain committed to sharing the benefits of the company's long-term development with our shareholders. As of June 1, 2026, we had repurchased a total of 33.1 million ADS for approximately RMB 704 million.
In addition, we continue to invest in initiatives that broaden access to quality education. For example, the Gaotu Foundation's "My AI Science" class project has reached 33 rural schools across seven provinces and empowered more than 23,000 teachers. We plan to expand its coverage for regular on-site classes in additional regions and improve the accessibility of educational resources in underserved areas. We believe technology should not only improve efficiency, but also help close regional gaps in high-quality educational resources and create broader social value. Enduring success comes from a wiring commitment and the future momentum begins with the steps we take today. Looking ahead, we will continue to advance with focus and resolve, leveraging technology and innovation to expand the boundaries of education and further strengthen our business foundation through disciplined execution.
We are fully confident in our capability to accompany and support students throughout their growth journey, creating sustainable long-term value for our users and our shareholders. And thank you very much, everyone. This concludes my prepared remarks. I will now pass the call over to our COO, Robin, to walk you through the quarter's operational performance.
Thank you, Larry, and thank you, everyone, for joining our call today. I'm Robin, I will now walk you through our operating performance and business updates for the first quarter of 2026. Please note that all financial data are in RMB terms unless otherwise stated. Building on the progress we made over the past year in enhancing operational quality and organizational efficiency, we continue to advance our profitable growth strategy as we enter 2026. Notably, we achieved first quarter profitability for the second consecutive year, reflecting the resilience of our mature business as well as our continued improvements in organizational execution and resource allocation. R&D and G&A expenses as a percentage of revenue declined by 0.7 percentage points year-over-year, demonstrating ongoing gains in management efficiency and organizational collaboration. Deferred revenue totaled nearly RMB 1.8 billion, up 24.1% year-over-year, providing clear visibility into revenue recognition in the coming quarters and laying a solid foundation for the steady execution of our full-year business plan.
The education business is subject to seasonal patterns closely aligned with students' learning cycles and course schedules. This year, the later timing of Chinese New Year shifted the delivery mix of spring classes in the first quarter. Our resource deployment is also calibrated to these enrollment and business cycles. Therefore, we believe that evaluating the company's performance over the first half of the year, as a more complete operating cycle, offers a clearer picture of our underlying trends. Looking at our current execution progress, our profitability and operational efficiency continue to improve as we further optimize our product mix, organizational collaboration and resource allocation efficiency, and we remain optimistic about our full-year operating performance. Next, our business progress by segments. Learning services contributed over 95% of net revenues; nonacademic tutoring services and traditional learning services at our core segments generated over 85% of our total revenue.
In our new initiatives focused on online and offline nonacademic tutoring services, gross billings increased by over 20% year-over-year in the first quarter, contributing more than 35% of total gross billings, while revenue grew by over 15% year-over-year, accounting for nearly 40% of total revenues. As these enrollment capabilities mature, the online business within this segment maintained first quarter profitability for the second consecutive year, underscoring strong product-market fit and operational resilience. On the business front, we continue to advance our learning service systems and strengthen educational product innovation, leveraging AI capabilities to build diverse learning scenarios that spark students' interest, sharpen critical thinking and develop attractive skills. We are also deepening our focus on localized curriculum development to make our teaching content more relevant and our services more tailored.
By meeting user needs with greater precision, this effort collectively lays a solid foundation for enhanced learning outcomes and higher user retention. Our one-on-one tutoring accounted for over 45% of total revenues and maintained a healthy growth trajectory during the first quarter. Our consistent investments in strengthening our teaching talent pipeline and upgrading our service system are gradually translating into tangible operating results. In particular, our one-on-one tutoring business recorded year-over-year growth of more than 20% in both revenue and gross billings, supported by professional capabilities, service engagement and supply stability. For our personalized learning services, AI is playing an important role in improving the efficiency and precision of personalized learning. We continue to strengthen our end-to-end tailored service model across key stages of the learning process, including learning assessment, starting planning, progress tracking and performance feedback.
Our AI-powered learning analytics and tools enable tutors to more efficiently consolidate and analyze users' learning data, identify individual knowledge gaps and design more personalized plans. This not only makes our service delivery more effective, but also provides students and parents with clear progress indicators and next-step planning, further enhancing user experience and service satisfaction. On the channel front, we continue to optimize our channel mix by focusing on higher-quality acquisition channels, while benefiting from traffic and word-of-mouth referrals. The resulting improvement in user quality, conversion efficiency and retention rates continue to strengthen the operating fundamentals of our traditional business. Another key component of our learning services is educational services for college students and adults, which sustained solid growth momentum this quarter. Gross billings grew over 15% year-over-year and contributed over 25% of total gross billings with revenue accounting for about 10% of total revenue.
This performance reflects our continued focus on users' evolving needs as well as ongoing optimization of product offerings, service management and operational usage. Taking our educational services for college students as an example, building high-quality engagements throughout users' learning journey has always been our key priority. We have developed a structured framework to evaluate the teacher-student engagement across interaction frequency, emotional connection and professional academic support, improving the quality of tutor services and optimizing user experience. At the same time, we are embedding AI capabilities more deeply in our daily operations to streamline standardized workflows and enhance operational support, enabling teachers to dedicate more time to higher-value activities such as personalizing the learning plan and regular mentorship. This quarter, billing and revenues for our educational services for college students grew by more than 20% year-over-year, with operating cash flow also improving year-over-year.
Our civil service exam preparation business also achieved double-digit year-over-year growth in both revenue and gross billings during the quarter with our captive productivity continuing to improve, reflecting ongoing enhancements in user value and operational efficiency. Across all segments, we are advancing towards the same goal: driving gains in both business scale and operational quality through a sharper understanding of user needs, stronger product and service relevance, and more efficient organization, collaboration and resource allocation. As we move in this direction, we will continue our disciplined operational decisions and resource deployment, enabling each business to chart a healthier and more sustainable growth path with improved organizational efficiency. I'll now turn the call over to our Senior Finance Director Willa, who will walk you through our financial data.
Thank you, Robin. I will now walk you through our financial data. Please note that all financial data are in RMB terms unless otherwise stated. Our cost of revenue this quarter was RMB 514.8 million. Gross profit increased 12.9% year-over-year to nearly RMB 1.2 billion with a gross margin of 69.5%. Total operating expenses during the quarter increased 16.1% year-over-year to nearly RMB 1.2 billion. Breaking it down, selling expenses increased 19.0% year-over-year this quarter to RMB 844.1 million, accounting for 50.0% of net revenue. Research and development expenses increased 5.7% year-over-year to RMB 159.0 million, accounting for 9.4% of net revenues. General and administrative expenses increased 12.9% year-over-year to RMB 164.7 million, accounting for 9.7% of net revenues. Income from operations was RMB 6.9 million, and the operating income margin was 0.4%. Non-GAAP income from operations was RMB 13.8 million and the non-GAAP operating income margin was 0.8%.
Net income was RMB 34.5 million and net income margin was 2.0%. Non-GAAP net income was RMB 41.4 million and the non-GAAP net income margin was 2.5%. Our net operating cash outflow increased 73.6% year-over-year to RMB 828.4 million. Now turning to our balance sheet. As of March 31, 2026, we have RMB 691.2 million in cash, cash equivalents and restricted cash, along with RMB 2.1 billion in short-term investments and RMB 501.4 million in long-term investments. This comes to a total of nearly RMB 3.3 billion. As of March 31, 2026, our deferred revenue balance was around RMB 1.8 billion, primarily consisting of consideration received in advance. As of June 1, 2026, we had repurchased an aggregate of around 33.1 million ADS on the open market for nearly RMB 704 million. Before I provide our business outlook for the next quarter, please allow me to remind everyone that this contains forward-looking statements, which include risks and uncertainties that are beyond our control and could cause the actual results to differ materially from our predictions.
Based on our current estimates, total net revenue for the second quarter of 2026 is expected to be between RMB 1,578 million and RMB 1,598 million, representing an increase of 13.6% to 15.0% on a year-over-year basis. This concludes my prepared remarks. Operator, we are now ready for the Q&A session. Thank you, everyone, for listening.
分析師問答
The first question comes from Elsie Sheng with CLSA. Forward-looking statements, which include risks and uncertainties that are beyond our control and could cause the actual results to differ materially from our predictions. Based on our current estimates, total net revenue for the second quarter of 2026 is expected to be between RMB 1,578 million and RMB 1,598 million, representing an increase of 13.6% to 15.0% on a year-over-year basis. This concludes my prepared remarks. Operator, we are now ready for the Q&A session. Thank you, everyone, for listening.
Thank you, management, for taking my question and congratulations on the steady results. My question is about the offline business. So we mentioned in our opening remarks that the offline business progress right now is in line with our expectation. Could you share more details on the latest update in terms of operation and also our plan for this year? I will translate to Chinese.
Okay. Thank you, Elsie. This is Mike. I will take this question. So let me first start with how we think about our offline business. For Gaotu, offline is an important part of our long-term learning service strategy. It is not just another revenue stream. It can help us build deeper local trust, provide more direct service to students and parents and create a meaningful second growth curve over time. Since we launched offline business, we have built the capabilities needed to run it well. That includes localized curriculum, local teams, experienced operating talent and better data systems. The goal is straightforward: we want each study center to have products that meet local demand, and we want our delivery quality to be consistent. As we enter 2026, we are starting to see these earlier investments translate into clearer operating results. So at the operating level, retention has been improving steadily and some cities and products are already showing stronger competitiveness.
Classroom utilization is also moving in the right direction. In cities where we have operated for a longer period of time, brand recognition and word of mouth are helping us scale more efficiently. In some markets, we are also seeing the brand equity from our online business support our offline services. We also see user demand becoming clearer. Families with specific learning growth goals and high expectations for service quality are looking for strong, localized products and more attractive learning support. This is Gaotu's long-term commitment to our teacher strategy and service excellence. So let's move to the summer enrollment. The offline business is progressing broadly in line with our expectation. As the enrollment is still going on, we will provide further updates accordingly. But based on the first five months, both gross billings and revenue have been tracking within our expected range, and we are seeing user demand and channel conversion gradually pick up.
Based on the current progress, we expect offline billings and revenue to maintain relatively strong growth in the first half of the year. Going forward, we will continue to expand with discipline. We'll closely evaluate each city, including user demand, classroom utilization, retention, teacher supply and operating efficiency before we scale further. More importantly, we want offline growth to be built on solid product quality, consistent service experience and steady accumulation of local trust and reputation. So that concludes my answer. I hope that I can address your question, Elsie.
The next question comes from an analyst with CITIC.
And my question is about cost control. We noticed that the company has achieved good R&D expense control this quarter. Do we have an outlook on cost control and efficiency over the coming quarters? And I will translate myself.
Okay. I will answer the question. Yes, we have been enjoying operational efficiency for almost six consecutive quarters. We are taking a really disciplined approach regarding resource allocation, our customer acquisition efficiency as well as the whole organizational operations. One important factor is that AI is playing an increasingly important role in our daily operations. We're not just using it on the operations front, but also on the customer-facing side, including content creation and improving our teaching services. By empowering our teachers and staff with these technologies, we are increasing productivity per capita, which you can see reflected in our online business margins. For our nonacademic tutoring services, we are enjoying profitability—this is our second consecutive quarter of first quarter profitability. Our high school tutoring sector is also profitable this quarter. On the operational front, AI is empowering employees across functions. We are deploying AI tools and AI agents to our employees to increase productivity and improve working efficiencies. We expect operating leverage to continue to show in the upcoming quarters. Yes. I hope that answers your question.
As there are no further questions now, I'd like to turn the call back over to Catherine Chen for closing remarks.
Yes. Thank you, everyone, for joining our call tonight. If you have any further questions, please don't hesitate to contact our Investor Relations department or our management via e-mail at ir@gaotu.cn directly. You are also welcome to subscribe to our news alert on the company's IR website. Thank you very much again for your time. Have a great night.
Thank you. This concludes today's conference call. You may now disconnect your line. Thank you.