On the evening of December 4, Beijing time, Gaotu (NYSE: GOTU) today released its financial report for the third quarter of 2024 ending September 30: net revenue of 1.2083 billion yuan, an increase of 53.1% over the previous year. The net loss was $0.4713 billion, compared to a net loss of $57.7 million for the same period in 2023; not in accordance with US GAAP, the adjusted net loss was $0.4572 billion, compared to a net loss of 41.7 million yuan for the same period in 2023.

Third quarter results:

net revenue

Net revenue was 1.2083 billion yuan, up 53.1% from 0.7894 billion yuan in the third quarter of 2023. The increase in revenue was mainly due to Gaotu's full and effective response to strong market demand, which led to a continuous year-on-year increase in gross revenue.

gross revenue

Gross revenue (course sales) was 1.0692 billion yuan, an increase of 67.2% compared to 0.6393 billion yuan in the third quarter of 2023.

Cost of revenue

The cost of revenue was 0.4298 billion yuan, an increase of 97.1% compared to 0.2181 billion yuan in the third quarter of 2023.

gross profit

Gross profit was 0.7785 billion yuan, up 36.3% from 0.5713 billion yuan in the third quarter of 2023. Gross margin was 64.4% compared to 72.4% in the third quarter of 2023.

Without US GAAP (Non-GAAP), gross profit was $0.7807 billion, up 36.3% from $0.5728 billion in the third quarter of 2023. Gross margin was 64.6% compared to 72.6% in the third quarter of 2023.

Operating expenses

Operating expenses were 1.2686 billion yuan, an increase of 89.1% compared to 0.6708 billion yuan in the third quarter of 2023.

Among them, sales expenses were 0.8858 billion yuan, compared to 0.4344 billion yuan in the third quarter of 2023.

R&D expenditure was $0.1893 billion, compared to $0.1306 billion in the third quarter of 2023.

General and administrative expenses were $0.1935 billion, compared to $0.1058 billion in the third quarter of 2023.

Operating losses

The operating loss was 0.4901 billion yuan, compared to the operating loss of 99.5 million yuan in the third quarter of 2023.

Without US GAAP (non-GAAP), the operating loss was 0.476 billion yuan, while the operating loss for the third quarter of 2023 was 83.6 million yuan.

Interest income and return on investment

Interest income and investment income combined were $21.7 million, compared to $31.7 million in the third quarter of 2023.

Other revenue was $4 million, compared to $15.8 million for the third quarter of 2023.

net loss

The net loss was $0.4713 billion, compared to a net loss of $57.7 million for the same period in 2023.

Excluding US GAAP (non-GAAP), the adjusted net loss was $0.4572 billion, compared with a net loss of 41.7 million yuan for the same period in 2023.

The basic and diluted net loss per American Depositary Share (ADS) share was $1.83.

Excluding US GAAP (Non-GAAP), the basic and diluted net loss per share of American Depositary Shares (ADS) was $1.78.

cash flow

In the third quarter of 2024, Gaotu's net operating cash outflow was 0.7144 billion yuan.

As of September 30, 2024, Gaotu's total holdings of cash and cash equivalents, restricted cash, and short-term and long-term investments were $3.31 billion, compared to $3.9535 billion as at 31 December 2023.

Results for the first nine months of 2024:

Net revenue was $3.1649 billion, up 43.9% from $2.1998 billion in the same period in 2023.

Gross revenue was 3.4522 billion yuan, an increase of 467.5% compared to 2.0606 billion yuan in the same period in 2023.

Net loss was 0.9131 billion yuan, while net profit for the same period in 2023 was 0.1124 billion yuan.

Excluding US GAAP (non-GAAP), net loss was 0.8722 billion yuan, compared to net profit of 0.155 billion yuan for the same period in 2023.

Stock repurchases

In November 2023, Gaotu's board of directors authorized changes to its existing share repurchase plan to increase the total value of shares that can be repurchased from $30 million to $80 million, which is valid until November 22, 2025. As of December 3, 2024, Gaotu has accumulated repurchases of approximately 11.5 million American Depositary Shares, for a total amount of about US$37.5 million.

Performance outlook:

Gaotu expects total net revenue for the fourth quarter of 2024 to reach 1.288 billion yuan to 1.308 billion yuan, an increase of 69.2% to 71.9% year-on-year.