China's Gaotu Techedu Q1 revenue rises on gross billings growth

Gaotu Techedu

02/06/2026 07:20

Overview
China education technology firm's Q1 revenue rose 13% yr/yr
Q1 net income and non-GAAP net income both declined sharply yr/yr
Company repurchased nearly US$98 mln in shares under buyback programs as of June 1, 2026

Outlook
Gaotu Techedu expects Q2 2026 net revenues of RMB1,578 mln to RMB1,598 mln
Company says deferred revenue growth provides visibility into future quarters
Company to focus on product-market fit, service quality, and resource allocation for sustainable growth

Result Drivers
GROSS BILLINGS GROWTH - Revenue growth was mainly driven by a 12% yr/yr increase in gross billings, reflecting strong market demand and improved recognition of educational products and services
HIGHER OPERATING EXPENSES - Operating expenses rose 16% yr/yr, mainly due to increased marketing, branding, and workforce expansion, weighing on profitability
AI-DRIVEN EFFICIENCY - Company said AI integration improved management efficiency and organizational collaboration, helping offset some cost pressures, per COO Bin Luo

Company press release: ID:nPn3pPvbGa

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
 
RMB 1.69 bln
 
Q1 Adjusted Net Income
 
RMB 41.40 mln
 
Q1 Net Income
 
RMB 34.50 mln
 
Q1 Adjusted Gross Margin
 
69.60%
 
Q1 Adjusted Gross Profit
 
RMB 1.18 bln
 
Q1 Adjusted Income from Operations
 
RMB 13.80 mln
 
Q1 Operating Expenses
 
RMB 1.17 bln
 

Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the miscellaneous educational service providers peer group is "buy"
Wall Street's median 12-month price target for Gaotu Techedu Inc is $3.80, about 96.9% above its June 1 closing price of $1.93
The stock recently traded at 29 times the next 12-month earnings vs. a P/E of 89 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)