By ZHA Qinjun
Wall Street listed ed-tech firm Gaotu, saw Q1 revenue decline 2.4 percent year on year, but the good news is that the company managed to turn a small profit of 707 million yuan (US$100 million), up 12.3 percent on the previous quarter, and a second consecutive profitable quarter. Net profit margin rose to 16.1 percent, the highest since its forced transformation in 2022.
CEO CHEN Xiangdong said the company expects further growth and positive cash flow throughout 2023. Gaotu’s core revenue streams include college entrance exam preparation, courses for college students and adults, as well as literacy courses for primary and secondary students. The firm also provides study-abroad services and related training.
SHEN Nan, Gaotu’s CFO, highlighted the growth in literacy courses for primary and secondary students, and improved customer acquisition through short videos and live streaming. GOTU has also ventured into live e-commerce through its subsidiary, Gaotu Jiapin.
Chen emphasized the potential of AI in education, promising more teaching products.
Gaotu holds a total of 3.4 billion yuan in cash, restricted funds, and short-term investments.
