Gaotu Techedu Inc. (NYSE:GOTU) shares gained 4.05% in pre-market trading on Thursday after the Chinese education technology company reported second-quarter revenue above Wall Street expectations, helping offset a weaker-than-anticipated earnings result.
Revenue climbed 20.2% year over year to RMB1.67 billion from RMB1.39 billion, exceeding the analyst forecast of RMB1.62 billion. Adjusted loss per ADS came in at RMB0.57, compared with the consensus estimate for a loss of RMB0.46.
Revenue growth accompanied by narrower losses
Gaotu Techedu also demonstrated progress in reducing its losses during the quarter. Adjusted net loss narrowed by 37.6% to RMB129.1 million from RMB206.8 million in the second quarter of 2025.
Gross billings increased 19.4% from a year earlier to RMB2.69 billion, while net operating cash inflow jumped 46.3% to RMB861.2 million, providing further evidence of improving organisational efficiency.
Founder, Chairman and CEO Larry Xiangdong Chen highlighted the company’s operational progress, saying: “Our sustained, user-focused investments in educational products, learning services, and organizational capabilities are steadily translating into healthier unit economics and a more efficient operating system.”
“In the second quarter, net revenues increased by 20.2% year over year to nearly RMB1.7 billion, and non-GAAP loss from operations narrowed significantly by 38.5%.”
AI integration supports greater efficiency
Gaotu Techedu continued to integrate artificial intelligence more deeply across its operations, contributing to an improvement in its cost structure. Operating expenses as a percentage of net revenue declined by 7.9 percentage points compared with the same period last year.
The combination of higher revenue, narrowing losses and stronger operating cash flow points to continued progress in improving the company’s underlying financial performance.
Gaotu has also remained active with its share repurchase programme. As of August 26, 2026, the company had bought back RMB741.8 million worth of shares under its existing buyback programmes.
Third-quarter outlook signals further expansion
Looking ahead, Gaotu Techedu expects third-quarter revenue of between RMB1.838 billion and RMB1.858 billion. The midpoint of the range, at approximately RMB1.848 billion, sits slightly above the period’s implied growth expectations.
Investors responded positively to the combination of better-than-forecast second-quarter revenue, improving efficiency and continued top-line growth expectations. Although adjusted earnings fell short of consensus forecasts, the company’s progress in narrowing losses and generating stronger operating cash flow provided encouraging signs for its ongoing growth strategy.
Gaotu Techedu stock price
