Gaotu Techedu Publicizes First Quarter of 2022 Unaudited Monetary Outcomes

BEIJING, June 6, 2022 /PRNewswire/ — Gaotu Techedu Inc. (NYSE: GOTU) (“Gaotu” or the “Firm”), a technology-driven training firm and on-line large-class tutoring service supplier in China, at the moment introduced its unaudited monetary outcomes for the primary quarter ended March 31, 2022.

First Quarter 2022 Highlights[1]

• Internet revenues have been RMB724.6 million, in contrast with internet revenues of RMB1,940.Three million in the identical interval of 2021.
• Gross billings[2] have been RMB318.1 million, in contrast with gross billings of RMB1,181.Three million in the identical interval of 2021.
• Internet revenue was RMB53.7 million, in contrast with internet lack of RMB1,425.9 million in the identical interval of 2021.
• Non-GAAP internet revenue was RMB92.5 million, in contrast with non-GAAP internet lack of RMB1,329.Four million in the identical interval of 2021.
• Internet working money outflow was RMB481.Three million, in contrast with internet working money outflow of RMB2,095.Three million in the identical interval of 2021.

First Quarter 2022 Key Monetary and Working Information
(In 1000’s of RMB, apart from percentages)
	For the three months ended March 31,
	2021				2022				Pct. Change
Internet revenues		1,940,343				724,615			(62.7)%
Gross billings		1,181,342				318,095			(73.1)%
Internet (loss) revenue		(1,425,919)				53,718			NM
Non-GAAP internet (loss) revenue		(1,329,420)				92,543			NM
Internet working money outflow		(2,095,328)				(481,266)			(77.0)%

[1] For a reconciliation of non-GAAP numbers, please see the desk captioned “Reconciliations of non-GAAP measures to probably the most comparable GAAP measures” on the finish of this press launch. Non-GAAP gross revenue, non-GAAP revenue (loss) from operations, non-GAAP internet revenue (loss) exclude share-based compensation bills.

[2] Gross billings is a non-GAAP monetary measure, which is outlined as the whole amount of money obtained for the sale in fact choices in such interval, internet of the whole quantity of refunds in such interval. See “About Non-GAAP Monetary Measures” and “Reconciliations of non-GAAP measures to probably the most comparable GAAP measures” elsewhere on this press launch.

Larry Xiangdong Chen, the Firm’s founder, Chairman and CEO, commented, “Within the first quarter of 2022, our companies continued to keep up a wholesome and sustainable improvement, and we have now remained worthwhile for 2 consecutive quarters since we started our enterprise restructuring. Going ahead, we are going to proceed to develop and put money into our 4 core companies, that are skilled training for school college students and adults, vocational training, STEAM training, and digital instructional merchandise. Throughout this quarter, the size of our skilled and vocational training service additional elevated, in contrast with that of the final quarter. Our STEAM training service has additionally made strong progress, particularly in its programming tutoring enterprise. Via the gradual improvement of our new companies, we are going to proceed to increase our product portfolio throughout varied classes to fulfil numerous and multi-dimensional studying calls for of scholars, and to construct a real learner-centric lifelong studying and repair platform.”

Shannon Shen, CFO of the Firm, added, “On this quarter, our internet revenues have been RMB724.6 million and gross billings have been RMB318.1 million. Additional, we’re happy to have the ability to proceed to be worthwhile on this difficult surroundings, with a internet revenue margin of seven.4% and a non-GAAP internet revenue margin of 12.8%, indicating that we have now achieved efficient development. Moreover, our capital place stays robust. As of March 31, 2022, we had a complete of roughly RMB3.2 billion when it comes to money, money equivalents, restricted money, and short-term investments on our stability sheet. 

We consider that beneath the robust assist of presidency coverage, vocational training could have a greater future with greater market demand. We sincerely hope that by offering the very best service and the very best training high quality, we can set up Gaotu as a good model within the vocational {and professional} training market.”

Monetary Outcomes for the First Quarter of 2022

Internet Revenues

Internet revenues decreased by 62.7% to RMB724.6 million from RMB1,940.Three million within the first quarter of 2021. The lower was primarily because of the organizational changes and enterprise restructuring the Firm carried out in 2021, together with the cessation of educational topic tutoring companies to college students, on account of the impression of presidency laws (“Enterprise Restructuring”).

Price of Revenues

Price of revenues decreased by 62.7% to RMB212.9 million from RMB571.5 million within the first quarter of 2021, primarily because of decreases in employees associated value, studying materials value and rental bills on account of the Enterprise Restructuring in 2021.

Gross Revenue and Gross Margin

Gross revenue was RMB511.7 million, in contrast with RMB1,368.Eight million within the first quarter of 2021. Gross revenue margin elevated to 70.6% from 70.5% in the identical interval of 2021.

Non-GAAP gross revenue was RMB530.Zero million, in contrast with RMB1,393.6 million in the identical interval of 2021. Non-GAAP gross revenue margin elevated to 73.1% from 71.8% in the identical interval of 2021.

Working Bills

Working bills decreased 83.1% to RMB486.Four million from RMB2,871.Four million within the first quarter of 2021.

Promoting bills decreased to RMB284.2 million from RMB2,288.7 million within the first quarter of 2021, primarily because of the decreased spending on branding and advertising and marketing actions on educational topic tutoring companies on account of the restrictions of promoting actions in keeping with authorities laws. Furthermore, the gross sales and advertising and marketing employees associated bills and different working associated bills additionally decreased, which was because of the discount of staff on account of the Enterprise Restructuring in 2021.

Analysis and improvement bills decreased to RMB123.Three million from RMB365.1 million within the first quarter of 2021, primarily because of a lower in compensation for analysis and improvement personnel on account of the Enterprise Restructuring in 2021.

Normal and administrative bills decreased to RMB78.9 million from RMB217.6 million within the first quarter of 2021, primarily because of a lower in compensation for basic and administrative personnel on account of the Enterprise Restructuring in 2021.

Revenue (Loss) from Operations

Revenue from operations was RMB25.Three million, in contrast with the loss from operations of RMB1,502.6 million within the first quarter of 2021, which was primarily because of a big lower in working associated value and bills on account of the Enterprise Restructuring.

Non-GAAP revenue from operations was RMB64.1 million, in contrast with non-GAAP loss from operations of RMB1,406.1 million within the first quarter of 2021.

Curiosity Revenue and Realized Features from Investments

Curiosity revenue and realized good points from investments, on combination, have been RMB19.Three million, in contrast with RMB22.9 million within the first quarter of 2021.

Different Revenue

Different revenue was RMB28.Zero million, in contrast with RMB44.9 million within the first quarter of 2021. The lower was primarily because of the value-added tax exemption supplied by the federal government within the first quarter of 2021, which was now not supplied after April 2021.

Internet Revenue (Loss)

Internet revenue was RMB53.7 million, in contrast with internet lack of RMB1,425.9 million within the first quarter of 2021.

Non-GAAP internet revenue was RMB92.5 million, in contrast with non-GAAP internet lack of RMB1,329.Four million within the first quarter of 2021.

Money Circulation

Internet working money outflow for the primary quarter of 2022 was RMB481.Three million. The outflow of internet working money this quarter was primarily because of worker compensation and advertising and marketing bills paid to enhance our market share and model consciousness within the skilled and vocational training market.

Primary and Diluted Internet Revenue per ADS

Primary and diluted internet revenue per ADS have been each RMB0.21 within the first quarter of 2022.

Non-GAAP fundamental and diluted internet revenue per ADS, have been RMB0.36 and RMB0.35, respectively, within the first quarter of 2022.

Share Excellent

As of March 31, 2022, the Firm had 172,096,742 bizarre shares excellent.

Money, Money Equivalents, Restricted Money and Quick-term Investments

As of March 31, 2022, the Firm had money, money equivalents, restricted money and short-term investments of RMB3,206.7 million in combination, in contrast with a complete of RMB3,671.1 million as of December 31, 2021.

Different Payables

As of March 31, 2022, different payables in non-current liabilities totaled RMB26.6 million, which have been payables associated to the acquisition of the Zhengzhou properties.

Enterprise Outlook

Primarily based on the Firm’s present estimates, complete internet revenues for the second quarter of 2022 are anticipated to be between RMB438 million and RMB458 million, representing a lower of 79% to 80% on a year-over-year foundation. These estimates mirror the Firm’s present expectations, that are topic to vary.

Convention Name

The Firm will maintain an earnings convention name at 8:00 AM U.S. Jap Time on Monday, June 6, 2022 (8:00 PM on Monday, June 6, 2022, Beijing/Hong Kong Time). Dial-in particulars for the earnings convention name are as follows:

Worldwide:	+1-412-317-6061
United States:	+1-888-317-6003
Hong Kong:	800-963-976
Mainland China:	400-120-6115
Passcode:	7635501

A phone replay shall be accessible two hours after the conclusion of the convention name by means of June 13, 2022. The dial-in particulars are as follows:

Worldwide:	+1-412-317-0088
United States:	+1-877-344-7529
Passcode:	7141257

 Moreover, a reside and archived webcast of this convention name shall be accessible at https://ir.gaotu.cn/house.

Protected Harbor Assertion

This announcement incorporates forward-looking statements. These statements are made beneath the “secure harbor” provisions of the U.S. Non-public Securities Litigation Reform Act of 1995. These forward-looking statements could be recognized by terminology similar to “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and comparable statements. Amongst different issues, the enterprise outlook, in addition to the Firm’s strategic and operational plans, include forward-looking statements. The Firm may make written or oral forward-looking statements in its reviews filed with, or furnished to, the U.S. Securities and Change Fee, in its annual reviews to shareholders, in press releases and different written supplies and in oral statements made by its officers, administrators or staff to 3rd events. Statements that aren’t historic info, together with statements in regards to the Firm’s beliefs and expectations, are forward-looking statements. Ahead-looking statements contain inherent dangers and uncertainties. Plenty of elements might trigger precise outcomes to vary materially from these contained in any forward-looking assertion, together with however not restricted to the next: the Firm’s capability to proceed to draw college students to enroll in its programs; the Firm’s capability to proceed to recruit, practice and retain certified academics; the Firm’s capability to enhance the content material of its current course choices and to develop new programs; the Firm’s capability to keep up and improve its model; the Firm’s capability to keep up and proceed to enhance its instructing outcomes; and the Firm’s capability to compete successfully towards its rivals. Additional data concerning these and different dangers is included within the Firm’s reviews filed with, or furnished to the U.S. Securities and Change Fee. All data offered on this press launch and within the attachments is as of the date of this press launch, and the Firm undertakes no obligation to replace such data or any forward-looking assertion, besides as required beneath relevant legislation.

About Gaotu Techedu Inc.

Gaotu is a technology-driven training firm and on-line large-class tutoring service supplier in China. The Firm provides skilled training for school college students and adults, vocational training, STEAM training and digital instructional merchandise. Gaotu adopts a web based reside large-class format to ship its programs, which the Firm believes is the simplest and scalable mannequin to disseminate scarce high-quality instructing assets to aspiring college students in China. Huge information analytics permeates each side of the Firm’s enterprise and facilitates the appliance of the newest expertise to enhance instructing supply, scholar studying expertise, and operational effectivity.

About Non-GAAP Monetary Measures

The Firm makes use of gross billings, non-GAAP gross revenue, non-GAAP revenue (loss) from operations and non-GAAP internet revenue (loss), every a non-GAAP monetary measure, in evaluating its working outcomes and for monetary and operational decision-making functions.

The Firm defines gross billings for a particular interval as the whole amount of money obtained for the sale in fact choices in such interval, internet of the whole quantity of refunds in such interval. The Firm’s administration makes use of gross billings as a efficiency measurement as a result of the Firm typically payments its college students for your entire course payment on the time of sale of its course choices and acknowledges income proportionally because the lessons are delivered. For some programs, the Firm continues to supply college students with 12 months to 36 months entry to the pre-recorded audio-video programs after the net reside programs are delivered. The Firm believes that gross billings gives useful perception into the gross sales of its course packages and the efficiency of its enterprise. As gross billings have materials limitations as an analytical metrics and might not be calculated in the identical method by all corporations, it might not be similar to different equally titled measures utilized by different corporations.

Non-GAAP gross revenue, non-GAAP revenue (loss) from operations and non-GAAP internet revenue (loss) exclude share-based compensation bills, and such adjustment excludes the impression on revenue tax. The Firm believes that these non-GAAP monetary measures present significant supplemental data concerning its efficiency and liquidity by excluding share-based bills that might not be indicative of its working efficiency from a money perspective. The Firm believes that each administration and buyers profit from these non-GAAP monetary measures in assessing its efficiency and when planning and forecasting future durations. These non-GAAP monetary measures additionally facilitate administration’s inside comparisons to the Firm’s historic efficiency. A limitation of utilizing non-GAAP measures is that these non-GAAP measures exclude share-based compensation prices which were and can proceed to be for the foreseeable future a big recurring expense within the Firm’s enterprise.

The presentation of those non-GAAP monetary measures isn’t meant to be thought of in isolation from or as an alternative choice to the monetary data ready and introduced in accordance with GAAP. For extra data on these non-GAAP monetary measures, please see the desk captioned “Reconciliations of non-GAAP measures to probably the most comparable GAAP measures” set forth on the finish of this launch.

The accompanying tables have extra particulars on the reconciliations between GAAP monetary measures which might be most straight similar to non-GAAP monetary measures.

Change Charge

The Firm’s enterprise is primarily carried out in China and the numerous majority of revenues generated are denominated in Renminbi (“RMB”). This announcement incorporates foreign money conversions of RMB quantities into U.S. {dollars} (“USD”) solely for the comfort of the reader. Until in any other case famous, all translations from RMB to USD are made at a fee of RMB6.3393 to USD1.0000, the efficient midday shopping for fee for March 31, 2022 as set forth within the H.10 statistical launch of the Federal Reserve Board. No illustration is made that the RMB quantities might have been, or might be, transformed, realized or settled into USD at that fee on March 31, 2022, or at another fee.

For additional data, please contact:

Gaotu Techedu Inc.
Investor Relations
E-mail: [email protected]

Christensen

In China
Ms. Vivian Wang
Telephone: +852 2232 3978
E-mail: [email protected]

Within the US
Ms. Linda Bergkamp
Telephone: +1-480-614-3004
E-mail: [email protected]

Gaotu Techedu Inc.
Unaudited condensed consolidated stability sheets
(In 1000’s of RMB and USD, apart from share, per share and per ADS information)
	As of December 31,				As of March 31,
	2021				2022				2022
	RMB				RMB				USD
ASSETS
Present belongings
Money and money equivalents		728,934				968,153				152,722
Restricted money		168,189				11,658				1,839
Quick-term investments		2,774,000				2,226,853				351,277
Stock		15,595				18,728				2,954
Pay as you go bills and different present belongings		250,068				309,306				48,792
Complete present belongings		3,936,786				3,534,698				557,584
Non-current belongings
Working lease right-of-use belongings		353,877				228,311				36,015
Property, gear and software program, internet		680,009				617,003				97,330
Land use rights, internet		28,178				27,976				4,413
Rental deposit		22,544				22,471				3,545
Different non-current belongings		3,272				3,078				486
TOTAL ASSETS		5,024,666				4,433,537				699,373
LIABILITIES
Present liabilities
Accrued bills and different present liabilities       (together with accrued bills and different       present liabilities of the consolidated VIE       with out recourse to the Group of       RMB417,032 and RMB263,851 as       of December 31, 2021 and March 31,       2022, respectively)		693,265				516,577				81,487
Deferred income, present portion of the       consolidated VIE with out recourse to the       Group		986,993				586,744				92,557
Working lease liabilities, present portion       (together with present portion of working lease       liabilities of the consolidated VIE with out       recourse to the Group of RMB41,479 and       RMB40,212 as of December 31, 2021 and       March 31, 2022, respectively)		80,010				53,418				8,426
Revenue tax payable (together with revenue tax       payable of the consolidated VIE with out       recourse to the Group of nil and RMB10,947       as of December 31, 2021 and March 31,       2022, respectively)		–				19,323				3,048
Complete present liabilities		1,760,268				1,176,062				185,518

Gaotu Techedu Inc.
Unaudited condensed consolidated stability sheets
(In 1000’s of RMB and USD, apart from share, per share and per ADS information)
	As of December 31,				As of March 31,
	2021				2022				2022
	RMB				RMB				USD
Non-current liabilities
Deferred income, non-current portion of       the consolidated VIE with out recourse       to the Group		9,225				12,975				2,047
Working lease liabilities, non-current       portion (together with non-current portion       of working lease liabilities of the       consolidated VIE with out recourse       to the Group of RMB158,824 and       RMB141,850 as of December 31, 2021       and March 31, 2022, respectively)		276,035				180,269				28,437
Deferred tax liabilities of the consolidated       VIE with out recourse to the Group		71,616				71,031				11,205
Different payables of the consolidated VIE        with out recourse to the Group		26,580				26,580				4,193
TOTAL LIABILITIES		2,143,724				1,466,917				231,400
SHAREHOLDERS’ EQUITY
Bizarre shares		114				114				18
Extra paid-in capital		7,793,234				7,831,799				1,235,436
Collected different complete loss		(143,111)				(149,716)				(23,617)
Statutory reserve		40,380				40,380				6,370
Collected deficit		(4,809,675)				(4,755,957)				(750,234)
TOTAL SHAREHOLDERS’ EQUITY		2,880,942				2,966,620				467,973
TOTAL LIABILITIES AND TOTAL   SHAREHOLDERS’ EQUITY		5,024,666				4,433,537				699,373

Gaotu Techedu Inc.
Unaudited condensed consolidated statements of operations
(In 1000’s of RMB and USD, apart from share, per share and per ADS information)
	For the three months ended March 31,
	2021				2022				2022
	RMB				RMB				USD
Internet revenues		1,940,343				724,615				114,305
Price of revenues		(571,502)				(212,945)				(33,591)
Gross revenue		1,368,841				511,670				80,714
Working bills:
Promoting bills		(2,288,710)				(284,174)				(44,827)
Analysis and improvement bills		(365,110)				(123,307)				(19,451)
Normal and administrative bills		(217,615)				(78,936)				(12,452)
Complete working bills		(2,871,435)				(486,417)				(76,730)
(Loss) revenue from operations		(1,502,594)				25,253				3,984
Curiosity revenue		14,085				7,682				1,212
Realized good points from investments		8,810				11,659				1,839
Different revenue		44,887				28,004				4,418
(Loss) revenue earlier than provision for revenue tax   and share of outcomes of fairness investees		(1,434,812)				72,598				11,453
Revenue tax advantages (bills)		9,810				(18,880)				(2,978)
Share of outcomes of fairness investees		(917)				–				–
Internet (loss) revenue		(1,425,919)				53,718				8,475
Internet (loss) revenue attributable to Gaotu   Techedu Inc.’s bizarre shareholders		(1,425,919)				53,718				8,475
Internet (loss) revenue per bizarre share
Primary		(8.37)				0.31				0.05
Diluted		(8.37)				0.31				0.05
Internet (loss) revenue per ADS
Primary		(5.58)				0.21				0.03
Diluted		(5.58)				0.21				0.03
Weighted common shares utilized in internet (loss)   revenue per share
Primary		170,329,724				171,540,658				171,540,658
Diluted		170,329,724				175,328,961				175,328,961
Word: Three ADSs signify two bizarre shares.

Gaotu Techedu Inc.
Reconciliations of non-GAAP measures to probably the most comparable GAAP measures
(In 1000’s of RMB and USD, apart from share, per share and per ADS information)
	For the three months ended March 31,
	2021				2022				2022
	RMB				RMB				USD
Internet revenues		1,940,343				724,615				114,305
Much less: different revenues(1)		393				14,587				2,301
Add: VAT and surcharges		114,923				44,450				7,012
Add: ending deferred income		1,896,528				599,719				94,604
Add: ending refund legal responsibility		84,389				38,746				6,112
Much less: starting deferred income		2,733,739				996,218				157,150
Much less: starting refund legal responsibility		120,709				78,630				12,404
Gross billings		1,181,342				318,095				50,178
Word (1): Embody miscellaneous revenues generated from companies aside from programs.

	For the three months ended March 31,
	2021				2022				2022
	RMB				RMB				USD
Gross revenue		1,368,841				511,670				80,714
Share-based compensation expense in value of revenues		24,781				18,349				2,894
Non-GAAP gross revenue		1,393,622				530,019				83,608
(Loss) revenue from operations		(1,502,594)				25,253				3,984
Share-based compensation bills		96,499				38,825				6,124
Non-GAAP (loss) revenue from operations		(1,406,095)				64,078				10,108
Internet (loss) revenue		(1,425,919)				53,718				8,475
Share-based compensation bills		96,499				38,825				6,124
Non-GAAP internet (loss) revenue		(1,329,420)				92,543				14,599

SOURCE Gaotu Techedu Inc.