Following a period of profound industry adjustment and strategic realignment, Gaotu Techedu Inc. (NYSE: GOTU) is entering a new phase characterized by high-quality and sustainable growth. In 2025, this educational technology company, which had previously contracted significantly due to major policy shifts, not only stabilized its core business but also achieved breakthroughs across multiple dimensions, including AI enablement, business diversification, and organizational efficiency.
Recently, Chen Xiangdong, Founder, Chairman, and CEO of Gaotu Group, systematically outlined the company's key achievements for 2025 in several public appearances. He also disclosed three core strategic directions for 2026—focusing on long-term strategy, strengthening innovation mechanisms, and solidifying corporate culture—explicitly identifying "profitability" as the central objective for future development.
Looking back at 2025, Gaotu demonstrated robust internal growth momentum. According to its third-quarter financial report released on November 26, 2025, for the period ending September 30, the company achieved Q3 revenue of 1.58 billion yuan, a year-on-year increase of 30.7%. Cash revenue reached 1.19 billion yuan, up 11.2% year-on-year. More notably, adjusted operating losses and adjusted net losses narrowed significantly by 64.6% and 69.9% year-on-year, respectively, with the loss ratio improving by nearly 29.1 percentage points, indicating a marked enhancement in profitability.
For the first nine months, Gaotu's cumulative revenue reached 4.46 billion yuan, a 41% increase year-on-year. Cash revenue was 4.33 billion yuan, up 25.4% year-on-year. Deferred revenue reached 1.77 billion yuan, an increase of 23.2% year-on-year, providing solid support for revenue in subsequent quarters. Concurrently, the company's operational efficiency continued to optimize: the proportion of operating expenses to revenue narrowed significantly by 27.6 percentage points, summer customer acquisition efficiency improved by 12.8%, and net operating cash outflow decreased by over 54 million yuan compared to the same period last year.
Financial health also improved substantially. As of the end of September 2025, Gaotu's combined cash and cash equivalents, short-term investments, and long-term investments exceeded 3.04 billion yuan. The company not only completed its $80 million stock repurchase plan ahead of schedule but also initiated a new $100 million repurchase program in May 2025. By November 25, it had cumulatively repurchased approximately 27.52 million ADSs, amounting to nearly 620 million yuan, demonstrating management's confidence in the company's long-term value.
Performance is expected to continue growing. Based on the company's forecast, Gaotu's revenue for the fourth quarter of 2025 is projected to be between 1.628 billion yuan and 1.648 billion yuan, representing a year-on-year increase of between 17.2% and 18.7%.
Gaotu's high-quality growth is not accidental but stems from clear strategic focus and systematic capability building.
First, the business structure has undergone a comprehensive upgrade, with over 70% of revenue now coming from new initiatives explored in the past four years.
Today's Gaotu has transformed from a single K-12 online tutoring platform into a lifelong learning service platform covering all age groups and integrating online and offline offerings. In 2025, its new businesses, including postgraduate entrance exam preparation for university students, civil service exam preparation, psychology, language training, literacy courses, and study abroad services, flourished. Particularly noteworthy is that the online youth quality and literacy business achieved profitability for the first time in a single quarter during Q3. Meanwhile, the university student and adult learning businesses achieved both revenue and profit growth, with university student learning business revenue increasing by nearly 50% year-on-year and profit achieving high double-digit growth.
Second, the deep integration of "Education + AI" creates differentiated competitive advantages.
Since 2023, Gaotu announced a $100 million investment in AI and has firmly advanced its "All with AI, Always AI" strategy. Currently, AI is deeply embedded in the entire process of teaching, service, and operations: from the "Maodou AI Learning Classroom" to IP content generation for "Gaotu Rabbit," from AI-powered exam preparation planning in "AI Smart Study for Exams" to vocabulary memorization in "Whale Love Language Context," technology genuinely serves personalized learning experiences. The company has also established an AI Education R&D Center in Shanghai, built joint laboratories with Renmin University and Fudan University, and launched a global campus recruitment drive for 2026 focused on attracting AI talent to build a long-term technological moat.
Third, a return to the essence of education strengthens the "good teacher" supply chain.
Chen Xiangdong has repeatedly emphasized that "Famous Teachers Make Gaotu" is not just a slogan but a core asset. Through an integrated mechanism involving rigorous selection, systematic training, scientific certification, and continuous empowerment, the company builds a high-quality teaching faculty. For example, in the university student business, the proportion of teaching assistants holding master's degrees has significantly increased, directly boosting user satisfaction and word-of-mouth recovery, forming a virtuous cycle of "quality faculty — good experience — high retention — profitability."
Looking ahead to 2026, Chen Xiangdong explicitly proposed the "Stop-Doing List" concept, emphasizing the concentration of limited resources on the most critical matters. He summarized this into three pillars:
The first is strategic focus: Look 3-8 years ahead, rejecting short-sighted gambles.
"A CEO's decisions affect tens of thousands of employees and millions of families; they must be made with extreme caution," Chen Xiangdong stated. In 2026, he will devote significant effort to contemplating Gaotu's development path for the next 3 to 8 years, ensuring strategic direction aligns with technological evolution and changing social needs amid "unprecedented changes in a century." This includes in-depth research and judgment on long-term opportunities such as AI education, global expansion, and offline ecosystems.
The second is mechanism innovation: Driven by both cadres and systems.
Innovation cannot rely solely on slogans; it must be supported by a cadre capable of winning battles and institutional designs that stimulate vitality. Gaotu will continue to optimize its cadre selection and incentive systems, promoting an organizational culture of "victorious soldiers win first and then seek battle"—meaning deploying formations, selecting the right people, and setting strategies before engagement to avoid inefficient internal competition. Simultaneously, through a data-driven accounting system, the principle of "fairly distributing rewards" will be implemented, allowing strivers to receive above-average returns.
The third is cultural foundation: Ensuring five core values take root.
"Customer First, Integrity, Responsibility, Collaboration, Innovation" are the values accumulated by Gaotu over 12 years. However, in Chen Xiangdong's view, truly living them is extremely difficult. "Human nature is inherently self-centered; to genuinely put customers first requires continuous cultivation." In 2026, the company will integrate value assessments into daily management, using culture to build consensus and enhance organizational resilience and execution.
Profitability is not the end goal but the starting point for sustainable value. From its founding in 2014, its NYSE listing in 2019, to its rebirth after weathering the policy storm, Gaotu's story has always revolved around "resilient growth." Now, driven by both the AI wave and the push for high-quality development, Chen Xiangdong is leading Gaotu to recalibrate its course, no longer chasing the illusion of scale but instead focusing on profitability as the core objective and user value as the fundamental basis.
As he stated in his 2026 New Year's address: "The true code to wealth is finding opportunities for compound interest." For Gaotu, this compound interest comes from the deep integration of technology and education, from the continuous iteration of good teachers and good products, and even more from a company's adherence to its original aspirations and reverence for the future.
In 2026, can Gaotu deliver on its profitability promise? The market is watching closely.