[Management View]
Gaotu reported a 37.6% YoY increase in revenue to RMB 1.4 billion and a 36.2% YoY increase in gross billings to RMB 2.3 billion. Net loss narrowed by 50.5% YoY to RMB 206.8 million. The company emphasized its AI-driven operational efficiency and strategic focus on offline learning centers.

[Outlook]
Gaotu expects Q3 2025 revenue between RMB 1.5 billion and RMB 1.578 billion, representing a 28.9%-30.6% increase. Management plans to raise full-year revenue expectations for FY2025, driven by strong enrollment and retention metrics, and continued AI-centric strategy.

[Financial Performance]
Revenue increased by 37.6% YoY to RMB 1.4 billion. Gross billings grew by 36.2% YoY to RMB 2.3 billion. Net loss narrowed by 50.5% YoY to RMB 206.8 million. Deferred revenue increased by 38.9% YoY to RMB 2.2 billion. Cash position exceeded RMB 3.8 billion.

[Q&A Highlights]
Question 1: I have a question on the offline centers development. What is the latest update, especially on the offline business, and do you have any operating metrics or indicators to share like the ramp-up and the future growth target?
Answer: Our offline business is experiencing strong momentum, with revenue growing by over 20% YoY and contributing over 5% of gross billings. We leverage in-person interaction to build deeper trust with students and parents, and our refined online content enhances offline learning centers' quality. Our strong brand recognition and digital infrastructure investments support offline operations. We see a virtuous cycle in cities with strong teachers and high-quality facilities, leading to positive word-of-mouth referrals and improving retention rates. Our offline business enriches our product mix and serves diverse learning needs.

Question 2: Could you share more color on the summer enrollment and the full year growth outlook given your strong first half and third quarter guidance?
Answer: Summer enrollment exceeded expectations, driven by improved teaching quality and retention rates. Our ROI improved from 1.99% last year to 2.75% this year, reflecting significant efficiency gains. AI technology enhances customer acquisition and operational processes, driving cost reduction and efficiency gains. We initially targeted 30% YoY revenue growth, but our first half growth was 47.3%, and Q3 guidance suggests over 40% growth for the first nine months. We will raise our full-year revenue expectations accordingly.

[Sentiment Analysis]
Analysts and management maintained a positive tone, highlighting strong growth, efficiency gains, and successful AI integration. Management expressed confidence in future performance and strategic initiatives.

[Quarterly Comparison]
| Metric | Q2 FY2025 | Q2 FY2024 | YoY Change |
|-------------------------------|-----------------|-----------------|----------------|
| Revenue | RMB 1.4 billion | RMB 1.02 billion| +37.6% |
| Gross Billings | RMB 2.3 billion | RMB 1.69 billion| +36.2% |
| Net Loss | RMB 206.8 million| RMB 418.2 million| -50.5% |
| Deferred Revenue | RMB 2.2 billion | RMB 1.58 billion| +38.9% |
| Cash Position | RMB 3.8 billion | RMB 2.7 billion | +40.7% |

[Risks and Concerns]
Potential risks include market uncertainties, regulatory changes, and the ability to sustain growth momentum. The company's reliance on AI and offline expansion may face operational challenges.

[Final Takeaway]
Gaotu's Q2 FY2025 performance demonstrated strong revenue growth and significant efficiency gains driven by AI integration and offline expansion. The company exceeded its initial targets and plans to raise full-year revenue expectations. Management's strategic focus on AI and diversified learning models positions Gaotu for continued success, despite potential market and operational risks.