Gaotu Techedu Inc.

Ladies and gentlemen, thank you for standing by and welcome to the GSX TechEdu Inc. Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then 2. Please note, this event is being recorded on September 2nd of 2020. I would now like to hand the conference over to your first speaker today, Ms. Sandy Chin, IR Senior Manager of GSX. Thank you. Please go ahead.

Thank you, Operator. Hello, everyone, and thank you for joining us. GSX and it's available on the company's IR website. On the call with me today are Mr. Larry Chen, he acts as founder, chairman, and chief executive officer, and Ms. Shannon Shen, the financial officer. Larry will give a general review, and then Shannon will discuss the financials. Following the prepared remarks, Larry and Shannon They will be available to answer your questions. Before we begin, I'd like to remind you that the conference calls contain full-length looking statements as defined to ask private security litigation before an access might be made available. Before we look at statements, I'd say that one of the management's current expectations is to respond in an operating condition. And the way to do that is that we want to know or unload these confirmations and other factors, all of which are difficult to predict and many of which are beyond the company's control. And we call companies' actual results, performance, or achievements to be declared material. Some of the information regarding these and other risks, uncertainties, or factors can be included in the company's timeline with the NCC. The company does not enter the annual location to update any forwarded business statement. As a reminder, this conference is being recorded. In addition, a lot of the archives that have been told to call will be available on PSX. You have to go to your website at pss.investingrooms.com. You are also welcome to subscribe to our following newsletters through the same website. It is now my pleasure Thank you Sandy.

Good evening and good morning to you all. Thank you for joining us today. First, we are pleased to see that the country has continued to flatten the curve of new COVID-19 cases over the last few months. Against this backdrop, we made a concerted effort to deliver another robust quarter. Net revenues hit a record high, supported by our focused strategy and notable organizational capabilities. The numbers say it all. Our net revenues and growth billions once again both maintained over four times year-over-year growth. Our T12 net revenues, in particular, have been growing more than five-fold year-over-year for over 10 consecutive quarters, which has further solidified our position among the top tier players in the education sector. We are thrilled to report that growth in paid course enrollment has accelerated to 332% year-over-year from 259% in the prior year. Not only did we maintain our high-speed growth, but we also remained profitable for the eighth consecutive quarter and non-GAAP profitable for the ninth consecutive quarter. Moreover, we generated a net operating cash inflow of $528 million. which was 2.7 times that of the second quarter last year, thanks to our exceptional retention for the spring semester. We plan to execute a profitable growth strategy for the whole year, and we will make efforts to prioritize investment in the high RI traffic acquisition channels. focus on an online large-class education business model, and continually enhance our organizational capabilities. I would like to emphasize that this year is very special. It's a year that even the two most important national school exams in China, Gaokao and Zongkao, will be laid due to the pandemic. It's a year that students' parents further recognize and accept the effectiveness efficiency, and convenience of online education. This year, the sector landscape is about to settle down and each online education company strives for its market position. In the second quarter, our sales and marketing expenses were 613% higher than last year, but translated into 2.4 billion gross billions for us. I would also like to remind everyone that a certain number of enrollments in the second quarter last year were from our 49 yuan promotional courses. This year, as we mainly focused on the lower 9 yuan promotional courses, which theoretically have a lower access threshold and conversion rate than the 49 yuan courses. we were still able to record an acceleration in paid cross enrollments, which really speaks to the remarkable conversion capabilities and operational efficiency of our team. Moreover, the paid cross enrollments that we attracted in the second quarter laid a solid foundation for net revenues growth in the third and fourth quarters. which can be seen in our deferred revenues, which hit nearly $2 billion. What's more, the soaring growth billions and net revenues this year, along with the following retention from our enrollment, will in turn drive up our growth in 2021, forming a positive flat-wheel effect. The first-order RI already reflects our outstanding operating efficiencies, and organizational capabilities. Considering the fact that the new customers will stay on our platform for more semesters, the lifetime value they brought will multiply the first order return on investment by time. In short, the more new elements that we are able to recruit and then retain now, the higher value they will bring in the future. Last but not least, In the face of enormous market opportunities, we target four-year profitability. As a part of this, we are laser-focused on deploying our customer acquisition resources based on RI. Our ultimate goal is to serve students and parents to their satisfaction, which is the core of our decision-making process. In the long run, we will constantly invest in talent, invest in technology, invest in content, invest in services, invest in branding, as well as invest in our culture, all with an eye on maintaining the values that we hold. Through these investments, we aim to redefine the online large class format in a way that delivers the quality of a large class, the learning experience of a small class, and the feeling and effects of one-on-one tutoring. Over the past six years, we have broken many records, accomplished multiple breakthroughs, and surpassed many expectations. However, we will still maintain our pragmatic values and humble and down-to-earth attitude as we continue to build the organizational capabilities of our team and improve the operational efficiency of our company. Drawing hands with the major players in our sector, we will spare no efforts to contribute to the equality and fairness of education within our society. Now, I will pass the call over to our CFO, Shannon, to walk you through our financial and operational details.