Gaotu Techedu Inc.

Ladies and gentlemen, thank you for standing by and welcome to the GSX-Tekadu, Inc. first quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw from the question queue, please press star then two. Please note, this event is being recorded on Wednesday, May 26, 2021. I would now like to hand the conference over to your first speaker today, Ms. Sandy Chin, IR Director of GoTo. Thank you. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us today. GoTools and its release was distributed earlier and is available on the company's IR website at ir.goTools.cn. On the call with me are Mr. Larry Chen, GoTools founder, chairman, and chief executive officer, and Ms. Shannon Schiff, chief financial officer. Larry will give a general overview and then Shannon will discuss the financials. Following the prepared remarks, Larry and Shannon will be available to answer your questions. I will translate for Larry. Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations in current market and operating conditions and related events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict, and many of which are beyond a company's control and may cause the company's actual results, performance, or achievements to differ materially. Further information regarding these and other risks, uncertainties, or factors is included in the company's filing for CFTC. The conference does not undertake any obligation to update any forward-looking statements except as required and are applicable now. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this conference call will be available on GoTo's new investor relations website. Today, we officially launched our new website at ir.go2.cn. The old red spot will no longer be in use within one week. It is now my pleasure to introduce Larry. Larry, please go ahead.

Thank you, Sandy. Good evening and good morning to you all. Thank you for joining us today on our first quarter 2021 earnings conference call. In the first quarter, to further improve our service quality, we further lowered our student per tutor ratio to just over 100 for our promotional courses. Costs related to our promotional cost tutors rose to account for 20% of our quarterly revenue, up by 5 percentage points sequentially. That, combined with miscellaneous expenses, totaled RMB 503 million. Additionally, this quarter, we spent RMB 352 million on branding activities. Excluding these factors, our traffic acquisition costs were RMB 1.37 billion, while first-time users contributed a majority of the RMB $1.18 billion in gross billions, which implies that on a lifetime value basis, we are still profitable. Recently, all of our school segments, including primary, junior, and senior high schools, have returned to profitability on a lifetime value basis, and we have witnessed rebounding trends in our conversion, class retention, and student reactivation rates. Last year end, we implemented some cost control measures and actively stayed away from the cash burning war for the winter semester student recruitment period. At the same time, we continuously upgraded our products, enhanced our education quality and services, and adjusted our operations to improve our long-term service quality and customer satisfaction. We have always believed that the core of online education is education rather than online. Expensive traffic growth no longer works for this industry, while every player has to compete by refining operations. As a company that prioritizes efficiency, we have decided to return to the core of education and quality-driven growth so that we could return to a possible profitable growth in the upcoming months. We will adhere to our long-term philosophy, adhere to our focus on continually improving efficiency and quality, adhere to our highest priority of satisfying each student and parent we serve, and adhere to expensive investment in our technology and education quality. A major priority for our investment has been on technology and education quality. In the first quarter, our investment in research and development reached a historical high of RMB 365 million. Over the past year, we have recruited a dozen technology experts at the director level or above to enhance our technology across learning scenarios, teaching content, and education services. We believe these investments will bring us tremendous leverage in terms of bolstering our education quality over the long term. In addition, premium instructors are one of the most important strategic resources for an education company. So we have been also expanding our investment in our teachers and education quality since the beginning of this year. We have raised the base compensation for each of our over 1,500 tutors by RMB 500 per month. We have also established a RMB 5,000 annual tribal fund for each of our instructors, tutors, and cross-development professionals so that they can have a better work-life balance. Our core strength has always been our instructors And this quarter, we ramped up our apps to recruit and develop talented instructors at the local level. Moreover, we continue to increase our spending to train tutors and have helped them improve their academic knowledge and the certain capabilities through routine subject training and the lecturing context. Education is one of the biggest factors that affect a person's well-being. It's a social responsibility, and in the end, it's about enlightening one life with another life. In the first quarter, third-tier cities and below contributed 59% of our K-12 enrollment. During the pandemic last year, we donated 20 million worth of winter semester regular-priced courses to Wuhan. We also founded a charity project to support prayer families in Hezhang County of Guizhou and the left-behind children in Shenyang City of Liaoning by donating numerous courses. In addition, we established the Payers of the State Scholarship in Shaanxi Province and have provided approximately RMB 15 million worth of regular-priced courses to more than 220 outstanding students from eight local high schools. The social impact of online education is significant, profound, and essential to society. We will uphold our original aspiration and belief about education, shoulder our responsibility in advancing social progress and promoting equal access to education and dedicate ourselves to bring quality education resources to more and more families. Now, I will pass the call over to our CFO, Shannon, to walk you through our financial and operation details.