Gaotu Techedu Inc.

Ladies and gentlemen, thank you for standing by and welcome to the GAL2 TechDo Incorporated fourth quarter and fiscal year 2021 earnings conference call. All participants will be in the 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 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note, this event is being recorded on Tuesday, March 8, 2022. I would now like to hand the conference over to your first speaker today, Ms. Sherry Liu. IR Manager of GAL2. Thank you. Please go ahead.

Thank you very much, Operator. Good evening, everyone, and thank you for joining us on our first quarter and full year 2021 earnings conference call. GAL2's first quarter earnings release was distributed earlier and is available on the company's IR website at ir.gal2.cn. On the call with me today are Mr. Larry Chen, GAL2's Founder, Chairman, and Chief Executive Officer and Ms. Shannon Shen, Gautu's 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 will contain 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 and the 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 the company's control and may cause the company's actual results, performance, and achievements to differ materially. Further information regarding these and other risks, uncertainties, or factors is included in the company's filings with the SEC. The company does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this conference call will be available on GAL2's IR website. It is now my pleasure to introduce Larry. Larry, please go ahead.

Thank you, Sherry. Good evening and good morning to you all. Thank you for joining us on our fourth quarter and fourth year 2021 earnings conference call. Before I start, I would like to remind everyone that all financial information that I mention later is based in RMB, unless otherwise noted. In the fourth quarter of 2021, our revenue was 1.3 billion, representing a 14.3 point quarter-over-quarter increase. which brought our revenues for the full year of 2021 to $6.6 billion. Our gross billions of this quarter also showed a huge 233.7% quarter-over-quarter increase to $1 billion. During this quarter, net revenues and gross billions from our comprehensive tutoring services which consists of our fitness other than control of academic subjects tutoring services were $149.1 million and $234.8 million respectively, representing a decent increase in size compared with previous quarters. and demonstrate that we are on the right track of gradually shifting our emphasis to business other than K-12 academic subject tutoring services. It's especially worth noting that after we restructured our business in the third quarter, in the fourth quarter we achieved considerable profitability in both GAAP and non-GAAP terms. as well as positive net of reaching cash flow. Our net profit was $285.9 million, and our non-GAAP net profit was $324.4 million, which gave us a record high non-GAAP net profit margin of 25.5%. Our net operating cash inflow was $245.8 million. All of these indicate that the business restructuring and organizational adjustments we performed in the last quarter delivered significant results, confirming that we chose the right strategic direction, which proved effective in a short period of time. In the meantime, we maintained a strong cash position as of December 31, 2021. Our cash and cash equivalents, restricted cash, and short-term wealth management investments totaled approximately $3.7 billion. Going forward, We will continue to focus on online vocational education, professional education and digital products. We will continue to focus on high operational efficiency as we have always emphasized. We will continue to focus on the effective growth of our business and we will continue to focus on the personal development of our team. Next, I will elaborate on these four points and briefly cover our progress in the quarter. First, in the fourth quarter, we further expanded our vocational and professional education cost offerings to better meet the broad range of demand of our existing and potential students. In November last year, we repositioned ourselves as a learner-centric lifelong learning and service platform, which is our new corporate vision statement. We now offer a relatively comprehensive range of vocational and professional education categories, including not only tutoring for recruitment and qualification examinations and preparation for a college-level academic exam, but also vocational skills training, capability improvement, professional counseling, comrades training, and others, covering most types of training courses that cater to a variety of needs of learners of various age groups, educational background, and life and work experience. In addition to benefiting society by developing more talent, our course offerings also help learners enrich their lives. A multi-category platform both reinforces the branding that we build up in the K-12 space in the vocational and professional education sector and will boost cross-selling, upselling, and retention rates. We all know that the demand for vocational and professional education in China is enormous and is growing rapidly. And we are confident that by leveraging the insights and resources that our operations, products, research and development, and tutors have accumulated in the online K-12 business, which have given us a strong competitive advantage. we will achieve significant growth in the vocational education sector. Second, we have always emphasized the importance of high operational efficiency. Since the founding of our company, we have been determined to build a highly efficient, organized, and unified team. Our greatest asset is our team, which is also the core engine of our business growth. After our restructuring in the fourth quarter, our growth margin was 69.7 percent, higher than that of previous two quarters. Our operating margin also reached a record high level. are solid testament to the high operational efficiency of our team. Third, we will continue to focus on the effective growth of our business. We do not pursue meaningless size expansion. Rather, we put a priority on maintaining healthy, stable, and sustainable growth. Before introducing a new cost offering, we carefully analyze its unit economic and profit model. Before launching a new product, we put ourselves into the shoes of the lender to ensure that we can provide the best quality, the best service, and the best user experience to our customers. Finally, we continue to invest heavily in our employees by providing them with ongoing training. We regularly arrange core competency trainings, including leadership, operations, and organizational skills for our business leaders as part of our efforts to develop well-rounded talent for our business. At the same time, we continue to offer highly competitive compensation by industry standards and continue to maintain high standards for the recruitment training, ranking, and performance evaluation of our tutors and employees. Looking back, 2021 was undeniably an eventful year as we went through large-scale strategic and organizational adjustments in the wake of regulatory policy changes in the industry. However, within a short period of time, we completed our restructuring and ended the year with a strong quarterly profit. Looking ahead into 2022, we will continue to comply with government policies, continue to cherish the goal to spread, putting our heart into it, and trying our best. and continue to leverage the deep roots of our experience in the online education industry and the hard work of our excellent team to bring superior vocational and professional education courses, superior digital products, and a better learning experience to more customers to fulfill our corporate mission of making learning better. Now I will pass the call over to our CFO, Shannon, to walk you through our financial and operational details.