Gaotu Techedu Inc.

Hello, and welcome to the GAL2 Tech EDU 3rd Quarter 2022-2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please send the World 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 your question, please press star, then two. Please note, today's event is being recorded. I would now like to turn the conference over to Catherine Chen, Head of Investor Relations. Please go ahead.

Thank you, Operator. Good evening, everyone. Thank you for joining GALTO's third quarter 2023 earnings conference call. My name is Catherine, and I'll help host the earnings call today. GoTo's earnings release for the quarter was distributed earlier and is available on the company's IR website at ir.goto.cn, as well as through PR newsletter services. Joining the call with me tonight from GoTo's senior management team is Mr. Larry Chen, GoTo's founder, chairman, and chief executive officer, and Ms. Shannon Shen, GoTo's chief financial officer. Larry will first provide the business highlights for the quarter, And then afterwards, Shannon will discuss our financial performance in more detail. Following their prepared remarks, we'll open the floor to questions from analysts. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements made under the safe harbor provision of the U.S. Private Security Litigation Reform Act of 1995. These forward-looking statements are based upon management's current beliefs and expectations, as well as the current market and operating conditions. And they 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, or achievements to differ materially from those contained in any forward-looking statement. Further information regarding this and other risks is included in the company's public filing with the USFDC. The company does not undertake any obligations to update any forward-looking statement except as required under applicable law. During today's call, management will also discuss certain non-GAAP measures for comparison purposes only. For a definition of non-GAAP financial measures and reconciliation of GAAP to non-GAAP financial results, please refer to our third quarter earnings release published earlier today. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this conference call will be available on GALJU's IR website. It is now my pleasure to introduce our founder, Larry. Larry, please.

Good evening and good morning, everyone. Thank you for joining us on GoTo's third quarter to Expenditure 23 Early Income Call. I would like to take this opportunity to express my gratitude to all of you for your interest in support of GoTo and the broader education industry. Before I start, I would like to remind everyone that all financial figures discussed today are quoted in RMB unless stated otherwise. Benefiting from the rising needs of students, our business continues to focus on the stages in students' life cycle where their learning capability is at its strongest, and we aim to meet their learning needs and enhance learning efficiency by continuously enriching product offerings and delivery formats. After the first nine months of operation optimization and rapid iteration in 2023, we are currently focusing on defining clear development directions and tracking a well-defined path forward dedicated to building up our core organizational competitiveness and continuously delving into new business initiatives. We will invest in areas that are strategically important for the company's success, continue to refine products and services for non-academic tutoring services, traditional learning services, and educational services for college students and adults, and build a resilient organization and a robust pool of talent. In the third quarter of 2023, our net revenues grew 30.2% year-over-year to $789.4 million, and our gross billions reached $639.3 million, up 5.3% year-over-year. Despite a decline in profits due to seasonality and historical operational constraints in 2022, we remain confident in our growth prospects and profitability in the coming year, driven by our constantly improving tenant pool, clearly defined growth strategies for each segment, and ample cash reserves. In the meantime, we also continued our share repurchase program during the quarter, demonstrating our unwavering confidence in our growth prospects I will now discuss our business highlights from the third quarter across five aspects. First, putting students and the users first so we can continue to invest in our educational products, teaching quality, and learning services. For our non-academic tutoring services and traditional learning services, we further expanded our knowledge graph, optimized our product matrix, and ensured precise alignment between students' needs and the courses we offer. Following our year of continuous refinement, the curriculum and services of our non-academic tutoring services have gained the trust of both our users and the market as a whole. We noticed a significant improvement in indicators that reflects our teaching quality and learning results, such as the retention rate. In terms of traditional learning services, revenue achieved year-over-year growth of over 40% in the third quarter. We broadened our variety of class offerings and teaching products to better address the diverse needs of our existing students, in addition to the dual teacher Online large class, we have introduced new offerings including personalized learning services, which have enhanced the scalability and sustainability of our portfolio as well as met the demands of students at all levels. Second, Anchoring on our effective growth strategy, we further optimized our organizational structure to create a more dynamic enterprise. Since the second quarter, we have strategically scaled back certain business lines within our educational services for college students and adults to focus on areas with high demand and rapid growth. This segment shows the promising signs of a turnaround in the third quarter, trimming its losses by nearly 100% by focusing on high-quality content and word-of-mouth referrals to drive customer acquisitions as well as enhancing our competitive advantage in terms of service quality. intensified our efforts to onboard and cultivate outstanding professional talents to expand the breadth and depth of our talent pool. A cohesive and motivated team is a driving force behind our sustainable growth, building a team of exceptional and skilled employees and accumulating and entering on best practices will enable us to consistently replicate our success and drive further business expansion. Since our business restructuring, we have prioritized the expansion of our talent pool and brought in a number of seasoned industry veterans. Their sophisticated prospectiveness and successful track record have proven highly beneficial to the development of our business. Meanwhile, we initiated a strategic program called Go to Talent Fostering Program for the 2024 recruitment season in collaboration with leading targeted universities. The program allowed us to brief screen top-notch candidates and provide them with the opportunity to gain insight into the industry, so as to deepen mutual understanding and increase talent acquisition efficiency. Fourth, we concentrated on enhancing customer acquisition ROI by diversifying our acquisition channels and fortifying our competitive edge in content-driven strategies. so improving the overall health of our business model. Through a combination of initiatives, including leveraging short-form video, live streaming, and book sales, expanding our offline presence, and engaging in private traffic, we aim to improve our acquisition efficiency. In particular, we have set up multiple offline centers for postgraduate entrance exam preparation business, and overseas study-related services. These centers enable us to acquire customers and deliver services in an online or offline format, which not only improves customer acquisition efficiency and service delivery quality, but also enhances our brand visibility. Lastly, we have strong confidence in our company's future growth and development. as of November 20, 2023. We had repurchased a cumulative total of approximately 4.2 million ADIs, and our share repurchasement plan adopted in November 2022. In addition, our Board of Directors today authorized the up-signing of our existing share repurchase program, pursuant to which we may repurchase up to 80 million U.S. dollars worth of EDS through November 22, 2025. We will continue to promote our long-term repurchase program to enhance our long-term shareholder value. We see tremendous growth potential for GoTo and are confident in our ability to deliver high-quality services and efficient operations through our ongoing efforts to improve customer acquisition efficiency, refine our educational products and services offerings, and fostering rapid growth of our talents and organizations. We believe These initiatives will put GoTo on the fast track to growth. Thank you very much. This is the end of my prepared remarks. Now I will pass the call over to our CFO, Shannon, to walk you through the financial and operational details of the quarter.