Gaotu Techedu Inc.

Ladies and gentlemen, thank you for standing by and welcome to the GAL2TechEDU second quarter 2024 earnings conference call. All participants will be in a 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 a touch tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Catherine Chen, Head of Investor Relations. Please go ahead.

Thank you, Operator. Good evening, everyone. Thank you for joining Gallatin's Second Quarter 2024 Earnings Conference Call. My name is Catherine, and I'll help host the earnings call today. GALTO's earnings release for the quarter was distributed earlier and is available on the company's IR website at ir.galto.cn, as well as through PR newsletter services. Joining the call with me tonight from GALTO's senior management is Mr. Larry Chen, GALTO's founder, chairman, and chief executive officer, and Ms. Shannon Shen, GALTO's chief financial officer. Mary 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 provisions 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 invoke 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 U.S. SEC. The company does not undertake any obligation 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 purpose only. For definition of non-GAAP financial measures and reconciliation of GAAP and non-GAAP financial results, please refer to our second 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 GAL2's IR website. It is now my pleasure to introduce our founder, chairman, and chief executive officer, Larry. Larry, please.

Good evening and good morning, everyone. Thank you for joining us on GoTo's second quarter of fiscal year 2024 earnings conference call. I would like to take this opportunity to express my gratitude to all of you for your interest in and support of GoTo. Before I start, I would like to remind everyone that all financial figures discussed today are quoted in RMB unless stated otherwise. We achieved encouraging results in the second quarter with net revenues increasing 43.6% year-over-year to $1.0 billion, reflecting strong accelerating growth momentum. Our growth billions grew by a substantial 87.4% year-over-year to 1.7 billion, which not only exceeded market expectations, but also underscored our growth potential in the education sector. Thanks to our long-term investment in diversified and proprietary channels, we maintain the industry-leading customer acquisition efficiency while serving robust market demand. During the quarter, our net operating cash inflow reached $386.2 million. Our cash reserves remained strong, totaling $4.1 billion in cash, cash equivalents, restricted cash, and short-term and long-term investments which is 361.3 million higher than at the same point in time last year. This ongoing improvement in our operational efficiency is the result of our consistent focus on business health and commitment to our educational aspirations. As of June 30, 2024, Our deferred revenue reached 1.6 billion, representing a 71.5% increase from the same point in time last year, ensuring robust support for our continued growth in the second half of the year. I will now provide an update on the progress we have achieved in the quarter. We've consistently recognized that learning services and the teaching quality form the bedrock of our core competition. Over the past few months, we have significantly enhanced learning experience and outcomes for students through the continuous optimization and refinement of course content alongside the strategic strengthening of our instructors and tutors expertise and qualifications. For instance, Within our educational services for college students, we have increased the proportion of our tutors and content development teams holding master's degree, thereby elevating our overall professional, academic, and teaching quality. In our non-academic tutoring services, we have not only fostered our team by raising the percentage of tutors from top-ranked universities, but also diligently refine the classroom activities and the course design based on student feedback and industry insights. This has boosted greater student engagement, fostering their comprehensive capability in innovation, problem solving, and self-directed learning. To address individualized learning needs, we have introduced innovative teaching models and flexible course structures that have significantly boosted student engagement and satisfaction. This approach has, in turn, contributed to the overall health of our business. During the quarter, we observed a steady increase in retention rates for our traditional learning services with a particularly notable uptake among new enrollments. These efforts have reinforced our competitive edge within the industry and laid a solid foundation for the effective growth of our business. Looking forward, our strategic priorities will remain focused on refining our educational offerings, improving our teaching quality, and optimizing the learning experience. Top-tier talent is the core driving force behind the long-term growth of our company and the education industry at large. At GoTo, we have enhanced the professional expertise and the stability of our leading instructors and tutors by refining our incentive and evaluation frameworks, strengthening our organizational culture, and expanding our training and feedback mechanisms. We have also established a robust recruitment system and made substantial investments in cultivating new teachers. In the first half of 2024, we formed a strategic partnership with over 60 leading universities across China, engaging in collaborative initiatives such as joint programs and on-campus lecture series to support new hires. We have implemented programs like mentor orientation and newcomer camp to facilitate their seamless acclimation to our culture, smooth team integration, and effective transition into teaching roles. These initiatives equip them with the skills and knowledge needed to succeed in their role. Moreover, we are actively onboarding seasoned industry professionals with extensive industry experience and management capabilities. Their proven methodologies and strategic insights are infusing our rapidly expanding business with invaluable expertise and comprehensive perspective. Going forward, we remain dedicated to cultivating our talent pool to ensure a solid foundation for sustained and effective growth. While rapidly expanding our business, we have maintained an unwavering focus on operational efficiency in terms of customer acquisition. We have proactively increased investment in talent and resources, developed a diverse range of acquisition channels, with a particular focus on building proprietary channels and private traffic poles. This strategy not only established positive market position for us, but also effectively mitigated risks by fostering closer cross-team collaboration and streamlining operations. We have consistently maintained the user conversion rates at a high level. Looking ahead as our enrollment grew and the brand recognition expands, we will continue to leverage the power of positive word of mouth to further to strengthen our brand and drive effective business growth. June the 16th marked the 10th anniversary of Goal 2's founding. Over the past decade, we have stayed true to our educational aspirations of striving for excellence by harnessing the power of artificial intelligence. We are advancing our mission to make learning better and working diligently pursuing our operational goal of fostering student growth through exceptional teachers and realizing meaningful social value. In response to China's evolving demands for talent cultivation, we co-hosted the second top-notch innovative talent collaborative cultivating academic forum in collaboration with esteemed official organizations, including the Chinese Society of Educational Development Strategy, This initiative underscores our dedication to advancing the framework and practices essential for nurturing innovative talent in the education sector. According to our internal data, the number of GoTo students admitted to the top two Chinese universities in 2024 has seen a further increase from last year, a strong testament to our excellence in cultivating outstanding innovative talent. Our success is fundamentally rooted in the trust and support of our shareholders. We remain steadfastly committed to enhancing shareholder value. As of August 26, 2024, the company had repurchased drawn the 7.9 million EDS in aggregate for a total of approximately 27 million US dollars under the existing share repurchase program. Moving forward, we remain committed to prioritizing customer needs and creating lasting value for our shareholders. 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.