Gaotu Techedu Inc.

Hello, ladies and gentlemen. Thank you for standing by, and welcome to the GOW2 TechEDU Inc. Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded. I would now like to turn the conference over to your first speaker today, Ms. Catherine Chen, Head of Investor Relations. Please go ahead, Catherine.

Thank you, Operator. Good evening, everyone. Thank you for joining GAL2's Fourth Quarter and Physical Year 2025 Earnings Conference Call. My name is Catherine, and I'll help host the earnings call today. GAL2's earnings release for the quarter was distributed earlier. and it's available on the company's IR website at ir.galto.cn, as well as through PR Newsware Services. Joining the call with me tonight from Galto Senior Management is Mr. Larry Chen, Galto's founder, chairman, and chief executive officer, and Ms. Shannon Shen, Galto'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 containing any forward-looking statements. 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 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 purpose only. For a definition of non-GAAP financial measures and reconciliation of GAAP to non-GAAP financial results, please refer to our fourth quarter and fiscal year 2025 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 GoTo'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 GAL2's fourth quarter and fifth year 2025 earnings comment call. I would like to take this opportunity to express my gratitude to each of you for your interest and support for GAL2. Before I start, I would like to remind everyone that all financial figures discussed today are IEMB, unless stated otherwise. 2025 marked a year of exceptional resilience for GoTo. We delivered a high-quality operating performance amid a rapidly evolving environment. If I were to summarize this year's achievements in one word, it would be refinement. representing not just a sharpening of our teaching quality, but a systematic elevation of our operational granularity. Throughout the year, we not only exceeded our growth targets, but more importantly, reinforced our organizational foundation, strengthening our core capabilities while continuing to scale rapidly. As we enter 2026, our approach to growth continues to evolve and mature. We are intentionally refining the way we grow, prioritizing profitable growth with the advancement of AI capabilities as a core of our operations, all with AI, always AI. This is how we are driving improvements in business health, operational efficiency, and long-term viability. Our fourth quarter performance represents an early validation of this strategic focus at the operational level. In the fourth quarter, we maintain steady top-line expansion while realizing meaningful operating leverage. Revenue increased by 21.4% year-over-year to $1.7 billion, and the bottom line improved by 38.0%, driven by continued efficiency gains. For the full year of 2025, revenue grew by 35.0% to $6.1 billion, exceeding our initial expectations at the beginning of 2025. net operating cash inflow reached $416 million, a net increase of $158 million year-over-year, reflecting continued improvement in operational quality and efficiency. After Excluding the impact of share repurchases, our cash position increased by 221 million year-over-year, providing strong support for our ongoing investments in products, technology, and talent, and pinning sustainable long-term growth. We remain firmly committed to enhancing long-term shareholder value and our aggregated share repurchase authorization. We have repurchased a total of RMB 670 million of shares, representing 12.8% of our total outstanding shares, including RMB 343 million in buybacks in 2025. As our business fundamentals continue to strengthen, We are well positioned to balance long-term strategic investments with a stable, predictable shareholder return framework. Through consistent and prudent capital allocation, we seek to build durable value, enabling investors who grow alongside the go-to to benefit from both our capital returns and the intrinsic value we generate. Most encouragingly, our operational gains are increasingly translating into tangible financial performance. We are shaping a more resilient, sustainable, and profitable business model, a virtuous growth flywheel anchored in healthy unit economics, driven by strong operational excellence and steered by our unwavering commitment to long-term user value. Guided by this framework, in 2026, we will focus on advancing strategic priorities across five fronts. First, in calibrating growth pace, profitability will remain a core strategic priority. Over the past year, we have comprehensively optimized our cost structure, resource education, and operating processes to fortify our business models and reinforce its economic foundation. Throughout 2025, our core business delivered stable profitability. validating the strategic direction we set in the prior period. Meanwhile, our strategic initiatives have progressed well and are steadily emerging as new growth engines, while near-term revenue trends may not fully capture our underlying momentum. We assess performance based on the quality, structure, and the sustainability of our growth, which are the pillars of lasting value creation. Second, in product development, we remain relentlessly user-centric driving continuous innovation in educational products and learning services. The essence of innovation lies in helping learners make real progress rather than merely completing cost delivery. We will continue deepening our understanding of users' real learning needs and pathways systematically embedding these insights into curriculum design, teaching methods, and service experiences. We firmly believe that truly valuable growth stems from superior learning outcomes, higher user satisfaction, and stronger brand trust. Third, with respect to technology, we are integrating innovation across our business, operations, and organizations, making it a structural driver for enhancing operational efficiency and user experience. Technology must enable teaching effectiveness, service excellence, and operational precision. In teaching scenarios, we are proactively combining high-quality instructor resources with AI-powered tools to make learning more engaging and effective. On the operations side, we are leveraging technology and data analysis to optimize resource allocation and enable more informed data-driven decision-making. At the organizational level, we are fostering more seamless collaboration through technology, empowering our team to focus on high-impact initiatives that drive meaningful value creation. Fourth, in terms of talent strategy, we continue to reinforce our competitive mode built around high-caliber educators. Educators are our most valuable assets and essential to sustaining our long-term competitive advantage. We will keep refining our talent selection, development, and incentive mechanisms, building a robust pipeline of educators and fostering an environment that supports educators' professional growth and long-term careers. A stable, high-caliber teaching team is a cornerstone for successfully scaling product innovation and technology upgrades. Fifth, to enhance our business portfolio, we are architecting a comprehensive lifelong learning service platform. Personal development is an ongoing journey, and learning needs at different stages are inherently connected rather than isolated. Through systematic integration of product formats and delivery models, we ensure learners have access to tailored solutions within GoTo's ecosystem during every critical developmental stage. By cultivating deep connections with users, we further strengthen our cross-maintenance synergies and extend the user lifecycle, significantly enhancing our operating model's resilience and long-term return potential. After nearly a decade of development and achievement, GALT will celebrate its 12th anniversary in 2026, Standing at this important milestone, we feel immense pride and a strong sense of responsibility. Through an ever-deepening understanding of our users, we have cultivated a core leadership team with a strong sense of ownership and long-term vision. assembled an outstanding, well-trained talent pool, distilled a set of cultural principles that shape our direction, and most importantly, earned the invaluable trust of tens of millions of students and parents. Since day one, GoTo's original aspiration has remained unchanged. to build a truly exceptional technology education enterprise when where every team member can achieve both material and spiritual prosperity, where every student enjoys an exceptional learning experience and accelerated personal growth, and where we accompany learners on a lifelong journey of progress while contributing enduring value to the development of the education industry in society. Looking ahead, we will remain committed to disciplined, prudent management, strictly control risk, and continuously strengthen our organizational and cultural foundation through unwavering strategic focus and powerful execution. I firmly believe that as long as we uphold the long-termism insist on value creation, and remain true to the essence of education, GoTo will advance steadily, generating lasting value for our shareholders, employees, users, and society at large. Thank you very much, everyone. This concludes my prepared remarks. I will now pass the call over to our Chief of Training to walk you through this quarter's financial and operational details.