Gaotu posts RMB1.67bn in Q2 revenue, up 20.2%, as AI gains and offline centers compound

Gaotu Techedu Inc. (NYSE: GOTU) reported second-quarter net revenues of RMB1,670.1 million for the three months ended June 30, 2026, up 20.2% from RMB1,389.4 million a year earlier, as the 12-year-old Chinese education group leaned on AI-driven efficiency and an expanding offline footprint.

Gross billings rose 19.4% to RMB2,689.1 million. Loss from operations narrowed to RMB149.8 million and net loss to RMB135.8 million; on a non-GAAP basis, net loss narrowed 37.6% to RMB129.1 million. Net operating cash inflow climbed 46.3% to RMB861.2 million. Operating expenses as a share of revenue fell 7.9 percentage points year over year, which management described as continued release of operating leverage.

Learning services remained the core, contributing more than 95% of revenue, with its traditional and non-academic tutoring lines accounting for over 85%. The company said its newer non-academic online and offline businesses grew more than 30% in revenue and now represent more than 40% of the total, with gross billings from that segment up over 20% and above 45% of the mix. Its online K9 business stayed profitable. Services for university students and adults grew more than 15% and now exceed 10% of revenue.

Founder, chairman and CEO Chen Xiangdong framed the quarter as validation of sustained investment in teaching products, learning services and organizational capability, describing a flywheel in which online brand and user trust support offline expansion while deeper offline service strengthens user connection and brand perception. The company added that cumulative share repurchases had passed RMB740 million as of Aug. 26.

Management credited much of the efficiency gain to AI. In curriculum and research, Gaotu said AI has rebuilt content production workflows, delivering efficiency gains of five to eight times in some scenarios and materially lowering the cost of personalized content. In course delivery and its secondary tutoring layer, AI assistance and quality checks now cover dozens of key service touchpoints, and automated homework marking has removed repetitive work — the company pointed to a spring-term renewal rate for new online students that improved more than five percentage points year over year as evidence. Chief operating officer Luo Bin said administrative and R&D expenses as a share of revenue fell 3.5 percentage points.

Gaotu is also pushing its accumulated capabilities into new delivery settings. The company said its two large offline learning centers in Zhengzhou and Wuhan are now operating at full enrollment, which it cited as evidence the model can be replicated at scale, and that it is tightening coordination between its university-study and civil-service exam preparation businesses through shared lead management and classroom resources.

"The compounding in education comes from time, and from every single delivery that is genuinely effective," Chen said.