On May 21st local time, Gaotu Education Technology Group Co., Ltd. (NYSE: GOTU) released unaudited financial data for the first quarter ended March 31, 2024.
In the first quarter of this year, Gaotu's net income was 946.9 million yuan (the same below), an increase of 33.9% from 707.3 million yuan in the same period in 2023; The gross profit increased by 23.4% year-on-year to 675.5 million yuan, and the gross profit margin decreased from 77.4% in the same period of 2023 to 71.3%, resulting in a net loss of 12.3 million yuan. The net profit for the same period of 2023 was 113.9 million yuan; The net outflow of operating cash was 197.4 million yuan, compared to 216.4 million yuan in the same period of 2023.
Due to the increase in labor costs for teachers and mentors, as well as the increase in learning material costs, the revenue cost of Gaotu increased by 69.6% from 160 million yuan in the first quarter of 2023, reaching 271.4 million yuan. R&D expenditure increased by 56% from 97 million yuan in the first quarter of 2023 to 151.6 million yuan.
As of March 31, 2024, Gaotu had a total of 3.7976 billion yuan in cash and cash equivalents, restricted cash, and short-term and long-term investments. As of the end of 2023, this total amount was 3.9535 billion yuan.
Chen Xiangdong, founder, chairman, and CEO of Gaotu, said, "In terms of customer acquisition, we have expanded our customer expansion scope by exploring diversified channels. The company's total cash, cash equivalents, restricted cash, and short-term and long-term investments amounted to 3.8 billion yuan, which is 374.6 million yuan higher than the same period last year."
The company's Chief Financial Officer, Shen Nan, said, "Our total sales have shown strong growth, increasing by 35.3% to 729.4 million yuan. On a comparable basis, total sales have increased by more than 70% year-on-year. It is expected that this will gradually translate into accelerated revenue growth."
Gaotu predicts that the total net income for the second quarter of 2024 is expected to be between 908 million yuan and 928 million yuan, a year-on-year increase of 29.1% to 32.0%
In addition, in November 2022, the board of directors of Gaotu authorized a stock repurchase plan, under which the company can repurchase up to $30 million worth of stocks, valid until November 22, 2025. In November 2023, the company's board of directors authorized the modification of the stock repurchase plan, increasing the total value of potential repurchased stocks from $30 million to $80 million, with an effective period until November 22, 2025.
As of May 20, 2024, the company has cumulatively repurchased approximately 4.9 million ADSs for approximately $12.4 million under its stock repurchase program.
In November 2022, Chen Xiangdong announced the purchase of up to $20 million in shares in the company and an additional 510000 ADSs in 2024. As of May 20, 2024, he has purchased approximately 1.4 million ADSs based on his existing purchase plan.