Gaotu Techedu Inc (GOTU) 2023 Q3 法說會逐字稿

Hello, and welcome to the Gaotu Techedu third quarter 2023 earnings conference call. All participants will be on listen only mode. (Operator Instructions) Please note, today's event is being recorded. I would now like turn the conference over to Catherine Chen, Head of Investor Relations. Please go ahead.

您好，歡迎參加高圖科技 2023 年第三季財報電話會議。所有參與者將處於僅聽模式。 （操作員說明）請注意，今天的活動正在錄製中。我現在想把會議交給投資人關係主管 Catherine Chen。請繼續。

Thank you, operator. Good evening, everyone. Thank you for joining Gaotu's third quarter 2023 earnings conference call. My name is Catherine, and I'll help host the earnings call today. Gaotu's earnings release for the quarter was distributed earlier, and it's available on the company's IR website at ir.gaotu.cn, as well as through [PR news references] Joining the call with me tonight from Gaotu's senior management team, is Mr. Larry Chen, Gaotu's Founder, Chairman, and Chief Executive Officer; and Ms. Shannon Shen, Gaotu's Chief Financial Officer.

謝謝你，接線生。各位晚上好。感謝您參加高圖2023年第三季財報電話會議。我叫凱瑟琳，我將幫忙主持今天的財報電話會議。高圖本季財報已於早些時候發布，可在公司IR網站ir.gaotu.cn以及[公關新聞參考]上查看。今晚與我一起參加高圖高級管理團隊電話會議的是Larry先生。陳先生，高圖創辦人、董事長兼執行長；以及高途財務長沉珊女士。

Larry will first provide the business highlights for the quarter. And t hen afterwards, Shannon will discuss our financial performance in more details. 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 US Private Security Litigation Reform Act of 1995. This 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 statements.

拉里將首先介紹本季的業務亮點。之後，香農將更詳細地討論我們的財務表現。在他們準備好的發言之後，我們將接受分析師的提問。在我們開始之前，我想提醒您，本次電話會議將包含根據 1995 年美國私人安全訴訟改革法案的安全港條款做出的前瞻性聲明。這些前瞻性聲明基於管理層當前的信念和預期，以及當前的市場和經營狀況，並且涉及已知或未知的風險、不確定性和其他因素，所有這些因素都難以預測，其中許多因素超出了公司的控制範圍，可能會導致公司的實際結果、業績或成就與任何前瞻性陳述中所包含的內容有重大差異。

Further information regarding this and other risks is included in the company's public filings with the US SEC. The company does not undertake any obligation to update any forward-looking statements except as required under applicable law. During today's call, management will also discuss certain non-GAAP measures for comparison purpose only. For our 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 Gaotu's IR website.

有關此風險和其他風險的更多資訊包含在該公司向美國證券交易委員會提交的公開文件中。除適用法律要求外，本公司不承擔更新任何前瞻性聲明的義務。在今天的電話會議中，管理階層還將討論某些非公認會計準則衡量指標，僅供比較之用。有關我們對非 GAAP 財務指標的定義以及 GAAP 與非 GAAP 財務業績的調節，請參閱我們今天早些時候發布的第三季度收益報告。提醒一下，本次會議正在錄製中。此外，本次電話會議的現場直播和存檔網路直播將在高圖的 IR 網站上提供。

It is now my pleasure to introduce our Founder, Larry. Larry, please.

現在我很高興向大家介紹我們的創辦人拉里。拉里，請。

Good evening and good morning, everyone. Thank you for joining us on Gaotu's third quarter 2023 earnings con call. I would like to take this opportunity to express my gratitude to all of you for your interest and support of Gaotu and a 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.

大家晚上好，早安。感謝您參加高圖 2023 年第三季財報電話會議。藉此機會，我謹向大家對高圖及廣大教育產業的關心與支持表示感謝。在開始之前，我想提醒大家，今天討論的所有財務數據，除非另有說明，均以人民幣報價。

Benefiting from the rising needs of students, our business continue to focus on the speeches, and student's life cycle where they are learning capability is at its strongest. And we aim to meet their learning needs and enhance learning efficiency by continuously enriching product offerings and a delivery format. After the first nine months of operation of 2023, the company focused on defining clear developmental directions and the tracking of well-defined path forward. Dedicated to building up our core organizational competitiveness and to continuously delving into neo business initiatives.

受益於學生不斷增長的需求，我們的業務繼續以演講為主，學生的生命週期中學習能力最強。我們的目標是透過不斷豐富產品和交付形式來滿足他們的學習需求並提高學習效率。經過 2023 年的前 9 個月運營，該公司的重點是確定明確的發展方向並追蹤明確的前進道路。致力於打造組織核心競爭力，持續深耕新業務措施。

We will invest in areas that are strategically important for the company's upside, continue to refine products and services for non-academic tutoring services, traditional learning services, and educational services for college students and either and to build a resilient organization and a robust poll of talent. In the third quarter of 2023, our net revenue grew 30.2% year-over-year to RMB789.4 million, and our gross billing reached RMB639.3 million, up 5.3% a year-over-year.

我們將投資於對公司發展具有戰略意義的領域，繼續完善非學術輔導服務、傳統學習服務和大學生教育服務等產品和服務，並建立一個有彈性的組織和強大的民意調查。天賦。 2023年第三季度，我們的淨收入年增30.2%至人民幣7.894億元，總流水達到人民幣6.393億元，較去年同期成長5.3%。

Despite a decline in profit due to seasonality and the historical operational constraints into lower than that of '22, we remain confident in our growth prospects and the profitability in the coming year. Driven by our constantly improving talent pool, clearly define the 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.

儘管由於季節性和歷史營運限制導致利潤下降，低於 22 年，但我們對來年的成長前景和獲利能力仍然充滿信心。在不斷完善的人才庫的推動下，明確各細分領域的成長策略和充裕的現金儲備。同時，我們也在本季繼續實施股票回購計劃，這表明我們對成長前景堅定不移的信心。

I will now discuss our business highlights from the third quarter across five aspects. First, putting students and the user differs so we can continue to invest in our educational products, teaching quality, and the learning services. For our non-academic tutorial services and the traditional learning services, we further expanded our knowledge graph, optimized our product matrix, and ensure the precise alignment between students' needs and the courses we offer. Following an idea of continuous refinement to the curriculum and the services of our non-academic tutorial services have gained the trust of both of our users and the market as a whole.

以下我從五個方面來談談我們第三季的經營亮點。首先，學生和使用者的定位不同，因此我們可以繼續投資我們的教育產品、教學品質和學習服務。針對非學術輔導服務和傳統學習服務，我們進一步擴展知識圖譜，優化產品矩陣，確保學生需求與課程的精準對接。我們的非學術輔導服務秉持著不斷改善課程和服務的概念，贏得了使用者和整個市場的信任。

We noticed a significant improvement in indicators that reflects our teaching quality and learning results which were higher retention rate. In terms of traditional learning services, the revenue achieved year-over-year growth of over 40% in the third quarter. We broadened our variety of class offerings and the teaching products to better address the diverse needs of our existing students, adjacent to the deal, teacher online large class. We have introduced new operations, including personalized learning services, which have enhanced the scalability and the sustainability of our portfolio as well as met the demand of students at all levels.

我們注意到反映我們教學品質和學習成果的指標有了顯著改善，即更高的留任率。傳統學習服務方面，第三季營收年增超過40%。我們擴大了課程內容和教學產品的種類，以更好地滿足現有學生的多樣化需求，毗鄰交易，老師在線大班。我們推出了包括個人化學習服務在內的新業務，增強了我們產品組合的可擴展性和可持續性，並滿足了各個級別學生的需求。

Second, anchoring on our effective growth strategy, we further optimize 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 show the promising signs of a turnaround beyond the third quarter [insinuate] the losses by nearly 100% by focusing on highly quality content and a word-of-mouth referral to drive customer acquisitions as well as the enhancing our competitive advantage in terms of service quality.

二是圍繞有效成長策略，進一步優化組織架構，打造更具活力的企業。自第二季以來，我們策略性地縮減了大學生和成人的教育服務中的某些業務線，以專注於需求高且成長迅速的領域。該細分市場顯示出第三季度之後好轉的良好跡象，透過專注於高品質內容和口碑推薦來推動客戶獲取以及增強我們在方面的競爭優勢，[暗示]虧損近 100%的服務品質。

Third, we can quantify it our efforts to onboard and cultivate outstanding professional talents to expand the brand and depth of our talent pool. These save our -- and the 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 the drive further business expansion. Since our business re-structuring, we have prior -- all the ties of the expansion of our talent pool and brought in a number of seasoned industry veterans.

第三是量化引進和培養優秀專業人才，擴大人才隊伍品牌與深度。這些拯救了我們——而積極進取的團隊是我們永續成長的驅動力。建立一支由優秀且技術精湛的員工組成的團隊，並累積和採用最佳實踐將使我們能夠不斷複製我們的成功並推動業務進一步擴張。自從我們的業務重組以來，我們優先考慮——擴大我們的人才庫並引進了一些經驗豐富的行業資深人士。

Their sophisticated prospectiveness and a successful trial of records have proven a highly beneficial to the development of our business. Meanwhile, we initiated a strategic program called the Gaotu Talent Fostering Program for the 2024 for recruitment season in collaboration with leading target heavy universities. The program allowed us to pre-screen top-notch candidates and provided them with the opportunity to gain insight into the industry, so it's a deepened mutual understanding and increased talent acquisition efficiency.

事實證明，他們的遠見卓識和成功的試驗記錄對我們業務的發展非常有利。同時，我們聯合重點目標大學啟動了2024年招募季「高途人才培育計畫」策略計畫。透過這個項目，我們可以預先篩選優秀的候選人，為他們提供深入了解產業的機會，從而加深相互了解，提高人才獲取效率。

Fourth, we concentrate on enhancing customer acquisition by diversifying our acquisition channels and fortifying our competitive edge in content agreements 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 post graduate entrance exam preparation business and overseas study related services. These centers enable us to acquire customers and it delivers services at online or offline format, which not only improve the content acquisition efficiency and service delivery quality, but also enhance our brand visibility.

第四，我們專注於透過多元化我們的獲取管道和增強我們在內容協議策略方面的競爭優勢來增強客戶獲取。從而改善我們商業模式的整體健康狀況。透過利用短影片、直播、圖書銷售等手段擴大線下影響力、吸引私域流量等舉措，提高獲客效率。特別是，我們設立了多個線下考研準備業務和留學相關服務中心。這些中心使我們能夠以線上或線下的方式獲取客戶並提供服務，這不僅提高了內容獲取效率和服務交付質量，還提高了我們的品牌知名度。

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 ADS and our share repurchasement plan adopted in November 2022. In addition, our Board of Directors today authorizes the upsizing of our existing share repurchase program pursuant to which we may repurchase up to $80 million worth of ADS through November 22, 2025. We will continue to promote our long-term repurchase program to enhance our long-term shareholder values. We see tremendous growth potential for Gaotu and are confident in our ability to deliver high quality services and efficient operations through our ongoing effort to improve customer acquisition efficiency. Refine our educational products and services offerings and a bolstering rapid growth of our tenants and organizations. We believe these initiatives will put a [go to under] fast track to growth.

最後，我們對公司未來的成長和發展充滿信心。截至2023 年11 月20 日，我們已累計回購約420 萬股美國存託股，並於2022 年11 月通過了我們的股票回購計畫。此外，我們的董事會今天授權擴大我們現有的股票回購計劃，根據該計劃，我們可以截至 2025 年 11 月 22 日，回購最多價值 8000 萬美元的美國存託股份。我們將繼續推進長期回購計劃，以提高我們的長期股東價值。我們看到了高圖巨大的成長潛力，並對我們透過不斷努力提高客戶獲取效率來提供高品質服務和高效營運的能力充滿信心。完善我們的教育產品和服務，促進我們的租戶和組織的快速成長。我們相信這些舉措將開啟快速成長軌道。

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.

非常感謝。我準備好的發言到此結束。現在我將把電話轉給我們的財務長。香農將帶您了解本季的財務和營運細節。

Thank you, Larry, and thank you, everyone, for joining our call today. I will now walk us through our operating and financial performance for the third quarter of 2023. Please note that all financial figures discussed today are quoted in RMB terms, unless otherwise stated. The company maintained gross momentum during the third quarter of 2023. Net revenues increased by 7.2% year-over-year to RMB789.4 million. 12 gross billings increased by 5.3% year-over-year to RMB639.3 million. We maintained a strong cash position, which was RMG180.6 million higher than that at the same time of last year. This highlights, the ample resources we have to continue driving development of our business.

謝謝拉里，也謝謝大家今天加入我們的電話會議。現在，我將向我們介紹 2023 年第三季的營運和財務業績。請注意，除非另有說明，今天討論的所有財務數據均以人民幣報價。公司2023年第三季維持整體成長動能。淨收入年增7.2%至人民幣7.894億元。 12 總流水年增 5.3% 至 6.393 億元。我們維持強勁的現金狀況，比去年同期增加了 1.806 億令吉。這凸顯了我們擁有充足的資源來繼續推動我們的業務發展。

Educational services targeted the group of students from primary to high school demonstrate sale and seasonality. And the sub quarter coincides with some allocation, making it the big season of the year for online customer acquisition. Operations need to be aligned with school schedules to capitalize on a limited window of opportunity for acquiring new customers. Coordinating our efforts also allowed us to benefit from economies of scale and maximize operational efficiency and ROI. During the period, we could allocate marketing expenses and tutors in line with market demand. As such, our selling expenses, technical at peak for the year during the third quarter, notably impacting our overall profitability.

針對從小學到高中的學生群體的教育服務表現出銷售性和季節性。而次季度恰逢部分分配，是一年中線上獲客的旺季。營運需要與學校時間表保持一致，以利用有限的機會來獲取新客戶。協調我們的努力也使我們能夠從規模經濟中受益，並最大限度地提高營運效率和投資回報率。期間，我們可以根據市場需求分配行銷費用和導師。因此，我們的銷售費用在第三季達到了當年的技術峰值，顯著影響了我們的整體獲利能力。

To align with school schedules, the second and fourth quarters, how being designated as our main customer retention cedents, to which gross billings are notably higher when compared to the first and third quarters. Throughout this quarter, summer enrollment period, we observed a robust learning demand from students. This also pose a higher demand on our ability to adapt and [find some] operations in response. We plan to enhance the effectiveness and efficiency of our marketing efforts in the following surveys.

為了與學校時間表保持一致，第二和第四季度，如何被指定為我們的主要客戶保留分出點，與第一和第三季度相比，其總帳單明顯更高。在本季的夏季入學期間，我們觀察到學生強勁的學習需求。這也對我們的適應力和應對能力提出了更高的要求。我們計劃在以下調查中提高行銷工作的有效性和效率。

First, in terms of tutor recruitment, we are taking a more proactive approach to acquire talent for tenants. For the 2024 fall recruitment season, we initiated a strategic a program called Gaotu Talent Fostering Program in collaboration with leading targeted universities and normal universities. As the project deepens, candidates can engage with us, and experience our culture from day one, completing the two-way fostering and selection process. It also allowed us fully grasped the recruitment progress yet, it results in a timely and accurate manner in order to align with customer acquisition schedules.

首先，在導師招募方面，我們正在採取更主動的方式為租戶獲取人才。在2024年秋季招募季，我們與領先的目標大學和師範大學合作啟動了一項名為「高途人才培育計畫」的策略計畫。隨著專案的深入，候選人可以與我們互動，從第一天起體驗我們的文化，完成雙向培養和選拔過程。它還使我們能夠充分掌握招募進度，及時準確地得出結果，以便與客戶獲取時間表保持一致。

Second, on market front, we will continue to expand our presence across a diverse range of innovative content driven customer acquisition channels. From short video platforms and live streaming platforms to proprietary channels such as on-time for seminars. At the same time, we aim to improve ROI by expanding and refining our customer profile, which could help boost our effectiveness at acquiring high quality leads. Lastly, on the technology field, we will enhance our operational efficiency and allegedly by leveraging advanced AI technologies to empower internal teams across touring research, sales and customer services.

其次，在市場方面，我們將繼續擴大我們在各種創新內容驅動的客戶獲取管道中的影響力。從短視訊平台、直播平台到研討會準時等自有管道。同時，我們的目標是透過擴大和完善我們的客戶檔案來提高投資回報率，這有助於提高我們獲取高品質潛在客戶的效率。最後，在技術領域，我們將提高營運效率，據稱透過利用先進的人工智慧技術為巡迴研究、銷售和客戶服務等內部團隊賦能。

Next, I will walk you through the progress we have made during the quarter. Learning services contributed over 95% of net revenues. Breaking it down approximately 70% of total revenues came from non-academic tutorial services. In other traditional learning services, representing an increase of over 40% year-over-year, and increase and solidifying this segment's role as a key driver of our business. Our non-academic tutorial services help students develop independent thinking and problem-solving skills and spark their passion for learning through engagement -- engaging content.

接下來，我將向您介紹本季我們的進展。學習服務貢獻了超過 95% 的淨收入。細分來看，大約 70% 的總收入來自非學術輔導服務。在其他傳統學習服務中，年成長超過 40%，並增強和鞏固了該細分市場作為我們業務關鍵驅動力的作用。我們的非學術輔導服務幫助學生培養獨立思考和解決問題的技能，並透過參與—引人入勝的內容激發他們的學習熱情。

After nearly two years of refinement and multiple intuitions, we have made considerable progress in fund owning our product offerings and making it a more sustainable and scalable. The settlement recorded middle double digit growth year-over-year in the quarter and is expected to achieve high double-digit annual growth for the full year, underscoring its position as a key revenue driver. The other crucial component [of our level of] services is educational services for college students and adults, which accounted for around 25% of total revenues during the quarter.

經過近兩年的完善和多種直覺，我們在基金擁有我們的產品並使其更具可持續性和可擴展性方面取得了長足的進步。和解協議在本季度實現了中兩位數的同比增長，預計全年將實現高兩位數的年度增長，凸顯了其作為主要收入驅動因素的地位。 [我們服務水準的]另一個重要組成部分是針對大學生和成人的教育服務，佔本季總收入的 25% 左右。

We made strategic adjustments to this business segment by discontinuing certain services and investing in areas with huge market potentials and rapid growth rate. During the quarter, as withdrawal organic growth through innovative customer acquisition strategies and word of mouth referrals, the remaining services significantly reduce the losses by nearly 100% year-over-year. Within this segment the posted graduate entrance exam private business saw a year-over-year increase of more than 25% in both net revenues and gross billings. Some of our overseas test prep and overseas study consulting businesses achieved triple year-over-year growth in both net revenues and gross billings.

我們對該業務板塊進行了策略調整，停止了部分業務，轉而投資於市場潛力巨大、成長較快的領域。本季度，隨著透過創新的客戶獲取策略和口碑推薦實現提款有機成長，其餘服務同比顯著減少了近 100% 的損失。在這一細分市場中，已公佈的研究生入學考試私人企業的淨收入和總帳單同比增長超過 25%。我們的一些海外準備和海外學習諮詢業務的淨收入和總營業額均實現了同比三倍增長。

I will now present our financials in detailed numbers. Our cost of revenues this quarter was RMB218.1 million. Gross profit increased 30.6% year-over-year to RMB571.3 million, and gross profit margin was 72.4%. Total operating expenses during the quarter increased 32.3% year-over-year to RMB670.8 million. Breaking it down, selling expenses increased 29% year-over-year to RMB434.4 million, accounting for 55% of net revenues. This was primarily attributable to our increased marketing investments to address the robust demand during the summer season.

我現在將詳細介紹我們的財務數據。本季我們的收入成本為 2.181 億元。毛利年增30.6%至人民幣5.713億元，毛利率為72.4%。本季總營運費用年增 32.3% 至 6.708 億元。其中，銷售費用年增29%至人民幣4.344億元，佔淨收入的55%。這主要歸因於我們增加了行銷投資，以滿足夏季的強勁需求。

Moving on, research and development expenses increased 22.6% year-over-year to RMB130.6 million, accounting for 16.5% of net revenues. This was primarily attributable to increased investment in AI related fees. General and administrative expenses increased 66.4% year-over-year to RMB105.8 million, accounting for [13.4%] of net revenues. Loss from operations increased [43%] year-over-year to RMB99.5 million, and operating margin was negative 12.6%. Non-GAAP loss from operations was RMB83.6 million and non-GAAP operating margin was negative 10.6%. Net loss narrowed 6% year-over-year to RMB57.7 million, and net income margin was negative [7.3%]. Non-GAAP net loss was RMB41.7 million cents, and non-GAAP net income margin was negative [5.3%]. Our net operating cash outflow was RMB209.9 million.

接下來，研發費用年增22.6%至人民幣1.306億元，佔淨收入的16.5%。這主要是由於人工智慧相關費用的投資增加。一般及管理費用較去年同期成長66.4%至人民幣1.058億元，佔淨收入的[13.4%]。營運虧損年增[43%]至人民幣9,950萬元，營運利潤率為負12.6%。非 GAAP 營運虧損為 8,360 萬元，非 GAAP 營運利潤率為負 10.6%。淨虧損年減6%至人民幣5,770萬元，淨利率為負[7.3%]。非 GAAP 淨虧損為 4,170 萬元，非 GAAP 淨利率為負 [5.3%]。我們的經營現金流淨額為人民幣209.9百萬元。

Turning to our balance sheet. As of September 30, 2023, we held RMB885.6 million in cash, cash equivalents and restricted cash along with RMB1.6 billion in short-term investments and RMB1.1 billion in long-term investments. This comes out to a total approximately RMB3.5 billion, [RMB118.6 million] higher than the same time of last year. As of September 30, 2023, our deferred revenue balance was RMB761.3 million which primarily consists of [tuition which was received in along] It's worth mentioning that on November 22, 2022, our Board of Directors authorized a share repurchase program of up to $30 million over a 36-month period.

轉向我們的資產負債表。截至2023年9月30日，我們持有現金、現金等價物及限制性現金人民幣8.856億元，以及人民幣16億元的短期投資及人民幣11億元的長期投資。總額約 35 億元，比去年同期增加[人民幣 1.186 億元]。截至2023年9月30日，我們的遞延收入餘額為人民幣7.613億元，主要包括[已收到的學費]值得一提的是，2022年11月22日，我們的董事會批准了一項最多36 個月期間3000 萬美元。

As of November 20, 2023, we have repurchased an aggregate of approximately 4.2 million ADS for approximately $10.8 million from the market. Moreover, we are pleased to announce that our Board today authorized upsizing of existing share repurchase program to RMB80 million, which demonstrates our unwavering long-term confidence in our growth prospects. Larry also pushes approximately 0.88 million ADS in the 2023 using his personal bonds to demonstrate management's unwavering commitment to the original aspiration to education. Going forward, the company will keep to its original goal of addressing user needs and enhancing learning outcomes in order to create sustainable long-term value for its customers and shareholders.

截至 2023 年 11 月 20 日，我們已從市場回購了總計約 420 萬股美國存託憑證，價值約 1,080 萬美元。此外，我們很高興地宣布，董事會今天授權將現有股票回購計畫擴大至人民幣8,000萬元，這表明我們對成長前景堅定不移的長期信心。拉里也利用自己的個人債券在 2023 年推出了約 88 萬股美國存託股份，以表明管理層對教育初心的堅定承諾。展望未來，公司將秉持滿足用戶需求、提升學習成果的初衷，為客戶和股東創造可持續的長期價值。

Before I provide our business outlook for the next quarter, please allow me to remind everyone that this contains forward-looking statements which involve risks and uncertainties which are beyond our control and could cause the actual results to differ materially from our predictions. Based on our current estimates, total net revenues for the fourth quarter of 2023 are expected to be between RMB668 million and RMB688 million, representing an increase of 6.1% to 9.3% on a year-over-year basis.

在我提供下一季的業務展望之前，請容許我提醒大家，其中包含前瞻性陳述，其中涉及我們無法控制的風險和不確定性，可能導致實際結果與我們的預測有重大差異。根據我們目前的預測，2023年第四季的淨收入總額預計在人民幣6.68億元至人民幣6.88億元之間，年增6.1%至9.3%。

This concludes my prepared remarks. Operator, we're now ready for the Q&A section. Thank you, everyone, for listening.

我準備好的發言到此結束。接線員，我們現在準備好進入問答部分。謝謝大家的聆聽。

(Operator Instructions)

（操作員說明）

Yiwen Zhang, China Renaissance.

張藝文，中國文藝復興。

Hey, [management] Thanks for taking my question. So as we know someone has a queue time for student enrollment. So can discuss more details of what was our strategy and give us an update on how the way -- how does our enrollment from during the summer continue?

嘿，[管理層]感謝您提出我的問題。據我們所知，有人需要排隊等待學生入學。那麼，我們可以討論一下我們的策略的更多細節，並向我們介紹一下我們夏季的招生情況如何繼續嗎？

Thanks, Yiwen. Thanks for your question. So the financials of Q3 are partially reflected the operations during the summer break. In terms of the revenue growth, we have maintained an overall growth rate of over 7%. Our revenues are primarily consist of educational services, which is further divided into non-academic tutorial services and traditional learning services and learning services for college student and adults. So as for the learning services for college students and adult, like I mentioned the last quarter and as mentioned in my prepared remarks, there is a strategic shift. The strategy has evolved from scale expansion to extra crucial of advertisers on profitability. So analyst strategic direction, we have gradually adjusted and fizzled out some unprofitable operational units.

謝謝，伊文。謝謝你的提問。因此，第三季的財務狀況部分反映了暑假期間的營運。從營收成長率來看，我們整體維持了7%以上的成長速度。我們的收入主要包括教育服務，進一步分為非學術輔導服務和傳統學習服務以及針對大學生和成人的學習服務。至於針對大學生和成人的學習服務，就像我在上個季度提到的以及我在準備好的發言中提到的那樣，存在著戰略轉變。策略已經從規模擴張演變為對廣告主獲利能力更為關鍵的策略。所以分析策略方向，我們逐步調整並淘汰了一些不獲利的營運部門。

So the revenue from this segment grows slower in Q3 as compared to the same period of last year. And in last year -- and in the 2022 third quarter, learning services for college student and adults actually contributed to over 30% of our total revenue, which has somewhat influenced our revenue growth rate for the third quarter of 2023, and also, this is the same dynamic in the fourth quarter of 2023. And that's why we see like our revenue guidance was around or less than 10%. And however, if we exclusively examine the income growth of our K-12 related business, which includes non-academic tutorial services and traditional learning services, it still maintain a over 40% year-over-year increase. We have observed strong demand from customers during the summer break. And the availability of high qualified service providers, which is capable of delivering high-quality courses, has been limited.

因此，第三季該細分市場的營收成長速度較去年同期放緩。去年，也就是2022年第三季度，大學生和成人的學習服務實際上貢獻了我們總收入的30%以上，這在一定程度上影響了我們2023年第三季度的收入增長率，而且，這個2023 年第四季也是如此。這就是為什麼我們認為我們的收入指引約為或低於10%。然而，如果我們單獨考察K-12相關業務（包括非學術輔導服務和傳統學習服務）的收入成長，仍維持著40%以上的年成長。我們在暑假期間觀察到客戶的強勁需求。能夠提供高品質課程的高品質服務提供者的數量也很有限。

As a result, our revenue has maintained relatively high growth rate, again, at Q3.

因此，我們的收入在第三季再次保持了較高的成長率。

In the third quarter. Our gross billings are, however, at the gross rate was approximately 5%. The primary drivers were in the K-12 business and the growth rate like behind the revenue growth rate mainly due to two reasons. Firstly, our traditional business as a major contributor to the gross billings' growth. And actually, the new customer acquisition efficiency during the summer break was overall impressive and show a meaningful year-over-year increase, but there was a significant decrease in the supply of [net graded] students as compared to last year. Therefore, the scale of gross billings grow more slowly than the revenue.

在第三季。然而，我們的毛收入約為 5%。主要驅動因素是 K-12 業務，收入成長率背後的成長率主要有兩個原因。首先，我們的傳統業務是總收入成長的主要貢獻者。事實上，暑假期間的新客戶獲取效率總體上令人印象深刻，並顯示出有意義的同比增長，但與去年相比，[淨評分]學生的供應量明顯減少。因此，總流水規模的成長速度慢於收入的成長速度。

And secondly, first series of strong demand during the summer break, we did not reserve a sufficient supply of tutors, resulting in situations where, at some point, customer demand could not be fuIly met, leading to a less level of gross billing collection. So after self-reflecting and to achieve a higher growth rate and next summer, I mean, in 2024, we have implemented a few measures. On one hand online within the boundaries constraints of policy compliance, we proactively acquired and operated private traffic to attract and engage the students from the middle school, especially for [net graded] students by providing services related to like learners, planning, and psychological consulting, and so on.

其次，第一季暑假期間需求旺盛，我們沒有儲備足夠的導師供應，導致在某些時候無法完全滿足客戶的需求，從而導致總收款水平較低。因此，經過自我反思，為了實現更高的成長率，以及明年夏天，我的意思是，2024年，我們實施了一些措施。一方面，線上在政策合規的範圍內，主動獲取和運營私域流量，透過提供學習、規劃、心理諮詢等服務，吸引和吸引中學學生，尤其是【網評分】學生。 ， 等等。

We aim to build up a pool of highly engaged students in the middle school, and we expect the pool in the next spring to reach or even exceed last year's level. And so that can kind of like provide a sufficient students pool for our next summer's gross billing growth. And on the other hand, during these years fall recruitment process, like I just mentioned, and Larry also mentioned, we collaborated with top schools and some normal institutions engaging in earlier, and they do two-way communication with -- those new graduations next year to improve recruitment efficiency and better meet the demands of tutors' supply for the next summer break.

我們的目標是在中學建立一支高度參與的學生隊伍，我們預計明年春季的學生隊伍將達到甚至超過去年的水平。因此，這可以為我們明年夏天的總帳單增長提供足夠的學生池。另一方面，在這些年的秋季招募過程中，就像我剛才提到的，拉里也提到過，我們與早期參與的頂尖學校和一些正規機構進行了合作，他們與接下來的那些應屆畢業生進行了雙向溝通。提高招募效率，並更好地滿足明年暑假導師的供應需求。

And this actually works. So as of the current progress in the fourth quarter, the gross billings growth rate of our K-12 business has rebounded to nearly 30% our year-over-year basis. So, last, the details, we really want to share for the summer vacation and hope that address your question Yiwen.

這確實有效。因此，截至第四季度目前的進展，我們的 K-12 業務的毛帳單成長率已同比反彈至近 30%。最後，我們非常想分享暑假的細節，並希望能夠解決您的問題 Yiwen。

Yes, that's very clear. Thank you.

是的，這很清楚。謝謝。

Thanks.

謝謝。

Thank you. And this concludes the question-and-answer session. I would like to turn the call over to Catherine Chen for any closing comments.

謝謝。問答環節到此結束。我想將電話轉接給凱瑟琳·陳（Catherine Chen）以徵求結束意見。

Thank you, operator. Thank you, everyone, for joining the call today. If you have any further questions, please don't hesitate to contact our Investor Relations department or our management, their e-mail at ir@gaotu.cn directly. You are also welcome to subscribe right to our news alert on the company's IR website.

謝謝你，接線生。謝謝大家今天加入電話會議。如果您還有任何疑問，請隨時聯絡我們的投資者關係部門或我們的管理層，他們的電子郵件地址為 ir@gaotu.cn。也歡迎您在公司的投資者關係網站上訂閱我們的新聞快訊。

Thank you very much again for your time. Have a great night.

再次非常感謝您抽出寶貴的時間。祝你有個愉快的夜晚。

Thank you. As mentioned, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

謝謝。如前所述，會議現已結束。感謝您參加今天的演講。現在您可以斷開線路。