Hello, ladies and gentlemen. Thank you for standing by, and welcome to the Gaotu 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 Gaotu Techedu Inc.’s fourth quarter and fiscal year 2025 earnings conference call. My name is Catherine Chen, and I will host the earnings call today. Gaotu Techedu Inc.’s earnings release for the quarter was distributed earlier and is available on the company's IR website at ir.gaotu.cn, as well as through PR Newswire services. Joining the call with me tonight from Gaotu Techedu Inc. senior management is Mr. Larry Chen, Gaotu Techedu Inc.’s Founder, Chairman, and Chief Executive Officer, and Ms. Shannon Shen, Gaotu Techedu Inc.’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 will open the floor to questions from analysts. Before we begin, I would like to remind you that this conference call will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities 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 contained in any forward-looking statements. Further information regarding this and other risks is included in the company's public filings with the U.S. 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 purposes only. For definitions of non-GAAP financial measures and reconciliations 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 Gaotu Techedu Inc.’s IR website. It is now my pleasure to introduce our Founder, Chairman, and Chief Executive Officer, Larry Chen. Larry,

Good evening and good morning, everyone. Thank you for joining us on Gaotu Techedu Inc.’s fourth quarter and fiscal year 2025 earnings conference call. I would like to take this opportunity to express my gratitude to each of you for your interest and support for Gaotu Techedu Inc. Before I start, I would like to remind everyone that all financial figures today are in RMB unless stated otherwise. 2025 marks a year of exceptional resilience for Gaotu Techedu Inc. We delivered high-quality operating performance and met 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 at the core of our operations—“all with AI, all with 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 maintained steady top-line expansion while realizing meaningful operating leverage. Revenue increased by 21.4% year over year to RMB 1.7 billion, and the bottom line improved by 38%, driven by continued efficiency gains. Over the full year of 2025, revenue grew by 35% to RMB 100 million, exceeding our initial expectations at the beginning of 2025. Net operating cash inflow reached RMB 416 million, a net increase of RMB 158 million year over year, reflecting continued…

Thank you, Larry, and thank you everyone for joining our call today. I will now walk you through our operating and financial performance for the fourth quarter and fiscal year 2025. Please note that all financial data are in RMB terms unless otherwise stated. In 2025, we systematically optimized our product portfolio and channel mix, building constant improvements in our revenue quality. We remain firmly committed to advancing our deep integration strategy of AI plus education, substantially enhancing both our educational products and end-to-end operational efficiency. Through the systematic optimization of our product portfolio and channel structure, leveraging AI as our foundation, learning solutions as our core value, and AI-powered digitalization as our operational support. From a structural perspective, after years of focused investments and refinements, we have established a staged growth roadmap that provides great visibility into future development. Our core businesses delivered solid growth with higher enrollments, optimized unit economics, and ongoing profitability improvements, serving as the fundamental pillar supporting the company's profit expansion. At the same time, our strategic initiatives are gaining traction and demonstrating upward momentum, serving as new engines for our scale expansion and profitable growth. In 2026, we will sharpen our focus on user experience and learning outcomes, pivoting from scale-oriented growth toward a more efficiency-led model driven by both revenue scale expansion and operating efficiency gains. We have realized operating leverage for five consecutive quarters, continuously elevating our bottom line. In particular, on the user acquisition front, we leveraged AI-driven capabilities and a dynamic resource allocation mechanism to boost user acquisition efficiency. Measured as gross billings divided by selling expenses, user acquisition efficiency improved by 10.8% year over year in 2025. Turning to our fourth quarter performance, revenue grew by 21.4% year over year to RMB 1.7 billion. Operating expenses as a percentage…

Thank you. We will now begin the question-and-answer session. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, for the sake of clarity and order, please ask one question at a time. Management will respond, and then feel free to follow up with your next question. At this time, we will pause momentarily to assemble our roster. The first question comes from Crystal Li with CMS. Please go ahead.

Thank you. Congratulations on the strong results, and thank you for the opportunity to ask a question. I just want maybe more color on the development of your offline business, and maybe elaborate more on your future plan on this offline business? Thank you.

Thanks, Crystal, for your question. We launched the expansion of our offline learning centers back in 2023. First, from a strategic perspective, our offline business represents a clear second growth curve for us and one of the top strategic priorities at the group level. The integration of online and offline is a highly effective approach to enhancing learning efficiency and the overall learning experience, and also makes our product matrix more holistic. It is also a critical step in building our long-term competitive advantages. This initiative is led directly by our founder, with prioritization in resource allocation, decision-making efficiency, and cross-sector collaboration. By capturing a favorable window of strong user demand in 2023, we moved quickly to scale our footprint over the past three years. We have attracted outstanding industry professionals with expertise in local operations, educational product design, and teacher sourcing and cultivation, etc., building a professional team that is truly important for offline operations and that can effectively support scalable growth. This has already laid a very solid foundation for our offline businesses. In terms of the current progress and results, our offline business has achieved clear economies of scale. Since 2023, with continuous investment and operational refinement, our offline learning center network and revenue scale have grown steadily and regularly. Based on our current expansion pace and operating plan, we expect the overall scale—meaning the top line, the revenue—of our offline business to surpass that of several independently listed peers in the coming year. This is not just a simple increase in the number of learning centers. It also represents healthy growth driven by proven unit economics, strong brand reputation, and a well-developed supply chain for high-quality teachers. After nearly three years of market penetration, our brand has established solid credibility and influence among students in regional markets. User satisfaction and retention rates continue to improve, and our brand moat is gradually taking shape. Simply put, we have evolved from a pure online service provider to a fully integrated platform, and this is the fundamental and most definitive outcome of our transformation. That said, the offline business has relatively high barriers to entry, including those related to management effectiveness, organizational alignment, and also system processes, and most importantly, the supply of top-tier teachers. We still have some areas that we need to further optimize and integrate. We are systematically reviewing and refining, and continually building up a system to support the growth of this segment. Our upfront investments are focused on strengthening our network footprint, reputation, and operational capabilities, and we are committed to capturing greater long-term market space and value and progressing steadily towards sustainable profitability. We foresee that at the school level, we can achieve profitability this year, and next year we foresee our offline business to be profitable including the headquarter overhead. I hope that addresses your question, Crystal.

Thanks, Shannon. That is very helpful.

As there are no further questions, I would like to turn the call back over to the company for closing remarks.

Thank you, operator, and thank you everyone for joining the call today. If you have any further questions, please do not hesitate to contact our Investor Relations department via email at ir@gaotu.cn directly. You are also welcome to subscribe to our news alerts on the company's IR website at ir.gaotu.cn. Thank you very much again for your time. Have a great night.

This concludes today's conference call. Thank you.