Gaotu Techedu Records ~46% Decline In Q3 Revenue

Gaotu Techedu Inc GOTU reported a third-quarter FY22 sales decline of 45.6% year-on-year to RMB606.2 million ($85.21 million).
The revenue decrease was driven by the organizational adjustments and business restructuring it performed to comply with government regulations.
Gross billings for the quarter jumped 101.3% to RMB607 million from RMB301.6 million last year.
Gross profit rose 9.4% Y/Y to RMB437.4 million, and the margin expanded 3,630 basis points to 72.2%.
Operating expenses for the quarter decreased by 65.8% to RMB506.9 million.
Operating loss for the quarter was RMB(69.6) million versus RMB(1.08) billion loss last year.
The company held RMB3.3 billion in cash and equivalents as of September 30, 2022.
The company registered a net loss of RMB(61.4) million for the quarter compared to a net loss of RMB(1.04) billion last year.
Non-GAAP net loss per ADS was RMB(0.17) in Q3.
The company's board of directors authorized a $30 million share repurchase program.
In addition, Larry Xiangdong Chen, the company's founder, Chairman and CEO, also intends to personally purchase up to $20 million of shares.
GOTU also stated that SEC had concluded its investigation that followed the publication of various short sellers' reports and did not intend to recommend an enforcement action against the company.
Outlook: Gaotu sees Q4 revenue of RMB608 million – RMB628 million, representing a decrease of 50.7% to 52.3% Y/Y.
Price Action: GOTU shares are trading lower by 4.72% at $1.01 on the last check Tuesday.

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