Gaotu Techedu, an online tutoring service provider for larger class sizes in China, announced on Tuesday its unaudited financial results for the fourth quarter and fiscal year that ended December 31, 2021.
In the fourth quarter of 2021, Gaotu’s net revenues were 1.27 billion yuan ($202 million), compared with a net revenue of 2.21 billion yuan in the same period of 2020. Most of the revenue came from the company’s online K-12 academic subject tutoring services. The revenue decrease was mainly due to the cessation of K-9 academic subject tutoring services in line with government policies.
Its net income was 285.9 million yuan, compared with a net loss of 627.0 million yuan in the same period of 2020. Non-GAAP net income was 324.4 million yuan, compared with a non-GAAP net loss of 554.4 million in the same period of 2020.
In the fiscal year that ended December 31, 2021, Gaotu’s net revenues were 6.56 billion yuan, most of which was driven by online K-12 academic subject tutoring services. Its net loss was 3.1 billion yuan, compared with net loss of 1.39 billion yuan in 2020. Non-GAAP net loss was 2,758.2 million, compared with non-GAAP net loss of 1,154.5 million in 2020.
The company also took a hit as it cost more to generate revenue in previous years. Last year the company spent 2.4 billion yuan on its operations, a figure that is a third larger than those of 2020, which was 1.76 billion yuan. The increase was mainly due to severance costs for the reduction of instructors and tutors in the third quarter of 2021.
Larry Chen, the company’s founder, Chairman and CEO, commented, “In the fourth quarter, we achieved considerable profitability in both GAAP and non-GAAP terms, as well as positive net operating cash flow, after we restructured our business in the third quarter. Looking ahead into 2022, we will continue to focus on vocational and professional education, digital products, and the effective growth of our business.”