Gaotu Techedu Inc (NYSE:GOTU) misses the topline consensus target in Q2 2021

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Gaotu Techedu Inc (NYSE:GOTU) stock fell 5.34% (As on Sep 23, 12:27:55 AM UTC-4, Source: Google Finance) though the company in the second quarter of FY 21 has reported increase of 35% compared to Q2 2020 the revenue, reaching a record high of RMB 2.2 billion ($340.2 million). But the New York-listed edtech company missed the consensus target of $387.5 million, according to unaudited earnings results. Net losses were RMB 918.8 million, compared with a net income of RMB 18.6 million in the same period last year. Gaotu’s share price since late July has fallen more than two-thirds after an industry-wide government crackdown on private tutoring companies. As of June 30, 2021, the Company had cash and cash equivalents, restricted cash, short-term investments and long-term investments of RMB5,486.9 million in the aggregate, compared with a total of RMB8,217.2 million of cash and cash equivalents, short-term investments and long-term investments as of December 31, 2020. As of June 30, 2021, the Company’s deferred revenue balance was RMB1,976.4 million, compared with RMB2,733.7 million as of December 31, 2020. Due to the uncertainty related to the recent regulatory and operating environment, the Company has decided not to issue guidance.
Moreover, gross billings, the leading indicator for net revenue, was 2.7 billion, increased by 12.2% year over year from 2.4 billion last year. Paid course enrollments, which refers to enrollments price at or above CNY 99, increased to a record high of 1.63 million for the quarter, a 4.1% year-over-year increase. The net revenue from the K-12 courses, including STEAM courses, increased by 51% year over year to 2.09 billion and accounted for 94% of net revenues. Gross billings contributed by K-12 courses increased by 17.2% year over year to 2.58 billion. Net revenues from the foreign language, professional, admission, and other vocational education services grew to 141 million and accounted for 6% of net revenues.
On the other hand, the company continues to expand the investments in the existing professional education segments, such as financial certificate and the public office exam preparation, while constantly exploring more professional education portfolio opportunities, such as post-graduate exam preparation and overseas studies preparation, among which some have already achieved a better-than-industry average online. The company aims to establish a diversified professional education portfolio with multiple segments. The company has also increased the investments in the STEAM education segment, which is developing rapidly

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