Hello, ladies and gentlemen. Thank you for standing by, and welcome to the Gao2Tech Edu Third Quarter Twenty Twenty Five Earnings Conference Call. At this time, all participants are in a listen-only mode. 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 Gao2 Third Quarter Twenty Twenty Five Earnings Conference Call. My name is Catherine, and I'll help host the earnings call today. Altus earnings release for the quarter was distributed earlier and is available on the company's IR website. As well as through PR Newswire services. Joining the call with me tonight from Gao2 Senior Management is Mr. Larry Chen, Gao2's Founder, Chairman, and Chief Executive Officer, and Ms. Shannon Shen, Gao2's Chief Financial Officer. Larry will first provide the business highlights for the quarter and then afterwards discuss known or unknown risks, uncertainties, and other factors, all of which are difficult to predict. This 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 filing 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 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 Gao2's IR website. It is now my pleasure to introduce our Founder, Chairman, and Chief Executive Officer, Larry. Larry, please.

Good evening and good morning everyone. Thank you for joining us on Gao2's third quarter of year twenty twenty five earnings conference call. I would like to take this opportunity to express my gratitude to each of you for your interest in and support for Gao2. Before I start, I would like to remind everyone that all financial figures discussed today are in RMB unless stated otherwise. Our user-centric approach continues to drive progress in our high-quality growth strategy. As we continually enrich the product portfolio to support learners of all ages across diverse study scenarios, we are deepening user insights, strengthening the high-quality teacher pipeline, and comprehensively enhancing product quality, delivery process, and operations. At the same time, the full stack integration of AI across our Q3 services and operations is driving measurable efficiency gains and smarter resource allocation. As our core capabilities expand, our differentiated value proposition is becoming increasingly evident, and our trajectory toward profitability is becoming more defined, creating a robust foundation for scalable long-term growth. In the third quarter, we delivered another solid set of financial results. Revenue grew by 30.7% year over year to nearly 1.6 billion RMB while on a non-GAAP basis both the loss from operations and the net loss narrowed significantly by 64.6% and 69.9% respectively. We're expecting sustained improvement in gross content and profitability. Excluding the impact of share repurchases, our cash position increased year over year strengthening the balance sheet and highlighting our disciplined financial management. We remain committed to creating long-term shareholder value. As of this quarter, we have completed the full amount of the initial share repurchase program approved in November 2022 and expanded it to 80 million RMB in 2023. Meanwhile, the new 100 million RMB program approved by our Board in May has already commenced. We will continue to execute the share repurchase program in a prudent and disciplined manner while safeguarding operational and financial health, further reinforcing our commitment to enhancing shareholder value. Now, I'd like to elaborate on our progress this quarter by reviewing our strategic priorities and key developments across five fronts. First, we are solidifying our strategic edge by extending the coverage across the full learner journey and diversifying our service scenarios. Through sustained investment and refinement, we have built a cohesive product and service ecosystem from primary school through adult learning. This brings us a deep understanding of users' learning trajectories, enabling us to deliver increasingly differentiated and personalized services at every stage and establish a unique user value proposition and brand equity. Building on this foundation, we continually iterate our service models in lockstep with user demand. We began with online delivery, gradually expanding our offerings to include online emerging offline models, and offline boot camps to meet the user demand for enhanced interactivity and immersive experiences, and have ultimately established offline learning centers. Our online model provides broad reach and leverages high-caliber teaching resources and a flexible learning format to deliver efficient and highly accessible services. Meanwhile, our offline learning centers enhance localized support and personalized instruction, naturally complementing our core online framework. Notably, for the first time in this quarter, the revenue contribution of offline learning services exceeded 10% of our total revenues. We believe our deeply integrated online-offline model not only aligns with users' lifelong development, but also forms a resilient, flexible, and scalable service network. By harnessing the efficient scalability of online learning while incorporating the interactive and immersive value of offline education, Gao2 is poised to become a premium lifelong learning platform. Second, we are building a robust pipeline of high-quality educators to strengthen our talent strategy. Exceptional educators are at the heart of our competitiveness. To attract talent, we have formed long-term strategic partnerships with thousands of leading domestic universities and continuously broaden our talent pool through career mentoring programs and other initiatives. Applications from our key target universities increased notably during this year's campus recruitment season. In terms of talent development, we have further enhanced our professional training team and integrated assessment, competition, and evaluation frameworks augmented by AI tools to systematically elevate employees' professional skills and foster their long-term growth. We have also fine-tuned our incentive system and organizational culture to enhance teachers' sense of belonging and job satisfaction. Together, these efforts are cultivating a sustainable high-quality talent ecosystem and laid a solid foundation for our long-term development. Third, both internally and externally, we are leveraging the power of AI to drive innovation and enhance efficiency. As a digital native education company, we are committed to integrating AI technology throughout our business operations. Internally, initiatives like AI Paxons encourage business units to identify efficiency improvement opportunities and develop AI-driven solutions and agents, creating a closed-loop process from exploration to implementation. These efforts have improved operational efficiency and embedded AI into everyday workflows, boosting employee satisfaction and fostering creativity. Externally, we are partnering with local governments and leading universities to co-establish educational AI R&D centers and labs, managing the research, development, and application of AI models in the education sector. These collaborations strengthen industry-academia integration and help make learning more intelligent, personalized, and effective. Fourth, we remain focused on strengthening execution, improving organizational efficiency, and driving profitable growth. This year, we continue to build our results-driven culture and made profitable growth a core objective. In the budgeting process, we implemented an operational metric tracking system for each business line using measurable quality and efficiency indicators to ensure that the teams are reaching their goals. At the management level, we are leveraging this driven decision-making and the disciplined execution to fuel growth. We believe that the future competition will be about more than product and services; organizational efficiency will also be key, underpinned by an agile organizational framework and technology-powered decision-making systems. We will boost our execution capabilities and drive high-quality growth. Fifth, we remain committed to fulfilling our social responsibilities and creating long-term value for all stakeholders. We firmly believe that the value of an educational company is not only in its commercial success, but also in its contributions to society. In the third quarter, Gao2 Foundation partnered with several leading universities to launch the Rural Teacher Empowerment Program. This initiative provides comprehensive training and practical courses to the teachers in Central and Western China, improving their teaching skills and promoting educational equity. In addition, we collaborated with Jingxin Medical, a mental healthcare company, launching an AI-powered training lab that trains counselors in adolescent mental health through practical exercises to help students on leave due to mental health changes reintegrate into school life. From a focus on operational efficiency to expanding our business boundaries and from a single point of breakthroughs to systematic growth, Gao2 is steadily shaping a distinctive development path. They go to has evolved into a technology-driven and AI-powered ad tech company centered on user needs, providing end-to-end solutions across the full learning lifecycle. Thank you very much, everyone. This concludes my prepared remarks. I will now pass the call over to our CFO, Shannon, to walk you through the quarter's financial and operational details.

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 2025 fiscal year. Please note that all financial data are in RMB terms unless otherwise stated. In the third quarter, net revenues continued to grow, and operating efficiency maintained a healthy trajectory, demonstrating that our investments in resource allocation optimization have addressed user demand while achieving a 1.4% year-over-year decrease in marketing expenses and improving customer acquisition efficiency by 12.8%. R&D and G&A expenses as a percentage of net revenues declined by 9.6 percentage points year over year, reflecting a steady improvement in operating leverage. Enhanced operational performance also led to a substantial year-over-year decrease in the operating net cash outflow of approximately 54.2 million RMB. Our deferred revenue sustained healthy growth of 23.2% year over year to nearly 1.8 billion RMB, providing strong visibility into revenue recognition in future quarters. In shaping our growth strategy, we constantly prioritize healthy unit economics, setting specific operational goals for each business segment based on its stage of development. For our mature businesses with clear and well-defined commercial models, we focus on sustainable steady growth while expanding margins through skilled service delivery, enabling incremental growth to flow through to the bottom line. For our businesses still in the early growth stage, we emphasize refining educational products, strengthening our instructor and tutor development system, and cultivating brand mindshare to deliver user experiences that drive long-term enhancement in retention, referrals, and willingness to pay. Ultimately, this strategy ensures every investment yields measurable returns, whether in the form of profitability, business resilience, or long-term user value. We remain committed to building organizational capabilities through distinct line quality improvements, positioning operational efficiency rather than focusing solely on speed to achieve the pace and scale of our growth. Next, an overview of this quarter's progress by business segment. Learning services contributed over 95% of net revenues. Traditional learning services and non-academic learning services as our core segments contributed more than 80% of our total revenues and recorded over 55% year-over-year growth. Revenue from our new initiatives, focused on non-academic tutoring services in both online and offline settings, increased by around 60% year over year. This quarter, the online segment for traditional learning services and non-academic learning services is on track to achieve a double-digit profit margin for the full year of 2025, supported by increased user enrollment and enhanced operational capabilities. On the curriculum side, we continue to explore genuine user needs through high-quality educational products. One standout example is our programming courses, which delivered impressive results in the National Youth Innovation Competition, further solidifying our product reputation and user trust. Our traditional learning services maintained a healthy growth trajectory with revenue increasing by 15% year over year in the third quarter. On the product front, we continued to advance our localized course development and service systems to enhance teaching delivery flexibility and adaptability. Regarding user acquisition, we focused on optimizing operational processes and addressing real user needs, achieving steady improvements in gross billings performance. At the same time, a more mature and stronger team, alongside AI-powered traffic operations, boosted our customer acquisition efficiency by nearly 20% year over year, providing stronger support for healthy business growth. Another key component of our learning services is educational services for college students and adults, which contributed more than 15% of total revenue in the third quarter. This segment has returned to a positive growth trajectory following our strategic adjustments, achieving double-digit year-over-year growth in both revenues and gross billings alongside quarterly profitability. Within this segment, our educational services for college students leverage intelligent student learning profile management to enable clear and more precise learning pathways. We also accelerate the development of a highly calibrated teaching team. These efforts further expanded our service capabilities, boosted user satisfaction, and promoted brand awareness. In this quarter, revenues from educational services for college students increased by nearly 50%, and net profit delivered high double-digit growth year over year. Lastly, I will walk you through our financial data. Our cost of revenue this quarter was 535.5 million RMB. Gross profit increased 34% year over year to over 1 billion RMB, with a gross margin of 66.1%. Total operating expenses during the quarter decreased 7% year over year to approximately 1.2 billion RMB. Breaking it down, selling expenses decreased 1.4% year over year to 873.4 million RMB, accounting for 55.3% of net revenues. Research and development expenses decreased 13.9% year over year to 152.9 million RMB, accounting for 10.3% of net revenues. General and administrative expenses decreased 3% year over year to 185.2 million RMB, accounting for 11.7% of net revenues. Loss from operations was 178 million RMB, and the operating loss margin was 11.3%. Net GAAP loss from operations was 168.6 million RMB, and non-GAAP operating loss margin was 10.7%. Net loss was 147.1 million RMB, and net loss margin was 9.3%. Non-GAAP net loss was 137.7 million RMB, and non-GAAP net loss margin was 8.7%. Our net operating cash outflow was 660.2 million RMB, narrowed by 7.6% year over year. Now turning to our balance sheet. As of 09/30/2025, we held 444 million RMB in cash, cash equivalents, and restricted cash, along with nearly 2.1 billion RMB in short-term investments and 500.4 million RMB in long-term investments. This comes to a total of over 3 billion RMB. As of 09/30/2025, our deferred revenue balance was around 1.8 billion RMB, primarily consisting of tuition received. As of November 25, 2025, we have repurchased an aggregate of around 27.5 million ADS on the open market, or nearly 619 million RMB. Before I provide our business outlook for the next quarter, please allow me to remind everyone that this contains forward-looking statements which include risks and uncertainties that are beyond our control and could cause actual results to differ materially from our predictions. Based on our current estimates, total net revenue for 2025 is expected to be between 2.628 billion RMB and 1.648 billion RMB, representing an increase of 17.2% to 18.7% on a year-over-year basis. This concludes my prepared remarks. Operator, we are now ready for the Q&A section. Thank you everyone for listening.

We will now begin the question and answer session. 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. The first question today comes from Crystal Li with CMS. Please go ahead.

Thanks, management, for taking my questions. Congratulations on strong results. Could you give us some color on your 2026 top line growth and your expectations on each business line? And in terms of the bottom line, how's your plan? Maybe could you share more about your plan to balance your growth and loss reduction? Thank you.

Thanks, Crystal, for your question. So looking back at 2024 and 2025, our revenue grew 53.8% year over year in 2024. Based on our latest guidance, we expect close to 35% year over year growth of our top line in 2025. Over the past two years, our revenue has actually more than doubled. We've achieved relatively strong line expansion in the past two years. Behind this growth is the steady increase in the number of students and parents we serve, the continued strengthening of our product portfolio, and the growing influence of our brand. As of today, our offerings cover the key needs of users with strong learning demand and motivation. From a product perspective, the integration of our online and offline solutions, along with the use of AI to enhance the user experience in our courses, is progressing steadily and continuously improving. As we scale, we are seeing sustained operating leverage, which adds a solid foundation for achieving full profitability at our target scale. For 2026, we expect our growth trajectory to become more balanced with profitability as the major focus guiding the execution of our overall strategy, which means profitability will play the most important role. Based on our expected gross billings in 2025's Q4, together with our operating plans and upcoming initiatives, we anticipate approximately 15% year-over-year revenue growth in 2026. We also expect to see further improvements in our operating cash flows with ongoing efforts aimed at moving the company toward sustainable net profitability in 2026. Hope that addresses your question. Thanks. This concludes our question and answer session. I would like to turn the conference back over for any closing remarks. Thank you everyone for joining us for today. If you have any further questions, please don't hesitate to contact our Investor Relations department or our management via email directly. You are also welcome to subscribe to our news alert on the company's IR website.

Thank you very much again for your time. Have a great night. The conference has now concluded. Thank you for attending today's presentation.