This article first appeared on GuruFocus .
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Revenue:RMB99.5 million (USD14.4 million), a year-over-year increase of 359.0% from RMB21.7 million in Q1 2025.
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Gross Margin:61.9%, up from 36.2% in Q1 2025, an improvement of 25.7 percentage points.
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Gross Profit:RMB61.6 million (USD8.9 million), a year-over-year increase of approximately 686.2% from RMB7.8 million in Q1 2025.
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Cost of Revenues:RMB37.9 million (USD5.5 million), a year-over-year increase of 173.7% from RMB13.8 million in Q1 2025.
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Total Operating Expenses:RMB82.9 million (USD12.0 million), a year-over-year increase of 98.7% from RMB41.7 million in Q1 2025.
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Sales and Marketing Expenses:RMB43.2 million (USD6.3 million), a year-over-year increase of 232.0% from RMB13 million in Q1 2025.
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Research and Development Expenses:RMB16.2 million (USD2.3 million), a year-over-year increase of 28.5% from RMB12.6 million in Q1 2025.
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General and Administrative Expenses:RMB23.5 million (USD3.4 million), a year-over-year increase of 45.9% from RMB16.1 million in Q1 2025.
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Loss from Operations:RMB21.3 million (USD3.1 million), improved from RMB33.9 million in Q1 2025.
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Net Loss:RMB19.4 million (USD2.8 million), a year-over-year reduction of 37.4% from RMB30.9 million in Q1 2025.
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Adjusted Net Loss (Non-GAAP):RMB15.1 million (USD2.2 million), compared with RMB22.4 million in Q1 2025.
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Cash and Cash Equivalents:RMB352.4 million (USD51.1 million) as of March 31, 2026, compared with RMB407.0 million as of December 31, 2025.
Release Date: June 17, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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First quarter revenue increased more than fourfold year-over-year and 155% sequentially, driven by the expansion of Yiqi Aixue.
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Gross margin improved significantly to 61.9%, up from 36.2% in the first quarter of 2025.
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GAAP net loss narrowed significantly both year-over-year and quarter-over-quarter, indicating progress in profitability.
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The company has successfully transformed into an AI-powered application service provider, focusing on personalized learning.
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Strong year-over-year revenue growth is expected to continue throughout 2026, with ongoing improvements in operating performance.
Negative Points
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Total operating expenses increased by 98.7% year-over-year, driven by higher sales, marketing, and administrative costs.
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Sales and marketing expenses rose by 232.0% year-over-year, reflecting increased efforts for user acquisition and market expansion.
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Research and development expenses increased by 28.5% year-over-year, indicating significant investment in AI product capabilities.
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General and administrative expenses grew by 45.9% year-over-year, primarily due to higher personnel-related costs.
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Cash and cash equivalents decreased from RMB407.0 million as of December 31, 2025, to RMB352.4 million as of March 31, 2026.
Q & A Highlights
Q: Can you elaborate on the key drivers behind the significant revenue growth in the first quarter of 2026? A: The revenue growth was primarily driven by the expansion of Yiqi Aixue, our consumer-facing AI application service for personalized learning. This growth was complemented by steady contributions from district-level and school-based subscription projects. (Sishi Zhou, CFO)
Q: How has the company's strategic transformation impacted its financial performance? A: Our strategic transformation into an AI-powered application service provider has led to a significant increase in gross margin, which rose to 61.9%. This transformation has also contributed to a narrowing of the GAAP net loss both year-over-year and quarter-over-quarter. (Sishi Zhou, CFO)
Q: What are the company's plans for future growth and investment? A: We plan to continue investing in product innovation and AI capability development while maintaining prudent capital allocation. Our focus remains on long-term value creation and disciplined execution to capture opportunities in AI-driven transformations in education. (Sishi Zhou, CFO)
Q: Can you discuss the role of AI in enhancing user experience and application performance? A: Our AI capabilities, combined with educational insights, enable us to improve personalization, recommendation accuracy, and user experience across our application services. This integrated AI-powered education ecosystem connects education systems, educators, students, and families, enhancing overall application performance. (Sishi Zhou, CFO)
Q: What is the company's outlook for the remainder of 2026? A: We expect strong year-over-year revenue growth and continued improvement in operating performance throughout 2026. While quarterly results may vary, our focus remains on sustainable long-term growth and value creation. (Sishi Zhou, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
