Shares of Gaotu Techedu Inc. (GOTU) plunged 5.24% in pre-market trading on Tuesday, despite the Chinese education technology company reporting improved second-quarter results and a positive growth outlook. The sharp decline suggests investors may be focusing on the company's continued losses rather than its top-line growth.

Gaotu Techedu announced its unaudited financial results for the second quarter of 2025 early Tuesday. The company reported a 37.6% year-over-year increase in net revenues to RMB1,389.4 million ($193.95 million). Gross billings, a key metric for education companies, rose 36.2% to RMB2,252.4 million ($314.42 million). Despite the strong top-line growth, the company still recorded a net loss of RMB216.0 million ($30.15 million), though this was significantly narrower than the RMB429.6 million loss in the same period last year.

Looking ahead, Gaotu Techedu provided an optimistic outlook for the third quarter, projecting net revenues between RMB1,558 million and RMB1,578 million, representing a year-over-year increase of 28.9% to 30.6%. However, the market's negative reaction suggests that investors may be growing impatient with the company's path to profitability, despite the improved financial metrics and positive growth trajectory. The pre-market sell-off indicates that some shareholders might be taking profits or reassessing their positions in light of the continued losses, even as the company shows signs of operational improvement.