Sunlands Technology Group Announces Unaudited Third Quarter 2024 Financial Results

Core Viewpoint - Sunlands Technology Group reported a decline in net revenues and gross profit for the third quarter of 2024, but managed to achieve a net income of RMB89.3 million, indicating resilience in a challenging market environment [4][12]. Financial Performance - Net revenues for Q3 2024 were RMB491.3 million (US$70.0 million), a decrease of 6.4$51.3 million), down from RMB390.0 million in Q3 2023 [2][30]. - Gross profit decreased by 11.1% to RMB409.2 million (US$58.3 million) compared to RMB460.5 million in Q3 2023 [2][9]. - Net income was RMB89.3 million (US$12.7 million), down from RMB131.6 million in Q3 2023, with a net income margin of 18.2% compared to 25.1% in the previous year [2][12]. Operational Highlights - New student enrollments increased to 158,395 in Q3 2024 from 154,299 in Q3 2023 [2][3]. - The deferred revenue balance as of September 30, 2024, was RMB920.6 million (US$131.2 million), down from RMB1,113.9 million as of December 31, 2023 [2][15]. Cost Structure - Cost of revenues rose by 28.0$11.7 million) in Q3 2024, primarily due to increased costs from sales of goods [2][8]. - Operating expenses were RMB343.4 million (US$48.9 million), a 1.4% increase from RMB338.5 million in Q3 2023, with sales and marketing expenses increasing by 2.7% [2][10]. Future Outlook - For Q4 2024, the company expects net revenues to be between RMB450 million to RMB470 million, representing a year-over-year decrease of 13.2% to 16.9% [25]. - The company aims to strengthen its brand presence and enhance user experience while optimizing its cost structure to drive sustainable profitability growth [5][6].