Sunlands Technology Group Announces Unaudited Third Quarter 2025 Financial Results

Core Insights - Sunlands Technology Group reported a net revenue of RMB523.0 million (approximately US$73.5 million) for Q3 2025, marking a 6.5% increase year-over-year from RMB491.3 million in Q3 2024 [6][9] - The company achieved a net income of RMB125.4 million (approximately US$17.6 million), representing a significant year-over-year increase of 40.5% from RMB89.3 million in Q3 2024 [3][13] - The strategic focus on high-margin, demand-driven course categories has contributed to the company's profitability and operational resilience [3][4] Financial Performance - Net revenues for the first nine months of 2025 increased by 2.9% to RMB1,549.7 million (approximately US$217.7 million) compared to RMB1,506.7 million in the same period of 2024 [18] - Gross profit for Q3 2025 rose by 13.1% to RMB462.7 million (approximately US$65.0 million) from RMB409.2 million in Q3 2024 [10][9] - Operating expenses decreased by 5.5% to RMB324.4 million (approximately US$45.6 million) in Q3 2025, down from RMB343.4 million in Q3 2024 [11] Cost Management - Cost of revenues decreased by 26.5% to RMB60.3 million (approximately US$8.5 million) in Q3 2025, primarily due to reduced costs associated with sales of learning materials and books [7] - Sales and marketing expenses fell by 7.7% to RMB279.7 million (approximately US$39.3 million) in Q3 2025, compared to RMB303.0 million in Q3 2024 [11] Student Enrollment and Market Trends - New student enrollments totaled 137,493 in Q3 2025, a decrease from 158,395 in Q3 2024, indicating a more selective marketing approach [9] - The gross billings per new student enrollment for interest, professional skills, and professional certification preparation courses grew by 11.7% year-over-year in Q3 2025, reflecting steady user acquisition momentum [5] Cash Flow and Balance Sheet - As of September 30, 2025, the company had cash, cash equivalents, and restricted cash totaling RMB601.0 million (approximately US$84.4 million) [15] - The deferred revenue balance as of September 30, 2025, was RMB695.5 million (approximately US$97.7 million), down from RMB916.5 million as of December 31, 2024 [16] Future Outlook - For Q4 2025, Sunlands expects net revenues to be between RMB440 million to RMB460 million, which would represent a year-over-year decrease of 4.9% to 9.0% [26]