AACG

This article first appeared on GuruFocus. Total Net Revenue (Q4 2025): RMB89.1 million, decreased 11.7% compared to Q4 2024. Gross Profit (Q4 2025): RMB50.2 million, down from RMB63.7 million in Q4 2024. Gross Margin (Q4 2025): 56.4%, compared to 63.1% in Q4 2024. Total Operating Expenses (Q4 2025): RMB73.3 million, increased due to a one-time goodwill impairment charge. Net Loss (Q4 2025): RMB26.3 million, compared to net income of RMB13.3 million in Q4 2024. Total Net Revenue (Full-Year 2025): RMB268.1 million. Gross Profit (Full-Year 2025): RMB130.3 million, a decrease of 7.8% from 2024. Gross Margin (Full-Year 2025): 48.6%, compared to 52.7% in 2024. Total Operating Expenses (Full-Year 2025): RMB194.6 million, increased by 5.5% from 2024. Net Loss (Full-Year 2025): RMB48 million, compared to RMB36.1 million in 2024. Cash and Cash Equivalents (Dec 31, 2025): RMB85.2 million. Total Student Enrollment (Q4 2025): 921, decreased from 1,038 in Q4 2024. Portfolio Training Service Revenue Contribution (Q4 2025): 68.8% of total net revenues. Project-Based Programs Credit Hours (Q4 2025): 74.9% of total credit hours delivered. Warning! GuruFocus has detected 3 Warning Signs with AACG. Is AACG fairly valued? Test your thesis with our free DCF calculator. Release Date: March 26, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ATA Creativity Global (NASDAQ:AACG) reported increased revenues from research-based learning and other educational services year over year. The company successfully implemented cost-saving initiatives, resulting in a 15.7% reduction in operating expenses, excluding a one-time goodwill impairment charge. Project-based programs accounted for 74.9% of total credit hours delivered, showing a strong preference among students. The company established its first music preparatory center in Chengdu, enhancing its educational offerings. ATA Creativity Global (NASDAQ:AACG) hosted the 2025 ACG Expert Tour, providing students with valuable insights and feedback from industry and academic experts. Total net revenue for the fourth quarter of 2025 decreased by 11.7% compared to the same period in 2024. Gross profit for the fourth quarter of 2025 was lower, with a gross margin of 56.4% compared to 63.1% in the prior-year period. The company recorded a significant one-time goodwill impairment charge of RMB33.9 million, impacting operating expenses. Net loss attributable to ATA Creativity Global (NASDAQ:AACG) during the fourth quarter of 2025 was RMB26.3 million, compared to net income in the prior-year period. Total student enrollment decreased in the fourth quarter of 2025, reflecting normalized demand for services. Q: Can you provide an overview of the financial performance for the fourth quarter of 2025? A: Ruobai Sima, Chief Financial Officer, reported that total net revenue for Q4 2025 was RMB89.1 million, a decrease of 11.7% compared to Q4 2024. The decline was mainly due to reduced revenue from portfolio training programs and overseas study counseling services, partially offset by increased revenue from research-based learning services and other educational services. Gross profit was RMB50.2 million, with a gross margin of 56.4%. Q: What were the main contributors to the revenue in Q4 2025? A: Xiaofeng Ma, Chairman and CEO, stated that the main revenue contributor was the portfolio training service, accounting for 68.8% of total net revenues. Project-based programs were the primary choice for students, making up 74.9% of total credit hours delivered. Q: How did operating expenses change in Q4 2025 compared to the previous year? A: Ruobai Sima, CFO, noted that total operating expenses were RMB73.3 million in Q4 2025, up from RMB46.8 million in Q4 2024. This increase was primarily due to a one-time goodwill impairment charge of RMB33.9 million. Excluding this charge, operating expenses decreased by 15.7% from Q4 2024. Q: What strategic initiatives are planned for 2026 to enhance growth and efficiency? A: Jun Zhang, President, explained that ACG aims to maintain its leading position in China's creative art education industry by leveraging its skilled faculty, high-quality offerings, and global partnerships. The company plans to optimize its service portfolio, expand online course offerings, and streamline operations to improve efficiency and financial performance. Q: What are the key focus areas for ACG's long-term growth strategy? A: Jun Zhang, President, emphasized that ACG will focus on strengthening its portfolio of higher fee and higher margin services, driving innovation, and introducing new services. The company is committed to delivering state-of-the-art education and enhancing student outcomes, which are central to its business strategy. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Conference Call Scheduled for Wednesday, March 25, at 9:00 p.m. Eastern Time (Thursday, March 26, at 9:00 a.m. Beijing Time) with Accompanying Audio and Slide Webcast BEIJING, CN / ACCESS Newswire / March 25, 2026 / ATA Creativity Global ("ACG" or the "Company") (Nasdaq:AACG), an international educational services company focused on providing quality learning experiences that cultivate and enhance students' creativity, today announced preliminary unaudited financial results for the fourth quarter ("Q4 2025") and twelve-month ("FY 2025") periods ended December 31, 2025. All amounts presented in U.S. dollars ($) in this news release are based on a conversion rate of RMB6.9931 to $1.00 for both reporting periods ended December 31, 2025. Q4 2025 Financial Highlights Net revenues for Q4 2025 of RMB89.1 million (or $12.7 million), compared to RMB100.9 million in Q4 2024. Gross profit for Q4 2025 of RMB50.2 million (or $7.2 million), compared to RMB63.7 million in Q4 2024. Q4 2025 gross margin was 56.4% during the current period, compared to 63.1% in the prior-year period. Net loss attributable to ACG for Q4 2025 of RMB26.3 million (or $3.8 million), compared to net income attributable to ACG of RMB13.3 million in Q4 2024. Cash and cash equivalents were RMB85.2 million (or $12.2 million) as of December 31, 2025. Full Year 2025 Financial Highlights Net revenues for FY 2025 of RMB268.1 million (or $38.3 million), consistent with RMB268.1 million in FY 2024. Gross profit for FY 2025 of RMB130.3 million (or $18.6 million), from RMB141.3 million during FY 2024. Gross margin was 48.6% during the current period, compared to 52.7% during FY 2024. Net loss attributable to ACG for FY 2025 was RMB48.0 million (or $6.9 million), compared to net loss attributable to ACG of RMB36.1 million in FY 2024. Q4 2025 Operational Highlights Student enrollment during Q4 2025 was 921, compared to 1,038 in Q4 2024. 61.7% of students were enrolled in ACG's portfolio training programs, which consisted of time-based programs and project-based programs. 38.3% of students were enrolled in ACG's other programs, which mainly consisted of overseas study counselling services and research-based learning services. Credit hours delivered during Q4 2025 were 58,806, representing a decrease of 10.5% compared to Q4 2024.   The following is a summary of the credit hours delivered for ACG's portfolio training programs for Q4 2025, compared to those for the prior-year period: Management Commentary Mr. Kevin Ma, Chairman and CEO of ACG, stated, "We closed the year with revenues remaining consistent with last year. While performance for our portfolio training business line was impacted by increased market competition, we reported strong growth in all other business lines. During the year, we made continuous efforts to streamline our operations and improve efficiency." Mr. Ma continued, "We are pleased that our various value-added services have continued to gain momentum among ACG students. During Q4 2025, we hosted ten online Master Classes co-developed and lectured by instructors from Carnegie Mellon University, Harvard University, as well as University of Arts London, Royal College of Art, and a number of winter camps, as well as the Open Hack Shanghai Fashion Week project. In October, we organized the 2025 ACG Expert Tour in several cities including Shanghai, Wuhan, Chengdu, Chongqing, and Suzhou, giving over 1,000 students the opportunity to interact with both academia and industry experts. We also strategically redirected internal resources to provide ACG students with world-class educational and academic support. During Q4 2025, we established ACG's first music preparatory center in association with Leeds Conservatoire in Chengdu, and implemented a series of service enhancements to our ACG Japan Center, which now hosts Master Class projects and provides improved class offerings and course customization, working in collaboration with more Japanese arts schools." Mr. Jun Zhang, President of ACG, added "In Q1, our flagship initiative has been the Finland Sustainable Design & Art Research Program, which offers students the opportunity to visit Aalto University in Finland, one of the world's leading institutions in design, architecture and engineering, and participate in Arctic Center sustainable development workshops to learn about Arctic and S￡mi culture. In parallel, in order to support students in strengthening their application portfolios, we are hosting the 2026 Competition Winter Camp in January through a hybrid format of online and in-person classes. The camp targets students specializing in architecture, interaction design, interior design, landscape design, game design and digital media, and focuses on helping students on preparing interdisciplinary portfolios for participation in various international and national competitions in their respective areas of focus. We remained committed to helping our students pursue their aspirations in creative arts." Mr. Zhang continued, "Our goal in 2026 is to maintain our leading position in China's creative arts education industry amidst increasing competition. We will leverage our skilled and experienced teaching team, high-quality existing and new offerings, and an extensive network of global partnerships with arts institutions to achieve this objective. At the same time, we expect to build on our existing operational efficiency initiatives and take additional steps to manage operating and administrative expenses in order to improve our profitability. Key priorities include optimizing our services, improving classroom utilization, strategically allocating teaching resources to larger campus locations, streamlining sales organization and prioritizing cost-effective and proven student acquisition channels." Registered Direct Offering of the Company's ADSs On November 17, 2025, the Company entered into a subscription agreement (the "Subscription Agreement") with three purchasers for a registered direct offering of 11,067,547 of its American Depositary Shares ("ADSs") at the price of $0.8 per ADS (equivalent to $0.4 per common share) (the "Registered Direct Offering"). The closing of the Registered Direct Offering occurred on January 28, 2026. The Company received gross proceeds of approximately US$8.85 million from the issuance and sale of the ADSs before deducting the offering expenses payable by the Company. Conference Call and Webcast Information (With Accompanying Presentation) ACG will host a conference call at 9:00 p.m. Eastern Time on Wednesday, March 25 (9:00 a.m. Beijing Time on Thursday, March 26), during which management will discuss Q4 2025 and Fiscal Year 2025 results. To participate in the conference call, please use the following dial-in numbers about 10 minutes prior to the scheduled conference call time: A simultaneous audio webcast including accompanying slides may be accessed via the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=cBJYYCSw, or via the investor relations section of the Company's website https://ir.atai.net.cn/. For those unable to listen to the live webcast, the replay will be available on the Company's website shortly after the conclusion of the call. --------------------------------------------------------------------------------------------------------------------------------------------------------- Q4 2025 Financial Review - GAAP Results ACG's total net revenues for Q4 2025 of RMB89.1 million (or $12.7 million), decreased by 11.7% as compared to RMB100.9 million in Q4 2024, primarily due to decreased revenue contributions from portfolio training programs and overseas study counselling services, partially offset by increased revenue contributions from research-based learning services and other educational services. Specifically: Net revenues from portfolio training programs of RMB61.3 million (or $8.8 million) decreased by 17.5% as compared to Q4 2024 and accounted for 68.8% of total net revenues. Decrease in portfolio training revenues was primarily due to an adjustment of portfolio training offerings and fee structure in response to increased market competition during the period. Net revenues from overseas study counselling services, research-based learning services and other educational services of RMB27.8 million (or $4.0 million) increased by 4.6% as compared to Q4 2024 and accounted for 31.2% of total net revenues. Increase in revenues was primarily attributable to increased contribution from other educational services related to in-school art classes in partnership schools, and was partially offset by deceased contribution from overseas study counselling services. Gross profit for Q4 2025 of RMB50.2 million (or $7.2 million) decreased by 21.1%, from RMB63.7 million in Q4 2024, mainly as a result of lower net revenues and higher research-based learning services outsourcing costs and part-time teacher costs. As a result, gross margin decreased to 56.4%, compared to 63.1% in the prior-year period. Total operating expenses for Q4 2025 were RMB73.3 million (or $10.5 million), representing an increase of 56.8% from RMB46.8 million in Q4 2024. The increase was mainly due to a one-time goodwill impairment charge of RMB33.9 million (or $4.8 million) recorded in Q4 2025 which was not recorded in Q4 2024, and partially offset by decreased selling expenses during the period. Excluding goodwill impairment charge, total operating expenses for Q4 2025 decreased by 15.7% as compared to Q4 2024. Furthermore, for Q4 2025: Selling expenses of RMB20.1 million (or $2.9 million) decreased by RMB7.4 million or 27.1% from Q4 2024, mainly as a result of decreased sales and a decreased number of sales personnel. General & administrative expenses of RMB18.6 million (or $2.7 million), slightly increased by RMB0.1 million or 0.9% from Q4 2024. Research and development expenses of RMB0.7 million (or $0.1 million), slightly decreased by RMB0.1 million or 8.6% from Q4 2024. Thus in Q4 2025, loss from operations for Q4 2025 was RMB23.0 million (or $3.3 million), compared to income from operations of RMB17.0 million in Q4 2024. Net loss attributable to ACG for Q4 2025 was RMB26.3 million (or $3.8 million), compared to net income attributable to ACG of RMB13.3 million in Q4 2024. Basic and diluted losses per common share attributable to ACG for Q4 2025 were RMB0.42 (or $0.06), compared to basic and diluted earnings per common share of RMB0.21for Q4 2024. Basic and diluted losses per ADS attributable to ACG were RMB0.84 or (or $0.12), compared to basic and diluted earnings per ADS of RMB0.42 in Q4 2024. FY 2025 Financial Review - GAAP Results ACG's total net revenues for FY 2025 was RMB268.1 million (or $38.3 million), consistent with RMB268.1 million during FY 2024. Specifically: Net revenues from portfolio training programs of RMB187.2 million (or $26.8 million) decreased by 6.1% as compared to FY 2024 and accounted for 69.8% of total net revenues. Net revenues from overseas study counselling services, research-based learning services and other educational services of RMB81.0 million (or $12.0 million) increased by 17.8% as compared to FY 2024 and accounted for 30.2% of total net revenues. Gross profit for FY 2025 was RMB130.3 million (or $18.6 million), representing a decrease of 7.8% from RMB141.3 million during FY 2024, while gross margin was 48.6% during the period, compared to 52.7% during FY 2024, decreased primarily due to increased cost of revenues related to research-based learning services outsourcing costs and part-time teacher costs. Total operating expenses for FY 2025 were RMB194.6 million (or $27.8 million), representing an increase of 5.5% from RMB184.5 million in FY 2024. The increase was primarily due to a one-time goodwill impairment charge of RMB33.9 million (or $4.8 million) recorded in Q4 2025, and partially offset by overall lowered operating expenses as well as an RMB3.8 million (or $0.5 million) collection of previously impaired loans and other receivables recorded in Q1 2025. Excluding goodwill impairment charge and the collection of previously impaired loans and other receivables, total operating expenses for FY 2025 decreased by 10.8% as compared to FY 2024. Furthermore, for FY 2025: Selling expenses of RMB82.6 million (or $11.8 million) decreased by RMB17.3 million or 17.3% from FY 2024, due to lower headcount in sales personnel and decreased sales incentives compared to FY 2024. General & administrative expenses of RMB78.8 million (or $11.3 million) decreased by RMB2.1 million or 2.6% from FY 2024, mainly as a result of decreased administrative personnel expenses and a decrease in amortization expenses related to purchase price accounting from a previously completed acquisition. Research and development expenses of RMB3.1 million (or $0.4 million) decreased by RMB0.6 million or 17.1% from FY 2024, as ACG's system development was completed in Q2 2024. Thus loss from operations for FY 2025 was RMB64.1 million (or $9.2 million), compared to loss of RMB43.0 million during FY 2024. Net loss attributable to ACG for FY 2025 was RMB48.0 million (or $6.9 million), compared to net loss attributable to ACG of RMB36.1 million during FY 2024, as a result of widened operating loss, and was partially offset by a one-time investment gain from previous investment. For FY 2025, basic and diluted losses per common share attributable to ACG were RMB0.76(or $0.11), compared to RMB0.57 during FY 2024. Basic and diluted losses per ADS attributable to ACG were RMB1.52 (or $0.22), compared to RMB1.14 during FY 2024. Non-GAAP Measures Adjusted net loss attributable to ACG for FY 2025, which excludes share-based compensation expense and foreign currency exchange losses, net, was RMB47.5million (or $6.8 million), compared to adjusted net loss of RMB33.3 million in FY 2024. Basic and diluted losses per common share attributable to ACG excluding share-based compensation expense and foreign currency exchange losses, net for FY 2025, were RMB0.75(or $0.011). Basic and diluted losses per ADS attributable to ACG excluding share-based compensation expense and foreign currency exchange losses, net for FY 2025 were RMB1.50 (or $0.22). Please see the note about non-GAAP measures and the reconciliation table at the end of this press release. Other Data The number of weighted average ADSs used to calculate basic and diluted earnings per ADS for Q4 2025 were both 31.6 million, respectively. The number of weighted average ADSs used to calculate basic and diluted losses per ADS for FY 2025 were both 31.7 million. Each ADS represents two common shares. Balance Sheet Highlights As of December 31, 2025, ACG's cash and cash equivalents were RMB85.2million (or $12.2 million), working capital deficit was RMB233.2 million (or $33.3 million), and total shareholders' equity was RMB32.0million (or $4.6 million); compared to cash and cash equivalents of RMB36.5 million, working capital deficit of RMB287.9 million, and total shareholders' equity of RMB79.6 million, respectively, as of December 31, 2024. About ATA Creativity Global ATA Creativity Global is an international educational services company focused on providing quality learning experiences that cultivate and enhance students' creativity. ATA Creativity Global offers a wide range of education services consisting primarily of portfolio training, research-based learning services, overseas study counselling and other educational services through its training center network. For more information, please visit ACG's website at www.atai.net.cn. Cautionary Note Regarding Forward-looking Statements This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "intend," "look forward to," "outlook," "guidance," "plan," "should," "will," and similar terms and include, among other things, statements regarding ACG's future growth and results of operations; ACG's plans for financing, mergers and acquisitions generally; ACG's growth strategy, anticipated growth prospects and subsequent business activities; ACG's 2025 guidance; market demand for, and market acceptance and competitiveness of, ACG's portfolio training programs and other education services. The factors that could cause the Company's actual financial and operating results to differ from what the Company currently anticipates may include its ability to develop and create content that could accommodate needs of potential students, its ability to provide effective creative related international education services and control sales and marketing expenses, its recognition in the marketplace for services it delivered and branding it established, its ability to maintain market share amid increasing competition, its ability to identify and execute on M&A opportunities within the education sector and its ability to integrate the acquired business, the economy of China, uncertainties with respect to China's legal and regulatory environments, the impact of the political tensions between the United States and China or other international tensions, and the impact of actual or potential international trade or military conflicts, and other factors stated in the Company's filings with the U.S. Securities and Exchange Commission ("SEC"). The financial information contained in this release should be read in conjunction with the consolidated financial statements and related notes included in the Company's annual report on Form 20-F for its fiscal year ended December 31, 2024, and other filings that ACG has made with the SEC. The filings are available on the SEC's website at www.sec.gov and at ACG's website at www.atai.net.cn. For additional information on the risk factors that could adversely affect the Company's business, financial conditions, results of operations, and prospects, please see the "Risk Factors" section of the Company's Form 20-F for the fiscal year ended December 31, 2024. The forward-looking statements in this release involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates, and projections about ACG and the markets in which it operates. The Company undertakes no obligation to update forward-looking statements, which speak only as of the date of this release, to reflect subsequent events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that its expectations and assumptions expressed in these forward-looking statements are reasonable, the Company cannot assure you that its expectations and assumptions will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Currency Convenience Translation The Company's financial information is stated in Renminbi ("RMB"), the currency of the People's Republic of China. The translations of RMB amounts for the quarter and year ended December 31, 2025, into U.S. dollars are included solely for the convenience of readers and have been made at the rate of RMB6.9931 to $1.00, the noon buying rate as of December 31, 2025, in New York for cable transfers in RMB per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under U.S. generally accepted accounting principles ("GAAP"). About Non-GAAP Financial Measures To supplement ACG's consolidated financial information presented in accordance with U.S. GAAP, ACG uses the following non-GAAP financial measures: net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss, and basic and diluted earnings (losses) per common share and ADS excluding share-based compensation expense and foreign currency exchange gain or loss. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. ACG believes these non-GAAP financial measures provide meaningful supplemental information about its performance by excluding share-based compensation expense and foreign currency exchange gain or loss, which may not be indicative of its operating performance. ACG believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to ACG's historical performance. ACG computes its non-GAAP financial measures using a consistent method from period to period. ACG believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss and basic and diluted earnings (losses) per common share and per ADS excluding share-based compensation expense and foreign currency exchange gain or loss is that share-based compensation charges and foreign currency exchange gain or loss have been, and are expected to continue to be for the foreseeable future, a significant recurring expense in ACG's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The table captioned "Reconciliations of Non-GAAP Measures to the Most Comparable GAAP Measures" shown at the end of this news release has more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures used by ACG. For more information on our company, please contact the following individuals:   ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) RECONCILIATIONS OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES SOURCE: ATA Creativity Global View the original press release on ACCESS Newswire

This article first appeared on GuruFocus. Release Date: November 13, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ATA Creativity Global (NASDAQ:AACG) reported a 7.1% revenue growth for the first nine months of 2025, driven by increased contributions from research-based learning and overseas study counseling. The company successfully increased project-based program credit hours by 22.9% compared to the third quarter of 2024, indicating strong demand for these offerings. Operating expenses significantly decreased by 22.4% in the third quarter of 2025, leading to a narrowed operating loss of RMB10.6 million compared to RMB17.6 million in the prior year. Net income attributed to AACG in the third quarter of 2025 was RMB2.4 million, a significant improvement from a net loss of RMB14.7 million in the previous year, primarily due to a one-time gain from a previous investment. AACG is on track to achieve total net revenues of between RMB276 million to RMB281 million for the full year 2025, representing a year-over-year increase of around 3 to 5%. Gross margin for the third quarter of 2025 decreased to 39.2% from 44.6% in the prior year, affected by higher costs related to research-based learning services and part-time teacher costs. Total student enrollment for the third quarter of 2025 decreased to 1,052 from 1,289 in the prior year period, indicating a decline in demand. The company's gross profit margin for the first nine months of 2025 decreased to 44.7% from 46.4% in the same period of 2024, partially offset by increased outsourcing costs. Despite revenue growth, AACG's total operating expenses as a percentage of net revenues remained high at 54.9% during the third quarter of 2025. The company faces challenges in maintaining student enrollment levels, as evidenced by the decrease in portfolio training student enrollment for the third quarter of 2025. Warning! GuruFocus has detected 3 Warning Signs with AACG. Is AACG fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide an overview of ATA Creativity Global's financial performance for the third quarter of 2025? A: The CFO reported stable net revenue for Q3 2025, with a 7.1% revenue growth for the first nine months of the year, driven by increased contributions from research-based learning and overseas study counseling. Portfolio training services accounted for 71.9% of total net revenues. Gross margin decreased to 39.2% from 44.6% in the previous year due to higher costs. Operating expenses decreased significantly, leading to a narrowed operating loss of RMB10.6 million. Net income was RMB2.4 million, compared to a net loss of RMB14.7 million in the prior year. Q: What are the expectations for ATA Creativity Global's full-year 2025 performance? A: The company expects total net revenues to be between RMB276 million and RMB281 million, representing a 3% to 5% increase from 2024. Portfolio training is anticipated to remain the main revenue pillar, with increased contributions from other business lines. The guidance is based on current business operations and market conditions, which are subject to change. Q: How is ATA Creativity Global planning to enhance its long-term growth strategy? A: The President highlighted the company's focus on expanding research-based learning and overseas study counseling services. ACG is committed to delivering high-quality portfolio training services and plans to consolidate select campuses while expanding online classroom capacity. New online master classes are being introduced in collaboration with prestigious universities to explore emerging art topics. Q: What initiatives are being taken to improve operating efficiency? A: ACG is streamlining selling expenses and reallocating regional teaching resources. The company plans to consolidate campuses in less active markets and expand online capacity. This approach aligns with the evolving digital and technology-driven formats in disciplines like computer design and gaming design. Q: How is ATA Creativity Global addressing student demand and satisfaction? A: The company is actively ensuring its product mix aligns with student demand, maintaining high satisfaction levels with its portfolio training services. ACG is also expanding its offerings to cater to a diverse student population with varying arts backgrounds, contributing to a strong and competitive application portfolio. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Conference Call Scheduled for Wednesday, November 12, at 8:00 p.m. Eastern Time (Thursday, November 13, at 9:00 a.m. Beijing Time) with Accompanying Audio and Slide Webcast BEIJING, CHINA / ACCESS Newswire / November 12, 2025 / ATA Creativity Global ("ACG" or the "Company"), (Nasdaq:AACG), an international educational services company focused on providing quality learning experiences that cultivate and enhance students' creativity, today announced preliminary unaudited financial results for the third quarter ("Q3 2025") and nine months ("9M 2025") periods ended September 30, 2025. All amounts presented in U.S. dollars ($) in this news release are based on a conversion rate of RMB7.1190 to $1.00 for both reporting periods ended September 30, 2025. Q3 2025 Financial Highlights Net revenues for Q3 2025 were RMB67.3 million (or $9.5 million), from RMB67.3 million in Q3 2024. Gross profit for Q3 2025 was RMB26.4 million (or $3.7 million), from RMB30.0 million in Q3 2024. Q3 2025 gross margin was 39.2%, compared to 44.6% in the prior year period. Net income attributable to ACG for Q3 2025 was RMB2.4 million (or $0.3 million), compared to net loss attributable to ACG of RMB14.7 million in Q3 2024. Cash and cash equivalents were RMB96.8 million (or $13.6 million) as of September 30, 2025. 9M 2025 Financial Highlights Net revenues for 9M 2025 increased 7.1% to RMB179.0 million (or $25.1 million), from RMB167.1 million in 9M 2024. Gross profit for 9M 2025 increased 3.2% to RMB80.1 million (or $11.2 million), from RMB77.6 million in 9M 2024. Gross margin for the current period was 44.7%, compared to 46.4% during 9M 2024. Net loss attributable to ACG for 9M 2025 decreased to RMB21.7 million (or $3.1 million), compared to net loss attributable to ACG of RMB49.4 million in 9M 2024. Q3 2025 Operational Highlights Student enrollment during Q3 2025 was 1,052, compared to 1,289 in Q3 2024. 55.6% of students were enrolled in ACG's portfolio training programs, which consist of time-based programs and project-based programs. 44.4% of students were enrolled in ACG's other programs, which mainly consist of overseas study counselling services and research-based learning services. Total credit hours delivered during Q3 2025 were 56,511, representing an increase of 5.6% compared to Q3 2024. The following is a summary of the credit hours delivered for ACG's portfolio training programs for Q3 2025, compared to those for the prior-year period: Management Commentary Mr. Kevin Ma, Chairman and CEO of ACG, stated, "For the 9M period, we reported a 7.1% increase in net revenues despite the overall stabilized market demand in 2025 compared to 2024, mainly supported by growth in the research-based learning and overseas study counselling business lines as we continued to offer innovative and relevant programs to ACG students. Moreover, we achieved solid cost savings in operating expenses, primarily as a result of streamlined sales efforts, which contributed to overall improved bottom-line results." Mr. Ma continued, "As students plan for the new academic year, many of them are exploring creative arts education services to strengthen their application portfolios. During Q3, ACG rolled out a number of new and recurring research-based learning projects, garnering widespread enthusiasm and positive reception from our students. We hosted a total of 14 summer labs in our Beijing Center, working with lecturers from an extensive list of prestigious arts schools in the U.S. and the U.K. to offer short-term projects that cover all of our six major arts disciplines. Our existing experiential offerings during the summer included online Master classes centered on computer engineering, game design, and animation, in addition to the United Nations Sustainable Development Goals Camp, and the New York Fashion Week program. Furthermore, we introduced a new in-person ten-day intensive summer lab project co-developed with Hong Kong Polytechnic University focusing on digital entertainment media design on the PolyU campus, where students gained first-hand learning experience on state-of-the-art virtual reality and augmented reality technologies and walk away with their own design solutions and certificates of attendance issued by PolyU. At the same time, our ACG Beijing Foundation Center has expanded its range of services, serving students with an extensive network of educational resources to help them pave the way for college entrance in their dream countries and schools." Mr. Ma added, "For fall 2025 enrollment, our students received over 4,000 admission offers from overseas universities, including prestigious names such as MIT, Harvard, University of Oxford, Parsons School of Design, Rhode Island School of Design and Royal College of Art. We are excited to welcome our new students exploring study-abroad opportunities for the upcoming application seasons. We remain committed to empowering ACG students by providing them with high-quality, customizable and innovative creative arts education products and services, and look forward to seeing them achieve academic and professional success in their creative arts journey." Reaffirms Guidance for FY 2025 For full year 2025, ACG expects total net revenues of between RMB276 million and RMB281 million, representing a year-over-year increase of around 3% to 5%. This guidance is based on the Company's current business operations, initiatives underway for the year ending December 31, 2025, and the current and preliminary assessment of existing domestic and international market conditions, all of which remain subject to change. Mr. Jun Zhang, President of ACG, commenting on the outlook of FY 2025, stated, "We believe we are on track to achieve our FY 2025 revenue guidance. In Q4, we continue to make quality offerings available to our students by introducing new online Master Classes co-developed and lectured by instructors from Carnegie Mellon University, Harvard University, University of the Arts London and Royal College of Art. These Master Classes build on ACG's long-standing commitment to excellence, continuing to offer students services that are relevant to emerging trends in both arts academia and industry, such as user design, digital love language design, digital media prototyping, and installation arts. Additionally, we are also hosting our traditional Shanghai Fashion Week project, allowing backstage access for students with an interest in fashion design to gain immersive experience of world-class fashion week preparation and execution." Mr. Zhang continued, "Moving forward, while we remain focused on addressing student demand with our expanding portfolio of offerings, we are also implementing cost control measures to drive bottom-line improvements. For portfolio training services, we continue to optimize product offerings to appeal to a larger audience, aiming to increase our market competitiveness; at the same time, we aim to further strengthen our capabilities by introducing new projects through our cooperation with prestigious arts schools overseas. Additionally, we plan to gradually consolidate select campuses located in less active markets and allocate teaching resources in top tier cities to maximize operating efficiency. We are confident that these strategic initiatives will contribute to a healthy growth trajectory for ACG in the long run." Update on Non-Binding Term Sheet with Baby Capital In August 2025, the Company announced the signing of a non-binding term sheet (the "Term Sheet") with Baby BTC Strategic Capital Limited ("Baby Capital"), pursuant to which Baby Capital will subscribe for new shares of the Company with the total purchase price of up to US$30 million, and at the same time obtain a warrant to purchase additional new shares of the Company for an aggregate exercise price of up to US$70 million. The Company and Baby Capital are still in the early stage of discussion and there has been no substantial progress regarding the transactions contemplated under the Term Sheet. The Company will provide further update as appropriate. There can be no assurance that the definitive share purchase agreement will be entered into, nor that the potential transactions contemplated under the Term Sheet will be consummated on the terms set forth in the Term Sheet, nor that the cooperation with Babylon will produce any expected outcome, or at all. Conference Call and Webcast Information (With Accompanying Presentation) ACG will host a conference call at 8:00 p.m. Eastern Time on Wednesday, November 12 (9:00 a.m. Beijing Time on Thursday, November 13), during which management will discuss Q3 2025 and 9M 2025 results. To participate in the conference call, please use the following dial-in numbers about 10 minutes prior to the scheduled conference call time: A simultaneous audio webcast including accompanying slides may be accessed via the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=dUsXW8Iz, or via the investor relations section of the Company's website https://ir.atai.net.cn/. For those unable to listen to the live webcast, the replay will be available on the Company's website shortly after the conclusion of the call. Q3 2025 Financial Review - GAAP Results ACG's total net revenues for Q3 2025 of RMB67.3 million (or $9.5 million), relatively stable as compared to RMB67.3 million in Q3 2024. Specifically: Net revenues from portfolio training programs of RMB48.4 million (or $6.8 million) decreased 2.0% as compared to Q3 2024 and accounted for 71.9% of total net revenues. The slight decrease was mainly a result of an adjustment of portfolio training offerings and fee structure in response to increased market competition during Q3 2025. Net revenues from overseas study counselling services, research-based learning services and other educational services of RMB18.9 million (or $2.7 million), relatively stable from Q3 2024 and accounted for 28.1% of total net revenues. Gross profit for Q3 2025 of RMB26.4 million (or $3.7 million) decreased by 12.1%, from RMB30.0 million in Q3 2024, as a result of higher cost of revenues related to research-based learning services outsourcing costs and part-time teacher costs. Thus gross margin was 39.2%, compared to 44.6% in the prior-year period. Total operating expenses for Q3 2025 were RMB37.0 million (or $5.2 million), representing a decrease of 22.4% from RMB47.7 million in Q3 2024. As a percentage of net revenues, the total operating expenses decreased to 54.9%, compared to 70.9% in Q3 2024. The decrease was a result of lower selling expenses and general & administrative expenses. Specifically, for Q3 2025: Selling expenses of RMB19.8 million (or $2.8 million) decreased by RMB5.9 million or 23.2% from Q3 2024, mainly due to lower headcount in sales personnel compared to the same period in 2024. General & administrative expenses of RMB16.4 million (or $2.3 million), decreased by RMB4.8 million or 22.4% from Q3 2024, mainly as a result of decreased professional fees and lower investments in new project development. Research and development expenses of RMB0.8 million (or $0.1 million), relatively stable from RMB0.7 million in Q3 2024. As a result of decreased operating expenses, loss from operations for Q3 2025 was RMB10.6 million (or $1.5 million), compared to loss from operations of RMB17.6 million in Q3 2024. Net income attributable to ACG for Q3 2025 was RMB2.4 million (or $0.3 million), compared to net loss attributable to ACG of RMB14.7 million in Q3 2024, primarily due to a one-time gain from previous investment. Basic and diluted earnings per common share attributable to ACG for Q3 2025 were RMB0.04 (or $0.01), compared to basic and diluted losses per common share of RMB0.23 for Q3 2024. Basic and diluted earnings per ADS attributable to ACG were RMB0.08 (or $0.02), compared to basic and diluted losses per ADS of RMB0.46 in Q3 2024. 9M 2025 Financial Review - GAAP Results ACG's total net revenues for 9M 2025 were RMB179.0 million (or $25.1 million), representing an increase of 7.1% from RMB167.1 million during 9M 2024, primarily due to increased revenue contributions from overseas study counselling services and research-based learning services, and other educational services. Specifically: Net revenues from portfolio training programs of RMB125.9 million (or $17.7 million) relatively stable from 9M 2024 and accounted for 70.4% of total net revenues. Net revenues from overseas study counselling services, research-based learning services and other educational services of RMB53.1 million (or $7.5million) increased 26.0% as compared to 9M 2024 and accounted for 29.6% of total net revenues. The increase was a result of increased services delivered across the three lines of services over the period. Gross profit for 9M 2025 was RMB80.1 million (or $11.2 million), representing an increase of 3.2% from RMB77.6 million during 9M 2024, mainly due to increased net revenues and partially offset by increased outsourcing costs. Gross margin was 44.7% during the period, compared to 46.4% during 9M 2024. Total operating expenses for 9M 2025 were RMB121.3 million (or $17.0 million), representing a decrease of 11.9% from RMB137.7 million in 9M 2024. As a percentage of net revenues, the total operating expenses decreased to 67.8%, compared to 82.4% in 9M 2024. The decrease was mainly a result of lower selling expenses, general & administrative expenses and research and development expenses. Specifically, for 9M 2025: Selling expenses of RMB62.6 million (or $8.8 million) decreased by RMB9.8 million or 13.6% from 9M 2024, primarily driven by lower headcount in sales personnel and decreased sales incentives compared to 9M 2024. General & administrative expenses of RMB60.1 million (or $8.4 million) decreased by RMB2.3 million or 3.7% from 9M 2024, mainly as a result of accounting impact of purchase price allocation from a previously completed acquisition. Research and development expenses of RMB2.4 million (or $0.3 million) decreased by RMB0.5 million or 19.3% from 9M 2024, as ACG's system development was completed in Q2 2024. As a result of increased revenues and lower operating expenses, loss from operations for 9M 2025 was RMB41.1 million (or $5.8 million), compared to loss of RMB60.0 million during 9M 2024. Net loss attributable to ACG for 9M 2025 was RMB21.7 million (or $3.1 million), compared to net loss attributable to ACG of RMB49.4 million during 9M 2024. For 9M 2025, basic and diluted losses per common share attributable to ACG were RMB0.34 (or $0.05), compared to RMB0.78 during 9M 2024. Basic and diluted losses per ADS attributable to ACG were RMB0.68 (or $0.10), compared to RMB1.56 during 9M 2024. Non-GAAP Measures Adjusted net income attributable to ACG for Q3 2025, which excludes share-based compensation expense and foreign currency exchange losses, net, was RMB2.6 million (or $0.4 million), compared to adjusted net loss of RMB13.9 million in Q3 2024. Basic and diluted earnings per common share attributable to ACG excluding share-based compensation expense and foreign currency exchange losses, net for Q3 2025, were RMB0.04 (or $0.01). Basic and diluted earnings per ADS attributable to ACG excluding share-based compensation expense and foreign currency exchange losses, net for Q3 2025 were RMB0.08 (or $0.02). Please see the note about non-GAAP measures and the reconciliation table at the end of this press release. Other Data The number of weighted average ADSs used to calculate basic and diluted earnings per ADS for Q3 2025 were 31.7 million and 31.9 million respectively. The number of weighted average ADSs used to calculate basic and diluted losses per ADS for 9M 2025 were both 31.7 million. Each ADS represents two common shares. Balance Sheet Highlights As of September 30, 2025, ACG's cash and cash equivalents were RMB96.8million (or $13.6 million), working capital deficit was RMB259.6 million (or $36.5 million), and total shareholders' equity was RMB58.8million (or $8.3 million); compared to cash and cash equivalents of RMB36.5 million, working capital deficit of RMB287.9 million, and total shareholders' equity of RMB79.6 million, respectively, as of December 31, 2024. About ATA Creativity Global ATA Creativity Global is an international educational services company focused on providing quality learning experiences that cultivate and enhance students' creativity. ATA Creativity Global offers a wide range of education services consisting primarily of portfolio training, research-based learning services, overseas study counselling and other educational services through its training center network. For more information, please visit ACG's website at www.atai.net.cn. Cautionary Note Regarding Forward-looking Statements This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "intend," "look forward to," "outlook," "guidance," "plan," "should," "will," and similar terms and include, among other things, statements regarding ACG's future growth and results of operations; ACG's plans for financing, mergers and acquisitions generally; ACG's growth strategy, anticipated growth prospects and subsequent business activities; ACG's 2025 guidance; market demand for, and market acceptance and competitiveness of, ACG's portfolio training programs and other education services. The factors that could cause the Company's actual financial and operating results to differ from what the Company currently anticipates may include its ability to develop and create content that could accommodate needs of potential students, its ability to provide effective creative related international education services and control sales and marketing expenses, its recognition in the marketplace for services it delivered and branding it established, its ability to maintain market share amid increasing competition, its ability to identify and execute on M&A opportunities within the education sector and its ability to integrate the acquired business, the economy of China, uncertainties with respect to China's legal and regulatory environments, the impact of the political tensions between the United States and China or other international tensions, and the impact of actual or potential international trade or military conflicts, and other factors stated in the Company's filings with the U.S. Securities and Exchange Commission ("SEC"). The financial information contained in this release should be read in conjunction with the consolidated financial statements and related notes included in the Company's annual report on Form 20-F for its fiscal year ended December 31, 2024, and other filings that ACG has made with the SEC. The filings are available on the SEC's website at www.sec.gov and at ACG's website at www.atai.net.cn. For additional information on the risk factors that could adversely affect the Company's business, financial conditions, results of operations, and prospects, please see the "Risk Factors" section of the Company's Form 20-F for the fiscal year ended December 31, 2024. The forward-looking statements in this release involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates, and projections about ACG and the markets in which it operates, and the actual results may differ materially from those indicated in these forward-looking statements, including without limitation those in relation to the potential transactions contemplated under the Term Sheet or other similar transaction(s). The Company undertakes no obligation to update forward-looking statements, which speak only as of the date of this release, to reflect subsequent events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that its expectations and assumptions expressed in these forward-looking statements are reasonable, the Company cannot assure you that its expectations and assumptions will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Currency Convenience Translation The Company's financial information is stated in Renminbi ("RMB"), the currency of the People's Republic of China. The translations of RMB amounts for the quarter and nine months ended September 30, 2025, into U.S. dollars are included solely for the convenience of readers and have been made at the rate of RMB7.1190 to $1.00, the noon buying rate as of September 30, 2025, in New York for cable transfers in RMB per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under U.S. generally accepted accounting principles ("GAAP"). About Non-GAAP Financial Measures To supplement ACG's consolidated financial information presented in accordance with U.S. GAAP, ACG uses the following non-GAAP financial measures: net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss, and basic and diluted earnings (losses) per common share and ADS excluding share-based compensation expense and foreign currency exchange gain or loss. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. ACG believes these non-GAAP financial measures provide meaningful supplemental information about its performance by excluding share-based compensation expense and foreign currency exchange gain or loss, which may not be indicative of its operating performance. ACG believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to ACG's historical performance. ACG computes its non-GAAP financial measures using a consistent method from period to period. ACG believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss and basic and diluted earnings (losses) per common share and per ADS excluding share-based compensation expense and foreign currency exchange gain or loss is that share-based compensation charges and foreign currency exchange gain or loss have been, and are expected to continue to be for the foreseeable future, a significant recurring expense in ACG's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The table captioned "Reconciliations of Non-GAAP Measures to the Most Comparable GAAP Measures" shown at the end of this news release has more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures used by ACG. For more information on our company, please contact the following individuals: ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) RECONCILIATIONS OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES SOURCE: ATA Creativity Global View the original press release on ACCESS Newswire

Release Date: August 07, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ATA Creativity Global (NASDAQ:AACG) reported a year-over-year increase in net revenues and gross profits for the second quarter of 2025. The company saw a significant 54.2% growth in revenues from research-based learning, overseas study counseling, and other educational services. Operating expenses decreased by 9.4% compared to the second quarter of 2024, contributing to improved financial performance. AACG's project-based programs saw a 25.7% increase in credit hours delivered, highlighting the popularity and flexibility of these offerings. The company successfully expanded its international partnership network, enhancing its global reach and student opportunities. Total student enrollment decreased by 3.1% in the second quarter of 2025 compared to the prior year period. Despite revenue growth, AACG reported a net loss of RMB10.8 million for the second quarter of 2025. The decrease in student enrollment was attributed to normalized demand following a rebound in previous years. Time-based programs saw a decrease in credit hours delivered, as more students opted for project-based tracks. The company faces intensified competition in the creative arts education market, which could impact future growth. Warning! GuruFocus has detected 6 Warning Signs with AACG. Q: Can you provide an overview of the financial performance for the second quarter of 2025? A: ATA Creativity Global CFO, Mr. Roba Sima, reported a year-over-year increase in net revenues and gross profits for the second quarter of 2025. Net revenues were RMB 55.9 million, an 8% increase from the previous year, primarily driven by overseas study counseling services and other educational services. Gross profit increased by 10.2% to RMB 28.3 million, with improved gross margins of 50.6%. Operating expenses decreased by 9.4%, leading to a narrowed net loss of RMB 10.8 million compared to RMB 16.8 million in the prior year. Q: What were the key drivers of revenue growth during this period? A: The primary drivers of revenue growth were the increased contributions from research-based learning, overseas study counseling, and other educational services. These areas saw a 54.2% growth compared to the previous year, with significant revenue growth in overseas study counseling services due to more services delivered and a high number of student admissions to prestigious institutions. Q: How did student enrollment trends impact the company's performance? A: Total student enrollment for the second quarter of 2025 was 1,050, a decrease of 3.1% from the prior year. This decline was attributed to normalized demand compared to the rebound in 2023 and the first half of 2024. Despite this, project-based programs saw a 25.7% increase in credit hours delivered, indicating a shift in student preference towards more flexible and customizable learning tracks. Q: What are the expectations for the full year 2025? A: The company expects total net revenues for the full year 2025 to be between RMB 276 million and RMB 281 million, representing a year-over-year increase of 3% to 5%. Portfolio training is anticipated to remain the main revenue pillar, with increased contributions from other business lines as the company continues to enhance its offerings and introduce new programs. Q: What strategic initiatives are being implemented to support long-term growth? A: ATA Creativity Global is focusing on organic expansion across all business lines, enhancing cost discipline, and improving efficiency to boost bottom-line results. The company is expanding its international partnership network and introducing new research-based learning projects and travel programs to diversify offerings and enhance student experiences. Additionally, cost-conscious methods such as maintaining a lean sales team and utilizing online marketing are being implemented to reduce operating expenses. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.

Reports Q2 2025 Net Revenues and Gross Profit Increases of 8.0% and 10.2%, Respectively, as Compared to Q2 2024 Conference Call Scheduled for Wednesday, August 6, at 9:00 p.m. Eastern Time (Thursday, August 7, at 9:00 a.m. Beijing Time) with Accompanying Audio and Slide Webcast BEIJING, CHINA / ACCESS Newswire / August 6, 2025 / ATA Creativity Global ("ACG" or the "Company"), (Nasdaq:AACG), an international educational services company focused on providing quality learning experiences that cultivate and enhance students' creativity, today announced preliminary unaudited financial results for the second quarter ("Q2 2025") and six months ("H1 2025") periods ended June 30, 2025. All amounts presented in U.S. dollars ($) in this news release are based on a conversion rate of RMB7.1636 to $1.00 for both reporting periods ended June 30, 2025. Q2 2025 Financial Highlights Net revenues for Q2 2025 increased 8.0% to RMB55.9 million (or $7.8 million), from RMB51.8 million in Q2 2024. Gross profit for Q2 2025 increased 10.2% to RMB28.3 million (or $4.0 million), from RMB25.7 million in Q2 2024. Q2 2025 gross margin improved to 50.6%, compared to 49.6% in the prior year period. Net loss attributable to ACG for Q2 2025 decreased to RMB10.8 million (or $1.5 million), compared to net loss attributable to ACG of RMB16.8 million in Q2 2024. Cash and cash equivalents were RMB34.7 million (or $4.8 million) as of June 30, 2025. H1 2025 Financial Highlights Net revenues for H1 2025 increased 11.8% to RMB111.7 million (or $15.6 million), from RMB99.9 million in H1 2024. Gross profit for H1 2025 increased 12.8% to RMB53.7 million (or $7.5 million), from RMB47.6 million in H1 2024. Gross margin for the current period improved to 48.1%, compared to 47.7% during H1 2024. Net loss attributable to ACG for H1 2025 decreased to RMB24.1 million (or $3.4 million), compared to net loss attributable to ACG of RMB34.7 million in H1 2024. Q2 2025 Operational Highlights Student enrollment during Q2 2025 was 1,050, compared to 1,084 in Q2 2024. 53.0% of students were enrolled in ACG's portfolio training programs, which consist of time-based programs and project-based programs. 47.0% of students were enrolled in ACG's other programs, which mainly consist of overseas study counselling services and research-based learning services. Total credit hours delivered during Q2 2025 were 42,983, representing an increase of 0.3% compared to Q2 2024. The following is a summary of the credit hours delivered for ACG's portfolio training programs for Q2 2025, compared to those for the prior-year period: Management Commentary Mr. Kevin Ma, Chairman and CEO of ACG, stated, "The 8.0% increase in net revenues, and the 10.2% growth in gross profit for Q2 2025 were due to higher revenues from overseas study counselling and other educational services, as well as an increased number of research-based learning projects during the period. While demand for our portfolio training services has returned to normalized levels following a post-COVID surge in 2023 and first half of 2024, we continued to offer value-added services and programs, which contributed to the revenue growth for the quarter, despite higher market competition. Furthermore, during the quarter, we continued our efforts to improve the overall efficiency of our business, streamlined the size of our sales team and explored and used several additional cost-efficient student acquisition channels such as online marketing via partner platforms. As a result of these initiatives, our Q2 2025 total operating expenses declined and margins improved as compared to the same period of 2024." Mr. Ma continued, "Total credit hours delivered during Q2 2025 slightly increased compared to the same period of last year. We saw substantial growth in credit hours for project-based programs as we continued to encourage newly enrolled students to take advantage of these flexible and customizable learning options, which continued to gain traction, as compared to traditional time-based programs. During Q2 2025, besides our regular Master Classes, we hosted another session of the United Nations Sustainable Development Goal Arts Boot Camp, an increasingly popular research-based learning offering that has now become a signature ACG project." Mr. Ma added, "This summer, our students have signed up for our regular, recurring research-based learning offerings, such as Japan and U.S. summer school camps, domestic themed travel programs focused on intangible cultural heritages in Dunhuang, Gansu Province and West Sichuan Province, as well as various in-person sessions of Summer Master Classes in Beijing featuring a wide range of arts topics taught by lecturers from reputable international colleges including MIT, Yale University, University of Southern California and Oxford University. In addition, we launched several new themed travel programs to further diversify our offerings and enhance the student experience: Singapore Top School Art Study Camp, Berklee Music Performance Intensive Camp, as well as an ACG-exclusive Studio for Electroacoustic Composition Summer School co-developed with Harvard University and UNESCO. We are pleased to wrap up Fall 2025 application season with over 4,000 offers received by ACG students from prestigious institutes worldwide, further validating our capabilities in driving positive student outcomes. Our core portfolio training services remain a leading choice for students pursuing overseas arts study opportunities. With the ongoing expansion of our value-added offerings, including overseas study counselling services and experiential learning projects, we remain committed to enabling all of our students to reach their full potential." Reaffirms Guidance for FY 2025 For full year 2025, ACG expects total net revenues of between RMB276 million and RMB281 million, representing a year-over-year increase of around 3% to 5%. This guidance is based on the Company's current business operations, initiatives underway for the year ending December 31, 2025, and the current and preliminary assessment of existing domestic and international market conditions, all of which remain subject to change. Mr. Jun Zhang, President of ACG, commenting on the outlook of FY 2025, stated, "While the overall market demand has returned to normalized levels following the post-COVID rebound of student demand, we remain confident about achieving our FY 2025 revenue guidance. We expect new programs we introduced earlier this year and additional ones this summer, coupled with the continued improvements we are making for our recurring programs, should continue to drive revenue growth for the second half of the year." Mr. Zhang continued, "As part of our continuous effort to optimize teaching resources, we have been organizing online group classes led by our most popular teachers in regional centers like Beijing, an approach that allows us to extend top-tier support to students across the country. At ACG, we believe the investments we are making in improving student experiences, including the integration of AI into our teaching system, the provision of flexible and customizable programs, as well as growing partnerships worldwide, position us well to capture market share in an increasingly competitive landscape. Our commitment to prioritizing student outcomes and delivering high-quality offerings remains at the core of everything we do." Conference Call and Webcast Information (With Accompanying Presentation) ACG will host a conference call at 9:00 p.m. Eastern Time on Wednesday, August 6 (9:00 a.m. Beijing Time on Thursday, August 7), during which management will discuss Q2 2025 and H1 2025 results. To participate in the conference call, please use the following dial-in numbers about 10 minutes prior to the scheduled conference call time: A simultaneous audio webcast including accompanying slides may be accessed via the following link: http://event.choruscall.com/mediaframe/webcast.html?webcastid=ntBFTOe5, or via the investor relations section of the Company's website https://ir.atai.net.cn/. For those unable to listen to the live webcast, the replay will be available on the Company's website shortly after the conclusion of the call. Q2 2025 Financial Review - GAAP Results ACG's total net revenues for Q2 2025 of RMB55.9 million (or $7.8million), increased 8.0% as compared to RMB51.8 million in Q2 2024, primarily due to increased revenue contributions from overseas study counselling services, other educational services, and research-based learning services. Specifically: Net revenues from portfolio training programs of RMB38.0 million (or $5.3 million) decreased 5.4% as compared to Q2 2024 and accounted for 68.0% of total net revenues. The decrease was mainly a result of normalized demand and increased market competition during Q2 2025 as compared to the prior-year period. Net revenues from overseas study counselling services, research-based learning services and other educational services of RMB17.9 million (or $2.5 million) increased 54.2% as compared to Q2 2024 and accounted for 32.0% of total net revenues, as ACG delivered more services during the period. Gross profit for Q2 2025 of RMB28.3 million (or $4.0 million) increased 10.2%, from RMB25.7 million in Q2 2024, as a result of higher revenues. Gross margin slightly increased to 50.6%, compared to 49.6% in the prior-year period. Total operating expenses for Q2 2025 were RMB42.1 million (or $5.9 million), representing a decrease of 9.4% from RMB46.5 million in Q2 2024. As a percentage of net revenues, the total operating expenses decreased to 75.3%, compared to 89.8% in Q2 2024. The decrease was a result of lower selling expenses, general & administrative expenses, as well as research and development expenses. Specifically, for Q2 2025: Selling expenses of RMB21.5 million (or $3.0 million) decreased by RMB2.6 million or 10.6% from Q2 2024, mainly due to lower headcount in sales personnel and decreased sales incentives compared to the same period in 2024. General & administrative expenses of RMB19.7 million (or $2.8 million), decreased by RMB1.5 million or 7.1% from Q2 2024, mainly as a result of decreased professional fees. Research and development expenses of RMB0.9 million (or $0.1 million), decreased by RMB0.3 million or 26.3% from Q2 2024, as ACG's system development was completed in Q2 2024. Loss from operations for Q2 2025 was RMB13.7 million (or $1.9 million), compared to loss from operations of RMB20.8 million in Q2 2024. Net loss attributable to ACG for Q2 2025 was RMB10.8 million (or $1.5 million), compared to net loss attributable to ACG of RMB16.8 million in Q2 2024. Basic and diluted losses per common share attributable to ACG for Q2 2025 were RMB0.17 (or $0.02), compared to basic and diluted losses per common share of RMB0.27 for Q2 2024. Basic and diluted losses per ADS attributable to ACG were RMB0.34 (or $0.04), compared to basic and diluted losses per ADS of RMB0.54 in Q2 2024. H1 2025 Financial Review - GAAP Results ACG's total net revenues for H1 2025 were RMB111.7 million (or $15.6 million), representing an increase of 11.8% from RMB99.9 million during H1 2024, primarily due to increased revenue contributions from research-based learning services, overseas study counselling services, and other educational services. Specifically: Net revenues from portfolio training programs of RMB77.5 million (or $10.8 million) increased 2.5% as compared to H1 2024 and accounted for 69.4% of total net revenues. Net revenues from overseas study counselling services, research-based learning services and other educational services of RMB34.2 million (or $4.8million) increased 40.8% as compared to H1 2024 and accounted for 30.6% of total net revenues. The increase was a result of increased services delivered across the three lines of services over the period. Gross profit for H1 2025 was RMB53.7 million (or $7.5 million), representing an increase of 12.8% from RMB47.6 million during H1 2024, mainly due to increased net revenues. Gross margin was 48.1% during the period, compared to 47.7% during H1 2024. Total operating expenses for H1 2025 were RMB84.3 million (or $11.8million), representing a decrease of 6.4% from RMB90.1 million in H1 2024. As a percentage of net revenues, the total operating expenses decreased to 75.5%, compared to 90.2% in H1 2024. The decrease was mainly a result of lower selling expenses and research and development expenses, offset by higher general & administrative expenses. Specifically, for H1 2025: Selling expenses of RMB42.8 million (or $6.0 million) decreased by RMB3.8 million or 8.3% from H1 2024, primarily driven by lower headcount in sales personnel and decreased sales incentives compared to H1 2024. General & administrative expenses of RMB43.7 million (or $6.1 million) increased by RMB2.5 million or 5.9% from H1 2024, mainly as a result of increased expenses related to development of new projects carried out in Q1 2025. Research and development expenses of RMB1.6 million (or $0.2 million) decreased by RMB0.6 million or 26.8% from H1 2024, as ACG's system development was completed in Q2 2024. Loss from operations for H1 2025 was RMB30.5 million (or $4.3 million), compared to loss of RMB42.4 million during H1 2024 as a result of higher net revenues and lower operating expenses. Net loss attributable to ACG for H1 2025 was RMB24.1 million (or $3.4 million), compared to net loss attributable to ACG of RMB34.7 million during H1 2024. For H1 2025, basic and diluted losses per common share attributable to ACG were RMB0.38 (or $0.05), compared to RMB0.55 during H1 2024. Basic and diluted losses per ADS attributable to ACG were RMB0.76 (or $0.10), compared to RMB1.10 during H1 2024. Non-GAAP Measures Adjusted net loss attributable to ACG for Q2 2025, which excludes share-based compensation expense and foreign currency exchange losses, net, was RMB10.6 million (or $1.5 million), compared to adjusted net loss of RMB15.9 million in Q2 2024. Basic and diluted losses per common share attributable to ACG excluding share-based compensation expense and foreign currency exchange losses, net for Q2 2025, were RMB0.17 (or $0.02). Basic and diluted losses per ADS attributable to ACG excluding share-based compensation expense and foreign currency exchange losses, net for Q2 2025 were RMB0.34 (or $0.04). Please see the note about non-GAAP measures and the reconciliation table at the end of this press release. Other Data The number of weighted average ADSs used to calculate basic and diluted losses per ADS for Q2 2025 were both 31.7 million. The number of weighted average ADSs used to calculate basic and diluted losses per ADS for H1 2025 were both 31.7 million. Each ADS represents two common shares. Balance Sheet Highlights As of June 30, 2025, ACG's cash and cash equivalents were RMB34.7million (or $4.8 million), working capital deficit was RMB304.0 million (or $42.4 million), and total shareholders' equity was RMB55.8million (or $7.8 million); compared to cash and cash equivalents of RMB36.5 million, working capital deficit of RMB287.9 million, and total shareholders' equity of RMB79.6 million, respectively, as of December 31, 2024. About ATA Creativity Global ATA Creativity Global is an international educational services company focused on providing quality learning experiences that cultivate and enhance students' creativity. ATA Creativity Global offers a wide range of education services consisting primarily of portfolio training, research-based learning services, overseas study counselling and other educational services through its training center network. For more information, please visit ACG's website at www.atai.net.cn. Cautionary Note Regarding Forward-looking Statements This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "intend," "look forward to," "outlook," "guidance," "plan," "should," "will," and similar terms and include, among other things, statements regarding ACG's future growth and results of operations; ACG's plans for mergers and acquisitions generally; ACG's growth strategy, anticipated growth prospects and subsequent business activities; ACG's 2025 guidance; market demand for, and market acceptance and competitiveness of, ACG's portfolio training programs and other education services. The factors that could cause the Company's actual financial and operating results to differ from what the Company currently anticipates may include its ability to develop and create content that could accommodate needs of potential students, its ability to provide effective creative related international education services and control sales and marketing expenses, its recognition in the marketplace for services it delivered and branding it established, its ability to maintain market share amid increasing competition, its ability to identify and execute on M&A opportunities within the education sector and its ability to integrate the acquired business, the economy of China, uncertainties with respect to China's legal and regulatory environments, the impact of the political tensions between the United States and China or other international tensions, and the impact of actual or potential international trade or military conflicts, and other factors stated in the Company's filings with the U.S. Securities and Exchange Commission ("SEC"). The financial information contained in this release should be read in conjunction with the consolidated financial statements and related notes included in the Company's annual report on Form 20-F for its fiscal year ended December 31, 2024, and other filings that ACG has made with the SEC. The filings are available on the SEC's website at www.sec.gov and at ACG's website at www.atai.net.cn. For additional information on the risk factors that could adversely affect the Company's business, financial conditions, results of operations, and prospects, please see the "Risk Factors" section of the Company's Form 20-F for the fiscal year ended December 31, 2024. The forward-looking statements in this release involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates, and projections about ACG and the markets in which it operates. The Company undertakes no obligation to update forward-looking statements, which speak only as of the date of this release, to reflect subsequent events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that its expectations and assumptions expressed in these forward-looking statements are reasonable, the Company cannot assure you that its expectations and assumptions will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Currency Convenience Translation The Company's financial information is stated in Renminbi ("RMB"), the currency of the People's Republic of China. The translations of RMB amounts for the quarter and six months ended June 30, 2025, into U.S. dollars are included solely for the convenience of readers and have been made at the rate of RMB7.1636 to $1.00, the noon buying rate as of June 30, 2025, in New York for cable transfers in RMB per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under U.S. generally accepted accounting principles ("GAAP"). About Non-GAAP Financial Measures To supplement ACG's consolidated financial information presented in accordance with U.S. GAAP, ACG uses the following non-GAAP financial measures: net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss, and basic and diluted earnings (losses) per common share and ADS excluding share-based compensation expense and foreign currency exchange gain or loss. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. ACG believes these non-GAAP financial measures provide meaningful supplemental information about its performance by excluding share-based compensation expense and foreign currency exchange gain or loss, which may not be indicative of its operating performance. ACG believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to ACG's historical performance. ACG computes its non-GAAP financial measures using a consistent method from period to period. ACG believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss and basic and diluted earnings (losses) per common share and per ADS excluding share-based compensation expense and foreign currency exchange gain or loss is that share-based compensation charges and foreign currency exchange gain or loss have been, and are expected to continue to be for the foreseeable future, a significant recurring expense in ACG's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The table captioned "Reconciliations of Non-GAAP Measures to the Most Comparable GAAP Measures" shown at the end of this news release has more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures used by ACG. For more information on our company, please contact the following individuals: ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) RECONCILIATIONS OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES SOURCE: ATA Creativity Global View the original press release on ACCESS Newswire