Sunlands Technology Group Announces Unaudited Second Quarter 2024 Financial Results

Core Viewpoint - Sunlands Technology Group reported its financial results for the second quarter of 2024, showing a decline in net revenues and net income compared to the same period in 2023, while achieving growth in gross billings for interest courses offerings [2][4][6]. Financial Performance - Net revenues for Q2 2024 were RMB492.2 million (US$67.7 million), a decrease of 6.5$52.8 million) from RMB354.1 million in Q2 2023, marking the fourth consecutive quarter of year-over-year growth [2][6]. - Gross profit decreased by 11.0% to RMB415.6 million (US$57.2 million) compared to RMB466.9 million in Q2 2023 [2][9]. - Net income for Q2 2024 was RMB82.3 million (US$11.3 million), down from RMB173.9 million in Q2 2023, resulting in a net income margin of 16.7% compared to 33.0% in the previous year [2][12]. Operational Highlights - New student enrollments increased to 168,296 in Q2 2024 from 154,209 in Q2 2023, indicating a positive trend in attracting students [2][6]. - The deferred revenue balance as of June 30, 2024, was RMB986.9 million (US$135.8 million), down from RMB1,113.9 million as of December 31, 2023 [2][14]. Cost and Expenses - Cost of revenues rose by 28.8$10.5 million) in Q2 2024, primarily due to increased costs associated with sales of goods such as books and learning materials [2][8]. - Operating expenses increased by 9.0% to RMB338.9 million (US$46.6 million) in Q2 2024, with sales and marketing expenses rising by 10.2$40.9 million) [2][10]. Future Outlook - For the third quarter of 2024, the company expects net revenues to be between RMB490 million to RMB510 million, reflecting a decrease of 2.8% to 6.6% year-over-year [22]. - The company aims to enhance brand awareness and improve the quality of existing products and services while focusing on operational efficiency and profitability [5][6].