Sunlands Technology Group Announces 2024 Financial Results and Q1 2025 Outlook

Strong Growth in New Student Enrollments

Sunlands Technology Group (NYSE: STG), a leading force in China's online education market, reported its unaudited financial results for the fourth quarter and full year of 2024. Despite facing headwinds in the post-secondary course market, Sunlands achieved a record-breaking number of new student enrollments in 2024, reaching an impressive 674,649, exceeding the previous year's 616,341.

"By expanding our course offerings and improving service quality, we welcomed about 675,000 new students in 2024—a historic record that underscores our significant market expansion potential and strengthens our leading position in the industry," said Mr. Tongbo Liu, Chief Executive Officer of Sunlands.

Financial Performance Overview

For the full year 2024, Sunlands generated net revenues of RMB1,990.2 million (US$272.7 million) and a net income of RMB342.1 million (US$46.9 million). This marks the fourth consecutive year of profitability for the company. Sunlands also maintained healthy operating cash flow, bolstering its financial resilience.

While full-year net revenues decreased by 7.8% year-over-year and Q4 2024 revenues saw a 10.8% decline to RMB483.5 million (US$66.2 million), this was largely attributed to a decline in gross billings from post-secondary courses. The company saw offsetting growth in revenues from sales of supplementary learning materials.

"Throughout the year, we focused on sustainable growth, operational efficiency, and cost optimization," stated Mr. Hangyu Li, Finance Director of Sunlands. "With solid cash flow and diversified products, we are confident in our ongoing growth.” Interest-based courses emerged as a key growth driver for Sunlands, benefiting from current economic and demographic trends.

Q1 2025 Outlook

Looking ahead to the first quarter of 2025, Sunlands projects net revenues to be between RMB470 million and RMB490 million. This prediction anticipates a year-over-year decrease of 6.4% to 10.2%, reflecting current market conditions and subject to potential changes.

Operational Efficiency and Cost Management

Sunlands demonstrated a focus on operational efficiency and cost optimization throughout 2024. Operating expenses for the fourth quarter increased marginally by 0.7% year-over-year, reaching RMB351.3 million (US$48.1 million). The increase in sales and marketing expenses, attributed to enhanced sales activities and branding efforts, was offset by decreases in general and administrative expenses and product development expenses due primarily to compensation expense declines related to workforce reductions.

Share Repurchase Program Update

As of March 19, 2025, Sunlands has repurchased a total of 689,935 ADSs for approximately US$3.9 million under its share repurchase program, initially authorized in December 2021 and extended in December 2023.

Continued Focus on Student-Centric Approach

Sunlands remains dedicated to providing a high-quality, student-centric learning experience. By adapting to evolving market demands and continuously enhancing its products and services, Sunlands aims to drive sustainable long-term growth.