Sunlands Technology Group Announces Unaudited Second Quarter 2025 Financial Results

BEIJING, Aug. 14, 2025 (GLOBE NEWSWIRE) -- Sunlands Technology Group (NYSE: STG) (“Sunlands” or the “Company”), a leader in China’s adult online education market and China’s adult personal interest learning market, today announced its unaudited financial results for the second quarter ended June 30, 2025. Second Quarter 2025 Financial and Operational Snapshots Net revenues were RMB539.0 million (US$75.2 million), compared to RMB492.2 million in the second quarter of 2024.Gross billings (non-GAAP) were RMB400.3 million (US$55.9 million), compared to RMB383.9 million in the second quarter of 2024.Gross profit was RMB469.4 million (US$65.5 million), compared to RMB415.6 million in the second quarter of 2024.Net income was RMB126.6 million (US$17.7 million), compared to RMB82.3 million in the second quarter of 2024.Net income margin1 was 23.5% in the second quarter of 2025, compared to 16.7% in the second quarter of 2024.New student enrollments2 were 159,154, compared to 168,296 in the second quarter of 2024.As of June 30, 2025, the Company’s deferred revenue balance was RMB814.3 million (US$113.7 million), compared to RMB916.5 million as of December 31, 2024. ___________________________________1 Net income margin is defined as net income as a percentage of net revenues. 2 New student enrollments for a given period refer to the total number of orders placed by students that newly enroll in at least one course during that period, including those students that enroll and then terminate their enrollment with us, excluding orders of our low-price courses, such as “mini courses” and “RMB1 courses”, which we offer in the form of recorded videos or short live streaming, to strengthen our competitiveness and improve customer experience. “In the second quarter of 2025, our net revenues reached RMB539.0 million, up 9.5% year-over-year, supported by resilient learner demand and the continued expansion of our course offerings. Net income surged to RMB126.6 million, with net income margin expanding to 23.5%—representing a 54.0% increase from the same period last year. This marked a significant step-change in our earnings capacity, reflecting the compounding effects of structural cost optimization, improved gross margin, and greater operating leverage. Our deliberate rebalancing of legacy and emerging businesses, combined with disciplined investment in high-impact areas, is creating meaningful value for both learners and shareholders. Looking ahead, Sunlands remains committed to responsible and sustainable growth. We will continue to deepen AI integration across core operations, while expanding personalized, outcome-driven learning solutions tailored to the shifting needs of China’s adult learners—ranging from career upskilling to interest-based enrichment and lifelong development,” said Mr. Tongbo Liu, Chief Executive Officer of Sunlands. Mr. Hangyu Li, Finance Director of Sunlands, commented, “Our second quarter results are strong and in line with expectations. This quarter, net revenues rose 10.5% quarter-over-quarter, a direct outcome of our strategic shift toward interest-based courses which now account for 77.6% of total revenues. With positive operating cash flow for eight quarters, we maintained substantial cash reserves as of quarter-end. This strong financial position empowers us to innovate and capture growth opportunities in an increasingly competitive market environment. Moving forward, we remain focused on sustaining high-quality earnings, driving operational efficiency, and making strategic investments in innovation to unlock new areas of growth.” Financial Results for the second Quarter of 2025 Net Revenues In the second quarter of 2025, net revenues increased by 9.5% to RMB539.0 million (US$75.2 million) from RMB492.2 million in the second quarter of 2024. The increase was primarily driven by the growth in gross billings from interest courses Cost of Revenues Cost of revenues decreased by 9.1% to RMB69.6 million (US$9.7 million) in the second quarter of 2025 from RMB76.6 million in the second quarter of 2024. The decrease was mainly due to the declined compensation expenses related to headcount reduction of the Company’s teachers and mentors for degree- or diploma-oriented post-secondary courses. Gross Profit Gross profit increased by 12.9% to RMB469.4 million (US$65.5 million) in the second quarter of 2025 from RMB415.6 million in the second quarter of 2024. Operating Expenses In the second quarter of 2025, operating expenses were RMB342.6 million (US$47.8 million), representing a 1.1% increase from RMB338.9 million in the second quarter of 2024. Sales and marketing expenses increased by 1.7% to RMB302.5 million (US$42.2 million) in the second quarter of 2025 from RMB297.4 million in the second quarter of 2024. General and administrative expenses decreased by 2.0% to RMB33.2 million (US$4.6 million) in the second quarter of 2025 from RMB33.8 million in the second quarter of 2024. Product development expenses decreased by 9.3% to RMB6.9 million (US$1.0 million) in the second quarter of 2025 from RMB7.7 million in the second quarter of 2024. The decrease was mainly due to declined compensation expenses related to headcount reduction of the Company’s product development personnel. Net Income Net income for the second quarter of 2025 was RMB126.6 million (US$17.7 million), as compared to RMB82.3 million in the second quarter of 2024. Basic and Diluted Net Income Per Share Basic and diluted net income per share was RMB18.75 (US$2.62) in the second quarter of 2025. Cash, Cash Equivalents, Restricted Cash and Short-term Investments As of June 30, 2025, the Company had RMB586.7 million (US$81.9 million) of cash, cash equivalents and restricted cash and RMB166.6 million (US$23.3 million) of short-term investments, as compared to RMB507.2 million of cash and cash equivalents and RMB276.0 million of short-term investments as of December 31, 2024. Deferred Revenue As of June 30, 2025, the Company had a deferred revenue balance of RMB814.3 million (US$113.7 million), as compared to RMB916.5 million as of December 31, 2024. Share Repurchase On December 6, 2021, the Company’s board of directors authorized a share repurchase program, under which the Company may repurchase up to US$15.0 million of Class A ordinary shares in the form of ADSs over the next 24 months. On December 1, 2023, the Company’s board of directors authorized to extend its share repurchase program over the next twenty-four months. As of August 11, 2025, the Company had repurchased an aggregate of 760,155 ADSs for approximately US$4.4 million under the share repurchase program. Financial Results for the First Six Months of 2025 Net Revenues In the first six months of 2025, net revenues increased by 1.1% to RMB1,026.6 million (US$143.3 million) from RMB1,015.5 million in the first six months of 2024. Cost of Revenues Cost of revenues decreased by 7.7% to RMB142.0 million (US$19.8 million) in the first six months of 2025 from RMB153.8 million in the first six months of 2024. The decrease was mainly due to the declined compensation expenses related to headcount reduction of the Company’s teachers and mentors. Gross Profit Gross profit increased by 2.7% to RMB884.7 million (US$123.5 million) from RMB861.7 million in the first six months of 2024. Operating Expenses In the first six months of 2025, operating expenses were RMB683.8 million (US$95.5 million), representing a 0.5% increase from RMB680.1 million in the first six months of 2024. Sales and marketing expenses increased by 0.7% to RMB603.0 million (US$84.2 million) in the first six months of 2025 from RMB599.0 million in the first six months of 2024. General and administrative expenses increased by 1.8% to RMB67.6 million (US$9.4 million) in the first six months of 2025 from RMB66.4 million in the first six months of 2024. Product development expenses decreased by 10.1% to RMB13.2 million (US$1.8 million) in the first six months of 2025 from RMB14.7 million in the first six months of 2024. The decrease was mainly due to declined compensation expenses related to headcount reduction of the Company’s product development personnel. Net Income Net income for the first six months of 2025 was RMB201.8 million (US$28.2 million), compared with RMB195.0 million in the first six months of 2024. Basic and Diluted Net Income Per Share Basic and diluted net income per share was RMB29.87 (US$4.17) in the first six months of 2025, compared with RMB28.44 in the first six months of 2024. Outlook For the third quarter of 2025, Sunlands currently expects net revenues to be between RMB500 million to RMB520 million, which would represent an increase of 1.8% to 5.8% year-over-year. The above outlook is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to substantial uncertainty. Exchange Rate The Company’s business is primarily conducted in China and all revenues are denominated in Renminbi (“RMB”). This announcement contains currency conversions of RMB amounts into U.S. dollars (“US$”) solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.1636 to US$1.00, the effective noon buying rate for June 30, 2025 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on June 30, 2025, or at any other rate. Conference Call and Webcast Sunlands’ management team will host a conference call at 6:00 AM U.S. Eastern Time, (6:00 PM Beijing/Hong Kong time) on August 14, 2025, following the quarterly results announcement. For participants who wish to join the call, please access the link provided below to complete online registration 15 minutes prior to the scheduled call start time. Upon registration, participants will receive details for the conference call, including dial-in numbers, a personal PIN and an e-mail with detailed instructions to join the conference call. Registration Link: https://register-conf.media-server.com/register/BI138527c50562419dbce86de3604c0e10 Additionally, a live webcast and archive of the conference call will be available on the Investor Relations section of Sunlands’ website at https://ir.sunlands.com/. About Sunlands Sunlands Technology Group (NYSE: STG) (“Sunlands” or the “Company”), formerly known as Sunlands Online Education Group, is a leader in China’s adult online education market and China’s adult personal interest learning market. With a one to many live streaming platform, Sunlands offers various degree- or diploma-oriented post-secondary courses as well as professional certification preparation, professional skills and interest courses. Students can access the Company’s services either through PC or mobile applications. The Company’s online platform cultivates a personalized, interactive learning environment by featuring a virtual learning community and a vast library of educational content offerings that adapt to the learning habits of its students. Sunlands offers a unique approach to education research and development that organizes subject content into Learning Outcome Trees, the Company’s proprietary knowledge management system. Sunlands has a deep understanding of the educational needs of its prospective students and offers solutions that help them achieve their goals. About Non-GAAP Financial Measures We use gross billings, EBITDA, non-GAAP operating cost and expenses, non-GAAP income from operations and non-GAAP net income per share, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. We define gross billings for a specific period as the total amount of cash received for the sale of course packages, net of the total amount of refunds paid in such period. Our management uses gross billings as a performance measurement because we generally bill our students for the entire course tuition at the time of sale of our course packages and recognize revenue proportionally over a period. EBITDA is defined as net income excluding depreciation and amortization, interest expense, interest income, and income tax expenses. We believe that gross billings and EBITDA provide valuable insight into the sales of our course packages and the performance of our business. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, their most directly comparable financial measures prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP measure has been provided in the tables included below. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP financial measures. As gross billings, EBITDA, operating cost and expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, sales and marketing expenses excluding share-based compensation expenses, product development expenses excluding share-based compensation expenses, income from operations excluding share-based compensation expenses, and basic and diluted net income per share excluding share-based compensation expenses have material limitations as an analytical metric and may not be calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider gross billings and EBITDA as a substitute for, or superior to, their respective most directly comparable financial measures prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. Safe Harbor Statement This press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Sunlands may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Sunlands' beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: Sunlands’ goals and strategies; its expectations regarding demand for and market acceptance of its brand and services; its ability to retain and increase student enrollments; its ability to offer new courses and educational content; its ability to improve teaching quality and students’ learning results; its ability to improve sales and marketing efficiency and effectiveness; its ability to engage, train and retain new faculty members; its future business development, results of operations and financial condition; its ability to maintain and improve technology infrastructure necessary to operate its business; competition in the online education industry in China; relevant government policies and regulations relating to Sunlands’ corporate structure, business and industry; and general economic and business condition in China. Further information regarding these and other risks, uncertainties or factors is included in Sunlands’ filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Sunlands does not undertake any obligation to update such information, except as required under applicable law. For investor and media enquiries, please contact: Sunlands Technology Group Investor Relations Email: sl-ir@sunlands.com SOURCE: Sunlands Technology Group SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except for share and per share data, or otherwise noted) As of December 31, As of June 30, 2024 2025 RMB RMB US$ASSETS Current assets Cash and cash equivalents 507,229 586,394 81,857Restricted cash - 353 49Short-term investments 276,029 166,576 23,253Prepaid expenses and other current assets 96,916 101,628 14,187Deferred costs, current 4,139 21,170 2,955Total current assets 884,313 876,121 122,301Non-current assets Property and equipment, net 758,215 744,338 103,906Intangible assets, net 723 486 68Right-of-use assets 110,154 107,897 15,062Deferred costs, non-current 56,657 27,453 3,832Long-term investments 260,083 346,493 48,369Deferred tax assets 24,699 23,745 3,315Other non-current assets 26,319 24,518 3,423Total non-current assets 1,236,850 1,274,930 177,975TOTAL ASSETS 2,121,163 2,151,051 300,276 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Current liabilities Accrued expenses and other current liabilities 404,865 372,379 51,984Deferred revenue, current 382,047 459,349 64,123Lease liabilities, current portion 8,317 9,088 1,269Short-term borrowing - 20,000 2,792Long-term debt, current portion 6,154 - -Total current liabilities 801,383 860,816 120,168 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-continued (Amounts in thousands, except for share and per share data, or otherwise noted) As of December 31, As of June 30, 2024 2025 RMB RMB US$Non-current liabilities Deferred revenue, non-current 534,463 354,928 49,546 Lease liabilities, non-current portion 137,040 134,133 18,724 Deferred tax liabilities 5,724 4,508 629 Other non-current liabilities 7,309 7,289 1,018 Long-term debt, non-current portion 35,386 - - Total non-current liabilities 719,922 500,858 69,917 TOTAL LIABILITIES 1,521,305 1,361,674 190,085 SHAREHOLDERS’ EQUITY Class A ordinary shares (par value of US$0.00005, 796,062,195 shares authorized; 3,131,807 and 3,131,807 shares issued as of December 31, 2024 and June 30, 2025, respectively; 2,600,779 and 2,589,826 shares outstanding as of December 31, 2024 and June 30, 2025, respectively) 1 1 - Class B ordinary shares (par value of US$0.00005, 826,389 shares authorized; 826,389 and 826,389 shares issued and outstanding as of December 31, 2024 and June 30, 2025, respectively) - - - Class C ordinary shares (par value of US$0.00005, 203,111,416 shares authorized; 3,332,062 and 3,332,062 shares issued and outstanding as of December 31, 2024 and June 30, 2025, respectively) 1 1 - Treasury stock - - - Statutory reserves 11,083 11,083 1,547 Accumulated deficit (1,840,285) (1,638,464) (228,721)Additional paid-in capital 2,294,381 2,293,508 320,161 Accumulated other comprehensive income 136,164 124,735 17,412 Total Sunlands Technology Group shareholders’ equity 601,345 790,864 110,399 Non-controlling interest (1,487) (1,487) (208)TOTAL SHAREHOLDERS’ EQUITY 599,858 789,377 110,191 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2,121,163 2,151,051 300,276 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) For the Three Months Ended June 30, 2024 2025 RMB RMB US$Net revenues 492,223 539,015 75,244 Cost of revenues (76,627) (69,641) (9,722)Gross profit 415,596 469,374 65,522 Operating expenses Sales and marketing expenses (297,443) (302,527) (42,231)Product development expenses (7,657) (6,946) (970)General and administrative expenses (33,829) (33,150) (4,628)Total operating expenses (338,929) (342,623) (47,829)Income from operations 76,667 126,751 17,693 Interest income 10,576 6,734 940 Interest expense (1,516) (273) (38)Other income, net 3,015 7,240 1,011 Loss on disposal of subsidiaries (250) - - Income before income tax benefit/(expenses) and loss from equity method investments 88,492 140,452 19,606 Income tax benefit/(expenses) 78 (13,550) (1,892)Loss from equity method investments (6,318) (257) (36)Net income 82,252 126,645 17,678 Less: Net loss attributable to non-controlling interest - - - Net income attributable to Sunlands Technology Group 82,252 126,645 17,678 Net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 12.00 18.75 2.62 Weighted average shares used in calculating net income per ordinary share: Basic and diluted 6,852,828 6,753,895 6,753,895 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) For the Three Months Ended June 30, 2024 2025 RMB RMB US$Net income 82,252 126,645 17,678 Other comprehensive income/(loss), net of tax effect of nil: Change in cumulative foreign currency translation adjustments 3,715 (7,885) (1,101)Unrealized loss on available-for-sale investments, net of tax effect of nil - 11,311 1,579 Total comprehensive income 85,967 130,071 18,156 Less: comprehensive income attributable to non-controlling interest - - - Comprehensive income attributable to Sunlands Technology Group 85,967 130,071 18,156 SUNLANDS TECHNOLOGY GROUP RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) For the Three Months Ended June 30, 2024 2025 RMB RMBNet revenues 492,223 539,015 Less: other revenues (62,094) (60,566)Add: tax and surcharges 15,740 19,761 Add: ending deferred revenue 986,938 814,277 Add: ending refund liability 126,797 77,942 Less: beginning deferred revenue (1,044,866) (891,617)Less: beginning refund liability (130,840) (98,516)Gross billings (non-GAAP) 383,898 400,296 Net income 82,252 126,645 Add: income tax (benefit)/expenses (78) 13,550 Add: depreciation and amortization 7,362 7,205 Add: interest expense 1,516 273 Less: interest income (10,576) (6,734)EBITDA (non-GAAP) 80,476 140,939 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) For the Six Months Ended June 30, 2024 2025 RMB RMB US$Net revenues 1,015,463 1,026,640 143,313 Cost of revenues (153,790) (141,977) (19,819)Gross profit 861,673 884,663 123,494 Operating expenses Sales and marketing expenses (599,018) (602,971) (84,172)Product development expenses (14,667) (13,188) (1,841)General and administrative expenses (66,381) (67,609) (9,438)Total operating expenses (680,066) (683,768) (95,451)Income from operations 181,607 200,895 28,043 Interest income 19,865 12,141 1,695 Interest expense (3,120) (680) (95)Other income, net 8,795 13,857 1,934 Loss on disposal of subsidiaries (250) - - Income before income tax benefit/(expenses) and loss from equity method investments 206,897 226,213 31,577 Income tax benefit/(expenses) 469 (23,324) (3,256)Loss from equity method investments (12,379) (1,068) (149)Net income 194,987 201,821 28,172 Less: Net loss attributable to non-controlling interest - - - Net income attributable to Sunlands Technology Group 194,987 201,821 28,172 Net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 28.44 29.87 4.17 Weighted average shares used in calculating net income per ordinary share: Basic and diluted 6,854,922 6,756,532 6,756,532 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) For the Six Months Ended June 30, 2024 2025 RMB RMB US$Net income 194,987 201,821 28,172 Other comprehensive income/(loss), net of tax effect of nil: Change in cumulative foreign currency translation adjustments 13,251 (11,481) (1,603)Unrealized loss on available-for-sale investments, net of tax effect of nil - 52 7 Total comprehensive income 208,238 190,392 26,576 Less: comprehensive income attributable to non-controlling interest - - - Comprehensive income attributable to Sunlands Technology Group 208,238 190,392 26,576 SUNLANDS TECHNOLOGY GROUP RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) For the Six Months Ended June 30, 2024 2025 RMB RMBNet revenues 1,015,463 1,026,640 Less: other revenues (120,968) (119,486)Add: tax and surcharges 32,109 42,051 Add: ending deferred revenue 986,938 814,277 Add: ending refund liability 126,797 77,942 Less: beginning deferred revenue (1,113,923) (916,510)Less: beginning refund liability (143,744) (112,342)Gross billings (non-GAAP) 782,672 812,572 Net income 194,987 201,821 Add: income tax (benefit)/expenses (469) 23,324 Add: depreciation and amortization 14,793 14,423 Add: interest expense 3,120 680 Less: interest income (19,865) (12,141)EBITDA (non-GAAP) 192,566 228,107

Sunlands Technology Group Announces Unaudited Second Quarter 2025 Financial Results

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