AACG - Earnings call 3 2023 | ATA Creativity Global

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Operator

Greetings. Welcome to ATA Creativity Global's Third Quarter 2023 Financial Results Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Alice Zhang of the Equity Group. Thank you.

begin. may You

Alice Zhang

September the and The operator, ACG's Thank for months you for the available Thank section IR release hello, announcing us. of ended company also ACG's its website X and replay website. at press third or XXXX, the of this XX be slide at accompanying next ATA this conference joining is the After company's an at for you, quarter presentation will made A website available the call, everyone. broadcast www.atai.net.cn. XX, has Connectivity results days. available Global's on

XXXX. get to, believe, expect, harbor any to remind accompanying provision could, of similar adjustments we restrictions, and portfolio market initiatives as including meaning plan, COVID-XX and strategy, and by future ACG other pandemic-related programs forward-looking Act Securities forward-looking training everyone activities, can statements and herein other business Reform forward identified estimate, ACG's I things, discussed anticipate, the call certain and operations; of competitiveness contains and conference include, terms is the and Private look for Before terms would among information market statements ACG's outlook, mergers results and prospects subsequent started, growth China safe generally; plans ACG's Litigation growth that and anticipated for as the like intend, ACG's acquisitions within demand statements by acceptance of this growth regarding These education and will such should, future, of forecast, be of services.

any expectations are could the There prove the before to differ from we Commission, in future of is to information, with the investing a as correct. making are any The about risks company as by Securities with in reflected market and forward-looking Exchange actual results update those you in required associated the no included ACG decision. encourage and uncertainties or of an be will does projected. that result assume review Although statements statements cause the changes company expectations conditions in risks the which except those otherwise, investment be today, that statements to those law. to believes as events, assurance not Information reasonable to can filings dramatically the subject that new forward-looking obligation

USD months Slide disclaimer Regarding the third would conference also financial using the RMB XXXX, the information. exchange converted historical RMB ended language, presentation conference to relating X accurate for U.S. to X this XXXX. buying for call to like All dollar are noted. amounts you results XX, of refer September XX, I X.XXXX All in rate further noon otherwise an call rate and quarter of from time the of reported, conversions unless of are to X, as as the September

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highlights Mr. overview Sima a and of will the operating of third Ruobai CFO, call, today's provide financial quarter On company's brief the XXXX. for

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Ruobai Sima

increase contribution time. and for We financial appreciate with the quarter XX.X% increased the reporting good camp everyone's to and Americas, COVID-XX portfolio net I of were this evening Thank XXXX, time performance third revenue, in from first learning our a summer for began able overseas you, since primarily in-person Alice, and and as pleased summer as welcome, XXXX. were research-based everyone, the training to solid result we the resume services a in

learning period, thrilled and third XXXX Total year coupled to during than expenses X,XXX enrollment Revenues with prior compared more have X,XXX doubled quarter. narrow still significant the from revenues services positive quarter received, the research-based in year with decreased in period. to was from enabled prior been the increasing student operational feedback we for losses

a slight portfolio core see programs. However, our we in training enrollment increase did in

During year-over-year. delivered to ] increasing increased XX.X% programs, delivered nearly with project-based the period, [ hours credit training for XX% portfolio XX,XXX credit as

We more our credit delivered. hours XX.X% teaching been hour portfolio ] credit training account [ for project-based students believe our have demonstrates leveraging resources ACG's this that efficiently as of

the university campuses countries and engage opportunity the had explore bringing [indiscernible] Japan, program, students During they the strategies to of as U.K. where to variety such and summer, overseas real-world our a the general applications. in

fulfilling is of successful in presenting in programs, we The these demand excited have students of learning our overseas for opportunities a belief are to reinforced continue delivery future. -- the these that and our growth it to programs

quickly improved to training research-based increased compared year learning Total compared XX.X services. RMB XX.X% million to net revenues to revenues XXXX due XX.X XXXX for in the RMB primarily year driven represented the Portfolio by and will quarter to net Gross period. revenues compared increasing net and XXXX. increase from in prior was during primarily XX.X% The quarter review the was quarter margin million period. gross margin period. to I that, XX.X% With This third in third financials. third portfolio the total increase of of revenues to training during services prior XX.X%

to increased narrowed RMB period. of million to XXXX prior profit the ACG operating, RMB in gross X.X million during compared attributable and the quarter third decreased of loss net to XX result a year As

ended RMB million prior X.X% year-to-date increased million XXX RMB margin Turning XX, RMB XX.X to September due Gross and primarily improved to to months increased to period. year prior year for to in XX.X% XXX.X Net loss in results XX.X compared narrowed X ACG Net revenues expenses. XXXX. the to the attributable from decreased revenue the million, RMB period. to from million operating XX.X%

sheet. balance the to Moving

X a USD position financial was September XXXX. to million cash million be Working USD ] deficit USD compared million cash with equivalents. solid December equity shareholders' deficit million to at XX, USD and equity XXXX, shareholders' XX.X XX XX.X capital working XX, continue million We total of of and at was and the capital XX in USD [ respectively

to business. training ACG's attention operating our from of see the results our outlook strategy. year were encouraging the Now positive second continued turning half a We year half pleased first the coming growth from momentum into and to services core portfolio of

a in third net losses total gross quarter improved increase margin ACG result, and significantly achieved solid XXXX. revenues, a narrowed of XX.X% As during the

initiating sales the creative that their and educations Our chosen it way results ACG remain as journey. interested support continuing students indicates institution the and and have longer as to makes guide trusted during period them and

positive hours ACG quarter, students the portfolio flow XX.X% We've this increased to our XXX increased delivered in to equivalents reported XXX also XX.X cash million. During from third cash training operations. Total and of enrolled number year-over-year. cash quarter XX.X% where by increasing credit from RMB by XXXX

value-added learning to reach and offerings so as study serves services, as powered our continue build learning in which services experience. enrich primary the This reserve-based overseas on. main further take creative business, of part the their through consulting channel enrolled We our portfolio students experiential and education can line to training includes

a services together portfolios comprehensive to All working again institutions. of for students completing these planning towards apply expenses their are offers who to personal other

were look domestic. reception, attractive rapid topics. XXXX, execute the We on plan positive We and the overseas given research-based third learning programs of variety during of excited XX in to offerings a forward And and programs and back more overseas a quarter successfully tremendous we hosted future, and X to this total in-person in X our providing these programs bring summer year. learning

season, prepare to As upcoming that year we XXXX. admission we and the applications to preliminary students start announce enter are results the to for academic XXXX for in submitted thrilled application 'XX

both university Island University Design MIT, School College focused and well far, ACG institutions XXXX, Art. Royal have of as as from received [indiscernible] and prestigious in offers Thus our students non-focused including worldwide Oxford of Howard, of from

incredibly to we to results, put their all are a of part We have our impressive in students grateful be these and work proud and of the and have journey. are hard yield

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Jun Zhang

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Alice Zhang

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the post-pandemic a time professional to provides academic XXXX, our ACG the perspective. enabled overseas programs fully the offer application. and of in We near business the since of environment, able itself instruction world to network experience only allowing XXX of programming, an bringing continue more build but positive also on type training in-person China have the of students them operate various study it receive been us momentum at and than to and and in creative countries quality for centers in our to prides rest development of interest ARP support from our first normal immersive on to resume not its summer which some as

and students class can more We in them utilize master can up, in provide real-world have the cooperate of to other offerings. with explore skills with ways lined with experiential opportunities remainder continue that which XXXX, programs online harness various regular we a institution we along to firms scenarios. In help

on. reference and positions, we're fashion still competency. environment. company well opportunity their well-established global For and with that working real-world will through some the will [indiscernible] students architecture design introducing college an away PTA work letter have looking so in interaction assisted students experience design, deplication professional world-class as gain brands Participating support as with design, walk experience, a work to covering to program will on various improve part-time Students engaging projects

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strive and in support students perfect our the entering process. It best-in-class They working application have respective ACG, business then many our we admission to field submission to watching with critical time the for well of At provide a schools. been the finalize art during a their them students as exciting. and of side with teaching for is be as portfolios staff many closely our truly

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remain For our of trends, the market China's to from institutional arts years, industry. in forming of of which our we cultivate our came providing network. study. center in record to track the worked stems leading generation on at nurtured and teaching creative efforts in base top a a arts and On and to substantial business deep and player serve are offering explore these committed competency continuous we're maintaining content, lies academic a products creative that experienced relevant, in monitoring that appreciation and ways offerings with become and capabilities, of younger to understanding students with we have partner art needs proven growing and continue and focused education of the We diverse high-quality constant growth. believe

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Ruobai Sima

offerings growth where Thanks, Alice. on by stronger. in execute strategy our look we concluding leveraging We We can forward remain believe a to with providing our carefully XXXX Jun curated position our students and focused and advantage. class are we

let's that, up open operator, it questions. With for

Operator

would I remarks. call time. to this for at closing to back turn questions the Mr. Sima no like are There Instructions] [Operator over

Ruobai Sima

directly and operator, you, our Thank reach to Equity and to for you or Group. all us, form If to feel anyone has The Okay. questions Relations joining thanks again of Investor for us. please free

earnings forward with XXXX to you. to and all We the investors you look speak Thank fiscal available are always during speaking call. to

Operator

This you. today's will Thank conference. conclude

for you at disconnect may and lines You your this thank time, your participation.

of spoken that on are an transcript marked by [Portions live interpreter the present this [interpreted] call.] were

ATA Creativity Global (AACG) 14 Nov 232023 Q3 Earnings call transcript