AACG - Earnings call transcript Q1 2024

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Operator

Greetings. Welcome to ATA Creativity Global's First Quarter 2024 Financial Results Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Alice Zhang with The Equity Group. Thank you.

begin. may You

Alice Zhang

available Hello, press operator. results you joining www.atai.net.cn. XXXX, for the the section Thank website company's announcing everyone. ATA the at is XX, March release quarter ACG's the Creativity us. IR first of you, ended Thank at Global's for or

days. As the available A an this replay slide part broadcast call, next at available presentation will has this company conference be ACG's of for website on XX of also the accompanying its website.

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

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

The disclaimer the ended of All XXXX. All are unless to RMB X.XXXX presentation X conversions refer to reported this $X as are dollar March conference GAAP to conference amounts XXXX, call its Slide calculated percentages the further financial in the of results the are under time like RMB also for rate you rate I to presentation of XX, otherwise noted. Regarding the U.S. financial buying for company noted. to exchange using historical March call unless RMB would the quarter first XX, language, as and otherwise information. as converted from in reports of in new accurate on all results RMB, based relating U.S.

For accompanying an there company presentation, those the you of following on is PowerPoint X. overview along Slide with the of

In via addition, take today's the happy investor company. or during more Q&A session to we e-mail questions than are to

operating of And azhang@equityny.com. send XXXX. CFO, ask Ruobai you read like the Sima, Mr. name provide have quarter address to you overview questions Q&A first your to wish the you can will today's specify please to for brief If e-mail questions, company's the financial session. On whether a call, your would highlights the of during and

Sima. Please floor go that, Mr. the update ahead, questions. for be growth strategy here an With to go Sima. turn Please call before with and today, opening As Sima and the I'll CFO, Mr. long-term will over President, company's ahead. ACG's Ma; Zhang the company's Jun its and Mr. Ruobai Mr. Kevin CEO, the Mr. is Chairman guidance, to unable on outlook follow

Ruobai Sima

time. and Alice, everyone's America. We everyone, welcome, appreciate good to Thank the and evening you,

increase XX.X% to of increased that pleased XXXX, credit result training our revenues in a total driven as in by delivered. student note on exceeding and portfolio growth fourth are services significant We in net start enrollment the quarter XXXX hours strong

continued We primary continue growth offerings. To to support reveal credit portfolio interest see grafted growth to population, driver our hour recruited our in teaching students in our as training better we primary growing and student staff. additional

students We'll ways of have of to to encourage also comprehensive specialize in foundation arts history to expanded with to study growth and meet sales ample We team our nearly enrolled research-based portfolio overseas counseling fourth core to a learning strong culture provide that offerings during Enrollment and portfolio extensive in prior with areas X,XXX up in XXXX services choice was students demand. programs the in our enhance continue and a and XX% opportunities to creative provide showcase more quarter XXX prior their learnings in X,XXX, world. Total year increased quarter for students fourth training period. the XXX student year from XXXX compared enrollment period. our XX% the real with than in

personnel of additional for year our primarily year -- of in that, primarily from quarter to period, support services, of loss hiring period. during efficiencies our revenues during net XX.X% from quarter growth. Net margin With to the the the to prior by fourth of attributable was for the during We to of XX.X XX.X a trading fourth revenue to of XX,XXX total financials XXXX of hours, XX.X% RMB period. improved our net also the was contributions fourth ACG hiring increased enrollment quarter additional quarter of business. XXXX. Total RMB let's continued related XX.X% XX.X portfolio growth compared to up represented delivered services quarter in was increase an operations to despite teaching RMB RMB portfolio This realized training million driven in increased increased which to XXXX. year-over-year. of XXXX fourth in in expenses XX.X staff million million, fourth Gross support sales portfolio for the from the move services XX.X% was cost million XXXX XX.X% credit training result the the related increased sales prior portfolio which We

compared total a XX.X we X in USD XX, was be million, USD shareholders' equity sheet, at equivalents. Moving XXXX, solid March to million Working to was with position deficit in financial USD the and to capital million and cash XX.X cash turn XX.X XX.X shareholders' balance million, USD continue to XX, With USD like Kevin? to Kevin, December over growth XXXX. it capital deficit who will respectively, at million outlook and working I'd upon strategy. equity of that, and of expand our

Xiaofeng Ma

Thank you, Sima.

increasing enabling supported RMB We XX% growth. variable improve supporting Having programs year service from we design our are strong [indiscernible] the XXXX. this from interruption, a growth of existing delivered while the without training teaching results, open us the solid for XX, our completed achieving line to portfolio setback in [indiscernible] help of and X% year December million, a student received full increase our core are quarter expanding reiterating first made operational which we new on to outcomes, with the ending start we XXXX, investments fiscal a focus our year business, continue a the XXX staff top expectations given RMB will XXX team XXXX to sales by mission costs year and revenue of to million with represents which

development existing and arise, other market guidance our grow acquisitions as business material opportunities. potential explore any and the And business to update sure and appropriate. reiterating to we continue will be We

reflected students ACG's the [indiscernible] of heart deleverage also lies increased portfolio Student quarter Our supporting students results. not first in during only was long-term to our and in academically interest business training in the efforts XXXX, commitment our and at but [indiscernible] development. emotionally sales

for of the offerings after improved the positions demand market education support high and different visibility on institution. in to a achievements long higher encourage our pursuing arts have quality to the and China's our were students China school We junior education As this the continues our environment. very of graduation, to believe traditional pathway for take students reputation opportunities

During received interest-related program. and the see March first the will incorporates hosted XXXX, were this Week portfolios [indiscernible] perform pleased experience by students to participating Fashion for was Shanghai overseas of applications. This we during hall quarter the well their and program program in open we

in in needs period [indiscernible] projects than Our masterclass introduced specific and multiple topics, testament offerings, students' [indiscernible] other that to expertise understanding various categories. a across in which believe learning the research-based [indiscernible] during more XXX including is -- students addressing ACG's we we

As a best work outcomes the and believe provider, service grit, are hard determination. by that driven we rich education

our [indiscernible] to and To to that the now and ACG. floor students graduating such whose admission [indiscernible] prestigious from Arts the Sima, over I Pennsylvania have London and support go the forward like provide please of University. beyond Mr. to they University [indiscernible] well of congratulate to to our Harvard to less like what our I'd the students University, back college continue would on as accomplished schools with end, of [indiscernible] design way efforts operating update through an Sima see Royal of been as as hand We ahead. the rewarded to institute initiatives. school look University Arts,

Ruobai Sima

Thank has and creative you, Kevin. full to their always And ACG's been to educational mission reach critical. their in potential individuals empower

are art dedication overseas partners students, supporting helping training services. institutional portfolio who our recognize trust families and our by We in our honored to their continued addition from and in our and the study their our teachers' roles -- students in

of of focus expand reflection with matter to have including of are and type ensuring is and reference professors and and Students believe a support research-based business United social, we their focused Art when master University photograph performed receive development as operational and environmental of to will global to to design portfolio University that we students programs we weeks letters. issues announce focus advantages as a discipline what we concerning students journey. only education including capability to our of a study their that have of [indiscernible] It camp new Nations the from to it interior acquisition business. The [indiscernible] will which students institutional our they accounts United to remain the the take the possible applications, remainder school with able that they They students what portfolio. Upon are and believe our strengthen benefit our and can also from of core drive reference of of to professors pleased XXXX, portfolio We ACG's are experience. Currently, projects no developed are several service ability London created [indiscernible] to we explore also Conference to are application accretive the are a line growth. classes of and well our track summer. chosen growing hosting participating full students become the [indiscernible] completion, because students universities sustainable also We on X or this record expand continue by Nations ACG's is support network certification the Nations various as and design. We teams project taught [indiscernible] comes sustainability. receive partners, on in our are attend that the where officers upon and UNESCO by application goals are students invited institutions. boot design, instructors development [indiscernible] of dedicated and reach We opportunity we for United and partnerships. In to ways horizons, learning their background exceptionally school have hope be economic internship on reflection issued of who a in certification UNESCO can competitive from internship [indiscernible] letter completion UNESCO seeing the excited Annual training empowering in such infrastructure classes overseas to the our by Selected and an merge institutional will completed specialties potential students attracted potential, part opportunities industry. in built their overseas to by will are

that, updating to We sure back the will With it developments. with be Kevin. I any turn to market

Xiaofeng Ma

that, operative strived look on become We initiatives and it progress strategic questions. take operator, guiding prospects optimistic education forward the the player students months. Yes, experience. our coming growth Thanks. reporting for along leading and we ACG way for a [indiscernible] let's pride about XXXX. And to up in remain China in to With in opportunities open has educational our ACG's market, the

Operator

from first with Company. question Fan comes Lewis Benchmark [Operator Instructions] Our The

Lewis Fan

I just a have of couple questions.

you tell trajectory. you First in QX it your mean XX% us at in current should thoughts rate. you Could about think of believe on feel revenue enrollment can its to due mentioned training grow was how growth growth and its about primarily portfolio I do to portfolio we all, QX. you continue training I services. mentioned

Ruobai Sima

hours the the enrollment And delivery your in can Lewis, And in student credit from with per Due question. of our thanks credit different be strong and the price have training fourth increase XX.X% we ways yes, for the increased delivered. and hour of program business to the a number delivered. nearly increase enrollment, measured revenues portfolio unit hours a credit XX.X% XX%. through and services student business quarter

have flexible go and For for according basis, they the encourage unit be more needs. the price project-based programs students continued over and [indiscernible] to we to are custom students' time to to and just designed

a For full-time team line with the business. programs in teaching and we [indiscernible] future project-based hiring our and support more deliver successfully hours primarily and growth to [indiscernible] also and the was which will result unit price able staff sales are more of higher the digital of and and for enrollment hiring, of with credit growth

in training investment services, has teaching have grown will to drive we We and students to students demand enable interest that portfolio to in us express resources believe growth. have continued and realize and ongoing sustainable our and meet continued scale of economics business

team increasingly efforts. In staff sales with been and teaching design engaging have closely has addition, working the program been who our sales

subsequently For a internally. business, from gathered our we believe business, which we is remains there training will key and be core number, portfolio room driven grow growth the sales services our We [indiscernible]. have to certain

Lewis Fan

you. Thank

That's information. very Okay. good

for revenue you full guidance XXXX. of your the year Now reiterated

year, that relatively whether from X% cadence, to could some additional coming you through will you given see do on revenue XX% are we or be lumpiness, be the So from? nearly this halfway to consistent there whether is any provide will there growth where QX color QX

Ruobai Sima

part first [indiscernible] growth next our sustainable quarters, for period. benefits [indiscernible] study this income, and think overseas more get part. bigger quarters, the also our will to I And since I think company. X and the this next or sales think or think of come and besides this, in portfolio of Actually, I following gets X X X the still our including besides from bigger, I we some revenue And the main try and learning would directive for

part X-part revenues period. of following will also the another and contribute that think next I the for additional

Operator

are There Kevin back over like I the would Ma. no time. conference questions further this at turn to to

Xiaofeng Ma

Thanks please free joining from for us, or Relations our anyone Equity again to to reach for our has us to all you feel If directly us. Investor questions of the Group.

available to with investors next always you. to and speaking are forward We speak earnings our all look you during to call. Thank

Operator

conference. today's Thank you. This will conclude

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

ATA Creativity Global (AACG) 15 May 242024 Q1 Earnings call transcript