AACG - Earnings call transcript Q3 2024

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Operator

Greetings. Welcome to ATA Creativity Global's Third Quarter 2024 Financial Results Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Alice Zhang with the Equity Group. Thank you. begin. may you Alice,

Alice Zhang

Good and all of good the us operator. us you you from from States. China, evening United morning you, of to joining joining Thank to all

today's be in statements. call forward-looking Please the involve and results forward-looking cause risks that certain the from to that discussions differ statements may forward-looking materially statements. advised include Such may actual uncertainties on those contained

SEC affect filings various refer projections for information, more result most to otherwise. Please company of could the of or complete to statements The factors assumptions. recent that obligation update these company's and description new no as events a assumes future forward-looking a

disclaimer A the IR Slide ACG's replay the is accessible the refer via website, via I the simultaneous to also section the be accessible which days. like you next X available ACG's of -- audio is Regarding IR to webcast of XX including webcast for will the website. would conference language, section also of call ACG's of which presentation,

the for for long-term Kevin of for CEO, quarter Ruobai Zhang, X highlighting and call floor guidance. company's Chairman and the on operating President, and and an this start XXXX growth with will quarter remarks Ma, the the and key Mr. provide overview strategy achievements. will will opening CFO, questions. third conclude Sima, XXXX, company's X and months operational expectations update financial an Jun of third before Mr. remainder full year financial results months ACG's the prepared Mr.

the following slide slides details. further refer you please company to of those the For for presentation,

go Mr. Mr. to over Ma. Kevin call the Ma. Chairman ACG's turn I'll and that, CEO, ahead, Please With

Xiaofeng Ma

America. everyone's everyone. to those I you, Alice. Good evening Thank appreciate Welcome, time. in

refer our so Alice to the remarks. site a go IR earnings of on we through website prepared our mentioned, taken our variable please As

institutions to XXXX, parents, to the seeking providing product and ACG third focus students offering and as curative service needs, During different industry our well and exploring the students -- through our growing to continued partnership valued art of evolving industries. as on within -- with opportunities the to quarter service collaboration new

As enrollment. portfolio revenues double-digit was net student well strong reported in training a growth as of student student revenues net is our and create deliveries our terms the secure ACG enrollment third last programs of We and highlighted [indiscernible], in period. quarter This quarter enrollment rates. by a as increased XXXX for during overall for

more on strong deliveries, saw revenues, For -- X improvement overall compared to year-over-year X XXXX. months XXXX, all increased months than we by net quick equal XX% rate and enrollment

Portfolio trading quarter service encourage this part remains XXXX third up profiles. sign students source total of for of revenues we than revenues, our of our continue X months more XXXX. the both project-based to service, for main and to Within the contributing XX%

this As for of segment our of responsible account in services, a continues quarter. to [indiscernible] for XX% the total the third result, majority during training our portfolio [indiscernible]

for also than by research-based in overseas continuous -- considering to a other parts enrollments our service. -- the XXXX. various quarter in XX% and of in to learning seeing are increased our we offerings, Thanks compared growing third more Student programs developing and study

in Camp K-XX and -- has our U.S. Nations summer X London a the Development same project [indiscernible]. China, For to in of Arts Goals this and category -- summer, Sustainable United heritage Boot X the campus integrate

financial those as continuous due is [indiscernible] industry allow and strong joiners with well ongoing competence core various us in market since and academia believe positive of in class the the investments study the [indiscernible] with the resources. [indiscernible], global with they they pandemic, is on are online our students the general. [indiscernible] which person have world [indiscernible] ACG actual the in for experience opportunity across addition, that in the ACG's [indiscernible] institutions one the time first network We our In as the to of also providing a from provide --

During will by educational strategic new to in third and with technology, [indiscernible] U.K. also consolidate XXXX, started our expand devising which the [indiscernible]. partnership quarter partnership we network continued Jun

I call fiscal Sima guidance and of and will X XXXX. that, overview third year results our a for With detailed hand financial months the XXXX over operating and the for our to quarter for

Ruobai Sima

X Thank key you, with quarter third will start I metrics. months and Kevin, and financial

XX.X portfolio RMB from and XXXX, net Total quarter XX.X for from RMB XX.X% in research-based revenue was XXXX third contributions of which quarter primarily third training revenue million million, to services. increase increased earnings were an due

X.X% larger services. third XX.X% million, XXXX. The was learning related during in RMB compared quarter was of as profit third in third XX.X% here million outsourcing XX.X from to to XXXX from more related XX decrease the was compared in prior a XXXX margin mainly gross Gross year quarter margin of to Gross RMB of quarter an XXXX period. higher increase the result and staff teaching costs to research-based accommodate costs numbers to increased children third quarter

increase third million quarter was XXXX, increase was The personnel XXXX. and of the million events million professional XX.X% RMB related expenses an increase due as and general primarily sales in increase quarter expenses to X.X expense an from X.X fees administrative number in investments. third as related in marketing expansion-related operating increased in and XX.X increased Total million sales business to RMB of RMB RMB to XX.X of well

was operations quarter X.X million RMB from RMB loss XX.X to quarter period. year during compared the million third third RMB RMB Net compared million the X.X in result, prior quarter XXXX to in XX.X attributable in was the XXXX. loss to million third a XXXX As ACG

from XX.X% and Turning million XXX.X XXXX. in increase to RMB RMB prior contribution period. training, from to increased to primarily [indiscernible] portfolio XXX research-based Total The study million revenues months X learning net overseas increased the services. attributable year was

in in X XXXX an increase RMB XXXX. months months XX.X from of X for profit RMB Gross was million, XX.X XX.X% million

gross XXXX. XX.X% months X during of XX.X% result increased margin XXXX, a from improved As X in months to revenues slightly

related was The due primarily months expense in million X to XXX.X million X of RMB increase RMB XX.X sales number XX% drive was operating in RMB and XXX.X from to increase as increase increased and XXXX, an increase fees expansion-related million months sales as in expenses growth increased to general XX.X million professional in investments. RMB to business related of personnel administrative Total XXXX. sales expenses well

As a X month in to operations compared months X was million attributable XXXX XX XXXX in XX.X X result, was loss million compared RMB to loss ACG XX.X XXXX. from RMB Net in million. million months XX.X RMB to RMB

sheet balance the to highlights. Moving

total RMB XXX.X XX, RMB we of million million, million September million. of XX.X of cash liabilities and of in XX.X total RMB XXXX, had As equivalents, shareholders XXX.X [indiscernible] cash total and assets RMB

Moving year-to-date on trends. enrollment to

to program X the training student for work enrollment increased growth months X to XXXX, start For due the XXXX of strong programs. for increased and historically to half services in student for months student the to XX% interest our XX.X% increased X as portfolio other for and months X,XXX, by semester. their [indiscernible] enrollment seasonal both training X total XXXX higher creation by fall X,XXX. compared second supported by portfolio year reasons following by and enrollment in months delivered and enrollment other students CV XX.X% Portfolio portfolio in XXXX, student our training

hour hours hour programs XX% increased by by X XXXX, increased by and by months the XX.X% credit significantly whereby by XX.X%. increased For delivered progress-based the time-based programs

high-quality line our [indiscernible] services to their study to and committed across remain We business [indiscernible] offering and pursuit in and of guidance career.

of for move guidance our into believe XXX RMB that, full revenue RMB million, to XXXX. X% we full let's to year track to With for full year guidance representing XXX year XXXX year-over-year achieve XX% to increase We are a on XXXX. million

is current and based on our belief strong enrollment are trend and Our seeing to the offering. ability expand services we

remainder growth will other serve driver student for continue services as our our training channel the of for as primary portfolio well to acquisition as XXXX, For business business. important a

over it growth Jun our turn to go Jim, to upon strategy. like long-term who expand will ahead. please I'd

Jun Zhang

Interpreted] Thank Sima. you,

growth surrounds opportunities. new and expanding and Organic potential main services strengthening Our footprint; X M&A of strategy pillars: launch geographic growth;

organic Starting growth. with

services track, training and that offers students been on programs join and to The in in our increased As study which contribution. training We Sima running student as overseas resulting value-added offerings, increased have flexible enrollments and portfolio more such seeing is more mentioned, research-based interest in we portfolio student see our today's services, also in to counseling trend customizable market revenue enrollment exciting. strong students the from encouraging services overall project-based showing we're enroll needs. based hence,

boost engagement The product program has our sales design and also of sales. us teaching process helped and quality staff improve in

existing have larger training in regional centers. coverage from resources center cities and We expanded concentrated

online just embarking ACG have to to Shanghai serve opened centers Beijing on the well example, our admitted down Center, assistance and months and abroad. Center, recently first XXXX. their student networking on expanded overseas as For of settle who addition few during and London life. more We provide students U.K. in colleges are students as create At we support studying been the to ACG we services events the extending our to London academic students helping to an

and such To explore and arts learning invest architecture, art, growing art have and green to art visual to scenes interaction, new as we been therapists, options end, of programs AI-generated majors user introduction and of new line computer-based content crucial design design research-based as that Innovation that career in business. on. from such urban new actively gaming and trends art so

institutional partnership. our through reach extend procedures preparations U.K. In growing new conservatory lecturers quarter to signed XXXX, our the to in of domestic providing a in ACG and and music continue third Leeds work Leeds application We Conservatoire partnership portfolio ACG will network students. global with insights institutional international our Conservatoire, a with we with

and initiated we via Technology existing long-term integration services jointly and upgrading cloud students. and service Oasis technologies Oasis the support artificial to our AI to addition, art Star Star's with delivery platform, introduce our Utilizing model, and intelligence. fueling growth AI In in our strategic we also Educational a offerings promote products better of to recently expect cooperation

Boot again this we marking this Camp, Nations United series Arts it third hosted introduced initially Goals Sustainable we of the section October, the May. since This Development

Week week to study and our in fashion in program in hosted design fashion forefront for career interested fashion students Shanghai management. October, also students brand in the We Fashion of

During and experience to part and to Rhode toured our such get October, awesome themed Design tips and Island of of speeches ACG study exhibition, from as advice. institutions share in School as applications China cities XX alumni ACG career share education inviting professors art

to on Art. students professionals to who growing We career of opportunities who and focused expand explore from study topics overseas multiple are our to who their registration, public look expanding to pursue student want remain to general opportunities willing the working demographics

high-quality make to career we'll and our so, path. continue our available students the to they are and mission a as offerings our academic where remains their invest to We're to act in teaching partner infrastructure team do of equipped always regardless ACG's trusted to or students. for well in

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

Operator

There would are time. to over questions closing Kevin it back this turn no Instructions] [Operator at I like remarks. to for

Xiaofeng Ma

our Equity or Investor the us to Group. from Directly Relations

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

Operator

Thank you. This conference. today's conclude will

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

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

ATA Creativity Global (AACG) 8 Nov 242024 Q3 Earnings call transcript