ATA Creativity Global (AACG) Q2 2024 earnings summary

Executive summary

• Net revenues for Q2 2024 rose 42.8% year-over-year to RMB51.8 million, driven by increased student enrollment and credit hours delivered in portfolio training programs.

• Student enrollment increased 16.8% year-over-year to 1,084, with 612 enrolled in portfolio training programs.

• Portfolio training, research-based learning, and overseas study counseling remained the main revenue drivers, supported by new program launches and expanded educational offerings.

• The company hosted major educational events, including the ACG Art Education Exhibition and UN SDG Arts Bootcamp, enhancing market exposure.

• Collaborations with international institutions and new cultural heritage camps further expanded offerings.

Financial highlights

• Q2 2024 net revenues were RMB51.8 million, up 42.8% year-over-year; gross margin improved to 49.6% from 39.5% a year earlier.

• Net loss attributable to shareholders was RMB16.8 million in Q2 2024, slightly reduced from RMB17.2 million in Q2 2023.

• For the first half of 2024, net revenues reached RMB99.9 million, up 27.2% year-over-year, with gross margin at 47.7%.

• Cash and cash equivalents stood at RMB40.1 million (or $5.5 million) as of June 30, 2024.

• Working capital deficit was RMB296.1 million ($40.7 million); shareholders' equity was RMB80.2 million ($11 million) at June 30, 2024.

Outlook and guidance

• Full-year 2024 revenue guidance reiterated at RMB233–255 million, representing 5%–15% year-over-year growth.

• The second half of 2024 is expected to be stronger, following historical seasonality.

• Focus remains on growing the student base, expanding business lines, and exploring M&A opportunities.