ATA Creativity Global (AACG) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenues rose 13.1% year-over-year to RMB67.3 million ($9.6 million), driven by strong performance in portfolio training and research-based learning services, with student enrollment up 17.9% and credit hours delivered up 19.6%.

• For the nine months ended September 30, 2024, net revenues increased 21.1% to RMB167.1 million ($23.8 million), and overall student enrollment grew 20% year-over-year.

• Portfolio training services contributed over 70% of total revenues and credit hour deliveries, remaining the main revenue driver, with new domestic and international projects and partnerships.

• Net loss attributable to ACG widened to RMB14.7 million ($2.1 million) in Q3 2024 and RMB49.4 million ($7.0 million) for the nine months, due to higher operating expenses.

• Expanded partnership network and launched new programs, including UN SDG Arts Bootcamp, cultural heritage camps, and international summer camps.

Financial highlights

• Q3 2024 net revenues were RMB67.3 million ($9.6 million), up 13.1% year-over-year; gross profit was RMB30.0 million ($4.3 million), with a gross margin of 44.6% (down from 49.2%).

• Operating expenses for Q3 2024 rose 28.4% to RMB47.7 million, leading to a Q3 operating loss of RMB17.6 million and net loss of RMB14.7 million.

• Nine-month 2024 net revenues increased 21.1% to RMB167.1 million ($23.8 million); gross profit rose 24.6% to RMB77.6 million ($11.1 million), with gross margin improving to 46.4% (up from 45.1%).

• Nine-month operating expenses increased 22% to RMB137.7 million; operating loss was RMB16 million, net loss RMB49.4 million ($7.0 million).

• As of September 30, 2024: cash and equivalents RMB39.4 million ($5.6 million), total assets RMB459.4 million ($65.5 million), liabilities RMB393.2 million ($56.1 million), equity RMB66.2 million ($9.4 million).

Outlook and guidance

• On track to achieve full-year 2024 revenue guidance of RMB233–255 million, representing 5–15% year-over-year growth.

• Portfolio training services expected to remain the primary growth driver, with management focused on innovation, new service launches, and expanded partnerships.