Here Group (HERE) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 revenue was RMB570.7 million, down 39.6% year-over-year and 21.5% sequentially, reflecting a strategic shift from traffic-driven to product-driven growth.

• Net income reached RMB41.1 million, a 181.2% year-over-year increase but a 67.5% sequential decline; adjusted net income was RMB37.8 million, up 18.5% year-over-year but down 71.3% sequentially.

• Registered users grew 19.9% year-over-year to 145 million as of March 31, 2025.

• Completed acquisition of 61% equity in Letsvan (Shenzhen Yiqi Culture) for RMB235 million, expanding into the pop toys market, with profit consolidation starting in Q4.

• Existing businesses, including financial literacy and senior-focused courses, maintained strong retention and positive cash flow.

Financial highlights

• Gross billings of individual online learning services were RMB515.6 million, down 47.5% year-over-year.

• Gross profit was RMB474.2 million; gross margin was 83.1% (vs. 84.6% last year).

• Net income was RMB41.1 million; net margin 7.2%. Adjusted net income was RMB37.8 million; adjusted net margin 6.6%.

• Cash, cash equivalents, restricted cash, and short-term investments totaled RMB1,134.9 million as of March 31, 2025.

• Operating expenses were RMB441.1 million, down 45.2% year-over-year; sales and marketing expenses fell 45.8% to RMB395.2 million.

Outlook and guidance

• Q4 will reflect full consolidation of Letsvan's operations, expected to significantly increase pop toy business revenue share.

• Management anticipates near-term profitability fluctuations as the business mix is optimized, but expects a robust financial foundation to support ongoing strategic evolution.

• Continued focus on ROI-driven resource allocation and product excellence to drive sustainable growth, especially in the pop toys sector.

• Revenue growth in pop toy business anticipated to offset declines in legacy education business in FY2026.

• Letsvan's international expansion is underway, with new product launches and pop-up stores generating favorable market response.