17 Education & Technology Group (YQ) Q1 2025 earnings summary

Executive summary

• Achieved strong business performance in Q1 2025, driven by AI-powered product upgrades and innovation in educational solutions, enhancing teaching and learning efficiency and personalized experiences.

• Saw robust growth in new contract acquisitions and expansion of the customer base, especially in SaaS subscriptions.

• Prioritized school-based projects and subscription models, shifting away from district-level projects.

• Operating expenses reduced by 42.6% year-over-year, leading to a 44.8% reduction in net loss on a GAAP basis.

Financial highlights

• Net revenues for Q1 2025 were RMB 21.7 million, a 15% year-over-year decrease from RMB 25.5 million in Q1 2024.

• Gross margin was 36.2% in Q1 2025, down from 38.4% in Q1 2024.

• Net loss (GAAP) was RMB 30.9 million, a 44.8% year-over-year reduction from RMB 56.1 million.

• Adjusted net loss (non-GAAP) was RMB 22.4 million, a 47.5% year-over-year decrease.

• Cash, restricted cash, and term deposits totaled RMB 333.3 million as of March 31, 2025.

Outlook and guidance

• Will continue to focus on AI-driven educational innovation and align with national digital transformation strategies.

• Aims to maintain growth momentum, enhance operational efficiency, and drive long-term sustainable development.

• Management will continue to monitor financial performance and make strategic decisions to ensure long-term sustainability.

• Focus remains on expanding SaaS offerings and driving digital transformation in Chinese schools.