Here Group (HERE) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 revenue was RMB 570.7 million, down 39.6% year-over-year and 21.5% sequentially, reflecting a strategic shift from traffic-driven to product-driven growth.

• Adjusted net income rose 18.5% year-over-year to RMB 37.8 million, but fell 71.3% sequentially; net income reached RMB 41.1 million, up 181.2% year-over-year.

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

• Completed acquisition of 61% equity in Letsvan (LICE1), entering the high-growth pop toy 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

• Total revenues: RMB 570.7 million, down 39.6% year-over-year.

• Gross profit: RMB 474.2 million; gross margin: 83.1% (vs. 84.6% last year).

• Net income: RMB 41.1 million; net margin: 7.2%. Adjusted net income: RMB 37.8 million; adjusted net margin: 6.6%.

• Cash and equivalents: RMB 1,134.9 million as of March 31, 2025.

• Operating expenses: RMB 441.1 million, down 45.2% year-over-year; sales and marketing expenses fell 45.8% to RMB 395.2 million.

Outlook and guidance

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

• Strategic focus on dual-engine growth: refining online learning and expanding pop toy business, leveraging synergies and new consumer trends.

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

• Management anticipates near-term profitability fluctuations as the business mix is optimized, but maintains a robust financial foundation.

• Continued focus on ROI-driven resource allocation and product excellence to drive sustainable growth.