Sunlands Technology Group (STG) Q2 2025 earnings summary

Executive summary

• Net revenue for Q2 2025 reached RMB 539 million, up 9.5% year-over-year, driven by strong learner demand and expanded course offerings.

• Net income surged to RMB 126.6 million, a 54% increase year-over-year, with net margin expanding to 23.5% from 16.7% in Q2 2024.

• Strategic shift from degree-focused to non-degree, interest-based, and professional skills courses, now comprising 77.6% of total revenue.

• Focus on the silver demographic (ages 15-75) and AI-powered personalized learning platforms as key growth drivers.

• Deferred revenue decreased to RMB 814.3 million as of June 30, 2025, from RMB 916.5 million at year-end 2024.

Financial highlights

• Gross profit rose 12.9% to RMB 469.4 million, with cost of revenues down 9.1% due to headcount reduction.

• Operating expenses were RMB 342.6 million, up 1.1% year-over-year; sales and marketing expenses rose 1.7%, while G&A and product development expenses declined.

• Basic and diluted EPS was RMB 18.75 for Q2 2025.

• Cash and cash equivalents stood at RMB 586.7 million as of June 30, 2025.

• Short-term investments decreased to RMB 166.6 million from RMB 276.0 million at year-end 2024.

Outlook and guidance

• Q3 2025 net revenues expected between RMB 500 million and RMB 520 million, representing 1.8%-5.8% year-over-year growth.

• Guidance reflects current market conditions and is subject to substantial uncertainty.

• Company plans to deepen AI integration and expand personalized, outcome-driven learning solutions.