Sunlands Technology Group (STG) Q4 2024 earnings summary

Executive summary

• Q4 2024 net revenues were RMB 483.5 million, down 10.8% year-over-year, with net income of RMB 57.8 million; full year 2024 net revenues were RMB 1.99 billion and net income RMB 342.1 million, both down from 2023.

• New student enrollments reached a record 674,649 for 2024, up 9.5% year-over-year, with Q4 enrollments at 172,200.

• Despite a 7.8% annual net revenue decline, the company marked its 15th consecutive profitable quarter and four years of profitability.

• Strategic shift from long-term, high-priced courses to short-term, accessible programs and interest-based offerings improved conversion and operational resilience.

• Gross billings for 2024 rose to RMB 1,555.4 million from RMB 1,504.6 million.

Financial highlights

• Q4 2024 gross profit was RMB 401.8 million, down 14.1% year-over-year; full year gross profit was RMB 1,672.6 million, down 11.7%.

• Q4 2024 net income margin was 12.0%, down from 28.6% in Q4 2023; full year net profit margin was 17.2%.

• EBITDA (non-GAAP) for Q4 2024 was RMB 63.0 million; full year EBITDA was RMB 339.3 million.

• Operating cash flow remained positive for the third consecutive year.

• Deferred revenue at year-end was RMB 916.5 million, down from RMB 1,113.9 million a year earlier.

Outlook and guidance

• Q1 2025 net revenues expected between RMB 470 million and RMB 490 million, a year-over-year decrease of 6.4% to 10.2%.

• Guidance reflects current market conditions and substantial uncertainty.