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ATA Creativity Global Reports Q3 2024 Financial Results

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ATA Creativity Global (AACG) reported Q3 2024 financial results with net revenues increasing 13.1% to RMB67.3 million ($9.6 million) compared to Q3 2023. Student enrollment grew 17.9% to 1,289, with 57.8% in portfolio training programs. Despite revenue growth, the company reported a net loss of RMB14.7 million ($2.1 million), wider than the RMB7.3 million loss in Q3 2023. Gross margin decreased to 44.6% from 49.2% year-over-year. The company reiterated its fiscal year 2024 net revenue guidance of RMB233-255 million, representing 5-15% year-over-year growth.

ATA Creativity Global (AACG) ha riportato i risultati finanziari del terzo trimestre 2024, con ricavi netti in aumento del 13,1% a RMB67,3 milioni (9,6 milioni di dollari) rispetto al terzo trimestre 2023. Le iscrizioni degli studenti sono aumentate del 17,9% a 1.289, con il 57,8% in programmi di formazione portfolio. Nonostante la crescita dei ricavi, l'azienda ha registrato una perdita netta di RMB14,7 milioni (2,1 milioni di dollari), più ampia rispetto alla perdita di RMB7,3 milioni nel terzo trimestre 2023. Il margine lordo è diminuito al 44,6% dal 49,2% rispetto all'anno precedente. L'azienda ha ribadito le sue previsioni di ricavi netti per l'anno fiscale 2024 tra RMB233 e 255 milioni, rappresentando una crescita del 5-15% rispetto all'anno precedente.

ATA Creativity Global (AACG) informó los resultados financieros del tercer trimestre de 2024, con ingresos netos aumentando un 13,1% a RMB67,3 millones (9,6 millones de dólares) en comparación con el tercer trimestre de 2023. La matrícula de estudiantes creció un 17,9% hasta alcanzar 1.289, con un 57,8% en programas de formación de cartera. A pesar del crecimiento de los ingresos, la empresa reportó una pérdida neta de RMB14,7 millones (2,1 millones de dólares), más amplia que la pérdida de RMB7,3 millones en el tercer trimestre de 2023. El margen bruto disminuyó al 44,6% desde el 49,2% en comparación con el año anterior. La empresa reiteró su guía de ingresos netos para el año fiscal 2024 entre RMB233 y 255 millones, lo que representa un crecimiento del 5-15% en comparación con el año anterior.

ATA Creativity Global (AACG)은 2024년 3분기 재무 결과를 보고하였으며, 순수익은 13.1% 증가하여 RMB67.3백만(960만 달러)에 이르렀습니다. 이는 2023년 3분기와 비교한 수치입니다. 학생 등록은 17.9% 증가하여 1,289명에 도달하였으며, 포트폴리오 교육 프로그램에 대한 비율은 57.8%입니다. 수익이 증가했음에도 불구하고, 회사는 RMB14.7백만(210만 달러)의 순손실을 보고하였으며, 이는 2023년 3분기의 RMB7.3백만 손실보다 넓은 수치입니다. 총 이익률은 지난해 49.2%에서 44.6%로 감소하였습니다. 회사는 2024 회계연도 순수익 가이던스를 RMB233-255백만으로 재확인하였으며, 이는 지난해 대비 5-15% 이익 성장을 나타냅니다.

ATA Creativity Global (AACG) a annoncé ses résultats financiers du troisième trimestre 2024, avec des revenus nets en hausse de 13,1 % pour atteindre 67,3 millions RMB (9,6 millions USD) par rapport au troisième trimestre 2023. Les inscriptions des étudiants ont augmenté de 17,9 % pour atteindre 1 289, dont 57,8 % dans des programmes de formation par portefeuille. Malgré la croissance des revenus, l'entreprise a enregistré une perte nette de 14,7 millions RMB (2,1 millions USD), plus importante que la perte de 7,3 millions RMB au cours du troisième trimestre 2023. La marge brute a diminué, passant de 49,2 % à 44,6 % d'une année sur l'autre. L'entreprise a réaffirmé ses prévisions de revenus nets pour l'exercice 2024, qui devraient se situer entre 233 et 255 millions RMB, représentant une croissance de 5 à 15 % par rapport à l'année précédente.

ATA Creativity Global (AACG) berichtete über die Finanzzahlen des dritten Quartals 2024, mit einem Anstieg der Nettoerlöse um 13,1 % auf RMB67,3 Millionen (9,6 Millionen USD) im Vergleich zum dritten Quartal 2023. Die Einschreibung der Schüler stieg um 17,9 % auf 1.289, wobei 57,8 % in Portfoliotraining-Programmen lagen. Trotz des Umsatzwachstums meldete das Unternehmen einen Nett Verlust von RMB14,7 Millionen (2,1 Millionen USD), was größer ist als der Verlust von RMB7,3 Millionen im dritten Quartal 2023. Der Bruttogewinn fiel von 49,2 % auf 44,6 % im Vergleich zum Vorjahr. Das Unternehmen bekräftigte seine Umsatzprognose für das Geschäftsjahr 2024 von RMB233-255 Millionen, was einem Wachstum von 5-15 % im Jahresvergleich entspricht.

Positive
  • Net revenues increased 13.1% YoY to RMB67.3 million in Q3 2024
  • Student enrollment grew 17.9% to 1,289 students
  • Credit hours delivered increased 19.6% compared to Q3 2023
  • Portfolio training program revenues grew 7.2% YoY
Negative
  • Net loss widened to RMB14.7 million from RMB7.3 million in Q3 2023
  • Gross margin declined to 44.6% from 49.2% YoY
  • Operating expenses increased 28.4% YoY
  • Working capital deficit increased to RMB310.7 million from RMB244.0 million in December 2023

Insights

The Q3 2024 results show mixed signals for ATA Creativity Global. While net revenues increased 13.1% to RMB67.3 million, reaching $9.6 million, the company's losses have widened significantly. The net loss doubled to RMB14.7 million ($2.1 million) compared to RMB7.3 million in Q3 2023.

Concerning trends include declining gross margins (from 49.2% to 44.6%) and a substantial 28.4% increase in operating expenses. The working capital deficit has grown to RMB310.7 million, while cash reserves declined to 39.4 million, indicating potential liquidity challenges ahead.

Despite revenue growth driven by portfolio training and research-based services, the expanding losses and deteriorating margins suggest operational inefficiencies that need addressing. The company's guidance for 5% to 15% revenue growth appears achievable but may come at the cost of profitability.

Reports Q3 2024 Net Revenues Increase of 13.1% vs. Q3 2023

Reiterates Fiscal Year 2024 Net Revenue Guidance of Between RMB233 Million and RMB255 Million

Conference Call Scheduled for Thursday, November 7, at 8:00 p.m. Eastern Time (Friday, November 8, at 9:00 a.m. Beijing Time) with Accompanying Audio and Slide Webcast

BEIJING, Nov. 07, 2024 (GLOBE NEWSWIRE) -- ATA Creativity Global (“ACG” or the “Company”, Nasdaq: AACG), an international educational services company focused on providing quality learning experiences that cultivate and enhance students’ creativity, today announced preliminary unaudited financial results for the third quarter (“Q3 2024”) and nine-months (“9M 2024”) periods ended September 30, 2024.

All amounts presented in U.S. dollars ($) in this news release are based on a conversion rate of RMB7.0176 to $1.00 for both reporting periods ended September 30, 2024, and RMB7.2960 to $1.00 for both reporting periods ended September 30, 2023.

Q3 2024 Financial Highlights

  • Net revenues for Q3 2024 increased 13.1% to RMB67.3 million (or $9.6 million), from RMB59.5 million (or $8.1 million) in Q3 2023.
  • Gross profit for Q3 2024 increased 2.6% to RMB30.0 million (or $4.3 million), from RMB29.2 million (or $4.0 million) in Q3 2023. Gross margin was 44.6% during the current period, compared to 49.2% in the prior-year period.
  • Net loss attributable to ACG for Q3 2024 was RMB14.7 million (or $2.1 million), compared to net loss attributable to ACG of RMB7.3 million (or $1.0 million) in Q3 2023.

9M 2024 Financial Highlights

  • Net revenues for 9M 2024 increased 21.1% to RMB167.1 million (or $23.8 million), from RMB138.0 million (or $18.9 million) in 9M 2023.
  • Gross profit for 9M 2024 increased 24.6% to RMB77.6 million (or $11.1 million), from RMB62.3 million (or $8.5 million) during 9M 2023. Gross margin was 46.4% during the current period, compared to 45.1% during 9M 2023.
  • Net loss attributable to ACG for 9M 2024 was RMB49.4 million (or $7.0 million), compared to net loss attributable to ACG of RMB42.2 million (or $5.8 million) in 9M 2023.
  • Cash and cash equivalents were RMB39.4 million (or $5.6 million) as of September 30, 2024.

Q3 2024 Operational Highlights

  • Student enrollment during Q3 2024 was 1,289, an increase of 17.9% from 1,093 in Q3 2023.
    • 57.8% of students were enrolled in ACG’s portfolio training programs, which consist of time-based programs and project-based programs.
    • 42.2% of students were enrolled in ACG’s other programs, which mainly consist of overseas study counselling services and research-based learning services.
  • Credit hours delivered during Q3 2024 were 53,492, an increase of 19.6% compared to Q3 2023.

The following is a summary of the credit hours delivered for ACG’s portfolio training programs for Q3 2024, compared to those for the prior-year period:

 Third
Quarter Ended
September 30,
2024
 Third
Quarter Ended
September 30,
2023
 % Change
 No. of Credit
Hours
 No. of Credit
Hours
  
       
Time-based Program 16,186 13,624 18.8%
Project-based Program 37,306 31,099 20.0%
Total 53,492 44,723 19.6%
        

Management Commentary
Mr. Kevin Ma, Chairman and CEO of ACG, stated, “Q3 2024 was a strong quarter for ACG in terms of net revenues and student enrollment. The 13.1% increase in total net revenues was due to expanded research-based learning and more portfolio training services offered, and a growing number of projects introduced this summer. Our expanded services continued to garner student interest, reflected by a 17.9% growth in student enrollment for all of our programs and approximately 19.6% increase in total credit hours delivered for our portfolio training programs.”

Mr. Ma continued, “During Q3 2024, we continued to expand our international exposure by hosting a variety of courses, including summer camps in London and Tokyo and a Campus Tour Trip in U.S. universities. We also offered multiple online and offline Master Classes covering various topics such as visual communication, innovation design engineering, and illustration & animation, amongst other projects. These value-adding experiences target a diversified student population, from junior high school to college students interested in studying abroad in the future. We look forward to continuing expanding our portfolio of offerings and helping students achieve positive outcomes.”

Reiterates Guidance for Fiscal Year 2024
ACG is reiterating its previously provided guidance of total net revenues of between RMB233 million and RMB255 million for the year ending December 31, 2024, which represents a year-over-year increase of 5% to 15%. These guidance assumptions are based on the Company's existing business, current view of existing market conditions and expectations for the year ending December 31, 2024.

Mr. Jun Zhang, President of ACG, stated, “As we are approaching the end of the year, we believe we are on the right track to achieve our previously announced full year 2024 net revenue guidance of RMB233 million to RMB255 million. We expect portfolio training services to continue driving the overall business growth for the remainder of 2024. We continue to focus on innovation and have made substantial investments in designing and introducing new research-based learning programs and other services that reflect the trends in the arts industry and academia. Furthermore, as we continue to expand coverage in existing cities by concentrating our resources on managing larger learning centers, we are also focused on increasing the number of partnerships, domestically and internationally. We believe we are well positioned to continue to grow our business in 2025 and beyond.”

Conference Call and Webcast Information (With Accompanying Presentation)
ACG will host a conference call at 8:00 p.m. Eastern Time on Thursday, November 7 (9:00 a.m. Beijing Time on Friday, November 8), during which management will discuss Q3 2024 and 9M 2024 results.

To participate in the conference call, please connect using the following dial-in numbers about 10 minutes prior to the scheduled conference call time:

  
  
  
  
U.S. & Canada (Toll-Free):+1 (877) 407-9122
  
  
  
  
International (Toll):+1 (201) 493-6747
  
  
  
  
China (Local Access):(400) 120 2840
  
  
  
  
Hong Kong (Local Access):(800) 965561
  

A simultaneous audio webcast including accompanying slides may be accessed via the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=tCUjiKgZ, or via the investor relations section of the Company’s website https://ir.atai.net.cn/.

For those unable to listen to the live webcast, the replay will be available on the Company’s website shortly after the conclusion of the call.

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Q3 2024 Financial Review – GAAP Results

ACG’s total net revenues for Q3 2024 of RMB67.3 million (or $9.6 million), increased 13.1% as compared to RMB59.5 million (or $8.1 million) in Q3 2023, primarily due to increased revenue contributions from portfolio training programs and research-based learning services. Specifically:

  • Net revenues from portfolio training programs of RMB49.4 million (or $7.0 million) increased 7.2% as compared to Q3 2023 and accounted for 73.5% of total net revenues.
  • Net revenues from overseas study counselling services, research-based learning services and other educational services of RMB17.9 million (or $2.6 million) increased 33.6% as compared to Q3 2023 and accounted for 26.5% of total net revenues.

Gross profit for Q3 2024 of RMB30.0 million (or $4.3 million) increased 2.6%, from RMB29.2 million (or $4.0 million) in Q3 2023 while gross margin decreased to 44.6%, from 49.2% in the prior-year period. The decrease in gross margin was mainly due to the higher number of teaching staff hired during the quarter as compared to the prior-year period to accommodate the increased number of students, in addition to larger outsourcing costs related to research-based learning services.

Total operating expenses for Q3 2024 were RMB47.7 million (or $6.8 million), an increase of 28.4% from RMB37.1 million (or $5.1 million) in Q3 2023. The increase was due to higher selling and general & administrative expenses, slightly offset by lower research and development expenses. Specifically, for Q3 2024:

  • Selling expenses of RMB25.7 million (or $3.7 million) increased by RMB5.4 million or 26.8% from Q3 2023, mainly as a result of increased number of sales personnel and other sales/marketing/event related expenses.
  • General & administrative expenses of RMB21.2 million (or $3.0 million), increased by RMB 5.6 million or 35.7% from Q3 2023, mainly as a result of an increase in professional fees and business expansion-related investments.
  • Research and development expenses of RMB0.7 million (or $0.1 million), decreased by RMB0.5 million or 38.6% from Q3 2023, as ACG’s system development was completed in Q2 2024.

As a result, loss from operations for Q3 2024 was RMB17.6 million (or $2.5 million), compared to loss from operations of RMB7.9 million (or $1.1 million) in Q3 2023. Net loss attributable to ACG for Q3 2024 was RMB14.7 million (or $2.1 million), from net loss attributable to ACG of RMB7.3 million (or $1.0 million) in Q3 2023.

Basic and diluted losses per common share attributable to ACG for Q3 2024 were RMB0.23 (or $0.03), compared to basic and diluted losses per common share of RMB0.12 (or $0.02) for Q3 2023. Basic and diluted losses per ADS attributable to ACG were RMB0.46 or (or $0.06), compared to basic and diluted losses per ADS of RMB0.24 (or $0.04) in Q3 2023.

9M 2024 Financial Review – GAAP Results

ACG’s total net revenues for 9M 2024 was RMB167.1 million (or $23.8 million), an increase of 21.1% from RMB138.0 million (or $18.9 million) during 9M 2023. Specifically:

  • Net revenues from portfolio training programs of RMB125.0 million (or $17.8 million) increased 22.9% as compared to 9M 2023 and accounted for 74.8% of total net revenues.
  • Net revenues from overseas study counselling services, research-based learning services and other educational services of RMB42.1 million (or $6.0 million) increased 16.1% as compared to 9M 2023 and accounted for 25.2% of total net revenues.

Gross profit for 9M 2024 was RMB77.6 million (or $11.1 million), an increase of 24.6% from RMB62.3 million (or $8.5 million) during 9M 2023, while gross margin was 46.4% during the period, compared to 45.1% during 9M 2023. The improvement in gross profit and gross margin was mainly related to increased net revenues for the period.

Total operating expenses for 9M 2024 were RMB137.7 million (or $19.6 million), an increase of 22.0% from RMB112.9 million (or $15.5 million) in 9M 2023. The increase was due to higher selling, and general & administrative expenses, slightly offset by lower research and development expenses. Specifically, for 9M 2024:

  • Selling expenses of RMB72.4 million (or $10.3 million) increased by RMB14.4 million or 24.8% from 9M 2023, mainly as a result of higher number of sales personnel contributing to the increase in sales.
  • General & administrative expenses of RMB62.4 million (or $8.9 million) increased by RMB10.5 million or 20.2% from 9M 2023, mainly as a result of higher professional fees and business expansion investments.
  • Research and development expenses of RMB2.9 million (or $0.4 million) decreased by RMB0.1 million or 1.8% from 9M 2023.

As a result, loss from operations for 9M 2024 was RMB60.0 million (or $8.6 million), compared to loss of RMB50.6 million (or $6.9 million) during 9M 2023. Net loss attributable to ACG for 9M 2024 was RMB49.4 million (or $7.0 million), from net loss attributable to ACG of RMB42.2 million (or $5.8 million) during 9M 2023.

For 9M 2024, basic and diluted losses per common share attributable to ACG were RMB0.78 (or $0.11), compared to RMB0.67 (or $0.09) during 9M 2023. Basic and diluted losses per ADS attributable to ACG were RMB1.56 (or $0.22), compared to RMB1.34 (or $0.18) during 9M 2023.

Non-GAAP Measures
Adjusted net loss attributable to ACG for Q3 2024, which excludes share-based compensation expense and foreign currency exchange losses, net, was RMB13.9 million (or $2.0 million), compared to adjusted net loss of RMB6.4 million (or $0.9 million) in Q3 2023.

Basic and diluted losses per common share attributable to ACG excluding share-based compensation expense and foreign currency exchange losses, net for Q3 2024, were RMB0.22 (or $0.03). Basic and diluted losses per ADS attributable to ACG excluding share-based compensation expense and foreign currency exchange losses, net for Q3 2024 were RMB0.44 (or $0.06).

Please see the note about non-GAAP measures and the reconciliation table at the end of this press release.

Other Data
The number of weighted average ADSs used to calculate both basic and diluted earnings per ADS for Q3 2024 were 31.5 million. Each ADS represents two common shares.

Balance Sheet Highlights
As of September 30, 2024, ACG’s cash and cash equivalents were RMB39.4 million (or $5.6 million), working capital deficit was RMB310.7 million (or $44.3 million), and total shareholders’ equity was RMB66.2 million (or $9.4 million); compared to cash and cash equivalents of RMB60.2 million (or $8.5 million), working capital deficit of RMB244.0 million (or $34.4 million), and total shareholders’ equity of RMB113.0 million (or $15.9 million), respectively, as of December 31, 2023.

About ATA Creativity Global
ATA Creativity Global is an international educational services company focused on providing quality learning experiences that cultivate and enhance students’ creativity. ATA Creativity Global offers a wide range of education services consisting primarily of portfolio training, research-based learning services, overseas study counselling and other educational services through its training center network. For more information, please visit ACG’s website at www.atai.net.cn.

Cautionary Note Regarding Forward-looking Statements
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “look forward to,” “outlook,” “guidance,” “plan,” “should,” “will,” and similar terms and include, among other things, statements regarding ACG’s future growth and results of operations; ACG’s plans for mergers and acquisitions generally; ACG’s growth strategy, anticipated growth prospects and subsequent business activities; ACG’s 2024 guidance; market demand for, and market acceptance and competitiveness of, ACG’s portfolio training programs and other education services.

The factors that could cause the Company’s actual financial and operating results to differ from what the Company currently anticipates may include its ability to develop and create content that could accommodate needs of potential students, its ability to provide effective creative related international education services and control sales and marketing expenses, its recognition in the marketplace for services it delivered and branding it established, its ability to maintain market share amid increasing competition, its ability to identify and execute on M&A opportunities within the education sector and its ability to integrate the acquired business, the economy of China, uncertainties with respect to China’s legal and regulatory environments, the impact of the political tensions between the United States and China or other international tensions, and the impact of actual or potential international trade or military conflicts, and other factors stated in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”).

The financial information contained in this release should be read in conjunction with the consolidated financial statements and related notes included in the Company’s annual report on Form 20-F for its fiscal year ended December 31, 2023, and other filings that ACG has made with the SEC. The filings are available on the SEC’s website at www.sec.gov and at ACG’s website at www.atai.net.cn. For additional information on the risk factors that could adversely affect the Company’s business, financial conditions, results of operations, and prospects, please see the “Risk Factors” section of the Company’s Form 20-F for the fiscal year ended December 31, 2023.

The forward-looking statements in this release involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates, and projections about ACG and the markets in which it operates. The Company undertakes no obligation to update forward-looking statements, which speak only as of the date of this release, to reflect subsequent events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that its expectations and assumptions expressed in these forward-looking statements are reasonable, the Company cannot assure you that its expectations and assumptions will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

Currency Convenience Translation
The Company’s financial information is stated in Renminbi (“RMB”), the currency of the People’s Republic of China. The translations of RMB amounts for the quarter and nine months ended September 30, 2024, into U.S. dollars are included solely for the convenience of readers and have been made at the rate of RMB7.0176 to $1.00, the noon buying rate as of September 30, 2024, in New York for cable transfers in RMB per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board. Historical translations of RMB amounts for the quarter and nine months ended September 30, 2023, into U.S. dollars have been made at the rate of RMB7.2960 to $1.00, the noon buying rate as of September 30, 2023. Historical translations of RMB amounts for the year ended December 31, 2023, into U.S. dollars have been made at the rate of RMB7.0999 to $1.00, the noon buying rate as of December 31, 2023. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under U.S. generally accepted accounting principles (“GAAP”).

About Non-GAAP Financial Measures
To supplement ACG’s consolidated financial information presented in accordance with U.S. GAAP, ACG uses the following non-GAAP financial measures: net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss, and basic and diluted earnings (losses) per common share and ADS excluding share-based compensation expense and foreign currency exchange gain or loss.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. ACG believes these non-GAAP financial measures provide meaningful supplemental information about its performance by excluding share-based compensation expense and foreign currency exchange gain or loss, which may not be indicative of its operating performance.

ACG believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to ACG’s historical performance. ACG computes its non-GAAP financial measures using a consistent method from period to period. ACG believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss and basic and diluted earnings (losses) per common share and per ADS excluding share-based compensation expense and foreign currency exchange gain or loss is that share-based compensation charges and foreign currency exchange gain or loss have been, and are expected to continue to be for the foreseeable future, a significant recurring expense in ACG’s business.

Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The table captioned “Reconciliations of Non-GAAP Measures to the Most Comparable GAAP Measures” shown at the end of this news release has more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures used by ACG.

For more information on our company, please contact the following individuals:

At the CompanyInvestor Relations
ATA Creativity GlobalThe Equity Group Inc.
Ruobai Sima, CFOLena Cati, Senior Vice President
+86 10 6518 1133 x 5518212-836-9611
simaruobai@acgedu.cnlcati@equityny.com
  
 Alice Zhang, Associate
 212-836-9610
 azhang@equityny.com
  


ATA CREATIVITY GLOBAL AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 
  December 31, September 30, September 30,
  2023  2024  2024 
  RMB RMB USD
ASSETS      
Current assets:      
Cash and cash equivalents 60,167,232  39,391,127  5,613,191 
Accounts receivable 2,235,490  1,149,062  163,740 
Prepaid expenses and other current assets 8,042,169  19,733,110  2,811,946 
Total current assets  70,444,891    60,273,299   8,588,877 
       
Long-term investments 38,000,000  38,000,000  5,414,957 
Property and equipment, net 30,235,985  39,261,010  5,594,649 
Intangible assets, net 58,886,111  50,669,444  7,220,338 
Goodwill 196,289,492  196,289,492  27,971,029 
Other non-current assets 31,691,417  34,342,266  4,893,734 
Right-of-use assets 23,391,247  40,613,651  5,787,399 
Total assets  448,939,143    459,449,162   65,470,983 
       
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Accrued expenses and other payables 49,146,103  51,063,959  7,276,558 
Lease liabilities-current 13,110,449  19,652,848  2,800,508 
Deferred revenues 252,145,949  300,274,793  42,788,816 
Total current liabilities  314,402,501    370,991,600   52,865,882 
       
Lease liabilities-non-current 9,496,422  19,992,990  2,848,978 
Deferred income tax liabilities 12,066,513  2,242,876  319,607 
Total liabilities  335,965,436    393,227,466   56,034,467 
       
Shareholders’ equity:      
Common shares 4,730,128  4,733,961  674,584 
Treasury shares (8,201,046) (8,201,046) (1,168,640)
Additional paid-in capital 545,222,465  547,865,450  78,070,202 
Accumulated other comprehensive loss (37,004,507) (37,066,452) (5,281,927)
Accumulated deficit (391,709,172) (441,045,983) (62,848,550)
Total shareholders’ equity attributable to ACG  113,037,868    66,285,930   9,445,669 
Non-redeemable non-controlling interests (64,161) (64,234) (9,153)
Total shareholders’ equity  112,973,707    66,221,696   9,436,516 
Commitments and contingencies      
Total liabilities and shareholders’ equity  448,939,143    459,449,162   65,470,983 
          


ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
 Three-month Period Ended
 September 30, September 30, September 30,
 2023  2024  2024 
 RMB RMB USD
Net revenues 59,450,108   67,254,807   9,583,733 
Cost of revenues 30,225,251   37,256,461   5,309,003 
Gross profit 29,224,857   29,998,346   4,274,730 
         
Operating expenses:        
Research and development 1,204,485   740,049   105,456 
Sales and marketing 20,297,200   25,743,503   3,668,420 
General and administrative 15,603,290   21,172,200   3,017,014 
Total operating expenses 37,104,975   47,655,752   6,790,890 
Other operating income, net 1,104   42,806   6,100 
Loss from operations (7,879,014)  (17,614,600)  (2,510,060)
Other income (expense):        
Interest income, net of interest expenses 241,534   224,646   32,012 
Foreign currency exchange gains (losses), net 2   (1,800)  (256)
Loss before income taxes (7,637,478)  (17,391,754)  (2,478,304)
Income tax benefit (335,902)  (2,739,486)  (390,374)
Net loss (7,301,576)  (14,652,268)  (2,087,930)
Net loss attributable to non-controlling interests (50,714)  (22)  (3)
Net loss attributable to ACG (7,250,862)  (14,652,246)  (2,087,927)
         
Other comprehensive loss:        
Foreign currency translation adjustment, net of nil income taxes (19,253)  (98,370)  (14,018)
Comprehensive loss attributable to ACG (7,270,115)  (14,750,616)  (2,101,945)
         
Basic and diluted losses per common share attributable to ACG (0.12)  (0.23)  (0.03)
Basic and diluted losses per ADS attributable to ACG (0.24)  (0.46)  (0.06)
            


ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
 Nine-month Period Ended
 September 30, September 30, September 30,
 2023 2024 2024
 RMB RMB USD
Net revenues 138,010,273   167,144,553   23,817,908 
Cost of revenues 75,718,910   89,543,642   12,759,867 
Gross profit 62,291,363   77,600,911   11,058,041 
         
Operating expenses:        
Research and development 2,978,521   2,924,091   416,680 
Sales and marketing 58,015,878   72,387,180   10,315,091 
General and administrative 51,906,675   62,414,642   8,894,015 
Total operating expenses 112,901,074   137,725,913   19,625,786 
Other operating income, net 2,657   86,586   12,338 
Loss from operations (50,607,054)  (60,038,416)  (8,555,407)
Other income (expense):        
Interest income, net of interest expenses 707,931   867,865   123,670 
Foreign currency exchange losses, net (380)  (7,668)  (1,093)
Loss before income taxes (49,899,503)  (59,178,219)  (8,432,830)
Income tax benefit (7,635,036)  (9,823,637)  (1,399,857)
Net loss (42,264,467)  (49,354,582)  (7,032,973)
Net loss attributable to non-controlling interests (48,620)  (72)  (10)
Net loss attributable to ACG (42,215,847)  (49,354,510)  (7,032,963)
         
Other comprehensive income (loss):        
Foreign currency translation adjustment, net of nil income taxes 71,146   (61,945)  (8,827)
Comprehensive loss attributable to ACG (42,144,701)  (49,416,455)  (7,041,790)
         
Basic and diluted losses per common share attributable to ACG (0.67)  (0.78)  (0.11)
Basic and diluted losses per ADS attributable to ACG (1.34)  (1.56)  (0.22)
            


RECONCILIATIONS OF NON-GAAP MEASURES
TO THE MOST COMPARABLE GAAP MEASURES
 
  Three-month Period Ended  Nine-month Period Ended
  September
30
,
  September
30
,
  September
30
,
  September
30
,
  2023  2024  2023  2024
  RMB  RMB  RMB  RMB
GAAP net loss attributable to ACG (7,250,862)  (14,652,246)  (42,215,847)  (49,354,510)
Share-based compensation expenses 818,922   769,733   2,029,817   2,653,050 
Foreign currency exchange losses (gains), net (2)  1,800   380   7,668 
Non-GAAP net loss attributable to ACG (6,431,942)  (13,880,713)  (40,185,650)  (46,693,792)
            
GAAP losses per common share attributable to ACG           
Basic and diluted (0.12)  (0.23)  (0.67)  (0.78)
            
Non-GAAP losses per common share attributable to ACG           
Basic and diluted (0.10)  (0.22)  (0.64)  (0.74)
                

FAQ

What was AACG's revenue growth in Q3 2024?

AACG's net revenues increased 13.1% to RMB67.3 million ($9.6 million) in Q3 2024 compared to Q3 2023.

How much did AACG's student enrollment grow in Q3 2024?

Student enrollment grew 17.9% to 1,289 students in Q3 2024 compared to 1,093 in Q3 2023.

What is AACG's revenue guidance for fiscal year 2024?

AACG reiterated its fiscal year 2024 net revenue guidance of RMB233-255 million, representing 5-15% year-over-year growth.

What was AACG's net loss in Q3 2024?

AACG reported a net loss of RMB14.7 million ($2.1 million) in Q3 2024, compared to a net loss of RMB7.3 million in Q3 2023.

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NASDAQ:AACG

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AACG Stock Data

31.47M
29.21M
7.2%
16.39%
0.45%
Education & Training Services
Consumer Defensive
Link
United States of America
Hefei