Ambow Education Announces Second Quarter and First Half of 2024 Financial Results

Rhea-AI Summary

Ambow Education (NYSE American: AMBO) reported its Q2 and H1 2024 financial results, showing mixed performance. Despite an 11.1% decrease in Q2 net revenues to $2.4 million, the company achieved profitability with a net income of $0.1 million, improving from a $1.0 million loss in Q2 2023. Gross profit margin improved to 54.2% from 44.4% year-over-year.

The company's operating expenses decreased by 35% to $1.3 million, primarily due to the closure of Bay State College. For H1 2024, despite a 21.3% revenue decline to $4.8 million, gross profit increased 30% to $2.6 million. The company maintained $9.0 million in cash resources, including $1.6 million in cash and equivalents and $7.4 million in restricted cash. Notably, Ambow secured a $1.3 million licensing agreement for its AI-driven HybriU platform in overseas markets.

Positive

• Achieved profitability with $0.1M net income in Q2 2024 vs. $1.0M loss in Q2 2023
• Gross profit margin improved to 54.2% from 44.4% YoY in Q2
• Operating expenses reduced by 35% to $1.3M in Q2
• Secured $1.3M licensing agreement for HybriU platform
• H1 2024 gross profit increased 30% to $2.6M

Negative

• Q2 2024 revenues decreased 11.1% to $2.4M
• H1 2024 revenues declined 21.3% to $4.8M
• Permanent closure of Bay State College impacting revenue

Insights

Financial Analyst

The Q2 2024 results reveal a complex transformation story at Ambow Education. Despite an 11.1% revenue decline to $2.4 million, the company achieved profitability with notable improvements in operational efficiency. The 54.2% gross margin expansion from 44.4% last year demonstrates successful cost optimization following Bay State College's closure. The transition to profitability, with a $0.1 million operating income versus last year's $0.8 million loss, signals effective restructuring.

The $1.3 million HybriU licensing deal marks a strategic pivot toward technology-driven revenue streams. With $9.0 million in cash resources, Ambow maintains adequate liquidity for its AI-focused growth initiatives. However, the micro-cap status and thin trading volume suggest execution risks in scaling the HybriU platform globally.

Tech Expert

Ambow's strategic focus on HybriU represents a calculated bet on the generative AI revolution in education. The platform's positioning as an all-in-one AI-driven solution for hybrid learning aligns with the accelerating shift toward tech-enabled education delivery models. The overseas licensing success validates the platform's market potential, though competing against established edtech players will require continuous innovation.

The adoption of the 2024 Equity Incentive Plan suggests a commitment to attracting and retaining tech talent, important for AI platform development. The streamlined cost structure and improved margins provide runway for R&D investment, essential for maintaining technological competitiveness in the rapidly evolving AI education space.

CUPERTINO, Calif., Dec. 30, 2024 /PRNewswire/ -- Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE American: AMBO), a leading AI-driven educational and collaboration technology company, today announced its unaudited financial and operating results for the three-month and six-month periods ended June 30, 2024.

"We made considerable progress in the first half of the year, reaching profitability and improving our margins, setting the stage for our next wave of growth," said Dr. Jin Huang, Ambow's President, Chief Executive Officer and acting Chief Financial Officer. "By dedicating our resources to our first-to-market AI-driven hybrid education platform, HybriU, we are poised to address expansive market opportunities with a more streamlined cost structure and agile business model. Generative AI is driving massive advancements in how we learn and how instruction is delivered. We are leading this transition to hybrid education with HybriU's all-in-one AI-led solution for education and workforce training on a global scale. Our recent $1.3 million licensing agreement for HybriU in overseas markets is a strong starting point. As we continue to make new inroads with HybriU in both U.S. and international markets, we are bringing a unified hybrid learning experience to students and educators worldwide."

Second Quarter 2024 Financial Highlights

• Net revenues for the second quarter of 2024 decreased by 11.1% to $2.4 million from $2.7 million for the same period of 2023. The decrease was primarily due to the permanent closure of Bay State College at the end of the 2022-2023 academic year.
• Gross profit for the second quarter of 2024 increased by 8.3% to $1.3 million from $1.2 million for the same period of 2023. Gross profit margin was 54.2% for the second quarter of 2024, compared with 44.4% for the second quarter of 2023.
• Operating expenses for the second quarter of 2024 decreased by 35.0% to $1.3 million from $2.0 million for the same period of 2023. The decrease was primarily due to the permanent closure of Bay State College at the end of the 2022-2023 academic year and the associated reduction in shared center personnel costs.
• Operating (loss) income improved to an income of $0.1 million for the second quarter of 2024 from a loss of $0.8 million for the same period of 2023.
• Net (loss) income attributable to ordinary shareholders improved to an income of $0.1 million for the second quarter of 2024, or $0 per basic and diluted share, from a net loss of $1.0 million, or $0.02 per basic and diluted share, for the same period of 2023.
• As of June 30, 2024, Ambow maintained cash resources of $9.0 million, comprising cash and cash equivalents of $1.6 million and restricted cash of $7.4 million.

First Six Months 2024 Financial Highlights

• Net revenues for the first six months of 2024 decreased by 21.3% to $4.8 million from $6.1 million for the same period of 2023. The decrease was primarily due to the permanent closure of Bay State College at the end of the 2022-2023 academic year.
• Gross profit for the first six months of 2024 increased by 30.0% to $2.6 million from $2.0 million for the same period of 2023. Gross profit margin was 54.2%, compared with 32.8% for the same period of 2023.
• Operating expenses for the first six months of 2024 decreased by 23.1% to $3.0 million from $3.9 million for the same period of 2023. The decrease was primarily due to the permanent closure of Bay State College at the end of the 2022-2023 academic year and the associated reduction in shared center personnel costs.
• Operating loss for the first six months of 2024 was $0.4 million, compared with an operating loss of $1.9 million for the same period of 2023.
• Net (loss) income attributable to ordinary shareholders improved to an income of $0.2 million for the first six months of 2024, or $0 per basic and diluted share, from a net loss of $2.2 million, or $0.04 per basic and diluted share, for the same period of 2023.

The Company's financial and operating results for the second quarter and first half of 2024 can also be found on its Report of Foreign Private Issuer on Form 6-K, to be furnished with the U.S. Securities and Exchange Commission (the "SEC") at www.sec.gov.

Subsequent Events

On December 20, 2024, at Ambow's Annual General Meeting of Shareholders, shareholders ratified the adoption of the Company's 2024 Equity Incentive Plan for the purpose of granting share-based compensation awards to employees, directors, officers and consultants to incentivize their performance and align their interests.

About Ambow

Ambow Education Holding Ltd. is a leading AI-driven educational and collaboration technology company with primary operations in the United States. Through its for-profit college in San Diego, California, and its innovative, patented AI-driven technology platform, HybriU, Ambow delivers high-quality, personalized, and career-oriented education services, along with a comprehensive, one-stop solution that revolutionizes how the world learns, works, and connects. For more information, visit Ambow's website at https://www.ambow.com/.

Follow us on X: @Ambow_Education
Follow us on LinkedIn: Ambow-education-group

Safe Harbor Statement

This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Ambow and the industry. All information provided in this press release is as of the date hereof, and Ambow undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Ambow believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

For more information, please contact:

Ambow Education Holding Ltd.
E-mail: ir@ambow.com 

or

Piacente Financial Communications

Tel: +1-212-481-2050
E-mail: ambow@tpg-ir.com  

 

 

AMBOW EDUCATION HOLDING LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except for share and per share data)
		As of December 31,				As of June 30,
		2023				2024
		$				$
		As Revised				Unaudited
ASSETS
Current assets:
Cash and cash equivalents			274				1,645
Restricted cash			9,781				7,384
Accounts receivable, net			2,280				2,257
Prepaid and other current assets			178				144
Total current assets			12,513				11,430
Non-current assets:
Property and equipment, net			6				2
Intangible assets, net			522				517
Operating lease right-of-use asset			4,896				3,821
Other non-current assets			2,629				1,805
Total non-current assets			8,053				6,145
Total assets			20,566				17,575
LIABILITIES
Current liabilities:
Short-term borrowings			3,939				2,700
Accounts payable			1,386				942
Accrued and other liabilities			1,468				973
Income taxes payable			510				—
Operating lease liability, current			2,486				2,325
Total current liabilities			9,789				6,940
Non-current liabilities:
Operating lease liability, non-current			4,349				3,991
Total non-current liabilities			4,349				3,991
Total liabilities			14,138				10,931
EQUITY
Preferred shares
($0.003 par value;1,666,667 shares authorized, nil issued and outstanding as of    December 31, 2023 and June 30, 2024)			—				—
Class A Ordinary shares
($0.003 par value; 66,666,667 and 66,666,667 shares authorized,    52,419,109 and 52,419,109 shares issued and outstanding as of December 31, 2023 and June 30,    2024, respectively)			146				146
Class C Ordinary shares
($0.003 par value; 8,333,333 and 8,333,333 shares authorized,    4,708,415 and 4,708,415 shares issued and outstanding as of December 31, 2023 and June 30,    2024, respectively)			13				13
Additional paid-in capital			517,031				517,031
Accumulated deficit			(510,634)				(510,418)
Accumulated other comprehensive loss			(128)				(128)
Total equity			6,428				6,644
Total liabilities and equity			20,566				17,575

 

 

 

AMBOW EDUCATION HOLDING LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(All amounts in thousands, except for share and per share data)
		For the six months ended June 30,								For the three months ended  June 30,
		2023				2024				2023				2024
		$				$				$				$
NET REVENUES
Educational programs and services			6,097				4,773				2,728				2,399
COST OF REVENUES
Educational programs and services			(4,082)				(2,208)				(1,508)				(1,064)
GROSS PROFIT			2,015				2,565				1,220				1,335
Operating expenses:
Selling and marketing			(425)				(550)				(148)				(251)
General and administrative			(3,449)				(2,280)				(1,829)				(944)
Research and development			—				(150)				—				(75)
Total operating expenses			(3,874)				(2,980)				(1,977)				(1,270)
OPERATING (LOSS) INCOME			(1,859)				(415)				(757)				65
OTHER (EXPENSES) INCOME
Interest (expense) income, net			(33)				66				(26)				31
Foreign exchange loss, net			(9)				—				(9)				—
Other (expense) income, net			(281)				60				(196)				33
Total other (expense) income			(323)				126				(231)				64
(LOSS) INCOME BEFORE INCOME    TAX AND NON-CONTROLLING    INTEREST			(2,182)				(289)				(988)				129
Income tax (expense) benefit			(13)				505				(13)				(6)
NET (LOSS) INCOME			(2,195)				216				(1,001)				123
-Less: Net (loss) income attributable to    non-controlling interests			—				—				—				—
NET (LOSS) INCOME    ATTRIBUTABLE TO ORDINARY    SHAREHOLDERS			(2,195)				216				(1,001)				123
OTHER COMPREHENSIVE (LOSS)    INCOME, NET OF TAX
Other comprehensive (loss) income			—				—				—				—
TOTAL COMPREHENSIVE (LOSS)    INCOME			(2,195)				216				(1,001)				123
Net (loss) income per share – basic and    diluted			(0.0395)				0.0038				(0.0175)				0.0022
Net (loss) income per ADS – basic and    diluted			(0.7900)				0.0760				(0.3500)				0.0440
Weighted average shares used in    calculating basic and diluted net (loss)    income per share			55,525,314				57,127,524				57,127,524				57,127,524

 

 

 

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SOURCE Ambow Education Holding Ltd.

FAQ

What caused AMBO's revenue decline in Q2 2024?

The 11.1% revenue decline to $2.4M was primarily due to the permanent closure of Bay State College at the end of the 2022-2023 academic year.

How much did AMBO's gross profit margin improve in Q2 2024?

AMBO's gross profit margin improved to 54.2% in Q2 2024, compared to 44.4% in Q2 2023.

What is the value of AMBO's recent HybriU licensing agreement?

Ambow secured a $1.3 million licensing agreement for its HybriU platform in overseas markets.

How much cash does AMBO have as of June 30, 2024?

As of June 30, 2024, AMBO maintained $9.0 million in cash resources, comprising $1.6 million in cash and cash equivalents and $7.4 million in restricted cash.

What was AMBO's net income in Q2 2024?

AMBO reported a net income of $0.1 million in Q2 2024, improving from a net loss of $1.0 million in Q2 2023.