17 Education & Technology Group Inc. Announces First Quarter 2026 Unaudited Financial Results
Rhea-AI Summary
17 Education & Technology Group (NASDAQ:YQ) reported unaudited Q1 2026 results.
Net revenues were RMB99.5 million, up 359.0% year-over-year. Gross margin improved to 61.9% from 36.2%. Net loss narrowed to RMB19.4 million, with adjusted net loss at RMB15.1 million. Cash, restricted cash and term deposit totaled RMB352.4 million as of March 31, 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Positive
- Net revenues rose 359.0% year-over-year to RMB99.5 million in Q1 2026
- Gross margin expanded to 61.9%, up 25.7 percentage points year-over-year
- Net loss decreased to RMB19.4 million from RMB30.9 million year-over-year
- Adjusted net loss (non-GAAP) fell to RMB15.1 million from RMB22.4 million
- Loss from operations margin improved to negative 21.4% from negative 156.3%
- Cash, restricted cash and term deposit stood at RMB352.4 million at March 31, 2026
Negative
- Company remained loss-making with Q1 2026 net loss of RMB19.4 million
- Total operating expenses nearly doubled, rising 98.7% year-over-year to RMB82.9 million
- Sales and marketing expenses increased 232.0% year-over-year to RMB43.2 million
- Cost of revenues grew 173.7% year-over-year to RMB37.9 million
- Cash, restricted cash and term deposit declined from RMB407.0 million to RMB352.4 million since December 31, 2025
News Market Reaction – YQ
On the day this news was published, YQ declined 4.58%, reflecting a moderate negative market reaction. Our momentum scanner triggered 2 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $1M from the company's valuation, bringing the market cap to $24.32M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Mar 24 | Q4/FY 2025 earnings | Neutral | +0.0% | FY2025 revenue drop but margin improvement and narrowed annual net loss. |
| Dec 09 | Q3 2025 earnings | Negative | -10.0% | Q3 2025 revenue down 66.4% YoY with sizable net loss despite better margins. |
| Sep 03 | Q2 2025 earnings | Positive | +19.0% | Improved gross margin, reduced net loss, and new US$10M share repurchase plan. |
| Jun 10 | Q1 2025 earnings | Neutral | -3.0% | Lower revenue and margin but sharply reduced net loss and lower expenses. |
| Mar 25 | Q4/FY 2024 earnings | Neutral | -10.2% | Mixed revenue and margin trends with improved annual loss and COO changes. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Earnings releases over the past five quarters have produced modest and often negative price reactions, even when results showed margin improvement or narrowed losses. The stock responded positively only once, when Q2 2025 results combined improving profitability metrics with a share repurchase program. Overall, the pattern suggests that earnings news has not consistently driven strong upside moves, with investors focusing on revenue trajectories and sustained losses.
Over the last five earnings-related releases since Mar 25, 2025, YQ has navigated revenue volatility while steadily improving margins and narrowing net losses. FY2024 and early 2025 featured revenue declines but significant cost cuts and strategic shifts toward SaaS and AI products. By Q2–Q3 2025, gross margin improved above 50% and AI offerings like Yiqi Aixue gained prominence. Today’s Q1 2026 results extend that trajectory with sharp revenue growth, stronger margins and reduced losses, building on the earlier AI-focused repositioning.
Historical Comparison
Across the last five earnings releases, YQ’s average 24-hour move was -0.84%, indicating generally muted and slightly negative reactions to financial results, even when margins improved.
Earnings updates show a progression from revenue declines with cost-cutting in 2024–early 2025 toward higher gross margins, narrowing losses, and increasing emphasis on AI products like Yiqi Aixue, culminating in Q1 2026’s strong revenue growth and margin expansion.
Regulatory & Risk Context
Key Terms
non-gaap financial
gross margin financial
loss from operations financial
consolidated balance sheets financial
comprehensive loss financial
cash flows financial
h.10 statistical release regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
BEIJING, June 17, 2026 (GLOBE NEWSWIRE) -- 17 Education & Technology Group Inc. (NASDAQ: YQ) (“17EdTech” or the “Company”), a leading AI-powered application service provider focused on personalized learning solutions, today announced its unaudited financial results for the first quarter of 2026.
First Quarter 2026 Highlights1
- Net revenues were RMB99.5 million (US
$14.4 million ), compared with net revenues of RMB21.7 million in the first quarter of 2025. - Gross margin was
61.9% , compared with36.2% in the first quarter of 2025. - Net loss was RMB19.4 million (US
$2.8 million ), compared with net loss of RMB30.9 million in the first quarter of 2025. - Net loss as a percentage of net revenues was negative
19.5% in the first quarter of 2026, compared with negative142.8% in the first quarter of 2025. - Adjusted net loss2 (non-GAAP), which excluded share-based compensation expenses of RMB4.2 million (US
$0.6 million ), was RMB15.1 million (US$2.2 million ), compared with adjusted net loss (non-GAAP) of RMB22.4 million in the first quarter of 2025. - Adjusted net loss (non-GAAP) as a percentage of net revenues was negative
15.2% in the first quarter of 2026, compared with negative103.4% adjusted net loss (non-GAAP) as a percentage of net revenues in the first quarter of 2025.
| 1 | For a reconciliation of non-GAAP numbers, please see the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” at the end of this press release. | ||
| 2 | Adjusted net loss represents net loss excluding share-based compensation expenses, as well as income tax effect. | ||
Mr. Andy Liu, Founder, Chairman and Chief Executive Officer of the Company commented, “We are pleased with our strong first quarter results. During the quarter, revenue more than quadrupled year-over-year and increased by
“Leveraging over a decade of large-scale, longitudinal educational insights accumulated across diverse teaching and learning scenarios, deep user engagement, and our growing AI capabilities, we will continue investing in AI-powered application services that support intelligent teaching and personalized learning. We believe these efforts will strengthen our overall product ecosystem and serve as a key driver of the Company's long-term growth.”
Ms. Sishi Zhou, Chief Financial Officer of the Company, commented, “We delivered significant improvement in our financial performance during the first quarter of 2026. Revenue growth, coupled with disciplined cost management and improving operating leverage, contributed to a
“Meanwhile, the Company maintained a strong cash position of RMB352.4 million (US
First Quarter 2026 Unaudited Financial Results
Net Revenues
Net revenues for the first quarter of 2026 were RMB99.5 million (US
Cost of Revenues
Cost of revenues for the first quarter of 2026 was RMB37.9 million (US
Gross Profit and Gross Margin
Gross profit for the first quarter of 2026 was RMB61.6 million (US
Gross margin for the first quarter of 2026 was
Total Operating Expenses
The following table sets forth a breakdown of operating expenses by amounts and percentages of revenue during the periods indicated (in thousands, except for percentages):
| For the three months ended March 31, | ||||||||||||||||||||||||
| 2025 | 2026 | Year- | ||||||||||||||||||||||
| RMB | % | RMB | USD | % | over-year | |||||||||||||||||||
| Sales and marketing expenses | 13,013 | 60.1 | % | 43,201 | 6,263 | 43.4 | % | 232.0 | % | |||||||||||||||
| Research and development expenses | 12,592 | 58.1 | % | 16,187 | 2,347 | 16.3 | % | 28.5 | % | |||||||||||||||
| General and administrative expenses | 16,101 | 74.3 | % | 23,487 | 3,405 | 23.6 | % | 45.9 | % | |||||||||||||||
| Total operating expenses | 41,706 | 192.5 | % | 82,875 | 12,015 | 83.3 | % | 98.7 | % | |||||||||||||||
Total operating expenses for the first quarter of 2026 were RMB82.9 million (US
Sales and marketing expenses for the first quarter of 2026 were RMB43.2 million (US
Research and development expenses for the first quarter of 2026 were RMB16.2 million (US
General and administrative expenses for the first quarter of 2026 were RMB23.5 million (US
Loss from Operations
Loss from operations for the first quarter of 2026 was RMB21.3 million (US
Net Loss
Net loss for the first quarter of 2026 was RMB19.4 million (US
Adjusted Net Loss (non-GAAP)
Adjusted net loss (non-GAAP) for the first quarter of 2026 was RMB15.1 million (US
Please refer to the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” at the end of this press release for a reconciliation of net loss under U.S. GAAP to adjusted net loss (non-GAAP).
Cash and Cash Equivalents, Restricted Cash and Term Deposit
Cash and cash equivalents, restricted cash and term deposit were RMB352.4 million (US
Conference Call Information
The Company will hold a conference call on Tuesday, June 16, 2026 at 9:00 p.m. U.S. Eastern Time (Wednesday, June 17, 2026 at 9:00 a.m. Beijing time) to discuss the financial results for the first quarter of 2026.
Please note that all participants will need to preregister for the conference call participation by navigating to https://register-conf.media-server.com/register/BId337aadf8452470ca9207c6219b9093d.
Upon registration, you will receive an email containing participant dial-in numbers, and PIN number. To join the conference call, please dial the number you receive, enter the PIN number, and you will be joined to the conference call instantly.
Additionally, a live and archived webcast of this conference call will be available at https://ir.17zuoye.com/.
Non-GAAP Financial Measures
17EdTech’s management uses adjusted net loss as a non-GAAP financial measure to gain an understanding of 17EdTech’s comparative operating performance and future prospects.
Adjusted net loss represents net loss excluding share-based compensation expenses and such adjustment has no impact on income tax.
Adjusted net loss is used by 17EdTech’s management in their financial and operating decision-making as a non-GAAP financial measure; because management believes it reflects 17EdTech’s ongoing business and operating performance in a manner that allows meaningful period-to-period comparisons. 17EdTech’s management believes that such non-GAAP measure provides useful information to investors and others in understanding and evaluating 17EdTech’s operating performance in the same manner as management does, if they so choose. Specifically, 17EdTech believes the non-GAAP measure provides useful information to both management and investors by excluding certain charges that the Company believes are not indicative of its core operating results.
The non-GAAP financial measure has limitations. It does not include all items of income and expense that affect 17EdTech’s income from operations. Specifically, the non-GAAP financial measure is not prepared in accordance with GAAP, may not be comparable to non-GAAP financial measures used by other companies and, with respect to the non-GAAP financial measure that excludes certain items under GAAP, does not reflect any benefit that such items may confer to 17EdTech. Management compensates for these limitations by also considering 17EdTech’s financial results as determined in accordance with GAAP. The presentation of this additional information is not meant to be considered superior to, in isolation from or as a substitute for results prepared in accordance with US GAAP.
Exchange Rate Information
The Company’s business is primarily conducted in China and all of the revenues are denominated in Renminbi (“RMB”). However, periodic reports made to shareholders will include current period amounts translated into U.S. dollars (“USD” or “US$”) using the exchange rate as of balance sheet date, for the convenience of the readers. Translations of balances in the consolidated balance sheets and the related consolidated statements of operations, comprehensive loss, change in shareholders’ deficit and cash flows from RMB into USD as of and for the three months ended March 31, 2026 are solely for the convenience of the readers and were calculated at the rate of US
About 17 Education & Technology Group Inc.
17 Education & Technology Group Inc. is a leading AI-powered application service provider in China, focused on personalized learning solutions. Leveraging over a decade of large-scale, longitudinal educational insights accumulated from daily teaching and learning interactions across diverse scenarios, alongside deep user engagement, and advanced AI capabilities, the Company develops application services that help students learn more effectively, empower educators, and drive innovation across the education ecosystem.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements about 17EdTech’s beliefs and expectations, are forward-looking statements. 17EdTech may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: 17EdTech’s growth strategies; its future business development, financial condition and results of operations; its ability to continue to attract and retain users; its ability to carry out its business and organization transformation, its ability to implement and grow its new business initiatives; the trends in, and size of, China’s online education market; competition in and relevant government policies and regulations relating to China's online education market; its expectations regarding demand for, and market acceptance of, its products and services; its expectations regarding its relationships with business partners; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in 17EdTech’s filings with the SEC. All information provided in this press release is as of the date of this press release, and 17EdTech does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
17 Education & Technology Group Inc.
Ms. Lara Zhao
Investor Relations Manager
E-mail: ir@17zuoye.com
| 17 EDUCATION & TECHNOLOGY GROUP INC. | ||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (In thousands of RMB and USD, except for share and per ADS data, or otherwise noted) | ||||||||||||
| As of December 31, | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | USD | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 246,448 | 174,603 | 25,312 | |||||||||
| Restricted cash | 49 | 49 | 7 | |||||||||
| Term deposits | 160,471 | 177,726 | 25,765 | |||||||||
| Accounts receivable, net | 42,577 | 42,260 | 6,126 | |||||||||
| Prepaid expenses and other current assets, net | 101,135 | 78,029 | 11,312 | |||||||||
| Total current assets | 550,680 | 472,667 | 68,522 | |||||||||
| Non-current assets | ||||||||||||
| Property and equipment, net | 22,455 | 21,666 | 3,141 | |||||||||
| Right-of-use assets | 15,003 | 13,747 | 1,993 | |||||||||
| Other non-current assets | 2,385 | 2,375 | 344 | |||||||||
| TOTAL ASSETS | 590,523 | 510,455 | 74,000 | |||||||||
| LIABILITIES | ||||||||||||
| Current liabilities | ||||||||||||
| Accrued expenses and other current liabilities | 123,280 | 123,509 | 17,905 | |||||||||
| Deferred revenue and advances from customers, current | 165,939 | 104,485 | 15,147 | |||||||||
| Operating lease liabilities, current | 4,992 | 4,712 | 683 | |||||||||
| Total current liabilities | 294,211 | 232,706 | 33,735 | |||||||||
| As of December 31, | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Non-current liabilities | ||||||||||||
| Operating lease liabilities, non-current | 9,684 | 8,659 | 1,255 | |||||||||
| TOTAL LIABILITIES | 303,895 | 241,365 | 34,990 | |||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||
| Class A ordinary shares | 256 | 256 | 37 | |||||||||
| Class B ordinary shares | 140 | 140 | 20 | |||||||||
| Treasury stock | (42 | ) | (42 | ) | (6 | ) | ||||||
| Additional paid-in capital | 11,126,837 | 11,131,062 | 1,613,665 | |||||||||
| Accumulated other comprehensive income | 77,527 | 75,122 | 10,891 | |||||||||
| Accumulated deficit | (10,918,090 | ) | (10,937,448 | ) | (1,585,597 | ) | ||||||
| TOTAL SHAREHOLDERS' EQUITY | 286,628 | 269,090 | 39,010 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 590,523 | 510,455 | 74,000 | |||||||||
| 17 EDUCATION & TECHNOLOGY GROUP INC. | ||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (In thousands of RMB and USD, except for share and per ADS data, or otherwise noted) | ||||||||||||
| For the three months ended March 31, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Net revenues | 21,668 | 99,452 | 14,418 | |||||||||
| Cost of revenues | (13,835 | ) | (37,871 | ) | (5,490 | ) | ||||||
| Gross profit | 7,833 | 61,581 | 8,928 | |||||||||
| Operating expenses (Note 1) | ||||||||||||
| Sales and marketing expenses | (13,013 | ) | (43,201 | ) | (6,263 | ) | ||||||
| Research and development expenses | (12,592 | ) | (16,187 | ) | (2,347 | ) | ||||||
| General and administrative expenses | (16,101 | ) | (23,487 | ) | (3,405 | ) | ||||||
| Total operating expenses | (41,706 | ) | (82,875 | ) | (12,015 | ) | ||||||
| Loss from operations | (33,873 | ) | (21,294 | ) | (3,087 | ) | ||||||
| Interest income | 2,676 | 1,773 | 257 | |||||||||
| Foreign currency exchange loss | (67 | ) | (9 | ) | (1 | ) | ||||||
| Other income, net | 320 | 172 | 25 | |||||||||
| Loss before provision for income tax | (30,944 | ) | (19,358 | ) | (2,806 | ) | ||||||
| Income tax expenses | — | — | — | |||||||||
| Net loss | (30,944 | ) | (19,358 | ) | (2,806 | ) | ||||||
| Net loss available to ordinary shareholders of 17 | (30,944 | ) | (19,358 | ) | (2,806 | ) | ||||||
| Education & Technology Group Inc. | ||||||||||||
| Net loss per ordinary share | ||||||||||||
| Basic and diluted | (0.07 | ) | (0.04 | ) | (0.01 | ) | ||||||
| Net loss per ADS (Note 2) | ||||||||||||
| Basic and diluted | (3.50 | ) | (2.00 | ) | (0.29 | ) | ||||||
| Weighted average shares used in calculating net loss per ordinary share | ||||||||||||
| Basic and diluted | 462,312,173 | 542,745,242 | 542,745,242 | |||||||||
| Note 1: Share-based compensation expenses were included in the operating expenses as follows: | ||||||||||||
| For the three months ended March 31, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Share-based compensation expenses: | ||||||||||||
| Sales and marketing expenses | 2,093 | 847 | 123 | |||||||||
| Research and development expenses | 2,397 | 1,692 | 245 | |||||||||
| General and administrative expenses | 4,056 | 1,703 | 247 | |||||||||
| Total | 8,546 | 4,242 | 615 | |||||||||
| Note 2: Each one ADS represents fifty Class A ordinary shares. | ||||||||||||
| 17 EDUCATION & TECHNOLOGY GROUP INC. | ||||||||||||
| Reconciliations of non-GAAP measures to the most comparable GAAP measures | ||||||||||||
| (In thousands of RMB and USD, except for share, per share and per ADS data) | ||||||||||||
| For the three months ended March 31, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Net Loss | (30,944 | ) | (19,358 | ) | (2,806 | ) | ||||||
| Share-based compensation | 8,546 | 4,242 | 615 | |||||||||
| Income tax effect | — | — | — | |||||||||
| Adjusted net loss | (22,398 | ) | (15,116 | ) | (2,191 | ) | ||||||
