Sunlands Technology Group Announces Unaudited Third Quarter 2025 Financial Results

BEIJING, Nov. 20, 2025 (GLOBE NEWSWIRE) -- Sunlands Technology Group (NYSE: STG) (“Sunlands” or the “Company”), a leader in China’s adult online education market and China’s adult personal interest learning market, today announced its unaudited financial results for the third quarter ended September 30, 2025. Third Quarter 2025 Financial and Operational Snapshots Net revenues were RMB523.0 million (US$73.5 million), compared to RMB491.3 million in the third quarter of 2024.Gross billings (non-GAAP) were RMB349.2 million (US$49.0 million), compared to RMB360.3 million in the third quarter of 2024.Gross profit was RMB462.7 million (US$65.0 million), compared to RMB409.2 million in the third quarter of 2024.Net income was RMB125.4 million (US$17.6 million), compared to RMB89.3 million in the third quarter of 2024.Net income margin1 was 24.0% in the third quarter of 2025, compared to 18.2% in the third quarter of 2024.New student enrollments2 were 137,493, compared to 158,395 in the third quarter of 2024.As of September 30, 2025, the Company’s deferred revenue balance was RMB695.5 million (US$97.7 million), compared to RMB916.5 million as of December 31, 2024. “We're pleased to see that the Company has now entered a phase of steady and healthy growth. Our performance in this quarter once again underscores the resilience of our business model and the effective execution of our strategic roadmap. We delivered net revenues of RMB523.0 million, coupled with a pronounced acceleration in profitability, as net income surged 40.5% year-over-year to RMB125.4 million. These achivements further validated the durability and scalability of our operations. Our strategic pivot towards high-margin, demand-driven course categories continues to yield tangible financial benefits. Our focus extends beyond short-term financial performance to the accumulation of intrinsic capabilities. Through refined management and structural cost control, we have established strong operating leverage while maintaining consistent investment in innovation and teaching quality. We believe that healthy cash flow, organizational agility, and a learner-centered product mindset will remain the core pillars of Sunlands’ competitiveness in this new stage,” said Mr. Tongbo Liu, Chief Executive Officer of Sunlands. Mr. Hangyu Li, Finance Director of Sunlands, commented, “The third quarter results underscore the Company’s focus on profitable growth and operational excellence. Net revenues rose 6.5% year-over-year to RMB523.0 million, driven by strong interest-based course performance. Gross profit climbed 13.1% year-over-year to RMB462.7 million, with operating expenses down 5.5%, driving net income to RMB125.4 million. The balance sheet is robust, with ample cash and positive cash flows from operating actives, reflecting a healthy core business. The gross billings per new student enrollment for interest, professional skills and professional certification preparation courses grew 11.7% year-over-year in the quarter, reflecting steady user acquisition momentum despite a more selective marketing approach. Leveraging silver economy tailwinds and tech innovation, the company will continue creating value for users and shareholders.” Financial Results for the Third Quarter of 2025 Net Revenues In the third quarter of 2025, net revenues increased by 6.5% to RMB523.0 million (US$73.5 million) from RMB491.3 million in the third quarter of 2024. The increase was primarily driven by shorter average service periods, leading to an increase in revenue recognized during 2025. Cost of Revenues Cost of revenues decreased by 26.5% to RMB60.3 million (US$8.5 million) in the third quarter of 2025 from RMB82.1 million in the third quarter of 2024. The decrease was mainly due to declined cost of revenues from sales of goods such as learning materials and books. Gross Profit Gross profit increased by 13.1% to RMB462.7 million (US$65.0 million) in the third quarter of 2025 from RMB409.2 million in the third quarter of 2024. Operating Expenses In the third quarter of 2025, operating expenses were RMB324.4 million (US$45.6 million), representing a 5.5% decrease from RMB343.4 million in the third quarter of 2024. Sales and marketing expenses decreased by 7.7% to RMB279.7 million (US$39.3 million) in the third quarter of 2025 from RMB303.0 million in the third quarter of 2024. General and administrative expenses increased by 4.3% to RMB36.0 million (US$5.1 million) in the third quarter of 2025 from RMB34.5 million in the third quarter of 2024. Product development expenses increased by 48.2% to RMB8.7 million (US$1.2 million) in the third quarter of 2025 from RMB5.8 million in the third quarter of 2024. The increase was mainly due to increased compensation expenses related to headcount expansion of the Company’s product development personnel. Net Income Net income for the third quarter of 2025 was RMB125.4 million (US$17.6 million), as compared to RMB89.3 million in the third quarter of 2024. Basic and Diluted Net Income Per Share Basic and diluted net income per share was RMB18.64 (US$2.62) in the third quarter of 2025. Cash, Cash Equivalents, Restricted Cash and Short-term Investments As of September 30, 2025, the Company had RMB601.0 million (US$84.4 million) of cash, cash equivalents and restricted cash and RMB176.5 million (US$24.8 million) of short-term investments, as compared to RMB507.2 million of cash and cash equivalents and RMB276.0 million of short-term investments as of December 31, 2024. Deferred Revenue As of September 30, 2025, the Company had a deferred revenue balance of RMB695.5 million (US$97.7 million), as compared to RMB916.5 million as of December 31, 2024. Share Repurchase On December 6, 2021, the Company’s board of directors authorized a share repurchase program, under which the Company may repurchase up to US$15.0 million of Class A ordinary shares in the form of ADSs over the next 24 months. On December 1, 2023, the Company’s board of directors authorized to extend its share repurchase program over the next twenty-four months. As of November 18, 2025, the Company had repurchased an aggregate of 797,615 ADSs for approximately US$4.7 million under the share repurchase program. Financial Results for the First Nine Months of 2025 Net Revenues In the first nine months of 2025, net revenues increased by 2.9% to RMB1,549.7 million (US$217.7 million) from RMB1,506.7 million in the first nine months of 2024. The increase was primarily driven by a 1.6% growth in gross billings from interest courses. Cost of Revenues Cost of revenues decreased by 14.2% to RMB202.3 million (US$28.4 million) in the first nine months of 2025 from RMB235.9 million in the first nine months of 2024. The decrease was mainly due to declined cost of revenues from sales of goods such as learning materials and books, and declined compensation expenses related to headcount reduction of the Company’s teachers and mentors. Gross Profit Gross profit increased by 6.0% to RMB1,347.4 million (US$189.3 million) from RMB1,270.8 million in the first nine months of 2024. Operating Expenses In the first nine months of 2025, operating expenses were RMB1,008.1 million (US$141.6 million), representing a 1.5% decrease from RMB1,023.4 million in the first nine months of 2024. Sales and marketing expenses decreased by 2.1% to RMB882.7 million (US$124.0 million) in the first nine months of 2025 from RMB902.1 million in the first nine months of 2024. General and administrative expenses increased by 2.7% to RMB103.6 million (US$14.5 million) in the first nine months of 2025 from RMB100.9 million in the first nine months of 2024. Product development expenses increased by 6.5% to RMB21.9 million (US$3.1 million) in the first nine months of 2025 from RMB20.5 million in the first nine months of 2024. The increase was mainly due to increased compensation expenses related to headcount expansion of the Company’s product development personnel. Net Income Net income for the first nine months of 2025 was RMB327.3 million (US$46.0 million), compared with RMB284.3 million in the first nine months of 2024. Basic and Diluted Net Income Per Share Basic and diluted net income per share was RMB48.50 (US$6.81) in the first nine months of 2025, compared with RMB41.52 in the first nine months of 2024. Outlook For the fourth quarter of 2025, Sunlands currently expects net revenues to be between RMB440 million to RMB460 million, which would represent a decrease of 4.9% to 9.0% year-over-year. The above outlook is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to substantial uncertainty. Exchange Rate The Company’s business is primarily conducted in China and all revenues are denominated in Renminbi (“RMB”). This announcement contains currency conversions of RMB amounts into U.S. dollars (“US$”) solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.1190 to US$1.00, the effective noon buying rate for September 30, 2025 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on September 30, 2025, or at any other rate. Conference Call and Webcast Sunlands’ management team will host a conference call at 7:00 AM U.S. Eastern Time, (8:00 PM Beijing/Hong Kong time) on November 20, 2025, following the quarterly results announcement. For participants who wish to join the call, please access the link provided below to complete online registration 15 minutes prior to the scheduled call start time. Upon registration, participants will receive details for the conference call, including dial-in numbers, a personal PIN and an e-mail with detailed instructions to join the conference call. Registration Link: https://register-conf.media-server.com/register/BI8300e40c73ed4950972d9e8dd3b708b8 Additionally, a live webcast and archive of the conference call will be available on the Investor Relations section of Sunlands’ website at https://ir.sunlands.com/. About Sunlands Sunlands Technology Group (NYSE: STG) (“Sunlands” or the “Company”), formerly known as Sunlands Online Education Group, is a leader in China’s adult online education market and China’s adult personal interest learning market. With a one to many live streaming platform, Sunlands offers various degree- or diploma-oriented post-secondary courses as well as professional certification preparation, professional skills and interest courses. Students can access the Company’s services either through PC or mobile applications. The Company’s online platform cultivates a personalized, interactive learning environment by featuring a virtual learning community and a vast library of educational content offerings that adapt to the learning habits of its students. Sunlands offers a unique approach to education research and development that organizes subject content into Learning Outcome Trees, the Company’s proprietary knowledge management system. Sunlands has a deep understanding of the educational needs of its prospective students and offers solutions that help them achieve their goals. About Non-GAAP Financial Measures We use gross billings, EBITDA, non-GAAP operating cost and expenses, non-GAAP income from operations and non-GAAP net income per share, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. We define gross billings for a specific period as the total amount of cash received for the sale of course packages, net of the total amount of refunds paid in such period. Our management uses gross billings as a performance measurement because we generally bill our students for the entire course tuition at the time of sale of our course packages and recognize revenue proportionally over a period. EBITDA is defined as net income excluding depreciation and amortization, interest expense, interest income, and income tax expenses. We believe that gross billings and EBITDA provide valuable insight into the sales of our course packages and the performance of our business. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, their most directly comparable financial measures prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP measure has been provided in the tables included below. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP financial measures. As gross billings, EBITDA, operating cost and expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, sales and marketing expenses excluding share-based compensation expenses, product development expenses excluding share-based compensation expenses, income from operations excluding share-based compensation expenses, and basic and diluted net income per share excluding share-based compensation expenses have material limitations as an analytical metric and may not be calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider gross billings and EBITDA as a substitute for, or superior to, their respective most directly comparable financial measures prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. Safe Harbor Statement This press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. 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,” “confident” and similar statements. Sunlands may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, 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. Any statements that are not historical facts, including statements about Sunlands' beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: Sunlands’ goals and strategies; its expectations regarding demand for and market acceptance of its brand and services; its ability to retain and increase student enrollments; its ability to offer new courses and educational content; its ability to improve teaching quality and students’ learning results; its ability to improve sales and marketing efficiency and effectiveness; its ability to engage, train and retain new faculty members; its future business development, results of operations and financial condition; its ability to maintain and improve technology infrastructure necessary to operate its business; competition in the online education industry in China; relevant government policies and regulations relating to Sunlands’ corporate structure, business and industry; and general economic and business condition in China. Further information regarding these and other risks, uncertainties or factors is included in Sunlands’ filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Sunlands does not undertake any obligation to update such information, except as required under applicable law. For investor and media enquiries, please contact: Sunlands Technology Group Investor Relations Email: sl-ir@sunlands.com SOURCE: Sunlands Technology Group SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except for share and per share data, or otherwise noted) As of December 31, As of September 30, 2024 2025 RMB RMB US$ASSETS Current assets Cash and cash equivalents 507,229 599,917 84,270Restricted cash - 1,049 147Short-term investments 276,029 176,496 24,792Prepaid expenses and other current assets 96,916 90,871 12,765Deferred costs, current 4,139 25,257 3,548Total current assets 884,313 893,590 125,522Non-current assets Property and equipment, net 758,215 737,154 103,547Intangible assets, net 723 368 52Right-of-use assets 110,154 101,170 14,211Deferred costs, non-current 56,657 16,212 2,277Long-term investments 260,083 332,636 46,725Deferred tax assets 24,699 20,247 2,844Other non-current assets 26,319 23,527 3,305Total non-current assets 1,236,850 1,231,314 172,961TOTAL ASSETS 2,121,163 2,124,904 298,483 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Current liabilities Accrued expenses and other current liabilities 404,865 366,480 51,479Deferred revenue, current 382,047 453,889 63,757Lease liabilities, current portion 8,317 9,534 1,339Long-term debt, current portion 6,154 - -Total current liabilities 801,383 829,903 116,575SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-continued (Amounts in thousands, except for share and per share data, or otherwise noted) As of December 31, As of September 30, 2024 2025 RMB RMB US$Non-current liabilities Deferred revenue, non-current 534,463 241,570 33,933 Lease liabilities, non-current portion 137,040 127,435 17,901 Deferred tax liabilities 5,724 3,418 480 Other non-current liabilities 7,309 7,289 1,024 Long-term debt, non-current portion 35,386 - - Total non-current liabilities 719,922 379,712 53,338 TOTAL LIABILITIES 1,521,305 1,209,615 169,913 SHAREHOLDERS’ EQUITY Class A ordinary shares (par value of US$0.00005, 796,062,195 shares authorized; 3,131,807 and 3,131,807 shares issued as of December 31, 2024 And September 30, 2025, respectively; 2,600,779 and 2,554,347 shares outstanding as of December 31, 2024 and September 30, 2025, respectively) 1 1 - Class B ordinary shares (par value of US$0.00005, 826,389 shares authorized; 826,389 and 826,389 shares issued and outstanding as of December 31, 2024 and September 30, 2025, respectively) - - - Class C ordinary shares (par value of US$0.00005, 203,111,416 shares authorized; 3,332,062 and 3,332,062 shares issued and outstanding as of December 31, 2024 and September 30, 2025, respectively) 1 1 - Treasury stock - - - Statutory reserves 11,083 11,083 1,557 Accumulated deficit (1,840,285) (1,513,028) (212,534) Additional paid-in capital 2,294,381 2,289,063 321,543 Accumulated other comprehensive income 136,164 129,656 18,213 Total Sunlands Technology Group shareholders’ equity 601,345 916,776 128,779 Non-controlling interest (1,487) (1,487) (209) TOTAL SHAREHOLDERS’ EQUITY 599,858 915,289 128,570 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2,121,163 2,124,904 298,483 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) For the Three Months Ended September 30, 2024 2025 RMB RMB US$Net revenues 491,264 523,049 73,472 Cost of revenues (82,093) (60,314) (8,472) Gross profit 409,171 462,735 65,000 Operating expenses Sales and marketing expenses (303,047) (279,725) (39,293) Product development expenses (5,849) (8,671) (1,218) General and administrative expenses (34,472) (35,956) (5,051) Total operating expenses (343,368) (324,352) (45,562) Income from operations 65,803 138,383 19,438 Interest income 7,810 6,462 908 Interest expense (1,415) (114) (16) Other income, net 10,443 8,323 1,169 Loss on disposal of subsidiaries (588) - - Income before income tax benefit/(expenses) and income/loss from equity method investments 82,053 153,054 21,499 Income tax benefit/(expenses) 6,506 (24,360) (3,422) Income/(loss) from equity method investments 730 (3,258) (458) Net income 89,289 125,436 17,619 Less: Net loss attributable to non-controlling interest - - - Net income attributable to Sunlands Technology Group 89,289 125,436 17,619 Net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 13.08 18.64 2.62 Weighted average shares used in calculating net income per ordinary share: Basic and diluted 6,828,784 6,728,503 6,728,503 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) For the Three Months Ended September 30, 2024 2025 RMB RMB US$Net income 89,289 125,436 17,619 Other comprehensive (loss)/income, net of tax effect of nil: Change in cumulative foreign currency translation adjustments (20,526) (3,671) (516) Unrealized loss on available-for-sale investments, net of tax effect of nil - 8,592 1,207 Total comprehensive income 68,763 130,357 18,310 Less: comprehensive income attributable to non-controlling interest - - - Comprehensive income attributable to Sunlands Technology Group 68,763 130,357 18,310 SUNLANDS TECHNOLOGY GROUP RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) For the Three Months Ended September 30, 2024 2025 RMB RMBNet revenues 491,264 523,049 Less: other revenues (84,838) (61,277) Add: tax and surcharges 23,931 16,310 Add: ending deferred revenue 920,593 695,459 Add: deferred revenue in connection with disposal of subsidiaries 3,423 - Add: ending refund liability 119,618 67,828 Less: beginning deferred revenue (986,938) (814,277) Less: beginning refund liability (126,797) (77,942) Gross billings (non-GAAP) 360,256 349,150 Net income 89,289 125,436 Add: income tax (benefit)/expenses (6,506) 24,360 Add: depreciation and amortization 7,355 7,199 Add: interest expense 1,415 114 Less: interest income (7,810) (6,462) EBITDA (non-GAAP) 83,743 150,647 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) For the Nine Months Ended September 30, 2024 2025 RMB RMB US$Net revenues 1,506,727 1,549,689 217,684 Cost of revenues (235,883) (202,291) (28,416) Gross profit 1,270,844 1,347,398 189,268 Operating expenses Sales and marketing expenses (902,065) (882,696) (123,992) Product development expenses (20,516) (21,859) (3,071) General and administrative expenses (100,853) (103,565) (14,548) Total operating expenses (1,023,434) (1,008,120) (141,611) Income from operations 247,410 339,278 47,657 Interest income 27,675 18,603 2,613 Interest expense (4,535) (794) (112) Other income, net 19,238 22,180 3,116 Loss on disposal of subsidiaries (838) - - Income before income tax benefit/(expenses) and loss from equity method investments 288,950 379,267 53,274 Income tax benefit/(expenses) 6,975 (47,684) (6,698) Loss from equity method investments (11,649) (4,326) (608) Net income 284,276 327,257 45,968 Less: Net loss attributable to non-controlling interest - - - Net income attributable to Sunlands Technology Group 284,276 327,257 45,968 Net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 41.52 48.50 6.81 Weighted average shares used in calculating net income per ordinary share: Basic and diluted 6,846,146 6,747,844 6,747,844 SUNLANDS TECHNOLOGY GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) For the Nine Months Ended September 30, 2024 2025 RMB RMB US$Net income 284,276 327,257 45,968 Other comprehensive (loss)/income, net of tax effect of nil: Change in cumulative foreign currency translation adjustments (7,275) (15,152) (2,128) Unrealized loss on available-for-sale investments, net of tax effect of nil - 8,644 1,214 Total comprehensive income 277,001 320,749 45,054 Less: comprehensive income attributable to non-controlling interest - - - Comprehensive income attributable to Sunlands Technology Group 277,001 320,749 45,054 SUNLANDS TECHNOLOGY GROUP RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) For the Nine Months Ended September 30, 2024 2025 RMB RMBNet revenues 1,506,727 1,549,689 Less: other revenues (205,806) (180,763) Add: tax and surcharges 56,040 58,361 Add: ending deferred revenue 920,593 695,459 Add: deferred revenue in connection with disposal of subsidiaries 3,423 - Add: ending refund liability 119,618 67,828 Less: beginning deferred revenue (1,113,923) (916,510) Less: beginning refund liability (143,744) (112,342) Gross billings (non-GAAP) 1,142,928 1,161,722 Net income 284,276 327,257 Add: income tax (benefit)/expenses (6,975) 47,684 Add: depreciation and amortization 22,148 21,622 Add: interest expense 4,535 794 Less: interest income (27,675) (18,603) EBITDA (non-GAAP) 276,309 378,754  1 Net income margin is defined as net income as a percentage of net revenues. 2 New student enrollments for a given period refer to the total number of orders placed by students that newly enroll in at least one course during that period, including those students that enroll and then terminate their enrollment with us, excluding orders of our low-price courses, such as “mini courses” and “RMB1 courses”, which we offer in the form of recorded videos or short live streaming, to strengthen our competitiveness and improve customer experience.