The following is a summary of the ATA Creativity Global (AACG) Q3 2024 Earnings Call Transcript:

Financial Performance:

• ATA Creativity Global reported a third-quarter net revenue of RMB 67.3 million, which is a 13.1% increase from RMB 59.5 million in the same quarter of the previous year.

• Gross profit for the third quarter was RMB 30 million, marking a 2.6% increase from RMB 29.2 million in the third quarter of 2023.

• Despite increased revenues, gross margin decreased to 44.6% in the third quarter of 2024 from 49.2% in 2023, primarily due to higher costs from an increase in teaching staff and outsourcing costs.

• Net loss for the third quarter was RMB 14.7 million, compared to RMB7.3 million in the previous year.

• Total net revenues for the first nine months of 2024 increased by 21.1%, reaching RMB167.1 million.

Business Progress:

• ATA Creativity Global continues to expand its services, including the portfolio training program which remains a major revenue source,

• Launched new strategic partnerships with Leeds Conservatoire in the UK and Oasis Star Educational Technology to integrate art and AI.

• Hosted various international educational programs and expanded its geographical presence with the new London Center.

Opportunities:

• Engaged in expanding services and operational efficiencies with the introduction of new strategic partnerships and integrating technology in program offerings.

• Continued growth in student enrollment and diversifying services points to an expanding market reach.

Risks:

• Higher operational costs due to increased staff and outsourcing, impacting the gross margin.

• Increased marketing and administrative expenses reflect growing operational risks associated with expansion.

More details: ATA Creativity Global IR

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