ATA Creativity Global announced its preliminary unaudited financial results for the third quarter ended September 30, 2024, reporting total net revenues of RMB67.3 million ($9.6 million). This represents a 13.1% increase compared to RMB59.5 million ($8.1 million) in the third quarter of 2023, driven by expanded research-based learning and portfolio training services.
Despite the revenue growth, the company's gross profit for Q3 2024 increased by a modest 2.6% to RMB30.0 million ($4.3 million), while the gross margin decreased to 44.6% from 49.2% in the prior-year period. This decline in gross margin was attributed to higher teaching staff costs and increased outsourcing expenses for research-based learning services.
Total operating expenses for the quarter rose by 28.4% to RMB47.7 million ($6.8 million), leading to a widened loss from operations of RMB17.6 million ($2.5 million) compared to RMB7.9 million ($1.1 million) in Q3 2023. Consequently, the net loss attributable to ACG for Q3 2024 was RMB14.7 million ($2.1 million), up from RMB7.3 million ($1.0 million) in the same period last year.
The company reiterated its full-year 2024 net revenue guidance, expecting between RMB233 million and RMB255 million, representing a year-over-year increase of 5% to 15%. As of September 30, 2024, cash and cash equivalents stood at RMB39.4 million ($5.6 million), with a working capital deficit of RMB310.7 million ($44.3 million).
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