Sunlands Technology Group Q2 FY2025 earnings call

• In the second quarter of 2025, net revenue reached RMB 539 million, up 9.5% year-over-year, supported by resilient learner demand and expanded course offerings. - Net income surged to RMB 126.6 million with a net margin of 23.5%, a 54% increase from the same period last year and 68.5% sequential jump. - The company has shifted from a degree-centric approach to 3-pillar models (degree programs, professional skills and interest-based learning) since 2021, with nondegree programs now being the growth driver. - Focused on the silver demographic (learners aged 15 to 75), Sunlands has built a private user ecosystem of tens of millions with over 1 million paying for full-price courses, with course completion rate around 18%, repurchase rate over 16% and satisfaction levels for certain courses generally above 95%. - Utilizes AI for intelligent personalization, with a proprietary SaaS platform delivering personalized content, real-time feedback and dynamically assembled courses at scale, and introduced a Mandarin voice-activated AI assistant for older learners.

In the second quarter of 2025, Sunlands achieved net revenue of RMB 539 million, up 9.5% year-over-year. The degree and diploma-oriented post-secondary offerings, the cornerstone of the legacy business model, contributed approximately 11% of total revenue. Nondegree programs, including professional certifications, practical skills and interest-based courses, contributed to approximately 77.6% of total revenue. Among nondegree programs, interest-based learning demonstrated exceptional growth, achieving over 15% year-over-year revenue growth. In 2024 and the first half of 2025, the sector recorded enrollments of over 517,000 and 300,000, respectively.

• For the fourth quarter of 2025, Sunlands currently expects net revenues to be between RMB 500 million to RMB 520 million, representing an increase of 1.8% to 5.8% year-over-year. - The outlook is based on current market conditions and preliminary estimates of market, operating conditions and customer demand, which are subject to substantial uncertainty.

• Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. - Potential risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission.

Q: A: Q: A: At this time, we are showing no questions. So this will conclude our question-and-answer session.