The following is a summary of the ATA Creativity Global (AACG) Q2 2024 Earnings Call Transcript:

Financial Performance:

• ATA Creativity Global reported a 42.8% increase in second quarter 2024 total net revenue, achieving RMB41.8 million.

• Gross margin improved to 49.6% in Q2 2024 from 39.5% in the previous year, primarily due to significantly increased revenue.

• Net loss decreased marginally to RMB15.8 million in Q2 2024 from RMB17.2 million in the previous year, despite a 30.2% increase in operating expenses related to higher G&A and sales expenses.

Business Progress:

• The company saw an enrollment increase in its portfolio training programs, with 612 students enrolled in Q2 2024 compared to 540 the previous year, demonstrating a 15.8% year-over-year growth.

• ATA Creativity Global continues to expand in teaching and sales staff to drive student enrollment and support growth.

• Significant growth in registrations from top global institutions for their graduates, suggesting increased demand for overseas study counseling services.

Opportunities:

• Continued expansion across all business areas, including research-based learning and overseas study counseling services, indicates robust market acceptance and competitive positioning.

• Anticipated stronger financial performance in the second half of 2024, supporting the year-end revenue forecast of RMB230 million to RMB235 million, a 5% to 50% increase over 2023.

Risks:

• Increased operating expenses due to expanded G&A and sales force may pressure profit margins if not offset by proportionate revenue growth.

More details: ATA Creativity Global IR

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