This article first appeared on GuruFocus .
Release Date: November 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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ATA Creativity Global ( NASDAQ:AACG ) reported a 7.1% revenue growth for the first nine months of 2025, driven by increased contributions from research-based learning and overseas study counseling.
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The company successfully increased project-based program credit hours by 22.9% compared to the third quarter of 2024, indicating strong demand for these offerings.
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Operating expenses significantly decreased by 22.4% in the third quarter of 2025, leading to a narrowed operating loss of RMB10.6 million compared to RMB17.6 million in the prior year.
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Net income attributed to AACG in the third quarter of 2025 was RMB2.4 million, a significant improvement from a net loss of RMB14.7 million in the previous year, primarily due to a one-time gain from a previous investment.
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AACG is on track to achieve total net revenues of between RMB276 million to RMB281 million for the full year 2025, representing a year-over-year increase of around 3 to 5%.
Negative Points
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Gross margin for the third quarter of 2025 decreased to 39.2% from 44.6% in the prior year, affected by higher costs related to research-based learning services and part-time teacher costs.
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Total student enrollment for the third quarter of 2025 decreased to 1,052 from 1,289 in the prior year period, indicating a decline in demand.
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The company's gross profit margin for the first nine months of 2025 decreased to 44.7% from 46.4% in the same period of 2024, partially offset by increased outsourcing costs.
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Despite revenue growth, AACG's total operating expenses as a percentage of net revenues remained high at 54.9% during the third quarter of 2025.
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The company faces challenges in maintaining student enrollment levels, as evidenced by the decrease in portfolio training student enrollment for the third quarter of 2025.
Q & A Highlights
Q: Can you provide an overview of ATA Creativity Global's financial performance for the third quarter of 2025? A: The CFO reported stable net revenue for Q3 2025, with a 7.1% revenue growth for the first nine months of the year, driven by increased contributions from research-based learning and overseas study counseling. Portfolio training services accounted for 71.9% of total net revenues. Gross margin decreased to 39.2% from 44.6% in the previous year due to higher costs. Operating expenses decreased significantly, leading to a narrowed operating loss of RMB10.6 million. Net income was RMB2.4 million, compared to a net loss of RMB14.7 million in the prior year.
Q: What are the expectations for ATA Creativity Global's full-year 2025 performance? A: The company expects total net revenues to be between RMB276 million and RMB281 million, representing a 3% to 5% increase from 2024. Portfolio training is anticipated to remain the main revenue pillar, with increased contributions from other business lines. The guidance is based on current business operations and market conditions, which are subject to change.
Q: How is ATA Creativity Global planning to enhance its long-term growth strategy? A: The President highlighted the company's focus on expanding research-based learning and overseas study counseling services. ACG is committed to delivering high-quality portfolio training services and plans to consolidate select campuses while expanding online classroom capacity. New online master classes are being introduced in collaboration with prestigious universities to explore emerging art topics.
Q: What initiatives are being taken to improve operating efficiency? A: ACG is streamlining selling expenses and reallocating regional teaching resources. The company plans to consolidate campuses in less active markets and expand online capacity. This approach aligns with the evolving digital and technology-driven formats in disciplines like computer design and gaming design.
Q: How is ATA Creativity Global addressing student demand and satisfaction? A: The company is actively ensuring its product mix aligns with student demand, maintaining high satisfaction levels with its portfolio training services. ACG is also expanding its offerings to cater to a diverse student population with varying arts backgrounds, contributing to a strong and competitive application portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
