ATA Creativity Global

Greetings. Welcome to the ATA Creativity Global First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Allison of the Equity Group. Thank you. You may begin.

Thank you, operator. Good morning to all of you joining us from the United States and good evening to all of you joining us from China. Please be advised that the discussions on today's call may include forward-looking statements. Special forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the company's most recent SEC filing for a more complete description of these factors that could affect these projections and assumptions. The company assumes no obligation to update forelooking statements as a result of new information, future events, or otherwise. Regarding the disclaimer language, I would also like to refer you to slide 2 of the conference call presentation, which is accessible via the IR section of ACG's website. A simultaneous audio webcast is also accessible via the IR section of ACG's website, including the replay, which will be available for the next 90 days. ACC's chairman and CEO, Mr. Kabama, will start this call by highlighting the company's first quarter 2025 key operational achievements and financial highlights. CFO, Mr. Rob Aizuma, will provide an overview of financial and operating results for first quarter 2025 and briefly discuss expectations for fall year 2025. President, Mr. Jun Zhang, will conclude the prepared remarks with an update on the company's long-term growth strategy before opening the floor for questions. For those of you following the accompanying slide presentation, please refer to the slides for further details. With that, I'll turn the call over to ACG's Chairman and CEO, Mr. Kevin. Please go ahead, Mr. Monk.

Thank you, Alice, and welcome, everyone. Good morning to those in America. We appreciate everyone's time. Q1 2025 was highlighted by April 6th increase in net revenue and gross profit respectively, driven by increased contribution from portfolio training and research-based learning service. Portfolio training program created an hour delivery to ACG students increased by 5.8% during the first quarter of 2025. Higher net revenues and slightly reduced operating expenses contributed to improved bottom-line results during the quarter as compared to Q1 2024. Moving on to first quarter operation highlights, portfolio trading services continued to account for the majority of our revenue for the quarter. Total credit and hours delivered increased by 5.8, with project-based programs contributing about 74% of total credit and hours delivered, translating into a 11.5% growth in revenue from the portfolio training programs. Combined revenues from the research based learning overseas studies concerning other educational services also increased by more than 28%, and it became an increased revenue contribution responsible for nearly 30% of total net revenues. During first quarter 2025, we brought a variety of in-person and online research-based learning projects to ACG students. In-person projects include a named campus to Hainan province and AI training campus at Alibaba, host to a United States and Japan online session week project entirely, engaging a total of more than 100 students. Apart from delivering our usual lambo for master class projects to students in an online group class format, we also hosted a creative arts therapy training program taught by University of London lecturers, which accommodated around eight students in total. We continue to receive a positive feedback from our students about the full 2025 admission results. During first quarter 2025, ACG students received numerous admissions from prestigious overseas institutions, including major legal schools. Other top schools' admissions, to name a few, came from Cambridge University, Hong Kong University, Nanyang Technological University, and so on. Also, our students have received offers from top art schools, some of which are the most popular major with extremely high application requirements and overall low acceptance rate, including the MFA in film and television production at the University of South California, architecture at UC Berkeley, and Engineering Design Innovation at Northwest University. We remain excited about the upcoming admission results for the remainder of the fall 2025 application season. We are proud to announce that on March 29, ACG was awarded the 2025 Forbes China Studying Abroad Leading Brand. along with New Oriental Education and New China International Education. On the 2025 International Education Leaders Annual Conference and the Forbes China Study Abroad Industry Selection Series Awards Ceremony, we are pleased that the campaign is recognized not only by students, but also by industry experts as a leading brand in technology generating positive outcomes for students who want to study art abroad. In March, ACG turned five key cities in China as part of our Spring Art Education Exhibition, including Beijing, Shanghai, Wuhan, Chengdu, and Chongqing. Similar to the October-Autumn Art Education Exhibition, we hosted to discuss the last arts design topics and observation of overseas study application changes and remission trends, giving participating students and parents a face-to-face opportunity to communicate with professors from prestigious overseas arts institutions. With that, I will hand over the call to Sima for first quarter 2025.