Sunlands Technology Group ADR

Ladies and gentlemen, thank you for standing by and welcome to Sunland's second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. And I'll turn the call over to your host today, Yu Hua, Sunland's IR representative. Please go ahead.

Hello, everyone, and thank you for joining Sunland's second quarter 2025 earnings conference call. The company's financial and operating results were issued in our press release by New Square Services earlier today and are posted online. You could download the earnings press release and sign up for our distribution list by visiting our IR website. Participants on today's call will be our CEO, Mr. Tongbo Liu, and our financial representative, Mr. Hongyu Li. Management will begin with prepared remarks and the call will conclude with a Q&A session. Before I hand it over to the management, I'd like to remind you of Staten Island Safe Harbor Statement in relation to today's call. Except for the historical information contained herein, certain matters discussed in this conference call are forward-looking statements. These statements are based on current trends, estimates, and projections. And therefore, you should not place undue reliance on them. 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. For more information about the potential risks and emergencies, please refer to the company's sellings with the Securities and Exchange Commission. With that, I'll now turn the call over to our CEO, Tongbo Liu.

Okay, thank you, Yu Hua. Hello, everyone. Welcome to Sunland's 7th Quarter 2025 Conference Call. Prior to commencing, I would like to kindly remind all entities that the financial information referenced in this release are presented on a continuing operation basis, and all figures are denominated in RMB unless explicitly specified otherwise. In the second quarter of 2025, we achieved solid momentum across key performance metrics. The revenue reached RMB 539 million, up 9.5% year-over-year. supported by resilience and demand and the continued expression of our cost offerings. Notably, net income in this quarter surged to RMB 126.6 million, with the margin expanding to 23.5%, representing a 54% increase from the same period as the year, and a 68.5% sequential jump. This marks a significant a step change in our learning capacities. Now let's turn to the performance of our Venture Courses programs. Our degree and diploma-oriented post-secondary offerings was the cornerstone of our flexibility modules, now contributed approximately 11% of our total revenue. By intentionally resizing this business line, we have redirected resources to faster growing. higher margin areas that better align with involving learner needs. The adult education landscape in China is undergoing a structural transformation. Learners are shifting from pursuing formal credentials to seeking practical skills, emotional enrichment, and lifelong growth. According to third-party research, the market is expected to exceed RMB1 training by 2027, with a five-year CAGR of 12.6%. Online location, in particular, is projected to grow at 17.3%, reflecting strong momentum behind the digital first, then the centric models. We identified this shift early. Since 2001, we have executed a deliberative transition from a degree-centric approach to three pillar models. degree programs, professional skills, and interest-based learning. This evolution was not a product expression. It redefined our value proposition, grounded in deep user insight and long-term activation. Today, non-degree programs, including professional certifications, practical skills, and interest-based courses, contribute to possibly 77.6% of our total revenue. Among them, interest-based learning has demonstrated exceptional growth, achieving over 15% year-over-year revenue growth. In 2024 and the first half of 2025, the sector recorded the enrollment of over 517,000 and 300,000, respectively. Based on current momentum and visibility, We believe Sunland has established a leading position in China's adult interest-based education sector. The core driver of this growth is our focus on the silver demographic, learners aged 15 to 75, which have emerged as a high potential audience. By the end of this quarter, we have built a private user ecosystem of tens of millions of new users, with over 1 million paying for full-price courses. Based on internal estimates, this segment achieves cost completion rate of around 18%, repurchase rate of over 16%, and satisfaction levels for certain courses generally above 95%. Beyond metrics, our platform has become a meaningful social hub for retirees. Many users, when facing solitude or social ,, are now finding new peer networks, sharing passions, and building lasting connections through online forums and offline . What emerges is a high-impact social graph born from the learning experiences itself, where causes spark conversations, and conversations evolve into communities. This is a multiplier effect of intelligent purpose-driven education. Complimenting this demographic focus is our second growth engine, intelligent personalization powered by AI. If demographic define who we teach, intelligent adaptive technology define how. Our proprietary SaaS platform trained on two acres of adult education data and billions of interactions delivers personalized content, real-time feedback, and dynamically assembled courses are at skill. Besides, we also introduced a Mandarin voice-activated AI assistant that understands no or accented speech for older learners. Embodied as expressive metahumans, this assistant makes learning intuitive intuitive, human, and emotional resident. Guided by our access framework answer, common supervisor study, we ensure consistent support and amenable outcomes. The silver economy is emerging as one of China's most transformative growth frontiers in the stakeholders. With our first mover advantages, proven execution capabilities, and the technology infrastructure refined over two decades. Sunland is uniquely positioned to lead in senior education. We extend our gratitude for your presence today and the continued support you provide. Thank you, and we look forward to your valuable engagement. With that, I will turn the call over to our financial director, Hangyu, to run through our financials.