ATA Creativity Global (AACG) 8 Aug 24 2024 Q2 Earnings call transcript

ATA Creativity Global (ACG) held its second quarter 2024 financial results call, highlighting a strong performance in its core portfolio trading services business, driving significant revenue growth and strategic investments in student support and overseas study services. The company's confident outlook for the remainder of the year and long-term growth strategy underscore its commitment to expanding its offerings and fulfilling student needs in a rapidly evolving market.

Financial Highlights and Strategic Investments

ATA Creativity Global reported a total net revenue of RMB 41.8 million for the second quarter of 2024, representing a 42.8% increase from the same period in 2023. This growth was driven by a surge in demand for portfolio trading services, which contributed RMB 40.2 million in revenue, and a 15.8% increase in student enrollment. Gross margin also improved significantly, reaching 49.6%, primarily due to the revenue growth.

The company's strategic investments in expanding its teaching and sales staff have contributed to these results and laid the foundation for future growth. ACG is focused on expanding its business, including research-based learning and overseas study services, as it anticipates continued enrollment growth in the second half of 2024.

A Strong Outlook for the Future

ATA Creativity Global's outlook for the remainder of 2024 is positive, with revenue expectations in the range of RMB 230 million to RMB 235 million. This growth strategy includes a focus on expanding the student base, exploring potential acquisition opportunities, and continuing to provide high-quality education services that cater to the evolving needs of students.

The company's commitment to fostering a collaborative relationship with world-renowned institutions and offering unique learning experiences, such as the United Nations Sustainable Development Goals Arts Boot Camp, demonstrates its dedication to providing students with a well-rounded education and strong foundation for success.

Conclusion

ATA Creativity Global's strong financial performance in the second quarter of 2024, coupled with its strategic investments and positive outlook for the remainder of the year, underscore its position as a leading player in China's creative arts education market. The company's focus on expanding its offerings and supporting students in their educational journeys positions it well for continued growth and success in the future. As ACG enters the overseas study application season, it remains committed to its mission of enabling positive student outcomes and driving success for its students and shareholders.