ATA Creativity Global's Q4 2024: Conflicting Signals on Partnerships, Performance, and Revenue Growth

These are the key contradictions discussed in ATA Creativity Global's latest 2024Q4 earnings call, specifically including: Partnership and Collaboration Strategy, Financial Performance Expectations, Student Demand and Revenue Growth, and Revenue Growth Trajectory:



Revenue Growth and Student Enrollment:
- ATA Creativity Global reported a 20.7% increase in net revenue for Q4 2024, reaching RMB109 million, and a 21% increase for the full year 2024.
- The growth was driven by increased student enrollment in portfolio training programs, research-based learning, and overseas study counseling services.

Operational Efficiency and Strategic Decisions:
- ACG reported a 54.9% increase in net income for Q4 2024 to RMB13.3 million.
- The improvement was due to the discontinuation of the junior art service, which enhanced operational efficiency and led to a lower GM&A expense.

Student Outcomes and Early Admissions:
- ACG's core business portfolio training services recorded a significant increase in student enrollment and credit hour deliveries.
- The positive results are attributed to favorable early admission outcomes for students, with offers and scholarships from prestigious overseas schools.

Gross Profit and Margin Improvement:
- The company's gross profit for Q4 2024 increased by 21.6%, reaching RMB53.7 million, with a slight improvement in gross margin from 62.6% to 63.1%.
- This was primarily due to higher net revenues, despite increased teaching staff costs.

Student Enrollment and Credit Hour Deliveries:
- For full year 2024, ACG's total student enrollment increased by 15.8%.
- The increase in credit hours delivered was driven by the popularity of project-based programs and the demand for portfolio trading services.