Second Quarter 2026 Financial and Operational Snapshots
- Net revenues were
RMB406.4 million (US$59.9 million ), compared toRMB539.0 million in the second quarter of 2025. - Gross billings (non-GAAP) were
RMB286.2 million (US$42.2 million ), compared toRMB400.3 million in the second quarter of 2025. - Gross profit was
RMB349.2 million (US$51.5 million ), compared toRMB469.4 million in the second quarter of 2025. - Net income was
RMB83.5 million (US$12.3 million ), compared toRMB126.6 million in the second quarter of 2025. - Net income margin1 was 20.5%, compared to 23.5% in the second quarter of 2025.
- New student enrollments2 were 95,280, compared to 159,154 in the second quarter of 2025.
- As of
June 30, 2026 , the Company’s deferred revenue balance wasRMB433.5 million (US$63.9 million ), compared toRMB585.3 million as ofDecember 31, 2025 .
___________________________
1 Net income margin is defined as net income as a percentage of net revenues.
2 New student enrollments for a given period refer to the total number of orders placed by students that newly enroll in at least one course during that period, including those students that enroll and then terminate their enrollment with us, excluding orders of our low-price courses, such as “mini courses” and “RMB1 courses”, which we offer in the form of recorded videos or short live streaming, to strengthen our competitiveness and improve customer experience.
Mr.
Mr.
Financial Results for the Second Quarter of 2026
Net Revenues
In the second quarter of 2026, net revenues decreased by 24.6% to
Cost of Revenues
Cost of revenues decreased by 17.9% to
Gross Profit
Gross profit decreased by 25.6% to
Operating Expenses
In the second quarter of 2026, operating expenses were
Sales and marketing expenses decreased by 24.5% to
General and administrative expenses decreased by 4.0% to
Product development expenses decreased by 20.8% to
Net Income
Net income for the second quarter of 2026 was
Basic and Diluted Net Income Per Share
Basic and diluted net income per share was
Cash, Cash Equivalents and Short-term Investments
As of
Deferred Revenue
As of
Share Repurchase
On
Financial Results for the First Six Months of 2026
Net Revenues
In the first six months of 2026, net revenues decreased by 17.5% to
Cost of Revenues
Cost of revenues decreased by 17.8% to
Gross Profit
Gross profit decreased by 17.5% to
Operating Expenses
In the first six months of 2026, operating expenses were
Sales and marketing expenses decreased by 22.0% to
General and administrative expenses increased by 0.1% to
Product development expenses decreased by 8.3% to
Net Income
Net income for the first six months of 2026 was
Basic and Diluted Net Income Per Share
Basic and diluted net income per share was
Outlook
For the third quarter of 2026,
Exchange Rate
The Company’s business is primarily conducted in
About
About Non-GAAP Financial Measures
We use gross billings, EBITDA, non-GAAP operating cost and expenses, non-GAAP income from operations and non-GAAP net income per share, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes.
We define gross billings for a specific period as the total amount of cash received for the sale of course packages, net of the total amount of refunds paid in such period. Our management uses gross billings as a performance measurement because we generally bill our students for the entire course tuition at the time of sale of our course packages and recognize revenue proportionally over a period. EBITDA is defined as net income excluding depreciation and amortization, interest expense, interest income, and income tax expenses. Adjusted EBITDA is defined as net income excluding depreciation and amortization, interest expense, interest income, income tax expenses and impairment loss on long-lived assets. We believe that gross billings, EBITDA and adjusted EBITDA provide valuable insight into the sales of our course packages and the performance of our business.
These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, their most directly comparable financial measures prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP measure has been provided in the tables included below. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP financial measures. As gross billings, EBITDA, adjusted EBITDA, operating cost and expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, sales and marketing expenses excluding share-based compensation expenses, product development expenses excluding share-based compensation expenses, income from operations excluding share-based compensation expenses, and basic and diluted net income per share excluding share-based compensation expenses have material limitations as an analytical metric and may not be calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider gross billings, EBITDA and adjusted EBITDA as a substitute for, or superior to, their respective most directly comparable financial measures prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.
Safe Harbor Statement
This press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Sunlands may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Sunlands' beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: Sunlands' goals and strategies; its expectations regarding demand for and market acceptance of its brand and services; its ability to retain and increase student enrollments; its ability to offer new courses and educational content; its ability to improve teaching quality and students’ learning results; its ability to improve sales and marketing efficiency and effectiveness; its ability to engage, train and retain new faculty members; its future business development, results of operations and financial condition; its ability to maintain and improve technology infrastructure necessary to operate its business; competition in the online education industry in China; relevant government policies and regulations relating to Sunlands’ corporate structure, business and industry; and general economic and business condition in China. Further information regarding these and other risks, uncertainties or factors is included in Sunlands' filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Sunlands does not undertake any obligation to update such information, except as required under applicable law.
For investor and media enquiries, please contact:
Sunlands Technology Group
Investor Relations
Email: sl-ir@sunlands.com
SOURCE: Sunlands Technology Group
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except for share and per share data, or otherwise noted) | ||||||
| As of | As of | |||||
| 2025 | 2026 | |||||
| RMB | RMB | US$ | ||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 575,740 | 520,635 | 76,732 | |||
| Restricted cash | 1,023 | - | - | |||
| Short-term investments | 235,937 | 336,876 | 49,649 | |||
| Prepaid expenses and other current assets | 82,566 | 93,852 | 13,832 | |||
| Deferred costs, current | 22,125 | 14,029 | 2,068 | |||
| Total current assets | 917,391 | 965,392 | 142,281 | |||
| Non-current assets | ||||||
| Property and equipment, net | 662,178 | 528,254 | 77,855 | |||
| Intangible assets, net | 250 | 95 | 14 | |||
| Right-of-use assets | 99,111 | 94,324 | 13,902 | |||
| Deferred costs, non-current | 10,643 | 6,502 | 958 | |||
| Long-term investments | 318,791 | 339,178 | 49,989 | |||
| Deferred tax assets | 19,104 | 17,149 | 2,527 | |||
| Other non-current assets | 19,750 | 18,274 | 2,693 | |||
| Total non-current assets | 1,129,827 | 1,003,776 | 147,938 | |||
| TOTAL ASSETS | 2,047,218 | 1,969,168 | 290,219 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| LIABILITIES | ||||||
| Current liabilities | ||||||
| Accrued expenses and other current liabilities | 366,011 | 317,064 | 46,730 | |||
| Deferred revenue, current portion | 384,334 | 266,443 | 39,269 | |||
| Lease liabilities, current portion | 9,104 | 9,347 | 1,378 | |||
| Total current liabilities | 759,449 | 592,854 | 87,377 | |||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-continued (Amounts in thousands, except for share and per share data, or otherwise noted) | |||||||||
| As of | As of | ||||||||
| 2025 | 2026 | ||||||||
| RMB | RMB | US$ | |||||||
| Non-current liabilities | |||||||||
| Deferred revenue, non-current portion | 200,960 | 167,011 | 24,614 | ||||||
| Lease liabilities, non-current portion | 129,564 | 123,761 | 18,240 | ||||||
| Deferred tax liabilities | 5,786 | 9,596 | 1,414 | ||||||
| Other non-current liabilities | 7,392 | 6,650 | 980 | ||||||
| Total non-current liabilities | 343,702 | 307,018 | 45,248 | ||||||
| TOTAL LIABILITIES | 1,103,151 | 899,872 | 132,625 | ||||||
| SHAREHOLDERS’ EQUITY | |||||||||
| Class A ordinary shares (par value of | |||||||||
| authorized; 3,131,807 and 3,131,807 shares issued as of | |||||||||
| and | |||||||||
| outstanding as of | 1 | 1 | - | ||||||
| Class B ordinary shares (par value of | |||||||||
| authorized; 826,389 and 826,389 shares issued and outstanding | |||||||||
| as of | - | - | - | ||||||
| Class C ordinary shares (par value of | |||||||||
| authorized; 3,332,062 and 3,332,062 shares issued and outstanding | |||||||||
| as of | 1 | 1 | - | ||||||
| - | - | - | |||||||
| Statutory reserves | 22,440 | 22,440 | 3,307 | ||||||
| Accumulated deficit | (1,486,011 | ) | (1,325,704 | ) | (195,385 | ) | |||
| Additional paid-in capital | 2,287,553 | 2,273,605 | 335,088 | ||||||
| Accumulated other comprehensive income | 121,570 | 100,440 | 14,803 | ||||||
| Total | 945,554 | 1,070,783 | 157,813 | ||||||
| Non-controlling interest | (1,487 | ) | (1,487 | ) | (219 | ) | |||
| TOTAL SHAREHOLDERS’ EQUITY | 944,067 | 1,069,296 | 157,594 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 2,047,218 | 1,969,168 | 290,219 | ||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) | |||||||||
| For the Three Months Ended | |||||||||
| 2025 | 2026 | ||||||||
| RMB | RMB | US$ | |||||||
| Net revenues | 539,015 | 406,367 | 59,891 | ||||||
| Cost of revenues | (69,641 | ) | (57,201 | ) | (8,430 | ) | |||
| Gross profit | 469,374 | 349,166 | 51,461 | ||||||
| Operating expenses | |||||||||
| Sales and marketing expenses | (302,527 | ) | (228,378 | ) | (33,659 | ) | |||
| Product development expenses | (6,946 | ) | (5,498 | ) | (810 | ) | |||
| General and administrative expenses | (33,150 | ) | (31,811 | ) | (4,688 | ) | |||
| Total operating expenses | (342,623 | ) | (265,687 | ) | (39,157 | ) | |||
| Income from operations | 126,751 | 83,479 | 12,304 | ||||||
| Interest income | 6,734 | 5,753 | 848 | ||||||
| Interest expense | (273 | ) | - | - | |||||
| Other income, net | 7,240 | 8,314 | 1,225 | ||||||
| Gain on disposal of subsidiaries | - | 661 | 97 | ||||||
| Income before income tax expenses | |||||||||
| and loss from equity method investments | 140,452 | 98,207 | 14,474 | ||||||
| Income tax expenses | (13,550 | ) | (14,158 | ) | (2,087 | ) | |||
| Loss from equity method investments | (257 | ) | (589 | ) | (87 | ) | |||
| Net income | 126,645 | 83,460 | 12,300 | ||||||
| Less: Net loss attributable to non-controlling interest | - | - | - | ||||||
| Net income attributable to | 126,645 | 83,460 | 12,300 | ||||||
| Net income per share attributable to ordinary shareholders of | |||||||||
| Basic and diluted | 18.75 | 12.58 | 1.85 | ||||||
| Weighted average shares used in calculating net income | |||||||||
| per ordinary share: | |||||||||
| Basic and diluted | 6,753,895 | 6,633,622 | 6,633,622 | ||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) | |||||||||
| For the Three Months Ended | |||||||||
| 2025 | 2026 | ||||||||
| RMB | RMB | US$ | |||||||
| Net income | 126,645 | 83,460 | 12,300 | ||||||
| Other comprehensive (loss)/gain, net of tax effect of nil: | |||||||||
| Change in cumulative foreign currency translation adjustments | (7,885 | ) | (12,510 | ) | (1,844 | ) | |||
| Unrealized gain on available-for-sale investments, net of tax effect of nil | 11,311 | 6,510 | 959 | ||||||
| Total comprehensive income | 130,071 | 77,460 | 11,415 | ||||||
| Less: comprehensive income attributable to non-controlling interest | - | - | - | ||||||
| Comprehensive income attributable to | 130,071 | 77,460 | 11,415 | ||||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) | ||||||
| For the Three Months Ended | ||||||
| 2025 | 2026 | |||||
| RMB | RMB | |||||
| Net revenues | 539,015 | 406,367 | ||||
| Less: other revenues | (60,566 | ) | (51,826 | ) | ||
| Add: tax and surcharges | 19,761 | 12,928 | ||||
| Add: ending deferred revenue | 814,277 | 433,454 | ||||
| Add: ending refund liability | 77,942 | 43,368 | ||||
| Less: beginning deferred revenue | (891,617 | ) | (500,548 | ) | ||
| Less: beginning refund liability | (98,516 | ) | (57,553 | ) | ||
| Gross billings (non-GAAP) | 400,296 | 286,190 | ||||
| Net income | 126,645 | 83,460 | ||||
| Add: income tax expenses | 13,550 | 14,158 | ||||
| Add: depreciation and amortization | 7,205 | 4,783 | ||||
| Add: interest expense | 273 | - | ||||
| Less: interest income | (6,734 | ) | (5,753 | ) | ||
| EBITDA (non-GAAP) | 140,939 | 96,648 | ||||
| Add: Impairment loss on long-lived assets | - | - | ||||
| Adjusted EBITDA (non-GAAP) | 140,939 | 96,648 | ||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) | |||||||||
| For the Six Months Ended | |||||||||
| 2025 | 2026 | ||||||||
| RMB | RMB | US$ | |||||||
| Net revenues | 1,026,640 | 847,027 | 124,836 | ||||||
| Cost of revenues | (141,977 | ) | (116,740 | ) | (17,205 | ) | |||
| Gross profit | 884,663 | 730,287 | 107,631 | ||||||
| Operating expenses | |||||||||
| Sales and marketing expenses | (602,971 | ) | (470,238 | ) | (69,305 | ) | |||
| Product development expenses | (13,188 | ) | (12,092 | ) | (1,782 | ) | |||
| General and administrative expenses | (67,609 | ) | (67,680 | ) | (9,975 | ) | |||
| Total operating expenses | (683,768 | ) | (550,010 | ) | (81,062 | ) | |||
| Income from operations | 200,895 | 180,277 | 26,569 | ||||||
| Interest income | 12,141 | 10,973 | 1,617 | ||||||
| Interest expense | (680 | ) | - | - | |||||
| Other income, net | 13,857 | 12,955 | 1,909 | ||||||
| Gain on disposal of subsidiaries | - | 661 | 97 | ||||||
| Income before income tax expenses | |||||||||
| and loss from equity method investments | 226,213 | 204,866 | 30,192 | ||||||
| Income tax expenses | (23,324 | ) | (42,963 | ) | (6,332 | ) | |||
| Loss from equity method investments | (1,068 | ) | (1,596 | ) | (235 | ) | |||
| Net income | 201,821 | 160,307 | 23,625 | ||||||
| Less: Net loss attributable to non-controlling interest | - | - | - | ||||||
| Net income attributable to | 201,821 | 160,307 | 23,625 | ||||||
| Net income per share attributable to ordinary shareholders of | |||||||||
| Basic and diluted | 29.87 | 24.05 | 3.54 | ||||||
| Weighted average shares used in calculating net income | |||||||||
| per ordinary share: | |||||||||
| Basic and diluted | 6,756,532 | 6,664,889 | 6,664,889 | ||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) | |||||||||
| For the Six Months Ended | |||||||||
| 2025 | 2026 | ||||||||
| RMB | RMB | US$ | |||||||
| Net income | 201,821 | 160,307 | 23,625 | ||||||
| Other comprehensive (loss)/gain, net of tax effect of nil: | |||||||||
| Change in cumulative foreign currency translation adjustments | (11,481 | ) | (21,666 | ) | (3,193 | ) | |||
| Unrealized gain on available-for-sale investments, net of tax effect of nil | 52 | 536 | 79 | ||||||
| Total comprehensive income | 190,392 | 139,177 | 20,511 | ||||||
| Less: comprehensive income attributable to non-controlling interest | - | - | - | ||||||
| Comprehensive income attributable to | 190,392 | 139,177 | 20,511 | ||||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) | ||||||
| For the Six Months Ended | ||||||
| 2025 | 2026 | |||||
| RMB | RMB | |||||
| Net revenues | 1,026,640 | 847,027 | ||||
| Less: other revenues | (119,486 | ) | (112,355 | ) | ||
| Add: tax and surcharges | 42,051 | 29,151 | ||||
| Add: ending deferred revenue | 814,277 | 433,454 | ||||
| Add: ending refund liability | 77,942 | 43,368 | ||||
| Less: beginning deferred revenue | (916,510 | ) | (585,294 | ) | ||
| Less: beginning refund liability | (112,342 | ) | (64,393 | ) | ||
| Gross billings (non-GAAP) | 812,572 | 590,958 | ||||
| Net income | 201,821 | 160,307 | ||||
| Add: income tax expenses | 23,324 | 42,963 | ||||
| Add: depreciation and amortization | 14,423 | 11,953 | ||||
| Add: interest expense | 680 | - | ||||
| Less: interest income | (12,141 | ) | (10,973 | ) | ||
| EBITDA (non-GAAP) | 228,107 | 204,250 | ||||
| Add: Impairment loss on long-lived assets | - | - | ||||
| Adjusted EBITDA (non-GAAP) | 228,107 | 204,250 | ||||
