Sunlands Technology Group (NYSE:STG) Q3 2023 Earnings Call Transcript
Sunlands Technology Group (NYSE:STG) Q3 2023 Earnings Call Transcript November 22, 2023
Operator: Ladies and gentlemen, thank you for standing by, and welcome to Sunlands' Third Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host today, Yuhua, Sunlands' IR representative. Please go ahead.
Yuhua Ye: Hello, everyone, and thank you for joining Sunlands' third quarter 2023 earnings conference call. The company's financial and operating results were issued in our press release via newswire services earlier today and are posted online. You can 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. Hangyu 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 Sunlands' safe harbor statement in relation to today's call. Except for the historical information contained herein, certain of the matters discussed in this conference call are forward-looking statements.
A modern student in a classroom with a laptop, symbolizing the modern education environment.
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 uncertainties, please refer to the company's filings with the Securities and Exchange Commission. With that, I will now turn the call over to our CEO, Tongbo Liu.
Tongbo Liu: Thank you, Yuhua. Hello, everyone. Welcome to Sunlands' third quarter 2023 conference call. Prior to commencing, I would like to kindly remind all attendees that the financial information referenced in this release are presented on a continuing operations basis, and all figures are denominated in RMB, unless explicitly specified otherwise. In Q3, our business has consistently adjusted to the evolving economic landscape and has strategically progressed despite the challenges. Our overarching objective of propelling the group toward sustained and high-level profitability has yielded positive results, as we maintained sizable net profits for ten consecutive quarters. Net income reached RMB131.6 million. Net revenues, despite a slight year-over-year decrease, exceeded the high-end of our guidance range and reached RMB524.6 million.
We were also pleased to see our ongoing efforts to optimize our product structure and expand our course portfolio rewarded with enhanced operational results, reflected in a 14.3% year-over-year increase in our new student enrollments and a 6.7% year-over-year increase in gross billings. We are delighted in our capability to remain profitable under challenging environment. This success is attributed to improvements in gross margins, the implementation of cost-cutting measures, and enhanced financial planning and analysis across the entire business. Our cost of revenues has achieved a year-over-year decrease of 24.5%, and G&A expenses have achieved a year-over-year decrease of 21%. We firmly believe that only by adhering to a long-term perspective and ensuring the healthy growth of the enterprise can we create sustainable value for shareholders and users.
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