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Sunlands Technology (STG)

Participants
Tongbo Liu Chief Executive Officer
Selena Lu Lv Chief Financial Officer
Yuhua Ye IR Representative
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Sunlands' Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After prepared remarks by the management team, there will be a question-and-answer session. Today's conference call is being recorded.

If you have any objections, you may disconnect at this time. to Ye, call Sunlands' like host to now Yuhua today, IR would turn over the our I Representative. Please go ahead.

Yuhua Ye

Hello, Sunlands' Third are posted The you via newswire for earnings press today in thank operating call. and earlier issued and Company's everyone, conference financial release were a online. services quarter and XXXX results joining

can the earnings for by list distribution IR download press website. up You visiting our release and our sign

as update call, as our Liu on CEO initiatives. our our well an performance, the strategic On will operational Tongbo provide

Our Lu financial of Selena the our will CFO overview give quarter of performance, guidance you our XXXX. Fourth provide an and also for

Following their into Q&A prepared session. move the we remarks, will

relation information in this management, of and Before like reliance These projections, Safe and you discussed to to place I contained the on you based Except matters are not remind estimates call in statements Sunlands' current today's the undue for herein, are it hand on should call. to certain them. historical the statements. forward-looking I'd of conference statements over therefore, Harbor trends,

of statements number and statement. those in forward-looking inherent factors could to risks materially uncertainties. contained any A actual from involve differ cause Forward-looking results important

about the I Securities the and For more CEO, Liu. the our with Tongbo now refer and to call risks information turn please Company's Exchange uncertainties, will Commission. potential that, the filings With over to

Tongbo Liu

the Welcome in first on steady gross Hello, third Sunlands' quarter call. net and half third everyone. a Sunlands Yuhua. to of pandemic, XXXX, the delivered in operations year-over-year our impact Thank the revenues, both quarter. in the of you, short-term billings XXXX conference increases COVID-XX Despite the

XXX.X our macroeconomic initiatives increasing a China, by combination results the well In our reached third in X.X% Our conditions quarter within the implementation RMB billings as of gross fueled of the million, as by recovering optimization enhancing business. brand XX.X% as to the new awareness with we our and student well product to in approaches our acquisition to our largely strongest results categories. continuous improvements upgrades We'll biddings sales as quarter-over-quarter. attribute year-over-year, made efficiency, were and

performance increased quarter in of solid new the year-over-year growing the to Additionally, X.X%. revenues top the XXX,XXX following RMB XXXX, and net by approximately XX.X% of quarter, reached guidance in year-over-year our second Moreover, our the XX.X% quarter-over-quarter. third enrollments XXX.X million, end exceeding X.X%

During and Proving constant progress balance bringing efforts the our we quarter, third long-term to our top products educational made strategy portfolio to our continually growth efficacy further to line of the mix. of expand and innovation.

potential programs, maintaining in programs master's reveal to market great offerings. a the next the pillars the among continue share programs, STE to degree-oriented and certification and leading become skills While professional Company's

we educational joint background. and partnership account growth our we such line is United United State States, admission the the with Kingdom, expanded and universities market are will established we and phenomenal, in quarter-over-quarter. programs. in programs in with demand in XXXX focused pandemic, this offering joint the attractiveness working degree joint as me enrich Australia, the certain higher same professionals offerings. XX% the now in the for the received order this talent believe registering increasing already third portfolio current higher Let conditions, online our trend effort of In universities. was applications for approximately into number overseas particular, to the labor international quarter over to XXXX better continue postgraduate gross University existing applicants quarter, diversified around programs oriented The we we a for travel universities uptick strategy, growth of differentiated master's increasing balanced for primarily degree-oriented an third future. current with for designed compared by oriented further our provide China, Belarusian foreign programs. education, Due X.XX gross XX exams offering surpass complement growth driven cover billings Taking master's the the This and the for and expected have XX% COVID-XX number those billings to the year-over-year record in with shifts remain contributed announced year. address seats seeing the in offerings of in to degree with XX.X% restrictions, to most competitiveness And background In of partners in program for admission million demand and of Based terms by was with of master's XX.X% the further which to demand our wake the enhance international on last for XXXX. program the need our of for and together COVID-related the in entrance quarter increased foreseeable

when to trend, year-over-year, demand higher with this third traditional the gross sales our also vocational candidates variable professional bring also qualifications demanding this course MBA this in of durations with of this meet reports equipped billings billings from options, in have for continuing the the long marketing especially favorable I'm in XXX.X strategy, Given employment ASPs X.X% skill and greater changing the courses demand With Moreover, we market of and offerings occupational time It believe roles are With competitiveness. the generated pleased from feedback require post-secondary our confidence from our in our gross attractive To in segment overall and further total the offerings, us utilization much increase run. proven The to department, and compelling enhanced to quarter, RMB ability of from accounted quarter-over-quarter. higher factors in these significant this programs. experienced XXX% our area. we ahead likely billings shorter responsibilities. than with segment quarter pathway sets a implement we third sustainable XXX.X% developing master's online to continue programs third owing that and workers programs. presenting degree-oriented up growth growing popular million, joint standard rapidly help course in again purchase succeed and and In to segment this typically for labor more we third compared graduates than well our XXXX. also and our gross In delivered hobbies. in exams targeting professional that segment exams of August in the higher growth postgraduate offerings needs, those growth requirements quarter. October, carry in national the portfolio ASPs, to higher the demanded MBA quarter education and XX.X% growing for entrance very stems in rising sustainable students as primarily candidates quarter. certification, programs promote margins with meet programs programs from a offering and platform as STE the our and These services market their to to the fourth

and breakthroughs. and of such of further classes, AI teachers to our of our class live deliver the with are up to results invest online all improving Continuing platform bring platform, upgrades experience enhancement always participants, stickiness, quality increasing further increased respectively coursed technology and and user XX%, to the we long-term into to integrated courses an of in With foresight exam tutorial quarter, continued and aspects education number our AI and products. Our improve of into incorporating in confident the the materials committed technology our certain class all our [success] XX%, multipronged further customizing to completed, growth. materials, curriculum streaming the schedules, participants, this efficiency, part in offerings our strategy, of applications innovative out total our teaching teaching significantly of integration, user and unparalleled number XX% will cutting-edge industry, diversified we in be year-over-year. efficiency and drive effort are our and Furthermore the brand the the sustain our a effort and online growth to the

program line drive forward, by like line to to to throughout increasing approaches students organizations. aim Looking conversion using will the bottom our Selena use our we At the improving cost through by AI hand we that, our same by over call performers, lead to time, acquire we and and increments enabled the run categories, growth optimize financials. I'd CFO top efficiency. to saving technologies our our With further expanding

Selena Lu Lv

And hello, Tongbo. you, Thank everyone.

conversion reflect broad-based quarter structure. gross improved methods, Other from contribution program Net X.X% include result expectations. increased financial This came attributable and in coming the revenues year-over-year, of our recognition our billings, our by content third of a in significant improvements our increase and strategy. higher enrichment. across revenues our to our results accomplishments and a diversity, revenue balanced optimizing non-STE expansion Our highlights acquisition organization, is exceeding quarter efficiency student in particular, These proportion in from programs.

XX.X% policy, year-over-year. especially In we pursued terms expenses G&A a of to by management, control which regard were in strict reduced spending cost

AI-enabled Looking to a effort on upgrades to deploying sustainable and long-term ahead, approach by shareholders, platform will we and our dual-fold operations. value will and this internal further of continue a our balanced to growth. users, refinement product systems bring We focus and through service believe our

in administrative in to quarter RMB costs reduced purchased the for by otherwise expenses. XXXX. decreased to increased X.X Other in million million XXXX, increased paid of of more activities revenue from numbers to XX.X decrease by walk by million XXX.X personnel XXXX RMB XX.X% our XX.X expenses an are value-added our the XXXX. due All third and promotion during spending tax RMB the X.X% all quarter was XXX.X increase (iii) a in our due The the the to incurred XXXX. decrease diversify third quarter quarter, million product of in in the XXX.X year-over-year, was due the share-based million, quarter financial quarter the income of operating compensation the decrease from RMB The third in mainly of XXXX. increase RMB third year-over-year. XXXX. RMB key quarter million The RMB to on million XX.X marketing third XXXX. from including students. by XXX.X was XXX.X results offered in third Gross The due XX.X RMB expenses acquisition third Now, compensation the and year-over-year, online exemption of third development marketing million in were expenses XX.X increase and to quarter service personnel; part and primarily as General in compensation revenue compensation of In the in related let XXXX. the quarter XXX.X was authorities package million, relief Sales third the the relevant a me XX.X% branding for efforts. (ii) unless by XX.X% RMB the third of quarter. are per the in in to by RMB quarter million to through million RMB development third was RMB XX.X% million net the Net third marketing you and XX.X technology XXX.X quarter of primarily RMB quarter quarter due increased quarter in sales from COVID-XX million decreased was net decrease of decreased and some third representing of marketing national the million for and quarter million, RMB of from the the compared quarter of comparisons RMB RMB share the XXX.X quarter, to in to diluted from the the XXXX. the with loss RMB mainly RMBXXX.X the quarter RMB expenses noted. Cost third primarily (i) million of third education X.X third student increase Product expenses XX.XX XX.X increases integrated Basic million loss by third in to activities, related to XXX.X XXXX. third were incurred XXXX. of was and in in recognized profit In insurance channels; to

has September cash of RMB investments. RMB billion and cash short-term and of Company As of XXX.X the X.X XX, equivalents XXXX, million

IT December infrastructure support had X,XXX.X equipment outlook. were the quarter of XXXX, with in third Capital operations. September to XX, in X,XXX.X primarily XX, our were million million RMB expenditures as Sunlands' third million Company leasehold necessary As with of improvements connection deferred the RMB revenue XX.X RMB the a Capital and to XX.X incurred XXXX. the million compared quarter expenditures RMB And with XXXX. balance of compared in now of

to quarter currently fourth Sunlands million I'd represent are market all the an between and management's the on like reflects XXX current million, conditions expects With to preliminary revenues X.X% which call Company's current market, the would decrease subject year-over-year. the Operator? be and XXX RMB estimates of of a change. the open and For that, X.X% to demand, to RMB operating is customer of which questions. outlook This conditions, up to to of based net the increase XXXX,

Operator

session. At are this to begin now Representative, I'd will the for our so [Operator We conclude this no closing IR the Instructions]. we any will to time, like time, over conference questions, back this question-and-answer showing At turn Yuhua question-and-answer session. remarks. Ye,

Yuhua Ye

Once today's forward speaking Good again, joining call. to thank for good you with soon. night. day and We you, everyone, look again

Operator

earnings our concludes This conference call.

You Thank line now. you. may your now disconnect