Shares of iHuman Inc. $(IH)$ plunged 5.79% in Tuesday's trading session after the Chinese educational technology company reported weaker-than-expected financial results for the fourth quarter and full year of 2024.

The Beijing-based firm, which provides tech-powered intellectual development products, saw its revenue decline 7.1% year-over-year to RMB232.7 million (US$31.9 million) in the fourth quarter. Net income for the quarter fell to RMB26.5 million (US$3.6 million), compared to RMB33.3 million in the same period last year. The company attributed the downturn to "the decline in China's newborn population and more conservative consumer spending."

For the full year 2024, iHuman's financial performance deteriorated further. Annual revenue dropped 9.4% to RMB922.2 million (US$126.3 million), while net income saw a steep decline to RMB98.6 million (US$13.5 million) from RMB180.9 million in 2023. This significant decrease in profitability likely spooked investors, contributing to the sharp sell-off.

Despite the challenging financial results, iHuman's management attempted to highlight positive developments, including the expansion of its AI-integrated features and the success of its animation studio. However, these efforts appear to have done little to assuage investor concerns over the company's declining top and bottom lines in the face of demographic headwinds and changing consumer behavior in China's educational technology sector.