QuantaSing Announces Unaudited Financial Results for the First Quarter of Fiscal Year 2025

BEIJING, Nov. 27, 2024 (GLOBE NEWSWIRE) -- QuantaSing Group Limited $(QSG)$ ("QuantaSing" or the "Company"), a leading lifestyle solution provider empowering adults to live better and longer, today announced its unaudited financial results for the first quarter of the fiscal year ending June 30, 2025 (the "first quarter of FY 2025", which refers to the quarter from July 1, 2024 to September 30, 2024).

Highlights for the First Quarter of FY 2025

   -- Revenues for the first quarter of FY 2025 were RMB810.4 million (US$115.5 
      million), representing a decrease of 19.0% from the fourth quarter of the 
      fiscal year ended June 30, 2024 (the "fourth quarter of FY 2024") and a 
      decrease of 6.8% from the first quarter of the fiscal year ended June 30, 
      2024 (the "first quarter of FY 2024"). 
 
   -- Gross billings of individual online learning services1 for the first 
      quarter of FY 2025 were RMB713.7 million (US$101.7 million), representing 
      a decrease of 7.8% from the fourth quarter of FY 2024 and a decrease of 
      6.3% from the first quarter of FY 2024. 
 
   -- Net income for the first quarter of FY 2025 was RMB80.7 million (US$11.5 
      million), compared with RMB196.6 million in the fourth quarter of FY 
      2024, and RMB66.7 million in the first quarter of FY 2024. 
 
   -- Adjusted net income2 for the first quarter of FY 2025 was RMB88.0 million 
      (US$12.5 million), compared with RMB193.6 million in the fourth quarter 
      of FY 2024, and RMB94.0 million in the first quarter of FY 2024. 
 
   -- Total registered users increased by 30.2% to approximately 134.6 million 
      as of September 30, 2024, from 103.3 million as of September 30, 2023. 
 
   -- Paying learners increased by 16.8% year over year to approximately 0.4 
      million in the first quarter of FY 2025. 

Mr. Peng Li, Chairman and Chief Executive Officer of QuantaSing, commented, "Our first quarter performance underscores our strategic pivot towards the burgeoning silver economy in China. This transition is a calculated move designed to align our offerings with the evolving needs of our aging population. While we anticipate some short-term revenue fluctuations as we implement this strategy, we remain committed to maintaining robust profitability and positive cash flow. Our partnerships with community centers and the introduction of integrated products, such as our 'Food as Medicine' line, are pivotal in creating a holistic ecosystem that addresses the lifestyle and wellness demands of older adults. As we advance through fiscal year 2025, our focus will be on establishing sustainable competitive advantages that contribute to long-term value for our shareholders."

Mr. Dong Xie, Chief Financial Officer of QuantaSing, added, "The financial results for the first quarter reflect our commitment to profitability during this strategic transition. We have seen improvements in operational efficiency as we shift from a traffic-driven to a product-driven business model, while also scaling back investments in non-core areas. Our disciplined cost management has resulted in a healthy net margin of 10.0%, and our cash position has strengthened to RMB1,193.7 million as of September 30, 2024. This solid financial foundation provides us with the flexibility to pursue growth opportunities within the silver economy while ensuring we maintain profitability."

Financial Results for the First Quarter of FY 2025

Revenues

Revenues were RMB810.4 million (US$115.5 million) in the first quarter of FY 2025, compared to RMB869.1 in the first quarter of FY 2024. The change was primarily due to a shift in revenue streams as the Company strategically moved towards the silver economy.

   -- Revenues from individual online learning services decreased by 6.2% year 
      over year to RMB709.0 million (US$101.0million) in the first quarter of 
      FY 2025, from RMB755.9 million in the first quarter of FY 2024. This 
      decrease was primarily due to the decline of RMB82.8 million (US$11.8 
      million) in revenues from financial literacy courses and the decline of 
      RMB35.6 million (US$5.1 million) in revenues from recreation and leisure 
      courses3, partially offset by the increase of RMB71.5 million (US$10.2 
      million) in revenues from skills upgrading courses3. 
 
   -- Revenues from enterprise services were RMB47.8 million (US$6.8 million) 
      in the first quarter of FY 2025, compared to RMB68.4 million in the first 
      quarter of FY 2024, representing a year-over year change of 30.2%, 
      primarily due to a change in revenue streams from transactions involving 
      a related party and certain other third parties. 
 
   -- Revenues from consumer business4 increased to RMB49.5 million (US$7.1 
      million) in the first quarter of FY 2025, representing a 10.4% increase 
      from RMB44.8 million in the first quarter of FY 2024, as a result of the 
      Company's expansion into wellness products. 
 
   -- Revenues from others4 were RMB4.1 million (US$0.6 million) in the first 
      quarter of FY 2025, compared to nil in the first quarter of FY 2024, 
      primarily due to revenue generated from the Company's online language 
      education services for children. 

Cost of revenues

Cost of revenues was RMB134.4 million (US$19.2 million) in the first quarter of FY 2025, compared to RMB118.2 million in the first quarter of FY 2024, representing a change of 13.8%. This increase was primarily due to increased labor outsourcing costs of RMB13.8 million (US$2.0 million) and higher procurement costs of RMB4.3 million (US$0.6 million).

Sales and marketing expenses

Sales and marketing expenses were RMB515.0 million (US$73.4 million) in the first quarter of FY2025, compared to RMB620.2 million in the first quarter of FY 2024, representing a decrease of 17.0%. The decrease was mainly due to declines in marketing and promotion expenses of RMB81.6 million (US$11.6 million), labor outsourcing costs of RMB11.2 million (US$1.6 million), and staff costs of RMB9.5 million (US$1.4 million), which includes a decrease in share-based compensation expenses of RMB4.5 million (US$0.6 million).

Research and development expenses

Research and development expenses were RMB28.1 million (US$4.0 million) in the first quarter of FY 2025, compared to RMB43.8 million in the first quarter of FY 2024, representing a decrease of 35.9%. The decrease was primarily due to a decline in staff costs of RMB13.6 million (US$1.9 million), which includes a decrease in share-based compensation expenses of RMB3.7 million (US$0.5 million).

General and administrative expenses

General and administrative expenses were RMB30.6 million (US$4.4 million) in the first quarter of FY 2025, compared to RMB42.8 million in the first quarter of FY 2024, representing a decrease of 28.4%. The decrease was primarily due to a decline in share-based compensation expenses of RMB10.4 million (US$1.5 million).

Net income and adjusted net income

Net income was RMB80.7 million (US$11.5 million) in the first quarter of FY 2025, compared with RMB66.7 million in the first quarter of FY 2024. Adjusted net income was RMB88.0 million (US$12.5 million) in the first quarter of FY 2025, compared with RMB94.0 million in the first quarter of FY 2024.

Earnings per share and adjusted earnings per share(5)

Basic and diluted net income per share were RMB0.52 (US$0.07) and RMB0.50 (US$0.07), respectively, in the first quarter of FY 2025, compared with basic and diluted net income per share of RMB0.39 and RMB0.38, respectively, in the first quarter of FY 2024. Basic and diluted adjusted net income per share were RMB0.56 (US$0.08) and RMB0.55 (US$0.08), respectively, in the first quarter of FY 2025, compared with basic and diluted adjusted net income per share of RMB0.56 and RMB0.54, respectively, in the first quarter of FY 2024.

Balance Sheet

As of September 30, 2024, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1,193.7 million (US$170.1 million), compared with RMB1,026.3 million as of June 30, 2024.

Recent Developments

Payment of a special cash dividend

In October 2024, the Company's board of directors declared a special cash dividend in the amount of US$0.067 per ordinary share, or US$0.201 per American depositary share ("ADS"). The cash dividend was paid in November 2024 to shareholders of record at the close of business on October 30, 2024. The aggregate amount of cash dividends paid was US$10.9 million.

Share repurchase program

On June 11, 2024, the Company announced that its board of directors had approved a share repurchase program of up to US$20.0 million of the Company's Class A ordinary shares in the form of ADSs for a 12-month period beginning on June 11, 2024 (the "2024 Share Repurchase Program"). As of September 30, 2024, a total of 1.7 million ADSs had been repurchased for an aggregate consideration of US$3.5 million under the 2024 Share Repurchase Program.

Conference Call Information

The Company's management team will hold an earnings conference call at 07:00 A.M. Eastern Time on Wednesday, November 27, 2024 (08:00 P.M. Beijing Time on the same day) to discuss the financial results. Listeners may access the call by dialing the following numbers:

 
International:                        1-412-902-4272 
United States Toll Free:              1-888-346-8982 
Mainland China Toll Free:                4001-201203 
Hong Kong Toll Free:                      800-905945 
Conference ID:              QuantaSing Group Limited 
 
 

The replay will be accessible through December 4, 2024 by dialing the following numbers:

 
International:             1-412-317-0088 
United States Toll Free:   1-877-344-7529 
Replay Access Code:               9195244 
 
 

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