Q4 2025 ATA Creativity Global Earnings Call

March 26, 2026

Speaker #1: Greetings. Welcome to ATA Creativity Global Q4 quarter and year-end 2025 financial results call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

Operator: Greetings. Welcome to ATA Creativity Global Q4 and year-end 2025 financial results call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Alice Zhang for The Equity Group. Please proceed.

Speaker #1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to Alice Zhang for the Equity Group.

Speaker #1: Please proceed.

Speaker #2: Thank you, operator. Good evening to all of you joining us from the United States, and good morning to all of you joining us from China.

Alice Zhang: Thank you, operator. Good evening to all of you joining us from the United States, and good morning to all of you joining us from China. Please be advised that the discussions on today's call may include forward-looking statements. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the company's most recent SEC filings for a more complete description of risk factors that could affect its projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events, or otherwise. Regarding the disclaimer language, I would also like to refer you to slide 2 of the conference call presentation, which is accessible via the IR section of ACG's website.

Speaker #2: Please be advised that the discussions on today's call may include forward-looking statements. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

Speaker #2: Please refer to the company's most recent SEC filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events, or otherwise.

Speaker #2: Regarding the disclaimer language, I would also like to refer you to slide 2 of the conference call presentation, which is accessible via the IR section of ACG's website.

Alice Zhang: Regarding the disclaimer language, I would also like to refer you to slide 2 of the conference call presentation, which is accessible via the IR section of ACG's website. Simultaneous audio webcast is also accessible via the IR section of ACG's website, including the replay, which will be available for the next 90 days. ACG's Chairman and CEO, Mr. Kevin Ma, will start this call by highlighting the company's Q4 2025 key operational achievements and financial highlights. CFO Mr. Ruobai Sima will provide an overview of financial and operating results for Q4 2025 and full year 2025.

Speaker #2: A simultaneous audio webcast is also accessible via the IR section of ACG's website, including a replay, which will be available for the next 90 days.

Alice Zhang: Simultaneous audio webcast is also accessible via the IR section of ACG's website, including the replay, which will be available for the next 90 days. ACG's Chairman and CEO, Mr. Kevin Ma, will start this call by highlighting the company's Q4 2025 key operational achievements and financial highlights. CFO Mr. Ruobai Sima will provide an overview of financial and operating results for Q4 2025 and full year 2025. President Mr. Jun Zhang will conclude the prepared remarks with an update on the company's long-term growth strategy before opening the floor for questions. For those of you following the accompanying slide presentation, please refer to the slides for further details. With that, I'll turn the call over to ACG's Chairman and CEO, Mr. Kevin Ma. Please go ahead, Mr. Ma.

Speaker #2: ACG's Chairman and CEO, Mr. Kevin Ma, will start this call by highlighting the company's fourth quarter 2025 key operational achievements and financial highlights. Thereafter, Mr. Ruobai Sima will provide an overview of financial and operating results for the fourth quarter 2025 and full year 2025.

Speaker #2: President Mr. Jun Zhang will conclude the prepared remarks with an update on the company's long-term growth strategy before opening the floor for questions. For those of you following the company's slide presentation, please refer to the slides for further details.

Alice Zhang: President Mr. Jun Zhang will conclude the prepared remarks with an update on the company's long-term growth strategy before opening the floor for questions. For those of you following the accompanying slide presentation, please refer to the slides for further details. With that, I'll turn the call over to ACG's Chairman and CEO, Mr. Kevin Ma. Please go ahead, Mr. Ma.

Speaker #2: With that, I'll turn the call over to ACG's Chairman and CEO, Mr. Kevin Ma. Please go ahead, Mr. Kevin Ma.

Speaker #3: Thank you, Alice. And welcome, everyone, to the evening introducing American. We appreciate everyone's time. As Alice mentioned, please refer to our earnings take, available on the IR site of our website.

Kevin Ma: Thank you, Alice, and welcome everyone. Good evening to those in America. We appreciate everyone's time. As Alice mentioned, please refer to our earnings deck available on the IR site of our website as we go through our prepared remarks. As we have discussed in previous quarters, 2025 overall student demand normalized following the surge of student enrollment in the previous year. While we report lower total revenues during Q4 2025 as compared to the same period of last year, revenues from research-based learning and other educational services increased year over year, primarily as we hosted more projects and provided more service to institutional partners.

Speaker #3: As we go through our prepared remarks, as we have discussed in previous quarters, 2025 overall student demand normalized following the super of student elements in the previous year.

Speaker #3: While we report lower total revenues during fourth quarter 2025 as compared to the same period of last year, revenues from research-based learning and other educational services increased year over year, primarily as we hosted more projects and provided more service to institutional partners in fourth quarter 2025 due to cost-saving initiatives we have been implementing, resulting in streamlined operations compared to fourth quarter 2024.

Kevin Ma: In Q4 2025, due to cost-saving initiatives we have been implementing and resulting streamlined operations compared to Q4 2024, we reported 15.7% lower operating expenses, including a one-time goodwill impairment charge in Q4 2025. For fiscal year 2025, despite overall normalized market demand, total revenues were stable, supported by our core portfolio training service and increased the contribution from research-based learning, overseas study counseling, and other educational service. Full year 2025 was also marked by lower operating expenses as compared to full year 2024. During Q4 2025, our main revenue contributor remained the portfolio training service, accounting for 68.8% of total net revenue.

Speaker #3: We reported a 15.7% lower operating expense, including a one-time goodwill impairment charge, in quarter four 2025. For fiscal year 2025, despite overall normalized market demand, total revenues were stable, supported by our core portfolio training services and increased contribution from research-based learning.

Speaker #3: Over this study, concerning and other educational services, full year 2025 was also marked by lower operating expenses as compared to full year 2024. During fourth quarter 2025, our main revenue contributor remained a portfolio training service, accounting for 68.8% of total net revenue.

Kevin Ma: During Q4 2025, our main revenue contributor remained the portfolio training service, accounting for 68.8% of total net revenue. Project-based programs have become the dominant choice for our students, accounting for 74.9% of total credit hours delivered, with 66.8% in Q4 2024. Revenues from research-based learning and overseas study counseling increased by 4.6% during Q4 2025 as a result of more service delivered for in-school art classes in partnership with schools. During Q4 2025, our highly diversified research-based learning services continued to gain student interest, especially during the winter vacation, when students have the time to participate in more intense projects, either in person or online.

Speaker #3: Project-based programs have become the domain choice for our students, accounting for 74.9% of total credit hours delivered, with 66.8% in fourth quarter 2024. Revenues from research-based learning and overseas study concerning increased by 4.6% during fourth quarter 2025, as a result of more service delivered for in-school art classes in partnership schools.

Kevin Ma: Project-based programs have become the dominant choice for our students, accounting for 74.9% of total credit hours delivered, with 66.8% in Q4 2024. Revenues from research-based learning and overseas study counseling increased by 4.6% during Q4 2025 as a result of more service delivered for in-school art classes in partnership with schools. During Q4 2025, our highly diversified research-based learning services continued to gain student interest, especially during the winter vacation, when students have the time to participate in more intense projects, either in person or online. As usual, in addition to our Open Hack Shanghai Fashion Week project, we hosted 10 online masterclasses covering a wide array of art topics given by lecturers from top universities including Carnegie Mellon University, Harvard University, as well as University of the Arts London, Royal College of Art.

Speaker #3: During the fourth quarter of 2025, our highly diversified research-based learning services continued to attract student interest, especially during the winter vacation when students have the time to participate in more intensive projects, either in person or online.

Speaker #3: As usual, in addition to our open heart Shanghai session week project, we hosted 10 online math classes covering a wide area of art topics given by lectures from top universities including karaoke, Maryland University, Harvard University, as well as the University of Arts London, Royal College of Art.

Kevin Ma: As usual, in addition to our Open Hack Shanghai Fashion Week project, we hosted 10 online masterclasses covering a wide array of art topics given by lecturers from top universities including Carnegie Mellon University, Harvard University, as well as University of the Arts London, Royal College of Art. We also made a continuous investment to ensure ACG students have access to world-class educational infrastructure and academic resources when preparing for overseas study journeys. In October, we hosted the 2025 ACG Expert Tour in several cities, bringing academia and in-industry experts to Shanghai, Wuhan, Chengdu, Chongqing, and Suzhou to sit face-to-face with over 1,000 students.

Speaker #3: We also made a continuous investment to ensure ACG students have access to world-class educational infrastructure and academic resources when preparing for overseas study journalists.

Kevin Ma: We also made a continuous investment to ensure ACG students have access to world-class educational infrastructure and academic resources when preparing for overseas study journeys. In October, we hosted the 2025 ACG Expert Tour in several cities, bringing academia and in-industry experts to Shanghai, Wuhan, Chengdu, Chongqing, and Suzhou to sit face-to-face with over 1,000 students. Experts gave lectures on industrial and academic trends of interdisciplinary design and met with 30 students one-on-one, providing feedback on their artwork and application portfolios and sharing their input in career planning. During Q4 2025, we established ACG's first music preparatory center in Chengdu, working in exclusive partnership with Leeds Conservatoire, which is the first and only music-focused preparatory center in collaboration with the overseas institute to provide a 1-year intensive study program before students head to the UK to finish their bachelor degree.

Speaker #3: In October, we hosted the 2025 ACG Expositor in several cities, bringing academia and industry experts to Shanghai, Wuhan, Chengdu, Chongqing, and Suzhou to meet face-to-face with over 1,000 students.

Speaker #3: Experts gave lectures on industrial and academic trends of interdisciplinary design, and mainly worked one-on-one with approximately 30 students, providing feedback on their artwork and application portfolios, and sharing their input on career planning.

Kevin Ma: Experts gave lectures on industrial and academic trends of interdisciplinary design and met with 30 students one-on-one, providing feedback on their artwork and application portfolios and sharing their input in career planning. During Q4 2025, we established ACG's first music preparatory center in Chengdu, working in exclusive partnership with Leeds Conservatoire, which is the first and only music-focused preparatory center in collaboration with the overseas institute to provide a 1-year intensive study program before students head to the UK to finish their bachelor degree.

Speaker #3: During quarter four 2025, we established ACG's first music preparatory center in Chengdu, working in exclusive partnership with Lee's Conservatory, which is the first and only music-focused preparatory center in collaboration with overseas institutes to provide a one-year intensive study program before students head to the UK to finish their bachelor degree.

Speaker #3: We also implemented a series of service enhancements to our existing ACG Japan center, which now hosts more math class projects and provides improved class offerings and course customization, working in collaboration with more Japanese art schools.

Kevin Ma: We also implemented a series of service enhancements to our existing ACG Japan Center, which now hosts more masterclass projects and provides improved class offerings, courses, and customization, working in collaboration with more Japanese art schools. Additionally, we began providing services to more institutional partners, contributing to increased revenues from other educational services. With that, I hand over the call to Ruobai Sima for a detailed overview of our financial and operating results for Q4 and full year 2025.

Speaker #3: Additionally, we began providing services to more institutional partners, contributing to increased revenues from other educational services. With that, I hand over the call to SMA for a detailed overview of our financial and operating results for the fourth quarter and full year 2025.

Ruobai Sima: Thank you, Kevin, and I will start with Q4 2025 key financial metrics. Total net revenue for Q4 2025 was RMB 89.1 million, decreased 11.7% as compared to Q4 2024. The decrease was primarily due to decreased revenue contribution from portfolio training programs and overseas study counseling services, partially offset by increased revenue contributions from research-based learning services and other educational services. Gross profit for Q4 2025 was RMB 50.2 million, compared to RMB 63.7 million in Q4 2024, affected by lower revenues and higher cost of revenues related to research-based learning services, outsourcing costs, and part-time teacher costs. Gross margin was 56.4% during Q4 2025, compared to 63.1% in the prior year period.

Speaker #4: Thank you, Kevin. And I will start with fourth quarter 2025 key financial metrics. Total net revenue for fourth quarter 2025 was RMB 89.1 million.

Speaker #4: Decreased 11.7% as compared to the fourth quarter 2024. The decrease was primarily due to decreased revenue contributions from portfolio training programs and overseas study counseling services, partially offset by increased revenue contributions from research-based learning services and other educational services.

Speaker #4: Gross profit for the fourth quarter of 2025 was RMB 50.2 million, compared to RMB 53.7 million in the fourth quarter of 2024, affected by lower revenues and higher costs of revenues related to research-based learning services, outsourcing costs, and part-time teacher costs.

Speaker #4: Gross margin was 56.4% during the fourth quarter 2025 compared to 63.1% in the prior year period. Total operating expenses were RMB 73.3 million in the fourth quarter 2025 compared to RMB 46.8 million in the fourth quarter 2024.

Ruobai Sima: Gross margin was 56.4% during Q4 2025, compared to 63.1% in the prior year period. Total operating expenses was RMB 73.3 million in Q4 2025, compared to RMB 46.8 million in Q4 2024. Increased primarily as a result of one-time goodwill impairment charge for RMB 33.9 million, or $4.8 million, recorded in Q4 2025, which was not recorded in Q4 2024. Partially offset by an RMB 7.4 million decrease in sales expenses related to lower headcounts in sales personnel and decreased sales incentives during the period, excluding the one-time goodwill impairment charge. Total operating expenses decreased by 15.7% from Q4 2024, and as a percentage of net revenues decreased to 44.2% during Q4 2025, compared to 46.3% in the prior year period.

Ruobai Sima: Total operating expenses was RMB 73.3 million in Q4 2025, compared to RMB 46.8 million in Q4 2024. Increased primarily as a result of one-time goodwill impairment charge for RMB 33.9 million, or $4.8 million, recorded in Q4 2025, which was not recorded in Q4 2024. Partially offset by an RMB 7.4 million decrease in sales expenses related to lower headcounts in sales personnel and decreased sales incentives during the period, excluding the one-time goodwill impairment charge. Total operating expenses decreased by 15.7% from Q4 2024, and as a percentage of net revenues decreased to 44.2% during Q4 2025, compared to 46.3% in the prior year period.

Speaker #4: Increased primarily as a result of a one-time goodwill impairment charge of RMB 33.9 million, or $4.8 million, recorded in Q4 2025, which was not recorded in Q4 2024.

Speaker #4: And partially offset by an RMB 7.4 million decrease in sales expenses related to lower headcounts in sales personnel and decreased sales incentives during the period.

Speaker #4: Excluding the one-time goodwill impairment charge, total operating expenses decreased by 15.7% from fourth quarter 2024 and, as a percentage of net revenues, decreased to 44.2% during fourth quarter 2025 compared to 46.3% in the prior year period.

Speaker #4: As a result, loss from operations in fourth quarter 2025 was RMB 23 million. Compared to income from operations, RMB 17 million in fourth quarter 2024.

Ruobai Sima: As a result, loss from operations in Q4 2025 was RMB 23 million, compared to income from operations of RMB 17 million in Q4 2024. Net loss attributed to ACG during Q4 2025 was RMB 26.3 million, compared to the net income attributed to ACG of RMB 13.3 million in the prior year period. For the full year 2025, total net revenue was RMB 268.1 million, flat from prior year period. Revenues were impacted by lower contributions from portfolio training services, and offset by increased contribution from research-based learning, overseas study counseling, and other educational services. Gross profits for full year 2025 was RMB 130.3 million, a decrease of 7.8% from RMB 141.3 million in full year 2024.

Speaker #4: Net loss attributable to ACG during the fourth quarter of 2025 was RMB 26.3 million, compared to net income attributable to ACG of RMB 13.3 million in the prior year period.

Speaker #4: For the full year 2025, total net revenue was RMB 268.1 million, flat from the prior-year period. Revenues were impacted by lower contributions from portfolio training services and offset by increased contributions from research-based learning and overseas study counseling.

Speaker #4: And other educational services. Gross profit for full year 2025 was RMB 130.3 million, a decrease of 7.8% from RMB 141.3 million in full year 2024.

Speaker #4: As a result of increased outsourcing costs during the period, gross margin was 48.6% compared to 52.7% in full year 2024. Total operating expenses were RMB 194.6 million in full year 2025, an increase of 5.5% from RMB 184.5 million in full year 2024.

Ruobai Sima: As a result of increased outsourcing costs during the period, gross margin was 48.6% compared to 52.7% in full year 2024. Total operating expenses were RMB 194.6 million in full year 2025, an increase of 5.5% from RMB 184.5 million in full year 2024. Increase in operating expenses during the year was primarily due to a one-time goodwill impairment charge of RMB 33.9 million recorded in Q4 2025. We were partially offset by our lowered operating expenses and an RMB 3.8 million collection of previous impaired loans and other receivables recorded in Q1 2025.

Speaker #4: The increase in operating expenses during the year was primarily due to a one-time goodwill impairment charge of RMB 33.9 million recorded in Q4 2025. This will be partially offset by the lower operating expenses and an RMB 3.8 million collection of prior years' impaired loans and other receivables recorded in Q1 2025.

Ruobai Sima: Excluding the one-time goodwill impairment charge and the collection of previous impaired loans and other receivables, total operating expense decreased by 10.8% from full year 2024, and as a percentage of net revenues decreased to 61.3% from 68.8% in the prior year period. We recorded a RMB 17.3 million decrease in sales expenses as a result of lower headcount in sales personnel and decreased sales incentives compared to full year 2024. An RMB 2.1 million decrease in general and administrative expenses, mainly as a result of decreased administrative personnel expenses and a decrease in amortization expenses related to purchase price accounting from a previous completed acquisition, as well as RMB 0.6 million decrease in research and development expenses.

Speaker #4: Excluding the one-time goodwill impairment charge, the collection of prior years' impaired loans, and other receivables, total operating expense decreased by 10.8% from full year 2024.

Speaker #4: And as a percentage of net revenues, decreased to 61.3% from 68.8% in the prior year period. We recorded an RMB 17.3 million decrease in sales expenses as a result of lower headcounts in sales personnel and decreased sales incentives compared to full year 2024.

Speaker #4: An RMB 2.1 million decrease in general and administrative expenses, mainly as a result of decreased administrative personnel expenses and a decrease in amortization expenses related to portrait price accounting from a previously completed acquisition, as well as an RMB 0.6 million decrease in research and development expenses.

Speaker #4: As a result, loss from operations in full year 2025 was RMB 64.1 million, compared to RMB 43.2 million in full year 2024. Net loss attributable to ACG in full year 2025 was RMB 48.0 million, compared to RMB 36.1 million.

Ruobai Sima: As a result, loss from operations in full year 2025 was RMB 64.1 million, compared to RMB 43.2 million in full year 2024. Net loss attributed to ACG in full year 2025 was RMB 48 million, compared to RMB 36.1 million. As a result of weighted operating loss and was partially offset by a one-time impairment gain from previous investment. Moving to the balance sheet highlights. As of 31 December 2025, we had RMB 85.2 million in cash and cash equivalents. Total assets of RMB 408.3 million. Total liabilities are RMB 336.3 million, and total shareholders equity of RMB 32 million. Moving on to year to date enrollment trends. Starting with students enrollment.

Speaker #4: As a result of weighted operating loss, and it was partially offset by a one-time impairment gain from previous investment. Moving to the balance sheet highlights, as of December 31, 2025, we had RMB 85.2 million in cash and cash equivalents, total assets of RMB 408.3 million, total liabilities of RMB 376.3 million, and total shareholders' equity of RMB 32.0 million.

Speaker #4: Moving on to year-to-date enrollment trends, starting with the students' enrollment, for fourth year for fourth quarter 2025, total student enrollment was 921 compared to 1,038 in the prior year period.

Ruobai Sima: For Q4 2025, total students enrollment was 921 compared to 1,038 in prior year period. Decreased as a result of normalized demand for our service in 2025. Portfolio training students enrollment for Q4 2025 was 568, and student enrollment for all other programs for Q4 2025 was 353. Moving on to credit hours delivered. For Q4 2025, total credit hours delivered decreased by 10.5% compared to prior year period. Project-based programs accounting for 74.9% of total credit hours delivered. With that, I will now turn it over to Jun who will expand upon our long-term business strategy. Jun, please go ahead.

Speaker #4: Decreased as a result of normalized demand for our service in 2025. Portfolio training students' enrollment for the fourth quarter of 2025 was 568, and student enrollment for all other programs for the fourth quarter of 2025 was 353.

Speaker #4: Moving on to credit hours delivered, for the fourth quarter of 2025, total credit hours delivered decreased by 10.5% compared to the prior year period. Project-based programs accounted for 74.9% of total credit hours delivered.

Speaker #4: With that, I will now turn it over to June, who will expand upon our long-term business strategy. June, please go ahead.

Speaker #2: Richard Sima, CLIU为大家介绍ACG 2026年业务战略。在2026年及未来，即便市场竞争日益激烈，我们的目标依然是保持在中国创意艺术教育领域的领先地位。一方面，我们相信我们的竞争优势源于基于精湛且经验丰富的教学团队、高质量的新旧服务产品组合，以及顶尖艺术院校建立的广泛全球合作网络。我们的师资团队兼具学术卓越与行业实战经验，使我们能够既提供出创意又具实践性的服务，同时广泛地院校合作为学生提供了更广阔的国际视野、更丰富的学习机会，以及通往世界顶级艺术项目更顺畅的路径。这一优势共同构建了ACG在创意教育领域持续领先和持续发展的基础。另一方面，我们计划在继续执行现有运营举措的同时，推出更多旨在节省成本、降低运营开支的措施，为此我们正在优化服务组合，通过扩大在线课程、增加学生容量来提高教师利用率。我们开始更多在线课程，以此容纳更多学生，战略性地将销售和教学资源向规模较大的校区集中，并将活跃路比较低的校区进行合并，以实现效益最大化。此外，我们正在精简销售架构，优先采用效益高且经验经过验证的声援渠道。总体而言，这些举措将为我们2026年以及以后整体运营和财务表现的改善奠定良好的基础。2026年第一季度，我们拥有丰富的研究生学习项目储备，其中亮点是芬兰可持续设计艺术研究营，该中营为参与学生提供机会。参访阿尔托大学、世界顶尖的设计建筑与工程学府之一，并参加北极中心的可持续发展研讨会，了解北极与萨米尔文化，亲手创作驯鹿角雕刻等艺术品。对此，为应对学生感兴趣的各类竞赛需求，我们于1月以线上线下混合形式举办。2026年竞赛中营，该营包括包含面向时装设计、数字设计、未来建筑等不同专业方向的学生训练营，通过ACG教师提供的定制化课程以及手把手的指导，学生能够为参与国内外赛事做好准备，并强化个人作品及竞争力。这些贴合需求设计精良，交付用新的项目，连同我们的持续精进的作品及服务，共同体现了我们为ACG学生在创意艺术领域追求梦想，提供前沿产品及服务的长期承诺。长期而言，我们将继续专注于强化与现有高收费、高利润的服务组合，并同时推进新服务的创新与推出。这些服务，这些努力与严格的成本管理措施相结合，再提高整体利润，为ACG以及我们的股东创造价值，推动学生取得优异成果。多年来一直是我们业务的核心，通过对教学团队的持续投入和对服务体系的不断优化，我们能够服务涵盖六大艺术门类，广泛年龄段不同背景和知识水平的学生群体，满足他们不断变化的需求。我们将一如既往地致力于2026年及未来，为ACG学生实现他们的学业与职业目标提供支持。好，我的发言结束。

Jun Zhang: 多谢司马。接下来由我为大家介绍ACG二零二六年业务战略。在二零二六年及未来，即便市场竞争日益激烈，我们的目标依然是保持在中国创意艺术教育领域的领先地位。一方面，我们相信我们的竞争优势源于技艺精湛且经验丰富的教学团队，高质量的新旧服务产品组合，以及顶尖艺术院校建立的广泛全球合作网络。我们的师资团队兼具学术卓越与行业实践经验，使我们能够既提供富创意又具实践性的服务，同时广泛的院校合作为学生提供了更广阔的国际视野，更丰富的学习机会，以及通往世界顶级艺术项目更顺畅的路径。这些优势共同构建了ACG在创意教育领域领先和持续发展的基础。另一方面，我们计划在继续执行现有运营举措的同时，推出更多旨在节省成本、降低运营开支的措施。为此，我们正在优化服务组合，通过扩大在线课程，增加学生容量来提高教室利用率。我们开设更多在线课程，以此容纳更多学生，战略性地将销售和教学资源向规模较大的校区集中，并将活跃度比较低的校区进行合并，以实现效益最大化。此外，我们正在精简销售架构，优先采用效益高且经过验证的生源渠道。总体而言，这些举措将为我们2026年以及以后整体运营和财务表现的改善奠定良好的基础。 2026年第一季度，我们拥有丰富的研究生学习项目储备，其中的亮点是芬兰可持续设计艺术研修营。该冬令营为参与学生提供机会，参访阿尔托大学世界顶尖的设计、建筑与工程学部之一，并参加北极中心的可持续发展研讨会，了解北极与萨米文化，亲手创作驯鹿角雕刻等艺术品。对此，为应对学生感兴趣的各类竞赛需求，我们于一月以线上线下混合形式举办2026年竞赛冬令营，该营包含面向时装设计、数字设计、未来建筑等不同专业方向的学生训练营。通过ACG教师提供的定制化课程以及手把手的指导，学生能够为参与国内外赛事做好准备，并强化个人作品集竞争力。这些贴合需求、设计精良、教辅用心的项目，连同我们持续精进的作品及服务，共同体现了我们为ACG学生在创意艺术领域追求梦想，提供前沿产品及服务的长期承诺。长线而言，我们将继续专注于强化现有高收费高利润的服务组合，并同时推进新服务的创新与推出。这些努力与严格的成本管理措施相结合，在提高整体利润，为ACG以及我们的股东创造价值，推动学生取得优异成果，多年来一直是我们业务的核心。通过对教学团队的持续投入和对服务体系的不断优化，我们能够服务涵盖六大艺术门类、广泛年龄段、不同背景和知识水平的学生群体，满足他们不断变化的需求。我们将一如既往地致力于2026年及未来，为ACG学生实现他们的学业与职业目标提供支持。好，我的发言结束。

Speaker #1: Thank you, Sima.

Alice Zhang: ACG business strategy in 2026. In 2026 and beyond, our goal is to maintain our leading position in China's creative arts education industry, despite increased market competition. On one hand, we believe our competitive advantages are rooted in our skilled and highly experienced teaching team, our strong portfolio of high-quality existing and new offerings, as well as an extensive network of global partnerships with leading arts institutions.

Speaker #3: We'll now discuss ACG's business strategy in 2026. In 2026 and beyond, our goal is to maintain our leading position in China's creative arts education industry, despite increased market competition.

Speaker #3: On one hand, we believe our competitive advantages are rooted in our skilled and highly experienced teaching team, our strong portfolio of high-quality existing and new offerings, as well as an extensive network of global partnerships with leading arts institutions.

Speaker #3: Our teaching faculty brings together academic excellence and real-world industry experience, enabling us to deliver education that is both creative and practical. Meanwhile, our broad institutional collaborations provide students with greater international exposure, enriched learning opportunities, and smooth pathways to top global arts programs.

Alice Zhang: Our teaching faculty brings together academic excellence and real world industry experience, enabling us to deliver education that is both creative and practical. Meanwhile, our broad institutional collaborations provide students with greater international exposure, enriched learning opportunities, and smoother pathways to top global arts programs. Together, these trends form the foundation of ACG sustained leadership and continued growth in the creative education sector. On the other hand, we plan to continue executing our existing operational initiatives while introducing additional measures aimed at driving cost savings and reducing operating expenses. To that end, we're optimizing our service portfolio and enhancing classroom utilization by expanding online course offerings and increasing student capacity. We're hosting more online classes and accommodating more students, strategically allocating sales and teaching resources to larger campus locations, and consolidating select campuses in less active markets to maximize efficiency. In addition, we're streamlining sales organization and prioritizing cost effective and proven student acquisition channels. Collectively, these initiatives should position us well for an overall improved operational and financial performance in 2026 and beyond. For Q1 2026, we have a strong pipeline of research-based learning projects highlighted by the Finland Sustainable Design & Art Research Program. This winter camp offers participating students the opportunity to visit Aalto University in Finland, one of the world's leading institutions in design, architecture, and engineering, and take part in Arctic Center sustainable development workshops to learn about Arctic and Sami culture and handcraft artworks such as reindeer antler sculptures. Furthermore, in response to multiple contest opportunities our students are interested in, we're hosting the 2026 Competition Winter Camp in January through a hybrid format of online and in-person classes. The camp includes multiple workshops for students with various areas of focus, including fashion design, digital design, future architecture, and more. With customized class offerings and hands-on guidance from ACG teaching staff, students prepare their interdisciplinary portfolios for participation in various international and national competitions and strengthen their application portfolios. This relevant, well-designed, and carefully delivered project, along with our core portfolio training services that we continue to improve, demonstrate our long-term commitment to delivering state-of-the-art products and services to ACG students as they pursue their aspirations in arts, creative arts.

Alice Zhang: Meanwhile, our broad institutional collaborations provide students with greater international exposure, enriched learning opportunities, and smoother pathways to top global arts programs. Together, these trends form the foundation of ACG sustained leadership and continued growth in the creative education sector. On the other hand, we plan to continue executing our existing operational initiatives while introducing additional measures aimed at driving cost savings and reducing operating expenses. To that end, we're optimizing our service portfolio and enhancing classroom utilization by expanding online course offerings and increasing student capacity.

Speaker #3: Together, these strengths form the foundation of ACG's sustained leadership and continued growth in the creative education sector. On the other hand, we plan to continue executing our existing operational initiatives while introducing additional measures aimed at driving cost savings and reducing operating expenses.

Speaker #3: To that end, we're optimizing our service portfolio and enhancing classroom utilization by expanding online course offerings and increasing student capacity. We're hosting more online classes and accommodating more students, strategically allocating cells and teaching resources to larger campus locations, and consolidating select campuses in less active markets to maximize efficiency.

Alice Zhang: We're hosting more online classes and accommodating more students, strategically allocating sales and teaching resources to larger campus locations, and consolidating select campuses in less active markets to maximize efficiency. In addition, we're streamlining sales organization and prioritizing cost effective and proven student acquisition channels. Collectively, these initiatives should position us well for an overall improved operational and financial performance in 2026 and beyond. For Q1 2026, we have a strong pipeline of research-based learning projects highlighted by the Finland Sustainable Design & Art Research Program.

Speaker #3: In addition, we're streamlining the sales organization and prioritizing cost-effective and proven student acquisition channels. Collectively, this initiative should position us well for overall improved operational and financial performance in 2026 and beyond.

Speaker #3: For Q1 2026, we have a strong pipeline of research-based learning projects, highlighted by the Finland Sustainable Design and Art Research Program. This winter camp offers participating students the opportunity to visit Aalto University in Finland, one of the world's leading institutions in design, architecture, and engineering, and take part in Arctic Center Sustainable Development workshops to learn about Arctic and Sámi culture and hand-create artworks such as reindeer and lear sculptures.

Alice Zhang: This winter camp offers participating students the opportunity to visit Aalto University in Finland, one of the world's leading institutions in design, architecture, and engineering, and take part in Arctic Center sustainable development workshops to learn about Arctic and Sami culture and handcraft artworks such as reindeer antler sculptures. Furthermore, in response to multiple contest opportunities our students are interested in, we're hosting the 2026 Competition Winter Camp in January through a hybrid format of online and in-person classes. The camp includes multiple workshops for students with various areas of focus, including fashion design, digital design, future architecture, and more. With customized class offerings and hands-on guidance from ACG teaching staff, students prepare their interdisciplinary portfolios for participation in various international and national competitions and strengthen their application portfolios. This relevant, well-designed, and carefully delivered project, along with our core portfolio training services that we continue to improve, demonstrate our long-term commitment to delivering state-of-the-art products and services to ACG students as they pursue their aspirations in arts, creative arts.

Speaker #3: Furthermore, in response to multiple contest opportunities our students are interested in, we're hosting the 2026 competition winter camp in January, through a hybrid format of online and in-person classes.

Speaker #3: The camp includes multiple workshops for students with various areas of focus, including fashion design, digital design, future architecture, and more. With customized class offerings and hands-on guidance from ACG teaching staff, students prepare their interdisciplinary portfolios for participation in various international and national competitions, and strengthen their application portfolios.

Speaker #3: This relevant, well-designed, and carefully delivered project, along with a core portfolio of training services that will continue to improve, demonstrates our long-term commitment to delivering state-of-the-art products and services to ACG students as they pursue their aspirations in creative arts.

Speaker #3: Over the long term, we remain focused on strengthening our portfolio of existing higher-fee and higher-margin services, while driving innovation and the introduction of new services.

Alice Zhang: Over the long term, we remain focused on strengthening our portfolio of existing higher fee and higher margin services while driving innovation and introduction of new services. These efforts, combined with disciplined cost management initiatives, are designed to enhance overall margin improvement and drive results for ACG and our shareholders. Driving positive student outcome has been the center of our business for years. Through our continuous investment in our teaching team and continuous enhancement of our service portfolio, we're able to cater to student populations that cover six major arts disciplines, a wide age range, and those with different backgrounds and knowledge in their respective areas of arts and addressing their evolving needs. We remain dedicated to serving ACG students as they pursue their academic and professional goals in 2026 and beyond. With that, operator, let's open it up for questions.

Speaker #3: These efforts, combined with disciplined cost management initiatives, are designed to enhance overall margin improvement and drive results for ACG and our shareholders. Driving positive student outcomes has been the center of our business for years.

Speaker #3: Through continuous investment in our teaching team and continuous enhancement of our service portfolio, we're able to cater to a student population that covers six major arts disciplines, a wide age range, and those with different backgrounds and knowledge in their respective areas of arts, and addressing their evolving needs.

Speaker #3: We remain dedicated to serving ACG students as they pursue their academic and professional goals in 2026 and beyond. With that, operator, let's open it up for questions.

Speaker #1: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We will pause for a brief moment to poll for questions. There are no questions at this time. I would like to turn the conference back over to Kevin Ma for closing remarks.

Speaker #1: You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #1: We will pause for a brief moment to pull for questions. There are no questions at this time. I would like to turn the conference back over to Kevin Ma for closing remarks.

Speaker #4: Thanks again to all of you for joining us. If anyone has questions for us, please feel free to reach out directly to us or our investor relations firm, The Active Group.

Kevin Ma: Thanks again to all of you for joining us. If anyone has questions for us, please feel free to reach out directly to us or our investor relations firm, The Equity Group. We are always available to speak to investors and look forward to speaking with you or during our next earnings call. Thank you.

Speaker #4: We are always available to speak to investors and look forward to speaking with you all during our next earnings call. Thank you.

Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

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