17 Education & Technology Group Inc. Announces Second Quarter 2025 Unaudited Financial Results
Rhea-AI Summary
17 Education & Technology Group (NASDAQ: YQ) reported its Q2 2025 financial results, showing mixed performance. Net revenues declined 62.4% year-over-year to RMB25.4 million (US$3.5 million), while gross margin improved significantly to 57.5% from 16.0% in Q2 2024.
The company reduced its net loss to RMB26.0 million (US$3.6 million), a 53.4% improvement from Q2 2024. Operating expenses decreased by 39.3% year-over-year through efficiency improvements and staff optimization. Additionally, YQ announced a new share repurchase program of up to US$10 million over 12 months starting September 4, 2025.
The company continues to focus on AI technology innovation, launching the "Yiqi Tongxue" intelligent agent and upgrading AI solutions in Shanghai Minhang District. Management reported 17.3% quarter-on-quarter growth driven by subscription model business.
Positive
- Gross margin significantly improved to 57.5% from 16.0% year-over-year
- Operating expenses reduced by 39.3% through efficiency improvements
- Net loss decreased by 53.4% compared to Q2 2024
- Announced US$10 million share repurchase program
- Quarter-on-quarter revenue growth of 17.3% in subscription model business
- Strong cash position of RMB350.9 million (US$49.0 million)
Negative
- Net revenues declined 62.4% year-over-year to RMB25.4 million
- Net loss margin worsened to negative 102.1% from negative 82.5% year-over-year
- Operating loss margin deteriorated to negative 112.0% from negative 89.2%
- Adjusted net loss margin worsened to negative 74.3% from negative 63.1%
News Market Reaction 15 Alerts
On the day this news was published, YQ gained 19.02%, reflecting a significant positive market reaction. Argus tracked a peak move of +36.5% during that session. Argus tracked a trough of -11.5% from its starting point during tracking. Our momentum scanner triggered 15 alerts that day, indicating notable trading interest and price volatility. This price movement added approximately $4M to the company's valuation, bringing the market cap to $22M at that time. Trading volume was exceptionally heavy at 56.1x the daily average, suggesting very strong buying interest.
Data tracked by StockTitan Argus on the day of publication.
BEIJING, Sept. 04, 2025 (GLOBE NEWSWIRE) -- September 4, 2025 — (GLOBE NEWSWIRE) — 17 Education & Technology Group Inc. (NASDAQ: YQ) (“17EdTech” or the “Company”), a leading education technology company in China, today announced its unaudited financial results for the second quarter of 2025.
Second Quarter 2025 Highlights1
- Net revenues were RMB25.4 million (US
$3.5 million ), compared with net revenues of RMB67.5 million in the second quarter of 2024. - Gross margin was
57.5% , compared with16.0% in the second quarter of 2024. - Net loss was RMB26.0 million (US
$3.6 million ), compared with net loss of RMB55.7 million in the second quarter of 2024. - Net loss as a percentage of net revenues was negative
102.1% in the second quarter of 2025, compared with negative82.5% in the second quarter of 2024. - Adjusted net loss2 (non-GAAP), which excluded share-based compensation expenses of RMB7.1 million (US
$1.0 million ), was RMB18.9 million (US$2.6 million ), compared with adjusted net loss (non-GAAP) of RMB42.6 million in the second quarter of 2024. - Adjusted net loss (non-GAAP) as a percentage of net revenues was negative
74.3% in the second quarter of 2025, compared with negative63.1% adjusted net loss (non-GAAP) as a percentage of net revenues in the second quarter of 2024.
First Half 2025 Highlights1
- Net revenues were RMB47.1 million (US
$6.6 million ), compared with net revenues of RMB93.0 million in the first half of 2024. - Gross margin was
47.7% , compared with22.1% in the first half of 2024. - Net loss was RMB56.9 million (US
$7.9 million ), compared with net loss of RMB111.8 million in the first half of 2024. - Net loss as a percentage of net revenues was negative
120.9% in the first half of 2025, compared with negative120.2% in the first half of 2024. - Adjusted net loss2 (non-GAAP), which excluded share-based compensation expenses of RMB15.6 million (US
$2.2 million ), was RMB41.3 million (US$5.8 million ), compared with adjusted net income (non-GAAP) of RMB85.3 million in the first half of 2024. - Adjusted net loss (non-GAAP) as a percentage of net revenues was negative
87.7% in the first half of 2025, compared with91.7% of adjusted net income (non-GAAP) as a percentage of net revenues in the first half of 2024.
| 1 | For a reconciliation of non-GAAP numbers, please see the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” at the end of this press release. | ||
| 2 | Adjusted net loss represents net loss excluding share-based compensation expenses. | ||
Mr. Andy Liu, Founder, Chairman and Chief Executive Officer of the Company, commented, “During the quarter, the company advanced its business by continuously optimizing and innovating AI technology across our product portfolios to constantly enhance customer satisfaction and user engagement. We launched the “Yiqi Tongxue” (Together Classmates) intelligent agent, and successfully upgraded AI solutions in Shanghai Minhang District.”
“Leveraging our strong brand endorsements and customer loyalty from our district projects and subscription model, as well as capitalizing on the emerging market opportunities and evolving customer needs, we will continuously strive to explore product innovation and new growth opportunities to extend our reach to a broader customer base, so that we can drive sustainable growth, ” he added.
Ms Sishi Zhou, Acting Chief Financial Officer of the Company, commented, “We are pleased to report a healthy financial results for the second quarter of 2025 with top-line growth of
“Our commitment to diligent cost control and operational efficiency has resulted in a
Second Quarter 2025 Unaudited Financial Results
Net Revenues
Net revenues for the second quarter of 2025 were RMB25.4 million (US
Cost of Revenues
Cost of revenues for the second quarter of 2025 was RMB10.8 million (US
Gross Profit and Gross Margin
Gross profit for the second quarter of 2025 was RMB14.6 million (US
Gross margin for the second quarter of 2025 was
Total Operating Expenses
The following table sets forth a breakdown of operating expenses by amounts and percentages of revenue during the periods indicated (in thousands, except for percentages):
| For the three months ended June 30, | ||||||||||||||||||||||||
| 2024 | 2025 | Year- | ||||||||||||||||||||||
| RMB | % | RMB | USD | % | over-year | |||||||||||||||||||
| Sales and marketing expenses | 16,874 | 25.0 | % | 13,995 | 1,954 | 55.1 | % | -17.1 | % | |||||||||||||||
| Research and development expenses | 23,158 | 34.3 | % | 12,002 | 1,675 | 47.2 | % | -48.2 | % | |||||||||||||||
| General and administrative expenses | 30,934 | 45.8 | % | 17,066 | 2,382 | 67.2 | % | -44.8 | % | |||||||||||||||
| Total operating expenses | 70,966 | 105.1 | % | 43,063 | 6,011 | 169.5 | % | -39.3 | % | |||||||||||||||
Total operating expenses for the second quarter of 2025 were RMB43.1 million (US
Sales and marketing expenses for the second quarter of 2025 were RMB14.0 million (US
Research and development expenses for the second quarter of 2025 were RMB12.0 million (US
General and administrative expenses for the second quarter of 2025 were RMB17.1 million (US
Loss from Operations
Loss from operations for the second quarter of 2025 was RMB28.5 million (US
Net Loss
Net loss for the second quarter of 2025 was RMB26.0 million (US
Adjusted Net Loss (non-GAAP)
Adjusted net loss (non-GAAP) for the second quarter of 2025 was RMB18.9 million (US
Please refer to the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” at the end of this press release for a reconciliation of net loss under U.S. GAAP to adjusted net loss (non-GAAP).
Cash and Cash Equivalents, Restricted Cash and Term Deposit
Cash and cash equivalents, restricted cash and term deposit were RMB350.9 million (US
Share Repurchase Program
On September 3, 2025, the board of directors of the Company approved a share repurchase program whereby the Company is authorized to repurchase up to US
The Company’s proposed repurchases may be made from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Company’s board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The Company expects to fund the repurchases out of its existing cash balance.
Conference Call Information
The Company will hold a conference call on Wednesday, September 3, 2025 at 9:00 p.m. U.S. Eastern Time (Thursday, September 4, 2025 at 9:00 a.m. Beijing time) to discuss the financial results for the second quarter of 2025.
Please note that all participants will need to preregister for the conference call participation by navigating to https://register-conf.media-server.com/register/BIf560a2c6d14348d48ab0ed58343340c5.
Upon registration, you will receive an email containing participant dial-in numbers, and PIN number. To join the conference call, please dial the number you receive, enter the PIN number, and you will be joined to the conference call instantly.
Additionally, a live and archived webcast of this conference call will be available at https://ir.17zuoye.com/.
Non-GAAP Financial Measures
17EdTech’s management uses adjusted net income (loss) as a non-GAAP financial measure to gain an understanding of 17EdTech’s comparative operating performance and future prospects.
Adjusted net income (loss) represents net loss excluding share-based compensation expenses and such adjustment has no impact on income tax.
Adjusted net income (loss) is used by 17EdTech’s management in their financial and operating decision-making as a non-GAAP financial measure; because management believes it reflects 17EdTech’s ongoing business and operating performance in a manner that allows meaningful period-to-period comparisons. 17EdTech’s management believes that such non-GAAP measure provides useful information to investors and others in understanding and evaluating 17EdTech’s operating performance in the same manner as management does, if they so choose. Specifically, 17EdTech believes the non-GAAP measure provides useful information to both management and investors by excluding certain charges that the Company believes are not indicative of its core operating results.
The non-GAAP financial measure has limitations. It does not include all items of income and expense that affect 17EdTech’s income from operations. Specifically, the non-GAAP financial measure is not prepared in accordance with GAAP, may not be comparable to non-GAAP financial measures used by other companies and, with respect to the non-GAAP financial measure that excludes certain items under GAAP, does not reflect any benefit that such items may confer to 17EdTech. Management compensates for these limitations by also considering 17EdTech’s financial results as determined in accordance with GAAP. The presentation of this additional information is not meant to be considered superior to, in isolation from or as a substitute for results prepared in accordance with US GAAP.
Exchange Rate Information
The Company’s business is primarily conducted in China and all of the revenues are denominated in Renminbi (“RMB”). However, periodic reports made to shareholders will include current period amounts translated into U.S. dollars (“USD” or “US$”) using the exchange rate as of balance sheet date, for the convenience of the readers. Translations of balances in the consolidated balance sheets and the related consolidated statements of operations, comprehensive loss, change in shareholders’ deficit and cash flows from RMB into USD as of and for the three months ended June 30, 2025 are solely for the convenience of the readers and were calculated at the rate of US
About 17 Education & Technology Group Inc.
17 Education & Technology Group Inc. is a leading education technology company in China, offering smart in-school classroom solution that delivers data-driven teaching, learning and assessment products to teachers, students and parents. Leveraging its extensive knowledge and expertise obtained from in-school business over the past decade, the Company provides teaching and learning SaaS offerings to facilitate the digital transformation and upgrade at Chinese schools, with a focus on improving the efficiency and effectiveness of core teaching and learning scenarios such as homework assignments and in-class teaching. The product utilizes the Company’s technology and data insights to provide personalized and targeted learning and exercise content that is aimed at improving students’ learning efficiency.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements about 17EdTech’s beliefs and expectations, are forward-looking statements. 17EdTech may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: 17EdTech’s growth strategies; its future business development, financial condition and results of operations; its ability to continue to attract and retain users; its ability to carry out its business and organization transformation, its ability to implement and grow its new business initiatives; the trends in, and size of, China’s online education market; competition in and relevant government policies and regulations relating to China's online education market; its expectations regarding demand for, and market acceptance of, its products and services; its expectations regarding its relationships with business partners; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in 17EdTech’s filings with the SEC. All information provided in this press release is as of the date of this press release, and 17EdTech does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
17 Education & Technology Group Inc.
Ms. Lara Zhao
Investor Relations Manager
E-mail: ir@17zuoye.com
| 17 EDUCATION & TECHNOLOGY GROUP INC. | ||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (In thousands of RMB and USD, except for share and per ADS data, or otherwise noted) | ||||||||||||
| As of December 31, | As of June 30, | |||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RMB | RMB | USD | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 234,144 | 231,516 | 32,318 | |||||||||
| Restricted cash | 49 | 49 | 7 | |||||||||
| Term deposits | 125,108 | 119,373 | 16,664 | |||||||||
| Accounts receivable | 67,097 | 27,662 | 3,861 | |||||||||
| Prepaid expenses and other current assets | 82,513 | 76,315 | 10,653 | |||||||||
| Total current assets | 508,911 | 454,915 | 63,503 | |||||||||
| Non-current assets | ||||||||||||
| Property and equipment, net | 26,410 | 25,456 | 3,554 | |||||||||
| Right-of-use assets | 11,768 | 11,122 | 1,553 | |||||||||
| Other non-current assets | 2,428 | 2,406 | 336 | |||||||||
| TOTAL ASSETS | 549,517 | 493,899 | 68,946 | |||||||||
| LIABILITIES | ||||||||||||
| Current liabilities | ||||||||||||
| Accrued expenses and other current liabilities | 104,422 | 98,500 | 13,750 | |||||||||
| Deferred revenue and customer advances, current | 40,397 | 39,567 | 5,523 | |||||||||
| Operating lease liabilities, current | 6,798 | 5,917 | 826 | |||||||||
| Total current liabilities | 151,617 | 143,984 | 20,099 | |||||||||
| As of December 31, | As of June 30, | |||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Non-current liabilities | ||||||||||||
| Operating lease liabilities, non-current | 4,261 | 4,676 | 653 | |||||||||
| TOTAL LIABILITIES | 155,878 | 148,660 | 20,752 | |||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||
| Class A ordinary shares | 241 | 243 | 34 | |||||||||
| Class B ordinary shares | 81 | 81 | 11 | |||||||||
| Treasury stock | (34 | ) | (40 | ) | (6 | ) | ||||||
| Additional paid-in capital | 11,070,615 | 11,083,674 | 1,547,221 | |||||||||
| Accumulated other comprehensive income | 86,410 | 81,851 | 11,426 | |||||||||
| Accumulated deficit | (10,763,674 | ) | (10,820,570 | ) | (1,510,492 | ) | ||||||
| TOTAL SHAREHOLDERS' EQUITY | 393,639 | 345,239 | 48,194 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 549,517 | 493,899 | 68,946 | |||||||||
| 17 EDUCATION & TECHNOLOGY GROUP INC. | ||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (In thousands of RMB and USD, except for share and per ADS data, or otherwise noted) | ||||||||||||
| For the three months ended June 30, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Net revenues | 67,491 | 25,410 | 3,547 | |||||||||
| Cost of revenues | (56,707 | ) | (10,798 | ) | (1,507 | ) | ||||||
| Gross profit | 10,784 | 14,612 | 2,040 | |||||||||
| Operating expenses (Note 1) | ||||||||||||
| Sales and marketing expenses | (16,874 | ) | (13,995 | ) | (1,954 | ) | ||||||
| Research and development expenses | (23,158 | ) | (12,002 | ) | (1,675 | ) | ||||||
| General and administrative expenses | (30,934 | ) | (17,066 | ) | (2,382 | ) | ||||||
| Total operating expenses | (70,966 | ) | (43,063 | ) | (6,011 | ) | ||||||
| Loss from operations | (60,182 | ) | (28,451 | ) | (3,971 | ) | ||||||
| Interest income | 4,389 | 2,248 | 314 | |||||||||
| Foreign currency exchange gain (loss) | 84 | (44 | ) | (6 | ) | |||||||
| Other income, net | 8 | 301 | 42 | |||||||||
| Loss before provision for income tax and income from equity method investments | (55,701 | ) | (25,946 | ) | (3,621 | ) | ||||||
| Income tax expenses | — | (6 | ) | (1 | ) | |||||||
| Net loss | (55,701 | ) | (25,952 | ) | (3,622 | ) | ||||||
| Net loss available to ordinary shareholders of 17 | (55,701 | ) | (25,952 | ) | (3,622 | ) | ||||||
| Education & Technology Group Inc. | ||||||||||||
| Net loss per ordinary share | ||||||||||||
| Basic and diluted | (0.14 | ) | (0.06 | ) | (0.01 | ) | ||||||
| Net loss per ADS (Note 2) | ||||||||||||
| Basic and diluted | (7.00 | ) | (3.00 | ) | (0.50 | ) | ||||||
| Weighted average shares used in calculating net loss per ordinary share | ||||||||||||
| Basic and diluted | 387,986,694 | 461,000,966 | 461,000,966 | |||||||||
| Note 1: Share-based compensation expenses were included in the operating expenses as follows: | ||||||||||||
| For the three months ended June 30, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Share-based compensation expenses: | ||||||||||||
| Sales and marketing expenses | 2,039 | 1,929 | 269 | |||||||||
| Research and development expenses | 3,547 | 2,872 | 401 | |||||||||
| General and administrative expenses | 7,526 | 2,261 | 316 | |||||||||
| Total | 13,112 | 7,062 | 986 | |||||||||
| Note 2: Each one ADS represents fifty Class A ordinary shares. | ||||||||||||
| 17 EDUCATION & TECHNOLOGY GROUP INC. | ||||||||||||
| Reconciliations of non-GAAP measures to the most comparable GAAP measures | ||||||||||||
| (In thousands of RMB and USD, except for share, per share and per ADS data) | ||||||||||||
| For the three months ended June 30, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Net Loss | (55,701 | ) | (25,952 | ) | (3,622 | ) | ||||||
| Share-based compensation | 13,112 | 7,062 | 986 | |||||||||
| Income tax effect | — | — | — | |||||||||
| Adjusted net loss | (42,589 | ) | (18,890 | ) | (2,636 | ) | ||||||
| 17 EDUCATION & TECHNOLOGY GROUP INC. | ||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (In thousands of RMB and USD, except for share and per ADS data, or otherwise noted) | ||||||||||||
| For the six months ended June 30, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Net revenues | 92,992 | 47,078 | 6,572 | |||||||||
| Cost of revenues | (72,406 | ) | (24,633 | ) | (3,439 | ) | ||||||
| Gross profit | 20,586 | 22,445 | 3,133 | |||||||||
| Operating expenses (Note 1) | ||||||||||||
| Sales and marketing expenses | (35,661 | ) | (27,008 | ) | (3,770 | ) | ||||||
| Research and development expenses | (42,239 | ) | (24,594 | ) | (3,433 | ) | ||||||
| General and administrative expenses | (65,779 | ) | (33,167 | ) | (4,630 | ) | ||||||
| Total operating expenses | (143,679 | ) | (84,769 | ) | (11,833 | ) | ||||||
| Loss from operations | (123,093 | ) | (62,324 | ) | (8,700 | ) | ||||||
| Interest income | 9,526 | 4,924 | 687 | |||||||||
| Foreign currency exchange gain (loss) | 244 | (111 | ) | (15 | ) | |||||||
| Other income, net | 1,545 | 621 | 87 | |||||||||
| Loss before provision for income tax and income from equity method investments | (111,778 | ) | (56,890 | ) | (7,941 | ) | ||||||
| Income tax expenses | — | (6 | ) | (1 | ) | |||||||
| Net loss | (111,778 | ) | (56,896 | ) | (7,942 | ) | ||||||
| Net loss available to ordinary shareholders of 17 | (111,778 | ) | (56,896 | ) | (7,942 | ) | ||||||
| Education & Technology Group Inc. | ||||||||||||
| Net loss per ordinary share | ||||||||||||
| Basic and diluted | (0.29 | ) | (0.12 | ) | (0.02 | ) | ||||||
| Net loss per ADS (Note 2) | ||||||||||||
| Basic and diluted | (14.50 | ) | (6.00 | ) | (1.00 | ) | ||||||
| Weighted average shares used in calculating net loss per ordinary share | ||||||||||||
| Basic and diluted | 387,776,710 | 461,652,947 | 461,652,947 | |||||||||
| Note 1: Share-based compensation expenses were included in the operating expenses as follows: | ||||||||||||
| For the six months ended June 30, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Share-based compensation expenses: | ||||||||||||
| Sales and marketing expenses | 4,065 | 4,022 | 561 | |||||||||
| Research and development expenses | 7,327 | 5,269 | 736 | |||||||||
| General and administrative expenses | 15,108 | 6,317 | 882 | |||||||||
| Total | 26,500 | 15,608 | 2,179 | |||||||||
| Note 2: Each one ADS represents fifty Class A ordinary shares. | ||||||||||||
| 17 EDUCATION & TECHNOLOGY GROUP INC. | ||||||||||||
| Reconciliations of non-GAAP measures to the most comparable GAAP measures | ||||||||||||
| (In thousands of RMB and USD, except for share, per share and per ADS data) | ||||||||||||
| For the six months ended June 30, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Net Loss | (111,778 | ) | (56,896 | ) | (7,942 | ) | ||||||
| Share-based compensation | 26,500 | 15,608 | 2,179 | |||||||||
| Income tax effect | — | — | — | |||||||||
| Adjusted net loss | (85,278 | ) | (41,288 | ) | (5,763 | ) | ||||||
FAQ
What were YQ's Q2 2025 earnings results?
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What is YQ's current cash position in Q2 2025?
How did YQ's operating expenses change in Q2 2025?
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