17 Education & Technology Group Inc. Announces Third Quarter 2025 Unaudited Financial Results
Rhea-AI Summary
17 Education & Technology Group (NASDAQ: YQ) reported third quarter 2025 unaudited results: Q3 net revenues RMB20.0M (US$2.8M), down 66.4% YoY, and Q3 net loss RMB44.5M (US$6.3M). Gross margin was 51.2% in Q3 and 48.7% for the first nine months. Adjusted net loss (non-GAAP) for Q3 was RMB38.2M. Total operating expenses in Q3 were RMB56.9M. Cash, cash equivalents and term deposit were RMB341.9M as of September 30, 2025. Management highlighted AI product launches (Yiqi Aixue) and said operating expenses fell 29.8% year-to-date while R&D increased to support AI rollout.
Positive
- Cash and term deposit of RMB341.9M as of Sept 30, 2025
- First nine months gross margin 48.7% vs 37.3% in 2024
- Operating expenses reduced by 29.8% year-to-date
Negative
- Q3 net revenues down 66.4% YoY to RMB20.0M
- Q3 net loss of RMB44.5M (negative 222.5% of revenue)
- Adjusted Q3 net loss (non-GAAP) RMB38.2M
- Total Q3 operating expenses were 284.3% of revenue
Key Figures
Market Reality Check
Peers on Argus 1 Up 1 Down
YQ is down 10.18% while close peers are mixed: MYND down 1.36%, KIDZ slightly negative, GSUN and FEDU flat, and EDTK up 13.1%. Momentum scanner shows EDTK down 5.29% and LXEH up 5.05%, reinforcing that YQ’s move appears company-specific rather than sector-wide.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Dec 03 | Earnings date notice | Neutral | -0.2% | Scheduled Q3 2025 results and conference call announcement. |
| Sep 03 | Q2 2025 earnings | Positive | +19.0% | Revenue drop but margin, loss and buyback news drove optimism. |
| Aug 28 | Q2 call scheduling | Neutral | +1.0% | Announcement of upcoming Q2 2025 release and call logistics. |
| Jun 10 | Q1 2025 earnings | Neutral | -3.0% | Revenue decline but sharply reduced net loss and lower expenses. |
| Mar 25 | Q4/FY 2024 earnings | Negative | +0.0% | Revenue growth with margin pressure and still large net loss. |
| Dec 11 | Q3 2024 earnings | Positive | +0.0% | Stronger revenues, higher margins, and sharply narrower net loss. |
Earnings releases have produced mixed but often aligned reactions, with strong moves when results or strategic updates are more clearly positive or negative.
Over the last year, 17EdTech has reported several quarters of “mixed” earnings, with revenues under pressure but material improvements in operating efficiency and net loss. Q1 and Q2 2025 highlighted cost cuts, better margins, and AI-driven product initiatives, and Q4 2024 showed annual net loss improvement despite margin compression. Today’s Q3 2025 report continues the AI and school-based focus but adds a sharp revenue decline and wider losses, contrasting with earlier loss-narrowing trends.
Market Pulse Summary
This announcement detailed Q3 2025 results with net revenues of RMB20.0 million, lower than Q3 2024, and a wider net loss of RMB44.5 million. Management emphasized ongoing AI transformation, new products like Yiqi Aixue, and cash reserves of RMB341.9 million. Historically, earnings have mixed revenue pressure with cost improvements, so investors may watch future quarters for revenue stabilization, margin trends, and progress in monetizing AI offerings.
Key Terms
non-GAAP financial
AI-generated analysis. Not financial advice.
BEIJING, Dec. 10, 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 third quarter of 2025.
Third Quarter 2025 Highlights1
- Net revenues were RMB20.0 million (US
$2.8 million ), compared with net revenues of RMB59.6 million in the third quarter of 2024. - Gross margin was
51.2% , compared with60.9% in the third quarter of 2024. - Net loss was RMB44.5 million (US
$6.3 million ), compared with net loss of RMB17.4 million in the third quarter of 2024. - Net loss as a percentage of net revenues was negative
222.5% in the third quarter of 2025, compared with negative29.2% in the third quarter of 2024. - Adjusted net loss2 (non-GAAP), which excluded share-based compensation expenses of RMB6.3 million (US
$0.9 million ), was RMB38.2 million (US$5.4 million ), compared with adjusted net loss (non-GAAP) of RMB5.7 million in the third quarter of 2024. - Adjusted net loss (non-GAAP) as a percentage of net revenues was negative
191.0% in the third quarter of 2025, compared with negative9.5% adjusted net loss (non-GAAP) as a percentage of net revenues in the third quarter of 2024.
First Nine Months 2025 Highlights1
- Net revenues were RMB67.1 million (US
$9.4 million ), compared with net revenues of RMB152.6 million in the first nine months of 2024. - Gross margin was
48.7% , compared with37.3% in the first nine months of 2024. - Net loss was RMB101.4 million (US
$14.2 million ), compared with net loss of RMB129.2 million in the first nine months of 2024. - Net loss as a percentage of net revenues was negative
151.2% in the first nine months of 2025, compared with negative84.6% in the first nine months of 2024. - Adjusted net loss2 (non-GAAP), which excluded share-based compensation expenses of RMB21.9 million (US
$3.1 million ), was RMB79.5 million (US$11.2 million ), compared with adjusted net loss (non-GAAP) of RMB90.9 million in the first nine months of 2024. - Adjusted net loss (non-GAAP) as a percentage of net revenues was negative
118.5% in the first nine months of 2025, compared with negative59.6% of adjusted net loss (non-GAAP) as a percentage of net revenues in the first nine months 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, “We maintained steady progress in our existing core business in the third quarter, marked by strong user engagement and healthy customer retention.
In terms of AI transformation, leveraging our previously accumulated brand endorsement, user recognition, private domain resources, as well as mature hardware capabilities and AI infrastructure, we have efficiently advanced the R&D and launch of new products while maintaining healthy cash position.”
“Following the successful launch of “Yiqi Tongxue” Intelligent Agent, we have successfully rolled out our new C-end product —Yiqi Aixue. This AI membership offering embodies our core philosophy of “Precision and Personalized Learning,” seamlessly integrating smart hardware and software solutions, with extensive content resources, advanced AI capabilities, and data insights accumulated in the past decade. The new product has received remarkable market response, indicating solid growth prospects for the future.” he continued.
Ms. Sishi Zhou, Acting Chief Financial Officer of the Company, commented, “Despite the company's increased investment in R&D to support the launch of new AI products, we still narrowed losses in the first nine months by consistently focusing on operational efficiency, reducing our operating expenses by
“The successful launch of our new C-end AI product marks a new milestone in the company’s AI transformation. We will continue to enhance our product capabilities, strive to improve our customers’ learning efficiency and experience, and drive sustained, healthy growth for the Company.” she added.
Third Quarter 2025 Unaudited Financial Results
Net Revenues
Net revenues for the third quarter of 2025 were RMB20.0 million (US
Cost of Revenues
Cost of revenues for the third quarter of 2025 was RMB9.8 million (US
Gross Profit and Gross Margin
Gross profit for the third quarter of 2025 was RMB10.2 million (US
Gross margin for the third 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 September 30, | |||||||||||||||
| 2024 | 2025 | Year- | |||||||||||||
| RMB | % | RMB | USD | % | over-year | ||||||||||
| Sales and marketing expenses | 20,244 | 34.0 | % | 15,869 | 2,229 | 79.3 | % | -21.6 | % | ||||||
| Research and development expenses | 12,789 | 21.4 | % | 15,248 | 2,142 | 76.2 | % | 19.2 | % | ||||||
| General and administrative expenses | 24,950 | 41.8 | % | 25,779 | 3,621 | 128.8 | % | 3.3 | % | ||||||
| Total operating expenses | 57,983 | 97.2 | % | 56,896 | 7,992 | 284.3 | % | -1.9 | % | ||||||
Total operating expenses for the third quarter of 2025 were RMB56.9 million (US
Sales and marketing expenses for the third quarter of 2025 were RMB15.9 million (US
Research and development expenses for the third quarter of 2025 were RMB15.2 million (US
General and administrative expenses for the third quarter of 2025 were RMB25.8 million (US
Loss from Operations
Loss from operations for the third quarter of 2025 was RMB46.6 million (US
Net Loss
Net loss for the third quarter of 2025 was RMB44.5 million (US
Adjusted Net Loss (non-GAAP)
Adjusted net loss (non-GAAP) for the third quarter of 2025 was RMB38.2 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 and term deposit were RMB341.9 million (US
Conference Call Information
The Company will hold a conference call on Tuesday, December 9, 2025 at 8:00 p.m. U.S. Eastern Time (Wednesday, December 10, 2025 at 9:00 a.m. Beijing time) to discuss the financial results for the third 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/BI321fdcdf12d243ceabd41e03ae81db1d.
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 September 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 September 30, | |||||||
| 2024 | 2025 | 2025 | ||||||
| RMB | RMB | USD | ||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 234,144 | 243,570 | 34,214 | |||||
| Restricted cash | 49 | 49 | 7 | |||||
| Term deposits | 125,108 | 98,287 | 13,806 | |||||
| Accounts receivable | 67,097 | 22,845 | 3,209 | |||||
| Prepaid expenses and other current assets | 82,513 | 82,616 | 11,605 | |||||
| Total current assets | 508,911 | 447,367 | 62,841 | |||||
| Non-current assets | ||||||||
| Property and equipment, net | 26,410 | 23,836 | 3,348 | |||||
| Right-of-use assets | 11,768 | 9,810 | 1,378 | |||||
| Other non-current assets | 2,428 | 1,499 | 211 | |||||
| TOTAL ASSETS | 549,517 | 482,512 | 67,778 | |||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accrued expenses and other current liabilities | 104,422 | 102,810 | 14,442 | |||||
| Deferred revenue and customer advances, current | 40,397 | 36,467 | 5,122 | |||||
| Operating lease liabilities, current | 6,798 | 5,097 | 716 | |||||
| Total current liabilities | 151,617 | 144,374 | 20,280 | |||||
| As of December 31, | As of September 30, | |||||||
| 2024 | 2025 | 2025 | ||||||
| RMB | RMB | USD | ||||||
| Non-current liabilities | ||||||||
| Operating lease liabilities, non-current | 4,261 | 3,990 | 560 | |||||
| TOTAL LIABILITIES | 155,878 | 148,364 | 20,840 | |||||
| SHAREHOLDERS' EQUITY | ||||||||
| Class A ordinary shares | 241 | 256 | 36 | |||||
| Class B ordinary shares | 81 | 140 | 20 | |||||
| Treasury stock | (34 | ) | (42 | ) | (6 | ) | ||
| Additional paid-in capital | 11,070,615 | 11,118,361 | 1,561,787 | |||||
| Accumulated other comprehensive income | 86,410 | 80,516 | 11,310 | |||||
| Accumulated deficit | (10,763,674 | ) | (10,865,083 | ) | (1,526,209 | ) | ||
| TOTAL SHAREHOLDERS' EQUITY | 393,639 | 334,148 | 46,938 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 549,517 | 482,512 | 67,778 | |||||
| 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 September 30, | ||||||||
| 2024 | 2025 | 2025 | ||||||
| RMB | RMB | USD | ||||||
| Net revenues | 59,627 | 20,009 | 2,811 | |||||
| Cost of revenues | (23,289 | ) | (9,762 | ) | (1,371 | ) | ||
| Gross profit | 36,338 | 10,247 | 1,440 | |||||
| Operating expenses (Note 1) | ||||||||
| Sales and marketing expenses | (20,244 | ) | (15,869 | ) | (2,229 | ) | ||
| Research and development expenses | (12,789 | ) | (15,248 | ) | (2,142 | ) | ||
| General and administrative expenses | (24,950 | ) | (25,779 | ) | (3,621 | ) | ||
| Total operating expenses | (57,983 | ) | (56,896 | ) | (7,992 | ) | ||
| Loss from operations | (21,645 | ) | (46,649 | ) | (6,552 | ) | ||
| Interest income | 3,835 | 2,149 | 302 | |||||
| Foreign currency exchange loss | (638 | ) | (53 | ) | (7 | ) | ||
| Other income, net | 1,047 | 40 | 6 | |||||
| Loss before provision for income tax and income from equity method investments | (17,401 | ) | (44,513 | ) | (6,251 | ) | ||
| Income tax expenses | — | — | — | |||||
| Net loss | (17,401 | ) | (44,513 | ) | (6,251 | ) | ||
| Net loss available to ordinary shareholders of 17 | (17,401 | ) | (44,513 | ) | (6,251 | ) | ||
| Education & Technology Group Inc. | ||||||||
| Net loss per ordinary share | ||||||||
| Basic and diluted | (0.04 | ) | (0.09 | ) | (0.01 | ) | ||
| Net loss per ADS (Note 2) | ||||||||
| Basic and diluted | (2.00 | ) | (4.50 | ) | (0.50 | ) | ||
| Weighted average shares used in calculating net loss per ordinary share | ||||||||
| Basic and diluted | 387,922,097 | 512,283,162 | 512,283,162 | |||||
| Note 1: Share-based compensation expenses were included in the operating expenses as follows: | ||||||||
| For the three months ended September 30, | ||||||||
| 2024 | 2025 | 2025 | ||||||
| RMB | RMB | USD | ||||||
| Share-based compensation expenses: | ||||||||
| Sales and marketing expenses | 1,868 | 1,618 | 227 | |||||
| Research and development expenses | 3,450 | 2,104 | 296 | |||||
| General and administrative expenses | 6,430 | 2,576 | 362 | |||||
| Total | 11,748 | 6,298 | 885 | |||||
| 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 September 30, | ||||||||
| 2024 | 2025 | 2025 | ||||||
| RMB | RMB | USD | ||||||
| Net Loss | (17,401 | ) | (44,513 | ) | (6,251 | ) | ||
| Share-based compensation | 11,748 | 6,298 | 885 | |||||
| Income tax effect | — | — | — | |||||
| Adjusted net loss | (5,653 | ) | (38,215 | ) | (5,366 | ) | ||
| 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 nine months ended September 30, | ||||||||
| 2024 | 2025 | 2025 | ||||||
| RMB | RMB | USD | ||||||
| Net revenues | 152,619 | 67,087 | 9,424 | |||||
| Cost of revenues | (95,695 | ) | (34,395 | ) | (4,831 | ) | ||
| Gross profit | 56,924 | 32,692 | 4,593 | |||||
| Operating expenses (Note 1) | ||||||||
| Sales and marketing expenses | (55,905 | ) | (42,877 | ) | (6,023 | ) | ||
| Research and development expenses | (55,028 | ) | (39,842 | ) | (5,597 | ) | ||
| General and administrative expenses | (90,729 | ) | (58,946 | ) | (8,280 | ) | ||
| Total operating expenses | (201,662 | ) | (141,665 | ) | (19,900 | ) | ||
| Loss from operations | (144,738 | ) | (108,973 | ) | (15,307 | ) | ||
| Interest income | 13,361 | 7,073 | 994 | |||||
| Foreign currency exchange loss | (394 | ) | (164 | ) | (23 | ) | ||
| Other income, net | 2,592 | 661 | 93 | |||||
| Loss before provision for income tax and income from equity method investments | (129,179 | ) | (101,403 | ) | (14,243 | ) | ||
| Income tax expenses | — | (6 | ) | (1 | ) | |||
| Net loss | (129,179 | ) | (101,409 | ) | (14,244 | ) | ||
| Net loss available to ordinary shareholders of 17 | (129,179 | ) | (101,409 | ) | (14,244 | ) | ||
| Education & Technology Group Inc. | ||||||||
| Net loss per ordinary share | ||||||||
| Basic and diluted | (0.33 | ) | (0.21 | ) | (0.03 | ) | ||
| Net loss per ADS (Note 2) | ||||||||
| Basic and diluted | (16.50 | ) | (10.50 | ) | (1.50 | ) | ||
| Weighted average shares used in calculating net loss per ordinary share | ||||||||
| Basic and diluted | 387,825,526 | 478,715,144 | 478,715,144 | |||||
| Note 1: Share-based compensation expenses were included in the operating expenses as follows: | ||||||||
| For the nine months ended September 30, | ||||||||
| 2024 | 2025 | 2025 | ||||||
| RMB | RMB | USD | ||||||
| Share-based compensation expenses: | ||||||||
| Sales and marketing expenses | 5,933 | 5,640 | 792 | |||||
| Research and development expenses | 10,777 | 7,373 | 1,036 | |||||
| General and administrative expenses | 21,538 | 8,893 | 1,249 | |||||
| Total | 38,248 | 21,906 | 3,077 | |||||
| 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 nine months ended September 30, | ||||||||
| 2024 | 2025 | 2025 | ||||||
| RMB | RMB | USD | ||||||
| Net Loss | (129,179 | ) | (101,409 | ) | (14,244 | ) | ||
| Share-based compensation | 38,248 | 21,906 | 3,077 | |||||
| Income tax effect | — | — | — | |||||
| Adjusted net loss | (90,931 | ) | (79,503 | ) | (11,167 | ) | ||
FAQ
What were 17EdTech (YQ) third quarter 2025 revenues and how much did they fall?
How large was 17EdTech's (YQ) net loss in Q3 2025 and adjusted loss (non-GAAP)?
What cash resources did 17EdTech (YQ) report as of September 30, 2025?
What drove the revenue decline at 17EdTech (YQ) in Q3 2025?
Did 17EdTech (YQ) increase R&D spending in Q3 2025 and why?
What recent product launch did 17EdTech (YQ) announce and what was the market response?
