Sunlands Technology Group (NYSE: STG) plummeted 4.43% to $1.51 per American depositary share after the company announced widened losses.
The Beijing-based online education platform said in a statement today that in the three months through September its revenue was $79.8 million, up 2.7% year-over-year.
Tongbo Liu, the chief executive officer and director of Sunlands, said in today’s announcement, "Despite the short-term impact on our operations of the COVID-19 pandemic in the first half of 2020, Sunlands achieved steady year-over-year increases in both gross billings and net revenues in the third quarter. Our results were fueled by a combination of the recovering macroeconomic conditions in China as well as the implementation of optimization initiatives within our business."
However, the company’s net loss widened to $24.4 million, or $3.63 per share in the third quarter. In the first nine months of 2020, net loss reached $52.7 million.
Sunlands said its sales and marketing expenses increased by 32.7% to $83.9 million in the third quarter from $65.42 million last year. The increase was mainly due to a rise in paid compensation and marketing activities.
"Our third quarter financial results were a reflection of our balanced expansion strategy. Net revenues increased by 2.7% year-over-year, exceeding our expectations. This result is attributable to broad-based improvements across our organization, in particular optimizing our revenue contribution structure,” said Selena Lu Lv, the chief financial officer of Sunlands.
Going forward, the company expects net revenue to be between 540 million yuan to 560 million yuan.