On November 20, Sunlands Online Education Group (STG.US) announced its unaudited financial results for the third quarter of 2025. The company reported revenue of RMB 523 million, a year-on-year increase of 6.5%, and net profit of RMB 125 million, up 40.5% YoY. The net profit margin rose to 24.0%, marking a 5.8 percentage point improvement from the same period last year. This marks Sunlands’ 18th consecutive quarter of profitability, demonstrating resilience and cross-cycle capabilities amid a rational growth phase in China’s adult education sector.

Sunlands’ management emphasized that the industry is transitioning into a high-quality development phase. "For us, growth is no longer about pure scale expansion but balancing efficiency, innovation, and long-term value," the company stated. "We’ve optimized our organizational structure and operations through precise course offerings and disciplined cash flow management, ensuring sustainable growth. Moving forward, we will prioritize user needs, digital transformation, and organizational upgrades to build a more resilient education ecosystem."

**Operational Stability: From Expansion to Profitability** In 2025, China’s adult education sector is undergoing structural transformation, shifting from speed-driven growth to quality-focused strategies. Competitiveness now hinges on sustainable profitability and operational efficiency rather than marketing spend. Sunlands exemplifies this trend. After posting Q2 revenue of RMB 539 million and a 23.5% net profit margin, the company delivered another steady performance in Q3, with revenue up 6.5% YoY and net profit surging 40.5% YoY. Its net profit margin climbed to 24.0%, reinforcing its position as one of the few players capable of navigating cyclical volatility with stability.

This stability stems from a two-year systemic overhaul centered on efficiency, quality, and value. Key initiatives include: - **Marketing**: Dynamic ROI monitoring and data modeling refined customer acquisition budgets, shifting focus from quantity to quality. Sales expenses fell 7.7% YoY. - **Operations**: Flatter hierarchies and digital collaboration shortened decision-making chains, cutting operating expenses by 5.5% YoY. - **Teaching**: Modular course design and AI-powered R&D tools halved development cycles, boosting content efficiency. Gross margin reached 88.5%, up 5.2 percentage points YoY.

Sunlands’ CFO noted, "Q3 results reflect our focus on profitable growth and operational quality. Through structural optimization, we’ve built robust operating leverage while sustaining investments in innovation and teaching excellence. Healthy cash flow, agile operations, and learner-centric products underpin our competitiveness."

**Demographic Stability: Tapping Long-Term Growth** As China’s aging population accelerates, education demand among middle-aged and elderly learners is evolving from a niche to a core growth driver. BCG data shows China’s 45+ population reached 640 million in 2025 (45% of the total), projected to hit 49% by 2030. The 60–74 age group alone will grow from 230 million to 260 million by 2030, fueling demand for "silver learning."

Sunlands identified this trend early, launching targeted programs since 2020. Its ecosystem spans hobby courses, life skills, arts, and cultural experiences, featuring tiered instruction and collaborations with artists/scholars. Blending online, offline, and community-based formats, some courses achieve 60–70% repurchase rates. The company also integrates education with cultural tourism, offering study tours co-designed with scholars and institutions. Future plans include rural volunteering, art contests, and cultural events to enrich learners’ social and emotional engagement.

**Future Stability: AI-Driven Organizational Evolution** Sunlands’ third pillar of stability lies in its self-evolving organizational capabilities. Unlike peers’ superficial AI adoption, Sunlands embeds AI across operations—enhancing R&D, teaching, decision-making, and cost control. Key applications: - **Teaching**: AI analyzes learner data to optimize course alignment and completion rates. - **Operations**: A real-time data platform slashes decision cycles from weeks to minutes. - **Management**: AI coordinates cross-departmental tasks, boosting efficiency. Internally, AI automates 70% of grading (8x faster, 95% accuracy), freeing instructors. For users, a 24/7 AI tutor aids knowledge retention, particularly for older learners.

"AI’s true value is enabling smarter, faster organizational growth," management stated. "It’s shifting us from experience-led to data-driven operations."

By interlinking financial health, demographic foresight, and AI-powered agility, Sunlands has forged a systemic growth model. As adult education matures, this "stability-first, intelligence-accelerated" approach is redefining long-term industry benchmarks.