iHuman Inc. Announces Third Quarter 2024 Unaudited Financial Results
PR Newswire
BEIJING, Dec. 26, 2024
BEIJING, Dec. 26, 2024 /PRNewswire/ -- iHuman Inc. $(IH)$ ("iHuman" or the "Company"), a leading provider of tech-powered, intellectual development products in China, today announced its unaudited financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Highlights
-- Revenues were RMB239.4 million (US$34.1 million), compared with RMB261.5
million in the same period last year.
-- Gross profit was RMB163.9 million (US$23.4 million), compared with
RMB186.6 million in the same period last year.
-- Operating income was RMB20.7 million (US$2.9 million), compared with
RMB40.4 million in the same period last year.
-- Net income was RMB25.1 million (US$3.6 million), compared with RMB51.9
million in the same period last year.
-- Average total MAUs[1] reached a record-high of 29.12 million, a
year-over-year increase of 14.8%.
[1] "Average total MAUs" refers to the monthly average of the sum of the MAUs
of each of the Company's apps during a specific period, which is counted based
on the number of unique mobile devices through which such app is accessed at
least once in a given month, and duplicate access to different apps is not
eliminated from the total MAUs calculation.
Dr. Peng Dai, Director and Chief Executive Officer of iHuman, commented, "In the third quarter, we continued to see robust user demand for our products, driving average total MAUs to another record high of 29.12 million, representing a year-over-year increase of 14.8%. This growth underscores the effectiveness of our product strategy focused on innovation, overseas market expansion, and responsiveness to evolving market dynamics.
Domestically, we further strengthened our market leadership by enhancing our product portfolio with the launch of iHuman Chinese Reading. This new offering aims to cultivate an interest in Chinese reading, enhance literacy and verbal skills, and deepen children's understanding of the Chinese culture. Developed by the same team behind our highly acclaimed iHuman Chinese app, iHuman Chinese Reading continues our proud tradition and commitment to excellent content and innovative design. The course features a leveled reading system that facilitates gradual progress in Chinese proficiency and offers a rich variety of content formats, such as ancient Chinese poems, interactive storybooks, and online study tours.
Building on our foundation, we expanded our content library by strengthening ties with influential industry players and leveraged our advanced technology to create richer and more immersive experiences for children. For instance, through our previously announced strategic partnership with Children's Fun Publishing Co. Ltd., a leading children's book publisher in China, we recently launched a new "Frozen" theme within iHuman Little Artists, where children can color their favorite Frozen characters and scenes, upload their artwork, and watch them come to life in a narrated storybook. This integration provides children with a creative way to experience the popular Frozen story while offering a highly interactive reading and drawing experience.
We also continued to roll out updates across other app products. For example, we added two new themes to iHuman Magic Thinking: "Sudoku" and "Thinking Logic." "Sudoku" introduces children to Sudoku rules and mathematical concepts through short, animated stories and interactive challenges, and "Thinking Logic" engages them with a detective story series designed to sharpen judgment, analytical thinking, and problem-solving abilities.
On the international front, we enriched our portfolio with fresh content and features to boost user engagement and expand our global reach. Aha World received several updates, adding even more fun and adventure to its ever-expanding fantasy world. Children can now explore the "Love Animal Shelter," where they can adopt, wash, and care for adorable virtual pets and enjoy an immersive and joyful pet ownership experience. For those captivated by the mystical, we introduced themes like "Magic School" and "Magic Street," which take children on enchanting adventures and introduce magical shops filled with delightful surprises. These efforts have further boosted Aha World's popularity. By the end of September, Aha World achieved over 502 million cumulative views across various social media platforms and attracted more than 1.4 million followers globally, reflecting its growing appeal among young users worldwide.
Looking ahead, we remain focused on enhancing our diverse portfolio across markets to better promote children's holistic development while advancing our sustainable growth initiatives," concluded Dr. Dai.
Ms. Vivien Weiwei Wang, Director and Chief Financial Officer of iHuman, added, "In the third quarter of 2024, we achieved our eleventh consecutive quarter of profitability, with net income reaching RMB25.1 million. This sustained financial strength enables us to continue expanding our impact across diverse channels and customer segments. For instance, our animation studio, Kunpeng, broadened its product lineup with the launch of a new animated series, "Rainbow Crew," in October. The new series swiftly gained traction following its release, topping the charts for children's shows on leading streaming platforms, including Tencent Video, iQIYI, and Youku.
Beyond consumer-facing products, we have also built a robust B2B model that currently supports nearly 10,000 kindergartens and institutions across China. Our tailored content resources and solutions empower these institutions with a comprehensive suite of diverse, ready-to-use products that effectively meet the developmental needs of young children, promoting the high-quality development of kindergartens and institutions. Recently, we have opened an experience center in Zhongshan, Guangdong Province, which combines education, entertainment, hands-on experience, and some unique features. Designed as a one-stop demonstration hub for institutional customers and vendors, the center is organized into six key areas--core content, specialty content, extended services, a multi-functional hall, indoor play spaces, and outdoor activity zones--showcasing our interactive products and innovative approach to supporting early childhood development in a kindergarten setting. This hands-on experience enables institutions to gain a deeper understanding of how our offerings can seamlessly integrate into their educational environments. Moving forward, we will leverage our solid financial foundation and innovative product ecosystem to deepen our impact in both the consumer and business segments, reinforcing our industry-leading position and creating value for our shareholders."
Third Quarter 2024 Unaudited Financial Results
Revenues
Revenues were RMB239.4 million (US$34.1 million), a decrease of 8.4% from RMB261.5 million in the same period last year, primarily due to more conservative consumer spending.
Average total MAUs for the quarter were 29.12 million, an increase of 14.8% year-over-year from 25.36 million in the same period last year, primarily due to the effective execution of our user acquisition strategy and ongoing product innovation.
Cost of Revenues
Cost of revenues was RMB75.5 million (US$10.8 million), compared with RMB74.9 million in the same period last year.
Gross Profit and Gross Margin
Gross profit was RMB163.9 million (US$23.4 million), compared with RMB186.6 million in the same period last year. Gross margin was 68.4%, compared with 71.4% in the same period last year. The slight decrease in gross margin was mainly due to our increased focus on the offline component in the integrated online-offline product strategy to enhance the attractiveness of the product.
Operating Expenses
Total operating expenses were RMB143.2 million (US$20.4 million), compared to RMB146.2 million in the same period last year.
Research and development expenses were RMB59.3 million (US$8.5 million), a decrease of 10.4% from RMB66.2 million in the same period last year, primarily due to savings in payroll related expenses.
Sales and marketing expenses were RMB60.9 million (US$8.7 million), an increase of 12.7% from RMB54.0 million in the same period last year, primarily due to increased strategic spending on promotional activities, brand enhancement, and overseas expansion.
General and administrative expenses were RMB23.0 million (US$3.3 million), a decrease of 11.8% from RMB26.1 million in the same period last year, primarily due to savings in payroll related expenses, share-based compensation expenses, as well as other administrative expenses.
Operating Income
Operating income was RMB20.7 million (US$2.9 million), compared with RMB40.4 million in the same period last year.
Net Income
Net income was RMB25.1 million (US$3.6 million), compared with RMB51.9 million in the same period last year.
Basic and diluted net income per ADS were RMB0.48 (US$0.07) and RMB0.47 (US$0.07), respectively, compared with RMB0.98 and RMB0.95 in the same period last year. Each ADS represents five Class A ordinary shares of the Company.
Deferred Revenue and Customer Advances
Deferred revenue and customer advances were RMB298.9 million (US$42.6 million) as of September 30, 2024, compared with RMB318.6 million as of December 31, 2023.
Cash, Cash Equivalents and Short-term Investments
Cash, cash equivalents and short-term investments were RMB1,168.6 million (US$166.5 million) as of September 30, 2024, compared with RMB1,213.8 million as of December 31, 2023.
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