Operating margins have compressed significantly from 21.4% in 2023Q1 to 9.7% in 2025Q2, highlighting a failure to achieve operating leverage despite maintaining a 67.8% gross margin.
| Sales/Revenue | 882.69M | 807.02M | 922.2M | 1.02B | 985.52M | 944.72M | 531.91M | 218.66M | 131.87M |
| Revenue Growth % | -8.25% | -12.49% | -9.42% | 3.31% | 4.32% | 77.61% | 143.27% | 65.82% | - |
| Cost of Goods Sold | 282.86M | 259.41M | 282.05M | 296.87M | 294.34M | 284.1M | 166.47M | 84.16M | 65.85M |
| COGS % of Revenue | - | 32.14% | 30.58% | 29.16% | 29.87% | 30.07% | 31.3% | 38.49% | 49.94% |
| Gross Profit | 599.83M | 547.61M | 640.15M | 721.27M | 691.17M | 660.62M | 365.44M | 134.49M | 66.01M |
| Gross Margin % | 67.95% | 67.86% | 69.42% | 70.84% | 70.13% | 69.93% | 68.7% | 61.51% | 50.06% |
| Gross Profit Growth % | - | -14.46% | -11.25% | 4.35% | 4.62% | 80.77% | 171.72% | 103.74% | - |
| Operating Expenses | 523.13M | 480.85M | 568.24M | 561.38M | 579.59M | 714.87M | 409.89M | 413.3M | 88.08M |
| OpEx % of Revenue | - | 59.58% | 61.62% | 55.14% | 58.81% | 75.67% | 77.06% | 189.02% | 66.79% |
| Selling, General & Admin | 292.3M | 272.41M | 320.48M | 303.84M | 266.11M | 299.54M | 210.38M | 243.15M | 35.97M |
| SG&A % of Revenue | - | 33.76% | 34.75% | 29.84% | 27% | 31.71% | 39.55% | 111.2% | 27.28% |
| Research & Development | 230.83M | 208.44M | 247.76M | 257.55M | 313.48M | 415.33M | 199.51M | 170.16M | 52.1M |
| R&D % of Revenue | - | 25.83% | 26.87% | 25.3% | 31.81% | 43.96% | 37.51% | 77.82% | 39.51% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 76.7M | 66.76M | 71.91M | 159.89M | 111.58M | -54.25M | -44.45M | -278.81M | -22.06M |
| Operating Margin % | 8.69% | 8.27% | 7.8% | 15.7% | 11.32% | -5.74% | -8.36% | -127.51% | -16.73% |
| Operating Income Growth % | - | -7.17% | -55.02% | 43.29% | 305.69% | -22.04% | 84.06% | -1163.7% | - |
| EBITDA | 119.75M | 74.5M | 85.57M | 171.58M | 122.41M | -47.83M | -41.64M | -278.21M | -21.7M |
| EBITDA Margin % | 13.57% | 9.23% | 9.28% | 16.85% | 12.42% | -5.06% | -7.83% | -127.24% | -16.45% |
| EBITDA Growth % | 8.8% | -12.93% | -50.13% | 40.16% | 355.94% | -14.87% | 85.03% | -1182.21% | - |
| D&A (Non-Cash Add-back) | 0 | 7.75M | 13.66M | 11.69M | 10.83M | 6.42M | 2.81M | 597K | 365K |
| EBIT | 119.75M | 101.79M | 110.6M | 202.57M | 132.77M | -37.2M | -44.45M | -278.81M | -22.06M |
| Net Interest Income | 0 | 0 | 0 | 28.54M | 12.19M | 9.44M | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 28.54M | 12.19M | 9.44M | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | 43.04M | 35.03M | 38.69M | 42.69M | 21.19M | 17.05M | 7.44M | 4.58M | 6.07M |
| Pretax Income | 119.75M | 101.79M | 110.6M | 202.57M | 132.77M | -37.2M | -37.01M | -274.23M | -15.99M |
| Pretax Margin % | 13.57% | 12.61% | 11.99% | 19.9% | 13.47% | -3.94% | -6.96% | -125.42% | -12.13% |
| Income Tax | 9.71M | 6.39M | 12.01M | 21.67M | 22.95M | -145K | 466K | 1.36M | 1.61M |
| Effective Tax Rate % | 8.11% | 6.27% | 10.86% | 10.7% | 17.29% | 0.39% | -1.26% | -0.5% | -10.07% |
| Net Income | 110.03M | 95.4M | 98.59M | 180.91M | 109.82M | -37.05M | -37.48M | -275.6M | -17.6M |
| Net Margin % | 12.47% | 11.82% | 10.69% | 17.77% | 11.14% | -3.92% | -7.05% | -126.04% | -13.35% |
| Net Income Growth % | -16.74% | -3.23% | -45.5% | 64.73% | 396.4% | 1.13% | 86.4% | -1465.54% | - |
| Net Income (Continuing) | 110.03M | 95.4M | 98.59M | 180.91M | 109.82M | -37.05M | -37.48M | -275.6M | -17.6M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 10.29 | 8.75 | 9.00 | 16.50 | 10.15 | -3.50 | -5.35 | -25.85 | -1.72 |
| EPS Growth % | -15.91% | -2.78% | -45.45% | 62.56% | 390% | 34.58% | 79.3% | -1402.91% | - |
| EPS (Basic) | - | 9.10 | 9.40 | 17.15 | 10.30 | -3.45 | -5.35 | -25.85 | -1.72 |
| Diluted Shares Outstanding | 10.7M | 10.7M | 10.85M | 10.95M | 10.81M | 10.67M | 9.05M | 10.66M | 10.66M |
| Basic Shares Outstanding | 10.28M | 10.28M | 10.48M | 10.56M | 10.66M | 10.67M | 9.05M | 10.66M | 10.66M |
| Dividend Payout Ratio | - | 39.85% | 35.77% | - | - | - | - | - | - |
Domestic demographic and regulatory headwinds
As reported in recent financial filings, iHuman has experienced a sustained period of negative top-line growth, with the most recent quarterly revenue of $200.2 million representing a 6.9% year-over-year decline, signaling potential saturation within its core domestic Chinese early childhood education market.
The consistent negative growth trajectory suggests that the company's current product suite may be struggling to maintain relevance among a shrinking target demographic. Investors should monitor whether this contraction reflects a structural decline in demand or a temporary lull in the company's content refresh cycle.
Based on the company's latest income statement, iHuman maintains a robust gross margin of 67.8%, demonstrating that despite top-line pressures, the underlying digital-first business model retains significant pricing power and cost efficiency relative to its physical product offerings.
The stability of these margins indicates that the firm has successfully protected its core value proposition from inflationary pressures or competitive discounting. However, the inability to translate this high gross profitability into superior operating margins suggests that the cost of maintaining user engagement remains a significant structural burden.
According to historical income statement data, iHuman's operating margin has compressed from 21.4% in 2023Q1 to 9.7% in 2025Q2, indicating that the company is failing to achieve meaningful operating leverage as revenue declines and fixed costs remain elevated.
This trend implies that the firm's current cost structure is not sufficiently flexible to adjust to lower revenue volumes, leading to a disproportionate impact on operating income. Analysts should investigate whether this reflects necessary ongoing R&D investment or an inability to optimize SG&A expenses in a cooling market.
As indicated by the provided financial data, iHuman's net income remains positive, yet the quality of these earnings warrants scrutiny given the significant contribution of non-operating items and the potential impact of interest income generated from the company's substantial $1.15 billion cash position.
The reliance on interest income to bolster net margins may be masking underlying operational inefficiencies within the core education business. Investors should be cautious of the sustainability of these earnings if the company eventually deploys its cash reserves or if interest rate environments shift unfavorably.
Based on the current market valuation relative to the company's $1.15 billion cash pile, the market appears to be pricing iHuman as a liquidating entity rather than a growth-oriented firm, reflecting deep skepticism regarding management's ability to reverse the current revenue decline.
Short-sellers likely focus on the persistent revenue contraction and the lack of a clear catalyst for a return to growth in a challenging demographic environment. The primary risk remains that the company's 'edutainment' moat is insufficient to overcome the broader macroeconomic and regulatory headwinds facing the Chinese education sector.
Quick answers to the most common questions about buying IH stock.
For fiscal year 2025, iHuman Inc. (IH) reported total revenue of $807.0M. This represents a 512.0% increase compared to $131.9M in 2018.
iHuman Inc. (IH) is profitable, generating $95.4M in net income for the fiscal year ending 2025 with a net profit margin of 11.8%.
iHuman Inc. (IH) reported an operating income of $66.8M, resulting in an operating profit margin of 8.3%. This margin reflects the operational efficiency of the business before interest and taxes.
iHuman Inc. (IH) generated $547.6M in gross profit for the year, representing a gross profit margin of 67.9%. This demonstrates the company's core pricing power and production efficiency.