Revenue contracted by 2.7% year-over-year in 2025Q4, while the company maintained a high gross margin of 86.8% despite rising competitive pressures.
| Sales/Revenue | 2.02B | 1.99B | 2.16B | 2.32B | 2.51B | 2.2B | 2.19B | 1.97B | 970.16M | 418.91M | 159.01M |
| Revenue Growth % | 1.49% | -7.84% | -7.04% | -7.37% | 13.8% | 0.45% | 11.14% | 103.47% | 131.59% | 163.45% | - |
| Cost of Goods Sold | 264.42M | 317.57M | 265.53M | 348.15M | 376.19M | 387.27M | 396.32M | 330.38M | 170.26M | 70.99M | 61.71M |
| COGS % of Revenue | 13.09% | 15.96% | 12.3% | 14.99% | 15% | 17.57% | 18.06% | 16.74% | 17.55% | 16.95% | 38.81% |
| Gross Profit | 1.76B | 1.67B | 1.89B | 1.97B | 2.13B | 1.82B | 1.8B | 1.64B | 799.9M | 347.92M | 97.3M |
| Gross Margin % | 86.91% | 84.04% | 87.7% | 85.01% | 85% | 82.43% | 81.94% | 83.26% | 82.45% | 83.05% | 61.19% |
| Gross Profit Growth % | 4.95% | -11.69% | -4.1% | -7.35% | 17.35% | 1.05% | 9.37% | 105.48% | 129.91% | 257.59% | - |
| Operating Expenses | 1.31B | 1.37B | 1.32B | 1.36B | 2.02B | 2.47B | 2.26B | 2.67B | 1.73B | 606.97M | 414.46M |
| OpEx % of Revenue | 64.9% | 69.07% | 61.08% | 58.46% | 80.44% | 111.88% | 102.89% | 135.39% | 178.07% | 144.89% | 260.65% |
| Selling, General & Admin | 1.28B | 1.35B | 1.29B | 1.32B | 1.96B | 2.4B | 2.16B | 2.6B | 1.69B | 593.03M | 409.27M |
| SG&A % of Revenue | 63.44% | 67.82% | 59.52% | 56.61% | 78% | 108.86% | 98.25% | 131.54% | 174.68% | 141.57% | 257.39% |
| Research & Development | 29.55M | 25.01M | 33.72M | 42.83M | 61.33M | 66.53M | 101.72M | 76.02M | 32.86M | 13.93M | 5.19M |
| R&D % of Revenue | 1.46% | 1.26% | 1.56% | 1.84% | 2.45% | 3.02% | 4.64% | 3.85% | 3.39% | 3.33% | 3.26% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 276K | 2.42M | 770K |
| Operating Income | 444.48M | 297.9M | 574.89M | 616.94M | 114.27M | -649.02M | -459.72M | -1.03B | -927.68M | -259.04M | -317.17M |
| Operating Margin % | 22.01% | 14.97% | 26.62% | 26.56% | 4.56% | -29.45% | -20.95% | -52.12% | -95.62% | -61.84% | -199.46% |
| Operating Income Growth % | 49.2% | -48.18% | -6.82% | 439.92% | 117.61% | -41.18% | 55.32% | -10.91% | -258.12% | 18.33% | - |
| EBITDA | 473.27M | 327.37M | 605.54M | 663.63M | 152.18M | -608.75M | -422.5M | -1B | -919.57M | -253.57M | -313.42M |
| EBITDA Margin % | 23.43% | 16.45% | 28.04% | 28.57% | 6.07% | -27.62% | -19.26% | -50.82% | -94.79% | -60.53% | -197.1% |
| EBITDA Growth % | 44.57% | -45.94% | -8.75% | 336.08% | 125% | -44.08% | 57.88% | -9.09% | -262.65% | 19.09% | - |
| D&A (Non-Cash Add-back) | 28.79M | 29.47M | 30.65M | 46.68M | 37.92M | 40.27M | 37.22M | 25.78M | 8.11M | 5.47M | 3.75M |
| EBIT | 430.31M | 362.19M | 683.74M | 616.94M | 208.56M | -649.02M | -378.28M | -926.49M | -913.82M | -253.57M | -317.17M |
| Net Interest Income | 22.79M | 33.53M | 23.44M | 6.19M | 5.25M | 14.12M | 45.85M | 68.18M | 13.58M | 3.05M | 814K |
| Interest Income | 23.64M | 38.82M | 31.09M | 16.25M | 16.18M | 25.81M | 60.17M | 70.36M | 13.58M | 3.05M | 814K |
| Interest Expense | 852K | 5.29M | 7.66M | 10.06M | 10.93M | 11.69M | 14.31M | 2.17M | 0 | 0 | 0 |
| Other Income/Expense | -19.55M | 45.48M | 91.1M | 38.06M | 78.48M | 217.79M | 67M | 100.27M | 8.96M | 5.47M | 1.58M |
| Pretax Income | 424.93M | 343.38M | 666M | 655M | 192.75M | -431.22M | -392.73M | -928.66M | -913.82M | -253.57M | -315.58M |
| Pretax Margin % | 21.04% | 17.25% | 30.84% | 28.2% | 7.69% | -19.57% | -17.9% | -47.04% | -94.19% | -60.53% | -198.47% |
| Income Tax | 59.3M | 1.3M | 25.17M | 11.99M | -19.62M | -236K | 2.44M | 102.44M | 8.82M | 0 | 1.91M |
| Effective Tax Rate % | 13.95% | 0.38% | 3.78% | 1.83% | -10.18% | 0.05% | -0.62% | -11.03% | -0.97% | 0% | -0.6% |
| Net Income | 365.63M | 342.08M | 640.83M | 643.96M | 219.06M | -432.34M | -395.03M | -927.02M | -918.58M | -253.57M | -318.3M |
| Net Margin % | 18.1% | 17.19% | 29.67% | 27.72% | 8.73% | -19.62% | -18.01% | -46.96% | -94.68% | -60.53% | -200.18% |
| Net Income Growth % | 6.88% | -46.62% | -0.49% | 193.97% | 150.67% | -9.44% | 57.39% | -0.92% | -262.26% | 20.34% | - |
| Net Income (Continuing) | 365.63M | 342.08M | 640.83M | 643.01M | 212.37M | -430.99M | -395.17M | -926.95M | -918.71M | -253.57M | -315.58M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | -1.49M | -1.49M | -1.49M | -5.36M | -4.93M | -658K | -212K | 136K | 64K | 0 | 0 |
| EPS (Diluted) | 26.43 | 25.06 | 46.44 | 47.07 | 16.28 | -32.01 | -28.92 | -73.63 | -111.17 | -30.69 | -41.68 |
| EPS Growth % | 5.47% | -46.04% | -1.34% | 189.13% | 150.86% | -10.68% | 60.72% | 33.77% | -262.24% | 26.37% | - |
| EPS (Basic) | 26.43 | 25.06 | 46.44 | 47.07 | 16.28 | -32.01 | -28.92 | -73.63 | -111.17 | -30.69 | -41.68 |
| Diluted Shares Outstanding | 13.47M | 13.65M | 13.8M | 13.68M | 13.46M | 13.51M | 13.66M | 12.59M | 8.26M | 8.26M | 7.64M |
| Basic Shares Outstanding | 13.47M | 13.65M | 13.8M | 13.68M | 13.46M | 13.51M | 13.66M | 12.59M | 8.26M | 8.26M | 7.64M |
| Dividend Payout Ratio | - | - | 4.88% | 5.06% | - | - | - | - | - | - | - |
Regulatory and enrollment saturation
As indicated by the most recent quarterly data, STG's revenue has contracted by 2.7% year-over-year, reflecting a persistent inability to catalyze top-line expansion despite the company's established position in the adult education market and its reliance on the cyclical nature of national examination schedules.
The consistent negative revenue growth trend over the past ten quarters suggests that the company is struggling to capture new market share in an increasingly competitive digital landscape. Investors should monitor whether this contraction is a result of intentional product pruning or a broader saturation of the core STE degree-oriented segment.
Based on reported financial statements, STG maintains a robust gross margin of 86.8%, which highlights the inherent scalability of its digital-first delivery model, yet this efficiency is increasingly offset by the rising costs required to sustain enrollment levels in a crowded vocational training environment.
While the gross margin remains structurally superior to peers like TAL and EDU, the lack of operating leverage suggests that the company's pricing power may be limited by intense competition. The stability of these margins appears to be a function of low marginal costs rather than an ability to command premium pricing for its educational services.
According to recent quarterly filings, STG's operating margin has fluctuated significantly, reaching 22.4% in the most recent period, which underscores the company's heavy reliance on aggressive sales and marketing expenditures to maintain its current revenue base against emerging vocational training competitors.
The high ratio of SG&A to gross profit indicates that the company's operating leverage is effectively capped by the necessity of constant customer acquisition. This suggests that any attempt to reduce marketing spend could lead to an immediate and potentially sharp decline in top-line performance.
As reported in the income statement, STG's net income has shown significant volatility, with the most recent quarter reporting $38.4 million, a sharp decline from the $126.6 million observed in 2025Q2, suggesting that bottom-line results are highly sensitive to quarterly fluctuations in marketing efficiency.
The absence of stock-based compensation expenses is a notable feature of the company's earnings profile, which may improve the quality of reported EPS compared to peers. However, the erratic nature of net income warrants further investigation into whether these swings are driven by seasonal enrollment patterns or underlying operational instability.
Based on an analysis of the provided data, the primary risk to the current investment thesis is the potential for permanent margin compression if the company is forced to increase marketing spend to combat the entry of larger, well-capitalized vocational training platforms into its niche.
Short-sellers may focus on the persistent revenue contraction as evidence that the company's core STE product is losing relevance in a changing labor market. The reliance on upfront tuition payments creates a significant deferred revenue float, which could mask underlying demand issues until they manifest as sudden cash flow volatility.
Quick answers to the most common questions about buying STG stock.
For fiscal year 2025, Sunlands Technology Group (STG) reported total revenue of $2.02B. This represents a 1170.3% increase compared to $159.0M in 2015.
Sunlands Technology Group (STG) is profitable, generating $365.6M in net income for the fiscal year ending 2025 with a net profit margin of 18.1%.
Sunlands Technology Group (STG) reported an operating income of $444.5M, resulting in an operating profit margin of 22.0%. This margin reflects the operational efficiency of the business before interest and taxes.
Sunlands Technology Group (STG) generated $1.76B in gross profit for the year, representing a gross profit margin of 86.9%. This demonstrates the company's core pricing power and production efficiency.