QuantaSing’s Strategic Shift: Earnings Call Insights

Quantasing Group Ltd. ADR ((QSG)) has held its Q3 earnings call. Read on for the main highlights of the call.

QuantaSing Group Ltd. ADR’s recent earnings call painted a picture of both achievement and challenge. The company celebrated significant milestones, such as the successful integration and promising growth of the Letsvan Pop Toy business. However, it also faced notable declines in revenue from online learning and enterprise services, as it shifts strategically from traffic-driven to product-driven models.

Revenue Achievement

QuantaSing reported a revenue of RMB 570.7 million, marking a strategic transition from traffic-driven to product-driven business models. This shift is a cornerstone of the company’s current strategy, aiming for sustainable growth and profitability.

Successful Integration of Letsvan

The company completed the consolidation of Letsvan on March 31, positioning itself at the forefront of the burgeoning Pop Toy market. This strategic move is expected to leverage Letsvan’s strengths and enhance QuantaSing’s market position.

Calligraphy Program Success

QuantaSing’s calligraphy program has been a standout success, achieving a repeat purchase rate exceeding 55%. The program’s innovative blend of online learning and offline graduation trips has garnered a 100% satisfaction rate, highlighting its appeal and effectiveness.

Pop Toy Market Expansion

The Pop Toy market is projected to grow at a CAGR of 5.1% to reach RMB 1,993.7 billion by 2028. Letsvan is poised to play a pivotal role in this expansion, capitalizing on its established market presence and expertise.

Promising IP Development

Letsvan’s IP ‘WAKUKU’ has gained significant market traction, with record-breaking sales and robust online engagement. This success underscores the potential of Letsvan’s creative assets in driving future growth.

Revenue Decline in Online Learning Services

Individual online learning services generated revenues of RMB 467.2 million, reflecting a 39.6% decrease year-over-year. This decline is part of a deliberate strategic transformation towards more sustainable, product-driven growth.

Enterprise Services Revenue Decline

Revenues from enterprise services fell to RMB 48.1 million, a 26.1% decrease from the previous year. This drop is attributed to a reduction in marketing services for enterprise customers, aligning with the company’s strategic shift.

Gross Billings Decline

Gross billings from individual online learning services were RMB 515.6 million, representing a 47.5% year-over-year decline. This decrease highlights the challenges faced during the transition to a product-driven model.

Forward-Looking Guidance

QuantaSing’s forward-looking guidance reflects its strategic transition to high-quality, product-driven growth. The company achieved a revenue of RMB 570.7 million in the third quarter of fiscal year 2025, with a breakdown of RMB 467.2 million from individual online learning services, RMB 48.1 million from enterprise services, and RMB 48.7 million from consumer business. The consolidation of Letsvan is expected to bolster future profits, with significant success anticipated in the Pop Toy market through the WAKUKU series.

In summary, QuantaSing Group Ltd. ADR’s earnings call highlighted a period of strategic transition, marked by significant achievements and challenges. While the company celebrates the successful integration of Letsvan and promising growth in the Pop Toy market, it also faces revenue declines in online learning and enterprise services. The forward-looking guidance suggests a continued focus on product-driven growth, with optimism surrounding the Pop Toy market and Letsvan’s IP development.