Quarterly revenue rebounds and cash flow turns positive—has Offcn Education made it through its darkest hour?

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Offcn Education recently disclosed its 2025 annual report and 2026 first quarter report.

Financial data shows that in 2025, the company achieved revenue of 2.24 billion yuan, a year-on-year decline of 14.84%; net profit attributable to shareholders of the listed company was 48.89 million yuan, a decline of 73.38% year-on-year.

Annual performance continued the contraction trend of recent years, a far cry from its peak of over 10 billion yuan in revenue, and its market value has dropped from the peak range of 200 billion yuan to the current approximately 16 billion yuan.

Although annual figures are under pressure, from a single quarter perspective, its financial indicators show signs of marginal stabilization.

In the fourth quarter of 2025, the company’s revenue achieved a year-on-year growth of 10.14%; entering the first quarter of 2026, revenue recorded 600 million yuan, a year-on-year increase of 4.31%, and in the same period, net profit attributable to shareholders reached 47.33 million yuan, a year-on-year increase of 18.33%.

A more critical indicator is that the net cash flow generated by operating activities in the first quarter increased by 81.95% year-on-year. The company’s performance has begun to show a weak recovery with gradual improvement each quarter.

At the macro level, the continuous shrinkage of Offcn Education’s revenue forms a stark contrast with the ever-growing “civil service exam fever.” For example, in the National Civil Service Exam, the number of approved applicants was about 1.57 million in 2021, but this figure surged to 3.718 million by 2026, showing explosive growth on the demand side.

Why has the leading company in a golden track fallen into a quagmire? The fundamental reason is the failure of its core business model.

In the early days, Offcn Education’s rapid scale-up tool was the “agreement class” model, i.e., the promise to refund a large portion of tuition fees if students failed the exams. This model essentially involved a bet and financial attributes—the institution profited not only from class service fees, but also from “result fees” if students succeeded and from the funds precipitated by large advance payments.

However, as competition in civil service exams has become fierce and the admission ratio has dropped, the students’ pass rates have decreased accordingly, causing the refund trigger rate for agreement classes to soar. When surging refund demands broke through the company's cash flow carrying capacity, coupled with the rigid operating costs from earlier expansions, a liquidity crisis was fully triggered.

In addition, dramatic changes on the supply side of the market have also intensified the divergence in performance.

After the “double reduction” policy, many education giants entered the adult vocational education and civil service exam markets; at the same time, with new media platforms like Douyin and Xiaohongshu, many personal IP studios and local small and medium-sized institutions quickly emerged. These long-tail institutions, relying on low-price strategies and flexible online customer acquisition, continue to erode the market share of traditional leaders. The “diseconomies of scale” in civil service exam training—which highly relies on star instructors and offline Q&A—has become more prominent in the current market environment.

Facing severe financial pressure and external competition, Offcn Education made deep operating adjustments in 2025. From analysis of the financial report, these adjustments focused mainly on cost control and channel restructuring.

On the cost side, the company’s total cost in 2025 decreased by 14.91% year-on-year, and the per capita efficiency ratio increased by 6.6 percentage points. The management team achieved a younger lineup, indicating that the company is strictly controlling costs to offset the profit dilution from decreased revenue size.

In channels and business model, Offcn Education abandoned its previous extensive expansion, stabilizing the number of directly operated branches at 816.

At the same time, the company began to try to shake off its single dependence on high-risk agreement classes, reinforced online-offline synergy, and sought to shift its business focus towards real teaching service fees by improving teaching research and introducing dual-teaching models like employment study machines.

Combining the financial performance of the fourth quarter of 2025 and the first quarter of 2026, the slight revenue increase and the significant rebound in operating net cash flow indicate that Offcn Education’s business is regaining its blood-making ability, and the years-long period of painful adjustment may have reached a cyclical bottom.

But beneath the surface of stabilization, the company still faces core challenges.

A large amount of refund liability accumulated from previous cash flow issues has yet to be completely cleared, and some former students are still having their refunds processed in installments. The core asset of education and training is trust, and historical contract fulfillment problems continue to put long-term pressure on the company's brand reputation.

Overall, Offcn Education’s current financial report reflects the deep adjustment of an asset-heavy education institution after being bitten by its own business model.

The fundamental demand for civil service exam training remains solid, but the industry’s growth logic has changed substantially, from “leveraging advance payments for scale” in the past, to “competing over teaching quality and single-store operational efficiency.”

Until Offcn Education completely resolves its historical debt and builds a more stable and healthy profit model, its path to recovery will remain long.

Risk warning and disclaimerThe market has risks, and investment must be cautious. This article does not constitute personal investment advice, nor does it take into account the individual investment goals, financial situation, or needs of any particular user. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investment based on this is at your own risk. ```