YXT.com Narrows Losses Through AI Integration and Strategic Shift to Large Enterprises

YXT.com Group Holding Limited narrowed its losses in the first nine months of 2024 as operational efficiency improvements, including the use of artificial intelligence, took hold. During the period ended September 30, 2024, the Chinese digital enterprise learning solutions provider posted a net loss of RMB14.9 million, significantly narrower than the RMB245.3 million loss reported in the same period a year ago. This improvement marks the company's first financial results as a public entity following its NASDAQ listing in August that raised approximately $25 million.

The company's strategic shift toward large enterprise clients has been central to its improved performance. Revenue generated from subscription-based solutions accounted for 91.7% of total revenue, up from 82.5% in the year-ago period, while margins expanded to 60.4% from 59.3%. Peter Lu, Director, Founder and Chairman who was recently appointed CEO, stated that despite macro challenges affecting enterprise training spending, the company deepened relationships with large enterprise clients, particularly among Fortune 500 companies. The company's AI features have been well-received by key customers, enabling healthy retention rates despite the challenging environment.

Operational efficiency improvements driven by AI automation and optimization of the company's service team structure contributed significantly to margin expansion. YXT.com implemented AI-powered solutions across several business functions, including automated sales assistants that help identify and prioritize opportunities, and Smart ServiceDesk which handles routine service inquiries. The company also employs AI-assisted code development and testing tools, streamlining its ability to deliver customized solutions for enterprise clients.

The digital corporate learning market in China represents a substantial opportunity, valued at RMB126.0 billion in 2023 and projected to reach RMB300.0 billion in 2028, growing at a CAGR of 18.9%. Among large enterprises specifically, the market is projected to grow at a CAGR of 20.5%. YXT.com reports that according to Frost & Sullivan, it is the largest digital corporate learning solution provider in China in terms of total revenue, subscription revenue, and number of subscription customers in 2023.

The company's strategic realignment resulted in short-term revenue challenges, with revenue decreasing to RMB241.7 million from RMB328.8 million in the same period last year. Net revenue retention rates of subscription customers decreased to 101.0% from 104.8% due to the planned reduction of small and medium-sized customers from its portfolio. However, the shift toward large enterprise accounts provides more stable spending patterns and higher revenue potential, as large businesses typically have bigger and more reliable training budgets.

YXT.com leverages advanced technologies including AI, speech recognition, adaptive learning, anti-cheating, and simulation to provide targeted training and learning paths for employees based on their positions and required skills. The company's personalized recommendation engine designs optimal learning paths using insights gleaned across different industries and business scenarios. As of September 30, 2024, YXT.com had cash of RMB488.7 million, slightly lower than the RMB496.2 million as of December 31, 2023.

The company remains focused on three main strategic areas: deepening relationships with large enterprise customers, expanding AI-powered learning solutions, and maintaining operational efficiency. Chief Financial Officer Pun Leung Liu emphasized that the financial results demonstrate the effectiveness of operational optimization initiatives through strategic cost management and AI-enabled improvements across multiple functions. The company maintains commitment to disciplined cost control while continuing to invest in technology capabilities and enterprise-focused solutions that drive long-term growth.