iHuman (NYSE:IH), a leading provider of tech-powered intellectual development products in China, announced third-quarter financial results on Monday that reflected the persistent headwinds facing the country's early childhood education sector.
The company saw a broad contraction across its key financial metrics and user engagement levels compared to the previous year.
Total revenues for the quarter ended September 30, 2025, fell to RMB205.8 million ($28.9 million), a 14% decrease from the RMB239.4 million reported in the same period of 2024.
The revenue slump was accompanied by a decline in average total monthly active users (MAUs), which dropped to 26.13 million from 29.12 million a year ago.
The company’s performance continues to be pressured by macro-demographic trends in its home market.
A declining newborn population in China has fundamentally altered the addressable market for iHuman’s core early-learning products.
In response, CEO Dr. Peng Dai noted that the company is strategically expanding its offerings to serve "older age cohorts," leveraging its existing technological expertise and intellectual property to reach children beyond the traditional preschool age.
Despite the top-line pressure, iHuman maintained a robust gross margin of 68.3%, nearly identical to the prior year.
Net income for the quarter was RMB21.6 million ($3 million), down from RMB25.1 million in the third quarter of 2024.
With domestic demand softening, iHuman is increasingly looking toward international expansion to diversify its revenue streams.
In late 2025, the company intensified its "globalization drive" through a strategic partnership with U.S.-based Cricket Media to launch Reading Stars, an interactive platform aimed at Western markets.
Management also highlighted continued investment in its "AI Lab," focusing on proprietary Large Language Models (LLMs) to enhance personalized tutoring features.
The company’s balance sheet remains a point of strength, with cash and short-term investments totaling RMB1,128.2 million ($158.5 million) as of September 30, providing a significant cushion for further R&D and international marketing efforts.
The report arrives as investors weigh the long-term viability of Chinese edtech firms following the regulatory overhauls of previous years.
While iHuman has remained consistently profitable, the shrinking user base suggests that its transition into new age brackets and geographic regions will be critical to returning to growth in 2026.