Second Quarter 2023 Highlights1
- Net revenues were
RMB69.2 million (US$9.5 million ), compared with net revenues ofRMB133.5 million in the second quarter of 2022. - Gross margin was 48.3%, compared with 52.2% in the second quarter of 2022.
- Net loss was
RMB47.9 million (US$6.6 million ), compared with net loss ofRMB26.4 million in the second quarter of 2022. - Net loss as a percentage of net revenues was negative 69.2% in the second quarter of 2023, compared with negative 19.8% in the second quarter of 2022.
- Adjusted net loss2 (non-GAAP), which excluded share-based compensation expenses of
RMB19.4 million (US$2.7 million ), wasRMB28.6 million (US$3.9 million ), compared with adjusted net income (non-GAAP) ofRMB3.6 million in the second quarter of 2022. - Adjusted net loss (non-GAAP) as a percentage of net revenues was negative 41.2% in the second quarter of 2022, compared with 2.7% of adjusted net income as a percentage of net revenues in the second quarter of 2022.
First Half 2023 Highlights
- Net revenues were
RMB78.5 million (US$10.8 million ), compared with net revenues ofRMB366.9 million in the first half of 2022. - Gross margin was 45.5%, compared with 57.6% in the first half of 2022.
- Net loss was
RMB140.5 million (US$19.4 million ), compared with net loss ofRMB51.2 million in the first half of 2022. - Net loss as a percentage of net revenues was negative 178.9% in the first half of 2023, compared with negative 14.0% in the first half of 2022.
- Adjusted net loss (non-GAAP), which excluded share-based compensation expenses of
RMB47.9 million (US$6.6 million ), wasRMB92.6 million (US$12.8 million ), compared with adjusted net income (non-GAAP) ofRMB13.5 million in the first half of 2022. - Adjusted net loss (non-GAAP) as a percentage of net revenues was negative 117.9% in the first half of 2023, compared with 3.7% of adjusted net income as a percentage of net revenues in the first half of 2022.
1 For a reconciliation of non-GAAP numbers, please see the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” at the end of this press release.
2 Adjusted net income (loss) represents net income (loss) excluding share-based compensation expenses.
Mr.
“Our offerings were enlisted in the National Directory of Intelligent Educational Products and Service Providers over the past quarter. It demonstrates industry recognition of our deep-rooted dedication to offering specialized services in educational digitalization and our market-leading technology and solutions. Continuous product development and evolution aimed at further enhancing user experience by applying the latest artificial intelligence technology will be our continued focus.”
Mr.
“With revenue rapidly rebounding over the past quarter, our gross margin is recovering to a normalized level and our net loss and adjusted net loss has also narrowed significantly. The Company is continuously implementing measures to control costs and enhance operational efficiency.”
Second Quarter 2023 Unaudited Financial Results
Net Revenues
Net revenues for the second quarter of 2023 were
Cost of Revenues
Cost of revenues for the second quarter of 2023 was
Gross Profit and Gross Margin
Gross profit for the second quarter of 2023 was
Gross margin for the second quarter of 2023 was 48.3%, compared with 52.2% in the second quarter of 2022.
Total Operating Expenses
The following table sets forth a breakdown of operating expenses by amounts and percentages of revenue during the periods indicated (in thousands, except for percentages):
For the three months ended | ||||||||||||||||||||||||
2022 | 2023 | Year- | ||||||||||||||||||||||
RMB | % | RMB | USD | % | over-year | |||||||||||||||||||
Sales and marketing expenses | 11,650 | 8.7 | % | 21,581 | 2,976 | 31.2 | % | 85.2 | % | |||||||||||||||
Research and development expenses | 35,709 | 26.7 | % | 36,796 | 5,074 | 53.1 | % | 3.0 | % | |||||||||||||||
General and administrative expenses | 56,441 | 42.3 | % | 32,904 | 4,538 | 47.5 | % | -41.7 | % | |||||||||||||||
Total operating expenses | 103,800 | 77.7 | % | 91,281 | 12,588 | 131.8 | % | -12.1 | % | |||||||||||||||
Total operating expenses for the second quarter of 2023 were
Sales and marketing expenses for the second quarter of 2023 were
Research and development expenses for the second quarter of 2023 were
General and administrative expenses for the second quarter of 2023 were
Loss from Operations
Loss from operations for the second quarter of 2023 was
Net Loss
Net loss for the second quarter of 2023 was
Adjusted Net Loss (non-GAAP)
Adjusted net loss (non-GAAP) for the second quarter of 2023 was
Please refer to the table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” at the end of this press release for a reconciliation of net loss under
Cash and Cash Equivalents, Restricted Cash, Short-term Investments, and Term Deposit
Cash and cash equivalents, restricted cash, short-term investments and term deposit were
Conference Call Information
The Company will hold a conference call on
Please note that all participants will need to preregister for the conference call participation by navigating to https://register.vevent.com/register/BI99159278b686419fbad714269178fdd2.
Upon registration, you will receive an email containing participant dial-in numbers, and PIN number. To join the conference call, please dial the number you receive, enter the PIN number, and you will be joined to the conference call instantly.
Additionally, a live and archived webcast of this conference call will be available at https://ir.17zuoye.com/.
Non-GAAP Financial Measures
17EdTech’s management uses adjusted net income (loss) as a non-GAAP financial measure to gain an understanding of 17EdTech’s comparative operating performance and future prospects.
Adjusted net income (loss) represents net loss excluding share-based compensation expenses and such adjustment has no impact on income tax.
Adjusted net income (loss) is used by 17EdTech’s management in their financial and operating decision-making as a non-GAAP financial measure, because management believes it reflects 17EdTech’s ongoing business and operating performance in a manner that allows meaningful period-to-period comparisons. 17EdTech’s management believes that such non-GAAP measure provides useful information to investors and others in understanding and evaluating 17EdTech’s operating performance in the same manner as management does, if they so choose. Specifically, 17EdTech believes the non-GAAP measure provides useful information to both management and investors by excluding certain charges that the Company believes are not indicative of its core operating results.
The non-GAAP financial measure has limitations. It does not include all items of income and expense that affect 17EdTech’s income from operations. Specifically, the non-GAAP financial measure is not prepared in accordance with GAAP, may not be comparable to non-GAAP financial measures used by other companies and, with respect to the non-GAAP financial measure that excludes certain items under GAAP, does not reflect any benefit that such items may confer to 17EdTech. Management compensates for these limitations by also considering 17EdTech’s financial results as determined in accordance with GAAP. The presentation of this additional information is not meant to be considered superior to, in isolation from or as a substitute for results prepared in accordance with US GAAP.
Exchange Rate Information
The Company’s business is primarily conducted in
About
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements about 17EdTech’s beliefs and expectations, are forward-looking statements. 17EdTech may also make written or oral forward-looking statements in its periodic reports to the
For investor and media inquiries, please contact:
Ms
Investor Relations Manager
E-mail: ir@17zuoye.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(In thousands of RMB and USD, except for share and per ADS data, or otherwise noted) | ||||||||||||
As of | As of | |||||||||||
2022 | 2023 | 2023 | ||||||||||
RMB | RMB | USD | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 707,895 | 259,933 | 35,846 | |||||||||
Restricted cash | 10,231 | 33,904 | 4,676 | |||||||||
Short-term investments | 19,531 | 7,373 | 1,017 | |||||||||
Term deposit | — | 284,441 | 39,226 | |||||||||
Accounts receivable | 34,824 | 58,286 | 8,038 | |||||||||
Amount due from a related party | — | 218 | 30 | |||||||||
Prepaid expenses and other current assets | 140,894 | 142,837 | 19,698 | |||||||||
Total current assets | 913,375 | 786,992 | 108,531 | |||||||||
Non-current assets | ||||||||||||
Property and equipment, net | 32,295 | 24,674 | 3,403 | |||||||||
Right-of-use assets | 30,052 | 20,781 | 2,866 | |||||||||
Long-term investment | — | 5,003 | 690 | |||||||||
Other non-current assets | 4,802 | 4,363 | 602 | |||||||||
TOTAL ASSETS | 980,524 | 841,813 | 116,092 | |||||||||
LIABILITIES | ||||||||||||
Current liabilities | ||||||||||||
Accrued expenses and other current liabilities | 153,023 | 133,647 | 18,431 | |||||||||
Deferred revenue and customer advances, current | 42,385 | 40,503 | 5,586 | |||||||||
Operating lease liabilities, current | 18,719 | 10,692 | 1,474 | |||||||||
Total current liabilities | 214,127 | 184,842 | 25,491 |
As of | As of | |||||||||||
2022 | 2023 | 2023 | ||||||||||
RMB | RMB | USD | ||||||||||
Non-current liabilities | ||||||||||||
Operating lease liabilities, non-current | 7,534 | 4,863 | 671 | |||||||||
TOTAL LIABILITIES | 221,661 | 189,705 | 26,162 | |||||||||
SHAREHOLDERS' EQUITY | ||||||||||||
Class A ordinary shares | 300 | 302 | 42 | |||||||||
Class B ordinary shares | 38 | 38 | 5 | |||||||||
(21 | ) | (60 | ) | (8 | ) | |||||||
Additional paid-in capital | 10,954,822 | 10,965,149 | 1,512,163 | |||||||||
Accumulated other comprehensive income | 62,689 | 86,107 | 11,875 | |||||||||
Accumulated deficit | (10,258,965 | ) | (10,399,428 | ) | (1,434,147 | ) | ||||||
TOTAL SHAREHOLDERS' EQUITY | 758,863 | 652,108 | 89,930 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 980,524 | 841,813 | 116,092 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(In thousands of RMB and USD, except for share and per ADS data, or otherwise noted) | ||||||||||||
For the three months ended | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
RMB | RMB | USD | ||||||||||
Net revenues | 133,492 | 69,246 | 9,549 | |||||||||
Cost of revenues | (63,773 | ) | (35,766 | ) | (4,932 | ) | ||||||
Gross profit | 69,719 | 33,480 | 4,617 | |||||||||
Operating expenses (Note 1) | ||||||||||||
Sales and marketing expenses | (11,650 | ) | (21,581 | ) | (2,976 | ) | ||||||
Research and development expenses | (35,709 | ) | (36,796 | ) | (5,074 | ) | ||||||
General and administrative expenses | (56,441 | ) | (32,904 | ) | (4,538 | ) | ||||||
Total operating expenses | (103,800 | ) | (91,281 | ) | (12,588 | ) | ||||||
Loss from operations | (34,081 | ) | (57,801 | ) | (7,971 | ) | ||||||
Interest income | 1,581 | 8,069 | 1,113 | |||||||||
Foreign currency exchange (loss) gain | (18 | ) | 148 | 20 | ||||||||
Other income, net | 6,087 | 1,639 | 226 | |||||||||
Loss before provision for income tax and income from equity method investments | (26,431 | ) | (47,945 | ) | (6,612 | ) | ||||||
Income tax expenses | — | — | — | |||||||||
Income from equity method investments | — | 19 | 3 | |||||||||
Net loss | (26,431 | ) | (47,926 | ) | (6,609 | ) | ||||||
Net loss available to ordinary shareholders of 17 | (26,431 | ) | (47,926 | ) | (6,609 | ) | ||||||
Net loss per ordinary share | ||||||||||||
Basic and diluted | (0.05 | ) | (0.10 | ) | (0.01 | ) | ||||||
Net loss per ADS (Note 2) | ||||||||||||
Basic and diluted | (0.50 | ) | (1.00 | ) | (0.10 | ) | ||||||
Weighted average shares used in calculating net loss per ordinary share | ||||||||||||
Basic and diluted | 509,153,443 | 478,317,045 | 478,317,045 | |||||||||
Note 1: Share-based compensation expenses were included in the operating expenses as follows: | ||||||||||||
For the three months ended | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
RMB | RMB | USD | ||||||||||
Share-based compensation expenses: | ||||||||||||
Sales and marketing expenses | 3,368 | 4,890 | 674 | |||||||||
Research and development expenses | 7,175 | 6,870 | 947 | |||||||||
General and administrative expenses | 19,516 | 7,614 | 1,050 | |||||||||
Total | 30,059 | 19,374 | 2,671 | |||||||||
Note 2: Each one ADS represents ten Class A ordinary shares. Effective on | ||||||||||||
Reconciliations of non-GAAP measures to the most comparable GAAP measures | ||||||||||||
(In thousands of RMB and USD, except for share, per share and per ADS data) | ||||||||||||
For the three months ended | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
RMB | RMB | USD | ||||||||||
Net Loss | (26,431 | ) | (47,926 | ) | (6,609 | ) | ||||||
Share-based compensation | 30,059 | 19,374 | 2,671 | |||||||||
Income tax effect | — | — | — | |||||||||
Adjusted net income (loss) | 3,628 | (28,552 | ) | (3,938 | ) |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(In thousands of RMB and USD, except for share and per ADS data, or otherwise noted) | ||||||||||||
For the six months ended | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
RMB | RMB | USD | ||||||||||
Net revenues | 366,938 | 78,519 | 10,828 | |||||||||
Cost of revenues | (155,558 | ) | (42,776 | ) | (5,899 | ) | ||||||
Gross profit | 211,380 | 35,743 | 4,929 | |||||||||
Operating expenses (Note 1) | ||||||||||||
Sales and marketing expenses | (33,647 | ) | (43,409 | ) | (5,986 | ) | ||||||
Research and development expenses | (133,185 | ) | (81,069 | ) | (11,180 | ) | ||||||
General and administrative expenses | (107,742 | ) | (73,086 | ) | (10,079 | ) | ||||||
Total operating expenses | (274,574 | ) | (197,564 | ) | (27,245 | ) | ||||||
Loss from operations | (63,194 | ) | (161,821 | ) | (22,316 | ) | ||||||
Interest income | 3,646 | 15,843 | 2,185 | |||||||||
Foreign currency exchange gain | 185 | 161 | 22 | |||||||||
Other income, net | 8,166 | 5,351 | 738 | |||||||||
Loss before provision for income tax and income from equity method investments | (51,197 | ) | (140,466 | ) | (19,371 | ) | ||||||
Income tax expenses | — | — | — | |||||||||
Income from equity method investments | — | 3 | — | |||||||||
Net loss | (51,197 | ) | (140,463 | ) | (19,371 | ) | ||||||
Net loss available to ordinary shareholders of 17 | (51,197 | ) | (140,463 | ) | (19,371 | ) | ||||||
Net loss per ordinary share | ||||||||||||
Basic and diluted | (0.10 | ) | (0.29 | ) | (0.04 | ) | ||||||
Net loss per ADS (Note 2) | ||||||||||||
Basic and diluted | (1.00 | ) | (2.90 | ) | (0.40 | ) | ||||||
Weighted average shares used in calculating net loss per ordinary share | ||||||||||||
Basic and diluted | 508,882,655 | 482,415,249 | 482,415,249 | |||||||||
Note 1: Share-based compensation expenses were included in the operating expenses as follows: | ||||||||||||
For the six months ended | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
RMB | RMB | USD | ||||||||||
Share-based compensation expenses: | ||||||||||||
Sales and marketing expenses | 7,348 | 9,957 | 1,373 | |||||||||
Research and development expenses | 14,360 | 13,834 | 1,908 | |||||||||
General and administrative expenses | 42,996 | 24,078 | 3,321 | |||||||||
Total | 64,704 | 47,869 | 6,602 | |||||||||
Note 2: Each one ADS represents ten Class A ordinary shares. Effective on |
Reconciliations of non-GAAP measures to the most comparable GAAP measures | ||||||||||||
(In thousands of RMB and USD, except for share, per share and per ADS data) | ||||||||||||
For the six months ended | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
RMB | RMB | USD | ||||||||||
Net Loss | (51,197 | ) | (140,463 | ) | (19,371 | ) | ||||||
Share-based compensation | 64,704 | 47,869 | 6,602 | |||||||||
Income tax effect | — | — | — | |||||||||
Adjusted net income (loss) | 13,507 | (92,594 | ) | (12,769 | ) |
Source:
2023 GlobeNewswire, Inc., source