Tarena International, Inc. Announces the Results for the First Quarter of 2022
BEIJING,
First Quarter 2022 Highlights
- Net revenues increased by 16.8% year-over-year to
RMB623.5 million (US$98.4 million ), fromRMB533.8 million in the same period of 2021. - Net revenue from childhood & adolescent quality education business, which represented 56.8% of the total net revenues, increased by 27.2% year-over-year to
RMB353.9 million (US$55.8 million ), fromRMB278.3 million in the same period of 2021. - Net revenue from adult professional education business, which represented 43.2% of the total net revenues, increased by 5.5% year-over-year to
RMB269.6 million (US$42.5 million ), fromRMB255.5 million in the same period of 2021. - Gross profit increased by 43.6% year-over-year to
RMB358.9 million (US$56.6 million ), fromRMB249.9 million in the same period of 2021. - Gross profit margin increased by 10.8% points year-over-year to 57.6%, from 46.8% in the same period of 2021.
- Operating income was
RMB28.6 million (US$4.5 million ), compared to operating loss ofRMB129.5 million in the same period of 2021. Operating margin improved year-over-year to 4.6% from -24.3% in the same period of 2021. - Non-GAAP operating income, which excluded share-based compensation expenses, was
RMB30.0 million (US$4.7 million ), compared to non-GAAP operating loss ofRMB122.6 million in the same period of 2021. - Income tax expense was
RMB5.4 million (US$0.9 million ), compared to income tax benefit ofRMB7.4 million in the same period of 2021. - Net income was
RMB27.1 million (US$4.3 million ), compared to net loss ofRMB121.9 million in the same period of 2021. - Non-GAAP net income, which excluded share-based compensation expenses, was
RMB28.5 million (US$4.5 million ), compared to non-GAAP net loss ofRMB115.0 million in the same period of 2021. - Basic income per ordinary share was
RMB0.48 (US$0.08 ), compared to loss per ordinary share ofRMB2.17 in the first quarter of 2021. Diluted income per ordinary share wasRMB0.47 (US$0.07 ), compared to loss per ordinary share ofRMB2.17 in the first quarter of 2021. - Cash, cash equivalents and time deposits, including current and non-current, and restricted cash totaled
RMB416.4 million (US$65.7 million ) as ofMarch 31, 2022 , compared toRMB430.4 million as ofDecember 31, 2021 . - Net cash outflow from operating activities in the first quarter of 2022 was
RMB18.9 million (US$3.0 million ). Capital expenditures in the first quarter of 2022 wereRMB10.6 million (US$1.7 million ). - Deferred revenue totaled
RMB1,974.2 million (US$311.4 million ) as ofMarch 31, 2022 , compared toRMB2,024.9 million as ofDecember 31, 2021 , representing a decrease of 2.5%. - Total student enrollments in childhood & adolescent quality education business, defined as the total number of students who attended at least one paid lesson during that period or have deposit balances in their accounts at the end of that period, in the first quarter of 2022 reached 173,100, increased by 27.7%, compared to the student enrollments of 135,500 in the same period of 2021.
- Total number of learning centers in childhood & adolescent quality education decreased to 232 as of
March 31, 2022 , from 236 as ofMarch 31, 2021 . - Total student enrollments in adult professional education business, defined as the total number of courses enrolled by students during that period, including multiple courses enrolled by the same student, in the first quarter of 2022 decreased by 5.5% year-over-year to 29,300.
- Total number of learning centers in adult professional education increased to 99 as of
March 31, 2022 , from 96 as ofMarch 31, 2021 .
Key Financial Results
For the Three Months Ended |
Variance |
% of |
||||||||||
2021 |
2022 |
RMB |
||||||||||
Unaudited |
Unaudited |
|||||||||||
RMB |
RMB |
|||||||||||
(in thousands, except for percentages) |
||||||||||||
Net revenues |
533,786 |
623,506 |
89,720 |
16.8 |
||||||||
Cost of revenues(a) |
(283,843) |
(264,588) |
19,255 |
-6.8 |
||||||||
Gross profit |
249,943 |
358,918 |
108,975 |
43.6 |
||||||||
Gross margin |
46.8% |
57.6% |
10.8% |
|||||||||
Selling and marketing expenses(a) |
(213,758) |
(172,400) |
41,358 |
-19.3 |
||||||||
General and administrative expenses(a) |
(143,192) |
(141,585) |
1,607 |
-1.1 |
||||||||
Research and development expenses(a) |
(22,468) |
(16,342) |
6,126 |
-27.3 |
||||||||
Total operating expenses |
(379,418) |
(330,327) |
49,091 |
-12.9 |
||||||||
Operating income/(loss) |
(129,475) |
28,591 |
158,066 |
122.1 |
||||||||
Notes: |
||||||||||||
(a) Includes share-based compensation expenses. |
"In the first quarter of 2022, we ended our long streak of quarterly net losses to achieve a net income. This marked the beginning of a healthy trajectory for our business. Our net income reached
Such financial performance resulted from the effective implementation and execution of our sound long-term business strategy, with revenue growth and continued cost reduction. In the first quarter of 2022, our net revenues increased by 16.8% year-over-year, with the adult professional education business enjoying renewed year-over-year growth of 5.5%; the childhood & adolescent quality education business has seen positive year-over-year growth for seven consecutive quarters since the outbreak of the pandemic, with 27.2% year-over-year increase in the first quarter of 2022. On the other hand, in the first quarter of 2022, our cost of revenues and operating expenses decreased by 6.8% and 12.9% year-over-year respectively, thanks to continued effective cost management." remarked Ms.
"Our core competitive advantages are backed by the constant optimization and upgrading of our business procedures and processes, which include our Online-Merge-Offline (OMO) customer acquisition model and omni-channel service delivery capability. This ability was tested in the first quarter, when we kept the business running smoothly, even when a resurgence of COVID-19 cases emerged in certain areas in
Looking ahead, we will continue to focus on the core advantages of 'adaptation of the Online-Merge-Offline (OMO) model to develop and deliver our comprehensive products', 'offline learning center operation capability' and 'customer acquisition capability' to continually improve operational efficiency and maintain positive and healthy development." concluded Ms.
First Quarter 2022 Results
Net Revenues
Total net revenues increased by 16.8% to
Net revenue from childhood & adolescent quality education business increased by 27.2% to
Net revenue from adult professional education business increased by 5.5% to
Cost of Revenues
Cost of revenues decreased by 6.8% to
Gross Profit and Gross Margin
Gross profit increased by 43.6% to
Operating Expenses
Total operating expenses decreased by 12.9% to
Selling and marketing expenses decreased by 19.3% to
General and administrative expenses decreased slightly by 1.1% to
Research and development expenses decreased by 27.3% to
Operating Income/(Loss)
Operating income was
Interest Income
Net interest income was
Other Income
Other income was
Foreign Exchange Loss
Foreign exchange loss was
Income Tax (Expense)/Benefit
The Company recorded an income tax expense of
Net Income/(Loss)
As a result of the foregoing, net income was
Basic and Diluted Income/(Loss) per ordinary share
Basic income per ordinary share was
Cash Flow
Net cash outflow from operating activities in the first quarter of 2022 was
Business Outlook
Based on the Company's current estimates, total net revenues for the second quarter of 2022 are expected to be in the range of
This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions, which are subject to change, particularly as to the potential impact of COVID-19 on the economy in
Exchange Rate Information
All translations made in the financial statements or elsewhere in this press release made from RMB into
Conference Call
Company management will hold an earnings conference call and live webcast to discuss the Company's results at
Dial-in details for the earnings conference call are as follows:
Mainland
International: +1-646-722-4977
Passcode: 27103456#
Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the following number until
International: +61-2-8325-2405
Passcode: 520002317#
Additionally, a live and archived webcast of this call will be available on the Investor Relations section of
About
Safe Harbor Statement
This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the
Further information regarding these and other risks, uncertainties or factors is included in
About Non-GAAP Financial Measures
Beginning in the second quarter of 2016, the Company revised its non-GAAP financial measures to exclude gain or loss on derivative instruments, goodwill impairment, impairment of intangibles via acquisitions of businesses and the related tax impact, in addition to its historical practice of excluding share-based compensation expenses for non-GAAP results.
To supplement
The non-GAAP financial measures are provided to enhance investors' overall understanding of
For further information, please contact:
Investor Relations Contact
Email: ir@tedu.cn
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data and per share data) |
||||||
As of |
||||||
|
|
|
||||
2021 |
2022 |
2022 |
||||
Audited |
Unaudited |
Unaudited |
||||
RMB |
RMB |
USD |
||||
ASSETS |
||||||
Current assets: |
||||||
Cash and cash equivalents |
423,766 |
409,803 |
64,645 |
|||
Time deposits |
6,257 |
6,236 |
984 |
|||
Restricted cash |
255 |
150 |
24 |
|||
Accounts receivable, net of allowance for doubtful accounts |
48,458 |
56,311 |
8,883 |
|||
Amounts due from related parties |
839 |
962 |
152 |
|||
Prepaid expenses and other current assets |
139,757 |
121,838 |
19,218 |
|||
Total current assets |
619,332 |
595,300 |
93,906 |
|||
Time deposits-non current |
123 |
224 |
35 |
|||
Accounts receivable, net of allowance for doubtful accounts-non current |
90 |
188 |
30 |
|||
Amount due from related parties-non current |
683 |
694 |
109 |
|||
Property and equipment, net |
299,441 |
282,728 |
44,599 |
|||
Intangible assets, net |
9,906 |
9,306 |
1,468 |
|||
|
52,782 |
52,782 |
8,326 |
|||
Right-of-use assets |
495,936 |
425,346 |
67,097 |
|||
Long-term investments, net |
46,449 |
44,445 |
7,011 |
|||
Deferred income tax assets |
41,000 |
38,846 |
6,128 |
|||
Other non-current assets, net |
76,040 |
77,298 |
12,194 |
|||
Total assets |
1,641,782 |
1,527,157 |
240,903 |
|||
LIABILITIES AND EQUITY |
||||||
Current liabilities: |
||||||
Short-term bank loans |
30,000 |
32,000 |
5,048 |
|||
Accounts payable |
8,914 |
6,950 |
1,096 |
|||
Amounts due to related parties |
554 |
353 |
56 |
|||
Operating lease liabilities-current |
239,937 |
217,993 |
34,388 |
|||
Income taxes payable |
89,000 |
91,962 |
14,507 |
|||
Deferred revenue-current |
2,008,078 |
1,958,480 |
308,943 |
|||
Accrued expenses and other current liabilities |
563,603 |
538,536 |
84,951 |
|||
Total current liabilities |
2,940,086 |
2,846,274 |
448,989 |
|||
Deferred revenue-non current |
16,774 |
15,706 |
2,478 |
|||
Operating lease liabilities-non current |
272,575 |
229,185 |
36,153 |
|||
Other non-current liabilities |
4,767 |
4,688 |
739 |
|||
Total liabilities |
3,234,202 |
3,095,853 |
488,359 |
|||
Commitments and contingencies |
- |
- |
- |
|||
Shareholders' equity: |
||||||
Class A ordinary shares |
355 |
355 |
56 |
|||
Class B ordinary shares |
74 |
74 |
12 |
|||
|
(459,815) |
(464,497) |
(73,273) |
|||
Additional paid-in capital |
1,347,205 |
1,348,593 |
212,735 |
|||
Accumulated other comprehensive income |
48,699 |
48,648 |
7,674 |
|||
Accumulated deficit |
(2,520,438) |
(2,493,877) |
(393,399) |
|||
Total deficit attributable to the shareholders of |
(1,583,920) |
(1,560,704) |
(246,195) |
|||
Non-controlling interest |
(8,500) |
(7,992) |
(1,261) |
|||
Total liabilities and equity |
1,641,782 |
1,527,157 |
240,903 |
|
||||||||
For the Three Months Ended |
||||||||
2021 |
2022 |
2022 |
||||||
Unaudited |
Unaudited |
Unaudited |
||||||
RMB |
RMB |
USD |
||||||
Net revenues |
533,786 |
623,506 |
98,356 |
|||||
Cost of revenues(a) |
(283,843) |
(264,588) |
(41,738) |
|||||
Gross profit |
249,943 |
358,918 |
56,618 |
|||||
Selling and marketing expenses(a) |
(213,758) |
(172,400) |
(27,195) |
|||||
General and administrative expenses(a) |
(143,192) |
(141,585) |
(22,334) |
|||||
Research and development expenses(a) |
(22,468) |
(16,342) |
(2,579) |
|||||
Operating income/(loss) |
(129,475) |
28,591 |
4,510 |
|||||
Interest income |
589 |
298 |
47 |
|||||
Other income |
343 |
3,663 |
578 |
|||||
Foreign exchange loss |
(689) |
(85) |
(13) |
|||||
Income/(loss) before income taxes |
(129,232) |
32,467 |
5,122 |
|||||
Income tax benefit/(expense) |
7,352 |
(5,398) |
(852) |
|||||
Net income/(loss) |
(121,880) |
27,069 |
4,270 |
|||||
Less: Net income/(loss) attributable to non-controlling interests |
(1,039) |
508 |
80 |
|||||
Net income/(loss) attributable to Class A and Class B ordinary |
(120,841) |
26,561 |
4,190 |
|||||
Net income/(loss) per Class A and Class B ordinary share: |
||||||||
Basic |
(2.17) |
0.48 |
0.08 |
|||||
Diluted |
(2.17) |
0.47 |
0.07 |
|||||
Weighted average number of Class A and Class B ordinary shares |
||||||||
Basic |
55,670,995 |
55,676,443 |
55,676,443 |
|||||
Diluted |
55,670,995 |
56,603,993 |
56,603,993 |
|||||
Net income/(loss) |
(121,880) |
27,069 |
4,270 |
|||||
Other comprehensive income/(loss) |
||||||||
Foreign currency translation adjustment, net of nil income taxes |
87 |
(51) |
(8) |
|||||
Comprehensive income/(loss) |
(121,793) |
27,018 |
4,262 |
|||||
Notes: |
||||||||
(a) Includes share-based compensation expenses as follows: |
||||||||
For the Three Months Ended |
||||||||
2021 Unaudited |
2022 Unaudited |
2022 Unaudited |
||||||
RMB |
RMB |
USD |
||||||
Cost of revenues |
185 |
11 |
2 |
|||||
Selling and marketing expenses |
1,033 |
144 |
23 |
|||||
General and administrative expenses |
5,310 |
958 |
151 |
|||||
Research and development expenses |
379 |
275 |
43 |
|||||
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (in thousands, except share data and per share data) |
|||||||
For the Three Months Ended |
|||||||
2021 |
2022 Unaudited |
2022 Unaudited |
|||||
RMB |
RMB |
USD |
|||||
GAAP Cost of revenues |
283,843 |
264,588 |
41,738 |
||||
Share-based compensation expense in cost of revenues |
185 |
11 |
2 |
||||
Non-GAAP Cost of revenues |
283,658 |
264,577 |
41,736 |
||||
GAAP Selling and marketing expenses |
213,758 |
172,400 |
27,195 |
||||
Share-based compensation expense in selling and marketing |
1,033 |
144 |
23 |
||||
Non-GAAP Selling and marketing expenses |
212,725 |
172,256 |
27,172 |
||||
GAAP General and administrative expenses |
143,192 |
141,585 |
22,334 |
||||
Share-based compensation expense in general and administrative |
5,310 |
958 |
151 |
||||
Non-GAAP General and administrative expenses |
137,882 |
140,627 |
22,183 |
||||
|
22,468 |
16,342 |
2,579 |
||||
Share-based compensation expense in research and development |
379 |
275 |
43 |
||||
|
22,089 |
16,067 |
2,536 |
||||
Operating income/(loss) |
(129,475) |
28,591 |
4,510 |
||||
Share-based compensation expenses |
6,907 |
1,388 |
219 |
||||
Non-GAAP Operating income/(loss) |
(122,568) |
29,979 |
4,729 |
||||
Net income/(loss) |
(121,880) |
27,069 |
4,270 |
||||
Share-based compensation expenses |
6,907 |
1,388 |
219 |
||||
Non-GAAP Net income/(loss) |
(114,973) |
28,457 |
4,489 |
||||
Less: Net income/(loss) attributable to non-controlling interests |
(1,039) |
508 |
80 |
||||
Non-GAAP net income/(loss) attributable to Class A and Class |
(113,934) |
27,949 |
4,409 |
||||
Non-GAAP net income/(loss) per Class A and Class B ordinary |
|||||||
Basic |
(2.05) |
0.50 |
0.08 |
||||
Diluted |
(2.05) |
0.49 |
0.08 |
||||
Weighted average number of ordinary shares outstanding used |
|||||||
Basic |
55,670,995 |
55,676,443 |
55,676,443 |
||||
Diluted |
55,670,995 |
56,603,993 |
56,603,993 |
||||
Notes: (a) The Non-GAAP net income/(loss) per ordinary share is computed using Non-GAAP net income/(loss) attributable to ordinary (b) There was no tax impact of share-based compensation expenses for the first quarter of 2022 and 2021, respectively. |
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