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Ambow Education Announces Second Half and Full-Year 2023 Financial Results

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Ambow Education Holding announced its financial results for the second half and full-year 2023, emphasizing the successful launch of HybriU, a pioneering AI-driven education platform. The company reported a gross margin of 50% in the fourth quarter of 2023, a significant improvement over the previous year. Despite a decrease in net revenues, Ambow showed positive growth in gross profit and net income. The company's strategic pivot towards digital education positions it well for future profitability in 2024.
Ambow Education Holding ha annunciato i risultati finanziari per il secondo semestre e l'intero anno 2023, evidenziando il lancio di successo di HybriU, una piattaforma educativa all'avanguardia guidata dall'IA. La società ha registrato un margine lordo del 50% nel quarto trimestre del 2023, un miglioramento significativo rispetto all'anno precedente. Nonostante una diminuzione delle entrate nette, Ambow ha mostrato una crescita positiva nel profitto lordo e nel reddito netto. Il cambio strategico dell'azienda verso l'educazione digitale la posiziona bene per la futura redditività nel 2024.
Ambow Education Holding anunció sus resultados financieros para el segundo semestre y el año completo de 2023, destacando el exitoso lanzamiento de HybriU, una plataforma de educación impulsada por IA pionera. La compañía informó un margen bruto del 50% en el cuarto trimestre de 2023, una mejora significativa respecto al año anterior. A pesar de una disminución en los ingresos netos, Ambow mostró un crecimiento positivo en la ganancia bruta e ingreso neto. El giro estratégico de la empresa hacia la educación digital la posiciona bien para la rentabilidad futura en 2024.
앰보우 에듀케이션 홀딩은 2023년 하반기 및 연간 재무 결과를 발표하면서, AI 주도의 혁신적인 교육 플랫폼인 HybriU의 성공적인 출시를 강조했습니다. 회사는 2023년 4분기에 50%의 매출 총이익률을 보고하여 전년 대비 큰 개선을 이루었습니다. 순매출이 감소했음에도 불구하고 앰보우는 매출 총이익과 순이익에서 긍정적인 성장을 보였습니다. 회사의 디지털 교육으로의 전략적 전환은 2024년의 미래 수익성에 좋은 위치를 선사할 것입니다.
Ambow Education Holding a annoncé ses résultats financiers pour le second semestre et l'année complète de 2023, mettant en lumière le lancement réussi de HybriU, une plateforme éducative novatrice pilotée par l'IA. La société a déclaré une marge brute de 50% au quatrième trimestre de 2023, une nette amélioration par rapport à l'année précédente. Malgré une baisse des revenus nets, Ambow a montré une croissance positive de son bénéfice brut et de son revenu net. Le pivot stratégique de l'entreprise vers l'éducation numérique la positionne bien pour une rentabilité future en 2024.
Ambow Education Holding gab seine Finanzergebnisse für das zweite Halbjahr und das gesamte Jahr 2023 bekannt und betonte den erfolgreichen Start von HybriU, einer bahnbrechenden, von künstlicher Intelligenz angetriebenen Bildungsplattform. Das Unternehmen verzeichnete im vierten Quartal 2023 eine Bruttomarge von 50%, was eine deutliche Verbesserung gegenüber dem Vorjahr darstellt. Trotz eines Rückgangs der Nettoumsätze zeigte Ambow ein positives Wachstum bei Bruttogewinn und Nettoeinkommen. Die strategische Ausrichtung des Unternehmens auf digitale Bildung positioniert es gut für zukünftige Rentabilität im Jahr 2024.
Positive
  • Successful launch of HybriU with innovative AI technology
  • Gross margin improvement to 50% in Q4 2023
  • Net revenues decreased by 37.8% in FY 2023
  • Gross profit increased to $2.5 million in FY 2023
  • Operating expenses decreased by 30.6% in FY 2023
  • Strong cash resources of $10.0 million as of December 31, 2023
  • Appointment of Mr. Norm Allgood as Head of HybriU
Negative
  • Decrease in net revenues in Q4 2023 compared to 2022
  • Operating expenses increased by 87.5% in Q4 2023
  • Loss of accreditation for Bay State College led to closure
  • Net loss attributable to ordinary shareholders in FY 2023

Insights

Ambow Education's shift towards the digital education market with their AI-driven HybriU platform appears to be gaining traction. The reported 50% gross margin in Q4 2023 is a significant improvement from the negative margins experienced in the same period the previous year. This suggests that the company's strategic pivot is starting to pay off, potentially leading to improved scalability and profitability. However, the concern arises from the 37.8% decrease in net revenues year over year, which may be attributed to the closure of Bay State College. Investors should consider the company's ability to offset this revenue loss with its new HybriU platform in future quarters. The mention of strict cost control measures contributing to reduced operating expenses by 30.6% is promising, indicating management's commitment to fiscal discipline.

The digital and hybrid education sector is growing and Ambow Education's introduction of HybriU could position it well within this expanding market. While the operating loss has improved, the key will be to observe how the market adoption of HybriU progresses and whether it can generate significant sales. Despite the company's positive outlook for 2024, investors should cautiously evaluate the aggressive market penetration and adoption rates necessary to maintain profitability. In light of Ambow's strategic moves, the stock's performance will likely be strongly influenced by the execution of HybriU's rollout and the education sector's receptivity to digital solutions.

The shift in ratio from one ADS representing two to twenty Class A ordinary shares, effectively a 1-for-10 reverse split, is usually a move to increase the stock price and maintain compliance with exchange listing requirements. This could be a red flag for investors as it may indicate a possible devaluation and could affect investor perception negatively. However, it's also commonly used to attract institutional investors. Furthermore, the accreditation withdrawal and subsequent sale of Bay State College raise compliance and regulatory questions that investors should be aware of, as such transitions can impact a company's operations and brand perception.

Unlocking Digital Education Market Opportunities with Pioneering AI-Driven HybriU 

CUPERTINO, Calif., April 25, 2024 /PRNewswire/ -- Ambow Education Holding Ltd. (NYSE American: AMBO) ("Ambow" or the "Company"), an AI-driven educational technology company, today announced its financial and operating results for the second half[1] and 2023 full fiscal year,[2] ended December 31, 2023.

"2023 was a transitional year for us. We strategically pivoted our business, securing the bedrock for our future growth with HybriU's official launch in July, marking our foray into the large, untapped hybrid and digital education market," said Dr. Jin Huang, Ambow's President, Chief Executive Officer and acting Chief Financial Officer. "The steps we have taken vastly improved our financial profile, achieving a gross margin of 50% in the fourth quarter of 2023 compared with a negative gross margin in the same period of 2022.

"Our sights are now squarely set on emerging opportunities with our transformational, first-to-market total solution HybriU product. HybriU's all-encompassing technology integrates innovative AI, lecture capture, connectivity, immersive technologies, and a comprehensive management platform for educational purposes. Most recently, we implemented HybriU at NewSchool of Architecture & Design in San Diego, where we hosted a highly successful open house event during the ASU+GSV summit. This gives us first-mover advantages as we diligently work to deploy our cutting-edge AI technology throughout higher education and workforce training scenarios. As we make more inroads in these large markets and continue to prudently manage our expenses, we foresee continued financial momentum with expected profitability for the full year 2024," concluded Dr. Huang.

[1] Financial results for the second half of 2023 have not been audited or reviewed by the Company's independent registered accounting firm.

[2] Financial results for the full fiscal year ended December 31, 2023 have been audited by the Company's independent registered accounting firm.

Fourth Quarter 2023 Financial Highlights

  • Net revenues from continuing operations in the fourth quarter of 2023 were $2.4 million, compared with $3.3 million in the same period of 2022. The decrease was primarily driven by the conclusion of its operation of Bay State College (BSC) in August 2023.

  • Gross profit (loss) from continuing operations in the fourth quarter of 2023 was $1.2 million, compared with a gross loss of $0.7 million in the same period of 2022. Gross profit margin was positive 50.0%, compared with negative 21.2% in the fourth quarter of 2022.

  • Operating expenses from continuing operations in the fourth quarter of 2023 increased by 87.5% to $1.5 million from $0.8 million in the same period of 2022. The increase was primarily associated with the expenditure of our new product, HybriU.

  • Operating loss from continuing operations in the fourth quarter of 2023 improved to $0.3 million, compared with $1.5 million in the same period of 2022.

  • Net income attributable to the Company's ordinary shareholders from continuing operations improved to $1.3 million, or $0.02 per basic and diluted share, compared with a loss of $0.9 million, or $0.02 per basic and diluted share, in the same period of 2022. The increase was mainly due to the $1.4 million gain on the disposal of assets from the BSC curriculum in 2023.

Full Fiscal Year 2023 Financial Highlights

  • Net revenues from continuing operations in fiscal year 2023 decreased by 37.8% to $9.2 million from $14.8 million in 2022. The decrease was primarily due to the permanent closure of BSC at the end of the 2022-2023 academic year.

  • Gross profit from continuing operations in fiscal year 2023 was $2.5 million, increasing from $0.3 million in 2022. The increase was primarily attributable to a decrease in the cost of revenues from stringent cost and expense controls.

  • Operating expenses from continuing operations in fiscal year 2023 decreased by 30.6% to $6.8 million from $9.8 million in 2022. The decrease was primarily attributable to the enactment of strict expense control measures.

  • Operating loss from continuing operations in fiscal year 2023 was $4.3 million, compared with a loss of $9.5 million in 2022.

  • Net loss attributable to the Company's ordinary shareholders from continuing operations was $3.2 million, or $0.06 per basic and diluted share, compared with a loss of $9.3 million, or $0.19 per basic and diluted share in 2022.

  • As of December 31, 2023, Ambow maintained strong cash resources of $10.0 million, comprised of cash and cash equivalents of $4.8 million and restricted cash of $5.2 million.

Recent Developments

On January 19, 2023, the New England Commission of Higher Education ("NECHE") informed BSC of its intention to withdraw BSC's accreditation. On April 11, 2023, the Board of Trustees voted to permanently close Bay State College at the end of the 2022-2023 academic year. This permanent closure was completed on August 31, 2023.

Subsequent Events

Bay State College engaged in a purchase and sale agreement (the "Purchase Agreement") with PRP Consulting Group P.C. (the "Purchaser"), a third party. Under the terms of the Purchase Agreement, Bay State College agreed to transfer all Account Receivable Portfolio to the Purchaser in exchange for a cash payment of $0.7 million. The transaction was finalized on January 4, 2024.

Our ADSs (each representing twenty Class A ordinary shares) currently trade in the NYSE American under the symbol "AMBO." Prior to February 20, 2024, one ADS represented two Class A ordinary shares. On February 20, 2024, we effected a change of the ADS to Class A ordinary share ratio from one ADS representing two Class A ordinary shares to one ADS representing 20 Class A ordinary shares. The ratio change has the same effect as a 1-for-10 ADS reverse split.

On March 6, 2024, Ambow appointed Mr. Norm Allgood as fractional Head of HybriU to lead the dissemination and implementation of HybriU, Ambow's AI-driven hybrid learning solution for education and workforce training.

Exchange Rate Information

Historically, we presented our financial results in Renminbi. Starting on January 1, 2023, we changed our reporting currency from Renminbi to U.S. dollars since the majority of our revenues and expenses are now denominated in U.S. dollars. We believe the alignment of the reporting currency with the underlying operations would better illustrate our results of operations for each period. The historical results of operations and financial statements included in this report are presented based on what was presented in the previously filed Form 20-F.

About Ambow

Ambow Education Holding Ltd. is a U.S.-based, AI-driven educational technology company. Its mission is to eliminate barriers between online and offline environments, languages and regions, and academia and industry. Ambow aims to empower educators, students, institutions and organizations with advanced technology designed explicitly for the education industry. For more information, visit Ambow's corporate website at https://www.ambow.com/.

Safe Harbor Statement

This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Ambow and the industry. All information provided in this press release is as of the date hereof, and Ambow undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Ambow believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

For more information, please contact:
Ambow Education Holding Ltd.
E-mail: ir@ambow.com
or
Piacente Financial Communications
Tel: +1 212 481 2050
E-mail: ambow@tpg-ir.com 

 

 

AMBOW EDUCATION HOLDING LTD.

CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data)








As of December 31,


As of December 31, 



2022


2023






ASSETS





Current assets:





Cash and cash equivalents


$3,308


$4,834

Restricted cash


4,362


5,221

Accounts receivable, net


1,983


2,280

Prepaid and other current assets


6,171


178

Total current assets


15,824


12,513

Non-current assets:





Property and equipment, net


276


6

Intangible assets, net


537


522

Operating lease right-of-use asset


6,909


4,896

Other non-current assets, net


1,970


2,629

Total non-current assets


9,692


8,053






Total assets


$25,516


$20,566






LIABILITIES





Current liabilities:





Short-term borrowings  


3,029


3,939

Accounts payable  


2,393


1,386

Accrued and other liabilities  


3,737


1,468

Income taxes payable, current  


528


510

Operating lease liability, current  


2,218


2,486

Total current liabilities


11,905


9,789

Non-current liabilities:





Operating lease liability, non-current  


5,744


4,349

Total non-current liabilities


5,744


4,349






Total liabilities


$17,649


$14,138






EQUITY





Preferred shares





(US$ 0.003 par value; 1,666,667 shares authorized, nil issued and
outstanding as of December 31, 2022 and 2023) 




-

Class A Ordinary shares





(US$ 0.003 par value; 66,666,667 and 66,666,667 shares authorized;
47,419,109 and 52,419,109 shares issued and outstanding as of
December 31, 2022 and 2023, respectively)


131


146

Class C Ordinary shares





(US$ 0.003 par value; 8,333,333 and 8,333,333 shares authorized;
4,708,415 and 4,708,415 shares issued and outstanding as of
December 31, 2022 and 2023, respectively)


13


13

Additional paid-in capital


515,182


517,031

Accumulated deficit


(507,459)


(510,634)

Accumulated other comprehensive income


-


(128)

Total equity


7,867


6,428

Total liabilities and equity


$25,516


$20,566

 

 

AMBOW EDUCATION HOLDING LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(All amounts in thousands, except for share and per share data)



For the three months ended
September 30,


For the three months ended
December 31,


2022


2023


2022


2023









NET REVENUES








 Educational program and services

$             2,351


$              671


$          3,274


$          2,395

COST OF REVENUES








 Educational program and services

(4,113)


(1,400)


(3,941)


(1,187)









GROSS (LOSS) PROFIT

(1,762)


(729)


(667)


1,208

Operating expenses:








Selling and marketing

(283)


(330)


(95)


(296)

General and administrative

(1,320)


(903)


(747)


(912)

Research and development

-


(242)


-


(242)

Impairment loss

(637)


-


-


-

Total operating expenses

(2,240)


(1,475)


(842)


(1,450)









OPERATING LOSS

(4,002)


(2,204)


(1,509)


(242)









OTHER INCOME (EXPENSES)








Interest (expenses) income

(34)


(39)


1


15

Foreign exchange gain (loss), net

-


21


-


(12)

Other (expenses) income, net

(33)


(12)


661


94

Gain on disposal of assets

-


-


-


1,400

Total other (expenses) income

(67)


(30)


662


1,497









(LOSS) INCOME BEFORE INCOME TAX
AND NON-CONTROLLING INTEREST

(4,069)


(2,234)


(847)


1,255

Income tax benefit (expenses) 

1


(1)


(33)


-









(LOSS) INCOME FROM CONTINUING
OPERATIONS

(4,068)


(2,235)


(880)


1,255

(Loss) Income from and on sale of discontinued
operations, net of income tax

(923)


-


4,794


-









NET (LOSS) INCOME

$          (4,991)


$         (2,235)


$           3,914


$          1,255

Less: Net loss attributable to noncontrolling
interests from continuing operations

-


-


-


-

Less: Net loss attributable to noncontrolling
interests from discontinued operations

(35)


-


(29)


-









NET (LOSS) INCOME ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS FROM
CONTINUING OPERATIONS

(4,068)


(2,235)


(880)


1,255

NET (LOSS) INCOME ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS FROM
DISCONTINUED OPERATIONS

(888)


-


4,823


-









NET (LOSS) INCOME ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS

$          (4,956)


$         (2,235)


$          3,943


$          1,255









OTHER COMPREHENSIVE (LOSS) INCOME,
NET OF TAX







Foreign currency translation adjustments

(278)


-


104


-

Other comprehensive (loss) income

(278)


-


104


-









TOTAL COMPREHENSIVE (LOSS) INCOME

(5,269)


(2,235)


4,018


1,255









Net (loss) income from continuing operations per
share – basic and diluted

$          (0.08)


$          (0.04)


$          (0.02)


$          0.02

Net (loss) income from discontinued operations per
share – basic and diluted

$          (0.02)


-


$             0.09


-

Net (loss) income from continuing operations per
ADS – basic and diluted

$          (1.60)


$          (0.80)


$          (0.40)


$          0.40

Net (loss) income from discontinued operations per
ADS – basic and diluted

$          (0.40)


-


$            1.80


-









Weighted average shares used in calculating basic
and diluted net (loss) income per share

52,110,948


57,127,524


52,127,524


57,127,524

 

 

AMBOW EDUCATION HOLDING LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(All amounts in thousands, except for share and per share data)

 


For the years ended December 31,


2022


2023





NET REVENUES




 Educational program and services

$               14,840


$              9,163

COST OF REVENUES




 Educational program and services

(14,556)


(6,669)





GROSS PROFIT

284


2,494

Operating expenses:




Selling and marketing

(1,487)


(1,051)

General and administrative

(7,628)


(5,264)

Research and development

-


(484)

Impairment loss

(657)


-

Total operating expenses

(9,772)


(6,799)





OPERATING LOSS

(9,488)


(4,305)





OTHER INCOME (EXPENSES)




Interest expenses

(101)


(57)

Other income (expenses), net

500


(199)

Loss on disposal of subsidiaries

(163)


-

Gain on disposal of assets

-


1,400

Total other income

236


1,144





LOSS BEFORE INCOME TAX AND NON-CONTROLLING
INTEREST

(9,252)


(3,161)

Income tax expenses

-


(14)





LOSS FROM CONTINUING OPERATIONS

(9,252)


(3,175)

Loss from and on sale of discontinued operations, net of income tax

(5,056)


-





NET LOSS

$                 (14,308)


$                 (3,175)

Less: Net loss attributable to noncontrolling interests from continuing
operations

-


-

Less: Net loss attributable to noncontrolling interests from
discontinued operations

(235)


-





NET LOSS ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS FROM CONTINUING OPERATIONS

(9,252)


(3,175)

NET LOSS ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS FROM DISCONTINUED OPERATIONS

(4,821)


-





NET LOSS ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS

(14,073)


(3,175)





OTHER COMPREHENSIVE LOSS, NET OF TAX




Foreign currency translation adjustments

(339)


-

Other comprehensive loss

(339)


-





TOTAL COMPREHENSIVE LOSS

(14,647)


(3,175)





Net loss from continuing operations per share – basic and diluted

$              (0.19)


$              (0.06)

Net loss from discontinued operations per share – basic and diluted

$              (0.10)


-

Net loss from continuing operations per ADS – basic and diluted

$              (3.80)


$              (1.20)

Net loss from discontinued operations per ADS – basic and diluted

$             (2.00)


-





Weighted average shares used in calculating basic and diluted net
(loss) income per share

49,458,266


56,333,003

 

 

 

 

Cision View original content:https://www.prnewswire.com/news-releases/ambow-education-announces-second-half-and-full-year-2023-financial-results-302128013.html

SOURCE Ambow Education Holding Ltd.

FAQ

What were Ambow Education's net revenues in the fourth quarter of 2023?

Ambow Education reported net revenues of $2.4 million in the fourth quarter of 2023.

What was the gross profit margin in the fourth quarter of 2023?

The gross profit margin in the fourth quarter of 2023 was positive 50.0%.

Who was appointed as fractional Head of HybriU in March 2024?

Mr. Norm Allgood was appointed as fractional Head of HybriU in March 2024.

What was the net loss attributable to the Company's ordinary shareholders from continuing operations in fiscal year 2023?

The net loss attributable to the Company's ordinary shareholders from continuing operations in fiscal year 2023 was $3.2 million.

Where do Ambow Education's ADSs trade?

Ambow Education's ADSs trade on the NYSE American under the symbol 'AMBO.'

Ambow Education Holding Ltd. American Depository Shares (each representing twenty (20)

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