Boqii Announces Fiscal 2022 Second Quarter Unaudited Financial Results

Rhea-AI Summary

Boqii Holding Limited (NYSE: BQ) announced its Q2 FY2022 financial results, reporting revenues of RMB282.1 million (US$43.8 million), a 23.1% increase from Q2 FY2021. The net loss widened to RMB44.5 million (US$6.9 million), compared to a loss of RMB27.5 million in the prior year. Adjusted net loss was RMB40.9 million (US$6.3 million). EBITDA also decreased to a loss of RMB41.5 million. Active buyers grew by 23.5%, reaching 1.6 million. Despite revenue growth, increased operating expenses raised concerns among investors.

Positive

• Total revenues increased by 23.1% year-over-year.
• Gross profit rose by 30.7% to RMB55.7 million.
• Active buyers grew to 1.6 million, a 23.5% increase.

Negative

• Net loss expanded to RMB44.5 million from RMB27.5 million year-over-year.
• EBITDA loss widened to RMB41.5 million from RMB23.4 million in the prior year.
• Operating expenses increased by 25.6% to RMB96.8 million.

SHANGHAI, Nov. 30, 2021 /PRNewswire/ -- Boqii Holding Limited ("Boqii" or the "Company") (NYSE: BQ), a leading pet-focused platform in China, today announced its unaudited financial results for the second quarter of fiscal year 2022 (the quarter ended September 30, 2021).

Fiscal Q2 2022 Operational and Financial Highlights

• Total revenues were RMB282.1 million (US$43.8 million), representing an increase of 23.1% from RMB229.2 million in the same quarter of fiscal year 2021.
• Net loss was RMB44.5million (US$6.9 million), compared to net loss of RMB27.5 million in the same quarter of fiscal year 2021.
• Adjusted net loss was RMB40.9 million (US$6.3 million), compared to adjusted net loss of RMB35.8 million in the same quarter of fiscal year 2021.
• EBITDA^[1] was a loss of RMB41.5 million (US$6.4 million), compared to a loss of RMB23.4 million in the same quarter of fiscal year 2021.
• Total GMV^[2] was RMB692.6 million (US$107.5 million), representing an increase of 23.0% from RMB563.3 million in the same quarter of fiscal year 2021.
• Active buyers were 1.6 million, representing an increase of 23.5% from RMB1.3 million in the same quarter of fiscal year 2021.

[1] EBITDA refers to net loss excluding income tax expenses, interest expense, interest income, depreciation and amortization expenses, but including all the professional expenses in relation to initial public offering in the fiscal year of 2021. EBITDA is a Non-GAAP financial measurement. Please refer to "Non-GAAP financial measurement".

[2] GMV refers to gross merchandise volume, which is the total value of confirmed orders placed with us and sold through distribution model or drop shipping model where we act as a principal in the transaction regardless of whether the products are delivered or returned, calculated based on the listed prices of the ordered products without taking into consideration any discounts. The total GMV amount (i) includes GMV of products sold by Xingmu, (ii) excludes products sold through consignment model and (iii) excludes the value of services offered by us. GMV is subject to future adjustments (such as refunds) and represents only one measure of the Company's performance and should not be relied on as an indicator of our financial results, which depend on a variety of factors.

CEO & CFO Quote

Mr. Hao Liang, Boqii's Founder, Chairman and Chief Executive Officer commented, "We maintained strong topline growth in the second quarter of Fiscal 2022. As the company continues to expand its offering and drive customer engagement, number of active buyers grew by 23.5% year over year.In addition to our organic business growth, we announced a strategic partnership with Yongle Huazhu in October, to provide pet-friendly stays in its Blossom House hotels. This partnership further demonstrates our dedication to providing all-round user care. We look forward to working with more partners to enhance our service portfolio, better address growing needs in our user communities, and lead accelerated growth for all."

Ms. Yingzhi (Lisa) Tang, Boqii's Co-Founder, Co-CEO and CFO, stated, "We generated healthy revenue growth of 23.1% year over year this quarter. Continuous growth momentum from online marketing, information services, and other revenue once again exhibited the strength of our vertical platform and unqique value propositions to other players in the industry chain. Our improved gross margin also demonstrated our ability to achieve high-quality topline growth. Looking ahead, we will remain committed to serving both our growing customer base and industry partners with seamless experience and elevated efficiency, and look forward to further strengthening our core capabilities to better capture the immense opportunities in the pet industry."

Fiscal Q2 2022 Financial Results

Total revenues were RMB282.1 million (US$43.8 million), representing an increase of 23.1% from RMB229.2 million in the same quarter of fiscal year 2021. The increase was primarily due to the continued organic growth of our business.

Revenues (in million)		Three Months Ended September 30				%
		2021		2020		change
		RMB		RMB		YoY
Product sales		266.1		227.9		16.8%
·         Boqii Mall		107.6		94.4		14.0%
·         Third party e-commerce platforms		158.5		133.5		18.7%
Online marketing and information services and other revenue		16.0		1.3		1123.8%
Total		282.1		229.2		23.1%

Gross profit was RMB55.7 million (US$8.6 million), representing an increase of 30.7% from RMB42.6 million in the same quarter of fiscal year 2021.

Gross margin was 19.7%, compared to 18.6% in the same quarter of fiscal year 2021.

Operating expenses were RMB96.8 million, representing an increase of 25.6 % from RMB77.1 million in the same quarter of fiscal year 2021. Operating expenses as a percentage of total revenues was 34.3%, compared to 33.6% in the same quarter of fiscal year 2021.

• Fulfillment Expenses were RMB29.6 million, representing an increase of 2.0% from RMB29.0 million in the same quarter of fiscal year 2021. Fulfillment expenses as a percentage of total revenues was 10.5%, down from 12.7% in the same quarter of fiscal year 2021. The decrease was mainly due to: (i) the improved utilization of warehouses by adjusting inventory mix; (ii) more cost-efficient China warehouse relocations; and (iii) lower delivery service prices through renegotiation with third-party delivery service providers.
• Sales and marketing expenses were RMB44.0 million, representing an increase of 40.3% from RMB31.3 million in the same quarter of fiscal year 2021. Sales and marketing expenses as a percentage of total revenue was 15.6%, compared to 13.7% in the same quarter of fiscal year 2021. The increase was primarily due to: (i) the increased personnel expense of RMB4.6 million related to the discontinued Covid government subdisies; (ii) the increased advertising expenses of RMB6.8 million for business expansion.
• General and administrative expenses were RMB23.2 million, representing an increase of 39.0% from RMB16.7 million in the same quarter of fiscal year 2021. General and administrative expenses as a percentage of total revenue was 8.2%, compared to 7.3% in the same quarter of fiscal year 2021. The increase was primarily due to: (i) share-based compensation expense of RMB3.3 million; and (ii) the increased professional fees of RMB3.4 million incurred after we became a publicly traded company.

Operating loss was RMB41.0 million (US$6.4 million), compared to RMB34.2 million in the same quarter of fiscal year 2021.

EBITDA was a loss of RMB41.5 million (US$6.4 million), compared to a loss of RMB23.4 million in the same quarter of fiscal year 2021.

Net loss was RMB44.5 million (US$6.9 million), compared to net loss of RMB27.5 million in the same quarter of fiscal year 2021.

Adjusted net loss was RMB40.9 million (US$6.3 million), compared to adjusted net loss of RMB35.8 million in the same quarter of fiscal year 2021.

Diluted net loss per share was RMB0.64 (US$0.10), compared to diluted net loss per share of RMB3.06 in the same quarter of fiscal year 2021.

Total cash and cash equivalents and short-term investments were RMB339.4 million (US$52.7 million), compared to RMB415.7 million as of June 30, 2021.

Conference Call

Boqii's management will hold a conference call to discuss the financial results at 8:00 AM on Tuesday, November 30, 2021, U.S. Eastern Time (9:00 PM on Tuesday, November 30, 2021, Beijing/Hong Kong Time).

To join the conference, please dial in 15 minutes before the conference is scheduled to begin using below numbers.

	Phone Number
International	1-412-317-6061
United States	1-888-317-6003
Hong Kong	852 800 963-976
Mainland China	86 4001-206115
Passcode	6835046

A replay of the conference call may be accessed by phone at the following numbers until December 7, 2021.

	Phone Number
International	1-412-317-0088
United States	1-877-344-7529
Replay Access Code	10161957

A live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.boqii.com/.

About Boqii Holding Limited

Boqii Holding Limited (NYSE: BQ) is a leading pet-focused platform in China. We are the leading online destination for pet products and supplies in China with our broad selection of high-quality products including global leading brands, local emerging brands, and our own private label, Yoken and Mocare, offered at competitive prices. Our online sales platforms, including Boqii Mall and our flagship stores on third-party e-commerce platforms, provide customers with convenient access to a wide selection of high-quality pet products and an engaging and personalized shopping experience. Our Boqii Community provides an informative and interactive content platform for users to share their knowledge and love for pets.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding such risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, namely adjusted net loss, adjusted net loss margin, EBITDA and EBITDA margin, in evaluating its operating results and for financial and operational decision-making purposes. The Company defines (i) adjusted net loss as net loss excluding fair value change of derivative liabilities and share-based compensation expenses, (ii) adjusted net loss margin as adjusted net loss as a percentage of total revenues, (iii) EBITDA as net loss excluding income tax expenses, interest expense, interest income, depreciation and amortization expenses, (iv) EBITDA margin as EBITDA as a percentage of total revenues. The Company believes adjusted net loss, adjusted net loss margin, EBITDA and EBITDA margin enhance investors' overall understanding of its financial performance and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. As these non-GAAP financial measures have limitations as analytical tools and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliation of GAAP and Non-GAAP Results." The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.4434 to US$1.00, the noon buying rate in effect on September 30, 2021 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB, as the case may be, at any particular rate or at all.

For investor and media inquiries, please contact:

In China:

Boqii Holding Limited
Investor Relations
Tel: +86-21-6882-6051
Email: ir@boqii.com

The Blueshirt Group
Ms. Susie Wang
Email: susie@blueshirtgroup.com

In the United States:

The Blueshirt Group
Ms. Julia Qian
Email: julia@blueshirtgroup.com

BOQII HOLDING LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except for share and per share data, unless otherwise noted)
	As of March 31, 2021				As of September 30, 2021				As of September 30, 2021
	RMB				RMB				US$
ASSETS
Current assets:
Cash and cash equivalents	292,237				210,199				32,622
Short-term investments	168,546				129,195				20,051
Accounts receivable, net	45,732				62,341				9,675
Inventories, net	91,551				97,294				15,100
Prepayments and other current assets	85,261				81,536				12,655
Amounts due from related parties	11,465				36,081				5,600
Total current assets	694,792				616,646				95,703
Non-current assets:
Property and equipment, net	8,386				7,731				1,200
Intangible assets	29,537				27,543				4,275
Operating lease right-of-use assets	29,234				44,405				6,892
Long-term investments	74,330				85,211				13,225
Goodwill	40,184				40,684				6,314
Other non-current asset	4,111				4,363				677
Total non-current assets	185,782				209,937				32,583
Total assets	880,574				826,583				128,286
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT
Current liabilities
Short-term borrowings	85,566				124,995				19,399
Accounts payable	71,848				82,838				12,856
Salary and welfare payable	6,309				5,307				824
Accrued liabilities and other current liabilities	30,055				26,732				4,149
Amounts due to related parties, current	910				9,495				1,474
Contract liabilities	3,866				3,893				604
Operating lease liabilities, current	8,063				9,945				1,543
Derivative liabilities	9,996				9,877				1,533
Total current liabilities	216,613				273,082				42,382
Non-current liabilities
Deferred tax liabilities	8,958				8,464				1,314
Operating lease liabilities, non-current	19,997				32,802				5,091
Long-term borrowings	68,075				24,837				3,855
Other debts, non-current	433,292				337,251				52,341
Total non-current liabilities	530,322				403,354				62,601
Total liabilities	746,935				676,436				104,983
Mezzanine equity
Redeemable non-controlling interests	5,946				6,229				967
Total mezzanine equity	5,946				6,229				967
Stockholders' equity:
Class A ordinary shares (US$0.001 par value; 129,500,000 shares authorized,      54,505,108 and 54,619,541 shares issued and outstanding as of March 31      and September 30, 2021, respectively)	364				366				57
Class B ordinary shares (US$0.001 par value; 15,000,000 shares authorized,      13,037,729 shares issued and outstanding as of March 31 and September,      30, 2021, respectively)	82				82				13
Additional paid-in capital	3,272,612				3,283,708				509,623
Statutory reserves	3,047				3,163				491
Accumulated other comprehensive loss	(20,172)				(25,937)				(4,025)
Accumulated deficit	(2,759,882)				(2,838,493)				(440,527)
Receivable for issuance of ordinary shares	(413,377)				(322,369)				(50,031)
Total Boqii Holding Limited shareholders' equity	82,674				100,520				15,601
Non-controlling interests	45,019				43,398				6,735
Total shareholders' equity	127,693				143,918				22,336
Total liabilities, mezzanine equity and shareholders' equity	880,574				826,583				128,286

Notes for all the condensed consolidated financial schedules presented:
Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.4434 on September 30, 2021 published by the Federal Reserve Board.

 

BOQII HOLDING LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(All amounts in thousands, except for share and per share data, unless otherwise noted)
	Three Months Ended September 30,							Six Months Ended September 30,
	2020		2021		2021			2020		2021		2021
	RMB		RMB		US$			RMB		RMB		US$
Net revenues:
Product sales	227,883		266,090		41,297			465,815		577,583		89,639
Online marketing and information services and      other revenue	1,307		16,031		2,488			1,813		26,384		4,095
Total revenues	229,190		282,121		43,785			467,628		603,967		93,734
Total cost of revenue	(186,555)		(226,415)		(35,139)			(381,723)		(491,880)		(76,339)
Gross profit	42,635		55,706		8,646			85,905		112,087		17,395
Operating expenses:
Fulfillment expenses	(29,037)		(29,632)		(4,599)			(62,669)		(62,519)		(9,703)
Sales and marketing expenses	(31,342)		(43,969)		(6,824)			(66,286)		(89,454)		(13,883)
General and administrative expenses	(16,697)		(23,203)		(3,601)			(33,565)		(42,774)		(6,638)
Other income, net	258		55		9			305		67		10
Loss from operations	(34,183)		(41,043)		(6,369)			(76,310)		(82,593)		(12,819)
Interest income	4,487		4,677		726			6,203		9,864		1,531
Interest expense	(6,416)		(5,997)		(931)			(13,559)		(12,059)		(1,872)
Other (losses)/gain, net	879		(2,723)		(423)			3,776		405		63
Fair value change of derivative liabilities	8,303		249		39			10,409		411		64
Loss before income tax expenses	(26,930)		(44,837)		(6,958)			(69,481)		(83,972)		(13,033)
Income taxes expenses	(500)		238		37			(191)		1,247		194
Share of results of equity investees	(20)		68		11			(77)		834		129
Net loss	(27,450)		(44,531)		(6,910)			(69,749)		(81,891)		(12,710)
Less: Net (loss)/income attributable to non-      controlling interest shareholders	617		(1,216)		(189)			896		(3,683)		(572)
Net loss attributable to Boqii Holding Limited	(28,067)		(43,315)		(6,721)			(70,645)		(78,208)		(12,138)
Less: Accretion on convertible redeemable      preferred shares to redemption value	(39,925)		-		-			(75,062)		-		-
Less: Accretion on redeemable non-controlling      interests to redemption value	-		(143)		(22)			-		(283)		(44)
Less: Deemed dividend to preferred shareholders	-		-		-			(12,547)		-		-
Net loss attributable to Boqii Holding      Limited's ordinary shareholders	(67,992)		(43,458)		(6,743)			(158,254)		(78,491)		(12,182)
Net loss	(27,450)		(44,531)		(6,910)			(69,749)		(81,891)		(12,710)
Other comprehensive income/(loss):
Foreign currency translation adjustment, net      of nil tax	(10,716)		2,947		457			(11,517)		(5,765)		(895)
Unrealized securities holding gains	-		-		-			1,195		-		-
Total comprehensive loss	(38,166)		(41,584)		(6,453)			(80,071)		(87,656)		(13,605)
Less: Net comprehesive (loss)/income      attributable to non- controlling interests s      hareholders	617		(1,216)		(189)			896		(3,683)		(572)
Total comprehensive loss attributable to Boqii      Holding Limited	(38,783)		(40,368)		(6,264)			(80,967)		(83,973)		(13,033)
Net loss per share attributable to Boqii      Holding Limited's ordinary shareholders
— basic	(3.06)		(0.64)		(0.10)			(7.12)		(1.16)		(0.18)
— diluted	(3.06)		(0.64)		(0.10)			(7.12)		(1.16)		(0.18)
Weighted average number of ordinary shares
— basic	22,238,454		67,703,830		67,703,830			22,238,454		67,703,830		67,703,830
— diluted	22,238,454		67,703,830		67,703,830			22,238,454		67,703,830		67,703,830

Notes for all the condensed consolidated financial schedules presented:
Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.4434 on September 30, 2021 published by the Federal Reserve Board.

 

Boqii Holding Limited
Reconciliation of GAAP and Non-GAAP Results
(In thousands)
	Three Months Ended September 30				Six Months Ended September 30,
	2020		2021		2020		2021
	RMB		RMB		RMB		RMB
Net loss	(27,450)		(44,531)		(69,749)		(81,891)
Fair value change of derivative liabilities	(8,303)		(249)		(10,409)		(411)
Share-based compensation	-		3,917		-		9,903
Adjusted Net loss	(35,753)		(40,863)		(80,158)		(72,399)
Adjusted Net Loss Margin	(15.6%)		(14.5%)		(17.1%)		(12.0%)
	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2021		2020		2021
	RMB		RMB		RMB		RMB
Net loss	(27,450)		(44,531)		(69,749)		(81,891)
Income tax expenses	500		(238)		191		(1,247)
Interest expenses	6,416		5,997		13,559		12,059
Interest income	(4,487)		(4,677)		(6,203)		(9,864)
Depreciation and amortization	1,601		1,957		3,351		3,885
EBITDA	(23,420)		(41,492)		(58,851)		(77,058)
EBITDA Margin	(10.2%)		(14.7%)		(12.6%)		(12.8%)

Notes for all the condensed consolidated financial schedules presented:
Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.4434 on September 30, 2021 published by the Federal Reserve Board.

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SOURCE Boqii Holding Limited

FAQ

What were Boqii's Q2 FY2022 revenue figures?

Boqii reported revenues of RMB282.1 million (US$43.8 million) for Q2 FY2022.

How did Boqii's net loss change in Q2 FY2022?

Boqii's net loss increased to RMB44.5 million (US$6.9 million) in Q2 FY2022, compared to RMB27.5 million in Q2 FY2021.

What is Boqii's stock symbol?

Boqii's stock symbol is BQ.

How many active buyers did Boqii have in Q2 FY2022?

Boqii reported 1.6 million active buyers in Q2 FY2022, a 23.5% increase year-over-year.

What was the EBITDA loss for Boqii in Q2 FY2022?

Boqii's EBITDA loss for Q2 FY2022 was RMB41.5 million (US$6.4 million).