China Online Education Group Announces Fourth Quarter 2020 Results
China Online Education Group (51Talk) (NYSE:COE) reported strong financial results for Q4 and FY 2020. Q4 net revenues reached RMB535.1 million, up 34.7% from 2019, with a gross margin of 72.7%. GAAP net income surged to RMB31.8 million from RMB0.8 million last year. For FY 2020, total revenues were RMB2,054.1 million, representing a 38.9% increase. Key drivers included a 70% rise in new paying students and a substantial operating cash flow of RMB719.3 million. The company also highlighted its acquisition of GKid, expanding its product offerings and addressing younger demographics.
- Net revenues for Q4 2020 increased 34.7% to RMB535.1 million.
- GAAP net income for Q4 2020 rose to RMB31.8 million from RMB0.8 million in Q4 2019.
- Full-year 2020 revenues grew 38.9% to RMB2,054.1 million.
- Active students reached 353,800, a 37.6% year-over-year increase.
- Operating cash inflow for FY 2020 was RMB719.3 million, up 80.8% from 2019.
- New paying students grew by 60% year-over-year.
- Acquisition of GKid enhances product offerings and market reach.
- Cost of revenues for Q4 2020 increased by 32.1%, impacting profit margins.
- Overall operating expenses rose 33.7% for Q4 2020, primarily due to increased sales and marketing costs.
- Net income excluding favorable impacts from COVID relief policies would have been significantly lower.
BEIJING, March 5, 2021 /PRNewswire/ -- China Online Education Group ("51Talk" or the "Company") (NYSE:COE), a leading online education platform in China, with core expertise in English education, announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2020.
Fourth Quarter 2020 Financial and Operating Highlights
- Net revenues were RMB535.1 million (US
$82.0 million ), a34.7% increase from RMB397.2 million for the fourth quarter of 2019. - Gross margin was
72.7% , compared with72.1% for the fourth quarter of 2019. - GAAP net income was RMB31.8 million, compared with GAAP net income RMB0.8 million for the fourth quarter of 2019.
- Non-GAAP net income[1] was RMB38.6 million, compared with non-GAAP net income RMB4.5 million for the fourth quarter of 2019.
- Operating cash inflow was RMB188.5 million (US
$28.9 million ), compared with RMB167.1 million cash inflow for the fourth quarter of 2019. - Cash, cash equivalents, time deposits and short-term investments balance reached RMB1,727.7 million (US
$264.8 million ) as of December 31, 2020. - Gross billings[2] were RMB720.9 million (US
$110.5 million ), a23.8% increase from RMB582.3 million for the fourth quarter of 2019.
Fiscal Year 2020 Financial and Operating Highlights
- Net revenues were RMB2,054.1 million (US
$314.8 million ), a38.9% increase from RMB1,478.5 million for the fiscal year 2019. - Gross margin was
71.7% , compared with70.2% for the fiscal year 2019. - GAAP net income was RMB147.0 million(US
$22.5 million ), compared with GAAP net loss RMB104.4 million for the fiscal year 2019. - Non-GAAP net income was RMB173.7 million (US
$26.6 million ), compared with non-GAAP net loss RMB87.7 million for the fiscal year 2019. - Operating cash inflow was RMB719.3 million (US
$110.2 million ), compared with RMB397.9 million cash inflow for the fiscal year 2019. - Gross billings were RMB2,722.6 million (US
$417.3 million ), a30.9% increase from RMB2,080.6 million for the fiscal year 2019.
[1] For more information on non-GAAP financial measures, please see the section of "Use of Non-GAAP Financial Measures" and the table captioned "Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures" set forth in this press release. |
[2] Gross billings for a specific period, which is one of the Company's key operating data, is defined as the total amount of cash received for the sale of course packages and services in such period, net of the total amount of refunds in such period. |
Key Financial and Operating Data
For the three months ended | For the year ended | |||||||||||||||
Dec. 31, | Dec. 31, | Y-o-Y | Dec. 31, | Dec. 31, | Y-o-Y | |||||||||||
2019 | 2020 | Change | 2019 | 2020 | Change | |||||||||||
Net Revenues (in RMB millions) | 397.2 | 535.1 | 1478.5 | 2,054.1 | ||||||||||||
K-12 mass-market one-on-one | 320.0 | 479.4 | 1131.3 | 1,773.2 | ||||||||||||
K-12 small class offering | 26.4 | 20.5 | ( | 112.8 | 97.1 | ( | ||||||||||
Adult offering | 38.8 | 27.9 | ( | 168.5 | 130.8 | ( | ||||||||||
K-12 American Academy one-on-one | 12.0 | 7.3 | ( |
65.9 |
53.0 |
( | ||||||||||
Gross Billings (in RMB millions) | 582.3 | 720.9 | 2,080.6 | 2,722.6 | ||||||||||||
K-12 mass-market one-on-one | 501.7 | 667.8 |
1,814.5 |
2,536.0 |
| |||||||||||
K-12 small class offering | 40.0 | 26.4 | ( | 96.6 | 90.9 | ( | ||||||||||
Adult offering | 34.5 | 25.8 | ( | 131.3 | 91.7 | ( | ||||||||||
K-12 American Academy one-on-one | 6.1 | 0.9 | ( |
38.2 |
4.0 |
( | ||||||||||
Active students[3] (in thousands) | 257.2 | 353.8 | ||||||||||||||
[3] An "active student" for a specified period refers to a student who booked at least one paid lesson, excluding those students who only | ||||||||||||||||
"The growth momentum from the beginning of 2020 continued into the fourth quarter," said Mr. Jack Jiajia Huang, Founder, Chairman and Chief Executive Officer of 51Talk. "Reflecting solid strategic execution in our online K-12 English mass-market offerings, fourth quarter net revenues grew
"Despite 2020 presenting an array of unforeseen challenges, our strong pre-established foundational groundwork allowed us to not only manage this tumultuous period but in fact benefit from the shifting environment as we took advantage of new opportunities. Full year net revenues grew
"We are also very excited about our recent acquisition of GKid's product portfolio and industry-leading AI technologies. GKid offers innovative AI-driven online English courses through highly interactive animation and picture books for children. With product offerings intended for those between the ages of three and eight, this acquisition both extends our addressable market and broadens our product and curriculum portfolio. We foresee many potential collaboration and integration opportunities between our platform and GKid's products and industry-leading AI technologies, leading to both new products and product improvements which will better serve our students.
"As we head further into 2021, we are focusing on user growth and enhanced brand promotions to drive market share expansion. To better attract and retain users, we will continue optimizing learning experiences through upgraded product offerings and an enriched curriculum mix. We are developing innovative AI-powered robotic tutors to help students review core knowledge points with the aim of enhancing overall learning efficiency. To make our courses more interesting and engaging to young children, we are also integrating more interactive features into our textbooks. Additionally, we are diversifying our curriculum portfolio in order to provide a holistic learning experience, through investing in R&D, upgrading services to students, and expanding our teacher operations. Finally, we target to further increase our branding and marketing efforts to heighten brand awareness as we enter the next phase of growth.
"We are also delighted to have successfully delivered over 50 million one-on-one online English lessons, including free trials, between November 2019 and December 2020 - a rapid increase that took our cumulative deliveries since our inception in 2011 to more than 150 million, and a strong testament to our accelerating growth trajectory. As 51Talk continues to grow, we are confident our balanced growth strategy will continue to yield solid value for our stakeholders," concluded Mr. Huang.
"I'm extremely proud that we concluded a turbulent 2020 with solid operating and financial results, evidenced by sustained revenue growth and the first profitable year in our company history," said Mr. Min Xu, Chief Financial Officer of 51Talk. "We recorded Non-GAAP net income of RMB173.7 million for 2020, compared to a Non-GAAP net loss of RMB87.7 million in 2019. In 2021, investment will be channeled towards the development of our curriculum, technology and brand as we look to capitalize on market dynamics, drive user growth and achieve the leading market position."
Fourth Quarter 2020 Financial Results
Net Revenues
Net revenues for the fourth quarter of 2020 were RMB535.1 million (US
Net revenues from one-on-one offerings for the fourth quarter of 2020 were RMB514.6 million (US
Cost of Revenues
Cost of revenues for the fourth quarter of 2020 was RMB146.1 million (US
As part of Chinese government's effort to ease the burden of businesses affected by the coronavirus (COVID-19) outbreak, the Ministry of Human Resources and Social Security, the Ministry of Finance and the State Taxation Administration, temporarily reduced and exempted employer obligation on social security contributions from February 2020. The impact of coronavirus policies on cost of revenues was RMB0.2 million in the fourth quarter. Excluding the impact, total cost of revenues for the fourth quarter would have been RMB146.3 million (US
Cost of revenues of one-on-one offerings for the fourth quarter of 2020 was RMB137.8 million (US
Gross Profit and Gross Margin
Gross profit for the fourth quarter of 2020 was RMB388.9 million (US
Gross margin for the fourth quarter of 2020 was
Excluding the positive impact of the coronavirus related social security contribution exemption, gross profit and gross margin for the fourth quarter would have been RMB388.7 million (US
Gross margin for one-on-one offerings for the fourth quarter of 2020 was
Operating Expenses
Total operating expenses for the fourth quarter of 2020 were RMB385.7 million (US
Sales and marketing expenses for the fourth quarter of 2020 were RMB284.5 million (US
Product development expenses for the fourth quarter of 2020 were RMB44.6 million (US
General and administrative expenses for the fourth quarter of 2020 were RMB56.6 million (US
Other income
As part of Chinese government's effort to ease the burden of businesses affected by the coronavirus
(COVID-19) outbreak, the State Taxation Administration (STA) exempted a wide range of consumer services from value added tax (VAT) from January 2020. The income obtained by taxpayers from providing essential services shall be exempted from VAT. The favorable impact of coronavirus relief policies was RMB7.5 million in the fourth quarter.
On September 30, 2019, Ministry of Finance and the State Taxation Administration announced that from October 1, 2019 to December 31, 2021, the taxpayers engaging in the provision of essential services are allowed to deduct an extra
Income/(loss) from Operations
Operating income for the fourth quarter of 2020 was RMB11.0 million (US
Non-GAAP operating income for the fourth quarter of 2020 was RMB17.8 million (US
The favorable impact of coronavirus relief policies was RMB15.7 million in the fourth quarter. Excluding the favorable impact, loss from operations and non-GAAP operating income for the fourth quarter would have been RMB4.7 million (US
Net income
Net income for the fourth quarter of 2020 was RMB31.8 million (US
Non-GAAP net income for the fourth quarter of 2020 was RMB38.6 million (US
The favorable impact of coronavirus relief policies was RMB15.7 million in the fourth quarter. Excluding the favorable impact, net income and non-GAAP net income for the fourth quarter would have been RMB16.1 million (US
Income tax benefits for the fourth quarter of 2020 were RMB8.9 million, including the releasing of valuation allowance for deferred tax assets of RMB9.7 million.
Basic net income per American depositary share ("ADS") attributable to ordinary shareholders for the fourth quarter of 2020 was RMB1.48 (US
Non-GAAP basic net income per ADS attributable to ordinary shareholders for the fourth quarter of 2020 was RMB1.79 (US
The favorable impact of coronavirus relief policies was RMB15.7 million in the fourth quarter. Excluding the favorable impact, basic net income per American depositary share ("ADS") attributable to ordinary shareholders for the fourth quarter of 2020 was RMB0.75 (US
Balance Sheet
As of December 31, 2020, the Company had total cash, cash equivalents, time deposits and short-term investments of RMB1,727.7 million (US
The Company had advances from students[4] (current and non-current) of RMB2,721.0 million (US
[4] "Advances from students", which is defined as the amount of obligation to transfer good or service to students or business partners for which consideration has been received from students in advance. The deposits from students are also presented in the total amount of "advances from students". |
Fiscal Year 2020 Financial Results
Net Revenues
Net revenues for 2020 were RMB2,054.1 million (US
Net revenues from one-on-one offerings for 2020 were RMB1,957.0 million (US
Cost of Revenues
Cost of revenues for 2020 was RMB580.4 million (US
As part of Chinese government's effort to ease the burden of businesses affected by the coronavirus (COVID-19) outbreak, the Ministry of Human Resources and Social Security, the Ministry of Finance and the State Taxation Administration temporarily reduced and exempted employer obligation on social security contributions for February 2020. The impact of coronavirus policies on cost of revenues was RMB1.3 million for 2020. Excluding the impact, total cost of revenues for 2020 would have been RMB581.7 million (US
Cost of revenues of one-on-one offerings for 2020 was 540.7 million (US
Gross Profit and Gross Margin
Gross profit for 2020 was RMB1,473.7 million (US
Gross margin for 2020 was
Excluding the positive impact of the coronavirus related social security contribution exemption, gross profit and gross margin for 2020 would have been RMB1,472.4 million (US
One-on-one offerings gross margin for 2020 was
Operating Expenses
Total operating expenses for 2020 were RMB1,412.7 million (US
Sales and marketing expenses for 2020 were RMB1,035.6 million (US
Product development expenses for 2020 were RMB162.8 million (US
General and administrative expenses for 2020 were RMB214.2million (US
Other income
As part of Chinese government's effort to ease the burden of businesses affected by the coronavirus
(COVID-19) outbreak, the State Taxation Administration (STA) exempted a wide range of consumer services from value added tax (VAT) from January 2020. The income obtained by taxpayers from providing essential services shall be exempted from VAT. The favorable impact of coronavirus relief policies was RMB32.3 million in 2020.
On September 30, 2019, Ministry of Finance and the State Taxation Administration announced that from October 1, 2019 to December 31, 2021, the taxpayers engaging in the provision of essential services are allowed to deduct an extra
Income/(loss) from Operations
Operating income for 2020 was RMB104.4 million (US
Non-GAAP operating income for 2020 was RMB131.2 million (US
The favorable impact of coronavirus relief policies was RMB65.5 million in 2020. Excluding the favorable impact, operating income and non-GAAP operating income for 2020 would have been RMB38.9 million (US
Net income/(loss)
Net income for 2020 was RMB147.0 million (US
Non-GAAP net income for 2020 was RMB173.7 million (US
The favorable impact of coronavirus relief policies was RMB65.5 million in 2020. Excluding the favorable impact, net income and non-GAAP net income for 2020 would have been RMB81.5 million (US
Income tax benefits for 2020 were RMB4.1 million, including the releasing of valuation allowance for deferred tax assets of RMB9.7 million.
Basic net income per American depositary share ("ADS") attributable to ordinary shareholders for 2020 was RMB6.90 (US
Non-GAAP basic net income per American depositary share ("ADS") attributable to ordinary shareholders for 2020 was RMB8.15 (US
The favorable impact of coronavirus relief policies was RMB65.5 million in 2020. Excluding the favorable impact, basic net income per American depositary share ("ADS") attributable to ordinary shareholders for 2020 was RMB3.82 (US
Outlook
For the first quarter of 2021, the Company currently expects net revenues to be between RMB595 million and RMB600 million, which would represent an increase of approximately
The above outlook is based on current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.
Share Repurchase Program
On September 8, 2020, 51Talk announced that its board of directors had authorized a share repurchase program of up to US
Notes to Unaudited Financial Information
The unaudited financial information disclosed in this press release is preliminary. The audit of the financial statements and related notes to be included in the Company's annual report on Form 20-F for the year ended December 31, 2020 is still in progress.
Conference Call
The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on March 5, 2021 (8:00 PM Beijing/Hong Kong time on March 5, 2021).
Dial-in details for the earnings conference call are as follows:
United States (toll free): | 1-866-264-5888 |
International: | 1-412-317-5226 |
Mainland China: | 400-120-1203 |
Hong Kong (toll free): | 800-905-945 |
Hong Kong: | 852-3018-4992 |
Participants should dial-in at least 5 minutes before the scheduled start time and ask to be connected to the call for "China Online Education Group."
Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.51talk.com.
A replay of the conference call will be accessible until March 12, 2021, by dialing the following telephone numbers:
United States (toll free): | 1-877-344-7529 |
International: | 1-412-317-0088 |
Replay Access Code: | 10152865 |
About China Online Education Group
China Online Education Group (NYSE: COE) is a leading online education platform in China, with core expertise in English education. The Company's mission is to make quality education accessible and affordable. The Company's online and mobile education platforms enable students across China to take live interactive English lessons with overseas foreign teachers, on demand. The Company connects its students with a large pool of highly qualified foreign teachers that it assembled using a shared economy approach, and employs student and teacher feedback and data analytics to deliver a personalized learning experience to its students.
Use of Non-GAAP Financial Measures
In evaluating its business, 51Talk considers and uses the following measures defined as non-GAAP financial measures by the SEC as supplemental metrics to review and assess its operating performance: non-GAAP sales and marketing expenses, non-GAAP product development expenses, non-GAAP general and administrative expenses, non-GAAP operating expenses, non-GAAP operating income/(loss), non-GAAP net income/(loss), non-GAAP net income/(loss) attributable to ordinary shareholders, and non-GAAP net income/(loss) attributable to ordinary shareholders per share and per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this press release.
51Talk believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding share-based compensation expenses that may not be indicative of its operating performance from a cash perspective. 51Talk believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to 51Talk's historical performance. 51Talk computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. 51Talk believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation expenses that have been and will continue to be for the foreseeable future a significant recurring expense in the 51Talk's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying table at the end of this press release provides more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.525 to US
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "aims", "future", "intends", "plans", "believes", "estimates", "likely to" and similar statements. Among other things, 51Talk's business outlook and quotations from management in this announcement, as well as 51Talk's strategic and operational plans, contain forward-looking statements. 51Talk may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission ("SEC"), in its annual report 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 51Talk's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: 51Talk's goals and strategies; 51Talk's expectations regarding demand for and market acceptance of its brand and platform; 51Talk's ability to retain and increase its student enrollment; 51Talk's ability to offer new courses; 51Talk's ability to engage, train and retain new teachers; 51Talk's future business development, results of operations and financial condition; 51Talk's ability to maintain and improve infrastructure necessary to operate its education platform; competition in the online education industry in China; the expected growth of, and trends in, the markets for 51Talk's course offerings in China; relevant government policies and regulations relating to 51Talk's corporate structure, business and industry; general economic and business condition in China, the Philippines and elsewhere and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in 51Talk's filings with the SEC. All information provided in this press release is as of the date of this press release, and 51Talk does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
China Online Education Group
Investor Relations
+86 (10) 8342-6262
ir@51talk.com
The Piacente Group, Inc.
Brandi Piacente
+86 (10) 6508-0677
+1 (212) 481-2050
51talk@tpg-ir.com
CHINA ONLINE EDUCATION GROUP | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
As of | ||||||||
Dec. 31, | Dec. 31, | Dec. 31, | ||||||
2019 | 2020 | 2020 | ||||||
RMB | RMB | US$ | ||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 342,951 | 326,647 | 50,061 | |||||
Time deposits | 144,093 | 477,408 | 73,166 | |||||
Short term investment | 452,936 | 509,636 | 78,105 | |||||
Inventory | 308 | 1,935 | 297 | |||||
Prepaid expenses and other current assets | 250,215 | 302,057 | 46,292 | |||||
Total current assets | 1,190,503 | 1,617,683 | 247,921 | |||||
Non-current assets | ||||||||
Property and equipment, net | 20,336 | 21,175 | 3,245 | |||||
Intangible assets, net | 9,918 | 20,302 | 3,111 | |||||
Goodwill | 4,223 | 4,223 | 647 | |||||
Right of use assets | 56,638 | 98,001 | 15,019 | |||||
Time deposits | 113,415 | 414,000 | 63,448 | |||||
Deferred tax assets | 337 | 10,268 | 1,574 | |||||
Other non-current assets | 6,447 | 23,896 | 3,662 | |||||
Total non-current assets | 211,314 | 591,865 | 90,706 | |||||
Total assets | 1,401,817 | 2,209,548 | 338,627 | |||||
LIABILITIES | ||||||||
AND SHAREHOLDERS' DEFICIT | ||||||||
Current liabilities | ||||||||
Short-term loan | 16,578 | - | - | |||||
Advances from students | 2,181,808 | 2,718,776 | 416,671 | |||||
Accrued expenses and other current liabilities | 166,955 | 237,101 | 36,337 | |||||
Lease liability | 31,550 | 42,949 | 6,582 | |||||
Taxes payable | 21,661 | 19,288 | 2,956 | |||||
Total current liabilities | 2,418,552 | 3,018,114 | 462,546 | |||||
Non-current liabilities | ||||||||
Advances from students | 4,783 | 2,270 | 348 | |||||
Lease liability | 23,545 | 53,594 | 8,214 | |||||
Other non-current liabilities | 1,595 | 2,508 | 384 | |||||
Total non-current liabilities | 29,923 | 58,372 | 8,946 | |||||
Total liabilities | 2,448,475 | 3,076,486 | 471,492 | |||||
Total shareholders' deficit | (1,046,658) | (866,938) | (132,865) | |||||
Total liabilities and shareholders' deficit | 1,401,817 | 2,209,548 | 338,627 | |||||
CHINA ONLINE EDUCATION GROUP | |||||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) | |||||||||||||||||||||||||
(In thousands except for number of shares and per share data) | |||||||||||||||||||||||||
For the three months ended | For the year ended | ||||||||||||||||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||
2019 | 2020 | 2020 | 2019 | 2020 | 2020 | ||||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||||||||
Net revenues[5] | 397,154 | 535,074 | 82,004 | 1,478,493 | 2,054,095 | 314,804 | |||||||||||||||||||
Cost of revenues | (110,648) | (146,134) | (22,396) | (439,923) | (580,417) | (88,953) | |||||||||||||||||||
Gross profit | 286,506 | 388,940 | 59,608 | 1,038,570 | 1,473,678 | 225,851 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||
Sales and marketing expenses | (202,520) | (284,493) | (43,600) | (792,591) | (1,035,620) | (158,716) | |||||||||||||||||||
Product development expenses | (37,046) | (44,577) | (6,832) | (157,505) | (162,829) | (24,955) | |||||||||||||||||||
General and administrative expenses | (48,883) | (56,626) | (8,678) | (196,029) | (214,224) | (32,831) | |||||||||||||||||||
Total operating expenses | (288,449) | (385,696) | (59,110) | (1,146,125) | (1,412,673) | (216,502) | |||||||||||||||||||
Other income | - | 7,766 | 1,190 | - | 43,414 | 6,653 | |||||||||||||||||||
(Loss)/Income from operations | (1,943) | 11,010 | 1,688 | (107,555) | 104,419 | 16,002 | |||||||||||||||||||
Interest income | 5,977 | 11,711 | 1,795 | 17,654 | 38,508 | 5,902 | |||||||||||||||||||
Interest expense and other expenses, net | (1,918) | 193 | 30 | (9,451) | (66) | (10) | |||||||||||||||||||
Income/(loss) before income tax | 2,116 | 22,914 | 3,513 | (99,352) | 142,861 | 21,894 | |||||||||||||||||||
Income tax (expenses)/benefits | (1,307) | 8,905 | 1,365 | (5,068) | 4,101 | 629 | |||||||||||||||||||
Net income/(loss) attributable to | 809 | 31,819 | 4,878 | (104,420) | 146,962 | 22,523 | |||||||||||||||||||
Weighted average number of ordinary | 311,064,347 | 323,458,483 | 323,458,483 | 308,364,918 | 319,553,690 | 319,553,690 | |||||||||||||||||||
Weighted average number of ordinary | 337,511,364 | 344,354,904 | 344,354,904 | 308,364,918 | 341,503,118 | 341,503,118 | |||||||||||||||||||
[5] By performing our last year-end financial closing procedures, we discovered an oversight in our process for evaluating the status of lessons that caused us to overstate net revenues | |||||||||||||||||||||||||
CHINA ONLINE EDUCATION GROUP | |||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) | |||||||||||||||||||||||
(In thousands except for number of shares and per share data) | |||||||||||||||||||||||
For the three months ended | For the year ended | ||||||||||||||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||
2019 | 2020 | 2020 | 2019 | 2020 | 2020 | ||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||||||
Net income/(loss) per share attributable to ordinary shareholders | |||||||||||||||||||||||
Basic | 0.00 | 0.10 | 0.02 | (0.34) | 0.46 | 0.07 | |||||||||||||||||
Diluted | 0.00 | 0.09 | 0.01 | (0.34) | 0.43 | 0.07 | |||||||||||||||||
Net income/(loss) per ADS attributable to ordinary shareholders | |||||||||||||||||||||||
Basic | 0.04 | 1.48 | 0.23 | (5.08) | 6.90 | 1.06 | |||||||||||||||||
Diluted | 0.04 | 1.39 | 0.21 | (5.08) | 6.46 | 0.99 | |||||||||||||||||
Comprehensive income/(loss): | |||||||||||||||||||||||
Net income/(loss) | 809 | 31,819 | 4,878 | (104,420) | 146,962 | 22,523 | |||||||||||||||||
Other comprehensive | |||||||||||||||||||||||
Foreign currency translation | (4,048) | (14,319) | (2,194) | 5,356 | (21,087) | (3,232) | |||||||||||||||||
Total comprehensive | (3,239) | 17,500 | 2,684 | (99,064) | 125,875 | 19,291 | |||||||||||||||||
Share-based compensation expenses are included in the operating expenses as follows: | |||||||||||||||||||||||
Sales and marketing expenses | (939) | (1,875) | (287) | (2,951) | (8,835) | (1,354) | |||||||||||||||||
Product development expenses | (218) | (1,281) | (196) | (3,472) | (4,477) | (686) | |||||||||||||||||
General and administrative | (2,582) | (3,636) | (557) | (10,309) | (13,422) | (2,057) | |||||||||||||||||
CHINA ONLINE EDUCATION GROUP | |||||||||||||||||
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures | |||||||||||||||||
(In thousands except for number of shares and per share data) | |||||||||||||||||
For the three months ended | For the year ended | ||||||||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||
2019 | 2020 | 2020 | 2019 | 2020 | 2020 | ||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||
Sales and marketing expenses | (202,520) | (284,493) | (43,600) | (792,591) | (1,035,620) | (158,716) | |||||||||||
Less: Share-based compensation expenses | (939) | (1,875) | (287) | (2,951) | (8,835) | (1,354) | |||||||||||
Non-GAAP sales and marketing expenses | (201,581) | (282,618) | (43,313) | (789,640) | (1,026,785) | (157,362) | |||||||||||
Product development expenses | (37,046) | (44,577) | (6,832) | (157,505) | (162,829) | (24,955) | |||||||||||
Less: Share-based compensation expenses | (218) | (1,281) | (196) | (3,472) | (4,477) | (686) | |||||||||||
Non-GAAP product development expenses | (36,828) | (43,296) | (6,636) | (154,033) | (158,352) | (24,269) | |||||||||||
General and administrative expenses | (48,883) | (56,626) | (8,678) | (196,029) | (214,224) | (32,831) | |||||||||||
Less: Share-based compensation expenses | (2,582) | (3,636) | (557) | (10,309) | (13,422) | (2,057) | |||||||||||
Non-GAAP general and administrative | (46,301) | (52,990) | (8,121) | (185,720) | (200,802) | (30,774) | |||||||||||
Operating expenses | (288,449) | (385,696) | (59,110) | (1,146,125) | (1,412,673) | (216,502) | |||||||||||
Less: Share-based compensation expenses | (3,739) | (6,792) | (1,040) | (16,732) | (26,734) | (4,097) | |||||||||||
Non-GAAP operating expenses | (284,710) | (378,904) | (58,070) | (1,129,393) | (1,385,939) | (212,405) | |||||||||||
(Loss)/income from operations | (1,943) | 11,010 | 1,688 | (107,555) | 104,419 | 16,002 | |||||||||||
Less: Share-based compensation expenses | (3,739) | (6,792) | (1,040) | (16,732) | (26,734) | (4,097) | |||||||||||
Non-GAAP income/(loss) from operations | 1,796 | 17,802 | 2,728 | (90,823) | 131,153 | 20,099 | |||||||||||
CHINA ONLINE EDUCATION GROUP | ||||||||||||
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures | ||||||||||||
(In thousands except for number of shares and per share data) | ||||||||||||
For the three months ended | For the year ended | |||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||
2019 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||
Income tax expenses/(benefits) | (1,307) | 8,905 | 1,365 | (5,068) | 4,101 | 629 | ||||||
Less: Tax impact of Share-based compensation | - | - | - | - | - | - | ||||||
Non-GAAP income tax expenses/(benefits) | (1,307) | 8,905 | 1,365 | (5,068) | 4,101 | 629 | ||||||
Net income/(loss) attributable to ordinary shareholders | 809 | 31,819 | 4,878 | (104,420) | 146,962 | 22,523 | ||||||
Less: Share-based compensation expenses, net of tax | (3,739) | (6,792) | (1,040) | (16,732) | (26,734) | (4,097) | ||||||
Non-GAAP net income/(loss) attributable to ordinary | 4,548 | 38,611 | 5,918 | (87,688) | 173,696 | 26,620 | ||||||
Weighted average number of ordinary shares used in | ||||||||||||
computing basic income/(loss) per share | 311,064,347 | 323,458,483 | 323,458,483 | 308,364,918 | 319,553,690 | 319,553,690 | ||||||
Weighted average number of ordinary shares used in | 337,511,364 | 344,354,904 | 344,354,904 | 308,364,918 | 341,503,118 | 341,503,118 | ||||||
computing diluted income/(loss) per share | ||||||||||||
Non-GAAP net income/(loss) per share attributable to ordinary | ||||||||||||
basic | 0.01 | 0.12 | 0.02 | (0.28) | 0.54 | 0.08 | ||||||
diluted | 0.01 | 0.11 | 0.02 | (0.28) | 0.51 | 0.08 | ||||||
Non-GAAP net income/(loss) per ADS attributable to ordinary | ||||||||||||
basic | 0.22 | 1.79 | 0.27 | (4.27) | 8.15 | 1.25 | ||||||
diluted | 0.20 | 1.68 | 0.26 | (4.27) | 7.63 | 1.17 | ||||||
CHINA ONLINE EDUCATION GROUP | ||||||||||||||||||||||||||||||||
UNAUDITED ADDITIONAL INFORMATION | ||||||||||||||||||||||||||||||||
(In thousands except percentages) | ||||||||||||||||||||||||||||||||
For the three months ended | For the year ended | |||||||||||||||||||||||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||
2019 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||||||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||||||||||
Net revenues | ||||||||||||||||||||||||||||||||
One-on-one offerings | 370,763 | 514,624 | 78,870 | 1,365,706 | 1,957,013 | 299,925 | ||||||||||||||||||||||||||
Small class offerings | 26,391 | 20,450 | 3,134 | 112,787 | 97,082 | 14,879 | ||||||||||||||||||||||||||
Total net revenues | 397,154 | 535,074 | 82,004 | 1,478,493 | 2,054,095 | 314,804 | ||||||||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||||||||||
One-on-one offerings | (98,178) | (137,846) | (21,126) | (386,085) | (540,707) | (82,867) | ||||||||||||||||||||||||||
Small class offerings | (12,470) | (8,288) | (1,270) | (53,838) | (39,710) | (6,086) | ||||||||||||||||||||||||||
Total cost of revenues | (110,648) | (146,134) | (22,396) | (439,923) | (580,417) | (88,953) | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||||||||
One-on-one offerings | 272,585 | 376,778 | 57,744 | 979,621 | 1,416,306 | 217,058 | ||||||||||||||||||||||||||
Small class offerings | 13,921 | 12,162 | 1,864 | 58,949 | 57,372 | 8,793 | ||||||||||||||||||||||||||
Total gross profit | 286,506 | 388,940 | 59,608 | 1,038,570 | 1,473,678 | 225,851 | ||||||||||||||||||||||||||
Gross margin | ||||||||||||||||||||||||||||||||
One-on-one offerings | ||||||||||||||||||||||||||||||||
Small class offerings | ||||||||||||||||||||||||||||||||
Total gross margin | ||||||||||||||||||||||||||||||||
CHINA ONLINE EDUCATION GROUP | ||||||||||||||||||||||||
UNAUDITED ADDITIONAL INFORMATION | ||||||||||||||||||||||||
(In thousands except percentages) | ||||||||||||||||||||||||
For the three months ended | For the year ended | |||||||||||||||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||
2019 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||
Sales and marketing expenses | ||||||||||||||||||||||||
One-on-one offerings | (189,502) | (278,302) | (42,651) | (738,010) | (991,479) | (151,951) | ||||||||||||||||||
Small class offerings | (13,018) | (6,191) | (949) | (54,581) | (44,141) | (6,765) | ||||||||||||||||||
Total sales and marketing expenses[6] | (202,520) | (284,493) | (43,600) | (792,591) | (1,035,620) | (158,716) | ||||||||||||||||||
Product development expenses | ||||||||||||||||||||||||
One-on-one offerings | (32,860) | (42,260) | (6,477) | (138,291) | (150,926) | (23,131) | ||||||||||||||||||
Small class offerings | (4,186) | (2,317) | (355) | (19,214) | (11,903) | (1,824) | ||||||||||||||||||
Total product development expenses[7] | (37,046) | (44,577) | (6,832) | (157,505) | (162,829) | (24,955) | ||||||||||||||||||
General and administrative expenses | ||||||||||||||||||||||||
One-on-one offerings | (45,576) | (54,562) | (8,362) | (178,606) | (202,955) | (31,104) | ||||||||||||||||||
Small class offerings | (3,307) | (2,064) | (316) | (17,423) | (11,269) | (1,727) | ||||||||||||||||||
Total general and administrative expenses[8] | (48,883) | (56,626) | (8,678) | (196,029) | (214,224) | (32,831) | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||
One-on-one offerings | (267,938) | (375,124) | (57,490) | (1,054,907) | (1,345,360) | (206,186) | ||||||||||||||||||
Small class offerings | (20,511) | (10,572) | (1,620) | (91,218) | (67,313) | (10,316) | ||||||||||||||||||
Total operating expenses | (288,449) | (385,696) | (59,110) | (1,146,125) | (1,412,673) | (216,502) | ||||||||||||||||||
Other income | ||||||||||||||||||||||||
One-on-one offerings | - | 7,469 | 1,145 | - | 38,683 | 5,928 | ||||||||||||||||||
Small class offerings | - | 297 | 45 | - | 4,731 | 725 | ||||||||||||||||||
Total Other income | - | 7,766 | 1,190 | - | 43,414 | 6,653 | ||||||||||||||||||
Income/(loss) from operations | ||||||||||||||||||||||||
One-on-one offerings | 4,647 | 9,123 | 1,399 | (75,286) | 109,629 | 16,800 | ||||||||||||||||||
Small class offerings | (6,590) | 1,887 | 289 | (32,269) | (5,210) | (798) | ||||||||||||||||||
Total (loss)/income from operations | (1,943) | 11,010 | 1,688 | (107,555) | 104,419 | 16,002 | ||||||||||||||||||
[6] Share-based compensation expenses included in the sales and marketing expenses for one-on-one offerings and small class offerings were RMB1,758 | ||||||||||||||||||||||||
[7] Share-based compensation expenses, included in the product development expenses for one-on-one offerings and small class offerings were RMB775 | ||||||||||||||||||||||||
[8] Share-based compensation expenses, included in the general and administrative expenses for one-on-one offerings and small class offerings were | ||||||||||||||||||||||||
View original content:http://www.prnewswire.com/news-releases/china-online-education-group-announces-fourth-quarter-2020-results-301241379.html
SOURCE China Online Education Group
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