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Dada Announces Unaudited Second Quarter 2022 Financial Results

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Dada Nexus Limited (NASDAQ: DADA) reported significant growth in its second quarter 2022 financial results, with total net revenues reaching RMB2,281.1 million, a 55% year-over-year increase. Gross Merchandise Volume (GMV) for JDDJ rose by 68.9% to RMB54.6 billion. Active consumers increased by 41.6% to 72.8 million. Despite rising expenses totaling RMB2,909.3 million, the company's net loss decreased to RMB578.8 million from RMB640.4 million in Q2 2021. For Q3 2022, Dada projects revenues of RMB2,350 million to RMB2,450 million, indicating growth of 39% to 45% year-over-year.

Positive
  • Net revenues grew by 55% year-over-year to RMB2,281.1 million.
  • Gross Merchandise Volume for JDDJ increased by 68.9% to RMB54.6 billion.
  • Active consumers rose to 72.8 million, a 41.6% increase year-over-year.
  • Net loss reduced to RMB578.8 million compared to RMB640.4 million in Q2 2021.
  • Projected Q3 2022 revenue guidance of RMB2,350 million to RMB2,450 million, reflecting 39% to 45% growth.
Negative
  • Total costs and expenses increased to RMB2,909.3 million, up from RMB2,205.8 million in Q2 2021.
  • Loss from operations was RMB608.7 million, though improved from RMB665.8 million in the previous year.

SHANGHAI, China, Aug. 22, 2022 (GLOBE NEWSWIRE) -- Dada Nexus Limited (NASDAQ: DADA, “Dada” or the “Company”), China’s leading local on-demand delivery and retail platform, today announced its unaudited financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Highlights

  • Total net revenues in the second quarter were RMB2,281.1 million.
  • Total Gross Merchandise Volume (“GMV”) of JDDJ for the twelve months ended June 30, 2022 was RMB54.6 billion, an increase of 68.9% year over year from RMB32.3 billion in the same period of 2021.
  • Number of active consumers for the twelve months ended June 30, 2022 was 72.8 million, as compared with 51.3 million in the same period of 2021.

“With trust from partners and strong digitalization capabilities, Dada is uniquely positioned in the changing consumption environment,” said Mr. Philip Kuai, Chairman and Chief Executive Officer of Dada. “We are proud to deliver solid results amid macro uncertainties, thanks to the invaluable support from our employees, customers, and strategic partners. Riding on the consumption trend towards on-demand shopping and leveraging our dual-engine business comprising JDDJ and Dada Now, we are well prepared to head for a brighter future.”

“Local on-demand retail and delivery service represents one of the biggest opportunities in this era,” said Mr. Jeff He, incoming President of Dada. “Joining hands with JD.com, we will leverage our respective strengths to lead the industry growth, while exploring innovative models to improve efficiency and customer experience for the whole retail sector.”

“It is encouraging to see impressive revenue growth and significant progress towards profitability,” said Mr. Beck Chen, Chief Financial Officer of Dada. “In the second quarter, Dada continued to deliver strong top-line growth with revenue growing by 55% year over year. In the meantime, our net margin improved by 18 percentage points year over year, marking a remarkable milestone in our path to profitability. Going forward, we will stay committed to empowering partners, streamlining operations, and driving our business growth in a sustainable way.”

Second Quarter 2022 Financial Results        

Total net revenues were RMB2,281.1 million.

  For the three months ended June 30,
  2021 2022
     
  (RMB in thousands)
Net Revenue    
Dada Now    
Services 576,712 793,844
Sales of goods 16,792 21,791
Subtotal 593,504 815,635
JDDJ    
Servicesnote (1) 881,090 1,460,612
Sales of goods  4,845
Subtotal 881,090 1,465,457
Total 1,474,594 2,281,092

Note:
(1) Includes net revenues from (i) commission fee, and online advertising and marketing services of RMB510,417 and RMB897,223 for the three months ended June 30, 2021 and 2022, respectively; and (ii) fulfillment services and others of RMB370,673 and RMB563,389 for the three months ended June 30, 2021 and 2022, respectively.

  • Net revenues generated from Dada Now increased by 37.4% from RMB593.5 million in the second quarter of 2021 to RMB815.6 million in the second quarter of 2022, mainly driven by the increases in order volume of intra-city delivery service to chain merchants.
  • Net revenues generated from JDDJ increased by 66.3% from RMB881.1 million in the second quarter of 2021 to RMB1,465.5 million in the second quarter of 2022, mainly due to the increase in GMV from the same quarter last year, which was driven by increases in the number of active consumers and average order size. The increase in online marketing services revenue as a result of the increasing promotional activities launched by brand owners and retailers also contributed to the increment of the net revenues generated from JDDJ.

Total costs and expenses were RMB2,909.3 million, compared with RMB2,205.8 million in the same quarter of 2021.

  • Operations and support costs were RMB1,431.3 million, compared with RMB1,136.5 million in the same quarter of 2021. The increase was primarily due to an increase in rider cost as a result of increasing order volume for intra-city delivery services provided to various chain merchants on the Dada Now platform and retailers on the JDDJ platform.
  • Selling and marketing expenses were RMB1,190.2 million, compared with RMB824.2 million in the same quarter of 2021. The increase was primarily due to (i) growing incentives to JDDJ consumers, (ii) an increase in advertising and marketing expenses to attract new consumers to JDDJ platform, and (iii) amortization of the business cooperation agreement (“BCA”) in connection with the share subscription transaction with JD.com in February 2022.
  • General and administrative expenses were RMB99.9 million, compared with RMB100.1 million in the same quarter of 2021. The measure was flat primarily due to efficient expense control measures.
  • Research and development expenses were RMB160.0 million, compared with RMB132.3 million in the same quarter of 2021. The increase was mainly attributable to the increase in research and development personnel cost as the Company continues to strengthen its technological capabilities.

Loss from operations was RMB608.7 million, compared with RMB665.8 million in the same quarter of 2021.

Non-GAAP loss from operations1 was RMB424.2 million, compared with RMB573.3 million in the same quarter of 2021.

Net loss was RMB578.8 million, compared with RMB640.4 million in the same period of 2021.

Non-GAAP net loss2 was RMB395.6 million, compared with RMB549.2 million in the same period of 2021.

Net loss attributable to ordinary shareholders of Dada was RMB578.8 million, compared with RMB640.4 million in the same quarter of 2021.

Non-GAAP net loss attributable to ordinary shareholders of Dada3 was RMB395.6 million, compared with RMB549.2 million in the same quarter of 2021.

Basic and diluted net loss per share was RMB0.60, compared with RMB0.67 for the second quarter of 2021.

Non-GAAP basic and diluted net loss per share4 was RMB0.41, compared with RMB0.58 for the second quarter of 2021.

As of June 30, 2022, the Company had RMB4,350.2 million in cash, cash equivalents, restricted cash and short-term investments, an increase from RMB1,764.8 million as of December 31, 2021.

Pursuant to our US$70 million share repurchase program announced in March 2022, as of June 30, 2022, we had repurchased approximately US$32.7 million of ADSs under this repurchase program.

Environment, Social Responsibility and Corporate Governance

The Company continued to execute its ESG strategy in a committed and proactive way:

  • At the end of June, the Company released its first ESG report after undertaking significant research to identify the ESG issues that matter most to its stakeholders. The Company provided details on its ESG efforts and performance in the areas of governance, human resources development, quality products and services, partner empowerment, environmentally friendly initiatives, and social care commitment. Meanwhile, the Company remains committed to continuously implementing its sustainable development strategy.
  • During the second quarter, the Company actively cooperated with local governmental authorities in Shanghai, Beijing and other cities affected by COVID-19 resurgence to maintain the supply of daily necessities, leveraging its strengths as an on-demand retail and delivery platform to fully embrace social responsibilities. In June, the Company received an appreciation letter from Shanghai Municipal Commission of Commerce, which recognized the Company's significant contribution to the fight against COVID-19 resurgence in Shanghai.
  • In July, the Company launched the 2022 "Summer Cooling Plan", marking the sixth consecutive year to carry out summer care programs for its riders. Under the program, the Company provided heatstroke prevention materials including quick-dry clothes, ice sleeves and water bottles to the riders, and carried out nationwide offline panels for riders' feedback and experience-sharing. In addition, the Company participated in the "Mutual Aid Protection Scheme for Workers in New Forms of Employment" launched by Shanghai Federation of Trade Unions to provide riders with certain insurance coverage for free.
  • The Company continues to help special groups such as the elderly and the disabled to enjoy the convenient services enabled by digital technology in healthcare and other fields. After passing the aging-friendly and barrier-free assessment launched by the Ministry of Industry and Information Technology earlier this year, JDDJ App was highlighted as a case study on aging-friendly and barrier-free approaches in the "White Paper on Information Accessibility (2022)" released by the China Academy of Information and Communications Technology in May 2022.

Business Outlook

For the third quarter of 2022, Dada expects total revenue to be between RMB2,350 million and RMB2,450 million, representing year-over-year growth of 39% to 45%. This outlook is based on information available as of the date of this press release and reflects the Company's current and preliminary expectations, which are subject to change in light of various uncertainties, including those related to the ongoing COVID-19 pandemic.

__________
1 Non-GAAP loss from operations represents loss from operations excluding the impact of share-based compensation expenses and amortization of intangible assets resulting from business acquisition.
2 Non-GAAP net loss represents net loss excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisitions and tax benefit from amortization of such intangible assets.
3 Non-GAAP net loss attributable to ordinary shareholders of Dada is net loss attributable to ordinary shareholders of Dada excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition and tax benefit from amortization of such intangible assets.
4 Non-GAAP net loss per share is non-GAAP net loss attributable to ordinary shareholders of Dada divided by weighted average number of shares used in calculating net loss per share.

Conference Call

The Company will host a conference call to discuss the earnings at 9:30 p.m. Eastern Time on Monday, Aug 22, 2022 (9:30 a.m. Beijing time on Tuesday, Aug 23, 2022).

Please register in advance of the conference using the link provided below and dial in 10 minutes prior to the call.

PRE-REGISTER LINK: https://s1.c-conf.com/diamondpass/10024407-sdmfs22.html

Upon registration, each participant will receive details for the conference call, including dial-in numbers, conference call passcode and a unique access PIN. To join the conference, please dial the number provided, enter the passcode followed by your PIN, and you will join the conference.

A telephone replay of the call will be available after the conclusion of the conference call through Aug 29, 2022.

Dial-in numbers for the replay are as follows:
 
U.S./Canada1-855-883-1031
Mainland China 400-1209-216
Hong Kong 800-930-639
Replay PIN10024407

A live and archived webcast of the conference call will be available on the Investor Relations section of Dada’s website at https://ir.imdada.cn/.

Use of Non-GAAP Financial Measures

The Company also uses certain non-GAAP financial measures in evaluating its business. For example, the Company uses non-GAAP income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net margin, non-GAAP net income/(loss) attributable to ordinary shareholders of Dada and non-GAAP net income/(loss) attributable to ordinary shareholders of Dada per share as supplemental measures to review and assess its financial and operating performance. 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 U.S. GAAP. Non-GAAP income/(loss) from operations is income/(loss) from operations excluding the impact of share-based compensation expenses and amortization of intangible assets resulting from business acquisition. Non-GAAP operating margin is non-GAAP income/(loss) from operations as a percentage of total net revenues. Non-GAAP net income/(loss) is net income/(loss) excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition and tax benefit from amortization of such intangible assets. Non-GAAP net margin is non-GAAP net income/(loss) as a percentage of total net revenues. Non-GAAP net income/(loss) attributable to ordinary shareholders of Dada is net income/(loss) attributable to ordinary shareholders of Dada excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition and tax benefit from amortization of such intangible assets. Non-GAAP net income/(loss) attributable to ordinary shareholders of Dada per share is non-GAAP net income/(loss) attributable to ordinary shareholders of Dada divided by weighted average number of shares used in calculating net income/(loss) per share.

The Company presents the non-GAAP financial measures because they are used by the Company’s management to evaluate the Company’s financial and operating performance and formulate business plans. Non-GAAP income/(loss) from operations and non-GAAP net income/(loss) enable the Company’s management to assess the Company’s financial and operating results without considering the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition and tax benefit from amortization of such intangible assets. The Company also believes that the use of the non-GAAP measures facilitates investors’ assessment of the Company’s financial and operating performance.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income/(loss) from operations, non-GAAP net income/(loss), non-GAAP net income/(loss) attributable to ordinary shareholders of Dada, and non-GAAP net income/(loss) attributable to ordinary shareholders of Dada per share is that they do not reflect all items of income and expense that affect the Company’s operations. Share-based compensation expenses, amortization of intangible assets resulting from business acquisition and tax benefit from amortization of such intangible assets have been and may continue to be incurred in the Company’s business and is not reflected in the presentation of non-GAAP income/(loss) from operations, non-GAAP net income/(loss), non-GAAP net income/(loss) attributable to ordinary shareholders of Dada, and non-GAAP net income/(loss) attributable to ordinary shareholders of Dada per share. Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, potentially limiting the comparability of their financial results to the Company’s. In light of the foregoing limitations, the non-GAAP income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net margin, non-GAAP net income/(loss) attributable to ordinary shareholders of Dada and non-GAAP net income/(loss) attributable to ordinary shareholders of Dada per share for the period should not be considered in isolation from or as an alternative to income/(loss) from operations, operating margin, net income/(loss), net margin, net income/(loss) attributable to ordinary shareholders of Dada and net income/(loss) attributable to ordinary shareholders of Dada per share, or other financial measures prepared in accordance with U.S. GAAP.

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 reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliations of GAAP and Non-GAAP Results.”

Forward-Looking Statements

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, quotations in this announcement, contain forward-looking statements. Dada may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “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 Dada’s beliefs, plans 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: Dada’s strategies; Dada’s future business development, financial condition and results of operations; Dada’s ability to maintain its relationship with major strategic investors; its ability to provide efficient on-demand delivery services and offer quality on-demand retail experience; its ability to maintain and enhance the recognition and reputation of its brands; general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Dada’s filings with the SEC. All information provided in this press release is as of the date of this press release, and Dada does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Dada

Dada is a leading platform of local on-demand retail and delivery in China. It operates JDDJ, one of China’s largest local on-demand retail platforms for retailers and brand owners, and Dada Now, a leading local on-demand delivery platform open to merchants and individual senders across various industries and product categories. The Company’s two platforms are inter-connected and mutually beneficial. The Dada Now platform enables improved delivery experience for participants on the JDDJ platform through its readily accessible fulfillment solutions and strong on-demand delivery infrastructure. Meanwhile, the vast volume of on-demand delivery orders from the JDDJ platform increases order volume and density for the Dada Now platform.

For more information, please visit https://ir.imdada.cn/.

For investor inquiries, please contact:

Dada Nexus Limited
Ms. Caroline Dong
E-mail: ir@imdada.cn

Christensen

In China
Mr. Rene Vanguestaine
Phone: +86-178-1749 0483
E-mail: rvanguestaine@christensenir.com

In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
E-mail: lbergkamp@christensenir.com

For media inquiries, please contact:

Dada Nexus Limited
E-mail: PR@imdada.cn


Appendix I

 
DADA NEXUS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data and otherwise noted)
      
  As of December 31, As of June 30, 
  2021 2022 
  RMB RMB 
ASSETS     
Current assets     
Cash and cash equivalents 512,830 614,224 
Restricted cash 58,020 99,793 
Short-term investments 1,193,909 3,636,142 
Accounts receivable 352,324 329,329 
Inventories, net 6,344 8,526 
Amount due from related parties 840,667 1,271,856 
Prepayments and other current assets 479,017 575,833 
Total current assets 3,443,111 6,535,703 


Non-current assets     
Property and equipment, net 37,555 26,205 
Goodwill 957,605 957,605 
Intangible assets, net 332,317 1,846,033 
Operating lease right-of-use assets 76,811 57,663 
Non-current time deposits 400,000 400,000 
Other non-current assets 33,181 40,341 
Total non-current assets 1,837,469 3,327,847 
      
TOTAL ASSETS 5,280,580 9,863,550 
      
LIABILITIES AND SHAREHOLDERS’ EQUITY     
Current liabilities     
Short-term loan 100,000 100,000 
Accounts payable 9,800 17,923 
Notes payable  500,000 
Payable to riders and drivers 580,983 609,470 
Amount due to related parties 71,760 134,113 
Accrued expenses and other current liabilities 620,406 657,318 
Operating lease liabilities 35,759 29,865 
Total current liabilities 1,418,708 2,048,689 
      
Non-current liabilities     
Deferred tax liabilities 27,000 24,494 
Non-current operating lease liabilities 46,243 32,121 
Total non-current liabilities 73,243 56,615 
      
TOTAL LIABILITIES 1,491,951 2,105,304 


     
SHAREHOLDERS’ EQUITY    
Ordinary shares (US$0.0001 par value, 2,000,000,000      
and 2,000,000,000 shares authorized, 955,876,116
and 1,079,498,378 shares issued, 927,776,552 and
1,035,214,226 shares outstanding as of December 31,
2021 and June 30, 2022, respectively)
 633  640 
Additional paid-in capital 15,714,015  20,677,836 
Accumulated deficit (11,816,229) (12,999,316)
Accumulated other comprehensive loss (109,790) 79,086 
TOTAL SHAREHOLDERS’ EQUITY 3,788,629  7,758,246 
     
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 5,280,580  9,863,550 
       


DADA NEXUS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Amounts in thousands, except share and per share data and otherwise noted)
        
  For the three months ended June 30,  For the six months ended June 30,
  2021  2022   2021  2022
  RMB RMB  RMB RMB
          
          
Net revenues 1,474,594  2,281,092   3,147,357  4,306,413 
Costs and expenses         
Operations and support (1,136,482) (1,431,286)  (2,531,473) (2,701,559)
Selling and marketing (824,170) (1,190,244)  (1,614,888) (2,304,708)
General and administrative (100,106) (99,942)  (202,843) (200,751)
Research and development (132,330) (160,038)  (256,528) (324,711)
Other operating expenses (12,742) (27,764)  (25,349) (41,802)
Total costs and expenses (2,205,830) (2,909,274)  (4,631,081) (5,573,531)
Other operating income 65,468  19,462   76,510  32,710 
Loss from operations (665,768) (608,720)  (1,407,214) (1,234,408)
          
Other income/(expenses)         
Interest expenses (4,007) (1,388)  (9,406) (2,210)
Others, net 28,113  30,008   63,435  51,025 
Total other income 24,106  28,620   54,029  48,815 
Loss before income tax benefits (641,662) (580,100)  (1,353,185) (1,185,593)
Income tax benefits 1,253  1,253   2,506  2,506 
Net loss (640,409) (578,847)  (1,350,679) (1,183,087)
Accretion of convertible redeemable preferred shares         
Net loss attributable to ordinary shareholders of Dada (640,409) (578,847)  (1,350,679) (1,183,087)
          
Net loss per share         
Basic (0.67) (0.60)  (1.42) (1.18)
Diluted (0.67) (0.60)  (1.42) (1.18)
          
Weighted average shares used in calculating net loss per share         
Basic 951,437,694  968,860,766   953,812,426  1,005,163,182 
Diluted 951,437,694  968,860,766   953,812,426  1,005,163,182 
          
Net loss (640,409) (578,847)  (1,350,679) (1,183,087)
Other comprehensive income/(loss)         
Foreign currency translation adjustments (15,387) 192,576   (30,561) 188,876 
Total comprehensive loss (655,796) (386,271)  (1,381,240) (994,211)


DADA NEXUS LIMITED
Reconciliations of GAAP and Non-GAAP Results
(Amounts in thousands, except share and per share data and otherwise noted)
      
  For the three months ended June 30,  For the six months ended June 30,
  2021
 2022
  2021
 2022
  RMB RMB  RMB RMB
          
Loss from operations (665,768) (608,720)  (1,407,214) (1,234,408)
Add:         
Share-based compensation expense 49,561  55,720   99,664  110,732 
Intangible assets amortization 42,887  128,753   86,165  198,066 
Non-GAAP loss from operations (573,320) (424,247)  (1,221,385) (925,610)
          
Net loss (640,409) (578,847)  (1,350,679) (1,183,087)
Add:         
Share-based compensation expense 49,561  55,720   99,664  110,732 
Intangible assets amortization 42,887  128,753   86,165  198,066 
Income tax benefit (1,253) (1,253)  (2,506) (2,506)
Non-GAAP net loss (549,214) (395,627)  (1,167,356) (876,795)
          
Accretion of convertible redeemable preferred shares         
          
Non-GAAP net loss attributable to ordinary shareholders of Dada (549,214) (395,627)  (1,167,356) (876,795)
          
Non-GAAP net loss per share         
Basic (0.58) (0.41)  (1.22) (0.87)
Diluted (0.58) (0.41)  (1.22) (0.87)
          
Weighted average shares used in calculating net loss per share         
Basic 951,437,694  968,860,766   953,812,426  1,005,163,182 
Diluted 951,437,694  968,860,766   953,812,426  1,005,163,182 

FAQ

What were Dada's second quarter 2022 revenue results?

Dada reported total net revenues of RMB2,281.1 million for the second quarter of 2022.

How did Dada's active consumer numbers change year-over-year?

The number of active consumers increased by 41.6%, reaching 72.8 million compared to 51.3 million in Q2 2021.

What is the projected revenue for Dada in the third quarter of 2022?

Dada expects total revenue in Q3 2022 to be between RMB2,350 million and RMB2,450 million.

How much did Dada's net loss decrease in Q2 2022?

Dada's net loss decreased to RMB578.8 million in Q2 2022 from RMB640.4 million in the same period of 2021.

What was the growth rate of Dada's GMV for JDDJ in Q2 2022?

The Gross Merchandise Volume for JDDJ grew by 68.9% year-over-year to RMB54.6 billion.

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