TAL Education Group Announces Unaudited Financial Results for the Third Fiscal Quarter Ended November 30, 2022
TAL Education Group (NYSE: TAL) announced its unaudited financial results for Q3 FY2023, ending November 30, 2022. The company reported net revenues of US$232.7 million, a 77.2% decrease year-over-year. However, losses from operations improved to US$32.9 million from US$108.4 million. Non-GAAP losses also decreased significantly, with a net loss of US$51.6 million compared to US$99.4 million in the previous year. Cash reserves increased to US$3,040.5 million. Despite revenue challenges, TAL's new business initiatives continue to show growth potential, positioning the company for enhanced operational efficiency and long-term growth.
- Loss from operations narrowed to US$32.9 million from US$108.4 million year-over-year.
- Non-GAAP net loss decreased to US$23.2 million from US$58.6 million year-over-year.
- Cash, cash equivalents and short-term investments rose to US$3,040.5 million.
- Net revenues dropped by 77.2% to US$232.7 million compared to US$1,020.9 million in the prior year.
- Net loss attributable to TAL was US$51.6 million, though improved from US$99.4 million.
Highlights for the Third Quarter of Fiscal Year 2023
- Net revenues was
US , compared to net revenues of$232.7 million US in the same period of the prior year.$1,020.9 million - Loss from operations was
US , compared to loss from operations of$32.9 million US in the same period of the prior year.$108.4 million - Non-GAAP loss from operations, which excluded share-based compensation expenses, was
US , compared to non-GAAP loss from operations of$4.5 million US in the same period of the prior year.$67.6 million - Net loss attributable to TAL was
US , compared to net loss attributable to TAL of$51.6 million US in the same period of the prior year.$99.4 million - Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was
US , compared to non-GAAP net loss attributable to TAL of$23.2 million US in the same period of the prior year.$58.6 million - Basic and diluted net loss per American Depositary Share ("ADS") were both
US . Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both$0.08 US . Three ADSs represent one Class A common share.$0.04 - Cash, cash equivalents and short-term investments totaled
US as of$3,040.5 million November 30, 2022 , compared toUS as of$2,708.7 million February 28, 2022 .
Highlights for the Nine Months Ended
- Net revenues was
US , compared to net revenues of$750.8 million US in the same period of the prior year.$3,849.8 million - Loss from operations was
US , compared to loss from operations of$46.3 million US in the same period of the prior year.$615.2 million - Non-GAAP income from operations, which excluded share-based compensation expenses, was
US , compared to non-GAAP loss from operations of$35.9 million US in the same period of the prior year.$440.5 million - Net loss attributable to TAL was
US , compared to net loss attributable to TAL of$96.2 million US in the same period of the prior year.$1,028.0 million - Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was
US , compared to non-GAAP net loss attributable to TAL of$14.0 million US in the same period of the prior year.$853.3 million - Basic and diluted net loss per ADS were both
US . Non-GAAP basic and diluted net loss per ADS, excluding share-based compensation expenses, were both$0.15 US .$0.02
Financial Data——Third Quarter and First Nine Months of Fiscal Year 2023
(In US$ thousands, except per ADS data and percentages)
Three Months Ended | |||
2021 | 2022 | Pct. Change | |
Net revenues | 1,020,932 | 232,681 | (77.2 %) |
Loss from operations | (108,429) | (32,882) | (69.7 %) |
Non-GAAP loss from operations | (67,611) | (4,540) | (93.3 %) |
Net loss attributable to TAL | (99,368) | (51,579) | (48.1 %) |
Non-GAAP net loss attributable to TAL | (58,550) | (23,237) | (60.3 %) |
Net loss per ADS attributable to TAL – basic | (0.15) | (0.08) | (47.3 %) |
Net loss per ADS attributable to TAL – diluted | (0.15) | (0.08) | (47.3 %) |
Non-GAAP net loss per ADS attributable to TAL | (0.09) | (0.04) | (59.7 %) |
Non-GAAP net loss per ADS attributable to TAL | (0.09) | (0.04) | (59.7 %) |
Nine Months Ended | |||
2021 | 2022 | Pct. Change | |
Net revenues | 3,849,755 | 750,786 | (80.5 %) |
Loss from operations | (615,160) | (46,314) | (92.5 %) |
Non-GAAP (loss)/income from operations | (440,463) | 35,931 | (108.2 %) |
Net loss attributable to TAL | (1,027,992) | (96,195) | (90.6 %) |
Non-GAAP net loss attributable to TAL | (853,295) | (13,950) | (98.4 %) |
Net loss per ADS attributable to TAL – basic | (1.60) | (0.15) | (90.6 %) |
Net loss per ADS attributable to TAL – diluted | (1.60) | (0.15) | (90.6 %) |
Non-GAAP net loss per ADS attributable to TAL | (1.33) | (0.02) | (98.4 %) |
Non-GAAP net loss per ADS attributable to TAL | (1.33) | (0.02) | (98.4 %) |
"Although the revenue of this quarter was affected by exchange rate fluctuations and seasonality,our new business has maintained the momentum of continuous development " said
Financial Results for the Third Quarter of Fiscal Year 2023
Net Revenues
In the third quarter of fiscal year 2023, TAL reported net revenues of
Operating Costs and Expenses
In the third quarter of fiscal year 2023, operating costs and expenses were
Cost of revenues decreased by
Selling and marketing expenses decreased by
General and administrative expenses decreased by
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by
Impairment loss on intangible assets and goodwill was nil for the third quarter of fiscal year 2023, compared to
Gross Profit
Gross profit decreased by
Loss from Operations
Loss from operations was
Other Income/(Expense)
Other expense was
Impairment Loss on Long-term Investments
Impairment loss on Long-term investment was
Income Tax Expense
Income tax expense was
Net Loss attributable to
Net loss attributable to TAL was
Basic and Diluted Net Loss per ADS
Basic and diluted net loss per ADS were both
Cash, Cash Equivalents, and Short-Term Investments
As of
Deferred Revenue
As of
Financial Results for the First Nine Months of Fiscal Year 2023
Net Revenues
For the first nine months of fiscal year 2023, TAL reported net revenues of US
Operating Costs and Expenses
In the first nine months of fiscal year 2023, operating costs and expenses were US
Cost of revenues decreased by
Selling and marketing expenses decreased by
General and administrative expenses decreased by
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by
Impairment loss on intangible assets and goodwill was nil for the first nine months of fiscal year 2023, compared to
Gross Profit
Gross profit decreased by
(Loss)/Income from Operations
Loss from operations was US
Other Income/(Expense)
Other expense was US
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was US
Income Tax Expense
Income tax expense was US
Net Loss Attributable to TAL Education Group
Net loss attributable to TAL was US
Basic and Diluted Net Loss per ADS
Basic and diluted net loss per ADS were both US
Conference Call
The Company will host a conference call and live webcast to discuss its financial results for the third fiscal quarter of fiscal year 2023 ended
Please note that you will need to pre-register for conference call participation at https://register.vevent.com/register/BI3278c68d351148b985b566d3f1215a12.
Upon registration, you will receive an email containing participant dial-in numbers and unique Direct Event Passcode. This information will allow you to gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.
A live and archived webcast of the conference call will be available on the Investor Relations section of TAL's website at https://ir.100tal.com/.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the
About
TAL Education Group is a smart learning solutions provider in
About Non-GAAP Financial Measures
In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the
TAL believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. TAL 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 TAL's historical performance and liquidity. TAL computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. TAL 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 charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
For further information, please contact:
Investor Relations
Tel: +86 10 5292 6669-8809
Email: ir@tal.com
TAL EDUCATION GROUP | ||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(In thousands of | ||||
As of
| As of
| |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | ||||
Restricted cash-current | 755,646 | 297,405 | ||
Short-term investments | 1,070,535 | 1,179,600 | ||
Inventory | 21,830 | 30,183 | ||
Amounts due from related parties-current | 919 | 393 | ||
Income tax receivables | 19,504 | 27 | ||
Prepaid expenses and other current assets | 122,753 | 134,796 | ||
Total current assets | 3,629,376 | 3,503,281 | ||
Restricted cash-non-current | 287,951 | 149,950 | ||
Property and equipment, net | 281,226 | 272,639 | ||
Deferred tax assets | 6,747 | 3,422 | ||
Rental deposits | 10,770 | 14,894 | ||
Intangible assets, net | 1,696 | 560 | ||
Land use right, net | 217,708 | 190,647 | ||
| - | 159 | ||
Amounts due from related parties- non-current | 77 | - | ||
Long-term investments | 414,487 | 467,256 | ||
Long-term prepayments and other non-current assets | 5,418 | 4,694 | ||
Operating lease right-of-use assets | 227,072 | 149,326 | ||
Total assets | ||||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | ||||
Deferred revenue-current | 187,718 | 270,111 | ||
Amounts due to related parties-current | 205 | 104 | ||
Accrued expenses and other current liabilities | 558,718 | 474,119 | ||
Operating lease liabilities, current portion | 66,105 | 41,326 | ||
Total current liabilities | 902,584 | 855,469 | ||
Deferred revenue-non-current | 14 | 686 | ||
Deferred tax liabilities | 1,680 | 3,323 | ||
Operating lease liabilities, non-current portion | 175,988 | 118,063 | ||
Total liabilities | 1,080,266 | 977,541 | ||
Equity | ||||
Class A common shares | 167 | 169 | ||
Class B common shares | 49 | 49 | ||
Treasury Stock | - | (6) | ||
Additional paid-in capital | 4,358,265 | 4,374,276 | ||
Statutory reserve | 154,362 | 150,749 | ||
Accumulated deficit | (544,309) | (636,891) | ||
Accumulated other comprehensive income/(loss) | 61,617 | (83,118) | ||
4,030,151 | 3,805,228 | |||
Noncontrolling interest | (27,889) | (25,941) | ||
Total equity | 4,002,262 | 3,779,287 | ||
Total liabilities and equity |
TAL EDUCATION GROUP | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands of | |||||||
For the Three Months Ended | For the Nine Months Ended | ||||||
2021 | 2022 | 2021 | 2022 | ||||
Net revenues | |||||||
Cost of revenues (note 1) | 519,483 | 102,955 | 2,005,252 | 308,645 | |||
Gross profit | 501,449 | 129,726 | 1,844,503 | 442,141 | |||
Operating expenses (note 1) | |||||||
Selling and marketing | 273,629 | 70,398 | 1,014,666 | 208,524 | |||
General and administrative | 299,963 | 92,972 | 987,595 | 301,628 | |||
Impairment loss on intangible assets and goodwill |
46,247 |
- |
472,437 |
- | |||
Total operating expenses | 619,839 | 163,370 | 2,474,698 | 510,152 | |||
Government subsidies | 9,961 | 762 | 15,035 | 21,697 | |||
Loss from operations | (108,429) | (32,882) | (615,160) | (46,314) | |||
Interest income | 12,747 | 15,979 | 84,644 | 41,487 | |||
Interest expense | (1,821) | - | (7,871) | - | |||
Other income/(expense) | 9,520 | (32,022) | 17,611 | (84,526) | |||
Gain from disposal of a subsidiary | - | - | - | 9,550 | |||
Impairment loss on long-term |
- |
(215) |
(178,063) |
(6,825) | |||
Loss before income tax expense | (87,983) | (49,140) | (698,839) | (86,628) | |||
Income tax expense | (25,562) | (2,756) | (367,120) | (9,559) | |||
Income from equity method | 6,423 | 280 | 10,471 | 801 | |||
Net loss | (107,122) | (51,616) | (1,055,488) | (95,386) | |||
Add: Net loss/(income) | 7,754 | 37 | 27,496 | (809) | |||
Total net loss attributable to | |||||||
Net loss per common share | |||||||
Basic | |||||||
Diluted | (0.46) | (0.24) | (4.79) | (0.45) | |||
Net loss per ADS (note 2) | |||||||
Basic | |||||||
Diluted | (0.15) | (0.08) | (1.60) | (0.15) | |||
Weighted average shares used in | |||||||
Basic | 214,672,624 | 211,617,052 | 214,619,651 | 212,770,824 | |||
Diluted | 214,672,624 | 211,617,052 | 214,619,651 | 212,770,824 | |||
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows: | |||||||
For the Three Months | For the Nine Months | ||||||
Ended November 30, | Ended November 30, | ||||||
2021 | 2022 | 2021 | 2022 | ||||
Cost of revenues | |||||||
Selling and marketing expenses | 15,008 | 6,637 | 63,440 | 23,014 | |||
General and administrative expenses | 25,548 | 18,156 | 110,261 | 50,702 | |||
Total | |||||||
Note 2: Three ADSs represent one Class A common Share. |
TAL EDUCATION GROUP | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF | |||||||
Comprehensive LOSS | |||||||
(In thousands of | |||||||
For the Three Months Ended | For the Nine Months Ended | ||||||
November 30, | November 30, | ||||||
2021 | 2022 | 2021 | 2022 | ||||
Net loss | |||||||
Other comprehensive | 6,053 | (24,634) | (17,796) | (141,372) | |||
Comprehensive loss | (101,069) | (76,250) | (1,073,284) | (236,758) | |||
Add: Comprehensive loss | 8,106 | (776) | 27,855 | (4,172) | |||
Comprehensive loss |
TAL EDUCATION GROUP | |||||||
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures | |||||||
(In thousands of | |||||||
For the Three Months Ended | For the Nine Months | ||||||
2021 | 2022 | 2021 | 2022 | ||||
Cost of revenues | $ 519,483 | $ 2,005,252 | |||||
Share-based compensation expense | 262 | 3,549 | 996 | 8,529 | |||
Non-GAAP cost of revenues | 519,221 | 99,406 | 2,004,256 | 300,116 | |||
Selling and marketing expenses | 273,629 | 70,398 | 1,014,666 | 208,524 | |||
Share-based compensation expense | 15,008 | 6,637 | 63,440 | 23,014 | |||
Non-GAAP selling and marketing | 258,621 | 63,761 | 951,226 | 185,510 | |||
General and administrative | 299,963 | 92,972 | 987,595 | 301,628 | |||
Share-based compensation expense | 25,548 | 18,156 | 110,261 | 50,702 | |||
Non-GAAP general and | 274,415 | 74,816 | 877,334 | 250,926 | |||
Operating costs and expenses | 1,139,322 | 266,325 | 4,479,950 | 818,797 | |||
Share-based compensation expense | 40,818 | 28,342 | 174,697 | 82,245 | |||
Non-GAAP operating costs and | 1,098,504 | 237,983 | 4,305,253 | 736,552 | |||
Loss from operations | (108,429) | (32,882) | (615,160) | (46,314) | |||
Share based compensation expenses | 40,818 | 28,342 | 174,697 | 82,245 | |||
Non-GAAP (loss)/income from | (67,611) | (4,540) | (440,463) | 35,931 | |||
Net loss attributable to | (99,368) | (51,579) | (1,027,992) | (96,195) | |||
Share based compensation expenses | 40,818 | 28,342 | 174,697 | 82,245 | |||
Non-GAAP net loss attributable to | $ (58,550) | $ (853,295) | |||||
Net loss per ADS | |||||||
Basic | $ (0.15) | ||||||
Diluted | (0.15) | (0.08) | (1.60) | (0.15) | |||
Non-GAAP Net loss per ADS | |||||||
Basic | |||||||
Diluted | (0.09) | (0.04) | (1.33) | (0.02) | |||
ADSs used in calculating net loss | |||||||
Basic | 644,017,872 | 634,851,156 | 643,858,953 | 638,312,472 | |||
Diluted | 644,017,872 | 634,851,156 | 643,858,953 | 638,312,472 | |||
ADSs used in calculating Non- | |||||||
Basic | 644,017,872 | 634,851,156 | 643,858,953 | 638,312,472 | |||
Diluted | 644,017,872 | 634,851,156 | 643,858,953 | 638,312,472 |
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