TAL Education Group Announces Unaudited Financial Results for the Fourth Fiscal Quarter and the Fiscal Year 2024
- Positive: TAL reported a 59.7% increase in net revenues for the fourth quarter of fiscal year 2024 compared to the prior year, with gross profit up by 60.9%. Non-GAAP income from operations improved significantly, showing a positive trend in operational efficiency. The company's cash, cash equivalents, and short-term investments increased year-over-year.
- Negative: Operating costs and expenses saw a notable increase, especially in selling and marketing expenses, which rose by 69.0% in the fourth quarter. Despite a reduction in loss from operations, there was still a significant loss reported. Impairment loss on long-term investments also increased, impacting the overall financial performance.
- Negative: The company reported a loss from operations of US$11.1 million in the fourth quarter of fiscal year 2024, albeit an improvement from the previous year. Operating costs and expenses, including cost of revenues and selling and marketing expenses, significantly increased. Impairment loss on long-term investments also rose, affecting the financial results.
- Negative: Despite improved net income figures, TAL still reported a net loss attributable to the company for the fourth quarter of fiscal year 2024. The increase in operating costs and expenses, coupled with impairment losses, may raise concerns about the company's financial performance.
Insights
The reported increase in net revenues for TAL Education Group, both for the fourth quarter and annual fiscal year, indicates effective business scaling and potential market share expansion. Notwithstanding, the reported operational loss suggests that the company is still encountering challenges in achieving operational profitability, albeit an improvement from the previous year. The non-GAAP income, excluding share-based compensation expenses, transforms the picture, signifying better management of operational expenses or successful strategic initiatives.
The share repurchase program extension serves as a signal of confidence from the management in the company's valuation and financial health, as such programs are often interpreted as a means to return value to shareholders and a belief in the intrinsic value of the company's stock. However, investors should closely monitor the cash flow statements, as repurchases funded entirely by cash reserves could potentially affect the company's financial flexibility.
The educational technology sector in China has been undergoing regulatory scrutiny, which makes TAL's revenue growth particularly notable. Their ability to navigate this landscape while still achieving growth might indicate a robust demand for their services and an adaptation to regulatory requirements. The significant improvement in gross profit and the reduction in net loss are positive indicators of operational efficiency and cost management.
The market could react to these financial indicators positively; however, it is important for investors to consider the broader regulatory context and competitive landscape in which TAL operates. The company's focus on harnessing new technologies to transform its business is important in maintaining competitive advantage in this rapidly evolving industry.
Highlights for the Fourth Quarter of Fiscal Year 2024
- Net revenues was
US , compared to net revenues of$429.6 million US in the same period of the prior year.$269.0 million - Loss from operations was
US , compared to loss from operations of$11.1 million US in the same period of the prior year.$44.4 million - Non-GAAP income from operations, which excluded share-based compensation expenses, was
US , compared to non-GAAP loss from operations of$9.4 million US in the same period of the prior year.$18.1 million - Net income attributable to TAL was
US , compared to net loss attributable to TAL of$27.5 million US in the same period of the prior year.$39.4 million - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was
US , compared to non-GAAP net loss attributable to TAL of$48.0 million US in the same period of the prior year.$13.1 million - Basic net income per American Depositary Share ("ADS") was
US , and diluted net income per ADS was$0.05 US . Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both$0.04 US . Three ADSs represent one Class A common share.$0.08 - Cash, cash equivalents and short-term investments totaled
US as of February 29, 2024, compared to$3,303.3 million US as of February 28, 2023.$3,171.5 million
Highlights for the Fiscal Year Ended February 29, 2024
- Net revenues was
US , compared to net revenues of$1,490.4 million US in the same period of the prior year.$1,019.8 million - Loss from operations was
US , compared to loss from operations of$69.2 million US in the same period of the prior year.$90.7 million - Non-GAAP income from operations, which excluded share-based compensation expenses, was
US , compared to non-GAAP income from operations of$19.7 million US in the same period of the prior year.$17.8 million - Net loss attributable to TAL was
US , compared to net loss attributable to TAL of$3.6 million US in the same period of the prior year.$135.6 million - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was
US , compared to non-GAAP net loss attributable to TAL of$85.3 million US in the same period of the prior year.$27.0 million - Basic and diluted net loss per ADS were both
US . Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both$0.01 US .$0.14
Financial Data——Fourth Quarter and Fiscal Year 2024
(In US$ thousands, except per ADS data and percentages)
Three Months Ended | ||||
February 28/29, | ||||
2023 | 2024 | Pct. Change | ||
Net revenues | 268,986 | 429,563 | 59.7 % | |
Loss from operations | (44,416) | (11,061) | (75.1 %) | |
Non-GAAP (loss)/income from operations | (18,090) | 9,440 | (152.2 %) | |
Net (loss)/income attributable to TAL | (39,417) | 27,508 | (169.8 %) | |
Non-GAAP net (loss)/income attributable to TAL | (13,091) | 48,009 | (466.7 %) | |
Net (loss)/income per ADS attributable to TAL – | (0.06) | 0.05 | (173.5 %) | |
Net (loss)/income per ADS attributable to TAL – | (0.06) | 0.04 | (172.1 %) | |
Non-GAAP net (loss)/income per ADS attributable | (0.02) | 0.08 | (486.5 %) | |
Non-GAAP net (loss)/income per ADS attributable | (0.02) | 0.08 | (478.9 %) | |
Fiscal Year Ended | ||||
February 28/29, | ||||
2023 | 2024 | Pct. Change | ||
Net revenues | 1,019,772 | 1,490,440 | 46.2 % | |
Loss from operations | (90,730) | (69,229) | (23.7 %) | |
Non-GAAP income from operations | 17,841 | 19,669 | 10.2 % | |
Net loss attributable to TAL | (135,612) | (3,573) | (97.4 %) | |
Non-GAAP net (loss)/income attributable to TAL | (27,041) | 85,325 | (415.5 %) | |
Net loss per ADS attributable to TAL – basic | (0.21) | (0.01) | (97.2 %) | |
Net loss per ADS attributable to TAL – diluted | (0.21) | (0.01) | (97.2 %) | |
Non-GAAP net (loss)/income per ADS | (0.04) | 0.14 | (429.9 %) | |
Non-GAAP net (loss)/income per ADS | (0.04) | 0.14 | (424.2 %) | |
"We ended the 2024 fiscal year with continued development across our core businesses, each delivering distinct value propositions to our customers." said Alex Peng, TAL's President & Chief Financial Officer.
Mr. Peng added: "As we move into fiscal year 2025, we remain focused on delivering high quality products and services, managing our overall operational efficiency, while also harnessing new technologies to transform our business."
Financial Results for the Fourth Quarter of Fiscal Year 2024
Net Revenues
In the fourth quarter of fiscal year 2024, TAL reported net revenues of
Operating Costs and Expenses
In the fourth quarter of fiscal year 2024, operating costs and expenses were
Cost of revenues increased by
Selling and marketing expenses increased by
General and administrative expenses increased by
Total share-based compensation expenses allocated to the related operating costs and expenses in the fourth quarter of fiscal year 2024 was
Gross Profit
Gross profit increased by
(Loss)/Income from Operations
Loss from operations was
Other Income/(Expense)
Other income was
Impairment Loss on Long-term Investments
Impairment loss on Long-term investment was
Income Tax Expense
Income tax expense was
Net (Loss)/Income attributable to TAL Education Group
Net income attributable to TAL was
Basic and Diluted Net (Loss)/Income per ADS
Basic net income per ADS was
Cash Flow
Net cash used in operating activities for the fourth quarter of fiscal year 2024 was
Cash, Cash Equivalents, and Short-Term Investments
As of February 29, 2024, the Company had
Deferred Revenue
As of February 29, 2024, the Company's deferred revenue balance was
Financial Results for the Fiscal Year Ended February 29, 2024
Net Revenues
For fiscal year 2024, TAL reported net revenues of
Operating Costs and Expenses
In fiscal year 2024, operating costs and expenses were
Cost of revenues increased by
Selling and marketing expenses increased by
General and administrative expenses increased by
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by
Gross Profit
Gross profit increased by
(Loss)/Income from Operations
Loss from operations was
Other Income/(Expense)
Other income was
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was
Income Tax Expense
Income tax expense was
Net (Loss)/Income Attributable to TAL Education Group
Net loss attributable to TAL was US
Cash Flow
Net cash provided by operating activities in fiscal year 2024 was
Basic and Diluted Net (Loss)/Income per ADS
Basic and diluted net loss per ADS were both
Extension of Share Repurchase Program by the Company
Extension of Share Repurchase Program by the Company TAL's board of directors (the "Board") has authorized to extend the Company's share repurchase program (the "Share Repurchase Program") initially launched in April 2021 by another 12 months. The Company has repurchased its American depositary shares, every three representing one Class A common share, at an aggregate consideration of approximately
Conference Call
The Company will host a conference call and live webcast to discuss its financial results for the fourth fiscal quarter of fiscal year 2024 ended February 29, 2024 at 8:00 a.m. Eastern Time on April 25, 2024 (8:00 p.m.
Please note that you will need to pre-register for conference call participation at https://register.vevent.com/register/BI23be6c0588034962aee23821deb37f5e.
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
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 SEC as supplemental metrics to review and assess its operating performance: non-GAAP operating costs and expenses, non-GAAP cost of revenues, non-GAAP selling and marketing expenses, non-GAAP general and administrative expenses, non-GAAP loss from operations, non-GAAP net loss attributable to TAL, non-GAAP basic and non-GAAP diluted net loss per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses, the related tax effect of which has been nil. 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 release.
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:
Jackson Ding
Investor Relations
TAL Education Group
Tel: +86 10 5292 6669-8809
Email: ir@tal.com
TAL EDUCATION GROUP | ||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(In thousands of U.S. dollars) | ||||
As of February 28, | As of February 29, | |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | ||||
Restricted cash-current | 126,891 | 167,656 | ||
Short-term investments | 1,149,607 | 1,094,593 | ||
Inventory | 39,002 | 68,328 | ||
Amounts due from related parties-current | 423 | 343 | ||
Income tax receivables | 5,071 | - | ||
Prepaid expenses and other current assets | 125,486 | 159,498 | ||
Total current assets | 3,468,407 | 3,699,174 | ||
Restricted cash-non-current | 146,089 | 81,064 | ||
Property and equipment, net | 288,877 | 405,319 | ||
Deferred tax assets | 5,973 | 4,620 | ||
Rental deposits | 12,734 | 16,947 | ||
Intangible assets, net | 485 | 1,988 | ||
Land use right, net | 193,878 | 189,049 | ||
Amounts due from related parties- non-current | - | 59 | ||
Long-term investments | 453,375 | 284,266 | ||
Long-term prepayments and other non-current assets | 5,534 | 14,359 | ||
Operating lease right-of-use assets | 149,002 | 231,104 | ||
Total assets | ||||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | ||||
Deferred revenue-current | 234,889 | 400,286 | ||
Amounts due to related parties-current | 100 | 96 | ||
Accrued expenses and other current liabilities | 446,711 | 491,911 | ||
Operating lease liabilities, current portion | 42,174 | 62,604 | ||
Total current liabilities | 783,865 | 1,082,218 | ||
Deferred revenue-non-current | 2,465 | 27,993 | ||
Deferred tax liabilities | 1,563 | 2,360 | ||
Operating lease liabilities, non-current portion | 115,548 | 176,614 | ||
Total liabilities | 903,441 | 1,289,185 | ||
Equity | ||||
Class A common shares | 169 | 152 | ||
Class B common shares | 49 | 49 | ||
Treasury Stock | (6) | - | ||
Additional paid-in capital | 4,400,656 | 4,256,957 | ||
Statutory reserve | 160,353 | 165,138 | ||
Accumulated deficit | (685,912) | (694,270) | ||
Accumulated other comprehensive loss | (30,666) | (65,928) | ||
Total TAL Education Group's equity | 3,844,643 | 3,662,098 | ||
Noncontrolling interest | (23,730) | (23,334) | ||
Total equity | 3,820,913 | 3,638,764 | ||
Total liabilities and equity | ||||
TAL EDUCATION GROUP | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands of U.S. dollars, except share, ADS, per share and per ADS data) | |||||||
For the Three Months Ended | For the Fiscal Year Ended February 28/29, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net revenues | |||||||
Cost of revenues (note 1) | 127,713 | 202,241 | 436,358 | 684,316 | |||
Gross profit | 141,273 | 227,322 | 583,414 | 806,124 | |||
Operating expenses (note 1) | |||||||
Selling and marketing | 74,512 | 125,949 | 283,036 | 461,851 | |||
General and administrative | 112,163 | 117,240 | 413,791 | 429,947 | |||
Total operating expenses | 186,675 | 243,189 | 696,827 | 891,798 | |||
Government subsidies | 986 | 4,806 | 22,683 | 16,445 | |||
Loss from operations | (44,416) | (11,061) | (90,730) | (69,229) | |||
Interest income | 20,077 | 20,895 | 61,564 | 84,928 | |||
Other income/(expense) | 2,110 | 37,255 | (82,416) | 48,766 | |||
Gain from disposal of a subsidiary | - | - | 9,550 | - | |||
Impairment loss on long-term | (862) | (13,951) | (7,687) | (46,982) | |||
(Loss)/income before income tax | (23,091) | 33,138 | (109,719) | 17,483 | |||
Income tax expense | (10,452) | (6,504) | (20,011) | (15,379) | |||
(Loss)/income from equity | (3,049) | 694 | (2,248) | (6,242) | |||
Net (loss)/income | |||||||
Add: Net (income)/loss | (2,825) | 180 | (3,634) | 565 | |||
Total net (loss)/income | |||||||
Net (loss)/income per common | |||||||
Basic | |||||||
Diluted | (0.19) | 0.13 | (0.64) | (0.02) | |||
Net (loss)/income per ADS (note | |||||||
Basic | |||||||
Diluted | (0.06) | 0.04 | (0.21) | (0.01) | |||
Weighted average shares used in | |||||||
Basic | 211,977,774 | 201,140,767 | 212,575,277 | 203,304,744 | |||
Diluted | 211,977,774 | 205,157,437 | 212,575,277 | 203,304,744 | |||
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows: | |||||||
For the Three Months | For the Fiscal Year | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Cost of revenues | |||||||
Selling and marketing expenses | 7,648 | 5,505 | 30,662 | 24,625 | |||
General and administrative expenses | 15,888 | 12,370 | 66,590 | 54,658 | |||
Total | |||||||
Note 2: Three ADSs represent one Class A common Share. | |||||||
TAL EDUCATION GROUP | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF | |||||||
COMPREHENSIVE INCOME/(LOSS) | |||||||
(In thousands of U.S. dollars) | |||||||
For the Three Months Ended February 28/29, | For the Fiscal Year Ended February 28/29, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net (loss)/income | |||||||
Other comprehensive | 51,838 | (8,062) | (89,534) | (34,301) | |||
Comprehensive income/(loss) | 15,246 | 19,266 | (221,512) | (38,439) | |||
Add: Comprehensive income | (2,211) | (40) | (6,383) | (396) | |||
Comprehensive income/(loss) | |||||||
TAL EDUCATION GROUP | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF | |||||||
CASH FLOWS | |||||||
(In thousands of U.S. dollars) | |||||||
For the Three Months Ended February 28/29, | For the Fiscal Year Ended February 28/29, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Net cash (used in)/provided by | |||||||
Net cash provided by/(used in) | 23,152 | (38,887) | (301,626) | 95,068 | |||
Net cash provided by/(used in) | 51 | 206 | (66,184) | (233,095) | |||
Effect of exchange rate | 4,433 | (2,465) | (26,427) | (5,576) | |||
Net (decrease)/increase in | (13,325) | (64,892) | (386,879) | 162,569 | |||
Cash, cash equivalents and | 2,308,232 | 2,522,368 | 2,681,786 | 2,294,907 | |||
Cash, cash equivalents and | |||||||
TAL EDUCATION GROUP | |||||||
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures | |||||||
(In thousands of U.S. dollars, except share, ADS, per share and per ADS data) | |||||||
For the Three Months Ended February 28/29, | For the Fiscal Year Ended February 28/29, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Cost of revenues | |||||||
Share-based compensation expense | 2,790 | 2,626 | 11,319 | 9,615 | |||
Non-GAAP cost of revenues | 124,923 | 199,615 | 425,039 | 674,701 | |||
Selling and marketing expenses | 74,512 | 125,949 | 283,036 | 461,851 | |||
Share-based compensation expense | 7,648 | 5,505 | 30,662 | 24,625 | |||
Non-GAAP selling and marketing | 66,864 | 120,444 | 252,374 | 437,226 | |||
General and administrative | 112,163 | 117,240 | 413,791 | 429,947 | |||
Share-based compensation expense | 15,888 | 12,370 | 66,590 | 54,658 | |||
Non-GAAP general and | 96,275 | 104,870 | 347,201 | 375,289 | |||
Operating costs and expenses | 314,388 | 445,430 | 1,133,185 | 1,576,114 | |||
Share-based compensation expense | 26,326 | 20,501 | 108,571 | 88,898 | |||
Non-GAAP operating costs and | 288,062 | 424,929 | 1,024,614 | 1,487,216 | |||
Loss from operations | (44,416) | (11,061) | (90,730) | (69,229) | |||
Share based compensation expenses | 26,326 | 20,501 | 108,571 | 88,898 | |||
Non-GAAP (loss)/income from | (18,090) | 9,440 | 17,841 | 19,669 | |||
Net (loss)/income attributable to | (39,417) | 27,508 | (135,612) | (3,573) | |||
Share based compensation expenses | 26,326 | 20,501 | 108,571 | 88,898 | |||
Non-GAAP net (loss)/income | |||||||
Net (loss)/income per ADS | |||||||
Basic | |||||||
Diluted | (0.06) | 0.04 | (0.21) | (0.01) | |||
Non-GAAP Net (loss)/income per | |||||||
Basic | |||||||
Diluted | (0.02) | 0.08 | (0.04) | 0.14 | |||
ADSs used in calculating net | |||||||
Basic | 635,933,322 | 603,422,301 | 637,725,831 | 609,914,232 | |||
Diluted | 635,933,322 | 615,472,311 | 637,725,831 | 609,914,232 | |||
ADSs used in calculating Non- | |||||||
Basic | 635,933,322 | 603,422,301 | 637,725,831 | 609,914,232 | |||
Diluted | 635,933,322 | 615,472,311 | 637,725,831 | 620,629,080 | |||
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SOURCE TAL Education Group
FAQ
What were TAL Education Group's net revenues for the fourth fiscal quarter of 2024?
How did TAL's loss from operations compare in the fourth quarter of fiscal year 2024 to the same period in the prior year?
What was the change in non-GAAP income from operations for TAL in the fourth quarter of fiscal year 2024?
How did TAL Education Group's cash, cash equivalents, and short-term investments change from February 28, 2023, to February 29, 2024?
What was TAL's net loss attributable to the company in the fourth quarter of fiscal year 2024?
