TAL Education Group Announces Unaudited Financial Results for the Second Fiscal Quarter Ended August 31, 2023
- TAL Education Group reports a significant increase in net revenues and income from operations for Q2 FY2024, indicating strong financial performance. The company's net revenues increased by 40.1% to $411.9 million, while income from operations more than doubled to $31.8 million. Net income attributable to TAL also showed a positive turnaround, reaching $37.9 million compared to a net loss of $0.8 million in the same period last year. Additionally, TAL's cash, cash equivalents, and short-term investments amounted to $2,963.5 million, providing a strong financial position.
- None.
Highlights for the Second Quarter of Fiscal Year 2024
- Net revenues was
US , compared to net revenues of$411.9 million US in the same period of the prior year.$294.1 million - Income from operations was
US , compared to income from operations of$31.8 million US in the same period of the prior year.$14.9 million - Non-GAAP income from operations, which excluded share-based compensation expenses, was
US , compared to non-GAAP income from operations of$52.7 million US in the same period of the prior year.$42.3 million - Net income attributable to TAL was
US , compared to net loss attributable to TAL of$37.9 million US .8 million in the same period of the prior year.$0 - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was
US , compared to non-GAAP net income attributable to TAL of$58.8 million US .6 million in the same period of the prior year.$26 - Basic and diluted net income per American Depositary Share ("ADS") were both
US . Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both$0.06 US . Three ADSs represent one Class A common share.$0.10 - Cash, cash equivalents and short-term investments totaled
US as of August 31, 2023, compared to$2,963.5 million US as of February 28, 2023.$3,171.5 million
Highlights for the Six Months Ended August 31, 2023
- Net revenues was
US , compared to net revenues of$687.4 million US in the same period of the prior year.$518.1 million - Loss from operations was
US , compared to loss from operations of$26.0 million US in the same period of the prior year.$13.4 million - Non-GAAP income from operations, which excluded share-based compensation expenses, was
US , compared to non-GAAP income from operations of$20.4 million US in the same period of the prior year.$40.5 million - Net loss attributable to TAL was
US , compared to net loss attributable to TAL of$7.1 million US in the same period of the prior year.$44.6 million - Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was
US , compared to non-GAAP net income attributable to TAL of$39.3 million US in the same period of the prior year.$9.3 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 .$0.06
Financial Data——Second Quarter and First Six Months of Fiscal Year 2024 | |||
(In US$ thousands, except per ADS data and percentages) | |||
Three Months Ended | |||
August 31, | |||
2022 | 2023 | Pct. Change | |
Net revenues | 294,060 | 411,931 | 40.1 % |
Income from operations | 14,891 | 31,790 | 113.5 % |
Non-GAAP income from operations | 42,315 | 52,673 | 24.5 % |
Net (loss)/income attributable to TAL | (787) | 37,902 | (4,916.0 %) |
Non-GAAP net income attributable to TAL | 26,637 | 58,785 | 120.7 % |
Net (loss)/income per ADS attributable to TAL – | (0.00) | 0.06 | (5,181.5 %) |
Net (loss)/income per ADS attributable to TAL – | (0.00) | 0.06 | (5,099.4 %) |
Non-GAAP net income per ADS attributable to | 0.04 | 0.10 | 132.9 % |
Non-GAAP net income per ADS attributable to | 0.04 | 0.10 | 131.7 % |
Six Months Ended | |||
August 31, | |||
2022 | 2023 | Pct. Change | |
Net revenues | 518,105 | 687,371 | 32.7 % |
Loss from operations | (13,432) | (25,983) | 93.4 % |
Non-GAAP income from operations | 40,471 | 20,413 | (49.6 %) |
Net loss attributable to TAL | (44,616) | (7,135) | (84.0 %) |
Non-GAAP net income attributable to TAL | 9,287 | 39,261 | 322.8 % |
Net loss per ADS attributable to TAL –basic | (0.07) | (0.01) | (83.4 %) |
Net loss per ADS attributable to TAL –diluted | (0.07) | (0.01) | (83.4 %) |
Non-GAAP net income per ADS attributable to | 0.01 | 0.06 | 337.9 % |
Non-GAAP net income per ADS attributable to | 0.01 | 0.06 | 332.8 % |
"In this quarter, our major business lines delivered material development, both in terms of product offerings and operational capabilities. Our posted financial results are a manifestation of such development," said Alex Peng, TAL's President & Chief Financial Officer.
Mr. Peng added: "We have been observing customers' diversified needs in their learning journeys and intend to serve them through a variety of products in our Learning Services and Content Solutions portfolio."
Financial Results for the Second Quarter of Fiscal Year 2024
Net Revenues
In the second quarter of fiscal year 2024, TAL reported net revenues of
Operating Costs and Expenses
In the second 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 decreased by
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by
Gross Profit
Gross profit increased by
Income from Operations
Income from operations was
Other (expense)/Income
Other income was
Impairment Loss on Long-term Investments
Impairment loss on Long-term investment was
Income Tax (Expense)/Income
Income tax income was
Net (Loss)/Income attributable to TAL
Net income attributable to TAL was
Basic and Diluted Net (Loss)/ Income per ADS
Basic and diluted net income per ADS were both
Cash Flow
Net cash used in operating activities for the second quarter of fiscal year 2024 was
Cash, Cash Equivalents, and Short-Term Investments
As of August 31, 2023, the Company had
Deferred Revenue
As of August 31, 2023, the Company's deferred revenue balance was
Financial Results for the First Six Months of Fiscal Year 2024
Net Revenues
For the first six months of fiscal year 2024, TAL reported net revenues of US
Operating Costs and Expenses
In the first six months of fiscal year 2024, operating costs and expenses were US
Cost of revenues increased by
Selling and marketing expenses increased by
General and administrative expenses decreased 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 US
Other (Expense)/Income
Other expense was US
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was
Income Tax (Expense)/Income
Income tax income was US
Net (Loss)/Income Attributable to TAL Education Group
Net loss attributable to TAL was US
Cash Flow
Net cash provided in operating activities for the first six months of fiscal year 2024 was
Basic and Diluted Net (Loss)/Income per ADS
Basic and diluted net loss per ADS were both US
Share Repurchase
In April 2023, the Company's board of directors authorized to extend its share repurchase program launched in April 2021 by 12 months. Pursuant to the extended share repurchase program, the Company may repurchase up to approximately
Conference Call
The Company will host a conference call and live webcast to discuss its financial results for the second fiscal quarter of fiscal year 2024 ended August 31, 2023 at 8:00 a.m. Eastern Time on October 26, 2023 (8:00 p.m.
Please note that you will need to pre-register for conference call participation at https://register.vevent.com/register/BIfec8b407406d47eda1ed641a4a3386d0.
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 | ||||
As of February 28, | As of August 31, | |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | ||||
Restricted cash-current | 126,891 | 177,732 | ||
Short-term investments | 1,149,607 | 767,614 | ||
Inventory | 39,002 | 65,504 | ||
Amounts due from related parties-current | 423 | 401 | ||
Income tax receivables | 5,071 | - | ||
Prepaid expenses and other current assets | 125,486 | 163,545 | ||
Total current assets | 3,468,407 | 3,370,679 | ||
Restricted cash-non-current | 146,089 | 103,465 | ||
Property and equipment, net | 288,877 | 318,038 | ||
Deferred tax assets | 5,973 | 2,825 | ||
Rental deposits | 12,734 | 12,076 | ||
Intangible assets, net | 485 | 2,748 | ||
Land use right, net | 193,878 | 183,141 | ||
Long-term investments | 453,375 | 418,585 | ||
Long-term prepayments and other non-current assets | 5,534 | 5,915 | ||
Operating lease right-of-use assets | 149,002 | 164,941 | ||
Total assets | ||||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | ||||
Deferred revenue-current | 234,889 | 313,607 | ||
Amounts due to related parties-current | 100 | 105 | ||
Accrued expenses and other current liabilities | 446,711 | 427,052 | ||
Operating lease liabilities, current portion | 42,174 | 47,610 | ||
Total current liabilities | 783,865 | 861,767 | ||
Deferred revenue-non-current | 2,465 | 11,769 | ||
Deferred tax liabilities | 1,563 | 2,084 | ||
Operating lease liabilities, non-current portion | 115,548 | 124,985 | ||
Total liabilities | 903,441 | 1,000,605 | ||
Equity | ||||
Class A common shares | 169 | 163 | ||
Class B common shares | 49 | 49 | ||
Treasury stock | (6) | (12) | ||
Additional paid-in capital | 4,400,656 | 4,213,551 | ||
Statutory reserve | 160,353 | 158,604 | ||
Accumulated deficit | (685,912) | (691,298) | ||
Accumulated other comprehensive loss | (30,666) | (76,432) | ||
Total TAL Education Group's equity | 3,844,643 | 3,604,625 | ||
Noncontrolling interest | (23,730) | (22,817) | ||
Total equity | 3,820,913 | 3,581,808 | ||
Total liabilities and equity |
TAL EDUCATION GROUP | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands of | |||||||
For the Three Months Ended | For the Six Months Ended August 31, | ||||||
2022 | 2023 | 2022 | 2023 | ||||
Net revenues | |||||||
Cost of revenues (note 1) | 117,132 | 169,382 | 205,690 | 308,895 | |||
Gross profit | 176,928 | 242,549 | 312,415 | 378,476 | |||
Operating expenses (note 1) | |||||||
Selling and marketing | 78,087 | 116,268 | 138,126 | 213,925 | |||
General and administrative | 97,206 | 97,106 | 208,656 | 202,029 | |||
Total operating expenses | 175,293 | 213,374 | 346,782 | 415,954 | |||
Government subsidies | 13,256 | 2,615 | 20,935 | 11,495 | |||
Income/(loss) from operations | 14,891 | 31,790 | (13,432) | (25,983) | |||
Interest income | 12,445 | 20,976 | 25,508 | 43,957 | |||
Other (expense)/income | (25,715) | 5,032 | (52,504) | (1,813) | |||
Gain from disposal of a subsidiary | 9,550 | - | 9,550 | - | |||
Impairment loss on long-term |
(6,610) |
(30,761) |
(6,610) |
(30,761) | |||
Income/(loss) before income tax | 4,561 | 27,037 | (37,488) | (14,600) | |||
Income tax (expense)/income | (4,487) | 10,018 | (6,803) | 6,499 | |||
(Loss)/income from equity | (932) | 779 | 521 | 708 | |||
Net (loss)/income | (858) | 37,834 | (43,770) | (7,393) | |||
Add: Net loss/(income) | 71 | 68 | (846) | 258 | |||
Total net (loss)/income | |||||||
Net (loss)/income per common | |||||||
Basic | |||||||
Diluted | (0.00) | 0.19 | (0.21) | (0.03) | |||
Net (loss)/income per ADS (note 2) | |||||||
Basic | |||||||
Diluted | (0.00) | 0.06 | (0.07) | (0.01) | |||
Weighted average shares used in | |||||||
Basic | 211,620,275 | 200,565,383 | 213,341,439 | 205,942,678 | |||
Diluted | 211,620,275 | 203,859,192 | 213,341,439 | 205,942,678 |
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows:
For the Three Months | For the Six Months | ||||||||
Ended August 31, | Ended August 31, | ||||||||
2022 | 2023 | 2022 | 2023 | ||||||
Cost of revenues | |||||||||
Selling and marketing expenses | 8,296 | 6,134 | 16,377 | 13,562 | |||||
General and administrative expenses | 16,541 | 12,668 | 32,546 | 28,344 | |||||
Total |
Note 2: Three ADSs represent one Class A common Share.
TAL EDUCATION GROUP | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF | |||||||
COMPREHENSIVE (LOSS)/INCOME | |||||||
(In thousands of | |||||||
For the Three Months Ended August 31, | For the Six Months Ended August 31, | ||||||
2022 | 2023 | 2022 | 2023 | ||||
Net (loss)/income | |||||||
Other comprehensive loss, net | (55,912) | (20,782) | (116,738) | (44,595) | |||
Comprehensive (loss)/income | (56,770) | 17,052 | (160,508) | (51,988) | |||
Add: Comprehensive income | (882) | (452) | (3,396) | (913) | |||
Comprehensive (loss)/income |
TAL EDUCATION GROUP | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF | |||||||
CASH FLOWS | |||||||
(In thousands of | |||||||
For the Three Months Ended August 31, | For the Six Months Ended August 31, | ||||||
2022 | 2023 | 2022 | 2023 | ||||
Net cash (used in)/provided by | (2,698) | (42,721) | (47,578) | 82,795 | |||
Net cash (used in)/provided by | (372,650) | 181,887 | (423,985) | 342,802 | |||
Net cash used in financing | (4,536) | (82,271) | (54,304) | (233,508) | |||
Effect of exchange rate | (11,720) | (5,406) | (30,457) | (9,916) | |||
Net (decrease)/increase in | (391,604) | 51,489 | (556,324) | 182,173 | |||
Cash, cash equivalents and | |||||||
Cash, cash equivalents and |
TAL EDUCATION GROUP | ||||||||
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures | ||||||||
(In thousands of | ||||||||
For the Three Months Ended August 31, | For the Six Months | |||||||
2022 | 2023 | 2022 | 2023 | |||||
Cost of revenues | ||||||||
Share-based compensation expense |
2,587 |
2,081 |
4,980 |
4,490 | ||||
Non-GAAP cost of revenues | 114,545 | 167,301 | 200,710 | 304,405 | ||||
Selling and marketing expenses | 78,087 | 116,268 | 138,126 | 213,925 | ||||
Share-based compensation expense |
8,296 |
6,134 |
16,377 |
13,562 | ||||
Non-GAAP selling and marketing |
69,791 |
110,134 |
121,749 |
200,363 | ||||
General and administrative |
97,206 |
97,106 |
208,656 |
202,029 | ||||
Share-based compensation expense | 16,541 | 12,668 | 32,546 |
28,344
| ||||
Non-GAAP general and |
80,665 |
84,438 |
176,110 |
173,685 | ||||
Operating costs and expenses | 292,425 | 382,756 | 552,472 | 724,849 | ||||
Share-based compensation expense |
27,424 |
20,883 |
53,903 |
46,396 | ||||
Non-GAAP operating costs and |
265,001 |
361,873 |
498,569 |
678,453 | ||||
Income/(loss) from operations | 14,891 | 31,790 | (13,432) | (25,983) | ||||
Share based compensation expenses | 27,424 | 20,883 | 53,903 | 46,396 | ||||
Non-GAAP income from |
42,315 |
52,673 |
40,471 |
20,413 | ||||
Net (loss)/income attributable to |
(787) |
37,902 |
(44,616) |
(7,135) | ||||
Share based compensation expenses | 27,424 | 20,883 | 53,903 | 46,396 | ||||
Non-GAAP net income | ||||||||
Net (loss)/income per ADS | ||||||||
Basic | ||||||||
Diluted | (0.00) | 0.06 | (0.07) | (0.01) | ||||
Non-GAAP Net income per ADS | ||||||||
Basic | ||||||||
Diluted | 0.04 | 0.10 | 0.01 | 0.06 | ||||
ADSs used in calculating net | ||||||||
Basic | 634,860,825 | 601,696,149 | 640,024,317 | 617,828,034 | ||||
Diluted | 634,860,825 | 611,577,576 | 640,024,317 | 617,828,034 | ||||
ADSs used in calculating Non- | ||||||||
Basic | 634,860,825 | 601,696,149 | 640,024,317 | 617,828,034 | ||||
Diluted | 642,251,238 | 611,577,576 | 642,521,076 | 627,500,331 |
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SOURCE TAL Education Group
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