TAL Education Group Announces Unaudited Financial Results for the Fourth Fiscal Quarter and the Fiscal Year 2023
TAL Education Group (NYSE: TAL) reported significant financial results for the fourth quarter and fiscal year ending February 28, 2023, showing a 50.3% decline in net revenues to US$269.0 million from US$541.2 million year-over-year. The company experienced a net loss of US$39.4 million, a substantial improvement from US$108.1 million in the prior year. However, fiscal year net revenues plummeted 76.8% to US$1.0198 billion compared to US$4.39 billion in the previous year. Despite operating losses of US$90.7 million, the company reported a non-GAAP income from operations of US$17.8 million. TAL's cash and short-term investments totaled US$3.17 billion, up from US$2.71 billion a year earlier. The board authorized an extension of the share repurchase program, aiming to buy back up to US$737.4 million in shares through April 2024.
- Net loss improved to US$39.4 million from US$108.1 million in Q4 2022.
- Non-GAAP income from operations reached US$17.8 million for FY 2023, compared to a loss of US$439.7 million in FY 2022.
- Cash and short-term investments increased to US$3.17 billion from US$2.71 billion year-over-year.
- Q4 net revenues declined 50.3% to US$269.0 million from US$541.2 million year-over-year.
- FY 2023 net revenues fell 76.8% to US$1.0198 billion compared to US$4.39 billion in FY 2022.
- Loss from operations was US$90.7 million for FY 2023, despite improved financial metrics.
Highlights for the Fourth Quarter of Fiscal Year 2023
- Net revenues was
US , compared to net revenues of$269.0 million US in the same period of the prior year.$541.2 million - Loss from operations was
US , compared to income from operations of$44.4 million US in the same period of the prior year.$0.6 million - Non-GAAP loss from operations, which excluded share-based compensation expenses, was
US , compared to non-GAAP income from operations of$18.1 million US in the same period of the prior year.$0.8 million - Net loss attributable to TAL was
US , compared to net loss attributable to TAL of$39.4 million US in the same period of the prior year.$108.1 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$13.1 million US in the same period of the prior year.$108.0 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$0.06 US . Three ADSs represent one Class A common share.$0.02 - Cash, cash equivalents and short-term investments totaled
US as of$3,171.5 million February 28, 2023 , compared toUS as of$2,708.7 million February 28, 2022 .
Highlights for the Fiscal Year Ended
- Net revenues was
US , compared to net revenues of$1,019.8 million US in the same period of the prior year.$4,390.9 million - Loss from operations was
US , compared to loss from operations of$90.7 million US in the same period of the prior year.$614.5 million - Non-GAAP income from operations, which excluded share-based compensation expenses, was
US , compared to non-GAAP loss from operations of$17.8 million US in the same period of the prior year.$439.7 million - Net loss attributable to TAL was
US , compared to net loss attributable to TAL of$135.6 million US in the same period of the prior year.$1,136.1 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$27.0 million US in the same period of the prior year.$961.3 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$0.21 US .$0.04
Financial Data——Fourth Quarter and Fiscal Year 2023
(In US$ thousands, except per ADS data and percentages)
Three Months Ended | ||||
2022 | 2023 | Pct. Change | ||
Net revenues | 541,152 | 268,986 | (50.3 %) | |
Income/(loss) from operations | 644 | (44,416) | (6996.9 %) | |
Non-GAAP operating income/(loss) | 779 | (18,090) | (2422.2 %) | |
Net loss attributable to TAL | (108,123) | (39,417) | (63.5 %) | |
Non-GAAP net loss attributable to TAL | (107,988) | (13,091) | (87.9 %) | |
Net loss per ADS attributable to TAL – basic | (0.17) | (0.06) | (62.9 %) | |
Net loss per ADS attributable to TAL – diluted | (0.17) | (0.06) | (62.9 %) | |
Non-GAAP net loss per ADS attributable to TAL | (0.17) | (0.02) | (87.7 %) | |
Non-GAAP net loss per ADS attributable to TAL | (0.17) | (0.02) | (87.7 %) | |
Fiscal Year Ended | ||||
2022 | 2023 | Pct. Change | ||
Net revenues | 4,390,907 | 1,019,772 | (76.8 %) | |
Loss from operations | (614,516) | (90,730) | (85.2 %) | |
Non-GAAP (loss)/income from operations | (439,684) | 17,841 | (104.1 %) | |
Net loss attributable to TAL | (1,136,115) | (135,612) | (88.1 %) | |
Non-GAAP net loss attributable to TAL | (961,283) | (27,041) | (97.2 %) | |
Net loss per ADS attributable to TAL – basic | (1.76) | (0.21) | (87.9 %) | |
Net loss per ADS attributable to TAL – diluted | (1.76) | (0.21) | (87.9 %) | |
Non-GAAP net loss per ADS attributable to TAL | (1.49) | (0.04) | (97.2 %) | |
Non-GAAP net loss per ADS attributable to TAL | (1.49) | (0.04) | (97.2 %) |
"In fiscal year 2023, we underwent significant transformation. Some of our newer initiatives, such as enrichment learning, smart books and smart devices exhibited material development. While we are encouraged by the development, we continue to upgrade our product offerings and operational efficiency." said
Financial Results for the Fourth Quarter of Fiscal Year 2023
Net Revenues
In the fourth quarter of fiscal year 2023, TAL reported net revenues of
Operating Costs and Expenses
In the fourth 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 in the fourth quarter of fiscal year 2023 was
Impairment loss on intangible assets and goodwill was nil for the fourth quarter of fiscal year 2023, compared to
Gross Profit
Gross profit decreased by
Income/(Loss) from operations
Loss 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 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 Fiscal Year Ended
Net Revenues
For fiscal year 2023, TAL reported net revenues of
Operating Costs and Expenses
In the 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 fiscal year 2023, compared to
Gross Profit
Gross profit decreased by
Income/(Loss) 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 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
Extension of Share Repurchase Program by the Company
TAL's board of directors (the "Board") has authorized to extend its share repurchase program launched in
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 2023 ended
Please note that you will need to pre-register for conference call participation at https://register.vevent.com/register/BI8434cf8eca934eeca83b8bb7c40495fb.
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
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(In thousands of | ||||
As of
| As of
| |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | ||||
Restricted cash-current | 755,646 | 126,891 | ||
Short-term investments | 1,070,535 | 1,149,607 | ||
Inventory | 21,830 | 39,002 | ||
Amounts due from related parties-current | 919 | 423 | ||
Income tax receivables | 19,504 | 5,071 | ||
Prepaid expenses and other current assets | 122,753 | 125,486 | ||
Total current assets | 3,629,376 | 3,468,407 | ||
Restricted cash-non-current | 287,951 | 146,089 | ||
Property and equipment, net | 281,226 | 288,877 | ||
Deferred tax assets | 6,747 | 5,973 | ||
Rental deposits | 10,770 | 12,734 | ||
Intangible assets, net | 1,696 | 485 | ||
Land use right, net | 217,708 | 193,878 | ||
| - | 163 | ||
Amounts due from related parties- non-current | 77 | - | ||
Long-term investments | 414,487 | 453,375 | ||
Long-term prepayments and other non-current assets | 5,418 | 5,371 | ||
Operating lease right-of-use assets | 227,072 | 149,002 | ||
Total assets | ||||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | ||||
Deferred revenue-current | 187,718 | 234,889 | ||
Amounts due to related parties-current | 205 | 100 | ||
Accrued expenses and other current liabilities | 558,718 | 446,711 | ||
Operating lease liabilities, current portion | 66,105 | 42,174 | ||
Total current liabilities | 902,584 | 783,865 | ||
Deferred revenue-non-current | 14 | 2,465 | ||
Deferred tax liabilities | 1,680 | 1,563 | ||
Operating lease liabilities, non-current portion | 175,988 | 115,548 | ||
Total liabilities | 1,080,266 | 903,441 | ||
Equity | ||||
Class A common shares | 167 | 169 | ||
Class B common shares | 49 | 49 | ||
Treasury Stock | - | (6) | ||
Additional paid-in capital | 4,358,265 | 4,400,656 | ||
Statutory reserve | 154,362 | 160,353 | ||
Accumulated deficit | (544,309) | (685,912) | ||
Accumulated other comprehensive income/(loss) | 61,617 | (30,666) | ||
4,030,151 | 3,844,643 | |||
Noncontrolling interest | (27,889) | (23,730) | ||
Total equity | 4,002,262 | 3,820,913 | ||
Total liabilities and equity |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands of | |||||||
For the Three Months Ended | For the Fiscal Year Ended | ||||||
2022 | 2023 | 2022 | 2023 | ||||
Net revenues | |||||||
Cost of revenues (note 1) | 198,084 | 127,713 | 2,203,336 | 436,358 | |||
Gross profit | 343,068 | 141,273 | 2,187,571 | 583,414 | |||
Operating expenses (note 1) | |||||||
Selling and marketing | 103,475 | 74,512 | 1,118,141 | 283,036 | |||
General and administrative | 212,113 | 112,163 | 1,199,708 | 413,791 | |||
Impairment loss on intangible assets and goodwill | 32,613 | - | 505,050 | - | |||
Total operating expenses | 348,201 | 186,675 | 2,822,899 | 696,827 | |||
Government subsidies | 5,777 | 986 | 20,812 | 22,683 | |||
Income/(loss) from operations | 644 | (44,416) | (614,516) | (90,730) | |||
Interest income | 18,535 | 20,077 | 103,179 | 61,564 | |||
Interest expense | - | - | (7,871) | - | |||
Other (expense) /income | (661) | 2,110 | 16,950 | (82,416) | |||
Gain from disposal of a subsidiary | - | - | - | 9,550 | |||
Impairment loss on long-term | (97,809) | (862) | (275,872) | (7,687) | |||
Loss before income tax expense | (79,291) | (23,091) | (778,130) | (109,719) | |||
Income tax expense | (29,872) | (10,452) | (396,992) | (20,011) | |||
Income/(loss) from equity method | 316 | (3,049) | 10,787 | (2,248) | |||
Net loss | |||||||
Add: Net loss/(income) | 724 | (2,825) | 28,220 | (3,634) | |||
Total net loss attributable to | |||||||
Net loss per common share | |||||||
Basic | |||||||
Diluted | (0.50) | (0.19) | (5.29) | (0.64) | |||
Net loss per ADS (note 2) | |||||||
Basic | |||||||
Diluted | (0.17) | (0.06) | (1.76) | (0.21) | |||
Weighted average shares used in | |||||||
Basic | 215,454,363 | 211,977,774 | 214,825,470 | 212,575,277 | |||
Diluted | 215,454,363 | 211,977,774 | 214,825,470 | 212,575,277 |
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows: | |||||||||
For the Three Months | For the Fiscal Year Ended | ||||||||
Ended | Ended | ||||||||
2022 | 2023 | 2022 | 2023 | ||||||
Cost of revenues | $ 2,790 | $ 11,319 | |||||||
Selling and marketing expenses | (9,590) | 7,648 | 53,850 | 30,662 | |||||
General and administrative expenses | 9,587 | 15,888 | 119,848 | 66,590 | |||||
Total | $ 108,571 | ||||||||
Note 2: Three ADSs represent one Class A common Share. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF | |||||||
COMPREHENSIVE (LOSS)/INCOME | |||||||
(In thousands of | |||||||
For the Three Months Ended | For the Fiscal Year Ended | ||||||
2022 | 2023 | 2022 | 2023 | ||||
Net loss | $ (1,164,335) | $ (131,978) | |||||
Other comprehensive | (7,533) | 51,838 | (25,325) | (89,534) | |||
Comprehensive (loss)/income | (116,380) | 15,246 | (1,189,660) | (221,512) | |||
Add: Comprehensive loss | 986 | (2,211) | 28,841 | (6,383) | |||
Comprehensive (loss)/income |
TAL EDUCATION GROUP | |||||||
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures | |||||||
(In thousands of | |||||||
For the Three Months Ended | For the Fiscal Year Ended | ||||||
2022 | 2023 | 2022 | 2023 | ||||
Cost of revenues | $ 198,084 | $ 2,203,336 | |||||
Share-based compensation expense | 138 | 2,790 | 1,134 | 11,319 | |||
Non-GAAP cost of revenues | 197,946 | 124,923 | 2,202,202 | 425,039 | |||
Selling and marketing expenses | 103,475 | 74,512 | 1,118,141 | 283,036 | |||
Share-based compensation expense | (9,590) | 7,648 | 53,850 | 30,662 | |||
Non-GAAP selling and marketing | 113,065 | 66,864 | 1,064,291 | 252,374 | |||
General and administrative | 212,113 | 112,163 | 1,199,708 | 413,791 | |||
Share-based compensation expense | 9,587 | 15,888 | 119,848 | 66,590 | |||
Non-GAAP general and | 202,526 | 96,275 | 1,079,860 | 347,201 | |||
Operating costs and expenses | 546,285 | 314,388 | 5,026,235 | 1,133,185 | |||
Share-based compensation expense | 135 | 26,326 | 174,832 | 108,571 | |||
Non-GAAP operating costs and | 546,150 | 288,062 | 4,851,403 | 1,024,614 | |||
Income/ (loss) from operations | 644 | (44,416) | (614,516) | (90,730) | |||
Share based compensation expenses | 135 | 26,326 | 174,832 | 108,571 | |||
Non-GAAP income/ (loss) from | 779 | (18,090) | (439,684) | 17,841 | |||
Net loss attributable to | (108,123) | (39,417) | (1,136,115) | (135,612) | |||
Share based compensation expenses | 135 | 26,326 | 174,832 | 108,571 | |||
Non-GAAP net loss attributable to | $ (107,988) | $ (13,091) | $ (961,283) | $ (27,041) | |||
Net loss per ADS | |||||||
Basic | $ (0.17) | ||||||
Diluted | (0.17) | (0.06) | (1.76) | (0.21) | |||
Non-GAAP Net loss per ADS | |||||||
Basic | $ (0.17) | ||||||
Diluted | (0.17) | (0.02) | (1.49) | (0.04) | |||
ADSs used in calculating net loss per ADS | |||||||
Basic | 646,363,089 | 635,933,322 | 644,476,410 | 637,725,831 | |||
Diluted | 646,363,089 | 635,933,322 | 644,476,410 | 637,725,831 | |||
ADSs used in calculating Non-GAAP net loss per ADS | |||||||
Basic | 646,363,089 | 635,933,322 | 644,476,410 | 637,725,831 | |||
Diluted | 646,363,089 | 635,933,322 | 644,476,410 | 637,725,831 |
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