Tarena International, Inc. Announces the Results for the First Quarter of 2022
Tarena International, Inc. (TEDU) reported a strong financial performance for Q1 2022, marking a turnaround from losses in the previous year. Net revenues increased by 16.8% YoY to RMB 623.5 million (US$98.4 million), driven by a 27.2% increase in childhood & adolescent education revenues. Operating income turned positive at RMB 28.6 million (US$4.5 million), with a gross profit surge of 43.6% year-over-year. Despite a slight decrease in cash and student enrollments in adult education, the company achieved a net income of RMB 27.1 million (US$4.3 million), reversing a significant loss from 2021.
- Net revenues rose by 16.8% YoY to RMB 623.5 million (US$ 98.4 million).
- Childhood & adolescent education revenue increased by 27.2% YoY to RMB 353.9 million (US$ 55.8 million).
- Gross profit jumped by 43.6% YoY to RMB 358.9 million (US$ 56.6 million).
- Operating income of RMB 28.6 million (US$ 4.5 million) compared to operating loss in Q1 2021.
- Net income reached RMB 27.1 million (US$ 4.3 million), reversing from a loss of RMB 121.9 million in Q1 2021.
- Adult professional education revenue grew only by 5.5% YoY amid a decline in student enrollments.
- Total cash decreased to RMB 416.4 million (US$ 65.7 million) from RMB 430.4 million at year-end 2021.
- Total student enrollments in adult professional education decreased by 5.5% YoY.
BEIJING, May 17, 2022 /PRNewswire/ -- Tarena International, Inc. (NASDAQ: TEDU) ("Tarena" or the "Company"), a leading provider of adult professional education and childhood & adolescent quality education services in China, today announced its unaudited financial results for the first quarter ended March 31, 2022.
First Quarter 2022 Highlights
- Net revenues increased by
16.8% year-over-year to RMB623.5 million (US$98.4 million ), from RMB533.8 million in the same period of 2021. - Net revenue from childhood & adolescent quality education business, which represented
56.8% of the total net revenues, increased by27.2% year-over-year to RMB353.9 million (US$55.8 million ), from RMB278.3 million in the same period of 2021. - Net revenue from adult professional education business, which represented
43.2% of the total net revenues, increased by5.5% year-over-year to RMB269.6 million (US$42.5 million ), from RMB255.5 million in the same period of 2021. - Gross profit increased by
43.6% year-over-year to RMB358.9 million (US$56.6 million ), from RMB249.9 million in the same period of 2021. - Gross profit margin increased by
10.8% points year-over-year to57.6% , from46.8% in the same period of 2021. - Operating income was RMB28.6 million (US
$4.5 million ), compared to operating loss of RMB129.5 million in the same period of 2021. Operating margin improved year-over-year to4.6% from -24.3% in the same period of 2021. - Non-GAAP operating income, which excluded share-based compensation expenses, was RMB30.0 million (US
$4.7 million ), compared to non-GAAP operating loss of RMB122.6 million in the same period of 2021. - Income tax expense was RMB5.4 million (US
$0.9 million ), compared to income tax benefit of RMB7.4 million in the same period of 2021. - Net income was RMB27.1 million (US
$4.3 million ), compared to net loss of RMB121.9 million in the same period of 2021. - Non-GAAP net income, which excluded share-based compensation expenses, was RMB28.5 million (US
$4.5 million ), compared to non-GAAP net loss of RMB115.0 million in the same period of 2021. - Basic income per ordinary share was RMB0.48 (US
$0.08) , compared to loss per ordinary share of RMB2.17 in the first quarter of 2021. Diluted income per ordinary share was RMB0.47 (US$0.07) , compared to loss per ordinary share of RMB2.17 in the first quarter of 2021. - Cash, cash equivalents and time deposits, including current and non-current, and restricted cash totaled RMB416.4 million (US
$65.7 million ) as of March 31, 2022, compared to RMB430.4 million as of December 31, 2021. - Net cash outflow from operating activities in the first quarter of 2022 was RMB18.9 million (US
$3.0 million ). Capital expenditures in the first quarter of 2022 were RMB10.6 million (US$1.7 million ). - Deferred revenue totaled RMB1,974.2 million (US
$311.4 million ) as of March 31, 2022, compared to RMB2,024.9 million as of December 31, 2021, representing a decrease of2.5% . - Total student enrollments in childhood & adolescent quality education business, defined as the total number of students who attended at least one paid lesson during that period or have deposit balances in their accounts at the end of that period, in the first quarter of 2022 reached 173,100, increased by
27.7% , compared to the student enrollments of 135,500 in the same period of 2021. - Total number of learning centers in childhood & adolescent quality education decreased to 232 as of March 31, 2022, from 236 as of March 31, 2021.
- Total student enrollments in adult professional education business, defined as the total number of courses enrolled by students during that period, including multiple courses enrolled by the same student, in the first quarter of 2022 decreased by
5.5% year-over-year to 29,300. - Total number of learning centers in adult professional education increased to 99 as of March 31, 2022, from 96 as of March 31, 2021.
Key Financial Results
For the Three Months Ended March 31, | Variance | % of | ||||||||||
2021 | 2022 | RMB | ||||||||||
Unaudited | Unaudited | |||||||||||
RMB | RMB | |||||||||||
(in thousands, except for percentages) | ||||||||||||
Net revenues | 533,786 | 623,506 | 89,720 | 16.8 | ||||||||
Cost of revenues(a) | (283,843) | (264,588) | 19,255 | -6.8 | ||||||||
Gross profit | 249,943 | 358,918 | 108,975 | 43.6 | ||||||||
Gross margin | ||||||||||||
Selling and marketing expenses(a) | (213,758) | (172,400) | 41,358 | -19.3 | ||||||||
General and administrative expenses(a) | (143,192) | (141,585) | 1,607 | -1.1 | ||||||||
Research and development expenses(a) | (22,468) | (16,342) | 6,126 | -27.3 | ||||||||
Total operating expenses | (379,418) | (330,327) | 49,091 | -12.9 | ||||||||
Operating income/(loss) | (129,475) | 28,591 | 158,066 | 122.1 | ||||||||
Notes: | ||||||||||||
(a) Includes share-based compensation expenses. |
"In the first quarter of 2022, we ended our long streak of quarterly net losses to achieve a net income. This marked the beginning of a healthy trajectory for our business. Our net income reached RMB27.1 million, operating income reached RMB28.6 million, and operating margin reached
Such financial performance resulted from the effective implementation and execution of our sound long-term business strategy, with revenue growth and continued cost reduction. In the first quarter of 2022, our net revenues increased by
"Our core competitive advantages are backed by the constant optimization and upgrading of our business procedures and processes, which include our Online-Merge-Offline (OMO) customer acquisition model and omni-channel service delivery capability. This ability was tested in the first quarter, when we kept the business running smoothly, even when a resurgence of COVID-19 cases emerged in certain areas in China.
Looking ahead, we will continue to focus on the core advantages of 'adaptation of the Online-Merge-Offline (OMO) model to develop and deliver our comprehensive products', 'offline learning center operation capability' and 'customer acquisition capability' to continually improve operational efficiency and maintain positive and healthy development." concluded Ms. Ying Sun.
First Quarter 2022 Results
Net Revenues
Total net revenues increased by
Net revenue from childhood & adolescent quality education business increased by
Net revenue from adult professional education business increased by
Cost of Revenues
Cost of revenues decreased by
Gross Profit and Gross Margin
Gross profit increased by
Operating Expenses
Total operating expenses decreased by
Selling and marketing expenses decreased by
General and administrative expenses decreased slightly by
Research and development expenses decreased by
Operating Income/(Loss)
Operating income was RMB28.6 million (US
Interest Income
Net interest income was RMB0.3 million (US
Other Income
Other income was RMB3.7 million (US
Foreign Exchange Loss
Foreign exchange loss was RMB0.1 million (US
Income Tax (Expense)/Benefit
The Company recorded an income tax expense of RMB5.4 million (US
Net Income/(Loss)
As a result of the foregoing, net income was RMB27.1 million (US
Basic and Diluted Income/(Loss) per ordinary share
Basic income per ordinary share was RMB0.48 (US
Cash Flow
Net cash outflow from operating activities in the first quarter of 2022 was RMB18.9 million (US
Business Outlook
Based on the Company's current estimates, total net revenues for the second quarter of 2022 are expected to be in the range of RMB600 million and RMB630 million, which represent an increase of
This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions, which are subject to change, particularly as to the potential impact of COVID-19 on the economy in China and elsewhere in the world.
Exchange Rate Information
All translations made in the financial statements or elsewhere in this press release made from RMB into United States dollars ("US$") are solely for convenience and calculated at the rate of US
Conference Call
Company management will hold an earnings conference call and live webcast to discuss the Company's results at 8:00 AM on May 17, 2022, U.S. Eastern Time (8:00 PM on May 17, 2022, Beijing Time).
Dial-in details for the earnings conference call are as follows:
United States: +1-855-824-5644
Hong Kong, China: +852-3027-6500
Mainland China: 8009-880-563/400-821-0637
United Kingdom: 0800-026-1542
International: +1-646-722-4977
Passcode: 27103456#
Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the following number until May 24, 2022:
United States: +1-646-982-0473
International: +61-2-8325-2405
Passcode: 520002317#
Additionally, a live and archived webcast of this call will be available on the Investor Relations section of Tarena's website at http://ir.tedu.cn.
About Tarena International, Inc.
Tarena is a leading provider of adult professional education and childhood and adolescent quality education services in China. Through its innovative education platform combining live distance instruction, classroom-based tutoring and online learning modules, Tarena offers adult professional education courses in IT and non-IT subjects. Its adult professional education courses provide students with practical skills to prepare them for jobs in industries with significant growth potential and strong hiring demand. Tarena also offers childhood and adolescent quality education programs, including computer coding and robotics programming courses, etc., targeting students aged between three and eighteen.
Safe Harbor Statement
This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the business outlook, the quotations from management in this announcement, as well as the Company's strategic and operational plans contain forward-looking statements. Tarena may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, 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. Any statements that are not historical facts, including any business outlook and statements about Tarena's beliefs and expectations, are forward-looking statements. Many factors, risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: the impact of the COVID-19 outbreak; Tarena's goals and strategies; its future business development, financial condition and results of operations; its ability to continue to attract students to enroll in its courses; its ability to continue to recruit, train and retain qualified instructors and teaching assistants; its ability to continually tailor its curriculum to market demand and enhance its courses to adequately and promptly respond to developments in the professional job market; its ability to maintain or enhance its brand recognition, its ability to maintain high job placement rate for its students, and its ability to maintain cooperative relationships with financing service providers for student loans.
Further information regarding these and other risks, uncertainties or factors is included in Tarena's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Tarena does not undertake any obligation to update such information, except as required under applicable law.
About Non-GAAP Financial Measures
Beginning in the second quarter of 2016, the Company revised its non-GAAP financial measures to exclude gain or loss on derivative instruments, goodwill impairment, impairment of intangibles via acquisitions of businesses and the related tax impact, in addition to its historical practice of excluding share-based compensation expenses for non-GAAP results.
To supplement Tarena's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Tarena's management uses non-GAAP measures of cost of revenues, operating expenses, operating income, net income, and basic and diluted net income per ordinary share, which are adjusted from results based on GAAP to exclude the share-based compensation expenses, gain or loss on derivative instruments, goodwill impairment, impairment of intangibles via acquisitions of businesses and the related tax impact. These non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. In addition, calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.
Tarena's management believes that excluding the share-based compensation expenses, gain or loss on derivative instruments, goodwill impairment, impairment of intangibles via acquisitions of businesses and the related tax impact provides meaningful supplemental information regarding our performance and liquidity by excluding certain items identified as non-recurring and infrequent in nature, and non-cash charges. The amount of share-based compensation expenses, gain or loss on derivative instruments, goodwill impairment, impairment of intangibles via acquisitions of businesses and the related tax impact are not built into the Company's annual budgets and quarterly forecasts, which generally will be the basis for information Tarena provides to analysts and investors as guidance for future operating performance.
The non-GAAP financial measures are provided to enhance investors' overall understanding of Tarena's current financial performance and prospects for the future. A limitation of using non-GAAP cost of revenues, operating expenses, operating income (loss) and net income (loss), excluding the share-based compensation expenses, gain or loss on derivative instruments, goodwill impairment, impairment of intangibles via acquisitions of businesses and the related tax impact is that the share-based compensation charge has been and will continue to be a recurring expense in the Company's business for the foreseeable future, and gain or loss on derivative instruments, goodwill impairment, impairment of intangibles via acquisitions of businesses and the related tax impact may recur in the future. In order to mitigate these limitations, the Company has provided specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables include details on the reconciliation between GAAP financial measures that are most directly comparable to the non-GAAP financial measures the Company has presented.
For further information, please contact:
Investor Relations Contact
Tarena International, Inc.
Email: ir@tedu.cn
TARENA INTERNATIONAL, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data and per share data) | ||||||
As of | ||||||
December 31, | March 31, | March 31, | ||||
2021 | 2022 | 2022 | ||||
Audited | Unaudited | Unaudited | ||||
RMB | RMB | USD | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | 423,766 | 409,803 | 64,645 | |||
Time deposits | 6,257 | 6,236 | 984 | |||
Restricted cash | 255 | 150 | 24 | |||
Accounts receivable, net of allowance for doubtful accounts | 48,458 | 56,311 | 8,883 | |||
Amounts due from related parties | 839 | 962 | 152 | |||
Prepaid expenses and other current assets | 139,757 | 121,838 | 19,218 | |||
Total current assets | 619,332 | 595,300 | 93,906 | |||
Time deposits-non current | 123 | 224 | 35 | |||
Accounts receivable, net of allowance for doubtful accounts-non current | 90 | 188 | 30 | |||
Amount due from related parties-non current | 683 | 694 | 109 | |||
Property and equipment, net | 299,441 | 282,728 | 44,599 | |||
Intangible assets, net | 9,906 | 9,306 | 1,468 | |||
Goodwill | 52,782 | 52,782 | 8,326 | |||
Right-of-use assets | 495,936 | 425,346 | 67,097 | |||
Long-term investments, net | 46,449 | 44,445 | 7,011 | |||
Deferred income tax assets | 41,000 | 38,846 | 6,128 | |||
Other non-current assets, net | 76,040 | 77,298 | 12,194 | |||
Total assets | 1,641,782 | 1,527,157 | 240,903 | |||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Short-term bank loans | 30,000 | 32,000 | 5,048 | |||
Accounts payable | 8,914 | 6,950 | 1,096 | |||
Amounts due to related parties | 554 | 353 | 56 | |||
Operating lease liabilities-current | 239,937 | 217,993 | 34,388 | |||
Income taxes payable | 89,000 | 91,962 | 14,507 | |||
Deferred revenue-current | 2,008,078 | 1,958,480 | 308,943 | |||
Accrued expenses and other current liabilities | 563,603 | 538,536 | 84,951 | |||
Total current liabilities | 2,940,086 | 2,846,274 | 448,989 | |||
Deferred revenue-non current | 16,774 | 15,706 | 2,478 | |||
Operating lease liabilities-non current | 272,575 | 229,185 | 36,153 | |||
Other non-current liabilities | 4,767 | 4,688 | 739 | |||
Total liabilities | 3,234,202 | 3,095,853 | 488,359 | |||
Commitments and contingencies | - | - | - | |||
Shareholders' equity: | ||||||
Class A ordinary shares | 355 | 355 | 56 | |||
Class B ordinary shares | 74 | 74 | 12 | |||
Treasury stock | (459,815) | (464,497) | (73,273) | |||
Additional paid-in capital | 1,347,205 | 1,348,593 | 212,735 | |||
Accumulated other comprehensive income | 48,699 | 48,648 | 7,674 | |||
Accumulated deficit | (2,520,438) | (2,493,877) | (393,399) | |||
Total deficit attributable to the shareholders of Tarena International, Inc. | (1,583,920) | (1,560,704) | (246,195) | |||
Non-controlling interest | (8,500) | (7,992) | (1,261) | |||
Total liabilities and equity | 1,641,782 | 1,527,157 | 240,903 |
TARENA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||
For the Three Months Ended March 31, | ||||||||
2021 | 2022 | 2022 | ||||||
Unaudited | Unaudited | Unaudited | ||||||
RMB | RMB | USD | ||||||
Net revenues | 533,786 | 623,506 | 98,356 | |||||
Cost of revenues(a) | (283,843) | (264,588) | (41,738) | |||||
Gross profit | 249,943 | 358,918 | 56,618 | |||||
Selling and marketing expenses(a) | (213,758) | (172,400) | (27,195) | |||||
General and administrative expenses(a) | (143,192) | (141,585) | (22,334) | |||||
Research and development expenses(a) | (22,468) | (16,342) | (2,579) | |||||
Operating income/(loss) | (129,475) | 28,591 | 4,510 | |||||
Interest income | 589 | 298 | 47 | |||||
Other income | 343 | 3,663 | 578 | |||||
Foreign exchange loss | (689) | (85) | (13) | |||||
Income/(loss) before income taxes | (129,232) | 32,467 | 5,122 | |||||
Income tax benefit/(expense) | 7,352 | (5,398) | (852) | |||||
Net income/(loss) | (121,880) | 27,069 | 4,270 | |||||
Less: Net income/(loss) attributable to non-controlling interests | (1,039) | 508 | 80 | |||||
Net income/(loss) attributable to Class A and Class B ordinary | (120,841) | 26,561 | 4,190 | |||||
Net income/(loss) per Class A and Class B ordinary share: | ||||||||
Basic | (2.17) | 0.48 | 0.08 | |||||
Diluted | (2.17) | 0.47 | 0.07 | |||||
Weighted average number of Class A and Class B ordinary shares | ||||||||
Basic | 55,670,995 | 55,676,443 | 55,676,443 | |||||
Diluted | 55,670,995 | 56,603,993 | 56,603,993 | |||||
Net income/(loss) | (121,880) | 27,069 | 4,270 | |||||
Other comprehensive income/(loss) | ||||||||
Foreign currency translation adjustment, net of nil income taxes | 87 | (51) | (8) | |||||
Comprehensive income/(loss) | (121,793) | 27,018 | 4,262 | |||||
Notes: | ||||||||
(a) Includes share-based compensation expenses as follows: | ||||||||
For the Three Months Ended March 31, | ||||||||
2021 Unaudited | 2022 Unaudited | 2022 Unaudited | ||||||
RMB | RMB | USD | ||||||
Cost of revenues | 185 | 11 | 2 | |||||
Selling and marketing expenses | 1,033 | 144 | 23 | |||||
General and administrative expenses | 5,310 | 958 | 151 | |||||
Research and development expenses | 379 | 275 | 43 | |||||
TARENA INTERNATIONAL, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (in thousands, except share data and per share data) | |||||||
For the Three Months Ended March 31, | |||||||
2021 | 2022 Unaudited | 2022 Unaudited | |||||
RMB | RMB | USD | |||||
GAAP Cost of revenues | 283,843 | 264,588 | 41,738 | ||||
Share-based compensation expense in cost of revenues | 185 | 11 | 2 | ||||
Non-GAAP Cost of revenues | 283,658 | 264,577 | 41,736 | ||||
GAAP Selling and marketing expenses | 213,758 | 172,400 | 27,195 | ||||
Share-based compensation expense in selling and marketing | 1,033 | 144 | 23 | ||||
Non-GAAP Selling and marketing expenses | 212,725 | 172,256 | 27,172 | ||||
GAAP General and administrative expenses | 143,192 | 141,585 | 22,334 | ||||
Share-based compensation expense in general and administrative | 5,310 | 958 | 151 | ||||
Non-GAAP General and administrative expenses | 137,882 | 140,627 | 22,183 | ||||
GAAP Research and development expenses | 22,468 | 16,342 | 2,579 | ||||
Share-based compensation expense in research and development | 379 | 275 | 43 | ||||
Non-GAAP Research and development expenses | 22,089 | 16,067 | 2,536 | ||||
Operating income/(loss) | (129,475) | 28,591 | 4,510 | ||||
Share-based compensation expenses | 6,907 | 1,388 | 219 | ||||
Non-GAAP Operating income/(loss) | (122,568) | 29,979 | 4,729 | ||||
Net income/(loss) | (121,880) | 27,069 | 4,270 | ||||
Share-based compensation expenses | 6,907 | 1,388 | 219 | ||||
Non-GAAP Net income/(loss) | (114,973) | 28,457 | 4,489 | ||||
Less: Net income/(loss) attributable to non-controlling interests | (1,039) | 508 | 80 | ||||
Non-GAAP net income/(loss) attributable to Class A and Class | (113,934) | 27,949 | 4,409 | ||||
Non-GAAP net income/(loss) per Class A and Class B ordinary | |||||||
Basic | (2.05) | 0.50 | 0.08 | ||||
Diluted | (2.05) | 0.49 | 0.08 | ||||
Weighted average number of ordinary shares outstanding used | |||||||
Basic | 55,670,995 | 55,676,443 | 55,676,443 | ||||
Diluted | 55,670,995 | 56,603,993 | 56,603,993 | ||||
Notes: (a) The Non-GAAP net income/(loss) per ordinary share is computed using Non-GAAP net income/(loss) attributable to ordinary (b) There was no tax impact of share-based compensation expenses for the first quarter of 2022 and 2021, respectively. |
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SOURCE Tarena International, Inc.
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