Tarena International, Inc. Announces the Unaudited Results for the Fourth Quarter and Fiscal Year of 2022

Rhea-AI Summary

Tarena International, Inc. (NASDAQ: TEDU) reported its unaudited financial results for Q4 and full year 2022. In Q4, total student enrollment surged by 17.0% to 177,000, despite a 15.7% decline in net revenues to RMB552.4 million (US$80.1 million). Gross profit decreased by 1.6% to RMB322.4 million, but gross profit margin improved to 58.4%. The operating loss significantly decreased to RMB4.6 million from RMB60.4 million in Q4 2021. For the entire fiscal year, net revenues rose by 3.4% to RMB2,468.1 million (US$357.8 million), with a net income of RMB85.2 million (US$12.4 million), compared to a loss in 2021.

Positive

• Total student enrollment increased by 17.0% year-over-year to 177,000 in Q4 2022.
• Net revenues for fiscal year 2022 grew by 3.4% to RMB2,468.1 million (US$357.8 million).
• Net income reached RMB85.2 million (US$12.4 million) in 2022, compared to a net loss of RMB475.8 million in 2021.
• Gross profit margin improved to 57.2% in 2022 from 49.7% in 2021.

Negative

• Q4 2022 net revenues decreased by 15.7% year-over-year to RMB552.4 million (US$80.1 million).
• Operating cash inflow decreased to RMB24.0 million (US$3.5 million) in Q4 2022.
• Guidance for Q1 2023 indicates expected revenues will decline by 39.1% to 41.5% year-over-year.

BEIJING, March 27, 2023 /PRNewswire/ -- Tarena International, Inc. (NASDAQ: TEDU) ("Tarena" or the "Company"), a leading provider of IT professional education and IT-focused supplementary STEAM education services in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2022.

Highlights for the Fourth Quarter of 2022   

• Total student enrollment in IT-focused supplementary STEAM education increased by 17.0% to 177,000 in the fourth quarter of 2022, compared to student enrollment of 151,300 in the same period of 2021.
• Net revenues decreased by 15.7% year-over-year to RMB552.4 million (US$80.1 million), from RMB655.3 million in the same period of 2021.
• Gross profit decreased by 1.6% year-over-year to RMB322.4 million (US$46.7 million), from RMB327.6 million in the same period of 2021.
• Gross profit margin increased by 8.4% year-over-year to 58.4%, from 50.0% in the same period of 2021.
• Operating loss decreased to RMB4.6 million (US$0.7 million), from a loss of RMB60.4 million in the same period of 2021.
• Non-GAAP operating income, which excluded share-based compensation expenses, was RMB0.2 million (US$0.03 million), compared to a non-GAAP operating loss of RMB56.5 million in the same period of 2021.
• Net loss was RMB17.7 million (US$2.6 million), compared to a net loss of RMB182.5 million in the same period of 2021.
• Non-GAAP net loss, which excluded share-based compensation expenses, was RMB12.9 million (US$1.9 million), compared to a non-GAAP net loss of RMB178.6 million in the same period of 2021.
• Basic and diluted loss per American Depositary Share ("ADS"), each representing five Class A ordinary shares with an effective date of December 23, 2021, was RMB1.72 (US$0.25), compared to a loss per ADS of RMB16.12 in the fourth quarter of 2021.
• Operating cash inflow for the quarter was RMB24.0 million (US$3.5 million).
• Cash, cash equivalents, and time deposits, including current and non-current, and restricted cash totaled RMB380.5 million (US$55.2 million) as of December 31, 2022.

Highlights for Fiscal Year of 2022

• Total student enrollment in our IT-focused supplementary STEAM education for fiscal year 2022 reached 209,400, increasing by 17.4%, compared to student enrollment of 178,400 in the same period in 2021.
• Net revenues increased by 3.4% year-over-year to RMB2,468.1 million (US$357.8 million), from RMB2,386.5 million in the same period in 2021.
• Gross profit increased by 19.1% year-over-year to RMB1,412.0 million (US$204.7 million), from RMB1,185.1 million in the same period in 2021.
• Gross profit margin increased by 7.5% year-over-year to 57.2%, from 49.7% in the same period in 2021.
• Operating income was RMB93.0 million (US$13.5 million), compared to an operating loss of RMB369.1 million in the same period in 2021.
• Non-GAAP operating income, which excluded share-based compensation expenses, was RMB109.6 million (US$15.9 million), compared to a non-GAAP operating loss of RMB350.0 million in the same period in 2021.
• Net income was RMB85.2 million (US$12.4 million), compared to a net loss of RMB475.8 million in the same period in 2021.
• Non-GAAP net income, which excluded share-based compensation expenses, was RMB101.8 million (US$14.8 million), compared to a non-GAAP net loss of RMB456.7 million in the same period in 2021.
• Basic income per American Depositary Share ("ADS"), each representing five Class A ordinary shares with an effective date of December 23, 2021, was RMB7.64 (US$1.11). Diluted income per American Depositary Share ("ADS") was RMB7.23 (US$1.05).

Key Financial Results

		For the Three Months Ended December 31,				Variance	% of change	Fiscal Year Ended December 31,				Variance	% of change
		2021		2022				2021		2022
		RMB		RMB		RMB		RMB		RMB		RMB
		(in thousands, except for percentages)
Net revenues		655,301		552,444		(102,857)	-15.7	2,386,520		2,468,074		81,554	3.4
Cost of revenues(a)		(327,689)		(230,067)		97,622	-29.8	(1,201,419)		(1,056,043)		145,376	-12.1
Gross profit		327,612		322,377		(5,235)	-1.6	1,185,101		1,412,031		226,930	19.1
Gross margin		50.0 %		58.4 %		8.4 %		49.7 %		57.2 %		7.5 %
Selling and marketing expenses(a)		(221,847)		(145,301)		76,546	-34.5	(878,130)		(642,937)		235,193	-26.8
General and administrative expenses(a)		(132,465)		(153,556)		(21,091)	15.9	(569,985)		(604,028)		(34,043)	6.0
Research and development expenses(a)		(33,664)		(28,088)		5,576	-16.6	(106,098)		(72,028)		34,070	-32.1
Total operating expenses		(387,976)		(326,945)		61,031	-15.7	(1,554,213)		(1,318,993)		235,220	-15.1
Operating income/(loss)		(60,364)		(4,568)		55,796	-92.4	(369,112)		93,038		462,150	125.2

 

Note:

(a)  Includes share-based compensation expenses.

"The changing dynamics in the fourth quarter of 2022 and January of 2023 and the uncertain business environment during the period temporarily affected our regular operations. We had to close some of our offline centers for almost two months as a good portion of our students, instructors, employees, and their families weathered the pandemic. Facing challenges during the period, particularly with respect to customer acquisition, course delivery, and services at our offline centers, we navigated through our robust online delivery system and continued focusing on cost reduction and efficiency enhancement. As a result, we realized an operating cash inflow of RMB24.0 million for the quarter," remarked Ms. Ying Sun, the Chief Executive Officer of Tarena.

Ms. Sun continued, "After the Chinese New Year holiday, as the country recovered from the impact, we also fully emerged, with all our offline centers resuming normal classes and operations in February. In addition, the gradual recovery of the macro environment has brought increased enthusiasm for students to enroll, which we believe will partially offset the impact of these exceptional circumstances on the financial performance of fiscal year of 2023."

"Looking ahead, we will continue to optimize our integrated online and offline product delivery and service system and promote the improvement of course and service quality, aiming to provide increased value and optimized experiences for our students. We will also drive new enrollment and renewal of existing students via strengthening word-of-mouth to achieve efficient customer acquisition at a lower cost. We are optimistic about the rebound in enrollment and future growth. At the same time, we will remain laser focused on enhancing operating efficiency, and strive for continued improvement in our profitability in 2023," concluded Ms. Ying Sun.

Financial Results for the Fourth Quarter of 2022

Net Revenues

Total net revenues decreased by 15.7% to RMB552.4 million (US$80.1 million) in the fourth quarter of 2022 from RMB655.3 million in the same period of 2021. The decrease was mainly due to a decrease in student enrollment in our IT professional education, and was partially offset by an increase in IT-focused supplementary STEAM education revenues.

Cost of Revenues

The cost of revenues decreased by 29.8% to RMB230.1 million (US$33.4 million) in the fourth quarter of 2022, from RMB327.7 million in the same period of 2021. The decrease was mainly due to decreased rental and personnel-related costs resulting from the closing of some of our teaching centers.

Gross Profit and Gross Margin

Gross profit decreased by 1.6% to RMB322.4 million (US$46.7 million) in the fourth quarter of 2022, from RMB327.6 million in the same period of 2021. Gross margin expanded to 58.4% in the fourth quarter of 2022, compared to 50.0% in the same period of 2021, as we continued to improve operational efficiency.

Operating Expenses

Total operating expenses decreased by 15.7% to RMB326.9 million (US$47.4 million) in the fourth quarter of 2022, from RMB388.0 million in the same period of 2021. Total non-GAAP operating expenses, which excluded share-based compensation expenses, decreased by 16.0% to RMB322.4 million (US$46.7 million) in the fourth quarter of 2022, from RMB383.6 million in the same period of 2021. Total share-based compensation expenses allocated to related operating expenses were RMB4.6 million (US$0.7 million) in the fourth quarter of 2022, compared to RMB4.4 million in the same period of 2021.

Selling and marketing expenses decreased by 34.5% to RMB145.3 million (US$21.1 million) in the fourth quarter of 2022, from RMB221.8 million in the same period of 2021. The decrease was mainly due to the drop in the number of sales staff and a decrease in advertising spending as the Company continued to optimize marketing spending in the fourth quarter of 2022.

General and administrative expenses increased by 15.9% to RMB153.6 million (US$22.3 million) in the fourth quarter of 2022, from RMB132.5 million in the same period of 2021. The increase was mainly attributable to the lower general and administrative expenses in the fourth quarter of 2021 resulting from the receipt of a settlement payment from the buyer group in connection with the termination of a proposed privatization transaction. Personnel-related expenses and rental expenses decreased in the fourth quarter of 2022 because the number of administration staff decreased and we obtained some rental relief as we closed some low performing centers.

Research and development expenses decreased by 16.6% to RMB28.1 million (US$4.1 million) in the fourth quarter of 2022, from RMB33.7 million in the same period of 2021. The decrease was mainly due to the decrease in personnel-related expenses in the fourth quarter of 2022.

Operating Income/(Loss)

Operating loss was RMB4.6 million (US$0.7 million) in the fourth quarter of 2022, compared to an operating loss of RMB60.4 million in the same period of 2021. Non-GAAP operating income, which excluded share-based compensation expenses, was RMB0.2 million (US$0.03 million) in the fourth quarter of 2022, compared to a non-GAAP operating loss of RMB56.5 million in the same period of 2021.

Income Tax Expense

The Company recorded an income tax expense of RMB17.6 million (US$2.6 million) in the fourth quarter of 2022, compared to an income tax expense of RMB125.7 million in the same period of 2021.

Net Loss

As a result of the foregoing factors, net loss was RMB17.7 million (US$2.6 million) in the fourth quarter of 2022, compared to a net loss of RMB182.5 million in the same period of 2021. Non-GAAP net loss, which excluded share-based compensation expenses, was RMB12.9 million (US$1.9 million) in the fourth quarter of 2022, compared to a non-GAAP net loss of RMB178.6 million in the same period of 2021.

Basic and Diluted Loss per ADS

Basic and diluted loss per ADS was RMB1.72 (US$0.25) in the fourth quarter of 2022, compared to a loss per ADS of RMB16.12 in the fourth quarter of 2021. Non-GAAP basic and diluted loss per ADS, which excluded share-based compensation expenses, was RMB1.27 (US$0.18) in the fourth quarter of 2022, compared to a non-GAAP loss per ADS of RMB15.78 in the fourth quarter of 2021.

Cash Flow

Net cash inflow from operating activities in the fourth quarter of 2022 was RMB24.0 million (US$3.5 million). Net cash inflow from financing activities in the fourth quarter of 2022 was RMB27.0 million (US$3.9 million), as we borrowed a net amount of RMB35.5 million (US$5.1 million). Capital expenditures in the fourth quarter of 2022 were RMB9.2 million (US$1.3 million).

Fiscal Year 2022 Results

Net Revenues

Total net revenues increased by 3.4% to RMB2,468.1 million (US$357.8 million) in 2022, from RMB2,386.5 million in 2021. The increase was primarily driven by higher student enrollment in our IT-focused supplementary STEAM education, and was partially offset by a decrease in IT professional education revenues.

Cost of Revenues

The cost of revenues decreased by 12.1% to RMB1,056.0 million (US$153.1 million) in 2022, from RMB1,201.4 million in 2021. The decrease was mainly due to the decrease in rental costs, depreciation costs, and personnel-related costs resulting from the closing of some of our teaching centers.

Gross Profit and Gross Margin

Gross profit increased by 19.1% to RMB1,412.0 million (US$204.7 million) in 2022, from RMB1,185.1 million in 2021. Gross margin increased to 57.2% in 2022, compared to 49.7% in 2021 as we continued to improve operational efficiency.

Operating Expenses

Total operating expenses decreased by 15.1% to RMB1,319.0 million (US$191.2 million) in 2022, from RMB1,554.2 million in 2021. Total non-GAAP operating expenses, which excluded share-based compensation expenses, decreased by 15.1% to RMB1,302.8 million (US$188.9 million) in 2022, from RMB1,535.2 million in 2021. Total share-based compensation expenses allocated to related operating expenses decreased by 14.7% to RMB16.2 million (US$2.3 million) in 2022, from RMB19.0 million in 2021.

Selling and marketing expenses decreased by 26.8% to RMB642.9 million (US$93.2 million) in 2022, from RMB878.1 million in 2021. The decrease was mainly due to a drop in the number of sales staff and a decrease in advertising spending as the Company continued to control marketing spending in 2022.

General and administrative expenses increased by 6.0% to RMB604.0 million (US$87.6 million) in 2022, from RMB570.0 million in 2021. The increase was mainly due to the lower general and administrative expenses in the fourth quarter of 2021 resulting from the receipt of a settlement payment from the buyer group in connection with the termination of a proposed privatization transaction, as well as a provision of a shareholder litigation in 2022. Rental expenses decreased as we closed some low performing centers and obtained some rental relief. Office expenses decreased as the Company focused on improving operational efficiency.

Research and development expenses decreased by 32.1% to RMB72.0 million (US$10.4 million) in 2022, from RMB106.1 million in 2021. The decrease was mainly due to a decrease in personnel-related costs in 2022.

Operating Income/(Loss)

Operating income was RMB93.0 million (US$13.5 million) in 2022, compared to an operating loss of RMB369.1 million in 2021. Non-GAAP operating income, which excluded share-based compensation expenses, was RMB109.6 million (US$15.9 million) in 2022, compared to a non-GAAP operating loss of RMB350.0 million in 2021.

Income Tax Expense

The Company recorded an income tax expense of RMB20.8 million (US$3.0 million) in 2022, compared to RMB114.1 million in income tax expense in 2021.

Net Income/(Loss)

As a result of the foregoing, net income was RMB85.2 million (US$12.4 million) in 2022, compared to net loss of RMB475.8 million in 2021. Non-GAAP net income, which excluded share-based compensation expenses, was RMB101.8 million (US$14.8 million) in 2022, compared to non-GAAP net loss of RMB456.7 million in 2021.

Basic and Diluted Income/(Loss) per ADS

Basic income per ADS was RMB7.64 (US$1.11) in 2022. Diluted income per ADS was RMB7.23 (US$1.05) in 2022. Non-GAAP basic income per ADS, which excluded share-based compensation expenses, was RMB9.15 (US$1.33) in 2022. Non-GAAP diluted income per ADS, which excluded share-based compensation expenses, was RMB8.67 (US$1.26) in 2022.

Cash Flow

The total balance of cash, cash equivalents, time deposits, and restricted cash decreased by RMB49.9 million from RMB430.4 million as of December 31, 2021, to RMB380.5 million (US$55.2 million) as of December 31, 2022. Net cash outflow from operating activities in 2022 was RMB27.5 million (US$4.0 million), primarily due to operational spending exceeding the amount of cash received from enrollments. Net cash outflow from financing activities in 2022 was RMB2.1 million (US$0.3 million) as we made treasury stock buyback. Capital expenditures in 2022 were RMB38.8 million (US$5.6 million).

The financial statements for the full year ended December 31, 2022 included within this earnings release have not been audited by the Company's independent registered accounting firm. The audited financial statements for the year ended December 31, 2022 to be disclosed in the Company's Form 20-F may have discrepancies with the above-mentioned unaudited financial statements.

Business Outlook

As classes and non-essential operations were suspended for the month of January and after taking into consideration the lingering impact from the fourth quarter of 2022, based on the Company's current estimates, total net revenues for the first quarter of 2023 are expected to be in the range of RMB365 million to RMB380 million, representing a decrease of 39.1% to 41.5% compared to net revenues in the same period of 2022. Since February 2023, we have resumed normal classes and business operations and we expect a better financial performance for the remainder of fiscal 2023.

This guidance is based on current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions, which are subject to change.

Exchange Rate Information

All translations made in the financial statements or elsewhere in this press release from RMB to United States dollars ("US$") are solely for convenience and calculated at the rate of US$1.00=RMB6.8972, representing the exchange rate as of December 30, 2022, as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been converted, realized or settled into US$ at that rate, or at any other rate, on December 30, 2022.

Conference Call

Company management will hold an earnings conference call and live webcast to discuss the Company's results at 8:00 AM on March 28, 2023, U.S. Eastern Time (8:00 PM on March 28, 2023, Beijing Time).

Please register in advance of the conference, using the link provided below. Upon registering, you will be provided with participant dial-in numbers, a passcode, and a unique registrant ID.

Conference call registration link: https://s1.c-conf.com/diamondpass/10029490-hd82y4.html. It will automatically direct you to the registration page for "Tarena's Fourth Quarter and Fiscal Year 2022 Earnings Conference Call," where you may fill in your details to RSVP. If it requires you to enter a participant conference ID, please enter "10029490".

In the 10 minutes prior to the call start time, you may use the conference access information (including dial in number(s), direct event passcode, and registrant ID) provided in the confirmation email received at the point of registration.

A replay of the conference call may be accessed by phone at the following number until April 4, 2023:

United States: +1855 883 1031
China: 400 1209 216
Hong Kong: 800 930 639
Conference ID: 10029490

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 IT professional education and IT-focused supplementary STEAM education services in China. Through its innovative education platform combining live distance instruction, classroom-based tutoring and online learning modules, Tarena offers professional education courses in IT and non-IT subjects. Its 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 IT-focused supplementary STEAM education programs, including computer coding and robotics programming courses, etc., targeting students between three and eighteen years of age. Aiming to encourage "code to learn," Tarena embraces the latest trends in STEAM education and technology to develop children's logical thinking and learning abilities while allowing them to discover their interests and potential.

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

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 ADS, which are adjusted from results based on GAAP to exclude the share-based compensation expenses. 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 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 is 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 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. In order to mitigate the limitation, 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.
Investor Relations
E-mail: ir@tedu.cn

The Piacente Group, Inc.
In China
Yang Song
Tel: +86-10-6508-0677
E-mail: tedu@tpg-ir.com

In the U.S.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: tedu@tpg-ir.com

 

  

TARENA INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data and per ADS data)
		As of
		December 31,		December 31,		December 31,
		2021		2022		2022
		Audited		Unaudited		Unaudited
		RMB		RMB		USD
ASSETS
Current assets:
Cash and cash equivalents		423,766		356,237		51,650
Time deposits		6,257		6,277		910
Restricted cash		255		17,730		2,571
Accounts receivable, net of allowance for doubtful accounts		48,458		68,733		9,965
Amounts due from related parties		839		698		101
Asset held for sale		-		106,539		15,447
Prepaid expenses and other current assets		139,757		111,339		16,142
Total current assets		619,332		667,553		96,786
Time deposits-non current		123		228		33
Accounts receivable, net of allowance for doubtful accounts-non current		90		182		26
Amount due from related parties-non current		683		701		102
Property and equipment, net		299,441		122,834		17,809
Intangible assets, net		9,906		7,542		1,093
Goodwill		52,782		52,782		7,653
Right-of-use assets		495,936		350,501		50,818
Long-term investments, net		46,449		46,183		6,696
Deferred income tax assets		41,000		40,127		5,818
Other non-current assets, net		76,040		48,867		7,085
Total assets		1,641,782		1,357,500		193,919
LIABILITIES AND EQUITY
Current liabilities:
Short-term bank loans		30,000		52,000		7,539
Accounts payable		8,914		6,330		918
Amounts due to related parties		554		87		13
Operating lease liabilities-current		239,937		197,969		28,703
Income taxes payable		89,000		108,434		15,721
Deferred revenue-current		2,008,078		1,688,610		244,825
Accrued expenses and other current liabilities		563,603		603,516		87,502
Total current liabilities		2,940,086		2,656,946		385,221
Deferred revenue-non current		16,774		14,051		2,037
Operating lease liabilities-non current		272,575		168,736		24,464
Other non-current liabilities		4,767		4,448		645
Total liabilities		3,234,202		2,844,181		412,367
Commitments and contingencies		-		-		-
Shareholders' equity:
Class A ordinary shares		355		359		52
Class B ordinary shares		74		74		11
Treasury stock		(459,815)		(476,918)		(69,147)
Additional paid-in capital		1,347,205		1,363,845		197,739
Accumulated other comprehensive income		48,699		49,664		7,201
Accumulated deficit		(2,520,438)		(2,436,918)		(353,320)
Total deficit attributable to the shareholders of Tarena International, Inc.		(1,583,920)		(1,499,894)		(217,464)
Non-controlling interest		(8,500)		(6,787)		(984)
Total liabilities and equity		1,641,782		1,337,500		193,919

 

 

TARENA INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(in thousands, except share data and per ADS data)
		For the Three Months Ended December 31						Fiscal Year Ended December 31
		2021 Unaudited		2022 Unaudited		2022 Unaudited		2021 Audited		2022 Unaudited		2022 Unaudited
		RMB		RMB		USD		RMB		RMB		USD
Net revenues		655,301		552,444		80,097		2,386,520		2,468,074		357,837
Cost of revenues(a)		(327,689)		(230,067)		(33,357)		(1,201,419)		(1,056,043)		(153,112)
Gross profit		327,612		322,377		46,740		1,185,101		1,412,031		204,725
Selling and marketing expenses(a)		(221,847)		(145,301)		(21,067)		(878,130)		(642,937)		(93,217)
General and administrative expenses(a)		(132,465)		(153,556)		(22,264)		(569,985)		(604,028)		(87,576)
Research and development expenses(a)		(33,664)		(28,088)		(4,072)		(106,098)		(72,028)		(10,443)
Operating income/(loss)		(60,364)		(4,568)		(663)		(369,112)		93,038		13,489
Interest income, net		774		844		122		2,335		2,700		391
Other income		2,749		3,503		508		5,572		11,283		1,636
Foreign exchange loss		(12)		158		23		(518)		(954)		(138)
Income/(loss) before income taxes		(56,853)		(63)		(10)		(361,723)		106,067		15,378
Income tax expense		(125,696)		(17,641)		(2,558)		(114,057)		(20,834)		(3,021)
Net income/(loss)		(182,549)		(17,704)		(2,568)		(475,780)		85,233		12,357
Less: Net income/(loss) attributable to non- controlling interests		(75)		802		116		-1233		1713		248
Net income/(loss) attributable to Class A and Class B ordinary shareholders		(182,474)		(18,506)		(2,684)		(474,547)		83,520		12,109
Net income/(loss) per ADS(b)
Basic(b)		(16.12)		(1.72)		(0.25)		(42.17)		7.64		1.11
Diluted(b)		(16.12)		(1.72)		(0.25)		(42.17)		7.23		1.05
Weighted average number of Class A and Class B ordinary shares outstanding:
Basic		56,587,227		53,856,656		53,856,656		56,260,925		54,657,222		54,657,222
Diluted		56,587,227		53,856,656		53,856,656		56,260,925		57,730,672		57,730,672
Net income/(loss)		(182,549)		(17,704)		(2,568)		(475,780)		85,233		12,357
Other comprehensive income
Foreign currency translation adjustment, net of nil income taxes		(285)		595		86		(421)		965		140
Comprehensive income/(loss)		(182,834)		(17,109)		(2,482)		(476,201)		86,198		12,497

 

Notes:

(a)  Includes share-based compensation expenses as follows:

		For the Three Months Ended December 31,						Fiscal Year Ended December 31
		2021		2022		2022		2021		2022		2022
		RMB		RMB		USD		RMB		RMB		USD
Cost of revenues		(485)		246		36		70		325		47
Selling and marketing expenses		(189)		413		60		2,785		1,388		201
General and administrative expenses		4,245		3,165		459		14,840		12,296		1,783
Research and development expenses		341		977		142		1,408		2,528		367

 

 

TARENA INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except share data and per ADS data)
		For the Three Months Ended December 31,						Fiscal Year Ended December 31,
		2021 Unaudited		2022 Unaudited		2022 Unaudited		2021 Unaudited		2022 Unaudited		2022 Unaudited
		RMB		RMB		USD		RMB		RMB		USD
GAAP Cost of revenues		327,689		230,067		33,357		1,201,419		1,056,043		153,112
Share-based compensation expense in cost of revenues		-485		246		36		70		325		47
Non-GAAP Cost of revenues		328,174		229,821		33,321		1,201,349		1,055,718		153,065
GAAP Selling and marketing expenses		221,847		145,301		21,067		878,130		642,937		93,217
Share-based compensation expense in selling and marketing expenses		(189)		413		60		2,785		1,388		201
Non-GAAP Selling and marketing expenses		222,036		144,888		21,007		875,345		641,549		93,016
GAAP General and administrative expenses		132,465		153,556		22,264		569,985		604,028		87,576
Share-based compensation expense in general and administrative expenses		4,245		3,165		459		14,840		12,296		1,783
Non-GAAP General and administrative expenses		128,220		150,391		21,805		555,145		591,732		85,793
GAAP Research and development expenses		33,664		28,088		4,072		106,098		72,028		10,443
Share-based compensation expense in research and development expenses		341		977		142		1,408		2,528		367
Non-GAAP Research and development expenses		33,323		27,111		3,930		104,690		69,500		10,076
Operating income/(loss)		(60,364)		(4,568)		(663)		(369,112)		93,038		13,489
Share-based compensation expenses		3,912		4,801		697		19,103		16,537		2,398
Non-GAAP Operating income/(loss)		(56,452)		233		34		(350,009)		109,575		15,887
Net income/(loss)		(182,549)		(17,704)		(2,568)		(475,780)		85,233		12,357
Share-based compensation expenses		3,912		4,801		697		19,103		16,537		2,398
Non-GAAP Net income/(loss)		(178,637)		(12,903)		(1,871)		(456,677)		101,770		14,755
Less: Net income/(loss) attributable to non-controlling interests		(75)		802		116		(1,233)		1,713		248
Non-GAAP net income/(loss) attributable to Class A and Class B ordinary shareholders		(178,562)		(13,705)		(1,987)		(455,444)		100,057		14,507
Non-GAAP net income/(loss) per ADS(b)
Basic(b)		(15.78)		(1.27)		(0.18)		(40.48)		9.15		1.33
Diluted(b)		(15.78)		(1.27)		(0.18)		(40.48)		8.67		1.26
Weighted average number of ordinary shares outstanding used in calculating Non-GAAP net income/loss per ADS(c)
Basic		56,587,227		53,856,656		53,856,656		56,260,925		54,657,222		54,657,222
Diluted		56,587,227		53,856,656		53,856,656		56,260,925		57,730,672		57,730,672

 

Notes:

(a)  There was no tax impact of share-based compensation expenses for the fourth quarter of 2022 and 2021, respectively.

(b)  The Non-GAAP net income/(loss) per ADS is computed using Non-GAAP net income/(loss) attributable to ordinary shareholders and the same number of ordinary shares are used in GAAP basic and diluted net income/(loss) per ADS calculation.

(c)  Each ADS represents five Class A ordinary shares. The weighted average number of ADS and earnings per ADS have been retrospectively adjusted to reflect the ADS ratio change from one ADS representing one Class A ordinary share to one ADS representing five Class A ordinary shares, which became effective on December 23, 2021.

 

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SOURCE Tarena International, Inc.

FAQ

What were Tarena's net revenues for Q4 2022?

Tarena's net revenues for Q4 2022 were RMB552.4 million (US$80.1 million), a decrease of 15.7% year-over-year.

How did Tarena perform financially in the fiscal year 2022?

In fiscal year 2022, Tarena reported net revenues of RMB2,468.1 million (US$357.8 million), a 3.4% increase, with net income of RMB85.2 million (US$12.4 million).

What is the forecast for Tarena's Q1 2023 revenues?

For Q1 2023, Tarena expects revenues to be in the range of RMB365 million to RMB380 million, indicating a decrease of 39.1% to 41.5% compared to Q1 2022.

What was the enrollment change for Tarena in Q4 2022?

Total student enrollment in Tarena's IT-focused supplementary STEAM education increased by 17.0% to 177,000 in Q4 2022.