BEIJING, March 5, 2021 /PRNewswire/ -- China Online
Education Group ("51Talk" or the "Company") (NYSE:COE), a leading
online education platform in China, with core expertise in English
education, announced its unaudited financial results for the fourth
quarter and fiscal year ended December 31,
2020.
Fourth Quarter 2020 Financial and
Operating Highlights
- Net revenues were RMB535.1
million (US$82.0 million), a
34.7% increase from RMB397.2 million
for the fourth quarter of 2019.
- Gross margin was 72.7%, compared with 72.1% for the fourth
quarter of 2019.
- GAAP net income was RMB31.8
million, compared with GAAP net income RMB0.8 million for the fourth quarter of
2019.
- Non-GAAP net income[1] was RMB38.6 million, compared with non-GAAP net
income RMB4.5 million for the fourth
quarter of 2019.
- Operating cash inflow was RMB188.5
million (US$28.9 million),
compared with RMB167.1 million cash
inflow for the fourth quarter of 2019.
- Cash, cash equivalents, time deposits and short-term
investments balance reached RMB1,727.7
million (US$264.8 million) as
of December 31, 2020.
- Gross billings[2] were RMB720.9 million (US$110.5
million), a 23.8% increase from RMB582.3 million for the fourth quarter of
2019.
Fiscal Year 2020 Financial
and Operating Highlights
- Net revenues were RMB2,054.1
million (US$314.8 million), a
38.9% increase from RMB1,478.5
million for the fiscal year 2019.
- Gross margin was 71.7%, compared with 70.2% for the fiscal year
2019.
- GAAP net income was RMB147.0
million(US$22.5 million),
compared with GAAP net loss RMB104.4
million for the fiscal year 2019.
- Non-GAAP net income was RMB173.7
million (US$26.6 million),
compared with non-GAAP net loss RMB87.7
million for the fiscal year 2019.
- Operating cash inflow was RMB719.3
million (US$110.2 million),
compared with RMB397.9 million cash
inflow for the fiscal year 2019.
- Gross billings were RMB2,722.6
million (US$417.3 million), a
30.9% increase from RMB2,080.6
million for the fiscal year 2019.
[1] For more information on non-GAAP
financial measures, please see the section of "Use of Non-GAAP
Financial Measures" and the table captioned "Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP Measures" set forth
in this press release.
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[2] Gross billings for a specific
period, which is one of the Company's key operating data, is
defined as the total amount of cash received for the sale of course
packages and services in such period, net of the total
amount of refunds in such period.
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Key Financial and Operating Data
|
For the three
months ended
|
|
For the year
ended
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Y-o-Y
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Y-o-Y
|
|
2019
|
|
2020
|
|
Change
|
|
2019
|
|
2020
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenues (in RMB millions)
|
397.2
|
|
535.1
|
|
34.7%
|
|
1478.5
|
|
2,054.1
|
|
38.9%
|
K-12 mass-market
one-on-one
|
320.0
|
|
479.4
|
|
49.8%
|
|
1131.3
|
|
1,773.2
|
|
56.7%
|
K-12 small class
offering
|
26.4
|
|
20.5
|
|
(22.5%)
|
|
112.8
|
|
97.1
|
|
(13.9%)
|
Adult
offering
|
38.8
|
|
27.9
|
|
(28.1%)
|
|
168.5
|
|
130.8
|
|
(22.4%)
|
K-12 American Academy
one-on-one
|
12.0
|
|
7.3
|
|
(39.2%)
|
|
65.9
|
|
53.0
|
|
(19.6%)
|
|
|
|
|
|
|
|
|
|
|
|
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Gross
Billings (in RMB millions)
|
582.3
|
|
720.9
|
|
23.8%
|
|
2,080.6
|
|
2,722.6
|
|
30.9%
|
K-12 mass-market
one-on-one
|
501.7
|
|
667.8
|
|
33.1%
|
|
1,814.5
|
|
2,536.0
|
|
39.8%
|
K-12 small class offering
|
40.0
|
|
26.4
|
|
(34.0%)
|
|
96.6
|
|
90.9
|
|
(5.9%)
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Adult
offering
|
34.5
|
|
25.8
|
|
(25.2%)
|
|
131.3
|
|
91.7
|
|
(30.2%)
|
K-12 American Academy
one-on-one
|
6.1
|
|
0.9
|
|
(85.2%)
|
|
38.2
|
|
4.0
|
|
(89.5%)
|
Active
students[3] (in thousands)
|
257.2
|
|
353.8
|
|
37.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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[3] An
"active student" for a specified period refers to a student
who booked at least one paid lesson, excluding those students who
only
attended paid live broadcasting lessons or trial lessons. A student
taking both one-on-one and small class lessons is counted as
one
active student.
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"The growth momentum from the beginning of 2020 continued into
the fourth quarter," said Mr. Jack Jiajia
Huang, Founder, Chairman and Chief Executive Officer of
51Talk. "Reflecting solid strategic execution in our online K-12
English mass-market offerings, fourth quarter net revenues grew
34.7% year-over-year to reach RMB535.1
million. We also recorded historically high operating cash
flow of RMB188.5 million. In
addition, the number of new paying students grew over 70.0%
year-over-year driven by our effective curriculum and improving
service quality, while our active students reached 353,800, up
37.6% compared with the same period in 2019.
"Despite 2020 presenting an array of unforeseen challenges, our
strong pre-established foundational groundwork allowed us to not
only manage this tumultuous period but in fact benefit from the
shifting environment as we took advantage of new opportunities.
Full year net revenues grew 38.9% to RMB2.1
billion. 2020 operating cash flow rose 80.8% to reach a
historical high of RMB719.3 million,
compared with RMB397.9 million in
2019, further strengthening our financial position for future
growth. We also witnessed remarkable growth in new paying students
which increased 60.0% year-over-year.
"We are also very excited about our recent acquisition of GKid's
product portfolio and industry-leading AI technologies. GKid offers
innovative AI-driven online English courses through highly
interactive animation and picture books for children. With product
offerings intended for those between the ages of three and eight,
this acquisition both extends our addressable market and broadens
our product and curriculum portfolio. We foresee many potential
collaboration and integration opportunities between our platform
and GKid's products and industry-leading AI technologies, leading
to both new products and product improvements which will better
serve our students.
"As we head further into 2021, we are focusing on user growth
and enhanced brand promotions to drive market share expansion. To
better attract and retain users, we will continue optimizing
learning experiences through upgraded product offerings and an
enriched curriculum mix. We are developing innovative AI-powered
robotic tutors to help students review core knowledge points with
the aim of enhancing overall learning efficiency. To make our
courses more interesting and engaging to young children, we are
also integrating more interactive features into our textbooks.
Additionally, we are diversifying our curriculum portfolio in order
to provide a holistic learning experience, through investing in
R&D, upgrading services to students, and expanding our teacher
operations. Finally, we target to further increase our branding and
marketing efforts to heighten brand awareness as we enter the next
phase of growth.
"We are also delighted to have successfully delivered over 50
million one-on-one online English lessons, including free trials,
between November 2019 and
December 2020 - a rapid increase that
took our cumulative deliveries since our inception in 2011 to more
than 150 million, and a strong testament to our accelerating growth
trajectory. As 51Talk continues to grow, we are confident our
balanced growth strategy will continue to yield solid value for our
stakeholders," concluded Mr. Huang.
"I'm extremely proud that we concluded a turbulent 2020 with
solid operating and financial results, evidenced by sustained
revenue growth and the first profitable year in our company
history," said Mr. Min Xu, Chief
Financial Officer of 51Talk. "We recorded Non-GAAP net income of
RMB173.7 million for 2020, compared
to a Non-GAAP net loss of RMB87.7
million in 2019. In 2021, investment will be channeled
towards the development of our curriculum, technology and brand as
we look to capitalize on market dynamics, drive user growth and
achieve the leading market position."
Fourth Quarter 2020 Financial Results
Net Revenues
Net revenues for the fourth quarter of 2020 were RMB535.1 million (US$82.0 million), a 34.7% increase from
RMB397.2 million for the same
quarter last year. The increase was primarily attributed to an
increase in the number of active students. The number of active
students in the fourth quarter of 2020 was 353,800, a 37.6%
increase from 257,200 for the same quarter last year.
Net revenues from one-on-one offerings for the fourth quarter of
2020 were RMB514.6 million
(US$78.9 million), a 38.8% increase
from RMB370.8 million for the same
quarter last year. Net revenues from small class offering for the
fourth quarter of 2020 were RMB20.5
million (US$3.1 million), a
22.5% decrease from RMB 26.4 million
for the same quarter last year.
Cost of Revenues
Cost of revenues for the fourth quarter of 2020 was RMB146.1 million (US$22.4 million), a 32.1% increase from
RMB110.6 million for the same quarter
last year. The increase was primarily driven by an increase in
total service fees paid to teachers, mainly due to an
increased number of paid lessons.
As part of Chinese government's effort to ease the burden of
businesses affected by the coronavirus (COVID-19) outbreak, the
Ministry of Human Resources and Social Security, the Ministry of
Finance and the State Taxation Administration, temporarily reduced
and exempted employer obligation on social security contributions
from February 2020. The impact of
coronavirus policies on cost of revenues was RMB0.2 million in the fourth quarter. Excluding
the impact, total cost of revenues for the fourth quarter would
have been RMB146.3 million
(US$22.4 million), representing a
32.3% year-over-year increase.
Cost of revenues of one-on-one offerings for the fourth quarter
of 2020 was RMB137.8 million
(US$21.1 million), a 40.4% increase
from RMB98.2 million for the same
quarter last year. Cost of revenues of small class offering for the
fourth quarter of 2020 was RMB8.3
million (US$1.3 million), a
33.5% decrease from RMB12.5 million
for the same quarter last year.
Gross Profit and Gross Margin
Gross profit for the fourth quarter of 2020 was RMB388.9 million (US$59.6 million), a 35.8% increase from
RMB286.5 million for the same quarter
last year.
Gross margin for the fourth quarter of 2020 was 72.7%, compared
with 72.1% for the same quarter last year.
Excluding the positive impact of the coronavirus related social
security contribution exemption, gross profit and gross margin for
the fourth quarter would have been RMB388.7
million (US$59.6 million) and
72.6% respectively.
Gross margin for one-on-one offerings for the fourth quarter of
2020 was 73.2%, compared with 73.5% for the same quarter last
year. 51Talk's small class offering gross margin for the
fourth quarter of 2020 was 59.5%, compared with 52.7% for the
fourth quarter of 2019. The increase was mainly due
to an optimization of the small class offering portfolio that
reduced the number of lower margined products.
Operating Expenses
Total operating expenses for the fourth quarter of 2020 were
RMB385.7 million (US$59.1 million), an 33.7% increase
from RMB288.4 million for the
same quarter last year. The increase was mainly due to an increase
in sales and marketing expenses.
Sales and marketing expenses for the fourth quarter of 2020 were
RMB284.5 million (US$43.6 million), a 40.5% increase from
RMB202.5 million for the same
quarter last year. The increase was mainly due to higher
sales personnel costs related to increases in the number of sales
and marketing personnel and higher marketing and branding expenses.
Excluding share-based compensation expenses, non-GAAP sales and
marketing expenses for the fourth quarter of 2020 were RMB282.6 million (US$43.3 million), a 40.2% increase from
RMB201.6 million for the same quarter
last year. Non-GAAP sales and marketing expenses, excluding
branding expenses, were 33.6% of the gross billings for the fourth
quarter of 2020, compared with 30.4% for the same quarter last year. The
impact of coronavirus policy related the exemption of employer
obligation on social security contributions on sales and marketing
expense was RMB5.3 million in the
fourth quarter. Excluding the impact, sales and marketing expenses
for the fourth quarter would have been RMB289.8 million (US$44.4
million), representing a 43.1% year-over-year increase.
Product development expenses for the fourth quarter of 2020 were
RMB44.6 million (US$6.8 million), a 20.3% increase from
RMB37.0 million for the same
quarter last year. The increase was primarily due to higher product
development personnel costs related to increases in both the number
of personnel and average salary. Excluding share-based compensation
expenses, non-GAAP product development expenses for the fourth
quarter of 2020 were RMB43.3 million
(US$6.6 million), a 17.6% increase
from RMB36.8 million for the same
quarter last year. The impact of coronavirus policy related to the
exemption of employer obligation on social security contributions
on product development expense was RMB1.5
million in the fourth quarter. Excluding the impact, product
development expense for the fourth quarter would have been
RMB46.1 million (US$7.1 million), representing a 24.6%
year-over-year increase.
General and administrative expenses for the fourth quarter of
2020 were RMB56.6 million
(US$8.7 million), a 15.8%
increase from RMB48.9 million
for the same quarter last year. The increase was primarily due to
higher general and administrative personnel costs related to
increases in both the number of personnel and average salary.
Excluding share-based compensation expenses, non-GAAP general and
administrative expenses for the fourth quarter of 2020 were
RMB53.0 million (US$8.1 million), a 14.4% increase from
RMB46.3 million for the same
quarter last year. The impact of coronavirus policy related to the
exemption of employer obligation on social security contributions
on general and administrative expense was RMB1.2 million in the fourth quarter. Excluding
the impact, general and administrative expense for the fourth
quarter would have been RMB57.8
million (US$8.9 million),
representing a 18.2% year-over-year increase.
Other income
As part of Chinese government's effort to ease the burden of
businesses affected by the coronavirus
(COVID-19) outbreak, the State Taxation Administration (STA)
exempted a wide range of consumer services from value added tax
(VAT) from January 2020. The income
obtained by taxpayers from providing essential services shall be
exempted from VAT. The favorable impact of coronavirus relief
policies was RMB7.5 million in the
fourth quarter.
On September 30, 2019, Ministry of
Finance and the State Taxation Administration announced that from
October 1, 2019 to December 31, 2021, the taxpayers engaging in the
provision of essential services are allowed to deduct an extra 15%
of the deductible input value-added tax for the current period from
the payable value-added tax. The impact of the policy of additional
value-added tax credit for the income generated by the essential
services provided by enterprises was RMB0.3
million in the fourth quarter.
Income/(loss) from Operations
Operating income for the fourth quarter of 2020 was RMB11.0 million (US$1.7
million), compared with loss from operations of
RMB1.9 million for the same quarter
last year. Operating margin for the fourth quarter was 2.1%,
compared with operating margin of negative 0.5% for the same
quarter last year.
Non-GAAP operating income for the fourth quarter of 2020 was
RMB17.8 million (US$2.7 million), compared with non-GAAP
operating income of RMB1.8 million
for the same quarter last year. Non-GAAP operating margin for the
fourth quarter was 3.3%, compared with non-GAAP operating margin of
0.5% for the same quarter last year.
The favorable impact of coronavirus relief policies was
RMB15.7 million in the fourth
quarter. Excluding the favorable impact, loss from operations
and non-GAAP operating income for the fourth quarter would have
been RMB4.7 million (US$0.7 million) and RMB2.1
million (US$0.3 million)
respectively, representing negative 0.9% GAAP operating margin and
0.4% non-GAAP operating margin.
Net income
Net income for the fourth quarter of 2020 was RMB31.8 million (US$4.9
million), compared with net income of RMB 0.8 million for the same quarter last year.
Net margin for the fourth quarter was 5.9%, compared with net
margin of 0.2% for the same quarter last year.
Non-GAAP net income for the fourth quarter of 2020 was
RMB38.6 million (US$5.9 million), compared with non-GAAP
net income of RMB4.5 million for
the same quarter last year. Non-GAAP net margin for the fourth
quarter was 7.2%, compared with non-GAAP net margin of 1.1% for the
same quarter last year.
The favorable impact of coronavirus relief policies was
RMB15.7 million in the fourth
quarter. Excluding the favorable impact, net income and non-GAAP
net income for the fourth quarter would have been RMB16.1 million (US$2.5
million) and RMB22.9 million
(US$3.5 million) respectively,
representing net margin of 3.0% and 4.3% respectively.
Income tax benefits for the
fourth quarter of 2020 were
RMB8.9 million, including the
releasing of valuation allowance for deferred tax assets of
RMB9.7 million.
Basic net income per American depositary share
("ADS") attributable to ordinary shareholders for the fourth
quarter of 2020 was RMB1.48
(US$0.23), compared with basic net
income per ADS of RMB0.04 for
the same quarter last year. Diluted net income per American
depositary share ("ADS") attributable to ordinary shareholders
for the fourth quarter of 2020 was RMB1.39 (US$0.21),
compared with diluted net income per ADS of RMB0.04 for the same quarter last year. Each
ADS represents 15 Class A ordinary shares.
Non-GAAP basic net income per ADS attributable to
ordinary shareholders for the fourth quarter of 2020 was
RMB1.79 (US$0.27), compared with non-GAAP basic net
income per ADS attributable to ordinary shareholders of
RMB0.22 for the same quarter
last year. Non-GAAP diluted net income per
ADS attributable to ordinary shareholders for the fourth
quarter of 2020 was RMB1.68
(US$0.26), compared
with non-GAAP diluted net income per ADS attributable to
ordinary shareholders of RMB0.20 for the same quarter last year.
The favorable impact of coronavirus relief policies was
RMB15.7 million in the fourth
quarter. Excluding the favorable impact, basic net income per
American depositary share ("ADS") attributable to ordinary
shareholders for the fourth quarter of 2020 was RMB0.75 (US$0.11)
and non-GAAP basic net income per American depositary share ("ADS")
attributable to ordinary shareholders for the fourth quarter of
2020 was RMB1.06 (US$0.16), respectively. Excluding the favorable
impact, diluted net income per American depositary share ("ADS")
attributable to ordinary shareholders for the fourth quarter of
2020 was RMB0.70 (US$0.11) and non-GAAP diluted net income per
American depositary share ("ADS") attributable to ordinary
shareholders for the fourth quarter of 2020 was RMB1.00 (US$0.15),
respectively.
Balance Sheet
As of December 31, 2020, the
Company had total cash, cash equivalents, time deposits and
short-term investments of RMB1,727.7 million (US$264.8 million), compared with
RMB1,053.4 million as of December 31, 2019. As a part of cash, cash
equivalents, time deposits and short-term investments, the Company
had non-current time deposits of RMB414.0
million (US$63.4 million),
compared with RMB113.4 million as of
December 31, 2019.
The Company had advances from students[4]
(current and non-current) of RMB2,721.0
million (US$417.0 million) as
of December 31, 2020, compared with
RMB2,186.6 million as of December 31, 2019.
[4] "Advances from students", which
is defined as the amount of obligation to transfer good or service
to students or business partners for which consideration has been
received from students in advance. The deposits from students
are also presented in the total amount of "advances from
students".
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Fiscal Year 2020 Financial
Results
Net Revenues
Net revenues for 2020 were RMB2,054.1
million (US$314.8 million), a
38.9% increase from RMB1,478.5
million for 2019. The increase was primarily attributed to
an increase in the number of active students.
Net revenues from one-on-one offerings for 2020 were
RMB1,957.0 million (US$299.9 million), a 43.3% increase from
RMB1,365.7 million for 2019. Net
revenues from small class offerings for 2020 were RMB97.1 million (US$14.9
million), compared with RMB112.8
million for 2019.
Cost of Revenues
Cost of revenues for 2020 was RMB580.4 million (US$89.0 million), a 31.9% increase from
RMB439.9 million for 2019. The
increase was primarily driven by an increase in total service fees
paid to teachers, mainly due to an increased number of paid
lessons.
As part of Chinese government's effort to ease the burden of
businesses affected by the coronavirus (COVID-19) outbreak, the
Ministry of Human Resources and Social Security, the Ministry of
Finance and the State Taxation Administration temporarily reduced
and exempted employer obligation on social security contributions
for February 2020. The impact of
coronavirus policies on cost of revenues was RMB1.3 million for 2020. Excluding the impact,
total cost of revenues for 2020 would have been RMB581.7 million (US$89.1
million), representing a 32.2% year-over-year increase.
Cost of revenues of one-on-one offerings for 2020 was
540.7 million (US$82.9 million),
an 40.0% increase from RMB386.1
million for 2019. Cost of revenues of small class offerings
for 2020 was RMB39.7 million
(US$6.1 million), a 26.2% decrease
from RMB53.8 million for 2019.
Gross Profit and Gross Margin
Gross profit for 2020 was RMB1,473.7 million (US$225.9 million), a 41.9% increase from
RMB1,038.6 million for 2019.
Gross margin for 2020 was 71.7%, compared with 70.2% for
2019.
Excluding the positive impact of the coronavirus related social
security contribution exemption, gross profit and gross margin for
2020 would have been RMB1,472.4
million (US$225.7 million) and
71.7% respectively.
One-on-one offerings gross margin for 2020 was 72.4%,
compared with 71.7% for 2019. 51Talk's small class offering
gross margin for 2020 was 59.1%, compared with 52.3% for
2019.
Operating Expenses
Total operating expenses for 2020 were RMB1,412.7 million (US$216.5 million), a 23.3% increase
from RMB1,146.1 million for
2019. The increase was mainly the result of the increases in sales
and marketing expenses.
Sales and marketing expenses for 2020 were RMB1,035.6 million (US$158.7 million), an 30.7% increase from
RMB792.6 million for
2019. The increase was mainly due to higher payroll
due to increasing sales personnel and higher marketing and
branding expenses. Excluding share-based compensation expenses,
non-GAAP sales and marketing expenses for 2020 were
RMB1,026.8 million (US$157.4 million), an 30.0% increase from
RMB789.6 million for 2019.
Non-GAAP sales and marketing expenses, excluding branding expenses,
were 32.1% of the gross billings for 2020, compared with 32.3% for
last year. The impact of coronavirus policy related to the
exemption of employer obligation on social security contributions
on sales and marketing expense was RMB21.1
million for 2020. Excluding the impact, sales and marketing
expenses for 2020 would have been RMB1,056.7
million (US$161.9 million),
representing a 33.3% year-over-year increase.
Product development expenses for 2020 were RMB162.8 million (US$25.0
million), a 3.4% increase from RMB157.5 million for 2019. Excluding share-based
compensation expenses, non-GAAP product
development expenses for 2020 were RMB158.4 million (US$24.3
million), a 2.8% increase from RMB154.0 million for 2019. The impact of
coronavirus policy related to the exemption of employer obligation
on social security contributions on product development expense was
RMB6.0 million for 2020. Excluding
the impact, product development expense for 2020 would have been
RMB168.8 million (US$25.9 million), representing an 7.2%
year-over-year increase.
General and administrative expenses for 2020 were RMB214.2million (US$32.8
million), a 9.3% increase from RMB196.0 million for 2019. The increase was
primarily due to higher general and administrative personnel costs
related to increases in the number of personnel and the higher
professional services fees in connection with the follow-on public
offering. Excluding share-based compensation expenses, non-GAAP
general and administrative expenses for 2020 were RMB200.8 million (US$30.8
million), an 8.1% increase from RMB185.7 million for 2019. The impact of
coronavirus policy related to the exemption of employer obligation
on social security contributions on general and administrative
expense was RMB4.8 million for 2020.
Excluding the impact, general and administrative expense for 2020
would have been RMB219.0 million
(US$33.6 million), representing an
11.7% year-over-year increase.
Other income
As part of Chinese government's effort to ease the burden of
businesses affected by the coronavirus
(COVID-19) outbreak, the State Taxation Administration (STA)
exempted a wide range of consumer services from value added tax
(VAT) from January 2020. The income
obtained by taxpayers from providing essential services shall be
exempted from VAT. The favorable impact of coronavirus relief
policies was RMB32.3 million in
2020.
On September 30, 2019, Ministry of
Finance and the State Taxation Administration announced that from
October 1, 2019 to December 31, 2021, the taxpayers engaging in the
provision of essential services are allowed to deduct an extra 15%
of the deductible input tax for the current period from the payable
tax. The impact of the policy of additional value-added tax credit
for the income generated by the essential services provided by
enterprises was RMB11.1 million in
2020.
Income/(loss) from Operations
Operating income for 2020 was RMB104.4 million (US$16.0 million), compared with loss
from operations of RMB107.6
million for 2019. Operating margin for 2020 was 5.1%,
compared with operating margin of negative 7.3% for 2019.
Non-GAAP operating income for 2020 was RMB131.2 million (US$20.1 million), compared with loss
from operations of RMB90.8 million for 2019. Non-GAAP
operating margin for 2020 was 6.4%, compared with non-GAAP
operating margin of negative 6.1% for 2019.
The favorable impact of coronavirus relief policies was
RMB65.5 million in 2020. Excluding
the favorable impact, operating income and non-GAAP operating
income for 2020 would have been RMB38.9
million (US$6.0 million) and
RMB65.7 million (US$10.1 million) respectively, representing 1.9%
GAAP operating magin and 3.2% non-GAAP operating margin.
Net income/(loss)
Net income for 2020 was RMB147.0 million (US$22.5 million), compared with net
loss of RMB104.4 million for 2019.
Net margin for 2020 was 7.2%, compared with net margin of negative
7.1% for 2019.
Non-GAAP net income for 2020 was RMB173.7 million (US$26.6 million), compared with net
loss of RMB87.7 million for 2019.
Non-GAAP net margin for 2020 was 8.5%, compared with non-GAAP net
margin of negative 5.9% for 2019.
The favorable impact of coronavirus relief policies was
RMB65.5 million in 2020. Excluding
the favorable impact, net income and non-GAAP net income for
2020 would have been RMB81.5 million
(US$12.5 million) and RMB108.2 million (US$16.6
million), representing net margin of 4.0% and 5.3%
respectively.
Income tax benefits for
2020 were RMB4.1 million, including the releasing of
valuation allowance for deferred tax assets of RMB9.7 million.
Basic net income per American depositary share
("ADS") attributable to ordinary shareholders for 2020 was
RMB6.90 (US$1.06), compared with basic net loss per ADS
of RMB5.08 for 2019. Diluted net
income per American depositary share ("ADS") attributable to
ordinary shareholders for 2020 was RMB6.46 (US$0.99),
compared with diluted net loss per ADS of RMB5.08 for 2019. Each ADS represents 15
Class A ordinary shares.
Non-GAAP basic net income per American depositary share
("ADS") attributable to ordinary shareholders for 2020 was
RMB8.15 (US$1.25), compared with non-GAAP basic net loss
per ADS of RMB4.27 for 2019.
Non-GAAP diluted net income per American depositary share
("ADS") attributable to ordinary shareholders for 2020 was
RMB7.63 (US$1.17), compared with non-GAAP diluted net
loss per ADS of RMB4.27 for
2019. Each ADS represents 15 Class A ordinary shares.
The favorable impact of coronavirus relief policies was
RMB65.5 million in 2020. Excluding
the favorable impact, basic net income per American depositary
share ("ADS") attributable to ordinary shareholders for 2020 was
RMB3.82 (US$0.59) and non-GAAP basic net income per
American depositary share ("ADS") attributable to ordinary
shareholders for 2020 was RMB5.08
(US$0.78), respectively. Excluding
the favorable impact, diluted net income per American depositary
share ("ADS") attributable to ordinary shareholders for 2020 was
RMB3.58 (US$0.55) and non-GAAP diluted net income per
American depositary share ("ADS") attributable to ordinary
shareholders for 2020 was RMB4.75
(US$0.73), respectively.
Outlook
For the first quarter of 2021, the Company currently
expects net revenues to be between RMB595
million and RMB600 million,
which would represent an increase of approximately 22.2% to 23.2%
from RMB487.1 million for the same
quarter last year.
The above outlook is based on current market conditions and
reflects the Company's current and preliminary estimates of market
and operating conditions and customer demand, which are all subject
to change.
Share Repurchase Program
On September 8, 2020, 51Talk
announced that its board of directors had authorized a share
repurchase program of up to US$20.0
million between September 8,
2020 and September 7, 2021. As
of March 3, 2021, the Company had
repurchased 260,530 ADSs for approximately US$6.6 million under this program.
Notes to Unaudited Financial Information
The unaudited financial information disclosed in this press
release is preliminary. The audit of the financial statements and
related notes to be included in the Company's annual report on Form
20-F for the year ended December 31,
2020 is still in progress.
Conference Call
The Company's management will host an earnings conference call
at 8:00 AM U.S. Eastern Time on
March 5, 2021 (8:00 PM
Beijing/Hong Kong time on
March 5, 2021).
Dial-in details for the earnings conference call are as
follows:
United States (toll
free):
|
1-866-264-5888
|
International:
|
1-412-317-5226
|
Mainland
China:
|
400-120-1203
|
Hong Kong (toll
free):
|
800-905-945
|
Hong Kong:
|
852-3018-4992
|
Participants should dial-in at least 5 minutes before the
scheduled start time and ask to be connected to the call for "China
Online Education Group."
Additionally, a live and archived webcast of the conference call
will be available on the Company's investor relations website at
http://ir.51talk.com.
A replay of the conference call will be accessible until
March 12, 2021, by dialing the
following telephone numbers:
United States (toll
free):
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Replay Access
Code:
|
10152865
|
About China Online Education Group
China Online Education Group (NYSE: COE) is a leading online
education platform in China, with
core expertise in English education. The Company's mission is to
make quality education accessible and affordable. The Company's
online and mobile education platforms enable students across
China to take live interactive
English lessons with overseas foreign teachers, on demand. The
Company connects its students with a large pool of highly qualified
foreign teachers that it assembled using a shared economy approach,
and employs student and teacher feedback and data analytics to
deliver a personalized learning experience to its students.
Use of Non-GAAP Financial Measures
In evaluating its business, 51Talk 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 sales and marketing expenses, non-GAAP
product development expenses, non-GAAP general and administrative
expenses, non-GAAP operating expenses, non-GAAP operating
income/(loss), non-GAAP net income/(loss), non-GAAP net
income/(loss) attributable to ordinary shareholders, and non-GAAP
net income/(loss) attributable to ordinary shareholders per share
and per ADS. To present each of these non-GAAP measures, the
Company excludes share-based compensation expenses. 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 press
release.
51Talk believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance by
excluding share-based compensation expenses that may not be
indicative of its operating performance from a cash perspective.
51Talk 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 51Talk's historical performance. 51Talk computes its
non-GAAP financial measures using the same consistent method from
quarter to quarter and from period to period. 51Talk 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 expenses that have been
and will continue to be for the foreseeable future a significant
recurring expense in the 51Talk's business. Management compensates
for these limitations by providing specific information regarding
the GAAP amounts excluded from each non-GAAP measure. The
accompanying table at the end of this press release provides more
details on the reconciliations between GAAP financial measures that
are most directly comparable to non-GAAP financial measures.
Exchange Rate Information
This announcement contains translations of certain RMB amounts
into U.S. dollars at a specified rate solely for the convenience of
the reader. Unless otherwise noted, all translations from RMB
to U.S. dollars are made at a rate of RMB6.525 to US$1.00, the rate in effect as of December 31, 2020 as certified for customs
purposes by the Federal Reserve Bank of New York.
Safe Harbor Statement
This press release contains statements that may constitute
"forward-looking" statements pursuant to the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as "will", "expects", "anticipates", "aims",
"future", "intends", "plans", "believes", "estimates", "likely to"
and similar statements. Among other things, 51Talk's business
outlook and quotations from management in this announcement, as
well as 51Talk's strategic and operational plans, contain
forward-looking statements. 51Talk may also make written or oral
forward-looking statements in its periodic reports to the
Securities and Exchange Commission ("SEC"), 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. Statements that are not historical facts, including
statements about 51Talk's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: 51Talk's goals and strategies; 51Talk's expectations
regarding demand for and market acceptance of its brand and
platform; 51Talk's ability to retain and increase its student
enrollment; 51Talk's ability to offer new courses; 51Talk's ability
to engage, train and retain new teachers; 51Talk's future business
development, results of operations and financial condition;
51Talk's ability to maintain and improve infrastructure necessary
to operate its education platform; competition in the online
education industry in China; the
expected growth of, and trends in, the markets for 51Talk's course
offerings in China; relevant
government policies and regulations relating to 51Talk's corporate
structure, business and industry; general economic and business
condition in China, the Philippines and elsewhere and assumptions
underlying or related to any of the foregoing. Further information
regarding these and other risks is included in 51Talk's filings
with the SEC. All information provided in this press release is as
of the date of this press release, and 51Talk does not undertake
any obligation to update any forward-looking statement, except as
required under applicable law.
For investor and media inquiries, please contact:
China Online Education Group
Investor Relations
+86 (10) 8342-6262
ir@51talk.com
The Piacente Group, Inc.
Brandi Piacente
+86 (10) 6508-0677
+1 (212) 481-2050
51talk@tpg-ir.com
CHINA ONLINE
EDUCATION GROUP
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
342,951
|
|
326,647
|
|
50,061
|
|
|
Time
deposits
|
|
144,093
|
|
477,408
|
|
73,166
|
|
|
Short term
investment
|
|
452,936
|
|
509,636
|
|
78,105
|
|
|
Inventory
|
|
308
|
|
1,935
|
|
297
|
|
|
Prepaid expenses and
other current assets
|
|
250,215
|
|
302,057
|
|
46,292
|
|
Total current
assets
|
|
1,190,503
|
|
1,617,683
|
|
247,921
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
20,336
|
|
21,175
|
|
3,245
|
|
|
Intangible assets,
net
|
|
9,918
|
|
20,302
|
|
3,111
|
|
|
Goodwill
|
|
4,223
|
|
4,223
|
|
647
|
|
|
Right of use
assets
|
|
56,638
|
|
98,001
|
|
15,019
|
|
|
Time
deposits
|
|
113,415
|
|
414,000
|
|
63,448
|
|
|
Deferred tax
assets
|
|
337
|
|
10,268
|
|
1,574
|
|
|
Other non-current
assets
|
|
6,447
|
|
23,896
|
|
3,662
|
|
Total non-current
assets
|
|
211,314
|
|
591,865
|
|
90,706
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
1,401,817
|
|
2,209,548
|
|
338,627
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
AND SHAREHOLDERS'
DEFICIT
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term
loan
|
|
16,578
|
|
-
|
|
-
|
|
|
Advances from
students
|
|
2,181,808
|
|
2,718,776
|
|
416,671
|
|
|
Accrued expenses and
other current liabilities
|
|
166,955
|
|
237,101
|
|
36,337
|
|
|
Lease
liability
|
|
31,550
|
|
42,949
|
|
6,582
|
|
|
Taxes
payable
|
|
21,661
|
|
19,288
|
|
2,956
|
|
Total current
liabilities
|
|
2,418,552
|
|
3,018,114
|
|
462,546
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
Advances from
students
|
|
4,783
|
|
2,270
|
|
348
|
|
|
Lease
liability
|
|
23,545
|
|
53,594
|
|
8,214
|
|
|
Other non-current
liabilities
|
|
1,595
|
|
2,508
|
|
384
|
|
Total non-current
liabilities
|
|
29,923
|
|
58,372
|
|
8,946
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
2,448,475
|
|
3,076,486
|
|
471,492
|
|
|
|
|
|
|
|
|
|
Total shareholders'
deficit
|
|
(1,046,658)
|
|
(866,938)
|
|
(132,865)
|
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' deficit
|
|
1,401,817
|
|
2,209,548
|
|
338,627
|
|
CHINA ONLINE
EDUCATION GROUP
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME/(LOSS)
|
|
|
(In thousands
except for number of shares and per share data)
|
|
|
|
|
|
|
For the three
months ended
|
|
For the year
ended
|
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Net
revenues[5]
|
|
397,154
|
|
535,074
|
|
82,004
|
|
1,478,493
|
|
2,054,095
|
|
314,804
|
|
Cost of
revenues
|
|
(110,648)
|
|
(146,134)
|
|
(22,396)
|
|
(439,923)
|
|
(580,417)
|
|
(88,953)
|
|
Gross
profit
|
|
286,506
|
|
388,940
|
|
59,608
|
|
1,038,570
|
|
1,473,678
|
|
225,851
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(202,520)
|
|
(284,493)
|
|
(43,600)
|
|
(792,591)
|
|
(1,035,620)
|
|
(158,716)
|
|
|
Product development
expenses
|
|
(37,046)
|
|
(44,577)
|
|
(6,832)
|
|
(157,505)
|
|
(162,829)
|
|
(24,955)
|
|
|
General and
administrative expenses
|
|
(48,883)
|
|
(56,626)
|
|
(8,678)
|
|
(196,029)
|
|
(214,224)
|
|
(32,831)
|
|
Total operating
expenses
|
|
(288,449)
|
|
(385,696)
|
|
(59,110)
|
|
(1,146,125)
|
|
(1,412,673)
|
|
(216,502)
|
|
Other
income
|
|
-
|
|
7,766
|
|
1,190
|
|
-
|
|
43,414
|
|
6,653
|
|
(Loss)/Income from
operations
|
|
(1,943)
|
|
11,010
|
|
1,688
|
|
(107,555)
|
|
104,419
|
|
16,002
|
|
Interest
income
|
|
5,977
|
|
11,711
|
|
1,795
|
|
17,654
|
|
38,508
|
|
5,902
|
|
Interest expense and
other expenses, net
|
|
(1,918)
|
|
193
|
|
30
|
|
(9,451)
|
|
(66)
|
|
(10)
|
|
Income/(loss) before
income tax
expenses
|
|
2,116
|
|
22,914
|
|
3,513
|
|
(99,352)
|
|
142,861
|
|
21,894
|
|
Income tax
(expenses)/benefits
|
|
(1,307)
|
|
8,905
|
|
1,365
|
|
(5,068)
|
|
4,101
|
|
629
|
|
Net income/(loss)
attributable to
ordinary shareholders
|
|
809
|
|
31,819
|
|
4,878
|
|
(104,420)
|
|
146,962
|
|
22,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary
shares used in computing basic
(loss)/income per share
|
|
311,064,347
|
|
323,458,483
|
|
323,458,483
|
|
308,364,918
|
|
319,553,690
|
|
319,553,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary
shares used in computing diluted
(loss)/income per share
|
|
337,511,364
|
|
344,354,904
|
|
344,354,904
|
|
308,364,918
|
|
341,503,118
|
|
341,503,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[5] By performing
our last year-end financial closing procedures, we discovered an
oversight in our process for evaluating the status of lessons that
caused us to overstate net revenues
during 2018 and in interim periods of 2019. The amounts were
reflecting RMB2.9 million (including RMB 2.5 million out-of-period
adjustment attributed to the year of 2018),
RMB0.8 million, RMB0.5 million and RMB0.7 million decreases to net
revenues for the three months ended March 31, 2019, June 30, 2019,
September 30, 2019 and December 31,
2019, respectively. Based on our quantitative and qualitative
analysis, we do not consider the out of period impact to be
material to our financial position or results of operations for
any
prior periods or for the quarter or year ended December 31,
2019.
|
|
|
CHINA
ONLINE EDUCATION GROUP
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME/(LOSS)
|
|
(In thousands
except for number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the year
ended
|
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per
share attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.00
|
|
0.10
|
|
0.02
|
|
(0.34)
|
|
0.46
|
|
0.07
|
|
|
Diluted
|
|
0.00
|
|
0.09
|
|
0.01
|
|
(0.34)
|
|
0.43
|
|
0.07
|
|
Net income/(loss) per
ADS attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.04
|
|
1.48
|
|
0.23
|
|
(5.08)
|
|
6.90
|
|
1.06
|
|
|
Diluted
|
|
0.04
|
|
1.39
|
|
0.21
|
|
(5.08)
|
|
6.46
|
|
0.99
|
|
Comprehensive
income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
809
|
|
31,819
|
|
4,878
|
|
(104,420)
|
|
146,962
|
|
22,523
|
|
Other
comprehensive
income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
adjustments
|
|
(4,048)
|
|
(14,319)
|
|
(2,194)
|
|
5,356
|
|
(21,087)
|
|
(3,232)
|
|
Total
comprehensive
(loss)/income
|
|
(3,239)
|
|
17,500
|
|
2,684
|
|
(99,064)
|
|
125,875
|
|
19,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expenses are included in the operating expenses as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(939)
|
|
(1,875)
|
|
(287)
|
|
(2,951)
|
|
(8,835)
|
|
(1,354)
|
|
Product development
expenses
|
|
(218)
|
|
(1,281)
|
|
(196)
|
|
(3,472)
|
|
(4,477)
|
|
(686)
|
|
General and
administrative
expenses
|
|
(2,582)
|
|
(3,636)
|
|
(557)
|
|
(10,309)
|
|
(13,422)
|
|
(2,057)
|
|
CHINA ONLINE
EDUCATION GROUP
|
Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP
Measures
|
(In
thousands except for number of shares and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the year
ended
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(202,520)
|
|
(284,493)
|
|
(43,600)
|
|
(792,591)
|
|
(1,035,620)
|
|
(158,716)
|
Less: Share-based
compensation expenses
|
|
(939)
|
|
(1,875)
|
|
(287)
|
|
(2,951)
|
|
(8,835)
|
|
(1,354)
|
Non-GAAP sales and
marketing expenses
|
|
(201,581)
|
|
(282,618)
|
|
(43,313)
|
|
(789,640)
|
|
(1,026,785)
|
|
(157,362)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
expenses
|
|
(37,046)
|
|
(44,577)
|
|
(6,832)
|
|
(157,505)
|
|
(162,829)
|
|
(24,955)
|
Less: Share-based
compensation expenses
|
|
(218)
|
|
(1,281)
|
|
(196)
|
|
(3,472)
|
|
(4,477)
|
|
(686)
|
Non-GAAP product
development expenses
|
|
(36,828)
|
|
(43,296)
|
|
(6,636)
|
|
(154,033)
|
|
(158,352)
|
|
(24,269)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
(48,883)
|
|
(56,626)
|
|
(8,678)
|
|
(196,029)
|
|
(214,224)
|
|
(32,831)
|
Less: Share-based
compensation expenses
|
|
(2,582)
|
|
(3,636)
|
|
(557)
|
|
(10,309)
|
|
(13,422)
|
|
(2,057)
|
Non-GAAP general and
administrative
expenses
|
|
(46,301)
|
|
(52,990)
|
|
(8,121)
|
|
(185,720)
|
|
(200,802)
|
|
(30,774)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
(288,449)
|
|
(385,696)
|
|
(59,110)
|
|
(1,146,125)
|
|
(1,412,673)
|
|
(216,502)
|
Less: Share-based
compensation expenses
|
|
(3,739)
|
|
(6,792)
|
|
(1,040)
|
|
(16,732)
|
|
(26,734)
|
|
(4,097)
|
Non-GAAP operating
expenses
|
|
(284,710)
|
|
(378,904)
|
|
(58,070)
|
|
(1,129,393)
|
|
(1,385,939)
|
|
(212,405)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/income from
operations
|
|
(1,943)
|
|
11,010
|
|
1,688
|
|
(107,555)
|
|
104,419
|
|
16,002
|
Less: Share-based
compensation expenses
|
|
(3,739)
|
|
(6,792)
|
|
(1,040)
|
|
(16,732)
|
|
(26,734)
|
|
(4,097)
|
Non-GAAP
income/(loss) from operations
|
|
1,796
|
|
17,802
|
|
2,728
|
|
(90,823)
|
|
131,153
|
|
20,099
|
CHINA ONLINE
EDUCATION GROUP
|
Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP
Measures
|
(In
thousands except for number of shares and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the year
ended
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expenses/(benefits)
|
|
(1,307)
|
|
8,905
|
|
1,365
|
|
(5,068)
|
|
4,101
|
|
629
|
Less: Tax impact of
Share-based compensation
expenses
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP income tax
expenses/(benefits)
|
|
(1,307)
|
|
8,905
|
|
1,365
|
|
(5,068)
|
|
4,101
|
|
629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
attributable to ordinary shareholders
|
|
809
|
|
31,819
|
|
4,878
|
|
(104,420)
|
|
146,962
|
|
22,523
|
Less: Share-based
compensation expenses, net of tax
|
|
(3,739)
|
|
(6,792)
|
|
(1,040)
|
|
(16,732)
|
|
(26,734)
|
|
(4,097)
|
Non-GAAP net
income/(loss) attributable to ordinary
shareholders
|
|
4,548
|
|
38,611
|
|
5,918
|
|
(87,688)
|
|
173,696
|
|
26,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used in
|
|
|
|
|
|
|
|
|
|
|
|
|
computing
basic income/(loss) per share
|
|
311,064,347
|
|
323,458,483
|
|
323,458,483
|
|
308,364,918
|
|
319,553,690
|
|
319,553,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used in
|
|
337,511,364
|
|
344,354,904
|
|
344,354,904
|
|
308,364,918
|
|
341,503,118
|
|
341,503,118
|
computing
diluted income/(loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income/(loss) per share attributable to ordinary
shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
basic
|
|
0.01
|
|
0.12
|
|
0.02
|
|
(0.28)
|
|
0.54
|
|
0.08
|
diluted
|
|
0.01
|
|
0.11
|
|
0.02
|
|
(0.28)
|
|
0.51
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income/(loss) per ADS attributable to ordinary
shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
basic
|
|
0.22
|
|
1.79
|
|
0.27
|
|
(4.27)
|
|
8.15
|
|
1.25
|
diluted
|
|
0.20
|
|
1.68
|
|
0.26
|
|
(4.27)
|
|
7.63
|
|
1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
ONLINE EDUCATION GROUP
|
|
|
UNAUDITED
ADDITIONAL INFORMATION
|
|
|
(In thousands
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the year
ended
|
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
370,763
|
|
514,624
|
|
78,870
|
|
1,365,706
|
|
1,957,013
|
|
299,925
|
|
Small class
offerings
|
|
26,391
|
|
20,450
|
|
3,134
|
|
112,787
|
|
97,082
|
|
14,879
|
|
Total net
revenues
|
|
397,154
|
|
535,074
|
|
82,004
|
|
1,478,493
|
|
2,054,095
|
|
314,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
(98,178)
|
|
(137,846)
|
|
(21,126)
|
|
(386,085)
|
|
(540,707)
|
|
(82,867)
|
|
Small class
offerings
|
|
(12,470)
|
|
(8,288)
|
|
(1,270)
|
|
(53,838)
|
|
(39,710)
|
|
(6,086)
|
|
Total cost of
revenues
|
|
(110,648)
|
|
(146,134)
|
|
(22,396)
|
|
(439,923)
|
|
(580,417)
|
|
(88,953)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
272,585
|
|
376,778
|
|
57,744
|
|
979,621
|
|
1,416,306
|
|
217,058
|
|
Small class
offerings
|
|
13,921
|
|
12,162
|
|
1,864
|
|
58,949
|
|
57,372
|
|
8,793
|
|
Total gross
profit
|
|
286,506
|
|
388,940
|
|
59,608
|
|
1,038,570
|
|
1,473,678
|
|
225,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
73.5%
|
|
73.2%
|
|
73.2%
|
|
71.7%
|
|
72.4%
|
|
72.4%
|
|
Small class
offerings
|
|
52.7%
|
|
59.5%
|
|
59.5%
|
|
52.3%
|
|
59.1%
|
|
59.1%
|
|
Total gross
margin
|
|
72.1%
|
|
72.7%
|
|
72.7%
|
|
70.2%
|
|
71.7%
|
|
71.7%
|
|
|
CHINA
ONLINE EDUCATION GROUP
|
|
UNAUDITED
ADDITIONAL INFORMATION
|
|
(In thousands
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the year
ended
|
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
(189,502)
|
|
(278,302)
|
|
(42,651)
|
|
(738,010)
|
|
(991,479)
|
|
(151,951)
|
|
Small class
offerings
|
|
(13,018)
|
|
(6,191)
|
|
(949)
|
|
(54,581)
|
|
(44,141)
|
|
(6,765)
|
|
Total sales and
marketing expenses[6]
|
|
(202,520)
|
|
(284,493)
|
|
(43,600)
|
|
(792,591)
|
|
(1,035,620)
|
|
(158,716)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
(32,860)
|
|
(42,260)
|
|
(6,477)
|
|
(138,291)
|
|
(150,926)
|
|
(23,131)
|
|
Small class
offerings
|
|
(4,186)
|
|
(2,317)
|
|
(355)
|
|
(19,214)
|
|
(11,903)
|
|
(1,824)
|
|
Total product
development expenses[7]
|
|
(37,046)
|
|
(44,577)
|
|
(6,832)
|
|
(157,505)
|
|
(162,829)
|
|
(24,955)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
(45,576)
|
|
(54,562)
|
|
(8,362)
|
|
(178,606)
|
|
(202,955)
|
|
(31,104)
|
|
Small class
offerings
|
|
(3,307)
|
|
(2,064)
|
|
(316)
|
|
(17,423)
|
|
(11,269)
|
|
(1,727)
|
|
Total general and
administrative expenses[8]
|
|
(48,883)
|
|
(56,626)
|
|
(8,678)
|
|
(196,029)
|
|
(214,224)
|
|
(32,831)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
(267,938)
|
|
(375,124)
|
|
(57,490)
|
|
(1,054,907)
|
|
(1,345,360)
|
|
(206,186)
|
|
Small class
offerings
|
|
(20,511)
|
|
(10,572)
|
|
(1,620)
|
|
(91,218)
|
|
(67,313)
|
|
(10,316)
|
|
Total operating
expenses
|
|
(288,449)
|
|
(385,696)
|
|
(59,110)
|
|
(1,146,125)
|
|
(1,412,673)
|
|
(216,502)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one offerings
|
|
-
|
|
7,469
|
|
1,145
|
|
-
|
|
38,683
|
|
5,928
|
|
Small
class offerings
|
|
-
|
|
297
|
|
45
|
|
-
|
|
4,731
|
|
725
|
|
Total Other
income
|
|
-
|
|
7,766
|
|
1,190
|
|
-
|
|
43,414
|
|
6,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-on-one
offerings
|
|
4,647
|
|
9,123
|
|
1,399
|
|
(75,286)
|
|
109,629
|
|
16,800
|
|
Small class
offerings
|
|
(6,590)
|
|
1,887
|
|
289
|
|
(32,269)
|
|
(5,210)
|
|
(798)
|
|
Total (loss)/income
from operations
|
|
(1,943)
|
|
11,010
|
|
1,688
|
|
(107,555)
|
|
104,419
|
|
16,002
|
|
|
|
|
|
|
[6] Share-based
compensation expenses included in the sales and marketing expenses
for one-on-one offerings and small class offerings were
RMB1,758
and RMB117 respectively for the fourth quarter of 2020, and RMB850
and RMB89 respectively for the fourth quarter of 2019.
|
|
[7] Share-based
compensation expenses, included in the product development expenses
for one-on-one offerings and small class offerings were RMB775
and RMB506 respectively for the fourth quarter of 2020, and RMB136
and RMB82 respectively for the fourth quarter of 2019.
|
|
[8] Share-based
compensation expenses, included in the general and administrative
expenses for one-on-one offerings and small class offerings
were
RMB3,592 and RMB44 respectively for the fourth quarter of 2020, and
RMB2,552 and RMB30 respectively for the fourth quarter of
2019.
|
View original
content:http://www.prnewswire.com/news-releases/china-online-education-group-announces-fourth-quarter-2020-results-301241379.html
SOURCE China Online Education Group