Sunlands Technology Group Announces Unaudited Fourth Quarter and Full Year 2019 Financial Results

March 27, 2020
Q4 net revenues decreased by 3.4% year-over-year
Q4 gross billings (non-GAAP) decreased by 15.5% year-over-year
Q4 new student enrollments[1] decreased by 22.6% year-over-year

BEIJING, March 27, 2020 /PRNewswire/ -- Sunlands Technology Group (NYSE: STG) ("Sunlands" or the "Company"), a leader in China's online post-secondary and professional education, today announced its unaudited financial results for the fourth quarter ended December 31, 2019.

[1] New student enrollments for a given period refers to the total number of orders placed by students that newly enroll in at least one course during that period (including those students that enroll and then terminate their enrollment with us, excluding orders of our low-price courses). In June 2019, we introduced low-price courses, including "mini courses" and "RMB1 courses," to strengthen our competitiveness and improve customer experience. We offer such low-price courses mainly in the formats of recorded videos or short live streaming.

Fourth Quarter 2019 Financial and Operational Snapshots

  • Net revenues were RMB549.7 million (US$79.0 million), representing a 3.4% decrease year-over-year.
  • Gross billings (non-GAAP) were RMB642.0 million (US$92.2 million), representing a 15.5% decrease year-over-year.
  • Gross profit was RMB448.2 million (US$64.4 million), representing an 8.6% decrease year-over-year.
  • Net loss was RMB139.5 million (US$20.0 million), representing a 24.0% decrease year-over-year. Net loss margin, defined as net loss as a percentage of net revenues, decreased to 25.4% from 32.3% in the fourth quarter of 2018.
  • New student enrollments were 92,718, representing a 22.6% decrease year-over-year.
  • As of December 31, 2019, the Company's deferred revenue balance was RMB3,228.8 million (US$ 463.8 million).

Full Year 2019 Financial and Operational Snapshots

  • Net revenues were RMB2,193.9 million (US$315.1 million), representing a 11.1% increase year-over-year.
  • Gross billings (non-GAAP) were RMB2,358.5 million (US$338.8 million), representing a 26.6% decrease year-over-year.
  • Gross profit was RMB1,797.6 million (US$258.2 million), representing a 9.4% increase year-over-year.
  • Net loss was RMB395.2 million (US$56.8 million), representing a 57.4% decrease year-over-year. Net loss margin, defined as net loss as a percentage of net revenues, decreased to 18.0% from 47.0% in the full year 2018.
  • New student enrollments were 363,013, representing a 31.0% decrease from the full year 2018.

"In the fourth quarter of 2019, we continued to focus on our multi-pronged strategy for student acquisition and retention. Our efforts centered around the further development and differentiation of our products and services through the application of big data analytics and AI technology. This has allowed us to produce significant operational benefits to both our employees and students, facilitate our digital transformation, and further strengthen our data security and risk control capabilities," said Mr. Tongbo Liu, Chief Executive Officer of Sunlands. "In order to satisfy the diverse needs of our students, we also continued broadening our online course offerings, with more choices for master's-oriented and professional certificate programs. Our master's-oriented programs accounted for 19.8% of total gross billings in the fourth quarter of 2019, significantly higher compared with 7.8% in the same period a year ago. These initiatives, coupled with and our solid track record of pass rates, position us well to capture the strong long run growth opportunity in the online post-secondary and professional education market."

Mr. Steven Yipeng Li, Chief Financial Officer of Sunlands, said, "Our net revenues were RMB549.7 million in the fourth quarter of 2019, in line with our guidance. Our gross billings and new student enrollments declined 15.5% and 22.6%, respectively, year-over-year, primarily as a result of slowing macroeconomic growth in China and adjustment of marketing strategies in view of challenges in student acquisition cost. During the fourth quarter, we continued to pursue a balanced approach to grow revenue and improve profitability, by executing our student acquisition strategy while continually streamlining our cost structure. Our administrative expenses, as well as sales and marketing expenses decreased by 30.9% and 10.2%, respectively, compared with the same quarter last year. Our cost efficiency improvement measures led to a reduction in net loss in the fourth quarter, to RMB139.5 million, 24.0% lower compared with a loss of RMB183.7 million in fourth quarter of 2018. Looking ahead into 2020, we are optimistic that our dedication to persistent product and service upgrades will continue to bring value to our customers, and ultimately our shareholders."

Financial Results for the Fourth Quarter of 2019

Net Revenues

In the fourth quarter of 2019, net revenues decreased by 3.4% to RMB549.7 million (US$79.0 million) from RMB568.8 million in the fourth quarter of 2018. The decrease was mainly due to the decrease of gross billings in 2019 compared with 2018.

Cost of Revenues

Cost of revenues increased by 29.3% to RMB101.5 million (US$14.6 million) in the fourth quarter of 2019 from RMB78.5 million in the fourth quarter of 2018, which was primarily due to an increase in our insurance-related costs as we began to offer a bundled service including an integrated online education service package with insurance coverage for tuition refund. Our insurance-related costs refer to the premium that we pay for the insurance in order to deliver such integrated online education service package purchased by students.

Gross Profit

Gross profit decreased by 8.6% to RMB448.2 million (US$64.4 million) in the fourth quarter of 2019 from RMB490.3 million in the fourth quarter of 2018.

Operating Expenses

In the fourth quarter of 2019, operating expenses were RMB599.0 million (US$86.0 million), representing a 14.4% decrease from RMB699.7 million in the fourth quarter of 2018.

Sales and marketing expenses decreased by 10.2% to RMB476.1 million (US$68.4 million) in the fourth quarter of 2019 from RMB530.1 million in the fourth quarter of 2018. The decrease was mainly due to reduced marketing spending, reflective of disciplined, prudent cost management, and the decrease in expenses related to sales and marketing personnel.

General and administrative expenses decreased by 30.9% to RMB98.6 million (US$14.2 million) in the fourth quarter of 2019 from RMB142.6 million in the fourth quarter of 2018. The decrease was mainly due to the decrease in office and compensation expenses.

Product development expenses decreased by 9.9% to RMB24.3 million (US$3.5 million) in the fourth quarter of 2019 from RMB27.0 million in the fourth quarter of 2018. The decrease was primarily due to a decrease in the number of employees and compensation incurred related to our product and technology development personnel during the quarter.

Net Loss

Net loss for the fourth quarter of 2019 was RMB139.5 million (US$20.0 million), compared with RMB183.7 million in the fourth quarter of 2018.

Basic and Diluted Net Loss Per Share

Basic and diluted net loss per share was RMB20.46 (US$2.94) in the fourth quarter of 2019.

Cash and Cash Equivalents and Short-term Investments

As of December 31, 2019, the Company had RMB1,402.2 million (US$201.4 million) of cash and cash equivalents and RMB217.6 million (US$31.3 million) of short-term investments, compared with RMB1,248.8 million of cash and cash equivalents and RMB1,028.6 million of short-term investments as of December 31, 2018.

Deferred Revenue

As of December 31, 2019, the Company had a deferred revenue balance of RMB3,228.8 million (US$463.8 million), compared with RMB3,286.0 million as of December 31, 2018.

Capital Expenditures

Capital expenditures were incurred primarily in connection with purchases of buildings and IT infrastructure equipment necessary to support Sunlands' operations. Capital expenditures were RMB10.4 million (US$1.5 million) in the fourth quarter of 2019, compared with RMB263.1 million in the fourth quarter of 2018.

Financial Results for the Year 2019

Net Revenues

In 2019, net revenues increased by 11.1% to RMB2,193.9 million (US$315.1 million) from RMB1,974.0 million in the year of 2018. The increase was mainly driven by the growth in the number of students in 2019 compared to 2018.

Cost of Revenues

Cost of revenues increased by 20.0% to RMB396.3 million (US$56.9 million) in the year of 2019 from RMB330.4 million in 2018, which was primarily due to an increase in our insurance-related costs as we began to offer a bundled service including an integrated online education service package with insurance coverage for tuition refund. Our insurance-related costs refer to the premium that we pay for the insurance in order to deliver such integrated online education service package purchased by students. 

Gross Profit

Gross profit increased by 9.4% to RMB1,797.6 million (US$258.2 million) from RMB1,643.6 million in 2018.

Operating Expenses

In the year of 2019, operating expenses were RMB2,257.3 million (US$324.2 million), representing a 15.5% decrease from RMB2,672.5 million in the year of 2018.

Sales and marketing expenses decreased by 16.7% to RMB1,792.3 million (US$257.4 million) in 2019 from RMB2,152.8 million in 2018. The decrease was mainly due to reduced marketing spend, reflective of disciplined, prudent cost management, and a decrease in expenses related to sales and marketing personnel.

General and administrative expenses decreased by 18.1% to RMB363.3 million (US$52.2 million) in 2019 from RMB443.7 million in 2018.

Product development expenses increased by 33.8% to RMB101.7 million (US$14.6 million) in 2019 from RMB76.0 million in 2018.

Net Loss

Net loss for 2019 was RMB395.2 million (US$56.8 million), compared with RMB927.0 million in 2018.

Basic and Diluted Net Loss Per Share

Basic and diluted net loss per share was RMB57.81 (US$ 8.30) in 2019, compared with RMB147.27 in 2018.

Capital Expenditures

Capital expenditures were incurred primarily in connection with purchases of buildings and IT infrastructure equipment necessary to support Sunlands' operations. Capital expenditures were RMB25.5 million (US$3.7 million) in 2019, compared with RMB518.4 million in 2018.

Outlook

For the first quarter of 2020, Sunlands currently expects net revenues to be between RMB540.0 million to RMB560.0 million, which would represent a decrease of 4.3% to 0.7% year-over-year.

The above outlook is based on the 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 substantial uncertainty.

Exchange Rate

The Company's business is primarily conducted in China and all revenues are denominated in Renminbi ("RMB"). This announcement contains currency conversions of RMB amounts into U.S. dollars ("US$") solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.9618 to US$1.00, the effective noon buying rate for December 31, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2019, or at any other rate.

Conference Call and Webcast

Sunlands' management team will host a conference call at 7:30 AM U.S. Eastern Time, (7:30 PM Beijing/Hong Kong time) on March 27, 2020, following the quarterly results announcement.

The dial-in details for the live conference call are:

International:

1-412-902-4272

US toll free:

1-888-346-8982

Canada toll free:

1-855-669-9657

Mainland China toll free:

400-120-1203

Hong Kong toll free:

800-905-945

Hong Kong:

852-3018-4992

Please dial in 10 minutes before the call is scheduled to begin. When prompted, ask to be connected to the call for "Sunlands Technology Group." Participants will be required to state their name and company upon entering the call.

A live webcast and archive of the conference call will be available on the Investor Relations section of Sunlands' website at http://www.sunlands.investorroom.com/.

A replay of the conference call will be available 1 hour after the end of the conference call until April 3, 2020.

International: 

1-412-317-0088

US toll free:

1-877-344-7529

Canada toll free:

855-669-9658

Replay access code:

10140418

About Sunlands

Sunlands Technology Group (NYSE: STG) ("Sunlands" or the "Company"), formerly known as Sunlands Online Education Group, is the leader in China's online post-secondary and professional education. With a one to many, live streaming platform, Sunlands offers various degree and diploma-oriented post-secondary courses as well as online professional courses and educational content, to help students prepare for professional certification exams and attain professional skills. Students can access its services either through PC or mobile applications. The Company's online platform cultivates a personalized, interactive learning environment by featuring a virtual learning community and a vast library of educational content offerings that adapt to the learning habits of its students. Sunlands offers a unique approach to education research and development that organizes subject content into Learning Outcome Trees, the Company's proprietary knowledge management system. Sunlands has a deep understanding of the educational needs of its prospective students and offers solutions that help them achieve their goals.

About Non-GAAP Financial Measures

We use gross billings and EBITDA, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes.

We define gross billings for a specific period as the total amount of cash received for the sale of course packages, net of the total amount of refunds paid in such period. Our management uses gross billings as a performance measurement because we generally bill our students for the entire course tuition at the time of sale of our course packages and recognize revenue proportionally over a period. EBITDA is defined as net loss excluding depreciation and amortization, interest expense, interest income, and income tax expenses. We believe that gross billings and EBITDA provide valuable insight into the sales of our course packages and the performance of our business.

These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, their most directly comparable financial measure prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP measure has been provided in the tables included below. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP financial measures. As gross billings and EBITDA have material limitations as an analytical metric and may not be calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider gross billings and EBITDA as a substitute for, or superior to, their respective most directly comparable financial measures prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

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. Sunlands 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 statements about Sunlands' beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that 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: Sunlands' goals and strategies; its expectations regarding demand for and market acceptance of its brand and services; its ability to retain and increase student enrollments; its ability to offer new courses and educational content; its ability to improve teaching quality and students' learning results; its ability to improve sales and marketing efficiency and effectiveness; its ability to engage, train and retain new faculty members; its future business development, results of operations and financial condition; its ability to maintain and improve technology infrastructure necessary to operate its business; competition in the online education industry in China; relevant government policies and regulations relating to Sunlands' corporate structure, business and industry; and general economic and business condition in China Further information regarding these and other risks, uncertainties or factors is included in the Sunlands' 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 Sunlands does not undertake any obligation to update such information, except as required under applicable law.

For investor and media enquiries, please contact:

Yingying Liu
IR Director
Tel: +86 182 5691 2232
Email: ir@sunlands.com 

The Piacente Group, Inc. 
Brandi Piacente
Tel: +1-212-481-2050
Email: sunlands@tpg-ir.com

Ross Warner
Tel: +86-10-6508-0677
Email: sunlands@tpg-ir.com  

 

 

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

(Amounts in thousands, except for share and per share data, or otherwise noted)

 
   
   

As of December 31,

 

As of December 31,

   

2018

 

2019

   

RMB

 

RMB

 

US$

ASSETS

           

Current assets

           

     Cash and cash equivalents

 

1,248,810

 

1,402,226

 

201,417

     Short-term investments

 

1,028,564

 

217,640

 

31,262

     Prepaid expenses and other current assets

 

124,908

 

180,881

 

25,982

     Deferred costs, current

 

180,657

 

243,447

 

34,969

Total current assets

 

2,582,939

 

2,044,194

 

293,630

Non-current assets

           

     Property and equipment, net

 

559,511

 

545,675

 

78,381

     Intangible assets, net

 

1,369

 

1,176

 

169

     Right-of-use assets

 

-

 

598,991

 

86,040

     Deferred costs, non-current

 

146,610

 

205,488

 

29,517

     Long-term investments

 

30,009

 

40,026

 

5,749

     Deferred tax assets

 

-

 

85,513

 

12,283

     Other non-current assets

 

418,700

 

447,639

 

64,299

Total non-current assets

 

1,156,199

 

1,924,508

 

276,438

TOTAL ASSETS

 

3,739,138

 

3,968,702

 

570,068

             

LIABILITIES AND SHAREHOLDERS' DEFICIT

           
             

LIABILITIES

           

Current liabilities

           

Accrued expenses and other current liabilities (including accrued expenses

           

        and other current liabilities of the consolidated VIEs without recourse to

           

        Sunlands Technology Group of RMB241,204 and RMB209,727 as of

           

        December 31, 2018 and December 31, 2019, respectively)

 

455,284

 

435,225

 

62,516

Deferred revenue, current (including deferred revenue, current of the consolidated VIEs

           

        without recourse to Sunlands Technology Group of RMB1,765,085 and

           

        RMB1,162,938 as of December 31, 2018 and December 31, 2019, respectively)

 

1,765,085

 

1,670,076

 

239,891

Lease liabilities, current (including lease liabilities, current of the consolidated VIEs

           

        without recourse to Sunlands Technology Group of nil and

           

        RMB22,659 as of December 31, 2018 and December 31, 2019, respectively)

 

-

 

40,236

 

5,780

Payables to acquire buildings (including payables to acquire buildings of the

           

        consolidated VIEs without recourse to Sunlands Technology Group of nil and nil

           

        as of December 31, 2018, and December 31, 2019, respectively)

 

61,540

 

61,540

 

8,840

Long-term debt, current (including long-term debt, current of the consolidated VIEs

           

        without recourse to Sunlands Technology Group of nil and nil as of December

           

         31, 2018 and December 31, 2019, respectively)

 

32,500

 

32,500

 

4,668

Total current liabilities

 

2,314,409

 

2,239,577

 

321,695

             
               

 

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-continued

(Amounts in thousands, except for share and per share data, or otherwise noted)

 
   

As of December 31,

 

As of December 31,

   

2018

 

2019

   

RMB

 

RMB

 

US$

Non-current liabilities

           

Deferred revenue, non-current (including deferred revenue, non-current of the

           

consolidated VIEs without recourse to Sunlands Technology Group of

           

RMB1,520,940 and RMB1,096,482 as of December 31, 2018 and December 31,

           

2019, respectively)

 

1,520,940

 

1,558,694

 

223,892

Lease liabilities, non-current (including lease liabilities, non-current of the

           

consolidated VIEs without recourse to Sunlands Technology Group of

           

nil and RMB358,467 as of December 31, 2018 and December 31,

           

2019, respectively)

 

-

 

616,246

 

88,518

    Deferred tax liabilities(including deferred tax liabilities of the consolidated

           

VIEs without recourse to Sunlands Technology Group of nil and RMB4,415 as of

           

December 31, 2018 and December 31, 2019, respectively)

 

-

 

87,954

 

12,634

Other non-current liabilities (including other non-current liabilities of the consolidated

           

VIEs without recourse to Sunlands Technology Group of RMB135 and RMB135 as of

           

December 31, 2018 and December 31, 2019, respectively)

 

17,147

 

11,469

 

1,647

Long-term debt, non-current (including long-term debt, non-current of the consolidated

           

VIEs without recourse to Sunlands Technology Group of nil and nil as of

           

December 31, 2018 and December 31, 2019, respectively)

 

225,625

 

193,125

 

27,741

Total non-current liabilities

 

1,763,712

 

2,467,488

 

354,432

TOTAL LIABILITIES

 

4,078,121

 

4,707,065

 

676,127

 

SHAREHOLDERS' DEFICIT

           

    Class A ordinary shares (par value of US$0.00005, 796,062,195 shares

           

authorized; 1,818,383 and 1,830,183 shares issued as of December 31, 2018

           

and December 31, 2019, respectively; 1,773,301 and 1,728,006 shares

           

outstanding as of December 31, 2018 and December 31, 2019, respectively)

 

1

 

1

 

-

    Class B ordinary shares (par value of US$0.00005, 826,389 shares

           

authorized; 826,389 and 826,389 shares issued and outstanding

           

as of December 31, 2018 and December 31, 2019, respectively)

 

-

 

-

 

-

Class C ordinary shares (par value of US$0.00005, 203,111,416 shares

           

authorized; 4,265,286 and 4,258,686 shares issued and outstanding

           

as of December 31, 2018 and December 31, 2019, respectively)

 

1

 

1

 

-

    Treasury stock

 

-

 

-

 

-

    Additional paid-in capital

 

2,391,822

 

2,363,999

 

339,567

    Accumulated deficit

 

(2,849,770)

 

(3,244,587)

 

(466,056)

    Accumulated other comprehensive income

 

118,827

 

142,435

 

20,460

Total Sunlands Technology Group shareholders' deficit

 

(339,119)

 

(738,151)

 

(106,029)

Noncontrolling interest

 

136

 

(212)

 

(30)

TOTAL SHAREHOLDERS' DEFICIT

 

(338,983)

 

(738,363)

 

(106,059)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT

 

3,739,138

 

3,968,702

 

570,068

             

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except for share and per share data, or otherwise noted)

 
             
   

For the Three Months Ended December 31,

   

2018

 

2019

   

RMB

 

RMB

 

US$

Net revenues

 

568,799

 

549,722

 

78,963

Cost of revenues

 

(78,515)

 

(101,512)

 

(14,581)

Gross profit

 

490,284

 

448,210

 

64,382

             

Operating expenses

           

     Sales and marketing expenses

 

(530,100)

 

(476,090)

 

(68,386)

     Product development expenses

 

(26,956)

 

(24,295)

 

(3,490)

     General and administrative expenses

 

(142,613)

 

(98,603)

 

(14,163)

Total operating expenses

 

(699,669)

 

(598,988)

 

(86,039)

Loss from operations

 

(209,385)

 

(150,778)

 

(21,657)

Interest income

 

23,421

 

9,203

 

1,320

Interest expense

 

(2,171)

 

(3,365)

 

(483)

Other income, net

 

1,179

 

6,894

 

990

Loss before income tax expenses

 

(186,956)

 

(138,046)

 

(19,830)

Income tax expenses

 

-

 

(2,440)

 

(350)

Gain from equity method investments

 

3,288

 

949

 

136

Net loss

 

(183,668)

 

(139,537)

 

(20,044)

             

Less: Net loss attributable to noncontrolling interest

 

(1)

 

(74)

 

(11)

             

Net loss attributable to Sunlands Technology Group

 

(183,667)

 

(139,463)

 

(20,033)

Net loss per share attributable to ordinary shareholders of

           

 Sunlands Technology Group:

           

     Basic and diluted

 

(26.68)

 

(20.46)

 

(2.94)

Weighted average shares used in calculating net loss

           

    per ordinary share:

           

     Basic and diluted

 

6,883,286

 

6,815,041

 

6,815,041

             

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands)

             
   

For the Three Months Ended December 31,

   

2018

 

2019

   

RMB

 

RMB

 

US$

Net loss

 

(183,668)

 

(139,537)

 

(20,044)

Other comprehensive income/(loss), net of tax effect of nil:

           

Change in cumulative foreign currency translation adjustments

 

1,820

 

(33,578)

 

(4,823)

Total comprehensive loss

 

(181,848)

 

(173,115)

 

(24,867)

Less: comprehensive loss attributable to noncontrolling

           

interest

 

(1)

 

(74)

 

(11)

Comprehensive loss attributable to Sunlands Technology

           

Group

 

(181,847)

 

(173,041)

 

(24,856)

 

 

 

 

SUNLANDS TECHNOLOGY GROUP

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(Amounts in thousands)

 
   

For the Three Months Ended December 31,

   

2018

 

2019

   

RMB

 

RMB

Net revenues

 

568,799

 

549,722

Less: other revenues

 

(697)

 

(11,137)

Add: tax and surcharges

 

21,879

 

35,746

Add: ending deferred revenue

 

3,286,025

 

3,228,770

Add: ending refund liability

 

-

 

128,478

Less: beginning deferred revenue

 

(3,116,225)

 

(3,214,564)

Less: beginning refund liability

 

-

 

(75,046)

Gross billings (non-GAAP)

 

759,781

 

641,969

         
         
         

Net loss

 

(183,668)

 

(139,537)

Add: income tax expenses

 

-

 

2,440

depreciation and amortization

 

8,013

 

9,343

interest expense

 

2,171

 

3,365

Less: interest income

 

(23,421)

 

(9,203)

EBITDA (non-GAAP)

 

(196,905)

 

(133,592)

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except for share and per share data, or otherwise noted)

             
   

For the Years Ended December 31,

   

2018

 

2019

   

RMB

 

RMB

 

US$

Net revenues

 

1,973,985

 

2,193,902

 

315,134

Cost of revenues

 

(330,376)

 

(396,316)

 

(56,927)

Gross profit

 

1,643,609

 

1,797,586

 

258,207

             

Operating expenses

           

     Sales and marketing expenses

 

(2,152,830)

 

(1,792,285)

 

(257,446)

     Product development expenses

 

(76,022)

 

(101,717)

 

(14,611)

     General and administrative expenses

 

(443,691)

 

(363,307)

 

(52,186)

Total operating expenses

 

(2,672,543)

 

(2,257,309)

 

(324,243)

Loss from operations

 

(1,028,934)

 

(459,723)

 

(66,036)

Interest income

 

70,355

 

60,166

 

8,642

Interest expense

 

(2,171)

 

(14,312)

 

(2,056)

Other income, net

 

32,090

 

21,280

 

3,057

Loss before income tax expenses

 

(928,660)

 

(392,589)

 

(56,393)

Income tax expenses

 

-

 

(2,440)

 

(350)

Gain/(loss) from equity method investments

 

1,710

 

(136)

 

(20)

Net loss

 

(926,950)

 

(395,165)

 

(56,763)

             

Less: Net income/(loss) attributable to noncontrolling interest

 

72

 

(348)

 

(50)

             

Net loss attributable to Sunlands Technology Group

 

(927,022)

 

(394,817)

 

(56,713)

Net loss per share attributable to ordinary shareholders of

           

 Sunlands Technology Group:

           

     Basic and diluted

 

(147.27)

 

(57.81)

 

(8.30)

Weighted average shares used in calculating net loss

           

    per ordinary share:

           

     Basic and diluted

 

6,294,870

 

6,830,058

 

6,830,058

             

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands)

             
   

For the Years Ended December 31,

   

2018

 

2019

   

RMB

 

RMB

 

US$

Net loss

 

(926,950)

 

(395,165)

 

(56,763)

Other comprehensive income, net of tax effect of nil:

           

Change in cumulative foreign currency translation adjustments

 

127,586

 

23,608

 

3,391

Total comprehensive loss

 

(799,364)

 

(371,557)

 

(53,372)

Less: comprehensive income/(loss) attributable to noncontrolling

           

interest

 

72

 

(348)

 

(50)

Comprehensive loss attributable to Sunlands Technology

           

Group

 

(799,436)

 

(371,209)

 

(53,322)

 

 

 

 

SUNLANDS TECHNOLOGY GROUP

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(Amounts in thousands)

 
   

For the Years Ended December 31,

   

2018

 

2019

   

RMB

 

RMB

Net revenues

 

1,973,985

 

2,193,902

Less: other revenues

 

(6,961)

 

(23,481)

Add: tax and surcharges

 

71,779

 

123,472

Add: ending deferred revenue

 

3,286,025

 

3,228,770

Add: ending refund liability

 

-

 

128,478

Less: beginning deferred revenue

 

(2,110,428)

 

(3,286,025)

Less: beginning refund liability

 

-

 

(6,625)

Gross billings (non-GAAP)

 

3,214,400

 

2,358,491

         
         
         

Net loss

 

(926,950)

 

(395,165)

Add: income tax expenses

 

 

2,440

depreciation and amortization

 

25,778

 

37,223

interest expense

 

2,171

 

14,312

Less: interest income

 

(70,355)

 

(60,166)

EBITDA (non-GAAP)

 

(969,356)

 

(401,356)

 

 

 

SOURCE Sunlands Technology Group