Sunlands Know-how Group Broadcasts Unaudited Fourth Quarter and Full Yr 2022 Monetary Outcomes

This fall internet revenues decreased by 1.7% year-over-year

This fall gross billings (non-GAAP) decreased by 23.3% year-over-year

This fall internet revenue reached RMB181.0 million

BEIJING, March 24, 2023 /PRNewswire/ — Sunlands Know-how Group (NYSE: STG) (“Sunlands” or the “Firm”), a frontrunner in China’s on-line post-secondary {and professional} schooling, at the moment introduced its unaudited monetary outcomes for the fourth quarter ended December 31, 2022.

Fourth Quarter 2022 Monetary and Operational Snapshots

• Web revenues had been RMB578.6 million (US$83.9 million), representing a 1.7% lower year-over-year.
• Gross billings (non-GAAP) had been RMB370.8 million (US$53.8 million), representing a 23.3% lower year-over-year.
• Gross revenue was RMB503.3 million (US$73.0 million), representing a 0.8% improve year-over-year.
• Web revenue was RMB181.0 million (US$26.2 million), in contrast with internet revenue of RMB150.8 million within the fourth quarter of 2021.
• Web revenue margin, outlined as internet revenue as a proportion of internet revenues, elevated to 31.3% from 25.6% within the fourth quarter of 2021.
• New pupil enrollments^[1] had been 161,348, representing a 48.2% improve year-over-year.
• As of December 31, 2022, the Firm’s deferred income stability was RMB1,690.9 million (US$245.2 million).

Full Yr 2022 Monetary and Operational Snapshots

• Web revenues had been RMB2,323.1 million (US$336.8 million), in contrast with RMB2,507.8 million in 2021.
• Gross billings (non-GAAP) had been RMB1,496.7 million (US$217.0 million), in contrast with RMB1,970.0 million in 2021.
• Gross revenue was RMB1,975.0 million (US$286.3 million), in contrast with RMB2,131.6 million in 2021.
• Web revenue was RMB643.0 million (US$93.2 million), in contrast with internet revenue of RMB212.4 million in 2021.
• Web revenue margin, outlined as internet revenue as a proportion of internet revenues, elevated to 27.7% from 8.5% within the 12 months 2021.
• New pupil enrollments had been 534,280, in contrast with 434,228 in 2021.

“Due to unwavering execution of our balanced progress and profitability technique, we concluded 2022 with sustained progress in each new pupil enrollments and our backside line within the fourth quarter,” mentioned Mr. Tongbo Liu, Chief Government Officer of Sunlands. “We maintained our disciplined value administration practices and streamlined operations to spice up our effectivity and profitability, driving our quarterly internet revenue to RMB181.0 million within the fourth quarter and our full-year internet revenue to RMB643.0 million, greater than triple that of 2021.”

“In the course of the quarter, we sharpened our strategic concentrate on diversifying our course content material, enhancing our course and repair high quality, and bettering pupil acquisition effectivity, resulting in 48.2% year-over-year and 19.5% quarter-over-quarter will increase in new pupil enrollments. Furthermore, we additional pursued the alternatives fueling the continued market demand for ability and curiosity programs by increasing our skilled certification preparation, skilled expertise and curiosity applications, which yielded encouraging outcomes. Along with our continued product combine optimization, we’ve got been prudently exploring new monetization alternatives to drive our future progress. As we progress into 2023, we stay dedicated to refining our services to satisfy a wider age group’s studying wants whereas amplifying our operational effectivity enchancment efforts to help our long-term, sustainable progress,” concluded Mr. Liu.

Ms. Selena Lu Lv, Chief Monetary Officer of Sunlands, added, “Amid a persistently difficult macro surroundings, our internet revenues got here in at RMB578.6 million within the fourth quarter, representing a 1.7% year-over-year lower however beating the excessive finish of our steering vary by 7.1%. As we continued to execute value discount and effectivity optimization measures, we efficiently introduced our fourth quarter working bills down by 16.1% year-over-year, which contributed to enhanced profitability as mirrored in our 20.0% year-over-year improve in internet revenue. Our internet revenue margin additionally expanded additional to 31.3% within the fourth quarter from 25.6% in the identical interval of 2021 and 29.2% within the prior quarter. In 2023, we are going to proceed to deepen our technique balancing enterprise progress and profitability as we try to create incremental worth for our stakeholders.”

Monetary Outcomes for the fourth quarter of 2022

Web Revenues

Within the fourth quarter of 2022, internet revenues decreased by 1.7% to RMB578.6 million (US$83.9 million) from RMB588.9 million within the fourth quarter of 2021. The lower was primarily pushed by the decline in gross billings over the latest quarters.

Value of Revenues

Value of revenues decreased by 15.8% to RMB75.3 million (US$10.9 million) within the fourth quarter of 2022 from RMB89.4 million within the fourth quarter of 2021. The lower was primarily because of declined compensation bills associated to headcount discount of our value of revenues personnel, together with academics and mentors.

Gross Revenue

Gross revenue elevated by 0.8% to RMB503.3 million (US$73.0 million) within the fourth quarter of 2022 from RMB499.5 million within the fourth quarter of 2021.

Working Bills

Within the fourth quarter of 2022, working bills had been RMB336.0 million (US$48.7 million), representing a 16.1% lower from RMB400.5 million within the fourth quarter of 2021.

Gross sales and advertising bills decreased by 19.7% to RMB272.5 million (US$39.5 million) within the fourth quarter of 2022 from RMB339.4 million within the fourth quarter of 2021. The lower was primarily because of: (i) decrease spending on branding and advertising actions; (ii) declined compensation bills associated to headcount discount of our gross sales and advertising personnel and (iii) declined rental bills as a result of early termination of sure lease contracts.

Common and administrative bills elevated by 11.1% to RMB56.1 million (US$8.1 million) within the fourth quarter of 2022 from RMB50.5 million within the fourth quarter of 2021. The rise was primarily because of the rise in skilled service charges.

Product growth bills decreased by 30.8% to RMB7.4 million (US$1.1 million) within the fourth quarter of 2022 from RMB10.7 million within the fourth quarter of 2021. The lower was primarily because of declined compensation bills associated to headcount discount of our product growth personnel.

Different Earnings/Different Expense

Different revenue was RMB4.9 million (US$0.7 million) within the fourth quarter of 2022, in contrast with different expense of RMB3.1 million within the fourth quarter of 2021.

Web Earnings

Web revenue for the fourth quarter of 2022 was RMB181.0 million (US$26.2 million), in contrast with RMB150.8 million within the fourth quarter of 2021.

Primary and Diluted Web Earnings Per Share

Primary and diluted internet revenue per share was RMB26.03 (US$3.77) within the fourth quarter of 2022.

Money, Money Equivalents, Restricted Money and Brief-term Investments

As of December 31, 2022, the Firm had RMB757.4 million (US$109.8 million) of money, money equivalents and restricted money and RMB70.5 million (US$10.2 million) of short-term investments, in contrast with RMB676.7 million of money, money equivalents and restricted money and RMB184.2 million of short-term investments as of December 31, 2021.

Deferred Income

As of December 31, 2022, the Firm had a deferred income stability of RMB1,690.9 million (US$245.2 million), in contrast with RMB2,348.2 million as of December 31, 2021.

Capital Expenditures

Capital expenditures had been incurred primarily in reference to info expertise (“IT”) infrastructure tools and leasehold enhancements essential to help the Firm’s operations. Capital expenditures had been RMB0.7 million (US$0.1 million) within the fourth quarter of 2022, in contrast with RMB5.2 million within the fourth quarter of 2021.

Monetary Outcomes for the Yr 2022

Web Revenues

In 2022, internet revenues decreased by 7.4% to RMB2,323.1 million (US$336.8 million) from RMB2,507.8 million within the 12 months of 2021.

Value of Revenues

Value of revenues decreased by 7.5% to RMB348.2 million (US$50.5 million) within the 12 months of 2022 from RMB376.2 million within the 12 months of 2021.

Gross Revenue

Gross revenue decreased by 7.4% to RMB1,975.0 million (US$286.3 million) from RMB2,131.6 million in 2021.

Working Bills

Within the 12 months of 2022, working bills had been RMB1,358.0 million (US$196.9 million), representing a 32.7% lower from RMB2,017.4 million in 2021.

Gross sales and advertising bills decreased by 35.4% to RMB1,129.5 million (US$163.8 million) in 2022 from RMB1,748.4 million in 2021. The lower was primarily because of: (i) decrease spending on branding and advertising actions; and (ii) declined compensation bills associated to  headcount discount of our gross sales and advertising personnel.

Common and administrative bills decreased by 10.6% to RMB185.7 million (US$26.9 million) in 2022 from RMB207.6 million in 2021. The lower was primarily because of a lower in compensation bills associated to  headcount discount of our basic and administrative personnel.

Product growth bills decreased by 30.2% to RMB42.8 million (US$6.2 million) in 2022 from RMB61.3 million in 2021. The lower was primarily because of declined compensation bills associated to headcount discount of our product growth personnel.

Different Income

Different revenue for 2022 was RMB24.5 million (US$3.6 million), in contrast with RMB39.2 million in 2021. The lower was primarily as a result of value-added tax exemption provided by the related tax authorities as a part of the nationwide COVID-19 aid effort got here to an finish in April 2021.

Web Earnings

Web revenue for 2022 was RMB643.0 million (US$93.2 million), in contrast with internet revenue of RMB212.4 million in 2021.

Primary and Diluted Web Earnings Per Share

Primary and diluted internet revenue per share was RMB94.14 (US$13.65) in 2022, in contrast with RMB32.56 in 2021.

Capital Expenditures

Capital expenditures had been incurred primarily in reference to IT infrastructure tools and leasehold enchancment essential to help the Firm’s operations. Capital expenditures had been RMB3.2 million (US$0.5 million) in 2022, in contrast with RMB16.5 million in 2021.

Outlook

For the primary quarter of 2023, Sunlands at present expects internet revenues to be between RMB530 million to RMB550 million, which might signify a lower of 10.3% to 13.6% year-over-year. The above outlook is predicated on the present market circumstances and displays the Firm’s present and preliminary estimates of market and working circumstances and buyer demand, that are all topic to substantial uncertainty.

Change Price

The Firm’s enterprise is primarily carried out in China and all revenues are denominated in Renminbi (“RMB”). This announcement incorporates foreign money conversions of RMB quantities into U.S. {dollars} (“US$”) solely for the comfort of the reader. Until in any other case famous, all translations from RMB to US$ are made at a fee of RMB6.8972 to US$1.00, the efficient midday shopping for fee for December 30, 2022 as set forth within the H.10 statistical launch of the Federal Reserve Board. No illustration is made that the RMB quantities may have been, or may very well be, transformed, realized or settled into US$ at that fee on December 30, 2022, or at every other fee.

Convention Name and Webcast

Sunlands’ administration staff will host a convention name at 7:30 AM U.S. Jap Time, (7:30 PM Beijing/Hong Kong time) on March 24, 2023, following the quarterly outcomes announcement.

The dial-in particulars for the stay convention name are:

Please dial in 10 minutes earlier than the decision is scheduled to start. When prompted, ask to be related to the decision for “Sunlands Know-how Group.” Members can be required to state their identify and firm upon coming into the decision.

A stay webcast and archive of the convention name can be out there on the Investor Relations part of Sunlands’ web site at http://www.sunlands.investorroom.com/.

A replay of the convention name can be out there 1 hour after the top of the convention name till March 24, 2023, by dialing the next phone numbers:

About Sunlands

Sunlands Know-how Group (NYSE: STG) (“Sunlands” or the “Firm”), previously often known as Sunlands On-line Training Group, is the chief in China’s on-line post-secondary {and professional} schooling. With a one to many, stay streaming platform, Sunlands presents varied diploma and diploma-oriented post-secondary programs in addition to on-line skilled programs and academic content material, to assist college students put together for skilled certification exams and attain skilled expertise. College students can entry its companies both via PC or cell functions. The Firm’s on-line platform cultivates a personalised, interactive studying surroundings by that includes a digital studying group and an enormous library of academic content material choices that adapt to the training habits of its college students. Sunlands presents a singular strategy to schooling analysis and growth that organizes topic content material into Studying Consequence Bushes, the Firm’s proprietary data administration system. Sunlands has a deep understanding of the academic wants of its potential college students and presents options that assist them obtain their objectives.

About Non-GAAP Monetary Measures

We use gross billings, EBITDA, non-GAAP working value and expense, non-GAAP loss/revenue from operations and Non-GAAP internet loss/revenue per share, every a non-GAAP monetary measure, in evaluating our working outcomes and for monetary and operational decision-making functions.

We outline gross billings for a selected interval as the overall amount of money acquired for the sale after all packages, internet of the overall quantity of refunds paid in such interval. Our administration makes use of gross billings as a efficiency measurement as a result of we typically invoice our college students for the complete course tuition on the time of sale of our course packages and acknowledge income proportionally over a interval. EBITDA is outlined as internet loss/revenue excluding depreciation and amortization, curiosity expense, curiosity revenue, and revenue tax bills/profit. We consider that gross billings and EBITDA present beneficial perception into the gross sales of our course packages and the efficiency of our enterprise.

These non-GAAP monetary measures shouldn’t be thought-about in isolation from, or as an alternative to, their most instantly comparable monetary measure ready in accordance with GAAP. A reconciliation of the historic non-GAAP monetary measures to their respective most instantly comparable GAAP measure has been offered within the tables included under. Traders are inspired to evaluate the reconciliation of the historic non-GAAP monetary measures to their respective most instantly comparable GAAP monetary measures. As gross billings, EBITDA, working value and bills excluding share-based compensation bills, basic and administrative bills excluding share-based compensation bills, gross sales and advertising bills excluding share-based compensation bills, product growth bills excluding share-based compensation bills, non-GAAP internet loss/revenue exclude share-based compensation bills, and primary and diluted internet loss/revenue per share excluding share-based compensation bills have materials limitations as an analytical metric and will not be calculated in the identical method by all corporations, it will not be similar to different equally titled measures utilized by different corporations. In gentle of the foregoing limitations, you shouldn’t contemplate gross billings and EBITDA as an alternative to, or superior to, their respective most instantly comparable monetary measures ready in accordance with GAAP. We encourage buyers and others to evaluate our monetary info in its entirety and never depend on a single monetary measure.

Protected Harbor Assertion

This press launch incorporates forward-looking statements made underneath the “protected harbor” provisions of Part 21E of the Securities Change Act of 1934, as amended, and the U.S. Non-public Securities Litigation Reform Act of 1995. These forward-looking statements may be recognized by terminology similar to “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “assured” and related statements. Sunlands may make written or oral forward-looking statements in its stories filed with or furnished to the U.S. Securities and Change Fee, in its annual report back to shareholders, in press releases and different written supplies and in oral statements made by its officers, administrators or workers to 3rd events. Any statements that aren’t historic information, together with statements about Sunlands’ beliefs and expectations, are forward-looking statements that contain elements, dangers and uncertainties that would trigger precise outcomes to vary materially from these within the forward-looking statements. Such elements and dangers embody, however not restricted to the next: Sunlands’ objectives and methods; its expectations relating to demand for and market acceptance of its model and companies; its skill to retain and improve pupil enrollments; its skill to supply new programs and academic content material; its skill to enhance instructing high quality and college students’ studying outcomes; its skill to enhance gross sales and advertising effectivity and effectiveness; its skill to interact, practice and retain new college members; its future enterprise growth, outcomes of operations and monetary situation; its skill to take care of and enhance expertise infrastructure essential to function its enterprise; competitors within the on-line schooling trade in China; related authorities insurance policies and rules referring to Sunlands’ company construction, enterprise and trade; and basic financial and enterprise situation in China Additional info relating to these and different dangers, uncertainties or elements is included within the Sunlands’ filings with the U.S. Securities and Change Fee. All info offered on this press launch is present as of the date of the press launch, and Sunlands doesn’t undertake any obligation to replace such info, besides as required underneath relevant regulation.

For investor and media enquiries, please contact:

Sunlands Know-how Group
Investor Relations
Electronic mail: [email protected]  

SOURCE Sunlands Know-how Group