Boqii Announces Fiscal 2021 Third Quarter Unaudited Financial Results

SHANGHAI, March 3, 2021 /PRNewswire/ -- Boqii Holding Limited ("Boqii" or the "Company") (NYSE: BQ), a leading pet-focused platform in China, today announced its unaudited financial results for the third quarter of fiscal year 2021 (the quarter ended December 31, 2020).

Fiscal Q3 2021 Operational and Financial Highlights

• Total revenues were RMB312.9 million (US$48.0 million), an increase of 23.2% from RMB254.1 million in the same quarter of fiscal year 2020.
• Net loss was RMB81.9 million (US$12.6 million), compared to net loss of RMB56.4 million in the same quarter of fiscal year 2020.
• Adjusted net loss was RMB30.5 million (US$4.7million), representing a decrease of 49.8% from the adjusted net loss of RMB60.8 million in the same quarter of fiscal year 2020.
• EBITDA^[1] was a loss of RMB79.2 million (US$12.1 million), representing a 109.2% setback from a loss of RMB37.9 million in the same quarter of fiscal year 2020.
• Total GMV^[2] was RMB763.8 million (US$117.1 million), an increase of 51.5% from RMB504.0 million in the same quarter of fiscal year 2020.
• Active buyers were 1.5 million, an increase of 21.0% from 1.3 million in the same quarter of fiscal year 2020.

CEO & CFO Quote

"Solid Q3 results were a testament to Boqii's relentless efforts on execution and user engagement," said Mr. Hao Liang, Boqii's Founder, Chairman and Chief Executive Officer. "We continued to influence pet parents with an extensive and appealing selection of content and products, fostering stronger user bonding and stickiness. We endeavor to build a pet ecosystem that provides full lifecycle coverage and a seamlessly integrated online and offline channel that offers an unparalleled customer experience."

Ms. Yingzhi (Lisa) Tang, Boqii's Co-Founder, Co-CEO and CFO commented: "We had another strong quarter, generating solid operational and financial results. Total revenues grew 23.2% year over year to RMB312.9 million. Adjusted net loss improved significantly from RMB60.8 million in the same quarter of last fiscal year to RMB30.5 million. Notably, during the quarter we considerably improved our operating efficiency, manifested in lower fulfillment cost and reduced inventory turnover days. As a result, our adjusted net loss decreased by 49.8% year-on-year to RMB30.5 million. These results demonstrated our strong execution and potential to translate promising topline growth to profitability. Looking ahead, we will continue to drive rapid growth by expanding user reach and providing all-round user care. This will deliver differentiated growth by attracting high value customers in a large growing addressable market, thus further consolidating our position as an industry leader."

Fiscal Third Quarter Financial Results

Total revenues were RMB312.9 million (US$48.0 million), representing an increase of 23.2% from RMB254.1 million in the same quarter of fiscal year 2020. The increase was primarily due to the continued organic growth of our business.

Gross profit was RMB56.1 million (US$8.6 million), an increase of 19.0% from RMB47.2 million in the same quarter of fiscal year 2020.

Gross margin was 17.9%, compared with 18.6% in the same quarter of fiscal 2020.

Operating expenses were RMB150.5 million, an increase of 67.3% from RMB90.0 million in the same quarter of fiscal year 2020.  Operating expenses as a percentage of total revenues was 48.1%, compared to 35.4% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expenses, amounting to RMB51.4 million. Pursuant to the Amended and Restated 2018 Global Share Plan, the performance condition for options granted thereunder was satisfied upon completion of the first public offering; and as a result, the company, upon the completion of this offering, recorded RMB44.1 million of cumulative share-based compensation expenses for those options for which the vesting conditions have been satisfied as of such date. For the three months ended December 31, 2020, additional RMB7.3 million of share-based compensation expense was recorded.

• Fulfillment Expenses were RMB33.6 million, a decrease of 7.9% from RMB36.5 million in the same quarter of fiscal year 2020. Fulfillment expenses as a percentage of total revenues were 10.7 %, compared to 14.3% in the same quarter of fiscal year 2020. The decrease was mainly due to: (i) the improved utilization of warehouses by adjusting inventory mix; (ii) relocation of warehouses across China to be more cost-efficient; and (iii) lower delivery service prices through renegotiation with third-party delivery service providers.
• Sales and marketing expenses were RMB55.1 million, an increase of 53.2% from RMB36.0 million in the same quarter of fiscal year 2020. Sales and marketing expenses as a percentage of total revenue were 17.6%, compared to 14.2% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expense of RMB 11.6 million.
• General and administrative expenses were RMB61.8 million, an increase of 252.7% from RMB17.5 million in the same quarter of fiscal year 2020. General and administrative expenses as a percentage of total revenue were 19.8%, compared to 6.9% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expense of RMB 39.8 million.

Operating loss^[3] was RMB93.6 million (US$14.3 million), an increase of 119.0% compared to RMB42.7 million in the same quarter of fiscal year 2020.

EBITDA^[4] was a loss of RMB79.2 million (US$12.1 million), representing a 109.2% setback from a loss of RMB37.9 million in the same quarter of fiscal year 2020.

Net loss was RMB81.9 million (US$12.6 million), compared to net loss of RMB56.4 million in the same quarter of fiscal year 2020.

Adjusted net loss was RMB30.5 million (US$4.7million), representing a decrease of 49.8% from the adjusted net loss of RMB60.8 million in the same quarter of fiscal year 2020.

Diluted net earnings per share was RMB1.61 (US$0.25), compared to diluted net loss per share of RMB4.12 in the same quarter of fiscal year 2020.

Total cash and cash equivalents and short-term investments were RMB475.4 million (US$72.9 million), compared to RMB127.8 million in the second quarter of fiscal year 2021.

Conference Call

Boqii's management will hold a conference call to discuss the financial results at 8:00 AM on Wednesday, March 3, 2021, U.S. Eastern Time (9:00 PM on Wednesday, March 3, 2021, Beijing/Hong Kong Time).

To join the conference, please dial in 15 minutes before the conference is scheduled to begin using below numbers.

A replay of the conference call may be accessed by phone at the following numbers until March 10, 2021.

A live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.boqii.com/.

About Boqii Holding Limited

Boqii Holding Limited (NYSE: BQ) is China's largest pet-focused platform We are the leading online destination for pet products and supplies in China with our broad selection of high-quality products including global leading brands, local emerging brands, and our own private label, Yoken and Mocare, offered at competitive prices. Our online sales platforms, including Boqii Mall and our flagship stores on third-party e-commerce platforms, provide customers with convenient access to a wide selection of high-quality pet products and an engaging and personalized shopping experience. Our Boqii Community provides an informative and interactive content platform for users to share their knowledge and love for pets.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company 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 reports 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 the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding such risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, namely adjusted net loss, EBITDA and EBITDA margin, in evaluating its operating results and for financial and operational decision-making purposes. The Company defines (i) adjusted net loss as net loss excluding fair value change of derivative liabilities and share-based compensation expenses, (ii) EBITDA as net loss excluding income tax expenses, interest expense, interest income, depreciation and amortization expenses, and (iii) EBITDA margin as EBITDA as a percentage of total revenues. The Company believes adjusted net loss, EBITDA and EBITDA margin enhance investors' overall understanding of its financial performance and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. As these non-GAAP financial measures have limitations as analytical tools and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliation of GAAP and Non-GAAP Results." The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.5250 to US$1.00, the noon buying rate in effect on December 31, 2020 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB, as the case may be, at any particular rate or at all.

For investor and media inquiries, please contact:

In China:

Boqii Holding Limited
Investor Relations
Tel: +86-21-6882-6051
Email: ir@boqii.com

The Blueshirt Group
Ms. Susie Wang
Email: susie@blueshirtgroup.com

In the United States:

The Blueshirt Group
Ms. Julia Qian
Email: julia@blueshirtgroup.com