omniture

Sunlands Technology Group Announces Unaudited Fourth Quarter and Full Year 2022 Financial Results

2023-03-24 16:00 3370

Q4 net revenues decreased by 1.7% year-over-year

Q4 gross billings (non-GAAP) decreased by 23.3% year-over-year

Q4 net income reached RMB181.0 million

BEIJING, March 24, 2023 /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, 2022.

Fourth Quarter 2022 Financial and Operational Snapshots

  • Net revenues were RMB578.6 million (US$83.9 million), representing a 1.7% decrease year-over-year.
  • Gross billings (non-GAAP) were RMB370.8 million (US$53.8 million), representing a 23.3% decrease year-over-year.
  • Gross profit was RMB503.3 million (US$73.0 million), representing a 0.8% increase year-over-year.
  • Net income was RMB181.0 million (US$26.2 million), compared with net income of RMB150.8 million in the fourth quarter of 2021.
  • Net income margin, defined as net income as a percentage of net revenues, increased to 31.3% from 25.6% in the fourth quarter of 2021.
  • New student enrollments[1] were 161,348, representing a 48.2% increase year-over-year.
  • As of December 31, 2022, the Company's deferred revenue balance was RMB1,690.9 million (US$245.2 million).

[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.)

Full Year 2022 Financial and Operational Snapshots

  • Net revenues were RMB2,323.1 million (US$336.8 million), compared with RMB2,507.8 million in 2021.
  • Gross billings (non-GAAP) were RMB1,496.7 million (US$217.0 million), compared with RMB1,970.0 million in 2021.
  • Gross profit was RMB1,975.0 million (US$286.3 million), compared with RMB2,131.6 million in 2021.
  • Net income was RMB643.0 million (US$93.2 million), compared with net income of RMB212.4 million in 2021.
  • Net income margin, defined as net income as a percentage of net revenues, increased to 27.7% from 8.5% in the year 2021.
  • New student enrollments were 534,280, compared with 434,228 in 2021.

"Thanks to unwavering execution of our balanced growth and profitability strategy, we concluded 2022 with sustained growth in both new student enrollments and our bottom line in the fourth quarter," said Mr. Tongbo Liu, Chief Executive Officer of Sunlands. "We maintained our disciplined cost management practices and streamlined operations to boost our efficiency and profitability, driving our quarterly net income to RMB181.0 million in the fourth quarter and our full-year net income to RMB643.0 million, more than triple that of 2021."

"During the quarter, we sharpened our strategic focus on diversifying our course content, enhancing our course and service quality, and improving student acquisition efficiency, leading to 48.2% year-over-year and 19.5% quarter-over-quarter increases in new student enrollments. Moreover, we further pursued the opportunities fueling the ongoing market demand for skill and interest courses by expanding our professional certification preparation, professional skills and interest programs, which yielded encouraging results. In addition to our continued product mix optimization, we have been prudently exploring new monetization opportunities to drive our future growth. As we progress into 2023, we remain committed to refining our products and services to fulfill a wider age group's learning needs while amplifying our operational efficiency improvement efforts to support our long-term, sustainable growth," concluded Mr. Liu.

Ms. Selena Lu Lv, Chief Financial Officer of Sunlands, added, "Amid a persistently challenging macro environment, our net revenues came in at RMB578.6 million in the fourth quarter, representing a 1.7% year-over-year decrease but beating the high end of our guidance range by 7.1%. As we continued to execute cost reduction and efficiency optimization measures, we successfully brought our fourth quarter operating expenses down by 16.1% year-over-year, which contributed to enhanced profitability as reflected in our 20.0% year-over-year increase in net income. Our net income margin also expanded further to 31.3% in the fourth quarter from 25.6% in the same period of 2021 and 29.2% in the prior quarter. In 2023, we will continue to deepen our strategy balancing business growth and profitability as we strive to create incremental value for our stakeholders."

Financial Results for the fourth quarter of 2022

Net Revenues

In the fourth quarter of 2022, net revenues decreased by 1.7% to RMB578.6 million (US$83.9 million) from RMB588.9 million in the fourth quarter of 2021. The decrease was mainly driven by the decline in gross billings over the recent quarters.

Cost of Revenues

Cost of revenues decreased by 15.8% to RMB75.3 million (US$10.9 million) in the fourth quarter of 2022 from RMB89.4 million in the fourth quarter of 2021. The decrease was primarily due to declined compensation expenses related to headcount reduction of our cost of revenues personnel, including teachers and mentors.

Gross Profit

Gross profit increased by 0.8% to RMB503.3 million (US$73.0 million) in the fourth quarter of 2022 from RMB499.5 million in the fourth quarter of 2021.

Operating Expenses

In the fourth quarter of 2022, operating expenses were RMB336.0 million (US$48.7 million), representing a 16.1% decrease from RMB400.5 million in the fourth quarter of 2021.

Sales and marketing expenses decreased by 19.7% to RMB272.5 million (US$39.5 million) in the fourth quarter of 2022 from RMB339.4 million in the fourth quarter of 2021. The decrease was mainly due to: (i) lower spending on branding and marketing activities; (ii) declined compensation expenses related to headcount reduction of our sales and marketing personnel and (iii) declined rental expenses due to the early termination of certain lease contracts.

General and administrative expenses increased by 11.1% to RMB56.1 million (US$8.1 million) in the fourth quarter of 2022 from RMB50.5 million in the fourth quarter of 2021. The increase was mainly due to the increase in professional service fees.

Product development expenses decreased by 30.8% to RMB7.4 million (US$1.1 million) in the fourth quarter of 2022 from RMB10.7 million in the fourth quarter of 2021. The decrease was mainly due to declined compensation expenses related to headcount reduction of our product development personnel.

Other Income/Other Expense

Other income was RMB4.9 million (US$0.7 million) in the fourth quarter of 2022, compared with other expense of RMB3.1 million in the fourth quarter of 2021.

Net Income

Net income for the fourth quarter of 2022 was RMB181.0 million (US$26.2 million), compared with RMB150.8 million in the fourth quarter of 2021.

Basic and Diluted Net Income Per Share

Basic and diluted net income per share was RMB26.03 (US$3.77) in the fourth quarter of 2022.

Cash, Cash Equivalents, Restricted Cash and Short-term Investments

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

Deferred Revenue

As of December 31, 2022, the Company had a deferred revenue balance of RMB1,690.9 million (US$245.2 million), compared with RMB2,348.2 million as of December 31, 2021.

Capital Expenditures

Capital expenditures were incurred primarily in connection with information technology ("IT") infrastructure equipment and leasehold improvements necessary to support the Company's operations. Capital expenditures were RMB0.7 million (US$0.1 million) in the fourth quarter of 2022, compared with RMB5.2 million in the fourth quarter of 2021.

Financial Results for the Year 2022

Net Revenues

In 2022, net revenues decreased by 7.4% to RMB2,323.1 million (US$336.8 million) from RMB2,507.8 million in the year of 2021.

Cost of Revenues

Cost of revenues decreased by 7.5% to RMB348.2 million (US$50.5 million) in the year of 2022 from RMB376.2 million in the year of 2021.

Gross Profit

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

Operating Expenses

In the year of 2022, operating expenses were RMB1,358.0 million (US$196.9 million), representing a 32.7% decrease from RMB2,017.4 million in 2021.

Sales and marketing expenses decreased by 35.4% to RMB1,129.5 million (US$163.8 million) in 2022 from RMB1,748.4 million in 2021. The decrease was mainly due to: (i) lower spending on branding and marketing activities; and (ii) declined compensation expenses related to  headcount reduction of our sales and marketing personnel.

General and administrative expenses decreased by 10.6% to RMB185.7 million (US$26.9 million) in 2022 from RMB207.6 million in 2021. The decrease was mainly due to a decrease in compensation expenses related to  headcount reduction of our general and administrative personnel.

Product development expenses decreased by 30.2% to RMB42.8 million (US$6.2 million) in 2022 from RMB61.3 million in 2021. The decrease was primarily due to declined compensation expenses related to headcount reduction of our product development personnel.

Other Income

Other income for 2022 was RMB24.5 million (US$3.6 million), compared with RMB39.2 million in 2021. The decrease was primarily because value-added tax exemption offered by the relevant tax authorities as part of the national COVID-19 relief effort came to an end in April 2021.

Net Income

Net income for 2022 was RMB643.0 million (US$93.2 million), compared with net income of RMB212.4 million in 2021.

Basic and Diluted Net Income Per Share

Basic and diluted net income per share was RMB94.14 (US$13.65) in 2022, compared with RMB32.56 in 2021.

Capital Expenditures

Capital expenditures were incurred primarily in connection with IT infrastructure equipment and leasehold improvement necessary to support the Company's operations. Capital expenditures were RMB3.2 million (US$0.5 million) in 2022, compared with RMB16.5 million in 2021.

Outlook

For the first quarter of 2023, Sunlands currently expects net revenues to be between RMB530 million to RMB550 million, which would represent a decrease of 10.3% to 13.6% 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 RMB6.8972 to US$1.00, the effective noon buying rate for December 30, 2022 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 30, 2022, 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 24, 2023, 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

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 March 24, 2023, by dialing the following telephone numbers:

International: 

+1-412-317-0088

US toll free:

+1-877-344-7529

Replay access code:

3501228

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, EBITDA, non-GAAP operating cost and expense, non-GAAP loss/income from operations and Non-GAAP net loss/income per share, 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/income excluding depreciation and amortization, interest expense, interest income, and income tax expenses/benefit. 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, EBITDA, operating cost and expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, sales and marketing expenses excluding share-based compensation expenses, product development expenses excluding share-based compensation expenses, non-GAAP net loss/income exclude share-based compensation expenses, and basic and diluted net loss/income per share excluding share-based compensation expenses 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:

Sunlands Technology Group
Investor Relations
Email: sl-ir@sunlands.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,



2021


2022



RMB


RMB


US$

ASSETS







Current assets







     Cash and cash equivalents


626,715


753,642


109,268

     Restricted cash


50,008


3,762


545

     Short-term investments


184,159


70,542


10,228

     Prepaid expenses and other current assets


176,349


98,272


14,248

     Deferred costs, current


89,353


42,886


6,218

Total current assets


1,126,584


969,104


140,507

Non-current assets







     Property and equipment, net


857,648


813,783


117,987

     Intangible assets, net


2,761


1,509


219

     Right-of-use assets


362,335


274,643


39,819

     Deferred costs, non-current


109,020


78,839


11,431

     Long-term investments


54,844


73,513


10,658

     Deferred tax assets


39,265


26,799


3,885

     Other non-current assets


40,163


37,880


5,492

Total non-current assets


1,466,036


1,306,966


189,491

TOTAL ASSETS


2,592,620


2,276,070


329,998








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 RMB197,467 and RMB191,172 as of







        December 31, 2021 and 2022, respectively)


586,043


436,339


63,263

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







        without recourse to Sunlands Technology Group of RMB295,958 and







        RMB374,208 as of December 31, 2021 and 2022, respectively)


1,266,948


986,086


142,969

Lease liabilities, current portion (including lease liabilities, current portion of the







   consolidated VIEs without recourse to Sunlands Technology Group of RMB8,366







       and RMB17,065 as of December 31, 2021 and  2022, respectively)


14,310


17,065


2,474

Long-term debt, current portion (including long-term debt, current portion of the







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







         as of  December 31, 2021 and  2022, respectively)


38,654


38,654


5,604

Total current liabilities


1,905,955


1,478,144


214,310

 

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,



2021


2022



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







RMB257,071 and RMB251,080  as of December 31, 2021 and  2022,







respectively)


1,081,231


704,860


102,195

Lease liabilities, non-current portion (including lease liabilities, non-current portion







of the consolidated VIEs without recourse to Sunlands Technology Group of







RMB318,598 and RMB316,844 as of December 31, 2021 and  2022,







respectively)


404,133


316,844


45,938

    Deferred tax liabilities (including deferred tax liabilities of the consolidated







VIEs without recourse to Sunlands Technology Group of RMB2,312 and RMB1,122







as of December 31, 2021 and 2022, respectively)


21,782


5,984


868

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







VIEs without recourse to Sunlands Technology Group of RMB963 and RMB1,063







as of December 31, 2021 and  2022, respectively)


11,698


6,770


982

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







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







as of December 31, 2021 and  2022, respectively)


181,973


143,319


20,779

Total non-current liabilities


1,700,817


1,177,777


170,762

TOTAL LIABILITIES


3,606,772


2,655,921


385,072


SHAREHOLDERS' DEFICIT







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







authorized; 2,085,939 and 2,982,516 shares issued as of December 31, 2021







and December 31, 2022, respectively; 1,839,553 and 2,618,698 shares







outstanding as of December 31, 2021 and 2022, 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, 2021 and 2022, respectively)


-


-


-

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







authorized; 4,002,930 and 3,481,353 shares issued and outstanding







as of December 31, 2021 and  2022, respectively)


1


1


-

    Treasury stock


-


-


-

    Accumulated deficit


(3,456,073)


(2,812,114)


(407,718)

    Additional paid-in capital


2,364,313


2,309,740


334,881

    Accumulated other comprehensive income


82,532


127,885


18,541

Total Sunlands Technology Group shareholders' deficit


(1,009,226)


(374,487)


(54,296)

Non-controlling interest


(4,926)


(5,364)


(778)

TOTAL SHAREHOLDERS' DEFICIT


(1,014,152)


(379,851)


(55,074)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT


2,592,620


2,276,070


329,998

 

 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,



2021


2022



RMB


RMB


US$

Net revenues


588,883


578,588


83,887

Cost of revenues


(89,378)


(75,291)


(10,916)

Gross profit


499,505


503,297


72,971








Operating expenses







     Sales and marketing expenses


(339,368)


(272,477)


(39,505)

     Product development expenses


(10,656)


(7,369)


(1,068)

     General and administrative expenses


(50,499)


(56,129)


(8,138)

Total operating expenses


(400,523)


(335,975)


(48,711)

Income from operations


98,982


167,322


24,260

Interest income


3,018


7,040


1,021

Interest expense


(2,900)


(2,295)


(333)

Other (expense)/income, net


(3,145)


4,860


705

Impairment loss on long-term investments


(5,000)


-


-

Gain/(loss) on disposal of subsidiaries


43,967


(319)


(46)

Income before income tax benefit/(expense)







and (loss)/income from equity method investments


134,922


176,608


25,607

Income tax benefit/(expense)


20,581


(3,424)


(496)

(Loss)/income from equity method investments


(4,731)


7,770


1,127

Net income


150,772


180,954


26,238








Less: Net (loss)/income attributable to non-controlling interest


(3,104)


330


48

Net income attributable to Sunlands Technology Group


153,876


180,624


26,190

Net income per share attributable to ordinary shareholders of







 Sunlands Technology Group:







     Basic and diluted


22.89


26.03


3.77

Weighted average shares used in calculating net income







    per ordinary share:







     Basic and diluted


6,722,670


6,939,213


6,939,213

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)




For the Three Months Ended December 31,



2021


2022



RMB


RMB


US$

Net income


150,772


180,954


26,238

Other comprehensive loss, net of tax effect of nil:







Change in cumulative foreign currency translation adjustments


(6,117)


(15,938)


(2,311)

Total comprehensive income


144,655


165,016


23,927

Less: comprehensive (loss)/income attributable to non-controlling







interest


(3,104)


330


48

Comprehensive income attributable to Sunlands Technology







Group


147,759


164,686


23,879

 

SUNLANDS TECHNOLOGY GROUP

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(Amounts in thousands)




For the Three Months Ended December 31,



2021


2022



RMB


RMB

Net revenues


588,883


578,588

Less: other revenues


(21,236)


(39,344)

Add: tax and surcharges


58,093


10,823

Add: ending deferred revenue


2,348,179


1,690,946

Add: deferred revenue in connection with disposal of subsidiaries


29,572


259

Add: ending refund liability


243,236


133,066

Less: beginning deferred revenue


(2,540,886)


(1,798,558)

Less: beginning refund liability


(222,266)


(204,961)

Gross billings (non-GAAP)


483,575


370,819
















Net income


150,772


180,954

Add: income tax (benefit)/expense


(20,581)


3,424

depreciation and amortization


9,651


18,584

interest expense


2,900


2,295

Less: interest income


(3,018)


(7,040)

EBITDA (non-GAAP)


139,724


198,217

 

SUNLANDS TECHNOLOGY GROUP

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

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




For the Three Months Ended December 31,



2021


2022



RMB


RMB

Cost of revenues


(89,378)


(75,291)

Less: Share-based compensation expenses in cost of revenues


(56)


-

Non-GAAP cost of revenues


(89,322)


(75,291)






Sales and marketing expenses


(339,368)


(272,477)

Less: Share-based compensation expenses in sales and marketing expenses


(58)


-

Non-GAAP sales and marketing expenses


(339,310)


(272,477)






General and administrative expenses


(50,499)


(56,129)

Less: Share-based compensation expenses in general and administrative expenses


(357)


-

Non-GAAP general and administrative expenses


(50,142)


(56,129)






Operating costs and expense


(489,901)


(411,266)

Less: Share-based compensation expenses


(471)


-

Non-GAAP operating costs and expense


(489,430)


(411,266)






Income from operations


98,982


167,322

Less: Share-based compensation expenses


(471)


-

Non-GAAP  income from operations


99,453


167,322






Net income attributable to Sunlands Technology Group


153,876


180,624

Less: Share-based compensation expenses


(471)


-

Non-GAAP net income attributable to Sunlands Technology Group


154,347


180,624






Net income per share attributable to ordinary shareholders of





 Sunlands Technology Group:





     Basic and diluted


22.89


26.03

Non-GAAP net income per share attributable to ordinary shareholders of





 Sunlands Technology Group:





     Basic and diluted


22.96


26.03






Weighted average shares used in calculating net income





    per ordinary share:





     Basic and diluted


6,722,670


6,939,213

Weighted average shares used in calculating Non-GAAP net income





    per ordinary share:





     Basic and diluted


6,722,670


6,939,213

 

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,



2021


2022



RMB


RMB


US$

Net revenues


2,507,817


2,323,101


336,818

Cost of revenues


(376,189)


(348,150)


(50,477)

Gross profit


2,131,628


1,974,951


286,341








Operating expenses







     Sales and marketing expenses


(1,748,436)


(1,129,508)


(163,763)

     Product development expenses


(61,325)


(42,834)


(6,210)

     General and administrative expenses


(207,602)


(185,667)


(26,919)

Total operating expenses


(2,017,363)


(1,358,009)


(196,892)

Income from operations


114,265


616,942


89,449

Interest income


16,175


16,248


2,356

Interest expense


(10,929)


(10,059)


(1,458)

Other income, net


39,156


24,527


3,556

Impairment loss on long-term investments


(5,000)


(500)


(72)

Gain on disposal of subsidiaries


43,967


1,390


202

Income before income tax benefit


197,634


648,548


94,033

Income tax benefit/(expense)


19,618


(11,992)


(1,739)

(Loss)/gain from equity method investments


(4,886)


6,453


936

Net income


212,366


643,009


93,230








Less: Net loss attributable to non-controlling interest


(6,690)


(950)


(138)

Net income attributable to Sunlands Technology Group


219,056


643,959


93,368

Net income per share attributable to ordinary shareholders of







 Sunlands Technology Group:







     Basic and diluted


32.56


94.14


13.65

Weighted average shares used in calculating net income







    per ordinary share:







    Basic and diluted


6,727,552


6,840,079


6,840,079








 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)




For the Years Ended December 31,



2021


2022



RMB


RMB


US$

Net income


212,366


643,009


93,230

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







Change in cumulative foreign currency translation adjustments


(13,958)


45,353


6,576

Total comprehensive income


198,408


688,362


99,806

Less: comprehensive loss attributable to non-controlling







interest


(6,690)


(950)


(138)

Comprehensive income attributable to Sunlands Technology







Group


205,098


689,312


99,944

 

SUNLANDS TECHNOLOGY GROUP

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(Amounts in thousands)




For the Years Ended December 31,



2021


2022



RMB


RMB

Net revenues


2,507,817


2,323,101

Less: other revenues


(79,444)


(125,864)

Add: tax and surcharges


177,966


66,638

Add: ending deferred revenue


2,348,179


1,690,946

Add: deferred revenue in connection with disposal of subsidiaries


29,572


259

Add: ending refund liability


243,236


133,066

Less: beginning deferred revenue


(3,024,443)


(2,348,179)

Less: beginning refund liability


(232,859)


(243,236)

Gross billings (non-GAAP)


1,970,024


1,496,731
















Net income


212,366


643,009

Add: income tax (benefit)/expense


(19,618)


11,992

depreciation and amortization


37,916


46,684

interest expense


10,929


10,059

Less: interest income


(16,175)


(16,248)

EBITDA (non-GAAP)


225,418


695,496

 

SUNLANDS TECHNOLOGY GROUP

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

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




For the Years Ended December 31,



2021


2022



RMB


RMB

Cost of revenues


(376,189)


(348,150)

Less: Share-based compensation expenses in cost of revenues


(101)


(33)

Non-GAAP cost of revenues


(376,088)


(348,117)






Sales and marketing expenses


(1,748,436)


(1,129,508)

Less: Share-based compensation expenses in sales and marketing expenses


14


(4,166)

Non-GAAP sales and marketing expenses


(1,748,450)


(1,125,342)






General and administrative expenses


(207,602)


(185,667)

Less: Share-based compensation expenses in general and administrative expenses


(681)


(2,982)

Non-GAAP general and administrative expenses


(206,921)


(182,685)






Operating costs and expense


(2,393,552)


(1,706,159)

Less: Share-based compensation expenses


(768)


(7,181)

Non-GAAP operating costs and expense


(2,392,784)


(1,698,978)






Income from operations


114,265


616,942

Less: Share-based compensation expenses


(768)


(7,181)

Non-GAAP income from operations


115,033


624,123






Net income attributable to Sunlands Technology Group


219,056


643,959

Less: Share-based compensation expenses


(768)


(7,181)

Non-GAAP net income attributable to Sunlands Technology Group


219,824


651,140






Net income per share attributable to ordinary shareholders of





 Sunlands Technology Group:





     Basic and diluted


32.56


94.14

Non-GAAP net income per share attributable to ordinary shareholders of





 Sunlands Technology Group:





     Basic and diluted


32.68


95.19






Weighted average shares used in calculating net income





    per ordinary share:





     Basic and diluted


6,727,552


6,840,079

Weighted average shares used in calculating Non-GAAP net income





    per ordinary share:





     Basic and diluted


6,727,552


6,840,079

 

Source: Sunlands Technology Group
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