First quarter net revenues increased
by 64.6% year-over-year
First quarter gross
billings[1] increased by
9.3% year-over-year
BEIJING, June 12, 2018 /PRNewswire/ -- China Online
Education Group ("51Talk" or the "Company") (NYSE:COE), a leading
online education platform in China, with core expertise in English
education, today announced its unaudited financial results for the
first quarter ended March 31,
2018.
First Quarter 2018 Financial and Operational
Highlights
- Net revenues were RMB262.6
million (US$41.9 million), a
64.6% increase from RMB159.5 million
for the first quarter of 2017.
- Gross billings were RMB355.3
million (US$56.6 million), a
9.3% increase from RMB325.1 million
for the first quarter of 2017.
- Gross margin was 64.6%, compared with 65.7% for the first
quarter of 2017.
- Percentage of gross billings contributed by K-12 students was
83.8%, compared with 68.7% for the first quarter of 2017.
Key Operating Data
|
For the three
months ended
|
|
|
|
March
31,
|
|
March
31,
|
|
Y-o-Y
|
|
2017
|
|
2018
|
|
Change
|
|
|
|
|
|
|
Gross billings (in
RMB millions)
|
325.1
|
|
355.3
|
|
9.3%
|
Gross billings
contributed by K-12 students (in RMB millions)
|
223.4
|
|
297.9
|
|
33.4%
|
K-12 mass-market
one-on-one offering
|
167.2
|
|
224.7
|
|
34.4%
|
K-12 American Academy
one-on-one offering
|
53.2
|
|
36.3
|
|
(31.9%)
|
K-12 small class
offering
|
-
|
|
36.9
|
|
-
|
Active
students[2] (in thousands)
|
134.5
|
|
190.8
|
|
41.8%
|
|
|
|
|
|
|
[1] Gross billings for a specific period, which is
one of the Company's key operating data, is defined as the total
amount of cash received for the sale of course packages and
services in such period, net of the total amount of refunds in such
period.
[2] An "active student" for a specified period refers to
a student who booked at least one paid lesson, and excluding those
students who only attended paid live broadcasting lessons or trial
lessons.
"2018 is off to a good start as we exceeded the top-end of our
guidance in both net revenues and gross billings," said Mr.
Jack Jiajia Huang, Founder, Chairman
and Chief Executive Officer of 51Talk. "Our first quarter results
reflect the successful implementation of our strategic initiatives
to focus our business on the thriving K-12 market, which
represented 84% of our first quarter total gross billings. We see a
clear pathway to leverage our core competencies and grow our
business.
"The cornerstone of our successful strategy is our K-12 mass
market one-on-one program, which represented 63% of total gross
billings in the first quarter and continues to grow. Our Hawo small
class offering is attracting an increasing number of students and
this early-stage program is gaining traction. The advances we have
made in each of our programs are designed to emphasize quality and
improve our margin profile, as we continue to wind down our
American Academy one-on-one offering.
"With our strategic initiatives squarely aligned in the K-12
market, we are able to more readily reach our target market not
only in tier-one cities, but also in lower-tier cities where we see
tremendous growth opportunity. Our model and strategy are
resonating well within this segment of the market with steadily
increasing gross billings from non-tier-one cities. For our K-12
mass market one-on-one program, gross billings from non-tier-one
cities accounted for 63% in the first quarter of 2018, compared to
52% a year ago.
"In summary, our top priority for the remainder of 2018 will be
K-12 mass market one-on-one program which will lead our penetration
in non-tier-one cities. We will also expand Hawo small class
program, utilizing resources from our American Academy one-on-one
program. In addition, we plan to rejuvenate our adult program which
we expect to stabilize," Mr. Huang concluded.
Mr. Jimmy Lai, Chief Financial
Officer of 51Talk, added, "We see positive impact on our financials
following the alignment of our strategy to dedicate our resources
to the K-12 mass market. Our strategy to streamline our business
and deemphasize our American Academy one-on-one program led to
sequential gross margin expansion from 62.4% in the fourth quarter
of 2017 to 64.6% in the first quarter of 2018, as well as a
sequential reduction of RMB47 million
in net loss, despite a RMB37 million
investment in the largest marketing campaign in our company's
history to support our branding effort during the first quarter of
2018. Furthermore, we expect our non-tier-one cities expansion
strategy will support our future growth and improve our financial
performance."
First Quarter 2018 Financial Results
Net Revenues
Net revenues for the first quarter of 2018 were RMB262.6 million (US$41.9
million), a 64.6% increase from RMB159.5 million for the same quarter last year.
The increase was primarily attributed to an increase in the number
of active students and, to a lesser extent, an increase in the
average revenue per active student. The number of active students
in the first quarter of 2018 was 190.8 thousand, a 41.8% increase
from 134.5 thousand for the same quarter last year.
Cost of Revenues
Cost of revenues for the first quarter of 2018 was RMB92.9 million (US$14.8
million), a 69.7% increase from RMB54.8 million for the same quarter last year.
The increase was primarily driven by an increase in total service
fees paid to teachers, mainly due to the delivery of an increased
number of paid lessons.
Gross Profit and Gross Margin
Gross profit for the first quarter of 2018 was RMB169.6 million (US$27.0
million), a 61.9% increase from RMB104.8 million for the same quarter last
year.
Gross margin for the first quarter of 2018 was 64.6%, compared
with 65.7% for the same quarter last year.
Operating Expenses
Total operating expenses for the first quarter of 2018 were
RMB280.2 million (US$44.7 million), a 14.3% increase from
RMB245.0 million for the same quarter
last year. The increase was mainly the result of increases in sales
and marketing, product development, and general and administrative
expenses.
Sales and marketing expenses for the first quarter of 2018 were
RMB171.6 million (US$27.4 million), a 17.5% increase from
RMB146.1 million for the same quarter
last year. The increase was mainly due to higher branding and
marketing expenses, and was partially offset by capitalized sales personnel expenses of
RMB6.7 million in relation to the new
accounting standard adopted since January 1,
2018 (please refer to section "Impact of Recently Adopted
New Accounting Standard"). Excluding share-based compensation
expenses, non-GAAP sales and marketing expenses for the first
quarter of 2018 were RMB170.4 million
(US$27.2 million), a 17.6% increase
from RMB144.9 million for the same
quarter last year.
Product development expenses for the first quarter of 2018 were
RMB52.2 million (US$8.3 million), a 3.2% increase from
RMB50.6 million for the same quarter
last year. The increase was primarily due to higher expenses
related to technology and course development-related personnel to
further strengthen technology platforms and expand curriculum
offerings, as well as higher technical services fees, partially
offset by lower recognized share-based compensation expenses.
Excluding share-based compensation expenses, non-GAAP product
development expenses for the first quarter of 2018 were
RMB50.7 million (US$8.1 million), an 11.5% increase from
RMB45.5 million for the same quarter
last year.
General and administrative expenses for the first quarter of
2018 were RMB56.4 million
(US$9.0 million), a 16.5% increase
from RMB48.4 million for the same
quarter last year. The increase was primarily the result of
additional expenses for personnel necessary to support expanded
operations, as well as higher costs related to compliance and
reporting obligations as a public company, partially offset by
lower recognized share-based compensation expenses. Excluding
share-based compensation expenses, non-GAAP general and
administrative expenses for the first quarter of 2018 were
RMB52.6 million (US$8.4 million), a 26.4% increase from
RMB41.6 million for the same quarter
last year.
Loss from Operations
Loss from operations for the first quarter of 2018 was
RMB110.5 million (US$17.6 million), compared with RMB140.3 million for the same quarter last
year.
Non-GAAP loss from operations for the first quarter of 2018 was
RMB104.0 million (US$16.6 million), compared with RMB127.2 million for the same quarter last
year.
Net Loss
Net loss for the first quarter of 2018 was RMB112.7 million (US$18.0
million), compared with RMB140.0
million for the same quarter last year.
Non-GAAP net loss for the first quarter of 2018 was RMB106.1 million (US$16.9
million), compared with RMB126.9
million for the same quarter last year.
Basic and diluted net loss per American depositary share ("ADS")
attributable to ordinary shareholders for the first quarter of 2018
was RMB5.55 (US$0.90), compared with basic and diluted net
loss per ADS attributable to ordinary shareholders of RMB7.05 for the same quarter last year. Each ADS
represents 15 Class A ordinary shares.
Non-GAAP basic and diluted net loss per ADS attributable to
ordinary shareholders for the first quarter of 2018 was
RMB5.25 (US$0.90), compared with non-GAAP basic and
diluted net loss per ADS attributable to ordinary shareholders of
RMB6.30 for the same quarter last
year.
Balance Sheet
As of March 31, 2018, the Company
had total cash, cash equivalents, time deposits and short-term
investments of RMB549.0 million
(US$87.5 million), compared with
RMB623.4 million as of December 31, 2017.
The Company had deferred revenues (current and non-current) of
RMB1,274.8 million (US$203.2 million) as of March 31, 2018, compared with RMB1,201.8 million as of December 31, 2017.
Outlook
For the second quarter of 2018, the Company currently
expects:
- Net
revenues to be between RMB265 million
to RMB275 million, which would
represent an increase of approximately 38% to 43% from RMB191.8 million for the same quarter last year;
and
- Gross
billings to be between RMB385 million
to RMB395 million, which would
represent an increase of approximately 8% to 11% from RMB355.1 million for the same quarter last
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 change.
Management Update
The Company has appointed Mr. Min
Xu as Co-Chief Financial Officer, alongside Mr. Jimmy Lai, effective immediately, to further
strengthen its senior management team.
Prior to joining 51Talk, Mr. Xu was the Chief Financial Officer
of ACM Research Inc., a Nasdaq-listed global semiconductor
equipment manufacturer, from 2016 to 2018. Previously, Mr. Xu
served as the Chief Financial Officer of UTStarcom Holding Corp., a
Nasdaq-listed global telecom infrastructure provider, from 2014 to
2016. Prior to that, Mr. Xu was an equity research analyst at
various investment banks from 2007 to 2014, including Roth Capital
Partners, LLC., Wedbush Securities, Jefferies & Co.,
Piper Jaffray & Co., and
Stanford Group Company. Earlier in his career, Mr. Xu worked as a
technical marketing engineer as well as a senior software engineer
with Cisco Systems, Inc. Mr. Xu received an MBA degree from The
Fuqua School of Business at Duke
University, a Master of Science degree in electrical
engineering from Purdue University, a
Master of Science degree in physics from Colorado State University, and a Bachelor of
Science degree in physics from Peking University.
Impact of Recently Adopted New Accounting Standard
In May 2014, the FASB issued ASU
No. 2014-09, "Revenue from Contracts with Customers (Topic 606)."
On January 1, 2018, the Company
adopted the Topic 606 new standard using the modified retrospective
method. Under this method, the Company records adjustments to its
fiscal 2018 opening balance sheet (as of January 1, 2018) to reflect the cumulative effect
of the new accounting standard. The comparative information has not
been restated and continues to be reported under the accounting
standard in effect for those periods. The Company has completed the
assessment of related adoption impact, including but not limited to
accounting for incentives to customers, contract modification,
contract cost and forfeitures of prepaid credits.
The Company is required to estimate the breakage, or the
forfeiture of prepaid credits, and recognize the expected breakage
amount as revenue in proportion to the pattern of credits consumed
by the customers. Based on the Company's analysis of historical
customer forfeitures of prepaid credits, the Company has concluded
that no breakage should be recognized in the period ending
March 31, 2018. The adoption of Topic
606 does not have any material impact on the Company's revenue
recognition for the first quarter of 2018 and comparable periods.
The Company will continue to update the estimate of expected
breakage at each reporting date.
The new accounting standard primarily impacts the accounting of
the Company's sales personnel expenses. Under the new accounting
standard, certain sales commissions to the sales personnel and the
sales agents are considered incremental cost of obtaining
contracts, and therefore shall be recognized as an asset given that
the Company expects to recover those costs. RMB82.7 million of contract cost asset was
capitalized in prepaid expenses and other current assets account on
March 31, 2018, including the
cumulative-effect adjustment of RMB76.0 million which was recorded as a
reduction to accumulated deficit and a reduction of sales personnel
expenses of RMB6.7 million recorded
in sales and marketing expenses for the first quarter of 2018. The
asset that was recognized for contract cost will be expensed
ratably, along with the recognition of revenue of corresponding
contracts.
Conference Call
The Company's management will host an earnings conference call
at 8:00 AM U.S. Eastern Time on
June 12, 2018 (8:00 PM Beijing/Hong
Kong time on June 12,
2018).
Dial-in details for the earnings conference call are as
follows:
United States (toll
free):
|
1-866-264-5888
|
International:
|
1-412-317-5226
|
Hong Kong (toll
free):
|
800-905-945
|
Hong Kong:
|
852-3018-4992
|
China:
|
400-120-1203
|
Participants should dial-in at least 5 minutes before the
scheduled start time and ask to be connected to the call for "China
Online Education Group."
Additionally, a live and archived webcast of the conference call
will be available on the Company's investor relations website at
http://ir.51talk.com.
A replay of the conference call will be accessible until
June 19, 2018, by dialing the
following telephone numbers:
United States (toll
free):
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Replay Access
Code:
|
10120938
|
About China Online Education Group
China Online Education Group (NYSE: COE) is a leading online
education platform in China, with
core expertise in English education. The Company's mission is to
make quality education accessible and affordable. The Company's
online and mobile education platforms enable students across
China to take live interactive
English lessons with overseas foreign teachers, on demand. The
Company connects its students with a large pool of highly qualified
foreign teachers that it assembled using a shared economy approach,
and employs student and teacher feedback and data analytics to
deliver a personalized learning experience to its students.
For more information, please visit http://ir.51talk.com.
Use of Non-GAAP Financial Measures
In evaluating its business, 51Talk considers and uses the
following measures defined as non-GAAP financial measures by the
SEC as supplemental metrics to review and assess its operating
performance: non-GAAP sales and marketing expenses, non-GAAP
product development expenses, non-GAAP general and administrative
expenses, non-GAAP operating expenses, non-GAAP loss from
operations, non-GAAP income tax expenses, non-GAAP net loss,
non-GAAP net loss attributable to ordinary shareholders, and
non-GAAP net loss attributable to ordinary shareholders per share
and per ADS. To present each of these non-GAAP measures, the
Company excludes share-based compensation expenses. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP. For
more information on these non-GAAP financial measures, please see
the table captioned "Reconciliations of non-GAAP measures to the
most comparable GAAP measures" set forth at the end of this press
release.
51Talk believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance by
excluding share-based expenses that may not be indicative of its
operating performance from a cash perspective. 51Talk believes that
both management and investors benefit from these non-GAAP financial
measures in assessing its performance and when planning and
forecasting future periods. These non-GAAP financial measures also
facilitate management's internal comparisons to 51Talk's historical
performance. 51Talk computes its non-GAAP financial measures using
the same consistent method from quarter to quarter and from period
to period. 51Talk believes these non-GAAP financial measures are
useful to investors in allowing for greater transparency with
respect to supplemental information used by management in its
financial and operational decision-making. A limitation of using
non-GAAP measures is that these non-GAAP measures exclude
share-based compensation expenses that have been and will continue
to be for the foreseeable future a significant recurring expense in
the 51Talk's business. Management compensates for these limitations
by providing specific information regarding the GAAP amounts
excluded from each non-GAAP measure. The accompanying table at the
end of this press release provides more details on the
reconciliations between GAAP financial measures that are most
directly comparable to non-GAAP financial measures.
Exchange Rate Information
This announcement contains translations of certain RMB amounts
into U.S. dollars at a specified rate solely for the convenience of
the reader. Unless otherwise noted, all translations from RMB
to U.S. dollars are made at a rate of RMB6.2726 to US$1.00, the rate in effect as of March 30, 2018 as certified for customs purposes
by the Federal Reserve Bank of New
York.
Safe Harbor Statement
This press release contains statements that may constitute
"forward-looking" statements pursuant to the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as "will", "expects", "anticipates", "aims",
"future", "intends", "plans", "believes", "estimates", "likely to"
and similar statements. Among other things, 51Talk's business
outlook and quotations from management in this announcement, as
well as 51Talk's strategic and operational plans, contain
forward-looking statements. 51Talk may also make written or oral
forward-looking statements in its periodic reports to the
Securities and Exchange Commission ("SEC"), in its annual report to
shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to
third parties. Statements that are not historical facts, including
statements about 51Talk's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: 51Talk's goals and strategies; 51Talk's expectations
regarding demand for and market acceptance of its brand and
platform; 51Talk's ability to retain and increase its student
enrollment; 51Talk's ability to offer new courses; 51Talk's ability
to engage, train and retain new teachers; 51Talk's future business
development, results of operations and financial condition;
51Talk's ability to maintain and improve infrastructure necessary
to operate its education platform; competition in the online
education industry in China; the
expected growth of, and trends in, the markets for 51Talk's course
offerings in China; relevant
government policies and regulations relating to 51Talk's corporate
structure, business and industry; general economic and business
condition in China, the Philippines and elsewhere and assumptions
underlying or related to any of the foregoing. Further information
regarding these and other risks is included in 51Talk's filings
with the SEC. All information provided in this press release is as
of the date of this press release, and 51Talk does not undertake
any obligation to update any forward-looking statement, except as
required under applicable law.
For investor and media inquiries, please contact:
China Online Education Group
Investor Relations
+86 (10) 5692-8909
ir@51talk.com
The Piacente Group, Inc.
Brandi Piacente
+86 (10) 5730-6200
+1-212-481-2050
51talk@tpg-ir.com
CHINA ONLINE
EDUCATION GROUP
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
Dec.
31,
|
|
Mar.
31,
|
|
Mar.
31,
|
|
|
|
|
2017
|
|
2018
|
|
2018
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
320,039
|
|
415,020
|
|
66,164
|
|
|
Time
deposits
|
|
202,659
|
|
103,732
|
|
16,537
|
|
|
Short term
investment
|
|
100,722
|
|
30,258
|
|
4,824
|
|
|
Prepaid expenses and
other current assets
|
|
84,941
|
|
173,587
|
|
27,674
|
|
Total current
assets
|
|
708,361
|
|
722,597
|
|
115,199
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Held to
maturity
|
|
6,751
|
|
6,561
|
|
1,046
|
|
|
Property, plant and
equipment, net
|
|
49,009
|
|
45,400
|
|
7,238
|
|
|
Intangible assets,
net
|
|
9,686
|
|
9,131
|
|
1,456
|
|
|
Goodwill
|
|
4,223
|
|
4,223
|
|
673
|
|
|
Other non-current
assets
|
|
5,526
|
|
5,355
|
|
854
|
|
Total non-current
assets
|
|
75,195
|
|
70,670
|
|
11,267
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
783,556
|
|
793,267
|
|
126,466
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY
|
|
|
|
|
|
|
|
AND STOCKHOLDERS'
DEFICIT
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term
loan
|
|
-
|
|
5,645
|
|
900
|
|
|
Deferred
revenues
|
|
1,176,565
|
|
1,251,044
|
|
199,446
|
|
|
Accrued expenses and
other current liabilities
|
|
222,798
|
|
196,270
|
|
31,290
|
|
|
Taxes
payable
|
|
24,985
|
|
22,761
|
|
3,629
|
|
Total current
liabilities
|
|
1,424,348
|
|
1,475,720
|
|
235,265
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
Deferred
revenues
|
|
25,230
|
|
23,745
|
|
3,786
|
|
|
Deferred tax
liabilities
|
|
124
|
|
98
|
|
16
|
|
|
Other non-current
liabilities
|
|
2,245
|
|
2,210
|
|
352
|
|
Total non-current
liabilities
|
|
27,599
|
|
26,053
|
|
4,154
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
1,451,947
|
|
1,501,773
|
|
239,419
|
CHINA ONLINE
EDUCATION GROUP
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
|
Dec.
31,
|
|
Mar.
31,
|
|
Mar.
31,
|
|
|
|
|
2017
|
|
2018
|
|
2018
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
deficit
|
|
(668,391)
|
|
(708,506)
|
|
(112,953)
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and
|
|
|
|
|
|
|
|
|
shareholders'
deficit
|
|
783,556
|
|
793,267
|
|
126,466
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
ONLINE EDUCATION GROUP
|
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
|
|
(In thousands
except for number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
Mar.
31,
|
|
|
|
2017
|
|
2017
|
|
2018
|
|
2018
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
159,519
|
|
260,621
|
|
262,577
|
|
41,861
|
Cost of
revenues
|
|
(54,752)
|
|
(98,021)
|
|
(92,929)
|
|
(14,815)
|
Gross
profit
|
|
104,767
|
|
162,600
|
|
169,648
|
|
27,046
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(146,077)
|
|
(190,248)
|
|
(171,592)
|
|
(27,356)
|
|
Product development
expenses
|
|
(50,601)
|
|
(60,396)
|
|
(52,240)
|
|
(8,328)
|
|
General and
administrative expenses
|
|
(48,364)
|
|
(64,904)
|
|
(56,364)
|
|
(8,986)
|
Total operating
expenses
|
|
(245,042)
|
|
(315,548)
|
|
(280,196)
|
|
(44,670)
|
Loss from
operations
|
|
(140,275)
|
|
(152,948)
|
|
(110,548)
|
|
(17,624)
|
Interest and other
income/ (expenses), net
|
|
963
|
|
(5,142)
|
|
(1,044)
|
|
(166)
|
Loss before income
tax expenses
|
|
(139,312)
|
|
(158,090)
|
|
(111,592)
|
|
(17,790)
|
Income tax
expenses
|
|
(728)
|
|
(1,583)
|
|
(1,070)
|
|
(171)
|
Net loss
|
|
(140,040)
|
|
(159,673)
|
|
(112,662)
|
|
(17,961)
|
Net loss attributable
to ordinary shareholders
|
|
(140,040)
|
|
(159,673)
|
|
(112,662)
|
|
(17,961)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used in
|
|
|
|
|
|
|
|
|
|
computing basic and
diluted loss per share
|
|
300,860,235
|
|
302,219,381
|
|
302,871,754
|
|
302,871,754
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
basic and
diluted
|
|
(0.47)
|
|
(0.53)
|
|
(0.37)
|
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA
ONLINE EDUCATION GROUP
|
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
|
|
(In thousands
except for number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
Mar.
31,
|
|
|
|
2017
|
|
2017
|
|
2018
|
|
2018
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Net loss per ADS
attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
basic and
diluted
|
|
(7.05)
|
|
(7.95)
|
|
(5.55)
|
|
(0.90)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
|
Net loss
|
|
(140,040)
|
|
(159,673)
|
|
(112,662)
|
|
(17,961)
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
(6,011)
|
|
(5,224)
|
|
(10,628)
|
|
(1,694)
|
Total comprehensive
loss
|
|
(146,051)
|
|
(164,897)
|
|
(123,290)
|
|
(19,655)
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expenses are included in the operating expenses as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(1,192)
|
|
(1,274)
|
|
(1,232)
|
|
(196)
|
Product development
expenses
|
|
(5,146)
|
|
(2,274)
|
|
(1,558)
|
|
(248)
|
General and
administrative expenses
|
|
(6,785)
|
|
(3,930)
|
|
(3,803)
|
|
(606)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA ONLINE
EDUCATION GROUP
|
Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP
Measures
|
(In
thousands except for number of shares and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
Mar.
31,
|
|
|
|
2017
|
|
2017
|
|
2018
|
|
2018
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(146,077)
|
|
(190,248)
|
|
(171,592)
|
|
(27,356)
|
Less: Share-based
compensation expenses
|
|
(1,192)
|
|
(1,274)
|
|
(1,232)
|
|
(196)
|
Non-GAAP sales and
marketing expenses
|
|
(144,885)
|
|
(188,974)
|
|
(170,360)
|
|
(27,160)
|
|
|
|
|
|
|
|
|
|
|
Product development
expenses
|
|
(50,601)
|
|
(60,396)
|
|
(52,240)
|
|
(8,328)
|
Less: Share-based
compensation expenses
|
|
(5,146)
|
|
(2,274)
|
|
(1,558)
|
|
(248)
|
Non-GAAP product
development expenses
|
|
(45,455)
|
|
(58,122)
|
|
(50,682)
|
|
(8,080)
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
(48,364)
|
|
(64,904)
|
|
(56,364)
|
|
(8,986)
|
Less: Share-based
compensation expenses
|
|
(6,785)
|
|
(3,930)
|
|
(3,803)
|
|
(606)
|
Non-GAAP general and
administrative expenses
|
|
(41,579)
|
|
(60,974)
|
|
(52,561)
|
|
(8,380)
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
(245,042)
|
|
(315,548)
|
|
(280,196)
|
|
(44,670)
|
Less: Share-based
compensation expenses
|
|
(13,123)
|
|
(7,478)
|
|
(6,593)
|
|
(1,050)
|
Non-GAAP operating
expenses
|
|
(231,919)
|
|
(308,070)
|
|
(273,603)
|
|
(43,620)
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(140,275)
|
|
(152,948)
|
|
(110,548)
|
|
(17,624)
|
Less: Share-based
compensation expenses
|
|
(13,123)
|
|
(7,478)
|
|
(6,593)
|
|
(1,050)
|
Non-GAAP loss from
operations
|
|
(127,152)
|
|
(145,470)
|
|
(103,955)
|
|
(16,574)
|
CHINA ONLINE
EDUCATION GROUP
|
Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP
Measures
|
(In
thousands except for number of shares and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
Mar.
31,
|
|
|
|
2017
|
|
2017
|
|
2018
|
|
2018
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Income tax
expenses
|
|
(728)
|
|
(1,583)
|
|
(1,070)
|
|
(171)
|
Less: Tax impact of
Share-based compensation expenses
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP income tax
expenses
|
|
(728)
|
|
(1,583)
|
|
(1,070)
|
|
(171)
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(140,040)
|
|
(159,673)
|
|
(112,662)
|
|
(17,961)
|
Less: Share-based
compensation expenses
|
|
(13,123)
|
|
(7,478)
|
|
(6,593)
|
|
(1,050)
|
Non-GAAP net
loss
|
|
(126,917)
|
|
(152,195)
|
|
(106,069)
|
|
(16,911)
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to ordinary shareholders
|
|
(140,040)
|
|
(159,673)
|
|
(112,662)
|
|
(17,961)
|
Less: Share-based
compensation expenses, net of tax
|
|
(13,123)
|
|
(7,478)
|
|
(6,593)
|
|
(1,050)
|
Non-GAAP net loss
attributable to ordinary shareholders
|
|
(126,917)
|
|
(152,195)
|
|
(106,069)
|
|
(16,911)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used in
|
|
|
|
|
|
|
|
|
|
computing basic and
diluted loss per share
|
|
300,860,235
|
|
302,219,381
|
|
302,871,754
|
|
302,871,754
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
share attributable to ordinary shareholders
|
|
|
|
|
|
|
|
basic and
diluted
|
|
(0.42)
|
|
(0.50)
|
|
(0.35)
|
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
ADS attributable to ordinary shareholders
|
|
|
|
|
|
|
|
basic and
diluted
|
|
(6.30)
|
|
(7.50)
|
|
(5.25)
|
|
(0.90)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/china-online-education-group-announces-first-quarter-2018-results-300664664.html
SOURCE China Online Education Group