- Fourth quarter and fiscal year net revenues increased
by 103.3% and 102.7% year-over-year,
respectively
- Fourth quarter and fiscal year gross
billings1 increased by 37.8%
and 64.3% year-over-year, respectively
BEIJING, March 26, 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
fourth quarter and fiscal year ended December 31, 2017.
Fourth Quarter 2017 Financial and Operational
Highlights
- Net revenues were RMB260.6
million (US$40.1 million), a
103.3% increase from RMB128.2 million
for the fourth quarter of 2016.
- In the fourth quarter of 2017, the Company posted an
out-of-period adjustment to record RMB15.5
million of omitted revenues that should have been recognized
in prior periods, of which RMB4.5
million, RMB6.8 million,
RMB3.0 million, and RMB1.2 million are attributed to the third, the
second and the first quarter of 2017 and the fourth quarter of
2016, respectively. If excluding this out-of-period adjustment, net
revenues for the fourth quarter of 2017 would have been
RMB245.1 million, representing an
89.4% increase from the fourth quarter of 2016.
- Gross billings were RMB393.4
million (US$60.5 million), a
37.8% increase from RMB285.5 million
for the fourth quarter of 2016.
- Gross margin was 62.4%, compared with 64.6% for the fourth
quarter of 2016. If recording the revenue out-of-period adjustment
in respective periods, gross margin for the fourth, the third, the
second and the first quarter of 2017 and the fourth quarter of 2016
would have been 60.0%, 62.5%, 64.2%, 66.3% and 64.9%,
respectively.
- Percentage of gross billings contributed by K-12 students was
80.3%, compared with 64.4% for the
fourth quarter of 2016.
Fiscal Year 2017 Financial and
Operational Highlights
- Net revenues were RMB848.0
million (US$130.3 million), a
102.7% increase from RMB418.3 million
for the fiscal year 2016.
- Gross billings were RMB1,426.9
million (US$219.3 million), a
64.3% increase from RMB868.7 million
for the fiscal year 2016.
- Gross margin was 63.0%, compared with 64.8% for the fiscal year
2016.
- Percentage of gross billings contributed by K-12 students was
74.6%, compared with 55.4% for the fiscal year 2016.
- Net cash provided by operating activities reached RMB55.1 million (US$8.5
million), compared with RMB28.7
million of net cash provided by operating activities for the
fiscal year 2016.
Key Operating Data
|
For the three
months ended
|
|
|
|
For the year
ended
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Y-o-Y
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Y-o-Y
|
|
2016
|
|
2017
|
|
Change
|
|
2016
|
|
2017
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross billings
(in RMB millions)
|
285.5
|
|
393.4
|
|
37.8%
|
|
868.7
|
|
1,426.9
|
|
64.3%
|
Gross billings
contributed
by K-12 students
(in RMB millions)
|
183.8
|
|
316.0
|
|
71.9%
|
|
480.9
|
|
1,064.4
|
|
121.3%
|
Active
students2
(in thousands)
|
115.5
|
|
175.2
|
|
51.7%
|
|
163.2
|
|
249.7
|
|
53.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
[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 excludes those students who only attended paid live
broadcasting lessons or trial lessons.
|
"We are pleased to report another strong quarter that capped off
a solid year," said Mr. Jack Jiajia
Huang, Founder, Director and Chief Executive Officer of
51Talk. "This quarter was highlighted by continued strong results
from our K-12 mass-market one-on-one offering and encouraging early
results of our recently launched K-12 small class offering. As a
result, the gross billings contributed by K-12 students reached
over 80% for the quarter. Key operating metrics for the small class
offering were in line with, or better than, our expectation, and we
are very excited about the growth prospects of this new
program.
"We made significant strides in 2017 to position our Company for
continued growth," Mr. Huang added. "In the third quarter of 2017
we announced our strategic focus on the K-12 segment including both
our mass-market one-on-one format and our small class offering.
This K-12 focus provides a more favorable margin proposition in the
future and significantly widens our target customer opportunity,
allowing us to further penetrate the market down to second-, third-
and fourth-tier cities in China.
"In conjunction with our K-12 focus, we unveiled our new brand
positioning a few weeks ago. Our 51Talk brand now represents K-12
mass-market one-on-one products and will be the centerpiece of our
marketing campaign this spring. We will position our small class
offering under the Hawo brand and
our adult English offering under the WuYouYingYu brand. We believe our refined
strategic focus and more fully developed brand identity will
increase national awareness of our offerings and position us well
for continued growth," Mr. Huang concluded.
Mr. Jimmy Lai, Chief Financial
Officer of 51Talk, added, "We saw dynamic growth for both net
revenues and gross billings for the full year 2017, which we view
as indicative of our compelling model and our strong competitive
position. We anticipate gross billings pressure in the first
quarter of 2018, as we continue to deemphasize our lower margin
American Academy offering. But importantly, our billings mix is
shifting to our higher margin mass-market K-12 offerings and our
pipeline is expected to yield solid results. Following anticipated
weakness in the first quarter of 2018, we expect gross billings
trends to resume to past growth patterns starting in the second
quarter of the year, as our mass-market K-12 focus strategy takes
effect and our small class offering grows. In addition, our
nationwide marketing and brand awareness campaign targeting the
spring back-to-school season will likely pressure sales and
marketing expenses near-term, but those costs are expected to
subside as those programs gain traction through the year.
"As we leverage our proven and industry leading technology, our
refined strategy targets higher margin revenue growth and a large
and diverse customer base which builds our confidence in the
future," Mr. Lai concluded.
Fourth Quarter 2017 Financial
Results
Net Revenues
Net revenues for the fourth quarter of 2017 were RMB260.6 million (US$40.1
million), a 103.3% increase from RMB128.2 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 fourth quarter of 2017 was 175.2 thousand, a 51.7% increase
from 115.5 thousand for the same quarter last year.
Cost of Revenues
Cost of revenues for the fourth quarter of 2017 was RMB98.0 million (US$15.1
million), a 115.8% increase from RMB45.4 million for the same quarter last year.
The increase was primarily driven by an increase in total service
fees paid to teachers, due to the delivery of an increased number
of paid lessons as well as the increased cost per lesson associated
with year-over-year increased use of western teachers.
Gross Profit and Gross Margin
Gross profit for the fourth quarter of 2017 was RMB162.6 million (US$25.0
million), a 96.4% increase from RMB82.8 million for the same quarter last
year.
Gross margin for the fourth quarter of 2017 was 62.4%, compared
with 64.6% for the same quarter last year. The decrease was mainly
attributable to the year-over-year increased penetration of the
American Academy program, which has a lower gross profit
margin.
Operating Expenses
Total operating expenses for the fourth quarter of 2017 were
RMB315.5 million (US$48.5 million), a 35.2% increase from
RMB233.4 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 fourth quarter of 2017 were
RMB190.2 million (US$29.2 million), a 37.3% increase from
RMB138.6 million for the same quarter
last year. The increase was mainly due to higher expenses related
to an increase in the number of sales and marketing personnel, as
well as increased marketing and branding promotional expenses.
Excluding share-based compensation expenses, non-GAAP sales and
marketing expenses for the fourth quarter of 2017 were RMB189.0 million (US$29.0
million), a 37.3% increase from RMB137.6 million for the same quarter last
year.
Product development expenses for the fourth quarter of 2017 were
RMB60.4 million (US$9.3 million), a 31.1% increase from
RMB46.1 million for the same quarter
last year. The increase was primarily the result of newly added
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 fourth quarter of 2017 were RMB58.1
million (US$8.9 million), a
37.3% increase from RMB42.3 million
for the same quarter last year.
General and administrative expenses for the fourth quarter of
2017 were RMB64.9 million
(US$10.0 million), a 33.1% increase
from RMB48.8 million for the same
quarter last year. The increase was primarily due to additional
expenses for personnel necessary to support expanded operations, as
well as higher recruitment costs and costs related to compliance
and reporting obligations as a public company. Excluding
share-based compensation expenses, non-GAAP general and
administrative expenses for the fourth quarter of 2017 were
RMB61.0 million (US$9.4 million), a 37.5% increase from
RMB44.3 million for the same quarter
last year.
Loss from Operations
Loss from operations for the fourth quarter of 2017 was
RMB152.9 million (US$23.5 million), compared with RMB150.6 million for the same quarter last
year.
Non-GAAP loss from operations for the fourth quarter of 2017 was
RMB145.5 million (US$22.4 million), compared with RMB141.5 million for the same quarter last
year.
Net Loss
Net loss for the fourth quarter of 2017 was RMB159.7 million (US$24.5
million), compared with RMB154.2
million for the same quarter last year.
Non-GAAP net loss for the fourth quarter of 2017 was
RMB152.2 million (US$23.4 million), compared with RMB145.0 million for the same quarter last
year.
Basic and diluted net loss per American depositary share ("ADS")
attributable to ordinary shareholders for the fourth quarter of
2017 was RMB7.95 (US$1.20), compared with basic and diluted net
loss per ADS attributable to ordinary shareholders of RMB7.70 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 fourth quarter of 2017 was
RMB7.50 (US$1.20), compared with non-GAAP basic and
diluted net loss per ADS attributable to ordinary shareholders of
RMB7.24 for the same quarter last
year.
Balance Sheet
As of December 31, 2017, the
Company had total cash, cash equivalents, time deposits and
short-term investments of RMB623.4
million (US$95.8 million),
compared with RMB647.0 million as of
December 31, 2016.
The Company had deferred revenues (current and non-current) of
RMB1,201.8 million (US$184.7 million) as of December 31, 2017, compared with RMB687.1 million as of December 31, 2016.
Fiscal Year 2017 Financial
Results
Net Revenues
Net revenues for the fiscal year 2017 were RMB848.0 million (US$130.3
million), a 102.7% increase from RMB418.3 million for the 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 was 249.7
thousand, a 53.0% increase from 163.2 thousand for the last
year.
Cost of Revenues
Cost of revenues for the fiscal year 2017 was RMB314.1 million (US$48.3
million), a 113.5% increase from RMB147.2 million for the 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, as well as the increased cost per lesson associated with
year-over-year increased use of western teachers.
Gross Profit and Gross Margin
Gross profit for the fiscal year 2017 was RMB533.9 million (US$82.1
million), a 96.9% increase from RMB271.1 million for the last year.
Gross margin for the fiscal year 2017 was 63.0%, compared with
64.8% for the last year. The decrease was mainly attributable to
the year-over-year increased penetration of the American Academy
program, which has a lower gross profit margin.
Operating Expenses
Total operating expenses for the fiscal year 2017 were
RMB1,104.7 million (US$169.8 million), a 41.0% increase from
RMB783.3 million for the 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 fiscal year 2017 were
RMB657.1 million (US$101.0 million), a 41.3% increase from
RMB464.9 million for the last year.
The increase was mainly due to an increase in the number of sales
and marketing personnel, as well as increased marketing and
promotional expenses. There were no share-based compensation
expenses recognized prior to the second quarter of 2016 as the
initial public offering performance condition was not considered
probable until the occurrence. Excluding share-based compensation
expenses, non-GAAP sales and marketing expenses were
RMB652.5 million (US$100.3 million), a 41.9% increase from
RMB459.8 million for the last
year.
Product development expenses for the fiscal year 2017 were
RMB223.2 million (US$34.3 million), a 46.2% increase from
RMB152.7 million for the last year.
The increase was primarily the result of an increase in the number
of 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 and by a reversal of
share-based compensation expenses recognized related to unvested
options upon departure of some technology-related personnel. There
were no share-based compensation expenses recognized prior to the
second quarter of 2016 as the initial public offering performance
condition was not considered probable until the occurrence.
Excluding share-based compensation expenses, non-GAAP product
development expenses were RMB214.2
million (US$32.9 million), a
56.9% increase from RMB136.5 million
for the last year.
General and administrative expenses for the fiscal year 2017
were RMB224.4 million (US$34.5 million), a 35.5% increase from
RMB165.7 million for the last year.
The increase was primarily due to additional personnel necessary to
support expanded operations, higher recruitment costs and costs
related to compliance and reporting obligations as a public
company, partially offset by lower recognized share-based
compensation expenses. There were no share-based compensation
expenses recognized prior to the second quarter of 2016 as the
initial public offering performance condition was not considered
probable until the occurrence. Excluding share-based compensation
expenses, non-GAAP general and administrative expenses were
RMB203.0 million (US$31.2 million), a 46.3% increase from
RMB138.7 million for the last
year.
Loss from Operations
Loss from operations for the fiscal year 2017 was RMB570.8 million (US$87.7
million), compared with RMB512.1
million for the last year.
Non-GAAP loss from operations for the fiscal year 2017 was
RMB535.7 million (US$82.3 million), compared with RMB463.9 million for the last year.
Net Loss
Net loss for the fiscal year 2017 was RMB580.8 million (US$89.3
million), compared with RMB514.8
million for the last year.
Non-GAAP net loss for the fiscal year 2017 was RMB545.7 million (US$83.9
million), compared with RMB466.5
million for the last year.
Basic and diluted net loss per ADS attributable to ordinary
shareholders for the fiscal year 2017 was RMB28.95 (US$4.50),
compared with basic and diluted net loss per ADS attributable to
ordinary shareholders of RMB45.50 for
the 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 fiscal year 2017 was RMB27.15 (US$4.20),
compared with non-GAAP basic and diluted net loss per ADS
attributable to ordinary shareholders of RMB41.87 for the last year.
Outlook
For the first quarter of 2018, the Company currently
expects:
- Net revenues to be between RMB245
million to RMB250 million,
which would represent an increase of approximately 54% to 57% from
RMB159.5 million for the same quarter
last year; and
- Gross billings to be between RMB340
million to RMB350 million,
which would represent an increase of approximately 5% to 8% from
RMB325.1 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.
Conference Call
The Company's management will host an earnings conference call
at 8:00 AM U.S. Eastern Time on
March 26, 2018 (8:00 PM Beijing/Hong
Kong time on March 26,
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
April 2, 2018, by dialing the
following telephone numbers:
United States (toll
free):
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Replay Access
Code:
|
10117897
|
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 RMB6.5063 to US$1.00, the rate in effect as of December 29, 2017 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
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
|
|
2016
|
|
2017
|
|
2017
|
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
274,873
|
|
320,039
|
|
49,189
|
|
|
|
Time
deposits
|
|
372,150
|
|
202,659
|
|
31,148
|
|
|
|
Short-term
investments
|
|
-
|
|
100,722
|
|
15,481
|
|
|
|
Prepaid expenses and
other current assets
|
|
65,766
|
|
84,941
|
|
13,055
|
|
|
Total current
assets
|
|
712,789
|
|
708,361
|
|
108,873
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
|
Held-to-maturity
securities
|
|
6,943
|
|
6,751
|
|
1,038
|
|
|
|
Property, plant and
equipment, net
|
|
41,576
|
|
49,009
|
|
7,533
|
|
|
|
Intangible assets,
net
|
|
4,629
|
|
9,686
|
|
1,489
|
|
|
|
Goodwill
|
|
4,223
|
|
4,223
|
|
649
|
|
|
|
Other non-current
assets
|
|
5,367
|
|
5,526
|
|
849
|
|
|
Total non-current
assets
|
|
62,738
|
|
75,195
|
|
11,558
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
775,527
|
|
783,556
|
|
120,431
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
AND STOCKHOLDERS'
DEFICIT
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Deferred
revenues
|
|
653,413
|
|
1,176,565
|
|
180,835
|
|
|
|
Accrued expenses and
other current liabilities
|
|
166,524
|
|
222,798
|
|
34,243
|
|
|
|
Taxes
payable
|
|
18,923
|
|
24,985
|
|
3,840
|
|
|
Total current
liabilities
|
|
838,860
|
|
1,424,348
|
|
218,918
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
|
Deferred
revenues
|
|
33,706
|
|
25,230
|
|
3,878
|
|
|
|
Deferred tax
liabilities
|
|
226
|
|
124
|
|
19
|
|
|
|
Other non-current
liabilities
|
|
1,918
|
|
2,245
|
|
345
|
|
|
Total non-current
liabilities
|
|
35,850
|
|
27,599
|
|
4,242
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
874,710
|
|
1,451,947
|
|
223,160
|
|
|
|
|
|
Total shareholders'
deficit
|
|
(99,183)
|
|
(668,391)
|
|
(102,729)
|
|
|
|
|
|
Total liabilities
and shareholders'
deficit
|
|
775,527
|
|
783,556
|
|
120,431
|
|
|
|
|
|
CHINA
ONLINE EDUCATION GROUP
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
|
|
(In thousands
except for number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the year
ended
|
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
|
2016
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2017
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
128,219
|
|
260,621
|
|
40,057
|
|
418,281
|
|
847,993
|
|
130,334
|
|
Cost of
revenues
|
|
(45,423)
|
|
(98,021)
|
|
(15,066)
|
|
(147,157)
|
|
(314,121)
|
|
(48,280)
|
|
Gross
profit
|
|
82,796
|
|
162,600
|
|
24,991
|
|
271,124
|
|
533,872
|
|
82,054
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(138,613)
|
|
(190,248)
|
|
(29,241)
|
|
(464,890)
|
|
(657,065)
|
|
(100,989)
|
|
|
Product development
expenses
|
|
(46,068)
|
|
(60,396)
|
|
(9,283)
|
|
(152,709)
|
|
(223,202)
|
|
(34,306)
|
|
|
General and
administrative expenses
|
|
(48,761)
|
|
(64,904)
|
|
(9,976)
|
|
(165,657)
|
|
(224,395)
|
|
(34,489)
|
|
Total operating
expenses
|
|
(233,442)
|
|
(315,548)
|
|
(48,500)
|
|
(783,256)
|
|
(1,104,662)
|
|
(169,784)
|
|
Loss from
operations
|
|
(150,646)
|
|
(152,948)
|
|
(23,509)
|
|
(512,132)
|
|
(570,790)
|
|
(87,730)
|
|
Interest and other
expenses, net
|
|
(3,111)
|
|
(5,142)
|
|
(790)
|
|
(1,030)
|
|
(5,679)
|
|
(873)
|
|
Loss before income
tax expenses
|
|
(153,757)
|
|
(158,090)
|
|
(24,299)
|
|
(513,162)
|
|
(576,469)
|
|
(88,603)
|
|
Income tax
expenses
|
|
(408)
|
|
(1,583)
|
|
(243)
|
|
(1,616)
|
|
(4,342)
|
|
(667)
|
|
Net loss
|
|
(154,165)
|
|
(159,673)
|
|
(24,542)
|
|
(514,778)
|
|
(580,811)
|
|
(89,270)
|
|
|
Accretions to
preferred shares redemption value
|
|
-
|
|
-
|
|
-
|
|
(91,631)
|
|
-
|
|
-
|
|
|
Deemed contribution
from preferred shares
|
|
-
|
|
-
|
|
-
|
|
2,618
|
|
-
|
|
-
|
|
Net loss attributable
to ordinary shareholders
|
|
(154,165)
|
|
(159,673)
|
|
(24,542)
|
|
(603,791)
|
|
(580,811)
|
|
(89,270)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
computing basic and
diluted loss per share
|
|
300,400,768
|
|
302,219,381
|
|
302,219,381
|
|
199,039,819
|
|
301,610,060
|
|
301,610,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
basic and
diluted
|
|
(0.51)
|
|
(0.53)
|
|
(0.08)
|
|
(3.03)
|
|
(1.93)
|
|
(0.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per ADS
attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
basic and
diluted
|
|
(7.70)
|
|
(7.95)
|
|
(1.20)
|
|
(45.50)
|
|
(28.95)
|
|
(4.50)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(154,165)
|
|
(159,673)
|
|
(24,542)
|
|
(514,778)
|
|
(580,811)
|
|
(89,270)
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
20,427
|
|
(5,224)
|
|
(803)
|
|
27,700
|
|
(24,662)
|
|
(3,790)
|
|
Total comprehensive
loss
|
|
(133,738)
|
|
(164,897)
|
|
(25,345)
|
|
(487,078)
|
|
(605,473)
|
|
(93,060)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expenses are included in the operating expenses as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(1,024)
|
|
(1,274)
|
|
(196)
|
|
(5,082)
|
|
(4,612)
|
|
(709)
|
|
Product development
expenses
|
|
(3,735)
|
|
(2,274)
|
|
(350)
|
|
(16,202)
|
|
(9,039)
|
|
(1,389)
|
|
General and
administrative expenses
|
|
(4,427)
|
|
(3,930)
|
|
(604)
|
|
(26,958)
|
|
(21,418)
|
|
(3,292)
|
|
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
|
|
For the year
ended
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
|
|
2016
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2017
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(138,613)
|
|
(190,248)
|
|
(29,241)
|
|
(464,890)
|
|
(657,065)
|
|
(100,989)
|
Less: Share-based
compensation expenses
|
|
(1,024)
|
|
(1,274)
|
|
(196)
|
|
(5,082)
|
|
(4,612)
|
|
(709)
|
Non-GAAP sales and
marketing expenses
|
|
(137,589)
|
|
(188,974)
|
|
(29,045)
|
|
(459,808)
|
|
(652,453)
|
|
(100,280)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
expenses
|
|
(46,068)
|
|
(60,396)
|
|
(9,283)
|
|
(152,709)
|
|
(223,202)
|
|
(34,306)
|
Less: Share-based
compensation expenses
|
|
(3,735)
|
|
(2,274)
|
|
(350)
|
|
(16,202)
|
|
(9,039)
|
|
(1,389)
|
Non-GAAP product
development expenses
|
|
(42,333)
|
|
(58,122)
|
|
(8,933)
|
|
(136,507)
|
|
(214,163)
|
|
(32,917)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
(48,761)
|
|
(64,904)
|
|
(9,976)
|
|
(165,657)
|
|
(224,395)
|
|
(34,489)
|
Less: Share-based
compensation expenses
|
|
(4,427)
|
|
(3,930)
|
|
(604)
|
|
(26,958)
|
|
(21,418)
|
|
(3,292)
|
Non-GAAP general and
administrative expenses
|
|
(44,334)
|
|
(60,974)
|
|
(9,372)
|
|
(138,699)
|
|
(202,977)
|
|
(31,197)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
(233,442)
|
|
(315,548)
|
|
(48,500)
|
|
(783,256)
|
|
(1,104,662)
|
|
(169,783)
|
Less: Share-based
compensation expenses
|
|
(9,186)
|
|
(7,478)
|
|
(1,150)
|
|
(48,242)
|
|
(35,069)
|
|
(5,390)
|
Non-GAAP operating
expenses
|
|
(224,256)
|
|
(308,070)
|
|
(47,350)
|
|
(735,014)
|
|
(1,069,593)
|
|
(164,393)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(150,646)
|
|
(152,948)
|
|
(23,509)
|
|
(512,132)
|
|
(570,790)
|
|
(87,730)
|
Less: Share-based
compensation expenses
|
|
(9,186)
|
|
(7,478)
|
|
(1,150)
|
|
(48,242)
|
|
(35,069)
|
|
(5,390)
|
Non-GAAP loss from
operations
|
|
(141,460)
|
|
(145,470)
|
|
(22,359)
|
|
(463,890)
|
|
(535,721)
|
|
(82,340)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expenses
|
|
(408)
|
|
(1,583)
|
|
(243)
|
|
(1,616)
|
|
(4,342)
|
|
(667)
|
Less: Tax impact of
share-based compensation expenses
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP income tax
expenses
|
|
(408)
|
|
(1,583)
|
|
(243)
|
|
(1,616)
|
|
(4,342)
|
|
(667)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(154,165)
|
|
(159,673)
|
|
(24,542)
|
|
(514,778)
|
|
(580,811)
|
|
(89,270)
|
Less: Share-based
compensation expenses
|
|
(9,186)
|
|
(7,478)
|
|
(1,150)
|
|
(48,242)
|
|
(35,069)
|
|
(5,390)
|
Non-GAAP net
loss
|
|
(144,979)
|
|
(152,195)
|
|
(23,392)
|
|
(466,536)
|
|
(545,742)
|
|
(83,880)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to ordinary shareholders
|
|
(154,165)
|
|
(159,673)
|
|
(24,542)
|
|
(603,791)
|
|
(580,811)
|
|
(89,270)
|
Less: Share-based
compensation expenses, net of tax
|
|
(9,186)
|
|
(7,478)
|
|
(1,150)
|
|
(48,242)
|
|
(35,069)
|
|
(5,390)
|
Non-GAAP net loss
attributable to ordinary shareholders
|
|
(144,979)
|
|
(152,195)
|
|
(23,392)
|
|
(555,549)
|
|
(545,742)
|
|
(83,880)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
computing basic and
diluted loss per share
|
|
300,400,768
|
|
302,219,381
|
|
302,219,381
|
|
199,039,819
|
|
301,610,060
|
|
301,610,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
share attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
basic and
diluted
|
|
(0.48)
|
|
(0.50)
|
|
(0.08)
|
|
(2.79)
|
|
(1.81)
|
|
(0.28)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
ADS attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
basic and
diluted
|
|
(7.24)
|
|
(7.50)
|
|
(1.20)
|
|
(41.87)
|
|
(27.15)
|
|
(4.20)
|
View original
content:http://www.prnewswire.com/news-releases/china-online-education-group-announces-fourth-quarter-and-fiscal-year-2017-results-300619229.html
SOURCE China Online Education Group