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Sunlands Technology Group Announces Unaudited Second Quarter 2023 Financial Results

Sunlands Technology Group
Sunlands Technology Group

Q2 net revenues decreased by 5.2% year-over-year
Q2 gross billings (non-GAAP) decreased by 4.2% year-over-year
Q2 net income reached RMB173.9 million

BEIJING, Aug. 18, 2023 (GLOBE NEWSWIRE) -- 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 second quarter ended June 30, 2023.

Second Quarter 2023 Financial and Operational Snapshots

  • Net revenues were RMB526.4 million (US$72.6 million), representing a 5.2% decrease year-over-year.

  • Gross billings (non-GAAP) were RMB354.1 million (US$48.8 million), representing a 4.2% decrease year-over-year.

  • Gross profit was RMB466.9 million (US$64.4 million), representing a 0.7% increase year-over-year.

  • Net income was RMB173.9 million (US$24.0 million), as compared to RMB114.6 million in the second quarter of 2022.

  • Net income margin, defined as net income as a percentage of net revenues, increased to 33.0% from 20.6% in the second quarter of 2022.

  • New student enrollments1 were 154,209, representing a 27.7% increase year-over-year.

  • As of June 30, 2023, the Company’s deferred revenue balance was RMB1,379.1 million (US$190.2 million).

ADVERTISEMENT

_____________________________

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.)

“In Q2, our business showcased remarkable resilience and steady performance. Our second quarter net revenue reached RMB526.4 million, exceeding the high end of our guidance range. Net income experienced year-over-year increase, reaching RMB173.9 million in Q2, marking the ninth consecutive quarter of sustained profitability for our company. We maintain a positive outlook for the upcoming second half of the year,” said Mr. Tongbo Liu, Chief Executive Officer of Sunlands.

“Through proactive reassessment of our long-term strategic focus and implementation of a series of endeavors, our pursuit of developing valuable interest courses has continued to yield remarkable results. Specifically, our revenue in the professional certification preparation, professional skills and interest courses has surged by 32.7% year-over-year, and we have witnessed a 36.8% increase in new student enrollments in this sector. The robust market demands have instilled us with confidence and we remain committed to seizing emerging opportunities actively, promoting innovation and improvement to meet the diverse needs of adult learners, and achieving sustained growth and development,” concluded Mr. Liu.

Mr. Hangyu Li, Financial Controller of Sunlands, commented, “We are delighted to announce that this quarter was also an excellent quarter in financial perspective. Our gross profit margin reached 88.7%, an increase of 5.1 percentage points compared with the same period last year. Thanks to our persistent efforts in cost controls, the operating expenses decreased by RMB40.1 million, or 11.4%, year-over-year and our net income margin increased 12.4 percentage points compared to the same period last year. Looking forward, we will keep our commitment to delivering value to our stakeholders and maintaining a competitive edge in the industry.”

Financial Results for the second quarter of 2023

Net Revenues

In the second quarter of 2023, net revenues decreased by 5.2% to RMB526.4 million (US$72.6 million) from RMB555.0 million in the second quarter of 2022. The decrease was mainly driven by the year-over-year decline in gross billings in 2023.

Cost of Revenues

Cost of revenues decreased by 34.8% to RMB59.5 million (US$8.2 million) in the second quarter of 2023 from RMB91.2 million in the second quarter of 2022. 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 0.7% to RMB466.9 million (US$64.4 million) in the second quarter of 2023 from RMB463.8 million in the second quarter of 2022.

Operating Expenses

In the second quarter of 2023, operating expenses were RMB311.0 million (US$42.9 million), representing an 11.4% decrease from RMB351.2 million in the second quarter of 2022.

Sales and marketing expenses decreased by 7.9% to RMB270.0 million (US$37.2 million) in the second quarter of 2023 from RMB293.0 million in the second quarter of 2022. The decrease was mainly due to declined compensation expenses related to headcount reduction of our sales and marketing personnel.

General and administrative expenses decreased by 29.1% to RMB33.1 million (US$4.6 million) in the second quarter of 2023 from RMB46.6 million in the second quarter of 2022. The decrease was mainly due to declined rental expenses due to the early termination of a lease contract.

Product development expenses decreased by 31.0% to RMB8.0 million (US$1.1 million) in the second quarter of 2023 from RMB11.6 million in the second quarter of 2022. The decrease was mainly due to declined compensation expenses related to headcount reduction of our product development personnel.

Net Income

Net income for the second quarter of 2023 was RMB173.9 million (US$24.0 million), as compared to RMB114.6 million in the second quarter of 2022.

Basic and Diluted Net Income Per Share

Basic and diluted net income per share was RMB25.12 (US$3.46) in the second quarter of 2023.

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

As of June 30, 2023, the Company had RMB749.5 million (US$103.4 million) of cash, cash equivalents and restricted cash and RMB63.2 million (US$8.7 million) of short-term investments, as compared to RMB757.4 million of cash, cash equivalents and restricted cash and RMB70.5 million of short-term investments as of December 31, 2022.

Deferred Revenue

As of June 30, 2023, the Company had a deferred revenue balance of RMB1,379.1 million (US$190.2 million), as compared to RMB1,690.9 million as of December 31, 2022.

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 RMB1.0 million (US$0.1 million) in the second quarter of 2023, as compared to RMB0.3 million in the second quarter of 2022.

Share Repurchase

On December 6, 2021, the Company’s board of directors authorized a share repurchase program, under which the Company may repurchase up to US$15.0 million of Class A ordinary shares in the form of ADSs over the next 24 months. As of August 17, 2023, the Company had repurchased an aggregate of 456,118 ADSs for approximately US$2.1 million under the share repurchase program.

Financial Results for the First Six Months of 2023

Net Revenues

In the first six months of 2023, net revenues decreased by 6.4% to RMB1,093.2 million (US$150.8 million) from RMB1,168.3 million in the first six months of 2022.

Cost of Revenues

Cost of revenues decreased by 32.1% to RMB127.6 million (US$17.6 million) in the first six months of 2023 from RMB188.0 million in the first six months of 2022.

Gross Profit

Gross profit decreased by 1.5% to RMB965.6 million (US$133.2 million) from RMB980.3 million in the first six months of 2022.

Operating Expenses

In the first six months of 2023, operating expenses were RMB631.8 million (US$87.1 million), representing a 9.4% decrease from RMB697.0 million in the first six months of 2022.

Sales and marketing expenses decreased by 7.9% to RMB541.4 million (US$74.7 million) in the first six months of 2023 from RMB588.0 million in the first six months of 2022.

General and administrative expenses decreased by 14.5% to RMB72.7 million (US$10.0 million) in the first six months of 2023 from RMB85.1 million in the first six months of 2022.

Product development expenses decreased by 26.2% to RMB17.7 million (US$2.4 million) in the first six months of 2023 from RMB23.9 million in the first six months of 2022.

Net Income

Net income for the first six months of 2023 was RMB354.0 million (US$48.8 million), compared with RMB294.0 million in the first six months of 2022.

Basic and Diluted Net Income Per Share

Basic and diluted net income per share was RMB51.13 (US$7.05) in the first six months of 2023, compared with RMB43.95 in the first six months of 2022.

Capital Expenditures

Capital expenditures were incurred primarily in connection with IT infrastructure equipment and leasehold improvements necessary to support the Company’s operations. Capital expenditures were RMB4.8 million (US$0.7 million) in the first six months of 2023, compared with RMB1.2 million in the first six months of 2022.

Outlook

For the third quarter of 2023, Sunlands currently expects net revenues to be between RMB470 million to RMB490 million, which would represent a decrease of 15.0% to 18.4% 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 RMB7.2513 to US$1.00, the effective noon buying rate for June 30, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on June 30, 2023, 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 August 18, 2023, following the quarterly results announcement.

For participants who wish to join the call, please access the link provided below to complete online registration 15 minutes prior to the scheduled call start time. Upon registration, participants will receive details for the conference call, including dial-in numbers, a personal PIN and an e-mail with detailed instructions to join the conference call.

Registration Link:
https://register.vevent.com/register/BI2fa7774d43e34ce697c1d5bd158f825d

Additionally, a live webcast and archive of the conference call will be available on the Investor Relations section of Sunlands' website at https://ir.sunlands.com/.

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- or diploma-oriented post-secondary courses as well as professional certification preparation, professional skills and interest courses. Students can access the Company's 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 income from operations and Non-GAAP net 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 income excluding depreciation and amortization, interest expense, interest income, and income tax expenses. 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 income exclude share-based compensation expenses, and basic and diluted net 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
SOURCE: Sunlands Technology Group


SUNLANDS TECHNOLOGY GROUP
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except for share and per share data, or otherwise noted)

 

 

 

As of December 31,

 

As of June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

 

US$

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

753,642

 

 

 

746,770

 

 

 

102,984

 

Restricted cash

 

 

3,762

 

 

 

2,705

 

 

 

373

 

Short-term investments

 

 

70,542

 

 

 

63,209

 

 

 

8,717

 

Prepaid expenses and other current assets

 

 

98,272

 

 

 

116,157

 

 

 

16,019

 

Deferred costs, current

 

 

42,886

 

 

 

23,238

 

 

 

3,205

 

Total current assets

 

 

969,104

 

 

 

952,079

 

 

 

131,298

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

813,783

 

 

 

799,804

 

 

 

110,298

 

Intangible assets, net

 

 

1,509

 

 

 

1,784

 

 

 

246

 

Right-of-use assets

 

 

274,643

 

 

 

139,732

 

 

 

19,270

 

Deferred costs, non-current

 

 

78,839

 

 

 

72,789

 

 

 

10,038

 

Long-term investments

 

 

73,513

 

 

 

66,419

 

 

 

9,160

 

Deferred tax assets

 

 

26,799

 

 

 

20,270

 

 

 

2,795

 

Other non-current assets

 

 

37,880

 

 

 

35,342

 

 

 

4,874

 

Total non-current assets

 

 

1,306,966

 

 

 

1,136,140

 

 

 

156,681

 

TOTAL ASSETS

 

 

2,276,070

 

 

 

2,088,219

 

 

 

287,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities

 

 

436,339

 

 

 

367,034

 

 

 

50,616

 

Deferred revenue, current

 

 

986,086

 

 

 

716,647

 

 

 

98,830

 

Lease liabilities, current portion

 

 

17,065

 

 

 

7,394

 

 

 

1,020

 

Long-term debt, current portion

 

 

38,654

 

 

 

38,654

 

 

 

5,331

 

Total current liabilities

 

 

1,478,144

 

 

 

1,129,729

 

 

 

155,797

 


SUNLANDS TECHNOLOGY GROUP
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 June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

 

US$

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deferred revenue, non-current

 

 

704,860

 

 

 

662,426

 

 

 

91,353

 

Lease liabilities, non-current portion

 

 

316,844

 

 

 

161,215

 

 

 

22,233

 

Deferred tax liabilities

 

 

5,984

 

 

 

4,555

 

 

 

628

 

Other non-current liabilities

 

 

6,770

 

 

 

6,870

 

 

 

947

 

Long-term debt, non-current portion

 

 

143,319

 

 

 

123,992

 

 

 

17,099

 

Total non-current liabilities

 

 

1,177,777

 

 

 

959,058

 

 

 

132,260

 

TOTAL LIABILITIES

 

 

2,655,921

 

 

 

2,088,787

 

 

 

288,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

authorized; 2,982,516 and 3,131,807 shares issued as of December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

and June 30, 2023, respectively; 2,618,698 and 2,740,119 shares

 

 

 

 

 

 

 

 

 

 

 

 

outstanding as of December 31, 2022 and June 30, 2023, 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, 2022 and June 30, 2023, respectively)

 

 

-

 

 

 

-

 

 

 

-

 

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

 

 

 

 

 

 

 

 

 

 

 

 

authorized; 3,481,353 and 3,332,062 shares issued and outstanding

 

 

 

 

 

 

 

 

 

 

 

 

as of December 31, 2022 and June 30, 2023, respectively)

 

 

1

 

 

 

1

 

 

 

-

 

Treasury stock

 

 

-

 

 

 

-

 

 

 

-

 

Accumulated deficit

 

 

(2,812,114

)

 

 

(2,458,125

)

 

 

(338,991

)

Additional paid-in capital

 

 

2,309,740

 

 

 

2,308,277

 

 

 

318,326

 

Accumulated other comprehensive income

 

 

127,885

 

 

 

155,161

 

 

 

21,398

 

Total Sunlands Technology Group shareholders’ (deficit)/equity

 

 

(374,487

)

 

 

5,315

 

 

 

733

 

Non-controlling interest

 

 

(5,364

)

 

 

(5,883

)

 

 

(811

)

TOTAL SHAREHOLDERS’ DEFICIT

 

 

(379,851

)

 

 

(568

)

 

 

(78

)

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT

 

 

2,276,070

 

 

 

2,088,219

 

 

 

287,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 


SUNLANDS TECHNOLOGY GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except for share and per share data, or otherwise noted)

 

 

 

For the Three Months Ended June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

 

US$

Net revenues

 

 

554,991

 

 

 

526,353

 

 

 

72,587

 

Cost of revenues

 

 

(91,237

)

 

 

(59,491

)

 

 

(8,204

)

Gross profit

 

 

463,754

 

 

 

466,862

 

 

 

64,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing expenses

 

 

(292,978

)

 

 

(269,969

)

 

 

(37,230

)

Product development expenses

 

 

(11,578

)

 

 

(7,992

)

 

 

(1,102

)

General and administrative expenses

 

 

(46,635

)

 

 

(33,085

)

 

 

(4,563

)

Total operating expenses

 

 

(351,191

)

 

 

(311,046

)

 

 

(42,895

)

Income from operations

 

 

112,563

 

 

 

155,816

 

 

 

21,488

 

Interest income

 

 

3,842

 

 

 

7,561

 

 

 

1,043

 

Interest expense

 

 

(2,552

)

 

 

(2,046

)

 

 

(282

)

Other income, net

 

 

4,750

 

 

 

8,171

 

 

 

1,127

 

Gain on disposal of a subsidiary

 

 

-

 

 

 

247

 

 

 

34

 

Income before income tax (expenses)/benefit

 

 

 

 

 

 

 

 

 

 

 

 

and (loss)/gain from equity method investments

 

 

118,603

 

 

 

169,749

 

 

 

23,410

 

Income tax (expenses)/benefit

 

 

(3,652

)

 

 

1,404

 

 

 

194

 

(Loss)/gain from equity method investments

 

 

(391

)

 

 

2,730

 

 

 

376

 

Net income

 

 

114,560

 

 

 

173,883

 

 

 

23,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net loss attributable to non-controlling interest

 

 

(52

)

 

 

-

 

 

 

-

 

Net income attributable to Sunlands Technology Group

 

 

114,612

 

 

 

173,883

 

 

 

23,980

 

Net income per share attributable to ordinary shareholders of

 

 

 

 

 

 

 

 

 

 

 

 

Sunlands Technology Group:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

16.89

 

 

 

25.12

 

 

 

3.46

 

Weighted average shares used in calculating net income

 

 

 

 

 

 

 

 

 

 

 

 

per ordinary share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

6,784,685

 

 

 

6,921,304

 

 

 

6,921,304

 


SUNLANDS TECHNOLOGY GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)

 

 

 

For the Three Months Ended June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

 

US$

Net income

 

 

114,560

 

 

 

173,883

 

 

 

23,980

 

Other comprehensive income, net of tax effect of nil:

 

 

 

 

 

 

 

 

 

 

 

 

Change in cumulative foreign currency translation adjustments

 

 

31,807

 

 

 

29,603

 

 

 

4,082

 

Total comprehensive income

 

 

146,367

 

 

 

203,486

 

 

 

28,062

 

Less: comprehensive loss attributable to non-controlling interest

 

 

(52

)

 

 

-

 

 

 

-

 

Comprehensive income attributable to Sunlands Technology Group

 

 

146,419

 

 

 

203,486

 

 

 

28,062

 


SUNLANDS TECHNOLOGY GROUP
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(Amounts in thousands)

 

 

 

For the Three Months Ended June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

Net revenues

 

 

554,991

 

 

 

526,353

 

Less: other revenues

 

 

(31,088

)

 

 

(42,377

)

Add: tax and surcharges

 

 

17,209

 

 

 

9,779

 

Add: ending deferred revenue

 

 

1,998,062

 

 

 

1,379,073

 

Add: ending refund liability

 

 

199,028

 

 

 

107,319

 

Less: beginning deferred revenue

 

 

(2,170,948

)

 

 

(1,513,896

)

Less: beginning refund liability

 

 

(197,494

)

 

 

(112,188

)

Gross billings (non-GAAP)

 

 

369,760

 

 

 

354,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

114,560

 

 

 

173,883

 

Add: income tax expenses/(benefit)

 

 

3,652

 

 

 

(1,404

)

depreciation and amortization

 

 

9,274

 

 

 

7,677

 

interest expense

 

 

2,552

 

 

 

2,046

 

Less: interest income

 

 

(3,842

)

 

 

(7,561

)

EBITDA (non-GAAP)

 

 

126,196

 

 

 

174,641

 


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 June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

Cost of revenues

 

 

(91,237

)

 

 

(59,491

)

Less: Share-based compensation expenses in cost of revenues

 

 

-

 

 

 

-

 

Non-GAAP cost of revenues

 

 

(91,237

)

 

 

(59,491

)

 

 

 

 

 

 

 

 

 

Sales and marketing expenses

 

 

(292,978

)

 

 

(269,969

)

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

 

 

(4,088

)

 

 

-

 

Non-GAAP sales and marketing expenses

 

 

(288,890

)

 

 

(269,969

)

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

(46,635

)

 

 

(33,085

)

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

 

 

(2,725

)

 

 

-

 

Non-GAAP general and administrative expenses

 

 

(43,910

)

 

 

(33,085

)

 

 

 

 

 

 

 

 

 

Operating costs and expense

 

 

(442,428

)

 

 

(370,537

)

Less: Share-based compensation expenses

 

 

(6,813

)

 

 

-

 

Non-GAAP operating costs and expense

 

 

(435,615

)

 

 

(370,537

)

 

 

 

 

 

 

 

 

 

Income from operations

 

 

112,563

 

 

 

155,816

 

Less: Share-based compensation expenses

 

 

(6,813

)

 

 

-

 

Non-GAAP  income from operations

 

 

119,376

 

 

 

155,816

 

 

 

 

 

 

 

 

 

 

Net income attributable to Sunlands Technology Group

 

 

114,612

 

 

 

173,883

 

Less: Share-based compensation expenses

 

 

(6,813

)

 

 

-

 

Non-GAAP net income attributable to Sunlands Technology Group

 

 

121,425

 

 

 

173,883

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to ordinary shareholders of

 

 

 

 

 

 

 

 

Sunlands Technology Group:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

16.89

 

 

 

25.12

 

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

 

 

 

 

 

 

 

 

Sunlands Technology Group:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

17.90

 

 

 

25.12

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in calculating net income

 

 

 

 

 

 

 

 

per ordinary share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

6,784,685

 

 

 

6,921,304

 

Weighted average shares used in calculating Non-GAAP net income

 

 

 

 

 

 

 

 

per ordinary share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

6,784,685

 

 

 

6,921,304

 


SUNLANDS TECHNOLOGY GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except for share and per share data, or otherwise noted)

 

 

 

For the Six Months Ended June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

 

US$

Net revenues

 

 

1,168,305

 

 

 

1,093,229

 

 

 

150,763

 

Cost of revenues

 

 

(187,957

)

 

 

(127,646

)

 

 

(17,603

)

Gross profit

 

 

980,348

 

 

 

965,583

 

 

 

133,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing expenses

 

 

(587,975

)

 

 

(541,383

)

 

 

(74,660

)

Product development expenses

 

 

(23,933

)

 

 

(17,672

)

 

 

(2,437

)

General and administrative expenses

 

 

(85,095

)

 

 

(72,725

)

 

 

(10,029

)

Total operating expenses

 

 

(697,003

)

 

 

(631,780

)

 

 

(87,126

)

Income from operations

 

 

283,345

 

 

 

333,803

 

 

 

46,034

 

Interest income

 

 

7,008

 

 

 

14,122

 

 

 

1,948

 

Interest expense

 

 

(5,277

)

 

 

(4,170

)

 

 

(575

)

Other income, net

 

 

14,342

 

 

 

16,969

 

 

 

2,340

 

Gain on disposal of a subsidiary

 

 

-

 

 

 

247

 

 

 

34

 

Impairment loss on long-term investments

 

 

(500

)

 

 

-

 

 

 

-

 

Income before income tax expenses

 

 

 

 

 

 

 

 

 

 

 

 

and loss from equity method investments

 

 

298,918

 

 

 

360,971

 

 

 

49,781

 

Income tax expenses

 

 

(4,343

)

 

 

(6,327

)

 

 

(873

)

Loss from equity method investments

 

 

(604

)

 

 

(654

)

 

 

(90

)

Net income

 

 

293,971

 

 

 

353,990

 

 

 

48,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(1,279

)

 

 

1

 

 

 

-

 

Net income attributable to Sunlands Technology Group

 

 

295,250

 

 

 

353,989

 

 

 

48,818

 

Net income per share attributable to ordinary shareholders of

 

 

 

 

 

 

 

 

 

 

 

 

Sunlands Technology Group:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

43.95

 

 

 

51.13

 

 

 

7.05

 

Weighted average shares used in calculating net income

 

 

 

 

 

 

 

 

 

 

 

 

per ordinary share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

6,717,836

 

 

 

6,923,858

 

 

 

6,923,858

 

 

 

 

 

 

 

 

 

 

 

 

 

 


SUNLANDS TECHNOLOGY GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)

 

 

For the Six Months Ended June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

 

US$

Net income

 

 

293,971

 

 

 

353,990

 

 

 

48,818

 

Other comprehensive income, net of tax effect of nil:

 

 

 

 

 

 

 

 

 

 

 

 

Change in cumulative foreign currency translation adjustments

 

 

29,188

 

 

 

27,276

 

 

 

3,762

 

Total comprehensive income

 

 

323,159

 

 

 

381,266

 

 

 

52,580

 

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

 

 

(1,279

)

 

 

1

 

 

 

-

 

Comprehensive income attributable to Sunlands Technology Group

 

 

324,438

 

 

 

381,265

 

 

 

52,580

 


SUNLANDS TECHNOLOGY GROUP
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(Amounts in thousands)

 

 

 

For the Six Months Ended June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

Net revenues

 

 

1,168,305

 

 

 

1,093,229

 

Less: other revenues

 

 

(57,995

)

 

 

(84,224

)

Add: tax and surcharges

 

 

44,421

 

 

 

27,774

 

Add: ending deferred revenue

 

 

1,998,062

 

 

 

1,379,073

 

Add: ending refund liability

 

 

199,028

 

 

 

107,319

 

Less: beginning deferred revenue

 

 

(2,348,179

)

 

 

(1,690,946

)

Less: beginning refund liability

 

 

(243,236

)

 

 

(133,066

)

Gross billings (non-GAAP)

 

 

760,406

 

 

 

699,159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

293,971

 

 

 

353,990

 

Add: income tax expenses

 

 

4,343

 

 

 

6,327

 

depreciation and amortization

 

 

19,161

 

 

 

15,267

 

interest expense

 

 

5,277

 

 

 

4,170

 

Less: interest income

 

 

(7,008

)

 

 

(14,122

)

EBITDA (non-GAAP)

 

 

315,744

 

 

 

365,632

 


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 Six Months Ended June 30,

 

 

2022

 

2023

 

 

RMB

 

RMB

Cost of revenues

 

 

(187,957

)

 

 

(127,646

)

Less: Share-based compensation expenses in cost of revenues

 

 

(33

)

 

 

-

 

Non-GAAP cost of revenues

 

 

(187,924

)

 

 

(127,646

)

 

 

 

 

 

 

 

 

 

Sales and marketing expenses

 

 

(587,975

)

 

 

(541,383

)

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

 

 

(4,166

)

 

 

-

 

Non-GAAP sales and marketing expenses

 

 

(583,809

)

 

 

(541,383

)

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

(85,095

)

 

 

(72,725

)

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

 

 

(2,982

)

 

 

-

 

Non-GAAP general and administrative expenses

 

 

(82,113

)

 

 

(72,725

)

 

 

 

 

 

 

 

 

 

Operating costs and expense

 

 

(884,960

)

 

 

(759,426

)

Less: Share-based compensation expenses

 

 

(7,181

)

 

 

-

 

Non-GAAP operating costs and expense

 

 

(877,779

)

 

 

(759,426

)

 

 

 

 

 

 

 

 

 

Income from operations

 

 

283,345

 

 

 

333,803

 

Less: Share-based compensation expenses

 

 

(7,181

)

 

 

-

 

Non-GAAP income from operations

 

 

290,526

 

 

 

333,803

 

 

 

 

 

 

 

 

 

 

Net income attributable to Sunlands Technology Group

 

 

295,250

 

 

 

353,989

 

Less: Share-based compensation expenses

 

 

(7,181

)

 

 

-

 

Non-GAAP net income attributable to Sunlands Technology Group

 

 

302,431

 

 

 

353,989

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to ordinary shareholders of

 

 

 

 

 

 

 

 

Sunlands Technology Group:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

43.95

 

 

 

51.13

 

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

 

 

 

 

 

 

 

 

Sunlands Technology Group:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

45.02

 

 

 

51.13

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in calculating net income

 

 

 

 

 

 

 

 

per ordinary share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

6,717,836

 

 

 

6,923,858

 

Weighted average shares used in calculating Non-GAAP net income

 

 

 

 

 

 

 

 

per ordinary share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

6,717,836

 

 

 

6,923,858