Tarena Int'l (TEDU) Misses Q2 EPS by 2c, Beats on Revenues and FY17 Revenue Guidance Below Consensus, $30M Buyback; Assumes 1 RMB to $0.15

Tarena Int'l (NASDAQ: TEDU) reported Q2 EPS of $0.14*, $0.02 worse than the analyst estimate of $0.16. Revenue for the quarter came in at $68.34* million versus the consensus estimate of $67.76 million.

* Assumes 1 RMB to $0.15 USD

• Second Quarter Net Revenues up by 24.8% Year-Over-Year
• Second Quarter Total Student Enrollment up by 14.2% Year-Over-Year
• Second Quarter Student Enrollment in Kid Education Programs up by 146.8% Year-Over-Year
• Revise Full Year 2017 Net Revenues Guidance to RMB1,920-2,000 million
• Announce Share Repurchase Plan of up to US$30 million

Second Quarter 2017 Highlights

• Net revenues increased by 24.8% year-over-year to RMB455.8 million from RMB365.1 million in the same period in 2016.
• Gross profit increased by 21.9% year-over-year to RMB312.3 million from RMB256.3 million in the same period in 2016.
• Operating income was RMB36.0 million, compared to RMB39.7 million in the same period in 2016.
• Non-GAAP operating income, which excluded share-based compensation expenses, was RMB55.2 million, compared to RMB54.5 million in the same period in 2016.
• Net income was RMB37.9 million, compared to RMB43.3 million in the same period in 2016.
• Non-GAAP net income, which excluded share-based compensation expenses and gain on foreign currency forward contract, was RMB57.1 million, compared to RMB51.3 million in the same period in 2016.
• Basic and diluted net income per American Depositary Share (\"ADS\") were RMB0.66 and RMB0.63, respectively. Non-GAAP basic and non-GAAP diluted net income per ADS, which excluded share-based compensation expenses and gain on foreign currency forward contract, were RMB1.0 and RMB0.95, respectively. Each ADS represents one Class A ordinary share.
• Net cash inflow from operating activities for the second quarter of 2017 was approximately RMB36.7 million.
• Cash and time deposits totaled RMB1,337.2 million as of June 30, 2017, compared to RMB1,286.1 million as of December 31, 2016.
• Deferred revenue totaled RMB392.3 million as of June 30, 2017, compared to RMB279.5 million as of June 30, 2016, representing a year-over-year increase of approximately 40.3%.
• Total course enrollments[1], defined as the cumulative number of courses enrolled in by our students, in the second quarter of 2017 increased by 18.1% year-over-year to 27,991.
• Total student enrollments[2], defined as the total number of new students recruited and registered, in the second quarter of 2017 increased by 14.2% year-over-year to 30,548.
• Total seat capacity[3], defined as the total number of seats available in our learning centers, increased by 19.8% to 57,043 as of June 30, 2017, from 47,632 as of June 30, 2016.
• Total number of learning centers[4] increased to 171 as of June 30, 2017, from 138 as of June 30, 2016.
• Total student enrollments in kid education programs, defined as the total number of students recruited and registered in our kid education programs, in the second quarter of 2017 increased by 146.8% year-over-year to 1,725.

GUIDANCE:

Tarena Int'l sees FY2017 revenue of $287.86-299.85 million, versus the consensus of $301.89 million.

For earnings history and earnings-related data on Tarena Int'l (TEDU) click here.

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