Tarena Int'l (TEDU) Reports Q4 Loss of $0.26, Revenues Beat

Tarena Int'l (NASDAQ: TEDU) reported Q4 EPS of ($0.26). Revenue for the quarter came in at $99.7 million versus the consensus estimate of $58.85 million.

Fourth Quarter 2020 Highlights

• Net revenues increased by 27.6% year-over-year to RMB650.3 million (US$99.7 million), from RMB509.6 million in the same period of 2019.
• Net revenue from adult education business, which represented 54.2% of the total net revenues, increased by 7.2% year-over-year to RMB352.4 million (US$54.0 million), from RMB328.7 million in the same period of 2019.
• Net revenue from K-12 education business, which represented 45.8% of the total net revenues, increased by 64.7% year-over-year to RMB297.9 million (US$45.7 million), from RMB180.9 million in the same period of 2019.
• Gross profit increased by 79.9% year-over-year to RMB358.8 million (US$55.0 million), from RMB199.4 million in the same period of 2019.
• Gross profit margin increased by 16.1% points year-over-year to 55.2%, from 39.1% in the same period of 2019.
• Operating loss decreased by 74.3% to a loss of RMB85.1 million (US$13.0 million), from a loss of RMB331.9 million in the same period of 2019.
• Non-GAAP operating loss, which excluded share-based compensation expenses, was RMB77.5 million (US$11.9 million), compared to non-GAAP operating loss of RMB321.7 million in the same period of 2019.
• Net loss was RMB94.7 million (US$14.5 million), compared to net loss of RMB303.8 million in the same period of 2019.
• Non-GAAP net loss, which excluded share-based compensation expenses, was RMB87.1 million (US$13.4 million), compared to non-GAAP net loss of RMB293.6 million in the same period of 2019.
• Basic and diluted loss per American Depositary Share ("ADS") was RMB1.72 (US$0.26), compared to loss per ADS of RMB5.64 in the fourth quarter of 2019.
• Cash, cash equivalents and time deposits, including current and non-current, and restricted cash totaled RMB364.8 million (US$55.9 million) as of December 31, 2020, compared to RMB621.2 million as of December 31, 2019.
• Net cash inflow from operating activities in the fourth quarter of 2020 was RMB86.5 million (US$13.3 million). Capital expenditures in the fourth quarter of 2020 were RMB14.6 million (US$2.2 million).
• Deferred revenue totaled RMB1,998.2 million (US$306.2 million) as of December 31, 2020, compared to RMB1,586.0 million as of December 31, 2019, representing an increase of 26.0%.
• Total student enrollments in adult education business, defined as the total number of courses enrolled by students during that period, including multiple courses enrolled in by the same student, in the fourth quarter of 2020 decreased by 21.3% year-over-year to 35,100.
• Total number of learning centers in adult education decreased to 104 as of December 31, 2020, from 130 as of December 31, 2019.
• Total student enrollments in K-12 education business, defined as the total number of students who attended at least one paid lesson during that period or have deposit balances in their accounts at the end of that period, in the fourth quarter of 2020 reached 128,300, increased by 47.0%, compared to the student enrollments of 87,300 in the same period of 2019.
• Total number of learning centers in K-12 education increased to 236 as of December 31, 2020, from 217 as of December 31, 2019.

"Compared to the net revenues of RMB509.6 million in the fourth quarter of 2019, the net revenues in the fourth quarter of 2020 increased by RMB140.7 million, or 27.6%. In 2020, we have adopted a series of policies and actions to minimize the impact of COVID-19 pandemic on our businesses. We have achieved remarkable results on the optimization of organizational structure, improvement of operational efficiency and effective controls on costs and expenses. The net loss decreased by 68.8% from RMB303.8 million in the fourth quarter of 2019 to RMB94.7 million in the same quarter of 2020. The net loss decreased by 25.8% from RMB1,038.9 million for the full year of 2019 to RMB771.2 million for the full year of 2020. In 2020, the Company has devoted more resources to our K-12 education online courses and encouraged more strategic migration to the online operation and business. The net revenue contributed by our K-12 online education business increased by 215.8% from RMB34.2 million in 2019 to RMB108.0 million (US$16.6 million) in 2020. K-12 online education business contributed 14.2% and 6.5% of the total K-12 education net revenue for the fiscal year of 2020 and 2019, respectively," remarked Mr. Yongji Sun, the Chief Executive Officer of Tarena.

"Going into 2021, we will continuously stick to and implement our strategies we adopted in 2020, which are streamlining our products and services and uplifting the operational and organizational structure efficiencies. For adult education business, we will further explore deeper and more value-added cooperation with educational institutions to strengthen our leading position in the market. For K-12 education business, we will further devote resources to products research and development, and enlarge our K-12 services capacity. On top of the K-12 programming and robotic training programs, we will organize and launch more IT-related competitions and relevant training campaigns. We will continuously build and strengthen our national brand, both for the adult professional trainings and K-12 IT educations," concluded Mr. Sun.

"Our cash and cash equivalents and time deposits, including current and non-current, and restricted cash, decreased by 41.3%, from RMB621.2 million as of December 31, 2019 to RMB364.8 million (US$55.9 million) as of December 31, 2020. The decrease was mainly due to net cash used in operating activities which was mainly composed of net loss of RMB771.2 million incurred in the year of 2020, partially offset by the increase in total deferred revenue of RMB412.2 million and depreciation and amortization charges of RMB177.5 million, as well as net cash used in financing activities which was mainly composed of a repayment of RMB78.5 million bank borrowings in 2020." said Wing Kee Lau, the Chief Financial Officer of Tarena.

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

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