Ucommune International Ltd. (UK) Reports Q4 Loss of $0.34 on Revenues of $42.71M

April 15, 2021 6:07 AM EDT
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Ucommune International Ltd. (NASDAQ: UK) reported Q4 EPS of ($0.34). Revenue for the quarter came in at $42.71 million.

Fourth Quarter 2020 Financial Highlights

  • Net revenues were RMB278.7 million, representing an increase of 39.4% from the third quarter of 2020 and a decrease of 4.8% from the fourth quarter of 2019.
  • Net loss was RMB149.1 million, narrowing by 11.9% from the third quarter of 2020 and by 36.8% from the fourth quarter of 2019.
  • Adjusted net income was RMB62.8 million, compared with an adjusted net loss (non-GAAP) of RMB122.8 million in the third quarter of 2020 and an adjusted net loss (non-GAAP) of RMB194.6 million in the fourth quarter of 2019. For a reconciliation of net loss to adjusted net income, see the "Non-GAAP Financial Measures" section and the table captioned "Ucommune Group Holdings Limited Reconciliation of GAAP and Non-GAAP Results" below.
  • EBITDA loss was RMB94.8 million, narrowing by 40.1% from RMB158.2 million in the third quarter of 2020 and by 51.0% from RMB193.6 million in the fourth quarter of 2019. For a reconciliation of net loss to EBITDA, see the "Non-GAAP Financial Measures" section and the table titled "Ucommune International Ltd. Reconciliation of GAAP and Non-GAAP Results" below.
  • Adjusted EBITDA loss was RMB9.4 million, narrowing by 87.7% from RMB76.1 million in the third quarter of 2020 and by 91.4% from RMB109.2 million in the fourth quarter of 2019. For a reconciliation of net loss to adjusted EBITDA, see the "Non-GAAP Financial Measures" section and the table titled "Ucommune International Ltd. Reconciliation of GAAP and Non-GAAP Results" below.

Dr. Daqing Mao, Founder of Ucommune, commented, "As the urbanization of core cities has gradually wound down, high-quality land has become scarce and the demand from existing enterprises for commercial office space remains strong. At the end of 2019, in response to the market's evolution and a tightening regulatory environment across China's commercial real estate industry, we began to shift our business from a self-operated model to an asset-light model to further augment our operational flexibility. Leveraging our asset-light services, operational expertise, potent customer acquisition capabilities, and refined partnership network, we successfully capitalized on these trends, ramping up the total managed area under our asset-light model to 54.3% of our total managed area by the end of 2020. Meanwhile, our subsidiary Xiyu Information, a provider of SaaS services and IoT solutions, continued to gain traction, with our other service revenue increasing by 297.3% year over year in the fourth quarter. As our business roadmap is fully aligned with the industry's long-term trajectory, we are well-positioned to benefit from the rising demand for more flexible, scalable, and efficient workspace solutions. Looking ahead, we plan to continue fueling our business transformation while refining our operations to deliver lasting value to our members, partners, and society at large."

Mr. Cheong Kwok Mun, Chief Financial Officer of Ucommune, added, "As a result of the residual impact of COVID-19 and its corresponding effects from our decision to streamline our self-operated business, we experienced a minor decline in total revenues during the fourth quarter of 2020, as compared to the corresponding quarter in 2019. Nevertheless, full year of 2020 revenue of RMB877.1 million came in at the top end of the RMB850-870 million revenue guidance provided in our third quarter 2020 results release. As we continued to advance our transition to an asset-light model while also improving our operating efficiency, we significantly reduced our net loss by 36.8% year over year and recorded adjusted net income of RMB62.8 million. In light of the increasing market demand for quality agile office space services and office space management services, we remain confident in our long-term business prospects. Going forward, we plan to prudently utilize our healthy capital position to take advantage of these market opportunities, to generate positive cash flow, and direct resources towards managing our workspace profitability. Ucommune remains confident that we are on the path to profitability over the foreseeable future."

Business Outlook

For the first quarter of 2021, the Company expects net revenues to be in the range of RMB210 million to RMB230 million. With the rapid development of its asset-light businesses in the coming quarter, the Company expects that net loss and EBITDA loss will continue to narrow in the foreseeable future. These forecasts reflect the Company's current and preliminary views on the market and its operational conditions, which are subject to change.

For earnings history and earnings-related data on Ucommune International Ltd. (UK) click here.



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