Good future financial report: Continuous shrinkage and reduction costs, non -training business has accounted for a quarter of income

The 21st Century Business Herald Wang Feng reported that the good future (NYSE: TAL) recently announced the financial report of the first quarter of fiscal year 2023 as of May 31, 2022.

During the reporting period, good future revenue was US $ 224 million, a year -on -year decrease of 83.8%; net loss was 43.8 million US dollars. The net loss of US $ 102 million in the same period last year was reduced by more than half a year -on -year loss.

The financial report shows that the good future is still in a difficult transformation period. Compared with some education companies that have transformed into the non -K12 business, they have turned their losses into profits. The good future business has focused on the K12 population, so the performance restoration cycle is longer. However, with the brand effect and strong performance foundation, the scale of good future revenue still ranks the head of the industry.

For the good future, the main business has been sorted out clearly, and the cash on the account at the end of this quarter was as high as US $ 2.89 billion, an increase of US $ 190 million over the previous quarter, which is enough to support its subsequent operations and new business exploration.

It is worth noting that the main business transformation in the future is to learn services and other, other learning technical solutions and content solutions. Learning services and other businesses have contributed 70%of total revenue. Non -training business has accounted for more than 25%of the overall income in the future. This is mainly to teach and assist information and to B's smart education business.

The release of this quarter's financial report revealed a "secret" hidden for nearly a year, that is, in July 2021, the "double reduction" introduced the good future financial situation in the quarter. After the "double reduction", the good news report has not been released in the future. Since then, it has only announced the merger data of the first and second quarters of fiscal year in 2022. This quarter's financial report revealed the data of the first quarter of last year, and naturally it can be calculated in the second quarter of last year, the "double reduction" seasonal data performance.

The results showed that the revenue in the future from June-August of 2021 reached a record 1.44 billion US dollars, but the net loss attributable to a good future also reached an amazing US $ 827 million, equivalent to more than 5 billion yuan. It can be seen that blindly "burning money" marketing to seize the market is almost crazy. Without "double reduction", the waste and inefficiency of the entire industry will be extremely amazing.

The performance shock is still bottoming out

In this quarter, good future revenue was 224 million US dollars, a year -on -year decrease of 83.8%. What level is this in the education industry?

New Oriental just announced a quarterly report as of May 31, 2022, with revenue of $ 524 million. New Oriental's traditional overseas examination, consulting and college student domestic examination training business has been steadily growing, and it is expected that it will take a lot in revenue. In contrast, good future business focuses on young people, so the scale of revenue is less than half of the New Oriental.

So, compared with other companies?

Among the other listed companies in the United States, NetEase Youdao revenue in the first quarter of 1.2 billion yuan, and the first quarter of 2022 revenue was 725 million yuan. The head position of the education industry.

It is worth noting that while the revenue of good in the future has decreased significantly year -on -year, it is also significantly reduced. In the last quarter, good future revenue was 541 million US dollars, and this quarter decreased by 58.6%. This can't help but worry whether the future performance of the good performance has not yet been found.

Reducing scale and optimizing the structure may be the reason why a good future revenue is reduced. This can be discovered from three indicators:

Revenue cost. The revenue cost of this quarter decreased from US $ 198 million in the previous quarter to US $ 88.56 million, indicating that it may be further retired to the campus and the dismissal of teachers in the future.

The 2022 FY 2022 annual report released on June 15th shows that 54,700 people have been layoffs in the year, accounting for 77.15%of the total number of fiscal years; 16.965 million square meters of leased teaching service centers, accounting for the total area of ​​the previous fiscal year. 89.85%.

As of February 28, 2022, the number of cities where the good future learning center was located has been reduced to 40. In the future, Peng Zhuangzhuang, president and chief financial officer, said at the Q1 financial report on July 30 that as of May 31, 2022, there were 100 to 150 learning centers in more than 30 cities and regions in the future. This shows that the good future is still withdrawn from some cities to shrink the front.

The atrophy of the learning center is even more amazing. As of February 28, 2021, a good future has established 1098 learning centers in 110 cities in China. The current 100-150 learning centers are at least equivalent to one-tenth of the peak.

Generally and administrative costs. The general and administrative expenses of this quarter decreased from US $ 212 million in the previous quarter to $ 111 million, indicating that the number of employees may be further reduced.

Marketing and market expenses. The marketing and market expenses of this quarter decreased from US $ 103 million in the previous quarter to US $ 603 million, which will inevitably affect the income scale.

The good news is that with excellent cost reduction, the cash on the good future of this quarter was US $ 2.89 billion, an increase of US $ 190 million over the previous quarter, which was enough to support its subsequent operations and new business explorations.

The progress of the new business is smooth

The main business of the future is also changing, and multiple new business lines have entered a benign development track.

Good future business transformation is learning services and other, other learning technical solutions and content solutions. In this quarter, the content solutions are more eye -catching.

Peng Zhuangzhuang said at the financial report on July 30 that Q1, 2023, more than 10%of the total revenue of the content solution business. Although due to seasonal factors, some quarterly performance may fluctuate, it is expected that the content solution business will contribute to better future revenue in fiscal 2023. The content solution business is likely to perform better in the next Q2, because entering the summer vacation, off -campus training is prohibited, and many parents switched to their children to buy teaching aid materials to learn at home.

Peng Zhuangzhuang mentioned that user learning habits are changing rapidly. Moreover, users have strong demand for high -quality digital content and diverse field content. Therefore, as parents and children pay attention to the needs of books and digital content, he believes that this is a long -term and extensive trend.

Peng Zhuangzhuang also mentioned that at present, in terms of specific products, a product that is loved by users is a smart teaching assistant.

Since April of this year, I have studied and launched a number of intelligent teaching aid products, namely "Little Blue Box", "Big White Box" and "Little Orange Box". You can scan the code outside the exercise to watch the study and the videos. Learning and thinking about intelligent teaching auxiliary products focus on the characteristics of "inclusive". The launch price of the smart teaching auxiliary box does not exceed 300 yuan.

It is reported that the future is recruiting soldiers to buy horses and forming its own cargo team. On its official Weibo, the needs of school recruitment positions in the future. Among them, in addition to conventional positions such as curriculum consultants, postgraduate entrance examinations, teaching, teaching and research, etc., it will also open educational anchor positions in the future.

In terms of learning technical solutions, good future has provided a full set of technical products and services for many schools and learning institutions, including online classrooms, content production platforms, teachers' class preparation systems, class arrangement systems, and academic analysis. Peng Zhuangzhuang introduced that Q1 in fiscal year 2023, about 15%of the total revenue of learning technical solutions contributed.

Learning services and others will still be the most important business in the future.

Q1 in fiscal year 2023, the total revenue of learning services and other businesses contributed 70%. It includes online and offline courses, including Peiyou's small classes, learning and thinking network schools, Think Academy, and other learning service services.

While iterating existing courses (including innovative thinking, scientific experiments, programming, and humanistic aesthetic education), some new courses have also been launched, such as new courses such as chess classes, eloquence courses and natural sciences, and will continue The possibility of exploring pioneers.

Peng Zhuangzhuang introduced that the retention rate of some quality courses is close to the retention rate of discipline training in the past few years, while other courses are lower than the level before the transition.

Q1 in fiscal year 2023, the business of overseas K12 students (Think Academy providing a variety of courses for overseas K12) achieved a year -on -year increase in three -digit. In addition to the establishment of offline learning centers in Singapore, the United Kingdom, and the United States, the good future has also begun to carry out business in Canada and other places.

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