Chinese Educator 17EdTech Net Revenue Plunges 80% YoY in Q2 2022

Consumer Discretionary Author: Yiru Qian Sep 14, 2022 04:58 PM (GMT+8)

Chinese K-12 tutoring platforms all suffered a lot from Beijing's regulation.

Education together

Chinese education technology company 17 Education & Technology Group (Chinese: 一起教育; YQ:NASDAQ) documented net revenues of CNY 133.5 million (USD 19.9 million) in the second quarter of 2022, representing a year-over-year decrease of 80.1% from CNY 670.9 million in Q1 2021.

The company attributed the drop in revenue to the nationwide cessation of online tutoring services relating to academic subjects to K-12 students. In contrast, its teaching and learning SaaS offerings contributed an increasing proportion during the reporting period.

Net loss in the second quarter of 2022 was CNY 26.4 million with a gross margin of 52.2%, significantly decreasing from net loss of CNY 266.7 million and 63% in the previous year.

The financial performance for the first half of 2022 also lacked shining points. The net revenues dropped 68% YoY from CNY 1,145.1 million to CNY 366.9 million, with a 57.6% gross margin.

"We expect the total net revenues for the third quarter of 2022 to be between CNY 120 million and CNY 140 million," 17EdTech said in the quarterly financial statement.

17 EdTech offers smart in-school classroom solution that delivers data-driven teaching, learning and assessment products to teachers, students and parents. It also provides teaching and learning SaaS offerings to facilitate the digital transformation and upgrade at Chinese schools, with a focus on improving the efficiency and effectiveness of core teaching and learning scenarios such as homework assignments and in-class teaching. Personalized self-directed learning product to Chinese families, which utilizes the company's technology and data insights to provide personalized and targeted learning and exercise content that is aimed at improving students’ learning efficiency.

As of press time, 17EdTech closed at USD 1.61 apiece, with a market cap of USD 72.38 million.