17 Education & Technology Group Inc (YQ) 2023 Q1 法說會逐字稿

Good evening, and good morning, ladies and gentlemen, and thank you for standing by for 17EdTech's First Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, today's conference call is being recorded. I'll now turn the meeting over to your host for today's call, Ms. Lara Zhao, 17EdTech's Investor Relations Manager. Please proceed, Lara.

女士們、先生們，晚上好，早上好，感謝你們出席 17EdTech 2023 年第一季度收益電話會議。 （操作員說明）提醒一下，今天的電話會議正在錄音。現在我將會議交給今天電話會議的東道主，17EdTech 投資者關係經理趙拉娜女士。請繼續，勞拉。

Thank you, Operator. Hello, everyone, and thank you for joining us today. Our earnings release was distributed earlier today and is available on our IR website. Joining us today are Mr. Andy Liu, Founder, Chairman and Chief Executive Officer; and Mr. Michael Du, Director and Chief Financial Officer. Andy will walk you through our latest business performance and strategies followed by Michael, who will discuss our financial performance and guidance. They will be available to answer your questions during the Q&A session after their prepared remarks.

謝謝你，接線員。大家好，感謝您今天加入我們。我們的財報已於今天早些時候發布，並可在我們的投資者關係網站上獲取。今天加入我們的是創始人、董事長兼首席執行官劉安迪先生；杜先生，董事兼首席財務官。安迪將向您介紹我們最新的業務績效和戰略，隨後邁克爾將討論我們的財務績效和指導。在準備好發言後，他們將在問答環節回答您的問題。

Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known, unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results, performance or achievements to differ materially. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the U.S. SEC. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.

在我們開始之前，我想提醒您，本次電話會議包含 1934 年《證券交易法》第 21E 條和 1995 年《美國私人證券訴訟改革法》中定義的前瞻性陳述。這些前瞻性陳述基於根據管理層當前的預期以及當前的市場和經營狀況，並涉及涉及已知、未知風險、不確定性和其他因素的事件，所有這些因素都難以預測，其中許多因素超出了公司的控制範圍。這些風險可能導致公司的實際結果、業績或成就出現重大差異。有關這些和其他風險、不確定性或因素的更多信息包含在該公司向美國證券交易委員會提交的文件中。除適用法律要求外，公司不承擔因新信息、未來事件或其他原因而更新任何前瞻性陳述的義務。

I will now turn the call over to our Chairman and Chief Executive Officer to review some of our business development and strategic direction. Andy, please go ahead.

我現在將把電話轉給我們的董事長兼首席執行官，以審查我們的一些業務發展和戰略方向。安迪，請繼續。

Thank you, Lara. Hello, everyone. Thank you all for joining us on our first quarter 2023 earnings call. Before we begin, I would like to mention that the financial information and non-GAAP numbers in the release are presented on a continuing operation basis, and all numbers are based on RMB unless otherwise stated.

謝謝你，拉拉。大家好。感謝大家參加我們的 2023 年第一季度財報電話會議。在開始之前，我想指出的是，本新聞稿中的財務信息和非公認會計原則數據是在持續經營的基礎上提供的，除非另有說明，所有數據均以人民幣為單位。

Before we go into the details, let me provide you with the quarter's business updates and financial performance across our business lines. The COVID outbreak in China in the fourth quarter of 2022 caused delays in the bidding delivery processes of our major products, which adversely affected our financial performance in the last 2 quarters. However, our in-school SaaS business continues to advance beyond the financial results might indicate.

在我們詳細介紹之前，讓我向您提供本季度的業務更新和整個業務線的財務業績。 2022年第四季度中國爆發的新冠肺炎疫情導致我們主要產品的招標交付流程延遲，這對我們過去兩個季度的財務業績產生了不利影響。然而，我們的校內 SaaS 業務的持續發展超出了財務業績可能表明的水平。

During the quarter, we continued to explore various business models for growth, constantly developing and refining our offerings to meet the demand of regional regular use and promoting the signing and delivery of each project. At the same time, we actively expanded our distribution network and enhance our operational efficiency. We responded to challenges in the new environment through diversified distribution channels and flexible financial arrangements. As a result, our business maintained its momentum and earned recognition from our customers beyond that the financial statements might indicate -- beyond what the financial statements might indicate.

本季度，我們繼續探索多種業務模式以實現增長，不斷開發和完善我們的產品以滿足區域常規使用需求，並推動各個項目的簽約和交付。同時，我們積極拓展分銷網絡，提昇運營效率。我們通過多元化的分銷渠道和靈活的財務安排應對新環境的挑戰。結果，我們的業務保持了發展勢頭，並贏得了客戶的認可，超出了財務報表可能顯示的範圍——超出了財務報表可能顯示的範圍。

In the past quarter, the impact of various pandemic containment measures were lifted across China. We saw business activities and projects relevant to our business returning to normal. The demand for our teaching and learning SaaS offerings is guided by the Chinese government's long-term policies and founded by dedicated government budgets. We believe this creates a real opportunity for us to grow in this uncertain environment.

過去一個季度，中國各地各項疫情防控措施的影響逐步解除。我們看到與我們業務相關的業務活動和項目恢復正常。對我們的教學 SaaS 產品的需求是由中國政府的長期政策引導並由專門的政府預算建立的。我們相信，這為我們在這個不確定的環境中成長創造了真正的機會。

We have made steady progress in our in-school teaching and learning SaaS business during the first quarter of 2023. Despite the fact that the bidding and delivery of some of our major products were delayed and our financial results were correspondingly affected.

2023年第一季度，我們的校內教學SaaS業務穩步推進。儘管部分主要產品的招標和交付出現延遲，導致我們的財務業績受到相應影響。

Part one, in-school teaching and learning SaaS business.

一、校內教學SaaS業務。

Several of our key project original scheduled for the fourth quarter of 2022 were delayed due to the COVID outbreak. However, through the joint efforts of our dedicated team, significant progress was made on these key projects in the first quarter of 2023.

由於新冠疫情的爆發，我們原定於 2022 年第四季度進行的幾個重點項目被推遲。但經過我們專業團隊的共同努力，這些重點項目在2023年第一季度取得了重大進展。

Notably, we won the RMB 116 million smart-pen and intelligent homework-based education digital transformation project in Shanghai Minhang District. We have complemented the signing of the contract, and delivery has already started as of today. This represents a milestone in our company's development and showcases our ability to provide industry-leading total solutions for one of the most demanding regions in China. We have received significant inbound inquiries about this product and our offerings from various education bureaus and regional distributors.

值得注意的是，我們贏得了上海閔行區1.16億元的智能筆和智能作業教育數字化轉型項目。我們已經完成了合同的簽訂，今天已經開始發貨。這是我們公司發展的一個里程碑，展示了我們為中國要求最嚴格的地區之一提供行業領先的整體解決方案的能力。我們收到了來自各個教育局和區域經銷商的大量關於該產品和我們的產品的入站詢問。

Xicheng District cloud classroom bid won and signed. On April 3, we won the bid for the cloud classroom evaluation system project in Beijing Xicheng District with a contract value of RMB 20.22 million. This remarkable achievement closely follows our successful bid for the smart-pen and intelligent homework project in Shanghai Minhang District in March of this year. It further reinforces the widespread recognition of the high-quality and diverse application of our teaching and learning SaaS offerings for China's educational digital transformation. The cloud classroom evaluation system project is to be implemented across 41 schools in Xicheng District, leveraging our 1 teaching 1 learning intelligence education platform and smart-pen technology. It enables the collection and analysis of interaction data between teachers and students during and after classes. This allows for comprehensive improvement of the overall quality of classroom instruction, ongoing enhancement of the regional curriculum evaluation system and the refinement of educational content and approaches.

西城區雲課堂中標並簽約。 4月3日，中標北京西城區雲課堂評價系統項目，合同金額2022萬元。這一驕人的成績是繼今年3月成功中標上海閔行區智能筆和智能作業項目之後取得的。這進一步強化了我們的教學SaaS產品在中國教育數字化轉型中的高質量和多樣化應用的廣泛認可。雲課堂評價系統項目將在西城區41所學校實施，利用我們的一教一學智能教育平台和智能筆技術。它可以收集和分析師生之間的課時和課後互動數據。全面提高課堂教學整體質量，不斷完善區域課程評價體系，細化教育內容和方式。

Product and service portfolio iteration. From a product and service offerings perspective, the company is committed to continually refining and enhancing our product and service portfolio to cater to needs for a solution that can achieve regular use in major teaching and learning scenarios. As a result, we have witnessed a constant improvement in the overall product experience.

產品和服務組合迭代。從產品和服務的角度來看，公司致力於不斷完善和增強我們的產品和服務組合，以滿足主要教學場景中可實現常規使用的解決方案的需求。結果，我們見證了整體產品體驗的不斷改進。

Moreover, our module-based SaaS products have undergone a series of continuous optimization and iterations, propelling them to the forefront of the front market. These offerings have gathered widespread recognition and high praise from our customers as their top solution. Throughout the reporting periods, we made efforts to optimize and iterate our product and service portfolio.

而且我們基於模塊的SaaS產品經過一系列的不斷優化和迭代，已經走在了前端市場的前列。這些產品作為他們的頂級解決方案贏得了客戶的廣泛認可和高度讚揚。報告期內，我們努力優化和迭代產品和服務組合。

With a particular emphasis on developing SaaS-based system and construction and curtailing the user experience, we implemented updates to the core functionalities of our SaaS operations, resulting in noticeable improvements in our product experience indicators. Consequently, we observed a significant increase in user activity and retention rates, reflecting the growing satisfaction and engagement of our customer base.

我們重點抓好SaaS系統建設和用戶體驗優化，對SaaS業務核心功能進行更新，產品體驗指標明顯提升。因此，我們觀察到用戶活動和保留率顯著增加，反映出我們客戶群的滿意度和參與度不斷提高。

We are also implementing measures to ensure a more constant delivery and service experience as well as managing associated expenses.

我們還採取措施確保更穩定的交付和服務體驗以及管理相關費用。

Ongoing hardware optimization. Meanwhile, we are continuously enhancing the core functionalities of our proprietary smart-pen to achieve a better user experience and additional application cases, providing an unparalleled user experience in our comprehensive internal business tests.

持續的硬件優化。同時，我們不斷增強自有智能筆的核心功能，以實現更好的用戶體驗和更多的應用案例，在我們全面的內部業務測試中提供無與倫比的用戶體驗。

The regular writing performance of our in-house developed those [matrix spend] has complemented the testing period and expected to enter mass production in the fourth quarter of 2023 to further enhance the hardware performance of our total solutions.

我們內部開發的這些[矩陣花費]的常規寫入性能已經補充了測試期，預計在2023年第四季度進入量產，以進一步增強我們整體解決方案的硬件性能。

Additionally, the company is actively exploring various use cases with AI plus education in our businesses, with the great potential from integrating the latest AI technology with what we have committed in the space, creating novel applications and improving operational efficiency.

此外，該公司正在積極探索人工智能+教育在我們業務中的各種用例，將最新的人工智能技術與我們在該領域的承諾相結合、創造新穎的應用程序並提高運營效率具有巨大的潛力。

During the quarter, the Ministry of Education held World Digital Education Conference in Beijing. Representatives from over 130 countries and regions worldwide registered to attend the meeting. With 100 of regional Chinese education bureaus invited to listen and exchange with industry peers and at educational authorities, 17EdTech was honored to be invited as one of the only 2 smart educational technology service providers to present at this prestigious event.

本季度，教育部在北京召開世界數字教育大會。來自全球130多個國家和地區的代表註冊參會。中國100個地區教育局受邀與行業同行和教育主管部門進行聆聽和交流，17EdTech很榮幸作為僅有的兩家智慧教育科技服務提供商之一受邀出席這一盛會。

We showcased our industry-leading teaching and learning SaaS offerings with application cases in multiple leading cities in the education space such as Beijing and Shanghai. Visitors were captivated by the professionalism and efficiency of our products and technical services.

我們展示了行業領先的教學SaaS產品以及在北京、上海等教育領域多個領先城市的應用案例。我們的產品和技術服務的專業性和高效性給參觀者留下了深刻的印象。

Our intelligent teaching and learning solutions left a lasting impression on attendees and received broad recognition from local educational authorities.

我們的智能教學解決方案給與會者留下了深刻的印象，並得到了當地教育部門的廣泛認可。

Part two, other educational service business. In terms of other educational services business, we offer personalized self-learning products, membership services and a range of digital products and services designed especially for students.

第二部分，其他教育服務業務。其他教育服務業務方面，我們提供個性化的自學產品、會員服務以及一系列專為學生設計的數字產品和服務。

Our in-house developed personalized self-directed learn products address the unique challenges associated with personalized learning in school. This empower students to tailor their learning strategies based on their unique interest, abilities, learning styles and goals. By providing a curated selection of learning content and styles that align with their progress, students can choose the most fitting resources to support their educational journey. Our portfolio includes digital tools such as direction books, personalized experience book, which have proven instrumental in enabling students to excel in personalized learning. The demand for these products is highly dependent on the regular environment and the provision of completing services.

我們內部開發的個性化自主學習產品解決了與學校個性化學習相關的獨特挑戰。這使學生能夠根據自己獨特的興趣、能力、學習風格和目標定制學習策略。通過提供符合他們進度的精選學習內容和風格，學生可以選擇最合適的資源來支持他們的教育旅程。我們的產品組合包括指導書、個性化體驗書等數字工具，事實證明這些工具有助於學生在個性化學習中取得優異成績。對這些產品的需求高度依賴於常規環境和完整服務的提供。

Moving forward, we remain committed to exploring educational products and services that comply with regulatory requirements. We still consistently optimize and iterate our offerings in response to evolving market trends and the changing needs of our valued customers in our other educational service business.

展望未來，我們將繼續致力於探索符合監管要求的教育產品和服務。我們仍然不斷優化和迭代我們的產品，以應對不斷變化的市場趨勢以及我們其他教育服務業務中尊貴客戶不斷變化的需求。

Now I will turn the call over to Michael, our CFO, to walk you through our latest financial performance. Thank you.

現在我將把電話轉給我們的首席財務官邁克爾，向您介紹我們最新的財務業績。謝謝。

Thanks, Andy, and thank you, everyone, for joining the call. I will now walk you through our financial and operating results. Please note that all financial data I talk about will be based in RMB terms.

謝謝安迪，也謝謝大家加入這次電話會議。現在我將向您介紹我們的財務和運營業績。請注意，我談論的所有財務數據均以人民幣計算。

I would like to remind you that the quarterly results we present in here should be taken with care in reference to our potential future performance are subject to potential impacts from seasonality and one-off events as a result of the series of regulations introduced in 2021 and corresponding adjustment to our business model, organization and workforce.

我想提醒您的是，我們在此提供的季度業績應謹慎考慮，因為我們未來的潛在業績可能會受到季節性和一次性事件的潛在影響，這些影響是由於 2021 年推出的一系列法規和我們的業務模式、組織機構和人員隊伍也相應調整。

Our revenue and gross profit in the first quarter of 2023 were impacted due to the delay in the bidding and delivery of our several projects. However, the recent win of major projects have marked another key milestone in the company's new business strategies. These projects are expected to be delivered gradually over the upcoming quarters and reflected in our financial statements.

由於多個項目招標和交付的延遲，我們 2023 年第一季度的收入和毛利潤受到影響。然而，最近取得的重大項目標誌著公司新業務戰略的另一個重要里程碑。這些項目預計將在未來幾個季度逐步交付，並反映在我們的財務報表中。

As of March 31, 2023, we have cash reserves of RMB 639 million on our balance sheet, providing us with sufficient funds for future development.

截至2023年3月31日，我們的資產負債表上擁有現金儲備人民幣6.39億元，為我們未來的發展提供了充足的資金。

Next, I will go through our first quarter financials in greater detail.

接下來，我將更詳細地介紹我們第一季度的財務狀況。

Our net revenues for the first quarter of 2023 were RMB 9.3 million, representing a year-over-year decrease of 96% from RMB 233.4 million in the first quarter of '22. Our revenues are recognized based on delivery and service providers of our projects, and they were delayed by the significant -- delayed in the bidding and delivery process of our major projects, which were affected by the COVID outbreak in the fourth quarter 2022.

我們2023年第一季度的淨收入為人民幣930萬元，比2022年第一季度的人民幣2.334億元同比下降96%。我們的收入是根據項目的交付和服務提供商確認的，這些收入是由於我們的主要項目的招標和交付過程中的重大延遲而延遲的，這些項目受到 2022 年第四季度新冠疫情爆發的影響。

Our cost of revenues for the first quarter of 2023 was RMB 7 million, representing a year-over-year decrease of 92.4% from RMB 91.8 million in the first quarter of 2022, which was largely in line with the decrease in our revenues.

2023年第一季度的收入成本為人民幣700萬元，較2022年第一季度的人民幣9180萬元同比下降92.4%，與收入的下降基本一致。

Gross profit for the first quarter of 2023 was RMB 2.3 million, representing a year-over-year decrease of 98.4% from RMB 141 million in the first quarter of 2022.

2023年第一季度毛利潤為人民幣230萬元，較2022年第一季度的人民幣1.41億元同比下降98.4%。

Gross margin for the first quarter of 2023 was 24.4% compared with 60.7% in the first quarter of 2022.

2023年第一季度的毛利率為24.4%，而2022年第一季度的毛利率為60.7%。

Total operating expenses for the first quarter of 2023 were RMB 106.3 million, representing a year-over-year decrease of 37.8% from RMB 170.8 million in the first quarter of 2022.

2023年第一季度營業費用總額為人民幣1.063億元，較2022年第一季度的人民幣1.708億元同比下降37.8%。

Loss from operations for the first quarter of 2023 was RMB 104 million compared with RMB 29.1 million for the first quarter of 2022. Loss from operations as a percentage of net revenues for the first quarter of 2023 was negative 1,121.8% compared with negative 12.5% in the first quarter of 2022.

2023 年第一季度的運營虧損為人民幣 1.04 億元，而 2022 年第一季度的運營虧損為人民幣 2,910 萬元。2023 年第一季度的運營虧損占淨收入的百分比為負 1,121.8%，而 2022 年第一季度的運營虧損為負 12.5%。 2022 年第一季度。

Net loss for the first quarter of 2023 was RMB 92.5 million compared with net loss of RMB 24.8 million for the first quarter of 2022. Net loss as a percentage of net revenues was negative 997.9% in the first quarter of 2023 compared with negative 10.6% in the first quarter of 2022.

2023年第一季度淨虧損為人民幣9250萬元，而2022年第一季度淨虧損為人民幣2480萬元。2023年第一季度淨虧損占淨收入的比例為負997.9%，而2023年第一季度為負10.6% 2022年第一季度。

Adjusted net loss on a non-GAAP basis for the first quarter of 2023 was RMB 64 million compared with adjusted net income of RMB 9.9 million in the first quarter of 2022.

2023年第一季度按非美國通用會計準則計算的調整後淨虧損為人民幣6400萬元，而2022年第一季度調整後淨利潤為人民幣990萬元。

Please refer to the table captioned of "Reconciliations of non-GAAP measures to the most comparable GAAP measures" at the end of the press release for a reconciliation of net loss under U.S. GAAP to adjusted net income or loss on a non-GAAP basis.

請參閱新聞稿末尾標題為“非公認會計準則衡量指標與最具可比性的公認會計準則衡量指標的調節表”的表格，了解美國公認會計準則下的淨虧損與非公認會計準則基礎上調整後的淨收入或虧損的調節表。

Looking ahead, we are optimistic about industry opportunities and the competitiveness of our teaching and learning SaaS offerings, and we are confident our financial performance will recover as our major winnings are being delivered to our clients.

展望未來，我們對行業機遇和我們的教學 SaaS 產品的競爭力持樂觀態度，並且我們相信，隨著我們的主要成果交付給客戶，我們的財務業績將會恢復。

With that, that concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session. Thanks.

我們準備好的發言到此結束。謝謝。接線員，我們現在準備開始問答環節。謝謝。

(Operator Instructions) Thank you. We have no questions. I'll now turn the conference back to Ms. Lara Zhao for closing remarks.

（操作員說明）謝謝。我們沒有問題。現在我將請趙女士致閉幕詞。

Thank you, operator. In closing, on behalf of 17EdTech's management team, we'd like to thank you for your participation on today's call. If you require any further information, please feel free to reach out to us directly. Thank you for joining us today. This concludes the call.

謝謝你，接線員。最後，我們謹代表 17EdTech 的管理團隊感謝您參加今天的電話會議。如果您需要任何進一步的信息，請隨時直接與我們聯繫。感謝您今天加入我們。通話就此結束。

Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。