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ATLANTA, June 8, 2023 /PRNewswire/ -- Secureworks® (NASDAQ: SCWX), a global leader in cybersecurity, today announced financial results for its first quarter, which ended on May 5, 2023. Key Highlights Secureworks Taegis™ first quarter revenue grew 68% year-over-year to $62.6 million. Taegis annual recurring revenue (ARR) grew to $269 million, an increase of 49% on a year-over-year basis, and now represents approximately 86% of Secureworks total ARR. Taegis GAAP gross margin and non-GAAP gross margin continued to expand in the first quarter, reaching 68.2% and 70.0%, respectively. "I'm proud of our competitive advantage in the Managed XDR market. Our holistic approach, combined with our open XDR strategy, drives better security outcomes for customers, as reflected in the continued strong momentum in Taegis this quarter," said Wendy Thomas, CEO, Secureworks. "Our ongoing use of AI and automation helps Taegis achieve the most effective and efficient detection and response for our customers." "As one of the largest providers of managed detection and response, Taegis ARR and revenue growth rates remain above the industry average," said Christian Grant, Interim Chief Financial Officer, Secureworks. "Taegis gross margin is expanding, reaching 70% in the first quarter, as we continue to deliver on our commitment to scaling our cost structure and managing our business toward profitable growth." First Quarter Fiscal 2024 Financial Highlights Total revenue for the first quarter was $94.4 million, compared to $121.0 million in the first quarter of fiscal 2023. Taegis revenue for the first quarter was $62.6 million, compared to $37.2 million in the first quarter of fiscal 2023. GAAP gross profit was $51.6 million, compared with $71.6 million in the first quarter of fiscal 2023. Non-GAAP gross profit was $56.6 million, compared with $76.4 million during the same period last year. GAAP gross profit specific to Taegis was $42.7 million, compared with $24.8 million in the first quarter of fiscal 2023. Non-GAAP Taegis gross profit was $43.8 million, compared with $25.7 million during the same period last year. GAAP gross margin was 54.7%, compared with 59.1% in the same period last year. Non-GAAP gross margin was 59.9%, compared with 63.1% in the first quarter of fiscal 2023. GAAP gross margin specific to Taegis was 68.2%, compared with 66.5% in the same period last year. Non-GAAP Taegis gross margin was 70.0%, compared with 68.9% in the first quarter of fiscal 2023. GAAP net loss was $31.0 million, or $0.36 per share, compared with net loss of $21.6 million, or $0.26 per share, in the prior year. Non-GAAP net loss was $17.1 million, or $0.20 per share, compared with non-GAAP net loss of $7.6 million, or $0.09 per share, in the same period last year. Adjusted EBITDA loss for the quarter was $20.1 million, compared with adjusted EBITDA loss of $7.8 million in the first quarter of fiscal 2023. The company ended the first quarter with $94.5 million in cash and cash equivalents. Business and Operational Highlights Appointed Alpana Wegner as Chief Financial Officer. Appointed Allan Peters as Chief Revenue Officer. Announced new Secureworks OT Detection and Response offering to reduce business risk and visibility across both the IT and OT landscape. Announced new Secureworks Taegis integration for SentinelOne Singularity Complete™ providing enhanced threat prevention, detection and response with comprehensive visibility across endpoints, identity systems, cloud applications, and beyond. Secureworks Counter Threat Unit™ (CTU™) researchers uncovered the activity of Cobalt Illusion, an Iran-based threat actor group targeting human rights researchers at US think tanks and NGOs. Published Annual Incident Response report "Learning from Incident Response: 2022 Year in Review," providing key findings including: the doubling in incidents involving business email compromise (BEC) and near tripling in successful phishing campaigns since 2021; an increase in hostile state-sponsored activity last year; and the fact that ransomware incidents have fallen in 2022 but remain a core threat. Recognition and awards in the first quarter of fiscal 2024 include: Listed Top 3 largest in MDR market share according to Gartner's report 'Market Share: Managed Security Services, Worldwide, 2022.' Recognized in "The Forrester Wave™: Managed Detection and Response, Q2 2023," with highest possible scores in areas most critical to our customers – Managed Detection, Managed Response, Threat Hunting, Time to Value, and Analytics – reflecting our success in delivering unmatched MDR capabilities through the Taegis platform. Named by SC Media as a "Finalist" in the "Best Managed Detection and Response Service;" and among the Top 5 that SC Media has deemed the "best in cybersecurity" for this category. Received a 5-Star Rating in 2023 CRN® Partner Program Guide. Included as a Leader in GigaOm's Radar for Cybersecurity Incident Response. Nominated for Zywave Cyber Technology Provider of the Year. Financial Outlook For the second quarter of fiscal 2024, the Company expects: Revenue of $90 million to $92 million. GAAP net loss per share of $0.32 to $0.34 and non-GAAP net loss per share of $0.15 to $0.17. Secureworks is providing the following updated guidance for full fiscal year 2024. The Company expects: Fiscal Year 2024 Guidance Taegis ARR At least $300M Other MSS ARR Below $20M Total revenue $380M to $400M GAAP net loss ($87M) to ($95M) ($1.02) to ($1.11) per share Non-GAAP net loss ($31M) to ($39M) ($0.34) to ($0.43) per share Adjusted EBITDA ($39M) to ($29M) Cash from operations ($55M) to ($45M) Conference Call Information As previously announced, the Company will hold a conference call to discuss its first quarter fiscal 2024 results and financial guidance on June 8, 2023, at 8:00 a.m. U.S. ET. A live audio webcast of the conference call and the related supplemental financial information will be accessible on the Company's website at http://investors.secureworks.com. The webcast and supplemental information will be archived at the same location. Operating Metrics The Company defines annual recurring revenue (ARR) as the value of its subscription contracts as of a particular date. Because the Company uses recurring revenue as a leading indicator of future annual revenue, it includes operational backlog. Operational backlog is defined as the recurring revenue associated with pending contracts, which are contracts that have been sold but for which the service period has not yet commenced. Non-GAAP Financial Measures This press release presents information about the Company's non-GAAP gross margin, non-GAAP subscription cost of revenue, non-GAAP professional services cost of revenue, non-GAAP Taegis Subscription Solutions cost of revenue, non-GAAP Managed Security Services cost of revenue, non-GAAP gross profit, non-GAAP Taegis gross profit, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP earnings (loss) per share, adjusted EBITDA, weighted average common shares outstanding - diluted (non-GAAP), non-GAAP Taegis gross margin, non-GAAP Managed Security Services gross margin, non-GAAP subscription gross margin and non-GAAP professional services gross margin, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP"). A reconciliation of each of the foregoing historical and forward-looking non-GAAP financial measures to the most directly comparable historical and forward-looking GAAP financial measure is provided below for each of the fiscal periods indicated. Special Note Regarding Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In some cases, you can identify these statements by such forward-looking words as "anticipate," "believe," "confidence," "could," "estimate," "expect," "guidance," "intend," "may," "plan," "potential," "outlook," "should," "will" and "would," or similar words or expressions that refer to future events or outcomes. Such forward-looking statements include, but are not limited to, the statements in this press release with respect to the Company's expectations regarding revenue, GAAP net loss per share and non-GAAP net loss per share for the second quarter of fiscal 2024, and Taegis ARR, other MSS ARR, total revenue, GAAP net loss, GAAP net loss per share, non-GAAP net loss, non-GAAP net loss per share, adjusted EBITDA, and cash from operations for full year fiscal 2024, all of which reflect the Company's current analysis of existing trends and information. These forward-looking statements represent the Company's judgment only as of the date of this press release. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of risks, uncertainties and other factors that include, but are not limited to, the following: the Company's ability to achieve or maintain profitability; the Company's ability to enhance its existing solutions and technologies and to develop or acquire new solutions and technologies; the Company's ability to navigate economic conditions, geopolitical uncertainty and financial market volatility; the Company's reliance on personnel with extensive information security expertise; the Company's ability to successfully implement its strategic plan to realign and optimize its investments with its priorities; intense competition in the Company's markets; the Company's ability to attract new customers, retain existing customers and increase its annual contract values; the Company's reliance on customers in the financial services industry; the Company's ability to manage its growth effectively; the Company's ability to maintain high-quality client service and support functions; terms of the Company's service level agreements with customers that require credits for service failures or inadequacies; the Company's recognition of revenue ratably over the terms of its Taegis SaaS applications and managed security services contracts; the Company's long and unpredictable sales cycles; risks associated with expansion of the Company's international sales and operations; the risks associated with proposed or currently enacted tax statutes, including Internal Revenue Code Section 174; the Company's exposure to fluctuations in currency exchange rates or inflation; the effect of new governmental export or import controls on the Company's business or any international sanctions compliance program applicable to the Company; the Company's ability to expand its key distribution relationships; the Company's technology alliance partnerships; real or perceived defects, errors or vulnerabilities in the Company's solutions or the failure of its solutions to prevent a security breach; the risks associated with cyber-attacks or other data security incidents; the ability of the Company's solutions to interoperate with its customers' IT infrastructure; the Company's ability to use third-party technologies; the effect of evolving information security and data privacy laws and regulations on the Company's business; the Company's ability to maintain and enhance its brand; risks associated with the Company's acquisition of other businesses; the effect of natural disasters, public health issues, geopolitical conflict and other catastrophic events on the Company's ability to serve its customers, including the Ukrainian/Russian conflict; the Company's reliance on patents to protect its intellectual property rights; the Company's ability to protect, maintain or enforce its non-patented intellectual property rights and proprietary information; claims by third parties of infringement of their proprietary technology by the Company; the Company's use of open source technology; risks related to the Company's relationship with Dell Technologies Inc. and Dell Inc. and control of the Company by Dell Technologies Inc.; and risks related to the volatility of the price of the Company's Class A common stock. This list of risks, uncertainties and other factors is not complete. The Company discusses these matters more fully, as well as certain risk factors that could affect the Company's business, financial condition, results of operations and prospects, under the caption "Risk Factors" in the Company's annual report on Form 10-K, as well as in the Company's other SEC filings. Any or all forward-looking statements the Company makes may turn out to be wrong and can be affected by inaccurate assumptions the Company might make or by known or unknown risks, uncertainties and other factors, including those identified in this press release. Accordingly, you should not place undue reliance on the forward-looking statements made in this press release, which speak only as of its date. The Company does not undertake to update, and expressly disclaims any obligation to update, any of its forward-looking statements, whether resulting from circumstances or events that arise after the date the statements are made, new information or otherwise. About Secureworks Secureworks (NASDAQ: SCWX) is a global cybersecurity leader that protects customer progress with Secureworks® Taegis™, a cloud-native security analytics platform built on 20+ years of real-world threat intelligence and research, improving customers' ability to detect advanced threats, streamline and collaborate on investigations, and automate the right actions.www.secureworks.com (Tables Follow) SECUREWORKS CORP. Condensed Consolidated Statements of Operations and Related Financial Highlights (in thousands, except per share data and percentages) (unaudited) Three Months Ended May 5, 2023 April 29, 2022 Net revenue: Subscription $ 77,259 $ 94,413 Professional services 17,136 26,602 Total net revenue 94,395 121,015 Cost of revenue: Subscription 31,019 32,826 Professional services 11,767 16,609 Total cost of revenue 42,786 49,435 Gross profit 51,609 71,580 Operating expenses: Research and development 31,172 33,331 Sales and marketing 34,526 39,245 General and administrative 22,263 25,360 Total operating expenses 87,961 97,936 Operating loss (36,352) (26,356) Interest and other, net (1,746) (697) Loss before income taxes (38,098) (27,053) Income tax benefit (7,128) (5,455) Net loss $ (30,970) $ (21,598) Loss per common share (basic and diluted) $ (0.36) $ (0.26) Weighted-average common shares outstanding (basic and diluted) 85,431 83,763 Percentage of Total Net Revenue (1) Subscription gross margin 59.9 % 65.2 % Professional services gross margin 31.3 % 37.6 % Total gross margin 54.7 % 59.1 % Research and development expenses 33.0 % 27.5 % Sales and marketing expenses 36.6 % 32.4 % General and administrative expenses 23.6 % 21.0 % Operating expenses 93.2 % 80.9 % Operating loss (38.5) % (21.8) % Loss before income taxes (40.4) % (22.4) % Net loss (32.8) % (17.8) % Effective tax rate 18.7 % 20.2 % Note: Percentage growth rates are calculated based on underlying data in thousands (1) Financial measures as a percentage of revenue are calculated based on total GAAP net revenue, except for GAAP subscription gross margin and GAAP professional services gross margin measures, which are calculated based on each of their respective GAAP net revenue measures. SECUREWORKS CORP. Condensed Consolidated Statements of Financial Position (in thousands) (unaudited) May 5,2023 February 3,2023 Assets: Current assets: Cash and cash equivalents $ 94,510 $ 143,517 Accounts receivable, net 56,994 72,627 Inventories, net 675 620 Other current assets 17,515 17,526 Total current assets 169,694 234,290 Property and equipment, net 4,122 4,632 Operating lease right-of-use assets, net 9,367 9,256 Goodwill 425,370 425,519 Intangible assets, net 99,414 106,208 Other non-current assets 64,725 60,965 Total assets $ 772,692 $ 840,870 Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 14,768 $ 18,847 Accrued and other current liabilities 53,489 81,566 Short-term deferred revenue 139,591 145,170 Total current liabilities 207,848 245,583 Long-term deferred revenue 9,884 11,162 Operating lease liabilities, non-current 11,025 12,141 Other non-current liabilities 14,282 14,023 Total liabilities 243,039 282,909 Total stockholders' equity 529,653 557,961 Total liabilities and stockholders' equity $ 772,692 $ 840,870 SECUREWORKS CORP. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended May 5, 2023 April 29, 2022 Cash flows from operating activities: Net loss $ (30,970) $ (21,598) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 8,980 9,383 Amortization of right of use asset 627 964 Amortization of costs capitalized to obtain revenue contracts 4,574 4,514 Amortization of costs capitalized to fulfill revenue contracts 954 1,395 Stock-based compensation expense 7,270 9,126 Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies 1,940 565 Income tax benefit (7,128) (5,455) Provision for credit losses (223) 53 Changes in assets and liabilities: Accounts receivable 15,586 10,728 Net transactions with Dell 5,179 (847) Inventories (55) 132 Other assets (2,660) (3,102) Accounts payable (4,126) 7,674 Deferred revenue (7,304) (3,421) Operating leases, net (1,822) (1,483) Accrued and other liabilities (33,005) (33,507) Net cash used in operating activities (42,183) (24,879) Cash flows from investing activities: Capital expenditures (480) (413) Software development costs (1,210) (1,701) Net cash used in investing activities (1,690) (2,114) Cash flows from financing activities: Taxes paid on vested restricted shares (5,134) (7,442) Net cash used in financing activities (5,134) (7,442) Net decrease in cash and cash equivalents (49,007) (34,435) Cash and cash equivalents at beginning of the period 143,517 220,655 Cash and cash equivalents at end of the period $ 94,510 $ 186,220 Non-GAAP Financial Measures This press release presents information about the Company's non-GAAP gross margin, non-GAAP subscription cost of revenue, non-GAAP professional services cost of revenue, non-GAAP Taegis Subscription Solutions cost of revenue, non-GAAP Managed Security Services cost of revenue, non-GAAP gross profit, non-GAAP Taegis gross profit, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP earnings (loss) per share, adjusted EBITDA, non-GAAP Taegis gross margin, non-GAAP Managed Security Services gross margin, non-GAAP subscription gross margin and non-GAAP professional services gross margin, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with GAAP. A detailed discussion of our reasons for including these non-GAAP financial measures, the limitations associated with these measures, the items excluded from these measures, and our reason for excluding those items are presented in "Management's Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures" in our periodic reports filed with the SEC. The Company encourages investors to review the non-GAAP discussion in these reports in conjunction with the presentation of non-GAAP financial measures. (Tables Follow) SECUREWORKS CORP. Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data) (unaudited) Three Months Ended May 5, 2023 April 29, 2022 GAAP net revenue: Taegis Subscription Solutions $ 62,596 $ 37,216 Managed Security Services 14,663 57,197 Total Subscription revenue 77,259 94,413 Professional services 17,136 26,602 GAAP net revenue(1) $ 94,395 $ 121,015 GAAP Taegis Subscription Solutions cost of revenue $ 19,908 $ 12,455 Amortization of intangibles (1,069) (855) Stock-based compensation expense (79) (41) Non-GAAP Taegis Subscription Solutions cost of revenue $ 18,760 $ 11,559 GAAP Managed Security Services cost of revenue $ 11,111 $ 20,371 Amortization of intangibles (3,411) (3,410) Stock-based compensation expense (67) (82) Non-GAAP Managed Security Services cost of revenue $ 7,633 $ 16,879 GAAP subscription cost of revenue $ 31,019 $ 32,826 Amortization of intangibles (4,480) (4,265) Stock-based compensation expense (146) (123) Non-GAAP subscription cost of revenue $ 26,393 $ 28,438 GAAP professional services cost of revenue $ 11,767 $ 16,609 Stock-based compensation expense (325) (387) Non-GAAP professional services cost of revenue $ 11,442 $ 16,222 GAAP gross profit $ 51,609 $ 71,580 Amortization of intangibles 4,480 4,265 Stock-based compensation expense 471 510 Non-GAAP gross profit $ 56,560 $ 76,355 GAAP Taegis Subscription Solutions gross profit $ 42,688 $ 24,761 Amortization of intangibles 1,069 855 Stock-based compensation expense 79 41 Non-GAAP Taegis Subscription Solutions gross profit $ 43,836 $ 25,657 GAAP research and development expenses $ 31,172 $ 33,331 Stock-based compensation expense (2,602) (2,743) Non-GAAP research and development expenses $ 28,570 $ 30,588 GAAP sales and marketing expenses $ 34,526 $ 39,245 Stock-based compensation expense (841) (1,638) Non-GAAP sales and marketing expenses $ 33,685 $ 37,607 GAAP general and administrative expenses $ 22,263 $ 25,360 Amortization of intangibles (3,524) (3,524) Stock-based compensation expense (3,356) (4,235) Non-GAAP general and administrative expenses $ 15,383 $ 17,601 GAAP operating loss $ (36,352) $ (26,356) Amortization of intangibles 8,004 7,789 Stock-based compensation expense 7,270 9,126 Non-GAAP operating (loss) income $ (21,078) $ (9,441) GAAP net loss $ (30,970) $ (21,598) Amortization of intangibles 8,004 7,789 Stock-based compensation expense 7,270 9,126 Aggregate adjustment for income taxes (1,440) (2,920) Non-GAAP net (loss) income $ (17,136) $ (7,603) GAAP loss per share $ (0.36) $ (0.26) Amortization of intangibles 0.09 0.09 Stock-based compensation expense 0.09 0.11 Aggregate adjustment for income taxes (0.02) (0.03) Non-GAAP (loss) earnings per share * $ (0.20) $ (0.09) * Sum of reconciling items may differ from total due to rounding of individual components GAAP net loss $ (30,970) $ (21,598) Interest and other, net 1,746 697 Income tax benefit (7,128) (5,455) Depreciation and amortization 8,980 9,383 Stock-based compensation expense 7,270 9,126 Adjusted EBITDA $ (20,102) $ (7,847) (1) Historically the Company has presented non-GAAP net revenue as a financial measure. There are no such adjustments that give rise to non-GAAP net revenue for any of the periods presented. SECUREWORKS CORP. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) Three Months Ended Percentage of Total Net Revenue May 5, 2023 April 29, 2022 GAAP Taegis gross margin 68.2 % 66.5 % Non-GAAP adjustment 1.8 % 2.4 % Non-GAAP Taegis gross margin 70.0 % 68.9 % GAAP Managed Security Services gross margin 24.2 % 64.4 % Non-GAAP adjustment 23.7 % 6.1 % Non-GAAP Managed Security Services gross margin 47.9 % 70.5 % GAAP subscription gross margin 59.9 % 65.2 % Non-GAAP adjustment 5.9 % 4.7 % Non-GAAP subscription gross margin 65.8 % 69.9 % GAAP professional services gross margin 31.3 % 37.6 % Non-GAAP adjustment 1.9 % 1.4 % Non-GAAP professional services gross margin 33.2 % 39.0 % GAAP gross margin 54.7 % 59.1 % Non-GAAP adjustment 5.2 % 4.0 % Non-GAAP gross margin 59.9 % 63.1 % GAAP research and development expenses 33.0 % 27.5 % Non-GAAP adjustment (2.7) % (2.2) % Non-GAAP research and development expenses 30.3 % 25.3 % GAAP sales and marketing expenses 36.6 % 32.4 % Non-GAAP adjustment (0.9) % (1.3) % Non-GAAP sales and marketing expenses 35.7 % 31.1 % GAAP general and administrative expenses 23.6 % 21.0 % Non-GAAP adjustment (7.3) % (6.5) % Non-GAAP general and administrative expenses 16.3 % 14.5 % GAAP operating loss (38.5) % (21.8) % Non-GAAP adjustment 16.2 % 14.0 % Non-GAAP operating (loss) income (22.3) % (7.8) % GAAP net loss (32.8) % (17.8) % Non-GAAP adjustment 14.6 % 11.5 % Non-GAAP net (loss) income (18.2) % (6.3) % SECUREWORKS CORP. Reconciliation of GAAP to Non-GAAP Financial Measures (in millions, except per share data) (unaudited) Three Months Ending Fiscal Year Ending August 4, 2023 February 2, 2024 Low End of Guidance High End of Guidance Low End of Guidance High End of Guidance GAAP net revenue $ 90 $ 92 $ 380 $ 400 GAAP net loss $ (29) $ (27) $ (95) $ (87) Amortization of intangibles 8 8 28 28 Stock-based compensation expense 10 10 44 44 Aggregate adjustment for income taxes (3) (3) (15) (15) Non-GAAP net loss* $ (14) $ (13) $ (39) $ (31) GAAP net loss per share $ (0.34) $ (0.32) $ (1.11) $ (1.02) Amortization of intangibles 0.09 0.09 0.32 0.32 Stock-based compensation expense 0.11 0.11 0.51 0.51 Aggregate adjustment for income taxes (0.04) (0.04) (0.18) (0.18) Non-GAAP net loss per share* $ (0.17) $ (0.15) $ (0.43) $ (0.34) GAAP net loss $ (95) $ (87) Interest and other, net 7 7 Income tax benefit (26) (24) Depreciation and amortization 31 31 Stock-based compensation expense 44 44 Adjusted EBITDA* $ (39) $ (29) Other Items Effective tax rate 22 % Weighted average shares outstanding (in millions) – diluted (non-GAAP) 86.2 Cash flow from operations $(55) to $(45) Capital expenditures $7 to $9 * Sum of reconciling items may differ from total due to rounding of individual components Sum of quarterly guidance may differ from full year guidance due to rounding
SANTA CLARA, Calif., June 8, 2023 /PRNewswire/ -- Tuya Inc. ("Tuya" or the "Company") (NYSE: TUYA; HKEx: 2391), a global leading IoT cloud development platform, today announced its unaudited financial results for the first quarter ended March 31, 2023. First Quarter 2023 Financial Highlights Total revenue was US$47.5 million, down approximately 14.2% year over year (1Q2022: US$55.3 million). IoT platform-as-a-service ("PaaS") revenue was US$33.6 million, down approximately 19.6% year over year (1Q2022: US$41.8 million). Software-as-a-service ("SaaS") and others revenue was US$8.5 million, up approximately 47.2% year over year (1Q2022: US$5.8 million). Overall gross margin for the quarter increased to 44.3%, up 3.1 percentage points year over year (1Q2022: 41.2%). Gross margin of IoT PaaS for the quarter decreased to 40.5%, down 1.8 percentage points year over year (1Q2022: 42.3%). Operating margin for the quarter was negative 68.0%, up 32.3 percentage points year over year (1Q2022: negative 100.3%). Non-GAAP operating margin for the quarter was negative 31.5%, up 36.9 percentage points year over year (1Q2022: negative 68.4%). Net margin for the quarter was negative 44.3%, up 55.0 percentage points year over year (1Q2022: negative 99.3%). Non-GAAP net margin for the quarter was negative 7.8%, up 59.6 percentage points year over year (Q12022: negative 67.4%). Total cash and cash equivalents, and short-term investments were US$937.5 million as of March 31, 2023, compared to US$954.3 million as of December 31, 2022. First Quarter 2023 Operating Highlights IoT PaaS customers[1] for the first quarter 2023 were approximately 2,000 (1Q2022: approximately 2,600). Total customers for the first quarter 2023 were approximately 2,800 (1Q2022: approximately 3,900). The Group's implementation of its key-account strategy enabled it to be more focused on serving strategic customers. Premium IoT PaaS customers[2] for the trailing 12 months ended March 31, 2023 were 261 (1Q2022: 303). In the first quarter 2023, the Group's premium IoT PaaS customers contributed approximately 80.2% of its IoT PaaS revenue (1Q2022: approximately 85.6%). The decrease in premium IoT PaaS customers was primarily attributable to a reduction in order size among certain previous premium customers, thus falling below the premium customer revenue contribution threshold, which is $100,000 in the last 12 months. Dollar-based net expansion rate ("DBNER")[3] of IoT PaaS for the trailing 12 months ended March 31, 2023 was 49% (1Q2022: 122%). Registered IoT device and software developers, or registered developers, were over 782,000 as of March 31, 2023, up 10.6% from approximately 708,000 developers as of December 31, 2022. 1. The Group defines an IoT PaaS customer for a given period as a customer who has directly placed orders for IoT PaaS with the Group during that period. 2. The Group defines a premium IoT PaaS customer as a customer as of a given date that contributed more than US$100,000 of IoT PaaS revenue during the immediately preceding 12-month period. 3. The Group calculates DBNER of IoT PaaS for a trailing 12-month period by first identifying all customers in the prior 12-month period (i.e., those have placed at least one order for IoT PaaS during that period), and then calculating the quotient from dividing the IoT PaaS revenue generated from such customers in the current trailing 12-month period by the IoT PaaS revenue generated from the same group of customers in the prior 12 month period. The Group's DBNER may change from period to period, due to a combination of various factors, including changes in the customers' purchase cycles and amounts and the Group's customer mix, among other things. DBNER indicates the Group's ability to expand customer use of the Tuya platform over time and generate revenue growth from existing customers. Mr. Xueji (Jerry) Wang, Founder and Chief Executive Officer of Tuya, commented, "Even amidst a relatively complex macroeconomic landscape this quarter, our strategic pivot towards key customers and high-value offerings has enabled us to stabilize our operations and support our growth. This improved approach contributed to a 5% sequential revenue growth in the first quarter of 2023, typically a period characterized by extended holidays and softer performance. We also made further progress in managing our pricing structures, helping us maintain solid gross margin profiles. Looking ahead, we will continue our focus on high-yield, cost-effective products and solutions to solidify our leadership position in the IoT industry. With our innovative capabilities, extensive device ecosystem, and comprehensive solutions, we are well-positioned to seize emerging market opportunities." Ms. Yao (Jessie) Liu, Director and Chief Financial Officer of Tuya, added, "Our first-quarter financial performance reflects our resilience and adaptability. Importantly, we have illustrated our commitment to prudent financial management by trimming our non-GAAP total operating expenses by over 40% － a testament to our stringent budget controls and efficient cost-saving practices. These efforts contributed to a substantial reduction in our non-GAAP net loss, reaching the lowest level since 2019. For the remainder of 2023, we acknowledge the possibility of persistent market challenges, leading to limited visibility in the industry. Despite these uncertainties, we are confident that our improved financial position, marked by reduced losses and a strong cash reserve, provides us with a solid base to support our strategic goals and foster future growth." First Quarter 2023 Unaudited Financial Results REVENUE Total revenue in the first quarter of 2023 decreased by 14.2% to US$47.5 million from US$55.3 million in the same period of 2022, mainly due to the decreases in IoT PaaS revenue and smart device distribution revenue, partially offset by the increase in SaaS and other revenue. More particularly: IoT PaaS revenue in the first quarter of 2023 decreased by 19.6% to US$33.6 million from US$41.8 million in the same period of 2022. During the quarter, the Group's customers remained cautious in their purchase decisions due to the persistent inventory backlog pressure in the downstream supply chain caused by the mismatch between supply and demand in the discretionary consumer electronics sector. Additionally, although the global inflation has shown some signs of relief in recent months, it continues to affect consumer sentiment, resulting in continued soft discretionary consumer electronics spending in multiple regions. Also, an adverse impact of US$2.5 million, or 6.0 percentage points, was caused by foreign exchange rate fluctuations compared to the same period of 2022. As a result of these factors, the Group's DBNER of IoT PaaS for the trailing 12 months ended March 31, 2023 decreased to 49% compared to previous periods. SaaS and others revenue in the first quarter of 2023 increased by 47.2% to US$8.5 million from US$5.8 million in the same period of 2022. During the quarter, the Group remained committed to offering value-added services ("VAS") and various software products with strong value propositions, including SaaS and Cube private cloud solution, to its customers. Smart device distribution revenue in the first quarter of 2023 decreased by 30.3% to US$5.4 million from US$7.8 million in the same period of 2022, primarily due to the fluctuating timing and volume of customer demands and purchases. COST OF REVENUE Cost of revenue in the first quarter of 2023 decreased by 18.6% to US$26.5 million from US$32.5 million in the same period of 2022, generally in line with the decrease in total revenue. GROSS PROFIT AND GROSS MARGIN Total gross profit in the first quarter of 2023 decreased by 7.9% to US$21.0 million from US$22.8 million in the same period of 2022 and gross margin percentage increased to 44.3% in the first quarter of 2023 from 41.2% in the same period of 2022. IoT PaaS gross margin in the first quarter of 2023 was 40.5%, compared to 42.3% in the same period of 2022, primarily due to the changes in product mix and pricing structure, as well as a negative 0.8 percentage points impact caused by a provision of US$0.3 million recorded for certain slow-moving IoT chips and raw material inventory in relation to the IoT PaaS business during the quarter. SaaS and others gross margin in the first quarter of 2023 was 74.1%, compared to 77.1% in the first quarter of 2022. Smart device distribution gross margin in the first quarter of 2023 was 21.0%, compared to 9.1% in the first quarter of 2022, primarily due to higher-value products solution we provided to our customers during the quarter. OPERATING EXPENSES Operating expenses decreased by 31.9% to US$53.3 million in the first quarter of 2023 from US$78.3 million in the same period of 2022. Non-GAAP operating expenses, defined as operating expenses excluding share-based compensation expenses, decreased by 40.6% to US$36.0 million in the first quarter of 2023 from US$60.6 million in the same period of 2022. Share-based compensation expenses in the first quarter of 2023 were US$17.3 million, compared to US$17.7 million in the same quarter of 2022. Research and development expenses in the first quarter of 2023 were US$28.1 million, down 41.1% from US$47.6 million in the same period of 2022, primarily because of the strategic streamlining of the Group's research and development team and operations. During this quarter, average salaried employee headcount of the Group's research and development team was down approximately 46.9% year over year, compared to the same quarter in last year. Sales and marketing expenses in the first quarter of 2023 were US$10.3 million, down 32.9% from US$15.3 million in the same period of 2022, primarily because of (i) the strategic streamlining of the sales and marketing team, and (ii) the Group's efforts to control expenditure and improve sales and marketing efficiency. General and administrative expenses in the first quarter of 2023 were US$16.8 million, down 6.9% from US$18.0 million in the same period of 2022, primarily due to the strategic streamlining of the general and administrative team. Other operating income, net in the first quarter of 2023 was US$1.8 million, primarily due to the receipts of software value-added tax ("VAT") refunds and various general subsidies for enterprises. LOSS FROM OPERATIONS AND OPERATING MARGIN Loss from operations in the first quarter of 2023 narrowed by 41.8% to US$32.3 million from US$55.5 million in the same period of 2022. Non-GAAP loss from operations in the first quarter of 2023 narrowed by 60.4% to US$15.0 million from US$37.8 million in the same period of 2022. Operating margin in the first quarter of 2023 was negative 68.0%, up 32.3 percentage points from negative 100.3% in the same period of 2022. Non-GAAP operating margin in the first quarter of 2023 was negative 31.5%, up 36.9 percentage points from negative 68.4% in the same period of 2022. NET LOSS AND NET MARGIN Net loss in the first quarter of 2023 narrowed by 61.7% to US$21.0 million from US$55.0 million in the same period of 2022. Non-GAAP net loss in the first quarter of 2023 narrowed by 90.0% to US$3.7 million from US$37.3 million in the same period of 2022. The difference between loss from operations and net loss in the first quarter of 2023 was primarily because of a US$11.5 million financial income achieved due to well implemented treasury strategies on the Group's cash and deposits recorded as short-term investment. Net margin in the first quarter of 2023 was negative 44.3%, up 55.0 percentage points from negative 99.3% in the same period of 2022. Non-GAAP net margin in the first quarter of 2023 was negative 7.8%, up 59.6 percentage points from negative 67.4% in the same period of 2022. BASIC AND DILUTED NET LOSS PER ADS Basic and diluted net loss per ADS was US$0.04 in the first quarter of 2023, compared to US$0.10 in the same period of 2022. Each ADS represents one Class A ordinary share. Non-GAAP basic and diluted net loss per ADS was US$0.01 in the first quarter of 2023, compared to US$0.07 in the same period of 2022. CASH AND CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS Cash and cash equivalents, and short-term investments were US$937.5 million as of March 31, 2023, compared to US$954.3 million as of December 31, 2022, which the Group believes is sufficient to meet its current liquidity and working capital needs. NET CASH USED IN OPERATING ACTIVITIES Net cash used in operating activities for the first quarter of 2023 was US$18.9 million, down 67.1% compared to US$57.4 million in the first quarter of 2022. The net cash used in the first quarter of 2023 improved mainly due to the significant decrease in operating expenses, particularly employee-related costs, and working capital changes in the ordinary course of business. SHARE REPURCHASE During the quarter ended March 31, 2023, the Group repurchased approximately 0.6 million of ADSs, representing 0.6 million Class A ordinary shares, from the open market, for a total consideration of approximately US$1.1 million, subject to the relevant regulation on the volume of share repurchases. Business Outlook Global discretionary consumer spending in the consumer electronic industry is still expected to continue facing a range of challenges in 2023, including, among other things, a decline or continued weakness in the general economic conditions across various regions, global high inflation, inventory backlog experienced by players such as smart device manufacturers, brands and retail channels in the supply chain, fluctuations in foreign exchange rates, and geopolitical tensions and conflicts. At present, downstream enterprises are expected to have varying perceptions after nearly three quarters of industry-wide destocking efforts. Some brands believe that the inventory pressure has somewhat eased, while other brands indicate that inventory pressure remains relatively high, and they need to continue monitoring the situation. The Group will continue to make efforts to monitor the uncertainties caused by such challenges, and despite these challenges, the Group remains confident in its long-term growth prospects and stays committed to iterating its products and services, further enhancing its software and hardware layer capabilities, expanding customer base, diversifying revenue streams, and further optimizing operating efficiency. Conference Call Information The Company's management will hold a conference call at 08:30 P.M. Eastern Time on Wednesday, June 7, 2023 (08:30 A.M. Beijing Time on Thursday, June 8, 2023) to discuss the financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this conference including a conference access code, a PIN number (personal access code), the dial-in number, and an e-mail with detailed instructions to join the conference call. Online registration: https://www.netroadshow.com/events/login?show=b2cf3458&confId=51502 The replay will be accessible through June 15, 2023 by dialing the following numbers: International: +44-20-3936-3001 United States: +1-855-762-8306 Access Code: 171541 A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.tuya.com. About Tuya Inc. Tuya Inc. (NYSE: TUYA; HKEX: 2391) is a global leading IoT cloud development platform with a mission to build an IoT developer ecosystem and enable everything to be smart. Tuya has pioneered a purpose-built IoT cloud development platform that delivers a full suite of offerings, including Platform-as-a-Service, or PaaS, and Software-as-a-Service, or SaaS, to businesses and developers. Through its IoT cloud development platform, Tuya has enabled developers to activate a vibrant IoT ecosystem of brands, OEMs, partners and end users to engage and communicate through a broad range of smart devices. Use of Non-GAAP Financial Measures In evaluating the business, the Company considers and uses non-GAAP measures, such as non- GAAP operating expenses, non GAAP loss from operations (including non-GAAP operating margin), non-GAAP net loss (including non-GAAP net margin), and non-GAAP basic and diluted net loss per ADS, as supplemental measures to review and assess its operating performance. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). The Company defines non-GAAP measures excluding the impact of share-based compensation expenses from the respective GAAP measures. The Company presents the non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. The Company also believes that the use of the non-GAAP measures facilitates investors' assessment of its operating performance. Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using the aforementioned non-GAAP financial measures is that they do not reflect all items of expenses that affect the Company's operations. Share-based compensation expenses have been and may continue to be incurred in the business and are not reflected in the presentation of non-GAAP financial measures. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, all of which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure. Reconciliations of Tuya's non-GAAP financial measures to the most comparable U.S. GAAP measures are included at the end of this press release. Safe Harbor Statement This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "anticipate", "target", "aim", "estimate", "intend", "plan", "believe", "potential", "continue", "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. The forward-looking statements included in this press release are only made as of the date hereof, and the Company disclaims any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Investor Relations Contact Tuya Inc.Investor RelationsEmail: ir@tuya.com The Blueshirt Group Gary Dvorchak, CFAPhone: +1 (323) 240-5796Email: gary@blueshirtgroup.com TUYA INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2022 AND MARCH 31, 2023 (All amounts in US$ thousands ("US$"), except for share and per share data,unless otherwise noted) As of December 31, As of March 31, 2022 2023 ASSETS Current assets: Cash and cash equivalents 133,161 74,815 Restricted cash – 4,430 Short-term investments 821,134 862,724 Accounts receivable, net 12,172 14,206 Notes receivable 2,767 2,002 Inventories, net 45,380 42,126 Prepayments and other current assets 8,752 9,966 Total current assets 1,023,366 1,010,269 Non-current assets: Property, equipment and software,net 3,827 3,313 Operating lease right-of-use assets, net 9,736 8,916 Long-term investments 18,031 18,031 Other non-current assets 1,179 1,084 Total non-current assets 32,773 31,344 Total assets 1,056,139 1,041,613 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 9,595 7,154 Advances from customers 27,633 27,060 Deferred revenue, current 6,821 6,339 Accruals and other current liabilities 33,383 27,179 Lease liabilities, current 3,850 3,876 Total current liabilities 81,282 71,608 Non-current liabilities: Lease liabilities, non-current 5,292 4,738 Deferred revenue, non-current 394 367 Other non-current liabilities 7,004 6,226 Total non-current liabilities 12,690 11,331 Total liabilities 93,972 82,939 Shareholders' equity: Class A ordinary shares 25 25 Class B ordinary shares 4 4 Treasury stock (86,438) (71,801) Additional paid-in capital 1,584,764 1,586,511 Accumulated other comprehensiveloss (22,115) (20,487) Accumulated deficit (514,073) (535,578) Total shareholders' equity 962,167 958,674 Total liabilities and shareholders' equity 1,056,139 1,041,613 TUYA INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (All amounts in US$ thousands ("US$"), except for share and per share data,unless otherwise noted) For the Three Months Ended March 31, March 31, 2022 2023 Revenue 55,324 47,485 Cost of revenue (32,504) (26,457) Gross profit 22,820 21,028 Operating expenses: Research and development expenses (47,588) (28,051) Sales and marketing expenses (15,278) (10,259) General and administrative expenses (18,030) (16,793) Other operating incomes, net 2,594 1,780 Total operating expenses (78,302) (53,323) Loss from operations (55,482) (32,295) Other income/(loss) Other non-operating income, net 653 778 Financial income, net 121 11,470 Foreign exchange loss, net (101) (34) Loss before income tax expense (54,809) (20,081) Income tax expense (144) (964) Net loss (54,953) (21,045) Net loss attributable to Tuya Inc. (54,953) (21,045) Net loss attribute to ordinary shareholders (54,953) (21,045) Net loss (54,953) (21,045) Other comprehensive income Foreign currency translation 649 1,628 Total comprehensive loss attributable toTuya Inc. (54,304) (19,417) Net loss attributable to Tuya Inc. (54,953) (21,045) Net loss attributable to ordinary shareholders (54,953) (21,045) Weighted average number of ordinary shares used in computing net loss per share, basic and diluted 556,808,050 553,994,418 Net loss per share attributable to ordinary shareholders, basic and diluted (0.10) (0.04) Share-based compensation expenses were included in: Research and development expenses 4,130 4,117 Sales and marketing expenses 1,653 1,606 General and administrative expenses 11,873 11,597 TUYA INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (All amounts in US$ thousands ("US$"), except for share and per share data, unlessotherwise noted) For the Three Months Ended March 31, March 31, 2022 2023 Net cash used in operating activities (57,374) (18,882) Net cash used in investing activities (141,941) (33,824) Net cash used in financing activities (21,751) (2,171) Effect of exchange rate changes on cash and cashequivalents, restricted cash 1,328 961 Net decrease in cash and cash equivalents, restrictedcash (219,738) (53,916) Cash and cash equivalents, restricted cash at thebeginning of period 964,576 133,161 Cash and cash equivalents, restricted cash at the end of period 744,838 79,245 TUYA INC. UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE FINANCIAL MEASURES (All amounts in US$ thousands ("US$"), except for share and per share data, unless otherwise noted) For the Three Months Ended March 31, March 31, 2022 2023 Reconciliation of operating expenses to non-GAAP operating expenses Research and development expenses (47,588) (28,051) Add: Share-based compensation expenses 4,130 4,117 Adjusted Research and development expenses (43,458) (23,934) Sales and marketing expenses (15,278) (10,259) Add: Share-based compensation expenses 1,653 1,606 Adjusted Sales and marketing expenses (13,625) (8,653) General and administrative expenses (18,030) (16,793) Add: Share-based compensation expenses 11,873 11,597 Adjusted General and administrative expenses (6,157) (5,196) Reconciliation of loss from operations to non-GAAP loss from operations Loss from operations (55,482) (32,295) Operating margin (100.3) % (68.0) % Add: Share-based compensation expenses 17,656 17,320 Non-GAAP Loss from operations (37,826) (14,975) Non-GAAP Operating margin (68.4) % (31.5) % Reconciliation of net loss to non-GAAP net loss Net loss (54,953) (21,045) Net margin (99.3) % (44.3) % Add: Share-based compensation expenses 17,656 17,320 Non-GAAP Net loss (37,297) (3,725) Non-GAAP Net margin (67.4) % (7.8) % Weighted average number of ordinary shares used in computing non-GAAP net loss per share, basic anddiluted 556,808,050 553,994,418 Non-GAAP net loss per share attributable to ordinary shareholders, basic and diluted (0.07) (0.01)
BEIJING, June 5, 2023 /PRNewswire/ -- Chindata Group, ("Chindata" or the "Company") (Nasdaq: CD), an industry leader in carrier-neutral hyperscale data center solutions, released its unaudited financial report for the first quarter ended March 31, 2023. To supplement the Company's consolidated financial results presented in accordance with U.S. GAAP, Chindata uses adjusted EBITDA, adjusted EBITDA margin, adjusted net income, and adjusted net income margin as non-GAAP financial measures, which are described further below. Under the wave of digital economy and the explosion of computing power, Chindata continues to consolidate its core competitiveness in the energy and technology end, and continues to take the lead in capturing the strategic opportunity of the new computing era. Beating market consensus continuously, total capacity expected to exceed 1,000MW in the next twelve months Chindata's revenue in the first quarter of 2023 was RMB1,443.5 million, representing 56.8% year over year ("YoY") growth. Net income in the first quarter of 2023 was RMB253.0 million, representing 167.5% YoY growth. Adjusted EBITDA in the first quarter of 2023 increased by 64.6% YoY to RMB813.8 million, beating market consensus for eleven straight quarters, with a margin of 56.4%. The Company reiterated its 2023 revenue guidance in the range of RMB5,880 million to RMB6,080 million, with positive outlook, and raised its 2023 adjusted EBITDA guidance to the range of RMB3,100 million to RMB3,220 million, a 3.6% increase at mid-point compared with the previous range. Total capacity continued to grow at a steady pace. One new under-construction project added, total capacity increased by 27MW to 898MW by the end of the first quarter of 2023. In-service capacity increased by 26MW to 639MW. By end of the first quarter of 2023, the Company had 33 projects in total. And the total capacity is expected to exceed 1,000MW in the next twelve months. Redefine the industry "First principle" to build a win-win model covering both supply and demand side The company's business strategy is based on its understanding of the "First principle" of the industry. Following the fundamental logic of the industry, Chindata created a unique win-win model covering both supply and demand side, leading to a significant differentiated competition barrier, and continual improvement of profitability and return profile of the Company. On the demand side, the major clients of the Company are leading players in internet, cloud computing and other high-tech business, whose growth far exceeds the average level of the industry. Meanwhile, on top of healthy demand and differentiated client base, the Company's unique contract profile ensures long-term visibility. More than 95% of customer contracts are of 10 years or longer term, and the commitment ratio of the total capacity remained high at 91% by the end of the first quarter of 2023. On the supply side, Chindata's unique hyperscale solution is characterized by having the majority of its data centers strategically located in energy-abundant region with significant cost advantages in terms of land and power. Together with such deployment that ensures power sufficiency, the low latency and scalability of its datacenter serve to accommodate the growing demand from its clients. Chindata has been operating in the key nodes of "East Data, West Computation" in China and in the emerging markets of Asia-Pacific for a long time, and a good trend of two "growth poles" at home and abroad has been formed. Chindata's overseas business has entered a period of rapid growth, with 69MW of the 78MW newly contracted capacity in the first quarter of 2023 coming from overseas. At the end of the first quarter of 2023, the overseas operation capacity was 75MW, representing an increase of 275% compared with the same period last year, and the overseas utilized capacity was 49MW, representing a year-on-year increase of 562%. In China, Chindata's 220kV self-built substation went into operation in the first quarter of 2023. The construction of the substation took only six months, setting a new record in the data center industry. The substation is capable of providing 360MW of power supply for Chindata's Lingqiu campus in Shanxi Province, the largest single datacenter campus in Asia Pacific. In Gansu Province, Chindata also signed a framework agreement with the local government and planned to build a 150MW data center there in the next 2-4 years. The launch of "East Data West Computation" and "Digital China" initiatives, as well as the development of AI technologies such as AI Generated Content ("AIGC"), machine learning and large language model, which requires large volumes of data storage and computing power, is expected to catalyze the iteration rate of digital infrastructure and bring huge strategic opportunities. The existing clients of the Chindata are actively investing resources in AI related technologies and application, and the Company is among the early ones in seizing such opportunity and becoming a leading high power computing infrastructure solution provider. Chindata has secured a contract of high density cabinet deployment, a good demonstration of the appreciation of the Company's capability in accommodating such high power computing demand. Management Quote Mr. Huapeng Wu, Chief Executive Officer of Chindata Group, commented, "We started the year of 2023 with another strong quarterly business and financial performance. During the first quarter of 2023, the Company continued to advance with our highly-demanding project delivery schedule. Demand from existing clients was healthy and ramp up was as scheduled. As a result, we continued to grow our top and bottom line, with adjusted EBITDA beating market consensus for eleven consecutive quarters. Notably on the demand side, we hold a positive view on how AIGC related development should drive industry demand in the long term, while we've also noticed the recent effort of our existing client in incorporating such new technology into their current product lines. In the first quarter, we've secured certain contract for high-density cabinet deployment, and we believe our unique supply model is capable of accommodating such AIGC related demand in the future. Such model is characterized by energy-abundant region layout and in-house full stack capabilities as the fundamentals, and actual practical experience in deploying high-density cabinet in our existing campuses, with various cooling technologies suited tested and applied. In our overseas business, the delivery of phase 2 and 3 of the over 100MW MY06 Johor project remained the key focus, and we are devoting dedicated resources to ensure the timely delivery. We remained confident with the capacity expansion target in the year 2023, and the healthy momentum in our cornerstone hyperscale business continued to serve as solid fundamentals for our consideration on further business diversification." About Chindata Group Chindata is a leading carrier-neutral hyperscale data center solution provider in Asia-Pacific emerging markets and a first mover in building next-generation hyperscale data centers in China, India, and Southeast Asia markets, focusing on the whole life cycle of facility planning, investment, design, construction and operation of ecosystem infrastructure in the IT industry. Chindata provides its clients with business solutions in major countries and regions in Asia-Pacific emerging markets, including asset-heavy ecosystem chain services such as industrial bases, data centers and network services.
BEIJING, June 2, 2023 /PRNewswire/ -- Waterdrop Inc. ("Waterdrop", the "Company" or "we") (NYSE: WDH), a leading technology platform dedicated to insurance and healthcare service with a positive social impact, today announced its unaudited financial results for the first quarter ended March 31, 2023. Financial and Operational Highlights for the First Quarter of 2023 Resilient Business Performance: For the first quarter of 2023, the first-year premiums ("FYP") generated through our Waterdrop Insurance Marketplace amounted to RMB1,692.0 million (US$246.4 million), representing an increase of 6.3% quarter over quarter. Our net operating revenue was RMB606.2 million (US$88.3 million), representing a decrease of 10.8% quarter over quarter. Effective cost control and sustained profitability: For the first quarter of 2023, our operating costs decreased by 11.0%, and total operating costs and expenses decreased by 1.8% quarter over quarter. Our net profit reached RMB49.7 million (US$7.2 million), continuing the trend in profitability since the beginning of 2022. Our solid financial performance highlights our achievements in cost control and profit enhancement. Positive operating cash flow: As of March 31, 2023, our cash and cash equivalents and short-term investments balance amounted to RMB3,597.3 million (US$523.8 million). We continued to generate positive operating cash flow, and have cash outflow of investing and financing activities. Further expanded product offerings: As of March 31, 2023, we offered 876 insurance products on our platform, as compared with 775 as of December 31, 2022. In the first quarter of 2023, the FYP generated from critical illness insurance products accounted for 26.9% of overall FYP generated through our Waterdrop Insurance Marketplace. As of March 31, 2023, around 432 million people cumulatively had donated an aggregate of approximately RMB58.4 billion to over 2.86 million patients through Waterdrop Medical Crowdfunding. Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "In the first quarter, we continued to demonstrate resilient and high-quality development, with net operating revenue reaching RMB606.2 million. Moreover, we are proud to have achieved another quarter of profitability. Our net profit reached RMB49.7 million, which again showcased our consistent efforts towards building a pattern of sustainable and high-quality business growth. For our insurance business, we further optimized our user acquisition strategies during the first quarter and saw a quarterly increase in the number of new users. Meanwhile, we continually streamlined channel operations and improved our service quality. As a result, our renewal rate sustained at a high level. We also continued to enrich our product offerings, including tailored products for specific user groups, specially the underaged and the elderly. On the technology side, we further upgraded our AI-empowered dialogue robot,.which can now conduct a ten-minute call independently and is expected to help accelerate business development to a greater extent. As for the medical crowdfunding business, we have focused on optimizing and improving our operational capabilities. By adjusting risk control strategies, we have basically eliminated cases with unreasonable fundraising targets. Our Operational Transparency Committee has also established a mechanism to examine service processes and improve the practice of consultants. Meanwhile, we continued to actively collaborate with multiple parties to crack down on dishonest fundraising practices. This year, we were honored as the "Consumer New Force" Integrity Commitment Enterprise at the Integrity Beijing 3.15 Gala. In terms of clinical trial solution business, as the impact of the pandemic and holidays gradually subsided, E-find Patient Platform showed continued growth. In the first quarter, we successfully enrolled over 700 patients and launched more than 70 clinical trial programs, boosting the progress of drug development for over 120 pharmaceutical companies and CROs. E-find Patient Platform maintained competitive in the field of oncology while consciously exploring other diseases, including but not limited to psoriasis, atopic dermatitis, and asthma. Moving forward, we will continue to play an active role in promoting the multi-level diversification of medical payment system in China and empowering Chinese insurance and healthcare industry participants. " Financial Results for the First Quarter of 2023 Operating revenue, net Net operating revenue for the first quarter of 2023 decreased by 6.6% year over year to RMB606.2 million (US$88.3 million) from RMB648.7 million for the same period of 2022. Insurance-related income includes insurance brokerage income and technical service income. Insurance brokerage income represents brokerage commissions earned from insurance companies. Technical service income is derived from providing technical services including customer relationship maintenance, customer complaint management, claim review, and user referral services, among other things, to insurance companies, insurance brokers, and agency companies. Our insurance-related income amounted to RMB536.3 million (US$78.1 million) in the first quarter of 2023, representing a decrease of 14.6% year over year from RMB628.2 million for the first quarter of 2022, which was mainly due to the decrease in insurance brokerage income. Crowdfunding service fees represent the service income earned when patients successfully withdraw the proceeds from their crowdfunding campaigns. Our role is to operate the Waterdrop Medical Crowdfunding platform to provide crowdfunding related services through the internet, enabling patients with significant medical bills to seek help from caring hearts through technology (the "medical crowdfunding services"). Our medical crowdfunding services generally consist of providing technical and internet support, managing, reviewing and supervising the crowdfunding campaigns, providing comprehensive risk management and anti-fraud measures, and facilitating the collection and transfer of the funds. Since April 7, 2022, our crowdfunding platform has ceased to fully subsidize the related cost and started to charge a service fee of 3% of the funds raised, up to a maximum amount of RMB5,000 for a single campaign. Considering the specific situation of each case, we may selectively subsidize the service fee for certain extremely needy patients. For the first quarter of 2023, we generated RMB42.0 million (US$6.1 million) in service fees, as compared to nil in the same period of 2022. Digital clinical trial solution income represents the service income earned from our customers mainly including biopharmaceutical companies and leading biotechnology companies. We match qualified and suitable patients for enrollment in clinical trials for our customers and generate digital clinical trial solution revenue for successful matches and we typically charge our customers a fixed unit price per successful match. For the first quarter of 2023, our clinical trial solution income amounted to RMB22.8 million (US$3.3 million), as compared to RMB8.6 million in the same period of 2022. Operating costs and expenses Operating costs and expenses increased by 12.0% year over year to RMB595.8 million (US$86.8 million) for the first quarter of 2023. On a quarter-over-quarter basis, operating costs and expenses decreased by 1.8%. Operating costs increased by 60.1% year over year to RMB248.0 million (US$36.1 million) for the first quarter of 2023, as compared with RMB154.9 million for the first quarter of 2022, which was primarily driven by (i) a RMB29.1 million increase in professional and outsourced customer service fees, (ii) an increase of RMB61.5 million mainly due to recording the crowdfunding consultants team costs as operating costs rather than as sales and marketing expense, as we started to generate crowdfunding service fees since April 2022, and (iii) a RMB8.9 million increase in the costs for patient recruitment consultants team. On a quarter-over-quarter basis, operating costs decreased by 11.0% in the first quarter of 2023, primarily due to the RMB25.9 million decrease in professional and outsourced customer service fees. Sales and marketing expenses decreased by 15.1% year over year to RMB173.4 million (US$25.2 million) for the first quarter of 2023, as compared with RMB204.3 million for the same quarter of 2022. The decrease was primarily due to (i) a decrease of RMB61.5 million in crowdfunding related direct costs recorded from under sales and marketing expenses to under operating costs as above mentioned, partially offset by (i) a RMB19.8 million increase in marketing expenses to third-party traffic channels, and (ii) a RMB24.9 million increase in personnel cost. On a quarter-over-quarter basis, sales and marketing expenses increased by 25.8% in the first quarter of 2023, primarily due to the RMB29.4 million increase in marketing expenses to third-party traffic channels. General and administrative expenses decreased by 6.1% year over year to RMB95.8 million (US$13.9 million) for the first quarter of 2023, compared with RMB102.0 million for the same quarter of 2022. The year-over-year variance was due to a decrease of RMB16.3 million allowance for doubtful accounts, partially offset by a RMB9.3 million increase in personnel cost. On a quarter-over-quarter basis, general and administrative expenses decreased by 19.2% in the first quarter of 2023, primarily due to (i) RMB19.7 million decrease in allowance for doubtful accounts, and (ii) RMB8.2 million decrease in professional service fees. Research and development expenses increased by 11.2% year over year to RMB78.7 million (US$11.5 million) for the first quarter of 2023, compared with RMB70.8 million for the same period of 2022. The increase was primarily due to RMB10.1 million increases in research and development personnel costs and share-based compensation expenses. On a quarter-over-quarter basis, research and development expenses increased by 9.8% from RMB71.7 million, which was mainly due to RMB7.0 million increases in research and development personnel costs and share-based compensation expenses. Operating profit for the first quarter of 2023 was RMB10.3 million (US$1.5 million), as compared with an operating profit of RMB116.6 million for the first quarter of 2022 and a profit of RMB72.9 million for the fourth quarter of 2022. Interest income for the first quarter of 2023 was RMB30.9 million (US$4.5 million), as compared with RMB14.5 million for the same period of 2022. The increase was primarily due to the increase in our short-term investments. Income tax benefit for the first quarter of 2023 was RMB2.6 million (US$0.4 million), as compared with an income tax expense of RMB51.3 million for the same period of 2022. Net profit attributable to Waterdrop for the first quarter of 2023 was RMB49.7 million (US$7.2 million), as compared with a net profit of RMB105.0 million for the same period of 2022, and a net profit of RMB126.2 million for the fourth quarter of 2022. Adjusted net profit attributable to Waterdrop for the first quarter of 2023 was RMB96.4 million (US$14.0 million), as compared with an adjusted net profit of RMB127.3 million for the same period of 2022, and an adjusted net profit of RMB159.7 million for the fourth quarter of 2022. Cash and cash equivalents and short-term investments As of March 31, 2023, the Company had combined cash and cash equivalents and short-term investments of RMB3,597.3 million (US$523.8 million), as compared with RMB3,704.5 million as of December 31, 2022. Share Repurchase Plan Pursuant to the share repurchase program launched in September 2021 and amended in September 2022, as of May 31, 2023, we cumulatively repurchased approximately 24.9 million ADSs from the open market with cash for a total consideration of approximately US$61.2 million. Exchange Rate This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8676 to US$1.00, the noon buying rate in effect on March 31, 2023 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release. Non-GAAP Financial Measures The Company uses non-GAAP financial measure, adjusted net profit, in evaluating the Company's operating results and for financial and operational decision-making purposes. Adjusted net profit represents net profit excluding share-based compensation expense and foreign currency exchange gain or losses. Such adjustments have no impact on income tax. The non-GAAP financial measure is not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measure has limitations as analytical tools and when assessing the Company's operating performance, investors should not consider it in isolation, or as a substitute for net loss or other consolidated statements of comprehensive loss data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Investors are encouraged to review the Company's historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted net profit presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measure differently, limiting its usefulness as a comparative measure to our data. The Company mitigates these limitations by reconciling the non-GAAP financial measure to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company's performance. For more information on the non-GAAP financial measures, please see the table captioned "Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release. Safe Harbor Statement This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to" and similar statements. Among other things, quotations in this announcement, contain forward-looking statements. Waterdrop may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Waterdrop's beliefs, plans and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Waterdrop's mission, goals and strategies; Waterdrop's future business development, financial condition and results of operations; the expected growth of the insurance, medical crowdfunding and healthcare industry in China; Waterdrop's expectations regarding demand for and market acceptance of our products and services; Waterdrop's expectations regarding its relationships with consumers, insurance carriers and other partners; competition in the industry and relevant government policies and regulations relating to insurance, medical crowdfunding and healthcare industry. Further information regarding these and other risks is included in Waterdrop's filings with the SEC. All information provided in this press release is as of the date of this press release, and Waterdrop does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Conference Call Information Waterdrop's management team will hold a conference call on June 2, 2023 at 8:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time on the same day) to discuss the financial results. Dial-in details for the earnings conference call are as follows: International: 1-412-317-6061 United States Toll Free: 1-888-317-6003 Hong Kong Toll Free: 800-963976 Hong Kong: 852-58081995 Mainland China: 4001-206115 Chinese Line (Mandarin) Entry Number: 6683992 English Interpretation Line (Listen-only Mode) Entry Number: 8700524 Participants can choose between the Chinese and the English interpretation lines. Please note that the English interpretation option will be in listen-only mode. Please dial in 15 minutes before the call is scheduled to begin and provide the Elite Entry Number to join the call. Telephone replays will be accessible two hours after the conclusion of the conference call through June 9, 2023 by dialing the following numbers: United States Toll Free: 1-877-344-7529 International: 1-412-317-0088 Chinese Line Access Code: 1702325 English Interpretation Line Access Code: 8201572 A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.waterdrop-inc.com/. About Waterdrop Inc. Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com. For investor inquiries, please contactWaterdrop Inc.IR@shuidi-inc.com WATERDROP INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, unless otherwise noted) As of December 31, 2022 March 31, 2023 RMB RMB USD Assets Current assets Cash and cash equivalents 1,574,171 722,800 105,248 Restricted cash 517,364 523,644 76,248 Short-term investments 2,130,377 2,874,526 418,563 Accounts receivable, net 675,796 692,826 100,883 Current contract assets 450,085 456,233 66,433 Amount due from related parties 358 107 16 Prepaid expense and other assets 342,468 257,578 37,507 Total current assets 5,690,619 5,527,714 804,898 Non-current assets Non-current contract assets 103,591 104,591 15,230 Property, equipment and software, net 31,397 31,465 4,582 Intangible assets, net 56,614 56,580 8,239 Long-term investments 11,969 9,900 1,442 Right of use assets, net 18,447 70,162 10,216 Deferred tax assets 6,166 7,016 1,022 Goodwill 3,420 3,420 498 Total non-current assets 231,604 283,134 41,229 Total assets 5,922,223 5,810,848 846,127 Liabilities and Shareholders' Equity Current liabilities Amount due to related parties 11,553 11,009 1,603 Insurance premium payables 516,661 523,151 76,177 Accrued expenses and other current liabilities 584,123 535,351 77,953 Current lease liabilities 9,354 29,583 4,308 Total current liabilities 1,121,691 1,099,094 160,041 Non-current liabilities Non-current lease liabilities 4,701 40,586 5,910 Deferred tax liabilities 29,703 25,252 3,677 Total non-current liabilities 34,404 65,838 9,587 Total liabilities 1,156,095 1,164,932 169,628 Shareholders' equity Class A ordinary shares 108 109 16 Class B ordinary shares 27 27 4 Treasury stock (3) (7) (1) Additional paid-in capital 7,384,670 7,211,658 1,050,099 Accumulated other comprehensive income 108,245 113,588 16,540 Accumulated deficit (2,726,919) (2,679,459) (390,159) Total shareholders' equity 4,766,128 4,645,916 676,499 Total liabilities and shareholders' equity 5,922,223 5,810,848 846,127 WATERDROP INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (All amounts in thousands, except for share and per share data, or otherwise noted) For the Three Months Ended March 31, 2022 December 31, 2022 March 31, 2023 RMB RMB RMB USD Operating revenue, net 648,688 679,470 606,165 88,264 Operating costs and expenses(i) Operating costs (154,880) (278,573) (247,983) (36,109) Sales and marketing expenses (204,343) (137,793) (173,401) (25,249) General and administrative expenses (101,995) (118,563) (95,798) (13,949) Research and development expenses (70,825) (71,685) (78,655) (11,453) Total operating costs and expenses (532,043) (606,614) (595,837) (86,760) Operating profit 116,645 72,856 10,328 1,504 Other income Interest income 14,492 27,677 30,876 4,496 Foreign currency exchange gain 653 4,260 282 41 Others, net 24,489 21,954 5,613 817 Profit before income tax 156,279 126,747 47,099 6,858 Income tax (expense)/benefit (51,321) (545) 2,626 382 Net profit attributable to Waterdrop Inc. 104,958 126,202 49,725 7,240 Net profit attributable to ordinary shareholders 104,958 126,202 49,725 7,240 Net profit 104,958 126,202 49,725 7,240 Other comprehensive income: Foreign currency translation adjustment, net of tax (7,783) (40,297) 3,386 493 Unrealized (loss)/gains on available for sale investments, net of tax 1,072 (4,339) 1,957 285 Comprehensive income 98,247 81,566 55,068 8,018 Weighted average number of ordinary shares used in computing net profit per share Basic 3,938,758,720 3,903,634,639 3,866,785,745 3,866,785,745 Diluted 4,017,949,706 4,067,145,456 4,027,428,601 4,027,428,601 Net profit per share attributable to ordinary shareholders Basic 0.03 0.03 0.01 0.00 Diluted 0.03 0.03 0.01 0.00 (i) Share-based compensation expenses are included in the operating costs and expenses as follows. For the Three Months Ended March 31, 2022 December 31, 2022 March 31, 2023 RMB RMB RMB USD Sales and marketing expenses (2,802) (9,635) (16,529) (2,407) General and administrative expenses (16,921) (23,886) (26,460) (3,853) Research and development expenses (3,284) (4,201) (3,937) (573) Total (23,007) (37,722) (46,926) (6,833) WATERDROP INC. RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, unless otherwise noted) For the Three Months Ended March 31, 2022 December 31, 2022 March 31, 2023 RMB RMB RMB USD Net profit 104,958 126,202 49,725 7,240 Add: Share-based compensation expense 23,007 37,722 46,926 6,833 Foreign currency exchange gain (653) (4,260) (282) (41) Adjusted net profit 127,312 159,664 96,369 14,032
Non-GAAP profit doubled quarter-over-quarter (QoQ) to US$10.33 million, a two-year high Number of new customer accounts up 40% QoQ, thanks to relentless global expansion efforts SINGAPORE and NEW YORK, May 30, 2023 /PRNewswire/ -- UP Fintech Holding Limited ("UP Fintech" or the "Company", Nasdaq: TIGR, and all its subsidiaries and consolidated entities), a leading online brokerage with a focus on redefining global investing with technologies for the next generation, announced its unaudited financial results for the three months ended March 31, 2023. Thanks to a scalable global expansion strategy and an unwavering commitment to fintech innovation, the company's revenue stood at US$66.33 million during the period, up 26.0% year-over-year (YoY). The non-GAAP profit attributable to UP Fintech reached US$10.33 million, registering a 128.5% increase QoQ. During the first quarter, 52,534 new customer accounts were added, up 39.8% QoQ, pushing the global total to 2.06 million. The number of new customers with deposits (number of funded accounts) rose by 30,392, or up 11.2% from the previous quarter, to 811,900. The total trading volume by customers stood at US$67.0 billion on the company's platform, of which US$23.0 billion was calculated from stock trading, along with 7.89 million options and futures contracts. The total customer asset amounted to US$16.1 billion during the reporting period, up 15.2% QoQ, and the total asset funded by customers approached US$1.2 billion. Wu Tianhua, CEO and founder of UP Fintech, said: "Amid the global market's modest recovery in the first quarter, the company's revenue and profit saw solid growth, with both our commission and interest-related income, and non-GAAP profit doubled on a quarterly basis. Worth mentioning, our non-GAAP profit marked a two-year high." "On the fintech innovation front, we brought the industry's first AI investment assistant, TigerGPT. The text-generating AI chatbot aims to provide intelligent decision-making support for global investors. In this period, our self-clearing technologies were gradually applying to Hong Kong stock trading orders, helping nearly halve our clearing expenses on a quarterly basis." "In our global expansion journey, we tread steadily during the past quarter. Sequential growth was seen in both the number of new customer accounts and the number of new funded accounts, and a strong rise was witnessed in the net asset inflow, indicating that we gained widespread trust for our one-stop global investing offerings from investors worldwide. Looking ahead, the company is committed to leveling up its products and services, in leverage to consolidate its leading position in various global markets, while maintaining long-term and sustainable growth momentum," he added. Number of new customer accounts up 40% QoQ In Singapore, a wealth management license on its way In the reporting period, the company's unparalleled product offerings helped expand its global customer base. A steady increase was seen in two key customer acquisition indicators. The number of customer accounts was up 52,534, or 39.8% sequentially, and 30,392 new customers with deposits (number of funded accounts) were added, or up 11.2% on a quarterly basis. In Singapore, the company's leading position was further cemented, with a stable and high-worth local customer base retained and served well. By the end of the reporting period, in Singapore, the average asset balance marked a continuous increase to approach US$15,000 per account. Also during the period, trading proactivity and willingness were seen in all local customer age groups, particularly among users aged below 30, where the company's flagship platform Tiger Trade received stepped-up recognition with the trading frequency up 17.8% on a quarterly basis. On the business expansion side, the breadth went deeper. The Monetary Authority of Singapore approved in principle a CMS (Capital Markets Services) Fund Management license, initially qualifying the company to manage funds for local customers. In Hong Kong, US options feature went live. With long and short options available and margin discounts for combination strategies introduced, the company is dedicated to offering local investors inclusive and bang-for-the-buck options trading services. In an effort to lower the investment threshold and help investors spread risks, the company also became one of the few brokerage firms that support US stock AIP (automatic investment plan) and ETF AIP, with a starting amount of US$1. This renders investors leeway to tailor investment strategy on a daily, weekly, biweekly, or monthly basis. In Hong Kong, local operations are implemented in a learning manner to set up a mutual communication channel with local users, with an active "Tiger think tank" program for more feedback. The company's accessible products and premium services also brought industry awards, including the "Outstanding Online Broker" award by Finet Group, and the "Excellent Stock Trading Platform" award by the Sky Post. Tiger Vault was also unveiled in Hong Kong. As a wealth management service that helps users better manage their idle cash, it is featured by its US$1 investment starting point, zero commission, and high liquidity. In Australia, the number of new funded accounts doubled in the period, while the number of new trading customers jumped 69.7% on a quarterly basis. The US stock AIP feature introduced earlier has been widely lauded for its equal accessibility. During the reporting period, a 106.1% sequential growth was seen in the number of local customers who started AIP for the first time. For the second consecutive year, the company received the "Best for ETFs" award from local media WeMoney, and was also a finalist for the "Best for International Investments" award. TigerGPT, the industry's first investment assistant, introduced Options trading experience enhanced with feature updates On the product side, the company has been placing investors' experience at the center of everything it does. On Tiger Trade's mobile app, new features were presented, including updated display customization of the earnings calendar, dividend distribution, and macroeconomic data, as well as a new lite version for stock positions, and insights on anomalous movements. On the desktop platform, new functions such as one-click trading tool for all investment products, and at-auction orders for Hong Kong stocks were added. An enhancement was also made to the options trading experience. An options screener was added on the Home/Discover page in Tiger Trade app so as to help investors better shape up their strategies. In another gesture to lower the costs of frequent options trades, a pricing ladder on the US options trading commission was launched to let investors select the periodical pricing plan in a flexible fashion. Forty-five pieces of investor education materials were made in the period, covering topics from ETFs basics and hands-on, analysis of US stocks' financial results, encyclopedia of financial terms, and understanding of stocks' trendlines and technical indicators. By the end of the reporting period, this systematic education program had consisted of over 800 pieces of materials spanning from "basics learning" to "case studies" and to "technical manuals". Thanks to the ever-improving user experience, during the period, the stock trading volume reached US$23.0 billion on the company's platform, up 12.4% QoQ. In addition, 7.89 million options and futures contracts were made, up 6.1% QoQ. In the first quarter, the company's income from commission stood at US$25.44 million, and the interest-related income was US$37.44 million, up 119.9% YoY. In the meantime, the clearing costs in the period dropped by 46.1% YoY, signaling a boost in operational efficiency. Tiger Vault AUM up 77% sequentially A fifth of new customers try wealth management services in Singapore In the first quarter, the company's wealth management business continued its growth in tandem with the widened global expansion. The asset under management (AUM) rose 79.1% on a sequential basis, with the number of wealth management-activated accounts up 34.0% QoQ. Tiger Vault's seven-day annualized rate of return reached 4.8%* at its peak — a stable yield that had earned it more investors' recognition worldwide. During the period worldwide, Tiger Vault's AUM rose 77.4% on a sequential basis, with the number of Tiger Vault-activated accounts up 50.7% QoQ. In Singapore, amid the buoying demand for a more diversified product portfolio and a growing interest in countering market volatility, nearly 20% of new funded accounts had tried wealth management services offered by the company. In the market, Tiger Vault's AUM rose 46.6% on a sequential basis, with the number of Tiger Vault-activated accounts up 30.5% QoQ. Within wealth management services, new fund rankings were introduced to include different themed lists, including "most consistent performers", "top traded funds", and "best performing funds". Different levels of risk preference are covered with improved efficiency in fund selection. In Singapore, during the period, the Fund Mall further supported AIP and facilitated the investment process, where local customers can invest in Singapore dollar-denominated funds with the fund from their bank accounts. Investment banking growth momentum continues ESOP ARR doubled YoY During the reporting period, other revenues from to-business corporate services, including investment banking and employee stock ownership plan (ESOP), reached US$3.45 million. The company underwrote 7 Hong Kong IPOs, placing the company in third position worldwide among all investment bank institutions, according to third-party data provider Wind. On the ESOP side, during the period, UponeShare signed 29 ESOP clients, bringing the total number of clients to 448, up 32.5% YoY. Thanks to its closed-loop services which span all stock options-related scenarios, UponeShare's general client stickiness remained at a high level. During the period, the value of signed contracts rose 50.5% YoY, with the annual recurring revenue (ARR) up 103.8% YoY. *4.8% was the seven-day annualized yield rate marked on March 30, 2023 for Tiger Vault's fund SGXZ99103178. Please note that this historical rate does not guarantee the fund's future yields. About UP Fintech UP Fintech Holding Limited (Nasdaq: TIGR), also known as Tiger Brokers, is a leading online brokerage firm with a focus on redefining global investing with technologies for the next generation. Founded in 2014, the company relentlessly offers superior user experience in pursuit of becoming a world-leading online brokerage, to let everyone enjoy efficient and smart investing. Currently, we offer a multitude of quality financial products and services across brokerage, employee stock ownership plan (ESOP) management, investment banking, wealth management, investor community, and investor education.UP Fintech strives to elevate financial technology R&D to a new level. While we inherit the best traditions from the financial sector and blend them with the best minds of tech experts, we develop our own technology infrastructure—an aggregation that enables multi-currency trading of various products across markets, guaranteeing our reliable, secure, and scalable services are accessible to all with low latency. In March 2019, UP Fintech was listed on Nasdaq under the ticker TIGR. As of now, we serve over 9 million users and more than 2 million account holders worldwide on our flagship platform "Tiger Trade", own 69 licenses and qualifications in different markets, and have over 1,000 employees on the team in Singapore, New Zealand, the US, Hong Kong, Australia, and Mainland China. For more information about UP Fintech as a company, please visit itigerup.com.For media inquiries, please contact press@itiger.com Safe Harbor Statement This announcement contains forward−looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward−looking statements can be identified by terminology such as "may," "might," "aim," "likely to," "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements or expressions. Among other statements, the business outlook and quotations from management in this announcement, as well as the Company's strategic and operational plans, contain forward−looking statements. The Company may also make written or oral forward−looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20−F and 6−K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties, including the earnings conference call. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward−looking statements. Forward−looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward−looking statement, including but not limited to the following: the cooperation with Interactive Brokers LLC and Xiaomi Corporation and its affiliates; the Company's ability to effectively implement its growth strategies; trends and competition in global financial markets; changes in the Company's revenues and certain cost or expense accounting policies; the effects of the global COVID-19 pandemic; and governmental policies and regulations affecting the Company's industry and general economic conditions in China, Singapore and other countries. Further information regarding these and other risks is included in the Company's filings with the SEC, including the Company's annual report on Form 20-F filed with the SEC on April 26, 2023. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law. Further information regarding these and other risks is included in the Company's filings with the SEC.
Blended RevPAR Recovers to 118% of 1Q19 SINGAPORE and SHANGHAI, May 30, 2023 /PRNewswire/ -- H World Group (NASDAQ: HTHT; HK: 1179) announced financial results for the first quarter of 2023. In 1Q 2023, H World captured the strong hotel industry recovery and reported hotel turnover of RMB16.2bn, representing 71.3% YoY increase. In the first quarter, H World's revenue reached RMB4.5bn, representing a 21% QoQ growth and an increase of 67.1% YoY from RMB2.68bn in the same quarter last year. The reported revenue exceeded company's previous guidance and surpassed its pre-COVID level. Adjusted EBITDA turned positive to RMB1.7bn, compared to a loss of RMB333mn in 1Q 2022. For the Legacy-Huazhu business, average daily room rate ("ADR") grew 23.9% YoY to RMB277 from RMB224 in the same period last year, and occupancy rate improved by 16.4ppts YoY to 75.6%. Jin Hui, CEO of H World commented: "The company's solid result in the first quarter was largely driven by pend-up demand, a combination of product mix change and continued product upgrades, as well as market penetration and synergy through regional offices." RevPAR Recovery Exceeds Expectation With the gradual recovery of China's consumption and travelling activates, together with some consumption stimulus measures introduced in various provinces, Legacy-Huazhu's blended RevPAR grew to RMB210 in 1Q 2023, from only RMB132 in 1Q 2022, and recovered to 118% of 1Q 2019 level. Breaking down into monthly numbers, RevPAR in January, February and March 2023 recovered to 96%, 140% and 120% of the 2019 levels of the corresponding months, respectively. In the first quarter, Legacy-Huazhu signed up 672 new hotels, up 26% YoY, but closed 209 hotels in the same period. The hotel closure primarily reflects the delayed hotel closure processes in 4Q22 due to COVID impacts, as well as Huazhu's proactive approach of tightening the new hotel opening requirements and removing interior hotels from the network. Launches Orange Hotel 3.0, Introducing the "LOHAS" Concept H World continued implementing its sustainable quality growth strategy. To further improve the quality of the hotel portfolio, H World closed more inferior economy soft brands and HanTing 1.0 version hotels, and achieved further breakthrough in the midscale and upper-midscale segments. In the midscale segment, H World launched Orange Hotel 3.0 version, which embraces the rising demand of "Lifestyles of Health and Sustainability (LOHAS)" concept. In the upper-midscale segment, H World launched DH's Intercity Hotel brand in China, which offers ultimate business travel experience. H World has successfully opened new Intercity Hotels in Shenzhen, Wuhan, Shanghai and Zhengzhou. The new openings marked an important first step for Intercity brand's future development in China where the brand is inherited and further evolved. Orange Hotel 3.0 Version On the overseas business front, Legacy-DH's 1Q 2023 RevPAR recovered to 94% of 2019 level. H World expects revenue to grow 51-55% YoY in the Second Quarter In the second quarter, H World continues focusing on the sustainable growth strategy, and expects its revenue growth to be in the range of 51%-55% YoY. The full year expectation remains unchanged with expectation of 1,400 gross hotel openings and 42-46% YoY revenue growth. About H World Group Originated in China, H World Group Limited is a key player in the global hotel industry. As of March 31, 2023, H World operated 8,592 hotels with 820,099 rooms in operation in 18 countries. H World's brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region. The above press release is distributed by Peanut Media. For media inquiries, please contact Olga Duan (852)9865-6561 duanjie@czgmcn.com Regen Wong (852)6437-6608 regenwong@czgmcn.com
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