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BEIJING, Dec. 9, 2024 /PRNewswire/ -- Hello Group Inc. (NASDAQ: MOMO) ("Hello Group" or the "Company"), a leading player in mainland China's online social networking space, today announced its unaudited financial results for the third quarter of 2024. Third Quarter of 2024 Highlights Net revenues decreased by 12.1% year over year to RMB2,674.7 million (US$381.1 million*) in the third quarter of 2024. Net income attributable to Hello Group Inc. decreased to RMB449.4 million (US$64.0 million) in the third quarter of 2024, from RMB546.4 million in the same period of 2023. Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB493.3 million (US$70.3 million) in the third quarter of 2024, from RMB605.9 million in the same period of 2023. Diluted net income per American Depositary Share ("ADS") was RMB2.46 (US$0.35) in the third quarter of 2024, compared to RMB2.75 in the same period of 2023. Non-GAAP diluted net income per ADS (note 1) was RMB2.70 (US$0.38) in the third quarter of 2024, compared to RMB3.05 in the same period of 2023. Monthly Active Users ("MAU") on Tantan app were 12.0 million in September 2024, compared to 15.7 million in September 2023. For the Momo app total paying users was 6.9 million for the third quarter of 2024, compared to 7.8 million for the same period last year. Tantan had 0.9 million paying users for the third quarter of 2024 compared to 1.4 million from the year ago period. First Nine Months of 2024 Highlights Net revenues decreased by 11.9% year over year to RMB7,926.5 million (US$1,129.5 million) for the first nine months of 2024. Net income attributable to Hello Group Inc. was RMB852.3 million (US$121.5 million) for the first nine months of 2024, compared to RMB1,505.1 million during the same period of 2023. Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,002.4 million (US$142.8 million) for the first nine months of 2024, compared to RMB1,710.0 million during the same period of 2023. Diluted net income per ADS was RMB4.51(US$0.64) for the first nine months of 2024, compared to RMB7.52 during the same period of 2023. Non-GAAP diluted net income per ADS (note 1) was RMB5.31(US$0.76) for the first nine months of 2024, compared to RMB8.53 during the same period of 2023. "Q3 2024 was a fruitful quarter for us. We delivered satisfactory financial results and executed well against our strategic priorities across all business lines," commented Yan Tang, Chairman and CEO of Hello Group. " Our overseas business reaccelerated growth thanks to improved operational efficiency. Our team made good progress in advancing the localization process and expanding our product offering. This gives us more confidence to continue to invest firmly in more diversified overseas markets." * This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rate solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB7.0176 to US$1.00, the effective noon buying rate for September 30, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board. Third Quarter of 2024 Financial Results Net revenues Total net revenues were RMB2,674.7 million (US$381.1 million) in the third quarter of 2024, a decrease of 12.1% from RMB3,042.8 million in the third quarter of 2023. Live video service revenues were RMB1,286.4 million (US$183.3 million) in the third quarter of 2024, a decrease of 16.0% from RMB1,530.8 million during the same period of 2023. The decrease was primarily attributable to our proactive operational adjustments to de-emphasize large scale competition events in the Momo app and a soft consumer sentiment in the current macro environment, and to a lesser degree, Tantan pivoting away from the less dating-centric live video service. Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,356.3 million (US$193.3 million) in the third quarter of 2024, a decrease of 7.5% from RMB1,466.7 million during the same period of 2023. The decrease was primarily due to our product adjustments to improve Momo app's ecosystem as well as the impact of the macro economy on consumer sentiment, and to a lesser extent, the decline in Tantan's paying users which was in turn due to the decline in user base and the short-term impact of the product upgrade on new user paying conversions. The decrease was partially offset by the revenue growth from the new standalone apps. Mobile marketing revenues were RMB30.7 million (US$4.4 million) in the third quarter of 2024, compared to RMB30.7 million during the same period of 2023. Net revenues from the Momo segment decreased from RMB2,743.1 million in the third quarter of 2023 to RMB2,462.3 million (US$350.9 million) in the third quarter of 2024, primarily due to the decrease in net revenues from value-added service and live video service on Momo app. The decrease was partially offset by the revenue growth of the new standalone apps. Net revenues from the Tantan segment decreased from RMB295.0 million in the third quarter of 2023 to RMB212.1 million (US$30.2 million) in the third quarter of 2024, mainly due to the decrease in net revenues from live video service and value-added service. Cost and expenses Cost and expenses were RMB2,286.2 million (US$325.8 million) in the third quarter of 2024, a decrease of 7.1% from RMB2,461.1 million in the third quarter of 2023. The decrease was primarily attributable to: (a) a decrease in revenue sharing with broadcasters related to live video service on Momo app and Tantan app, and a decrease in revenue sharing with virtual gift recipients of virtual gift service on Momo app. The decrease was partially offset by an increase in revenue sharing with virtual gift recipients for new standalone apps; and (b) a decrease in salary expenses and share-based compensation expenses, due to our continuous optimization in personnel costs and the newly granted share options which had lower fair value. Non-GAAP cost and expenses (note 1) were RMB2,242.2 million (US$319.5 million) in the third quarter of 2024, a decrease of 6.6% from RMB2,401.6 million during the same period of 2023. Income from operations Income from operations was RMB410.7 million (US$58.5 million) in the third quarter of 2024, compared to RMB621.8 million during the same period of 2023. Income from operations of the Momo segment was RMB397.5 million (US$56.7 million) in the third quarter of 2024, which decreased from RMB618.6 million in the third quarter of 2023. Income from operations of the Tantan segment was RMB14.7 million (US$2.1 million) in the third quarter of 2024, which decreased from RMB24.0 million in the third quarter of 2023. Non-GAAP income from operations (note 1) was RMB454.7 million (US$64.8 million) in the third quarter of 2024, compared to RMB681.2 million during the same period of 2023. Non-GAAP income from operations of the Momo segment was RMB441.0 million (US$62.8 million) in the third quarter of 2024, which decreased from RMB674.5 million in the third quarter of 2023. Non-GAAP income from operations of the Tantan segment was RMB15.2 million (US$2.2 million) in the third quarter of 2024, compared to RMB27.6 million in the third quarter of 2023. Income tax expenses Income tax expenses were RMB95.3 million (US$13.6 million) in the third quarter of 2024, compared to RMB158.1 million in the third quarter of 2023. The decrease in income tax expenses was primarily due to the lower profit in the third quarter of 2024, and to a lesser extent, lower withholding tax rate due to our eligibility for a preferential tax rate since the beginning of the year. Net income Net income was RMB449.4 million (US$64.0 million) in the third quarter of 2024, compared to RMB542.2 million during the same period of 2023. Net income from the Momo segment was RMB436.4 million (US$62.2 million) in the third quarter of 2024, compared to RMB540.0 million in the same period of 2023. Net income from the Tantan segment was RMB14.4 million (US$2.1 million) in the third quarter of 2024, compared to RMB23.0 million in the third quarter of 2023. Non-GAAP net income (note 1) was RMB493.3 million (US$70.3 million) in the third quarter of 2024, compared to RMB601.6 million during the same period of 2023. Non-GAAP net income from the Momo segment was RMB479.9 million (US$68.4 million) in the third quarter of 2024, which decreased from RMB595.9 million in the third quarter of 2023. Non-GAAP net income of the Tantan segment was RMB14.9 million (US$2.1 million) in the third quarter of 2024, compared to RMB26.6 million in the third quarter of 2023. Net income attributable to Hello Group Inc. Net income attributable to Hello Group Inc. was RMB449.4 million (US$64.0 million) in the third quarter of 2024, compared to RMB546.4 million during the same period of 2023. Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB493.3 million (US$70.3 million) in the third quarter of 2024, compared to RMB605.9 million during the same period of 2023. Net income per ADS Diluted net income per ADS was RMB2.46 (US$0.35) in the third quarter of 2024, compared to RMB2.75 in the third quarter of 2023. Non-GAAP diluted net income per ADS (note 1) was RMB2.70 (US$0.38) in the third quarter of 2024, compared to RMB3.05 in the third quarter of 2023. Cash and cash flow As of September 30, 2024, the Company's cash, cash equivalents, short-term deposits, long-term deposits, short-term restricted cash and long-term restricted cash totaled RMB14,782.2 million (US$2,106.4 million), compared to RMB13,478.5 million as of December 31, 2023. Net cash provided by operating activities in the third quarter of 2024 was RMB341.0 million (US$48.6 million), compared to RMB582.5 million in the third quarter of 2023. First Nine Months of 2024 Financial Results Net revenues for the first nine months of 2024 were RMB7,926.5 million (US$1,129.5 million), a decrease of 11.9% from RMB8,999.4 million in the same period of 2023. Net income attributable to Hello Group Inc. was RMB852.3 million (US$121.5 million) for the first nine months of 2024, compared to RMB1,505.1 million during the same period of 2023. Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,002.4 million (US$142.8 million) for the first nine months of 2024, compared to RMB1,710.0 million during the same period of 2023. Diluted net income per ADS was RMB4.51 (US$0.64) during the first nine months of 2024, compared to RMB7.52 in the same period of 2023. Non-GAAP diluted net income per ADS (note 1) was RMB5.31 (US$0.76) during the first nine months of 2024, compared to RMB8.53 in the same period of 2023. Net cash provided by operating activities was RMB1,216.4 million (US$173.3 million) during the first nine months of 2024, compared to RMB1,861.3 million in the same period of 2023. Recent Development Share repurchase program On June 7, 2022, Hello Group's board of directors authorized a share repurchase program under which the Company may repurchase up to US$200 million of its shares up to June 6, 2024 (the "Share Repurchase Program"). On March 14, 2024, Hello Group's board of directors approved to amend the Share Repurchase Program to (i) extend the term of the Share Repurchase Program up to June 30, 2026, and (ii) upsize the Share Repurchase Program so that the Company is authorized to, from time to time, acquire up to an aggregate of US$286.1 million worth of its shares in the form of ADSs and/or the ordinary shares of the Company in the open market and through privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. As of December 9, 2024, the Company has repurchased 40.0 million ADSs for US$238.4 million on the open market under Share Repurchase Program announced on June 7, 2022 and amended on March 14, 2024, at an average purchase price of US$5.94 per ADS. Business Outlook For the fourth quarter of 2024, the Company expects total net revenues to be between RMB2.56 billion to RMB2.66 billion, representing a decrease of 14.7% to 11.4% year over year. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change. Note 1: Non-GAAP measures To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we, Hello Group, use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation and such adjustment has no impact on income tax. Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures. Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the GAAP results. In addition, our calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited. Our non-GAAP information (including non-GAAP cost and operating expenses, income (loss) from operations, net income (loss), net income attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation and such adjustment has no impact on income tax. A limitation of using these non-GAAP financial measures is that share-based compensation has been and will continue to be for the foreseeable future significant recurring expenses in our results of operations. We compensate for such limitation by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release. Conference Call Hello Group's management will host an earnings conference call on Monday, December 9, 2024, at 7:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on December 9, 2024). Participants can register for the conference call by navigating to: https://s1.c-conf.com/diamondpass/10043397-w4b3f5.html. Upon registration, each participant will receive details for the conference call, including dial-in numbers, conference call passcode and a unique access PIN. Please dial in 10 minutes before the call is scheduled to begin. A telephone replay of the call will be available after the conclusion of the conference call through December 16, 2024. The dial-in details for the replay are as follows: U.S. / Canada: 1-855-883-1031Hong Kong: 800-930-639Passcode: 10043397 Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of Hello Group's website at https://ir.hellogroup.com. About Hello Group Inc. We are a leading player in mainland China's online social networking space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates social interactions based on location, interests and a variety of online recreational activities. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application. Tantan is designed to help its users find and establish romantic connections as well as meet interesting people. Starting from 2019, we have incubated a number of other new apps, such as Hertz, Soulchill, and Duidui, which target more niche markets and more selective demographics. For investor and media inquiries, please contact: Hello Group Inc. Investor Relations Phone: +86-10-5731-0538Email: ir@hellogroup.com Christensen In ChinaMs. Xiaoyan Su Phone: +86-10-5900-1548 E-mail: Xiaoyan.Su@christensencomms.com In U.S.Ms. Linda BergkampPhone: +1-480-614-3004 Email: linda.bergkamp@christensencomms.com Safe Harbor Statement This news release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes, our financial outlook for the fourth quarter of 2024, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program. Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the third quarter of 2024 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the fourth quarter of 2024 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth. Moreover, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, general economic conditions, and other factors. For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, after the date of this release, except as required by law. Such information speaks only as of the date of this release. Hello Group Inc. Unaudited Condensed Consolidated Statement of Operations (All amounts in thousands, except share and per share data) Three months First nine months Ended September 30 Ended September 30 2023 2024 2024 2023 2024 2024 RMB RMB US$ RMB RMB US$ Net revenues: Live video service 1,530,797 1,286,442 183,317 4,548,986 3,828,003 545,486 Value-added service 1,466,727 1,356,270 193,267 4,327,678 3,995,962 569,420 Mobile marketing 30,705 30,735 4,380 88,762 99,320 14,153 Mobile games 7,864 - - 14,169 432 62 Other services 6,754 1,217 173 19,796 2,758 393 Total net revenues 3,042,847 2,674,664 381,137 8,999,391 7,926,475 1,129,514 Cost and expenses: Cost of revenues (1,771,530) (1,623,723) (231,379) (5,255,277) (4,722,520) (672,954) Research and development (201,693) (196,382) (27,984) (653,145) (581,741) (82,897) Sales and marketing (373,942) (354,881) (50,570) (1,110,253) (1,013,081) (144,363) General and administrative (113,896) (111,174) (15,842) (376,981) (364,037) (51,875) Total cost and expenses (2,461,061) (2,286,160) (325,775) (7,395,656) (6,681,379) (952,089) Other operating income, net 39,971 22,221 3,166 99,284 50,988 7,266 Income from operations 621,757 410,725 58,528 1,703,019 1,296,084 184,691 Interest income 96,791 134,875 19,220 311,899 386,919 55,136 Interest expense (19,293) (34,809) (4,960) (41,671) (91,000) (12,967) Other gain or loss, net - - - 4,565 (43,870) (6,251) Income before income tax and share of income (loss) on equity method investments 699,255 510,791 72,788 1,977,812 1,548,133 220,609 Income tax expenses (158,064) (95,298) (13,580) (446,646) (755,525) (107,661) Income before share of income (loss)on equity methodinvestments 541,191 415,493 59,208 1,531,166 792,608 112,948 Share of income (loss) on equity method investments 974 33,876 4,827 (31,940) 59,730 8,511 Net income 542,165 449,369 64,035 1,499,226 852,338 121,459 Less: net loss attributable to non-controlling interest (4,263) - - (5,886) - - Net income attributable to the shareholders of Hello Group Inc. 546,428 449,369 64,035 1,505,112 852,338 121,459 Net income per share attributable to ordinary shareholders Basic 1.44 1.29 0.18 3.98 2.36 0.34 Diluted 1.37 1.23 0.18 3.76 2.26 0.32 Weighted average shares used in calculating net income per ordinary share Basic 379,292,110 347,943,851 347,943,851 378,085,030 361,613,017 361,613,017 Diluted 398,296,690 365,942,405 365,942,405 405,490,366 377,697,017 377,697,017 Hello Group Inc. Unaudited Condensed Consolidated Statement of Comprehensive Income (All amounts in thousands, except share and per share data) Three months First nine months Ended September 30 Ended September 30 2023 2024 2024 2023 2024 2024 RMB RMB US$ RMB RMB US$ Net income 542,165 449,369 64,035 1,499,226 852,338 121,459 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment 6,032 (287,150) (40,919) 116,188 (190,687) (27,173) Comprehensive income 548,197 162,219 23,116 1,615,414 661,651 94,286 Less: comprehensive (loss) income attributed to the non-controlling interest (3,141) (6,400) (912) 5,377 (2,114) (301) Comprehensive income attributable to Hello Group Inc. 551,338 168,619 24,028 1,610,037 663,765 94,587 Hello Group Inc. Unaudited Condensed Consolidated Balance Sheets (All amounts in thousands, except share and per share data) December 31 September 30 September 30 2023 2024 2024 RMB RMB US$ Assets Current assets Cash and cash equivalents 5,620,466 3,301,235 470,422 Short-term deposits 1,270,626 2,840,310 404,741 Restricted cash 10,147 4,084,937 582,099 Accounts receivable, net of allowance for doubtful accounts of RMB12,780 and RMB12,490 as of December 31, 2023 and September 30, 2024, respectively 201,517 186,374 26,558 Amounts due from related parties 7,258 - - Prepaid expenses and other current assets 723,364 1,008,208 143,668 Total current assets 7,833,378 11,421,064 1,627,488 Long-term deposits 3,924,975 3,354,400 477,998 Long-term restricted cash 2,652,299 1,201,311 171,185 Right-of-use assets, net 109,572 288,193 41,067 Property and equipment, net 659,033 879,996 125,398 Intangible assets, net 17,086 13,247 1,888 Rental deposits 12,962 13,257 1,889 Long-term investments 786,911 783,521 111,651 Amounts due from RPT-non current 20,000 - - Other non-current assets 180,052 161,702 23,042 Deferred tax assets 31,741 35,938 5,121 Total assets 16,228,009 18,152,629 2,586,727 Liabilities and equity Current liabilities Accounts payable 616,681 608,607 86,723 Deferred revenue 442,805 443,036 63,132 Accrued expenses and other current liabilities 630,617 600,435 85,561 Amounts due to related parties 4,314 - - Lease liabilities due within one year 60,008 154,969 22,083 Income tax payable 94,719 93,432 13,314 Deferred consideration in connection with business acquisitions 27,261 26,945 3,840 Convertible Senior Notes-current - 19,394 2,764 Long-term borrowings, current portion 215,615 1,938,385 276,218 Short-term borrowings - 2,365,535 337,086 Total current liabilities 2,092,020 6,250,738 890,721 Deferred tax liabilities 24,987 323,362 46,079 Convertible Senior Notes 19,571 - - Long-term borrowings 1,938,385 - - Lease liabilities 52,171 142,803 20,349 Other non-current liabilities 114,085 130,359 18,576 Total liabilities 4,241,219 6,847,262 975,725 Shareholder's equity (i) 11,986,790 11,305,367 1,611,002 Total liabilities and shareholder's equity 16,228,009 18,152,629 2,586,727 (i): As of September 30, 2024, the number of ordinary shares outstanding was 344,219,472. Hello Group Inc. Unaudited Condensed Consolidated Statement of Cash Flows (All amounts in thousands, except share and per share data) Three months First nine months Ended September 30 Ended September 30 2023 2024 2024 2023 2024 2024 RMB RMB US$ RMB RMB US$ Cash flows from operating activities: Net income 542,165 449,369 64,035 1,499,226 852,338 121,459 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment 17,467 13,144 1,873 59,098 40,979 5,839 Amortization of intangible assets 1,279 1,279 182 3,837 3,837 547 Share-based compensation 59,472 43,951 6,264 204,877 150,079 21,385 Share of (income) loss on equity method investments (974) (33,876) (4,827) 31,940 (59,730) (8,511) Gain on repurchase of convertible senior notes - - - (4,565) - - Cash received on distributions from equity method investments 718 - - 2,067 1,197 171 Loss on long-term investments - - - - 43,870 6,251 Gain or loss on disposal of property and equipment (60) (142) (20) (520) (62) (9) Provision of (income) loss on receivable and other assets (133) 1,754 250 10,071 3,675 524 Changes in operating assets and liabilities: Accounts receivable 10,749 (3,876) (552) (9,916) 11,952 1,703 Prepaid expenses and other current assets (96,572) (97,212) (13,853) 98,294 (91,846) (13,088) Amounts due from related parties (27,114) - - (27,059) - - Rental deposits 1,301 493 70 2,252 (309) (44) Deferred tax assets 415 (117) (17) 872 (4,195) (598) Other non-current assets (50,578) 22,945 3,270 (27,639) (183,398) (26,134) Accounts payable 6,987 16,036 2,285 38,825 (15,710) (2,239) Income tax payable 24,215 35,209 5,017 20,496 (1,288) (184) Deferred revenue 11,736 (838) (119) (11,137) 568 81 Accrued expenses and other current liabilities 15,374 (3,390) (483) (172,186) 61,357 8,743 Amount due to related parties (8,401) - - (5,504) - - Deferred tax liabilities 47,681 (85,088) (12,125) 130,198 294,333 41,942 Other non-current liabilities 26,741 (18,688) (2,663) 17,757 108,705 15,490 Net cash provided by operating activities 582,468 340,953 48,587 1,861,284 1,216,352 173,328 Cash flows from investing activities: Purchase of property and equipment (238,219) (19,796) (2,821) (259,463) (263,814) (37,593) Payment for long-term investments - (28,000) (3,990) (9,000) (33,250) (4,738) Purchase of short-term deposits (531,214) (2,133,086) (303,962) (1,028,556) (2,133,086) (303,962) Cash received on maturity of short-term deposits 1,900,000 - - 5,409,820 1,081,016 154,044 Cash received on investment income distribution - - - 1,517 - - Purchase of long-term deposits (2,498,860) - - (3,848,860) (718,860) (102,437) Cash received on maturity of long-term deposits 1,700,000 - - 1,700,000 718,860 102,437 Cash received from sales of long-term investment 15,000 - - 15,000 2,000 285 Loan to a third-party company - (96,680) (13,777) - (96,680) (13,777) Other investing activities 137 212 30 1,822 895 128 Net cash provided by (used in) investing activities 346,844 (2,277,350) (324,520) 1,982,280 (1,442,919) (205,613) Cash flows from financing activities: Proceeds from exercise of share options 551 4 1 570 17 2 Repurchase of ordinary shares (58,767) (265,441) (37,825) (62,004) (772,263) (110,047) Repurchase of subsidiary's share options (223) - - (4,319) - - Dividends payment - - - (937,249) (716,302) (102,072) Proceeds from short-term borrowings - 1,033,900 147,330 - 2,365,535 337,086 Proceeds from long-term borrowings 2,154,000 - - 2,154,000 - - Repayment of long-term borrowings - (215,400) (30,694) - (215,615) (30,725) Payment for redemption of convertible bonds (86,932) - - (2,679,942) - - Net cash provided by (used in) financing activities 2,008,629 553,063 78,812 (1,528,944) 661,372 94,244 Effect of exchange rate changes (7,837) (178,773) (25,478) 128,597 (130,234) (18,559) Net increase (decrease) in cash and cash equivalents 2,930,104 (1,562,107) (222,599) 2,443,217 304,571 43,400 Cash, cash equivalents and restricted cash at the beginning of period 4,711,714 10,149,590 1,446,305 5,198,601 8,282,912 1,180,306 Cash, cash equivalents and restricted cash at the end of period 7,641,818 8,587,483 1,223,706 7,641,818 8,587,483 1,223,706 Hello Group Inc. Reconciliation of Non-GAAP financial measures to comparable GAAP measures (All amounts in thousands, except per share data) 1. Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures. Three months Three months Three months Ended September 30, 2023 Ended September 30, 2024 Ended September 30, 2024 GAAP Share-based compensation Non-GAAP GAAP Share-based compensation Non-GAAP GAAP Share-based compensation Non-GAAP RMB RMB RMB RMB RMB RMB US$ US$ US$ Cost of revenues (1,771,530) 1,211 (1,770,319) (1,623,723) 2,143 (1,621,580) (231,379) 305 (231,074) Research and development (201,693) 14,993 (186,700) (196,382) 11,030 (185,352) (27,984) 1,573 (26,411) Sales and marketing (373,942) 5,854 (368,088) (354,881) 4,774 (350,107) (50,570) 680 (49,890) General and administrative (113,896) 37,414 (76,482) (111,174) 26,004 (85,170) (15,842) 3,706 (12,136) Cost and operating expenses (2,461,061) 59,472 (2,401,589) (2,286,160) 43,951 (2,242,209) (325,775) 6,264 (319,511) Income from operations 621,757 59,472 681,229 410,725 43,951 454,676 58,528 6,264 64,792 Net income attributable to Hello Group Inc. 546,428 59,472 605,900 449,369 43,951 493,320 64,035 6,264 70,299 Hello Group Inc. Reconciliation of Non-GAAP financial measures to comparable GAAP measures (All amounts in thousands, except per share data) 1. Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures-continued. First nine months First nine months First nine months Ended September 30, 2023 Ended September 30, 2024 Ended September 30, 2024 GAAP Share-based compensation Non-GAAP GAAP Share-based compensation Non-GAAP GAAP Share-based compensation Non-GAAP RMB RMB RMB RMB RMB RMB US$ US$ US$ Cost of revenues (5,255,277) 4,398 (5,250,879) (4,722,520) 5,821 (4,716,699) (672,954) 829 (672,125) Research and development (653,145) 51,186 (601,959) (581,741) 33,328 (548,413) (82,897) 4,749 (78,148) Sales and marketing (1,110,253) 20,413 (1,089,840) (1,013,081) 15,040 (998,041) (144,363) 2,143 (142,220) General and administrative (376,981) 128,880 (248,101) (364,037) 95,890 (268,147) (51,875) 13,664 (38,211) Cost and operating expenses (7,395,656) 204,877 (7,190,779) (6,681,379) 150,079 (6,531,300) (952,089) 21,385 (930,704) Income from operations 1,703,019 204,877 1,907,896 1,296,084 150,079 1,446,163 184,691 21,385 206,076 Net income attributable to Hello Group Inc. 1,505,112 204,877 1,709,989 852,338 150,079 1,002,417 121,459 21,385 142,844 Hello Group Inc. Unaudited Condensed Segment Report (All amounts in thousands, except share and per share data) Three months Ended September 30, 2024 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Net revenues: Live video service 1,219,890 66,552 - 1,286,442 183,317 Value-added service 1,219,115 137,155 - 1,356,270 193,267 Mobile marketing 22,368 8,367 - 30,735 4,380 Other services 899 - 318 1,217 173 Total net revenues 2,462,272 212,074 318 2,674,664 381,137 Cost and expenses (ii): Cost of revenues (1,523,515) (100,171) (37) (1,623,723) (231,379) Research and development (160,161) (36,221) - (196,382) (27,984) Sales and marketing (298,630) (55,033) (1,218) (354,881) (50,570) General and administrative (103,438) (7,175) (561) (111,174) (15,842) Total cost and expenses (2,085,744) (198,600) (1,816) (2,286,160) (325,775) Other operating income 21,021 1,200 - 22,221 3,166 Income (loss) from operations 397,549 14,674 (1,498) 410,725 58,528 Interest income 134,605 268 2 134,875 19,220 Interest expense (34,809) - - (34,809) (4,960) Income (loss) before income tax and share of income on equity method investments 497,345 14,942 (1,496) 510,791 72,788 Income tax expenses (94,777) (521) - (95,298) (13,580) Income (loss) before share of income on equity method investments 402,568 14,421 (1,496) 415,493 59,208 Share of income on equity method investments 33,876 - - 33,876 4,827 Net income (loss) 436,444 14,421 (1,496) 449,369 64,035 (ii) Share-based compensation was allocated in cost of revenues and operating expenses as follows: Three months Ended September 30, 2024 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Cost of revenues 2,143 - - 2,143 305 Research and development 10,533 497 - 11,030 1,573 Sales and marketing 4,774 - - 4,774 680 General and administrative 26,002 2 - 26,004 3,706 Total cost and expenses 43,452 499 - 43,951 6,264 Hello Group Inc. Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report (All amounts in thousands, except share and per share data) Three months Ended September 30, 2024 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Income (loss) from operations 397,549 14,674 (1,498) 410,725 58,528 Share-based compensation 43,452 499 - 43,951 6,264 Non-GAAP income (loss) from operations 441,001 15,173 (1,498) 454,676 64,792 Net income (loss) 436,444 14,421 (1,496) 449,369 64,035 Share-based compensation 43,452 499 - 43,951 6,264 Non-GAAP net income (loss) 479,896 14,920 (1,496) 493,320 70,299 Hello Group Inc. Unaudited Condensed Segment Report (All amounts in thousands, except share and per share data) Three months Ended September 30, 2023 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$[1] Net revenues: Live video service 1,410,844 119,953 - 1,530,797 209,813 Value-added service 1,298,329 168,398 - 1,466,727 201,031 Mobile marketing 24,039 6,666 - 30,705 4,208 Mobile games 7,864 - - 7,864 1,078 Other services 1,981 - 4,773 6,754 927 Total net revenues 2,743,057 295,017 4,773 3,042,847 417,057 Cost and expenses (iii): Cost of revenues (1,606,261) (145,346) (19,923) (1,771,530) (242,808) Research and development (151,649) (50,044) - (201,693) (27,644) Sales and marketing (298,919) (71,978) (3,045) (373,942) (51,253) General and administrative (105,339) (5,656) (2,901) (113,896) (15,611) Total cost and expenses (2,162,168) (273,024) (25,869) (2,461,061) (337,316) Other operating income, net 37,750 1,985 236 39,971 5,478 Income (loss) from operations 618,639 23,978 (20,860) 621,757 85,219 Interest income 96,680 94 17 96,791 13,266 Interest expense (19,293) - - (19,293) (2,644) Income (loss) before income tax and share of income on equitymethod investments 696,026 24,072 (20,843) 699,255 95,841 Income tax expenses (156,992) (1,072) - (158,064) (21,664) Income (loss) before share of income on equity method investments 539,034 23,000 (20,843) 541,191 74,177 Share of income on equity method investments 974 - - 974 133 Net income (loss) 540,008 23,000 (20,843) 542,165 74,310 (iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows: Three months Ended September 30, 2023 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Cost of revenues 1,207 4 - 1,211 166 Research and development 11,401 3,592 - 14,993 2,055 Sales and marketing 5,854 - - 5,854 802 General and administrative 37,406 8 - 37,414 5,128 Total cost and expenses 55,868 3,604 - 59,472 8,151 [1] All translations from RMB to U.S. dollars are made at a rate of RMB7.2960 to US$1.00, the effective noon buying rate for September 29, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board. Hello Group Inc. Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report (All amounts in thousands, except share and per share data) Three months Ended September 30, 2023 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Income (loss) from operations 618,639 23,978 (20,860) 621,757 85,219 Share-based compensation 55,868 3,604 - 59,472 8,151 Non-GAAP income (loss) from operations 674,507 27,582 (20,860) 681,229 93,370 Net income (loss) 540,008 23,000 (20,843) 542,165 74,310 Share-based compensation 55,868 3,604 - 59,472 8,151 Non-GAAP net income (loss) 595,876 26,604 (20,843) 601,637 82,461 Hello Group Inc. Unaudited Condensed Segment Report (All amounts in thousands, except share and per share data) First nine months Ended September 30, 2024 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Net revenues: Live video service 3,590,747 237,256 - 3,828,003 545,486 Value-added service 3,573,860 422,102 - 3,995,962 569,420 Mobile marketing 71,397 27,923 - 99,320 14,153 Mobile games 432 - - 432 62 Other services 1,915 - 843 2,758 393 Total net revenues 7,238,351 687,281 843 7,926,475 1,129,514 Cost and expenses (iv): Cost of revenues (4,408,264) (314,217) (39) (4,722,520) (672,954) Research and development (462,202) (119,539) - (581,741) (82,897) Sales and marketing (836,410) (171,988) (4,683) (1,013,081) (144,363) General and administrative (339,578) (23,744) (715) (364,037) (51,875) Total cost and expenses (6,046,454) (629,488) (5,437) (6,681,379) (952,089) Other operating income 49,037 1,925 26 50,988 7,266 Income (loss) from operations 1,240,934 59,718 (4,568) 1,296,084 184,691 Interest income 386,340 573 6 386,919 55,136 Interest expense (91,000) - - (91,000) (12,967) Other gain or loss, net (43,870) - - (43,870) (6,251) Income (loss) before income tax and share of income on equity method investments 1,492,404 60,291 (4,562) 1,548,133 220,609 Income tax expenses (753,721) (1,804) - (755,525) (107,661) Income (loss) before share of income on equity method investments 738,683 58,487 (4,562) 792,608 112,948 Share of income on equity method investments 59,730 - - 59,730 8,511 Net income (loss) 798,413 58,487 (4,562) 852,338 121,459 (iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows: First nine months Ended September 30, 2024 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Cost of revenues 5,817 4 - 5,821 829 Research and development 28,496 4,832 - 33,328 4,749 Sales and marketing 15,040 - - 15,040 2,143 General and administrative 95,874 16 - 95,890 13,664 Total cost and expenses 145,227 4,852 - 150,079 21,385 Hello Group Inc. Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report (All amounts in thousands, except share and per share data) First nine months Ended September 30, 2024 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Income (loss) from operations 1,240,934 59,718 (4,568) 1,296,084 184,691 Share-based compensation 145,227 4,852 - 150,079 21,385 Non-GAAP income (loss) from operations 1,386,161 64,570 (4,568) 1,446,163 206,076 Net income (loss) 798,413 58,487 (4,562) 852,338 121,459 Share-based compensation 145,227 4,852 - 150,079 21,385 Non-GAAP net income (loss) 943,640 63,339 (4,562) 1,002,417 142,844 Hello Group Inc. Unaudited Condensed Segment Report (All amounts in thousands, except share and per share data) First nine months Ended September 30, 2023 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Net revenues: Live video service 4,144,164 404,822 - 4,548,986 623,490 Value-added service 3,821,183 506,495 - 4,327,678 593,158 Mobile marketing 75,730 13,032 - 88,762 12,166 Mobile games 14,169 - - 14,169 1,942 Other services 14,577 - 5,219 19,796 2,713 Total net revenues 8,069,823 924,349 5,219 8,999,391 1,233,469 Cost and expenses (v): Cost of revenues (4,765,127) (469,111) (21,039) (5,255,277) (720,296) Research and development (483,997) (169,148) - (653,145) (89,521) Sales and marketing (894,462) (210,208) (5,583) (1,110,253) (152,173) General and administrative (349,614) (19,600) (7,767) (376,981) (51,670) Total cost and expenses (6,493,200) (868,067) (34,389) (7,395,656) (1,013,660) Other operating income 95,876 3,110 298 99,284 13,608 Income (loss) from operations 1,672,499 59,392 (28,872) 1,703,019 233,417 Interest income 311,157 656 86 311,899 42,749 Interest expense (41,671) - - (41,671) (5,711) Other gain or loss, net 4,565 - - 4,565 626 Income (loss) before income tax and share of loss on equity method investments 1,946,550 60,048 (28,786) 1,977,812 271,081 Income tax expenses (443,175) (3,471) - (446,646) (61,218) Income (loss) before share of loss on equity method investments 1,503,375 56,577 (28,786) 1,531,166 209,863 Share of loss on equity method investments (31,940) - - (31,940) (4,378) Net income (loss) 1,471,435 56,577 (28,786) 1,499,226 205,485 (v) Share-based compensation was allocated in cost of revenues and operating expenses as follows: First nine months Ended September 30, 2023 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Cost of revenues 4,262 136 - 4,398 603 Research and development 36,793 14,393 - 51,186 7,016 Sales and marketing 20,408 5 - 20,413 2,798 General and administrative 128,856 24 - 128,880 17,664 Total cost and expenses 190,319 14,558 - 204,877 28,081 Hello Group Inc. Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report (All amounts in thousands, except share and per share data) First nine months ended September 30, 2023 Momo Tantan QOOL Total Total RMB RMB RMB RMB US$ Operating income (loss) 1,672,499 59,392 (28,872) 1,703,019 233,417 Share-based compensation 190,319 14,558 - 204,877 28,081 Non-GAAP operating income (loss) 1,862,818 73,950 (28,872) 1,907,896 261,498 Net income (loss) 1,471,435 56,577 (28,786) 1,499,226 205,485 Share-based compensation 190,319 14,558 - 204,877 28,081 Non-GAAP net income (loss) 1,661,754 71,135 (28,786) 1,704,103 233,566
BEIJING, Dec. 4, 2024 /PRNewswire/ -- Gaotu Techedu Inc. (NYSE: GOTU) ("Gaotu" or the "Company"), a technology-driven education company and online large-class tutoring service provider in China, today announced its unaudited financial results for the third quarter ended September 30, 2024. Third Quarter 2024 Highlights[1] Net revenues were RMB1,208.3 million, increased by 53.1% from RMB789.4 million in the same period of 2023. Gross billings[2] were RMB1,069.2 million, increased by 67.2% from RMB639.3 million in the same period of 2023. Loss from operations was RMB490.1 million, compared with loss from operations of RMB99.5 million in the same period of 2023. Net loss was RMB471.3 million, compared with net loss of RMB57.7 million in the same period of 2023. Non-GAAP net loss was RMB457.2 million, compared with non-GAAP net loss of RMB41.7 million in the same period of 2023. Net operating cash outflow was RMB714.4 million, compared with net operating cash outflow of RMB209.9 million in the same period of 2023. Third Quarter 2024 Key Financial and Operating Data (In thousands of RMB, except for percentages) For the three months ended September 30, 2023 2024 Pct. Change Net revenues 789,413 1,208,253 53.1 % Gross billings 639,342 1,069,159 67.2 % Loss from operations (99,541) (490,107) 392.4 % Net loss (57,663) (471,273) 717.3 % Non-GAAP net loss (41,729) (457,195) 995.6 % Net operating cash outflow (209,930) (714,385) 240.3 % [1] For a reconciliation of non-GAAP numbers, please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" at the end of this press release. Non-GAAP income (loss) from operations and non-GAAP net income (loss) exclude share-based compensation expenses. [2] Gross billings is a non-GAAP financial measure, which is defined as the total amount of cash received for the sale of course offerings in such period, net of the total amount of refunds in such period. See "About Non-GAAP Financial Measures" and "Reconciliations of non-GAAP measures to the most comparable GAAP measures" elsewhere in this press release. Nine Months Ended September 30, 2024 Highlights Net revenues were RMB3,164.9 million, increased by 43.9% from RMB2,199.8 million in the same period of 2023. Gross billings were RMB3,452.2 million, increased by 67.5% from RMB2,060.6 million in the same period of 2023. Loss from operations was RMB1,032.6 million, compared with income from operations of RMB38.9 million in the same period of 2023. Net loss was RMB913.1 million, compared with net income of RMB112.4 million in the same period of 2023. Non-GAAP net loss was RMB872.2 million, compared with non-GAAP net income of RMB155.0 million in the same period of 2023. Net operating cash outflow was RMB525.6 million, compared with net operating cash outflow of RMB137.8 million in the same period of 2023. First Nine Months 2024 Key Financial and Operating Data (In thousands of RMB, except for percentages) For the nine months ended September 30, 2023 2024 Pct. Change Net revenues 2,199,799 3,164,935 43.9 % Gross billings 2,060,618 3,452,211 67.5 % Income/(loss) from operations 38,909 (1,032,559) (2,753.8) % Net income/(loss) 112,351 (913,120) (912.7) % Non-GAAP net income/(loss) 155,025 (872,196) (662.6) % Net operating cash outflow (137,796) (525,636) 281.5 % Larry Xiangdong Chen, the Company's founder, Chairman and CEO, commented, "During the past quarter, our core businesses continued to make steady progress, with gross billings increasing by 67.2% year-over-year to approximately RMB1.1 billion and revenue growing by 53.1% year-over-year to over RMB1.2 billion. This growth was attributed to our keen understanding of market trends and the continuous optimization of our strategy and execution. As our business scales rapidly and the product matrix gradually expands, we have ramped up investments with a particular focus on upgrading our educational systems, enhancing organizational capabilities, and improving management practices. We have also strengthened efforts in talent development and professional training, equipping our team with skills needed to navigate dynamic business environments and improve operational efficiency. In this quarter, we allocated over RMB120 million for share buybacks, underscoring our strong commitment to shareholder returns. As of September 30, 2024, we had a total of over RMB3.3 billion in cash, cash equivalents, restricted cash, and short-term and long-term investments, providing a firm foundation for our strategic priorities and long-term growth." Shannon Shen, CFO of the Company, added, "In the past quarter, we capitalized on the robust market demand during the summer vacation period, successfully achieving our gross billing targets amid rapid business growth and driving meaningful increases in student enrollments and market share. With a continuous rise in student enrollments, growth in our top-line has accelerated sequentially in each of the past three quarters. In the third quarter, our revenue increased by 53.1% year-over-year and grew by approximately 10 percentage points sequentially. As of September 30, 2024, our deferred revenue balance increased by 89.0% year-over-year to over RMB1.4 billion. Looking ahead, we anticipate year-on-year revenue growth to peak in the fourth quarter, further consolidating our leading position in the market and laying a strong foundation for future growth." Financial Results for the Third Quarter of 2024 Net Revenues Net revenues increased by 53.1% to RMB1,208.3 million from RMB789.4 million in the third quarter of 2023, which was mainly due to the continuous year-over-year growth of gross billings as a result of our sufficient and effective response to strong market demand. Furthermore, our high-quality educational products and learning services resulted in improved recognition of our product and service offerings. Cost of Revenues Cost of revenues increased by 97.1% to RMB429.8 million from RMB218.1 million in the third quarter of 2023. The increase was mainly due to expansion of instructors and tutors workforce, growing rental cost, as well as an increased cost of learning materials. Gross Profit and Gross Margin Gross profit increased by 36.3% to RMB778.5 million from RMB571.3 million in the third quarter of 2023. Gross profit margin decreased to 64.4% from 72.4% in the same period of 2023. Non-GAAP gross profit increased by 36.3% to RMB780.7 million from RMB572.8 million in the third quarter of 2023. Non-GAAP gross profit margin decreased to 64.6% from 72.6% in the same period of 2023. Operating Expenses Operating expenses increased by 89.1% to RMB1,268.6 million from RMB670.8 million in the third quarter of 2023. The increase was primarily due to the expansion of employees workforce and a higher expenditure on marketing and branding activities. Selling expenses increased to RMB885.8 million from RMB434.4 million in the third quarter of 2023. Research and development expenses increased to RMB189.3 million from RMB130.6 million in the third quarter of 2023. General and administrative expenses increased to RMB193.5 million from RMB105.8 million in the third quarter of 2023. Loss from Operations Loss from operations was RMB490.1 million, compared with loss from operations of RMB99.5 million in the third quarter of 2023. Non-GAAP loss from operations was RMB476.0 million, compared with non-GAAP loss from operations of RMB83.6 million in the third quarter of 2023. Interest Income and Realized Gains from Investments Interest income and realized gains from investments, on aggregate, were RMB21.7 million, compared with a total of RMB31.7 million in the third quarter of 2023. Other Income, net Other income, net was RMB4.0 million, compared with other income, net of RMB15.8 million in the third quarter of 2023. Net Loss Net loss was RMB471.3 million, compared with net loss of RMB57.7 million in the third quarter of 2023. Non-GAAP net loss was RMB457.2 million, compared with non-GAAP net loss of RMB41.7 million in the third quarter of 2023. Cash Flow Net operating cash outflow in the third quarter of 2024 was RMB714.4 million. Basic and Diluted Net Loss per ADS Basic and diluted net loss per ADS were both RMB1.83 in the third quarter of 2024. Non-GAAP basic and diluted net loss per ADS were both RMB1.78 in the third quarter of 2024. Share Outstanding As of September 30, 2024, the Company had 169,556,395 ordinary shares outstanding. Cash, Cash Equivalents, Restricted Cash, Short-term and Long-term Investments As of September 30, 2024, the Company had cash and cash equivalents, restricted cash, short-term and long-term investments of RMB3,310.0 million in aggregate, compared with a total of RMB3,953.5 million as of December 31, 2023. Share Repurchase In November 2022, the Company's board of directors authorized a share repurchase program under which the Company may repurchase up to US$30 million of its shares, effective until November 22, 2025. In November 2023, the Company's board of directors authorized modifications to the share repurchase program, increasing the aggregate value of shares that may be repurchased from US$30 million to US$80 million, effective until November 22, 2025. As of December 3, 2024, the Company had cumulatively repurchased approximately 11.5 million ADSs for approximately US$37.5 million under the share repurchase program. Business Outlook Based on the Company's current estimates, total net revenues for the fourth quarter of 2024 are expected to be between RMB1,288 million and RMB1,308 million, representing an increase of 69.2% to 71.9% on a year-over-year basis. These estimates reflect the Company's current expectations, which are subject to change. Conference Call The Company will hold an earnings conference call at 8:00 AM U.S. Eastern Time on Wednesday, December 4, 2024 (9:00 PM Beijing/Hong Kong Time on Wednesday, December 4, 2024). Dial-in details for the earnings conference call are as follows: International: 1-412-317-6061United States: 1-888-317-6003Hong Kong: 800-963-976Mainland China: 400-120-6115Passcode: 7597303 A telephone replay will be available two hours after the conclusion of the conference call through December 11, 2024. The dial-in details are: International: 1-412-317-0088United States: 1-877-344-7529Passcode: 1398008 Additionally, a live and archived webcast of this conference call will be available at http://ir.gaotu.cn/. 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 "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook, 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 reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports 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 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 Company's ability to continue to attract students to enroll in its courses; the Company's ability to continue to recruit, train and retain qualified teachers; the Company's ability to improve the content of its existing course offerings and to develop new courses; the Company's ability to maintain and enhance its brand; the Company's ability to maintain and continue to improve its teaching results; and the Company's ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company's reports filed with, or furnished to the U.S. Securities and Exchange Commission. 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 duty to update such information or any forward-looking statement, except as required under applicable law. About Gaotu Techedu Inc. Gaotu is a technology-driven education company and online large-class tutoring service provider in China. The Company offers learning services and educational content & digitalized learning products. Gaotu adopts an online live large-class format to deliver its courses, which the Company believes is the most effective and scalable model to disseminate scarce high-quality teaching resources to aspiring students in China. Big data analytics permeates every aspect of the Company's business and facilitates the application of the latest technology to improve teaching delivery, student learning experience, and operational efficiency. About Non-GAAP Financial Measures The Company uses gross billings, non-GAAP gross profit, non-GAAP income (loss) from operations and non-GAAP net income (loss), each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. The Company defines gross billings for a specific period as the total amount of cash received for the sale of course offerings in such period, net of the total amount of refunds in such period. The Company's management uses gross billings as a performance measurement because the Company generally bills its students for the entire course fee at the time of sale of its course offerings and recognizes revenue proportionally as the classes are delivered. For some courses, the Company continues to provide students with 12 months to 36 months access to the pre-recorded audio-video courses after the online live courses are delivered. The Company believes that gross billings provides valuable insight into the sales of its course packages and the performance of its business. As gross billings have material limitations as an analytical metrics and may not be calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. Non-GAAP gross profit, non-GAAP income (loss) from operations and non-GAAP net income (loss) exclude share-based compensation expenses. The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. The Company believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to the Company's historical performance. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company's business. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this release. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures. Exchange Rate The Company's business is primarily conducted in China and a significant majority of revenues generated are denominated in Renminbi ("RMB"). This announcement contains currency conversions of RMB amounts into U.S. dollars ("USD") solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to USD are made at a rate of RMB7.0176 to USD1.0000, the effective noon buying rate for September 30, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate on September 30, 2024, or at any other rate. For further information, please contact: Gaotu Techedu Inc.Investor RelationsE-mail: ir@gaotu.cn Christensen In ChinaMs. Vivian WangPhone: +852-2232-3978E-mail: gotu@christensencomms.com In the USMs. Linda BergkampPhone: +1-480-614-3004Email: linda.bergkamp@christensencomms.com Gaotu Techedu Inc. Unaudited condensed consolidated balance sheets (In thousands of RMB and USD, except for share, per share and per ADS data) As of December 31, As of September 30, 2023 2024 2024 RMB RMB USD ASSETS Current assets Cash and cash equivalents 636,052 855,815 121,953 Restricted cash 33,901 6,874 980 Short-term investments 2,253,910 1,482,924 211,315 Inventory, net 24,596 53,404 7,610 Prepaid expenses and other current assets, net 638,248 555,722 79,190 Total current assets 3,586,707 2,954,739 421,048 Non-current assets Operating lease right-of-use assets 189,662 574,743 81,900 Property, equipment and software, net 533,531 626,880 89,330 Land use rights, net 26,568 25,964 3,700 Long-term investments 1,029,632 964,363 137,421 Deferred tax assets 11,312 - - Rental deposit 17,742 43,751 6,234 Other non-current assets 18,155 17,920 2,553 TOTAL ASSETS 5,413,309 5,208,360 742,186 LIABILITIES Current liabilities Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to the Group of RMB484,222 and RMB667,944 as of December 31, 2023 and September 30, 2024, respectively) 805,032 1,070,433 152,536 Deferred revenue, current portion of the consolidated VIE without recourse to the Group 1,113,480 1,223,614 174,364 Operating lease liabilities, current portion (including current portion of operating lease liabilities of the consolidated VIE without recourse to the Group of RMB34,401 and RMB123,783 as of December 31, 2023 and September 30, 2024, respectively) 50,494 164,178 23,395 Income tax payable (including income tax payable of the consolidated VIE without recourse to the Group of RMB4,210 and RMB102 as of December 31, 2023 and September 30, 2024, respectively) 4,278 133 19 Total current liabilities 1,973,284 2,458,358 350,314 Gaotu Techedu Inc. Unaudited condensed consolidated balance sheets (In thousands of RMB and USD, except for share, per share and per ADS data) As of December 31, As of September 30, 2023 2024 2024 RMB RMB USD Non-current liabilities Deferred revenue, non-current portion of the consolidated VIE without recourse to the Group 124,141 215,603 30,723 Operating lease liabilities, non-current portion (including non-current portion of operating lease liabilities of the consolidated VIE without recourse to the Group of RMB121,277 and RMB382,747 as of December 31, 2023 and September 30, 2024, respectively) 137,652 397,466 56,638 Deferred tax liabilities (including deferred tax liabilities of the consolidated VIE without recourse to the Group of RMB71,850 and RMB70,524 as of December 31, 2023 and September 30, 2024, respectively) 71,967 70,664 10,070 TOTAL LIABILITIES 2,307,044 3,142,091 447,745 SHAREHOLDERS' EQUITY Ordinary shares 116 116 17 Treasury stock, at cost (85,178) (216,494) (30,850) Additional paid-in capital 7,987,957 7,994,101 1,139,150 Accumulated other comprehensive loss (33,209) (34,913) (4,975) Statutory reserve 50,225 50,225 7,157 Accumulated deficit (4,813,646) (5,726,766) (816,058) TOTAL SHAREHOLDERS' EQUITY 3,106,265 2,066,269 294,441 TOTAL LIABILITIES AND TOTAL SHAREHOLDERS' EQUITY 5,413,309 5,208,360 742,186 Gaotu Techedu Inc. Unaudited condensed consolidated statements of operations (In thousands of RMB and USD, except for share, per share and per ADS data) For the three months ended September 30, For the nine months ended September 30, 2023 2024 2024 2023 2024 2024 RMB RMB USD RMB RMB USD Net revenues 789,413 1,208,253 172,175 2,199,799 3,164,935 451,000 Cost of revenues (218,126) (429,791) (61,245) (562,488) (1,014,638) (144,585) Gross profit 571,287 778,462 110,930 1,637,311 2,150,297 306,415 Operating expenses: Selling expenses (434,428) (885,769) (126,221) (1,035,514) (2,227,547) (317,423) Research and development expenses (130,618) (189,305) (26,976) (325,997) (503,013) (71,679) General and administrative expenses (105,782) (193,495) (27,573) (236,891) (452,296) (64,452) Total operating expenses (670,828) (1,268,569) (180,770) (1,598,402) (3,182,856) (453,554) (Loss)/income from operations (99,541) (490,107) (69,840) 38,909 (1,032,559) (147,139) Interest income 24,153 15,661 2,232 57,226 55,608 7,924 Realized gains from investments 7,579 6,001 855 25,961 20,285 2,891 Other income, net 15,782 3,964 565 21,695 52,220 7,441 (Loss)/income before provision for income tax and share of results of equity investees (52,027) (464,481) (66,188) 143,791 (904,446) (128,883) Income tax (expenses)/benefits (656) (6,792) (968) (22,275) (8,674) (1,236) Share of results of equity investees (4,980) - - (9,165) - - Net (loss)/income (57,663) (471,273) (67,156) 112,351 (913,120) (130,119) Net (loss)/income attributable to Gaotu Techedu Inc.'s ordinary shareholders (57,663) (471,273) (67,156) 112,351 (913,120) (130,119) Net (loss)/income per ordinary share Basic (0.33) (2.75) (0.39) 0.65 (5.30) (0.76) Diluted (0.33) (2.75) (0.39) 0.63 (5.30) (0.76) Net (loss)/income per ADS Basic (0.22) (1.83) (0.26) 0.43 (3.54) (0.50) Diluted (0.22) (1.83) (0.26) 0.42 (3.54) (0.50) Weighted average shares used in net (loss)/income per share Basic 174,631,114 171,135,287 171,135,287 174,107,221 172,165,794 172,165,794 Diluted 174,631,114 171,135,287 171,135,287 179,488,050 172,165,794 172,165,794 Note: Three ADSs represent two ordinary shares. Gaotu Techedu Inc. Reconciliations of non-GAAP measures to the most comparable GAAP measures (In thousands of RMB and USD, except for share, per share and per ADS data) For the three months ended September 30, For the nine months ended September 30, 2023 2024 2024 2023 2024 2024 RMB RMB USD RMB RMB USD Net revenues 789,413 1,208,253 172,175 2,199,799 3,164,935 451,000 Less: other revenues(1) 26,319 60,581 8,633 62,675 117,081 16,684 Add: VAT and surcharges 47,542 72,056 10,268 134,492 192,049 27,367 Add: ending deferred revenue 761,301 1,439,217 205,087 761,301 1,439,217 205,087 Add: ending refund liability 47,631 77,869 11,096 47,631 77,869 11,096 Less: beginning deferred revenue 922,576 1,582,135 225,452 959,333 1,237,621 176,360 Less: beginning refund liability 57,650 85,520 12,187 60,597 67,157 9,570 Gross billings 639,342 1,069,159 152,354 2,060,618 3,452,211 491,936 Note (1): Include miscellaneous revenues generated from services other than courses. For the three months ended September 30, For the nine months ended September 30, 2023 2024 2024 2023 2024 2024 RMB RMB USD RMB RMB USD Gross profit 571,287 778,462 110,930 1,637,311 2,150,297 306,415 Share-based compensation expenses(1) in cost of revenues 1,522 2,265 323 9,097 4,543 647 Non-GAAP gross profit 572,809 780,727 111,253 1,646,408 2,154,840 307,062 (Loss)/income from operations (99,541) (490,107) (69,840) 38,909 (1,032,559) (147,139) Share-based compensation expenses(1) 15,934 14,078 2,006 42,674 40,924 5,832 Non-GAAP (loss)/income from operations (83,607) (476,029) (67,834) 81,583 (991,635) (141,307) Net (loss)/income (57,663) (471,273) (67,156) 112,351 (913,120) (130,119) Share-based compensation expenses(1) 15,934 14,078 2,006 42,674 40,924 5,832 Non-GAAP net (loss)/income (41,729) (457,195) (65,150) 155,025 (872,196) (124,287) Note (1): The tax effects of share-based compensation expenses adjustments were nil.
Patients in the low-dose cohort who have completed 36 weeks of treatment, 9 out of 11 (81.8%) achieved overall clinical remission and 10 out of 11 (91%) achieved immunological complete remission. In the high dose cohort, 6 out of 7 (85.7%) patients achieved overall clinical remission and all patients achieved immunological complete remission by week 24. EVER001 was generally safe and well tolerated. No clinically significant adverse events typically associated with earlier-generation BTK inhibitors, such as bleeding, arrhythmia, severe infection, leukopenia, thrombocytopenia, or severe liver function impairment, were reported. SHANGHAI, Dec. 4, 2024 /PRNewswire/ -- Everest Medicines (HKEX 1952.HK,"Everest", or the "Company"), a biopharmaceutical company focused on the discovery, clinical development, manufacturing and commercialization of innovative therapeutics, today announced positive results in the ongoing Phase 1b/2a clinical trial for the treatment of primary membranous nephropathy (pMN) with EVER001 (previously known as XNW1011), a next-generation covalent reversible Bruton's tyrosine kinase (BTK) inhibitor. In an analysis of the data available as of September 13th, 2024, results from the Phase 1b/2a clinical trial showed that for patients in the low-dose cohort who have completed 36 weeks of treatment, 9 out of 11 (81.8%) achieved overall clinical remission1 and 10 out of 11 (91%) achieved immunological complete remission (ICR)2. In the high dose cohort, 6 out of 7 (85.7%) patients achieved overall clinical remission and all patients achieved ICR by week 24. EVER001 is a covalent reversible BTK inhibitor with potentially best-in-class characteristics for the treatment of autoimmune renal diseases. Compared to covalent irreversible BTK inhibitors, EVER001 offers improved selectivity while maintaining high potency, thereby potentially avoiding many of the side effects associated with earlier-generation BTK inhibitors. Everest Medicines holds global rights to EVER001 for the treatment of renal diseases. The Phase 1b/2a clinical trial of EVER001 for the treatment of pMN is an ongoing trial conducted in China. A total of 31 patients with biopsy-proven pMN who tested positive for anti-PLA2R autoantibodies were enrolled into two cohorts. The total treatment duration was 36 weeks. Based on the patient data collected by September 13th, 2024, in the low-dose cohort, the geometric least squares mean 24-hour proteinuria decreased by 78.3% at week 36 compared to baseline, while the high-dose cohort achieved a 73.8% reduction by week 24. EVER001 treatment induced greater than 90% reductions in anti-PLA2R antibody as early as week 24 in the low-dose cohort and week 12 in the high-dose cohort. EVER001 was generally safe and well tolerated. No clinically significant adverse events typically associated with earlier-generation BTK inhibitors, such as bleeding, arrhythmia, severe infection, leukopenia, thrombocytopenia, or severe liver function impairment, were reported. "We are excited to see the encouraging results in this preliminary analysis of our Phase 1b/2a clinical proof-of-concept trial of EVER001. This demonstrates the potential of EVER001 as a next-generation BTK inhibitor for the treatment of various autoimmune renal diseases, including pMN." Rogers Yongqing Luo, Chief Executive Officer of Everest Medicines, said："This data release marks the first time Everest Medicines has disclosed results from its global pipeline. We look forward to completing this trial and sharing detailed data in future conferences and publications. Moving forward, we will continue to drive the global clinical development of EVER001, to meet patients' urgent clinical needs." Membranous nephropathy is a common pathological type of nephrotic syndrome in adults, and its prevalence in China has been increasing, ranking second only to IgA nephropathy3. There are about 2 million patients with pMN in China, with an estimated 80,000 to 100,000 patients in the United States, 80,000 in Europe, and 40,000 in Japan. There are no approved drugs for this indication worldwide. The current treatment goal is to improve remission rates, reduce high relapse rates, and minimize the risk of chronic toxicity caused by currently available treatments. More than one-third of pMN patients still progress to end-stage renal disease under current standards of care. This Phase 1b/2a clinical trial was approved by the Center for Drug Evaluation of the National Medical Products Administration in September 2022 to evaluate the safety, efficacy, pharmacokinetics, and pharmacodynamics of EVER001 in Chinese patients with glomerular diseases characterized by proteinuria. The previously published results of a Phase 1 study conducted in healthy Chinese and Australian subjects conducted by SinoMab BioScience indicate that EVER001 has high selectivity, excellent pharmacokinetic properties, a good safety profile, and strong target binding. About EVER001 EVER001 (previously known as XNW1011) is a next-generation covalent reversible Bruton's tyrosine kinase (BTK) inhibitor in development globally for the treatment of renal diseases. BTK is an essential component of the B-cell receptor signaling pathways that regulate the survival, activation, proliferation, and differentiation of B lymphocytes. Targeting BTK with small molecule inhibitors has been demonstrated to be an effective treatment option for B-cell lymphomas and autoimmune diseases. Based in part on results from a completed phase 1 trial with healthy subjects conducted by SinoMab in China, EVER001 exhibited high selectivity, excellent pharmacokinetics properties, strong target binding and a safety profile that supports continued clinical development. Under an exclusive licensing agreement with Sinovent Pharmaceuticals and SinoMab BioScience, Everest owns global rights to develop, produce and commercialize EVER001 for the treatment of renal diseases. Investor Calls Information Everest Medicines will hold investor calls on the data results from EVER001 Phase 1b/2a clinical study in primary membranous nephropathy. EVER001 is a next-generation covalent reversible Bruton's tyrosine kinase (BTK) inhibitor, and Everest owns the global rights to develop EVER001 for the treatment of renal diseases. The English session of the conference call will be held at 9:00 AM on Dec. 4, 2024, Beijing Time (8:00 PM U.S. Eastern Time on Dec. 3, 2024) and the Mandarin session of the conference call will be held at 10:30 AM Beijing Time on the same day (9:30 PM U.S. Eastern Time on Dec. 3, 2024). The conference calls can be accessed by the following links: For English Session:Time: 9:00 AM Beijing Time, Wednesday, Dec. 4, 2024 (8:00 PM U.S. Eastern Time on Dec. 3, 2024)Pre-Registration Link: https://www.acecamptech.com/eventDetail/60510700 Webcast Link: https://www.acecamptech.com/meeting_live/70512679/774680?event_id=60510700 Alternatively, participants may dial in to the conference call using below dial-in information: United States: +1-646-2543594 (EN)Chinese Mainland: +86-10-58084166 (EN) +86-10-58084199 (CN)Hong Kong, China: +852-30051313 (EN) +852-30051355 (CN)United Kingdom: +44-12-1368-0466 (EN)International: +1-866-6363243 (EN)Password: 842080 For Mandarin Session:Time: 10:30 AM Beijing Time, Wednesday, Dec. 4, 2024 (9:30 PM U.S. Eastern Time on Dec. 3, 2024)Webcast Link: https://s.comein.cn/n3arj55s Alternatively, participants may dial into the conference call using below dial-in information: United States: +1-646-3578788 +1-408-7093255Chinese Mainland: 400-969-8928 400-806-3263Hong Kong, China: +852-301-83602Taiwan, China: +886-226563394 +886-277417882Singapore: +65-64075649 +65-66220840United Kingdom: +44-2070970018International: +86-2362737123Password: 377570 The replay of English session will be available shortly after the call and can be accessed by visiting the Company's website at http://www.everestmedicines.com. About Everest Medicines Everest Medicines is a biopharmaceutical company focused on discovering, developing, manufacturing and commercializing transformative pharmaceutical products and vaccines that address critical unmet medical needs for patients in Asian markets. The management team of Everest Medicines has deep expertise and an extensive track record from both leading global pharmaceutical companies and local Chinese pharmaceutical companies in high-quality discovery, clinical development, regulatory affairs, CMC, business development and operations. Everest Medicines has built a portfolio of potentially global first-in-class or best-in-class molecules in the company's core therapeutic areas of renal diseases, infectious diseases and autoimmune disorders. For more information, please visit its website at www.everestmedicines.com. Forward-Looking Statements: This news release may make statements that constitute forward-looking statements, including descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the business operations and financial condition of the Company, which can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, or other factors, some of which are beyond the control of the Company and are unforeseeable. Therefore, the actual results may differ from those in the forward-looking statements as a result of various factors and assumptions, such as future changes and developments in our business, competitive environment, political, economic, legal and social conditions. The Company or any of its affiliates, directors, officers, advisors or representatives has no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this news release, except as required by law. References: Overall clinical remission (complete remission or partial remission): 24h proteinuria complete remission (CR): 24h proteinuria < 0.3g/24 h; 24h proteinuria partial remission (PR): 24h proteinuria < 3.5g/24h, but ≥0.3g/24 h, and reduction > 50%, regardless of eGFR or the serum albumin level from baseline. Immunological complete remission (ICR): anti-PLA2R titer < 20RU/ml (negative). Expert consensus on the application of rituximab in the treatment of membranous nephropathy, Chin J Intern Med, March 2022, Vol. 61, No. 3.
GUANGZHOU, China, Nov. 29, 2024 /PRNewswire/ -- MINISO Group Holding Limited (NYSE: MNSO; HKEX: 9896) ("MINISO", "MINISO Group" or the "Company"), a global value retailer offering a variety of trendy lifestyle products featuring IP design, today announced its unaudited financial results for the quarter and the nine months ended September 30, 2024. Financial Highlights Highlights for the Nine Months Ended September 30, 2024 Revenue in the first nine months of 2024 was RMB12,281.3 million (US$1,750.1 million), increasing 22.8% year over year. Gross profit increased 34.1% year over year to RMB5,419.8 million (US$772.3 million). Gross margin was 44.1%, compared to 40.4% in the same period of 2023. Operating profit increased 14.3% year over year to RMB2,347.4 million (US$334.5 million). Profit for the period increased 11.6% year over year to RMB1,825.7 million (US$260.2 million). Adjusted net profit(1) increased 13.7% year over year to RMB1,928.1 million (US$274.8 million). Adjusted net profit for the first nine months of 2024 included a net foreign exchange loss of RMB21.7 million (US$3.1 million), compared to a net foreign exchange gain of RMB47.8 million in the same period of last year. Excluding net foreign exchange loss and gain, adjusted net profit would have increased 18.3% year over year. Adjusted net margin(1) was 15.7%, compared to 17.0% in the same period of 2023. Excluding net foreign exchange loss and gain, adjusted net profit margin would have been 15.9%, compared to 16.5% in the same period of 2023. Adjusted EBITDA(1) increased 20.6% year over year to RMB3,107.1 million (US$442.8 million). Adjusted EBITDA margin(1) was 25.3%, compared to 25.8% in the same period of 2023. Cash position(2) was RMB6,284.1 million (US$895.5 million) as of September 30, 2024, compared to RMB6,887.0 million as of December 31, 2023. Net cash from operating activities was RMB2,031.1 million (US$289.4 million). Capital expenditure was RMB565.5 million (US$80.6 million) and free cash flow was RMB1,465.6 million (US$208.8 million) in the first nine months of 2024. Highlights for September Quarter Revenue was RMB4,522.6 million (US$644.5 million), increasing 19.3% year over year. Gross profit increased 28.2% year over year to RMB2,030.0 million (US$289.3 million). Gross margin was 44.9%, another record high for the Company, compared to 41.8% in the same period of 2023. Operating profit increased 8.2% year over year to RMB852.6 million (US$121.5 million). Profit for the period increased 4.9% year over year to RMB648.3 million (US$92.4 million). Adjusted net profit(1) increased 6.9% year over year to RMB686.2 million (US$97.8 million). Adjusted net margin(1) was 15.2%, compared to 16.9% in the same period of 2023. Adjusted EBITDA(1) increased 12.4% year over year to RMB1,139.8 million (US$162.4 million). Adjusted EBITDA margin(1) was 25.2%, compared to 26.8% in the same period of 2023. Basic and diluted earnings per ADS both increased 6.1% year over year to RMB2.08(US$0.30). Adjusted basic and diluted earnings per ADS(1) both increased 7.8% year over year to RMB2.20 (US$0.31). Operational Highlights Total number of stores on group level was 7,420 as of September 30, 2024, an increase of 859 net new stores in the first nine months of 2024. Number of MINISO stores was 7,186 as of September 30, 2024, an increase of 773 net new stores in the first nine months of 2024. -Number of MINISO stores in mainland China was 4,250 as of September 30, 2024, a net increase of 324 in the first nine months of 2024, compared to 3,926 as of December 31, 2023. -Number of MINISO stores in overseas markets was 2,936 as of September 30, 2024, a net increase of 449 in the first nine months of 2024, compared to 2,487 as of December 31, 2023. Number of TOP TOY stores was 234 as of September 30, 2024, with a record opening of 86 net new stores in the first nine months of 2024. Notes: (1) See the sections titled "Non-IFRS Financial Measures" and "Reconciliation of Non-IFRS Financial Measures" in this press release for more information. (2) "Cash position" refers to the combined balance of the Company's cash and cash equivalents, restricted cash, term deposits with original maturity over three months, and other investments recorded as current assets. The following table provides a breakdown of the Company's store network and its growth. The directly operated stores of the Company has more than doubled from a year ago. For the first nine months of 2024, the Company had a net increase of 202 directly operated stores, 184 of which were located in overseas markets. As of September 30, 2023 December31, 2023 September 30, 2024 YoY Year to Date(3) Number of MINISO stores(1) 6,115 6,413 7,186 1,071 773 Mainland China 3,802 3,926 4,250 448 324 —Directly operated stores 20 26 29 9 3 —Third-party stores 3,782 3,900 4,221 439 321 Overseas 2,313 2,487 2,936 623 449 —Directly operated stores 202 238 422 220 184 —Third-party stores 2,111 2,249 2,514 403 265 Number of TOP TOY stores(2) 122 148 234 112 86 —Directly operated stores 9 14 29 20 15 —Third-party stores 113 134 205 92 71 Notes: (1) "MINISO stores" refers to the offline stores operated under the "MINISO" brand, including those directly operated by the Company, and those operated by third parties under the MINISO Retail Partner model and the distributor model. (2) "TOP TOY stores" refers to the offline stores operated under the "TOP TOY" brand, including those directly operated by the Company, and those operated by third parties under the MINISO Retail Partner model. (3) "Year to Date" refers to the nine months ended September 30, 2024. Mr. Guofu Ye, Founder, Chairman, and CEO of MINISO, commented, "MINISO's global footprints continue to expand steadily. As of September 30, 2024, the Group's total number of stores reached 7,420 with a net increase of 859 stores in the first nine months of 2024, representing only one step away from our annual target of 900 to 1,100 net new stores. Both the net growth of stores of MINISO overseas and TOP TOY for the first nine months of 2024 exceeded their net growth of stores for the whole year of 2023. On the group level, revenue grew 23% year over year to RMB12.28 billion, mainly attributable to 19% growth in average store count and low-single digit same-store sales growth. We are well on track to reach our annual target." "In the past September, we entered into share purchase agreements to acquire 29.4% stake in Yonghui Superstores Co., Ltd. (the "Yonghui"). We believe that the retail industry will have two important trends going forward, including quality retailing and interest-driven consumption, which require enterprises to emphasize more on product innovation and consumer experience. Despite short-term macro headwinds and uncertainties, MINISO Group remains focused on our long-term strategies, especially IP strategy and globalization strategy, leveraging global store network, global design capabilities and global supply chain integration capabilities to bring joy and happiness to our consumers around the world. Meanwhile, MINISO's core business is committed to its five-year development plan. Moving forward, MINISO Group will stick to our dividend policy of paying out no less than 50% of adjusted net profit each year. We will continue to carry out dynamic share buybacks to bring predictable returns to the Company's shareholders." Mr. Ye continued. Mr. Eason Zhang, CFO of MINISO, commented, "Thanks to higher overseas revenue contribution and MINISO brand upgrade, the Company's gross margin for the first nine months of 2024 reached 44.1%, representing 3.7 percentage points increase year over year. Overseas revenue contribution increased from 32% last year to 37% this year. With effective execution of IP strategy, each of our business segment had improvement in gross margin, especially MINISO overseas and TOP TOY both had middle to high single digit improvement. We continue to invest in strategic markets, especially the U.S. market. As of September 30, 2024, our overseas directly operated stores has more than doubled from a year ago. Despite that our overseas markets are at investment stage, our margins maintained at healthy level under effective expenses control. For the first nine months of 2024, adjusted net margin was 15.7% while adjusted EBITDA margin was 25.3%. We believe that our margins will gradually stabilize under lean operation and disciplined expense management. MINISO Group generated RMB2.03 billion net cash from operating activities and RMB1.47 billion free cash flow for the first nine months of 2024. As of September 30, 2024, our cash position was RMB6.28 billion. Turning to capital allocation, the Company has distributed over RMB600 million cash dividends at the end of September this year. From year to date, the Company has returned about RMB1.6 billion to shareholders through dividends and share buybacks. Our capital allocation strategy will continue to balance growth of the Company and our commitment to bring stable and foreseeable returns to shareholders." "We published the notice of the extraordinary shareholder meeting (the "EGM") regarding the stake transaction of Yonghui last Friday, announcing the convening of EGM on January 17, 2025. So far, the transaction is moving forward as planned and is expected to be closed during the first half of 2025. It is expected that no more than 40% of consideration for the transaction will be funded by internal financial resources. We will leverage borrowing facilities to optimize capital structure and enhance our return on capital while maintain strong cash reserves. Our financial strategy will remain disciplined in terms of budgeting, cost controls and capital allocation as we are committed to delivering stable profit and healthy cash flows." Mr. Zhang concluded. Unaudited Financial Results for the Nine Months Ended September 30, 2024 Revenue was RMB12,281.3 million (US$1,750.1 million), representing an increase of 22.8% year over year, primarily driven by an 18.5% year-over-year increase in average store count, and a low-single digit same-store sales growth on group level. Revenue from mainland China increased by 14.0% to RMB7,738.4 million (US$1,102.7 million), including (i) an increase of 11.8% in revenue from MINISO's offline stores in mainland China, which was primarily due to a 14.7% year-over-year growth in average store count, while same-store sales down mid-single digit compared to prior year's level, and (ii) an increase of 42.5% in revenue from TOP TOY, which was powered by a mid-single digit same-store sales growth and a rapid growth in average store count. Revenue from overseas markets increased 41.5% to RMB4,542.9 million (US$647.4 million). The year-over-year increase was primarily due to an increase of 22.5% in average store count, coupled with a high-single digit same-store sales growth. Revenue from overseas markets contributed 37.0% of the Company's total revenue for the first nine months of 2024, compared to 32.1% for the same period in 2023. For more information on the composition and year-over-year change of revenue, please refer to the "Unaudited Additional Information" in this press release. Cost of sales was RMB6,861.6 million (US$977.8 million), representing an increase of 15.2% year over year. Gross profit was RMB5,419.8 million (US$772.3 million), representing an increase of 34.1% year over year. Gross margin was 44.1%, with an increase of 3.7 percentage points. The year-over-year increase was primarily due to (i) higher revenue contribution from overseas directly operated markets, which accounted for 19.9% of group revenue in the first nine months of 2024, compared to 14.9% in the same period of 2023 on a comparable basis(1), and (ii) improved gross margin of TOP TOY brand, due to a shift in product mix towards more profitable products. Selling and distribution expenses were RMB2,518.5 million (US$358.9 million), increased by 61.6% year over year. Excluding share-based compensation expenses, selling and distribution expenses were RMB2,457.8 million (US$350.2 million), increased by 62.7% year over year. The year-over-year increase was mainly attributable to the Company's investments into directly operated stores both in mainland China and overseas markets to pursue the future success of the Company's business, especially in strategic overseas markets such as the U.S. market. For the first nine months of 2024, revenue from directly operated stores increased 103.7%, while related expenses including rental and related expenses, depreciation and amortization expenses and payroll excluding share-based compensation expenses increased 75.2%. For the first nine months of 2024, we added 18 and 184 directly operated store in mainland China and overseas markets, respectively. Promotion and advertising expenses increased 38.4%, as a percentage of revenue stabilizing at around 3% in both comparative periods. Licensing expenses increased 38.0%, due to the Company's growing IP library and enriched offerings of IP products. Logistics expenses increased 52.3%, mainly reflecting the rising freight costs caused by the tension in international shipping. General and administrative expenses were RMB654.8 million (US$93.3 million), increased by 33.6% year over year. Excluding share-based compensation expenses, general and administrative expenses were RMB613.1 million (US$87.4 million), increased by 28.1% year over year. The year-over-year increase was primarily due to the increase in personnel-related expenses in relation to the growth of the Company's business. Other net income was RMB78.5 million (US$11.2 million), compared to RMB42.2 million in the same period of 2023. The year-over-year increase was mainly due to an increase in investment income in wealth management products and an increase in fair value of an investment, partially offset by a net foreign exchange loss. Operating profit was RMB2,347.4 million (US$334.5 million), representing an increase of 14.3% year over year. Net finance income was RMB41.9 million (US$6.0 million), compared to RMB120.1 million in the same period of 2023. The year-over-year decrease was mainly due to (i) a decrease of RMB50.2 million in finance income as a result of reduced bank deposit principal and lower interest rate, and (ii) an increase of RMB28.1 million in finance costs due to an increase in lease liabilities, in line with the Company's investment in directly operated stores. Profit for the period was RMB1,825.7 million (US$260.2 million), compared to RMB1,636.2 million in the same period of 2023, representing an increase of 11.6% year over year. Adjusted net profit, which represents profit for the period excluding equity-settled share-based payment expenses, was RMB1,928.1 million (US$274.8 million), representing an increase of 13.7% year over year. Adjusted net profit included a net foreign exchange loss of RMB21.7 million (US$3.1 million) for the first nine months of 2024, compared to a net foreign exchange gain of RMB47.8 million in the same period of last year. Excluding net foreign exchange loss and gain, adjusted net profit would have increased 18.3% year over year. Adjusted net margin was 15.7%, compared to 17.0% in the same period of 2023. Excluding net foreign exchange loss and gain, adjusted net margin would have been 15.9%, compared to 16.5% in the same period of 2023. Adjusted EBITDA increased 20.6% year over year to RMB3,107.1 million (US$442.8 million). Adjusted EBITDA margin was 25.3%, compared to 25.8% in the same period of 2023. Basic earnings per ADS increased 12.3% year over year to RMB5.84 (US$0.83), compared to RMB 5.20 in the same period of 2023. Diluted earnings per ADS increased 12.4% year over year to RMB5.80 (US$0.83), compared to RMB 5.16 in the same period of 2023. Adjusted basic earnings per ADS increased 14.1% year over year to RMB6.16 (US$0.88), compared to RMB5.40 in the same period of 2023. Adjusted diluted earnings per ADS increased 14.2% year over year to RMB6.12 (US$0.87), compared to RMB5.36 in the same period of 2023. Cash position, which was the combined balance of the Company's cash and cash equivalents, restricted cash, term deposits, and other investments recorded as current assets was RMB6,284.1 million (US$895.5 million) as of September 30, 2024, compared to RMB6,887.0 million as of December 31, 2023. Net cash from operating activities was RMB2,031.1 million (US$289.4 million). Capital expenditure was RMB565.5 million (US$80.6 million) and free cash flow was RMB1,465.6 million (US$208.8 million) in the first nine months of 2024. Unaudited Financial Results for the September Quarter 2024 Revenue was RMB4,522.6 million (US$644.5 million), representing an increase of 19.3% year over year. Revenue from mainland China increased by 8.7% year over year, primarily driven by (i) an increase of 5.7% in revenue from MINISO brand in mainland China, and (ii) an increase of 50.4% in revenue from TOP TOY. Revenue from overseas markets increased 39.8% to RMB1,810.9 million (US$258.1 million), primarily driven by (i) an increase of 55.4% in revenue from overseas directly operated markets on a comparable basis(1), and (ii) an increase of 26.5% in revenue from overseas distributor markets on a comparable basis(1). For more information on the composition and year-over-year change of revenue, please refer to the "Unaudited Additional Information" in this press release. Cost of sales was RMB2,492.6 million (US$355.2 million), representing an increase of 12.9% year over year. Gross profit was RMB2,030.0 million (US$289.3 million), representing an increase of 28.2% year over year. Gross margin was 44.9%, an increase of 3.1 percentage points year over year. Selling and distribution expenses were RMB996.5 million (US$142.0 million), representing an increase of 55.5% year over year. Excluding share-based compensation expenses, selling and distribution expenses were RMB977.2 million (US$139.3 million), representing an increase of 57.4% year over year. General and administrative expenses were RMB236.2 million (US$33.7 million), representing an increase of 38.5% year over year. Excluding share-based compensation expenses, general and administrative expenses were RMB217.6 million (US$31.0 million), representing an increase of 30.4% year over year. Other net income was RMB36.8 million (US$5.2 million), compared to RMB1.0 million in the same period of 2023. The year-over-year increase was mainly due to an increase in investment income in wealth management products and an increase in fair value of an investment, partially offset by a net foreign exchange loss. Operating profit was RMB852.6 million (US$121.5 million), representing an increase of 8.2% year over year. Net finance income was RMB7.8 million (US$1.1 million), compared to RMB57.9 million in the same period of last year. The year-over-year decrease was mainly due to (i) a decrease of RMB44.3 million in finance income as a result of reduced bank deposit principal and lower interest rate, and (ii) an increase of RMB5.7 million in finance costs due to an increase in lease liabilities, in line with the Company's investment in directly operated stores. Profit for the period was RMB648.3 million (US$92.4 million), representing an increase of 4.9% year over year. Adjusted net profit, which represents profit for the period excluding equity-settled share-based payment expenses, was RMB686.2 million (US$97.8 million), representing an increase of 6.9% year over year. Adjusted net margin was 15.2%, compared to 16.9% in the same period of 2023. Adjusted EBITDA was RMB1,139.8 million (US$162.4 million), representing an increase of 12.4% year over year. Adjusted EBITDA margin was 25.2%, compared to 26.8% in the same period of 2023. Basic and diluted earnings per ADS were both RMB2.08 (US$0.30), representing an increase of 6.1% year over year from RMB1.96 in the same period of 2023. Adjusted basic and diluted earnings per ADS were both RMB2.20 (US$0.31), representing an increase of 7.8% year over year from RMB2.04 in the same period of 2023. Note: (1) "Comparable basis" refers to the basis that excludes the impacts from market transitions from overseas distributor markets to directly operated markets, or vice versa. Conference Call The Company's management will hold an earnings conference call at 4:00 A.M. Eastern Time on Friday, November 29, 2024 (5:00 P.M. Beijing Time on the same day) to discuss the financial results. Simultaneous interpretation in English will be provided during the conference call. The conference call can be accessed by the following Zoom link or dialing the following numbers: Access 1 Join Zoom meeting. Zoom link: https://zoom.us/j/95133958059?pwd=lm4fHDsWTXEaqHF4VsGl7gWrIhe5iS.1Meeting Number: 951 3395 8059Meeting Passcode: 9896 Access 2 Listeners may access the call by dialing the following numbers with the same meeting number and passcode with access 1. United States: +1 689 278 1000 (or +1 719 359 4580) Hong Kong, China: +852 5803 3730 (or +852 5803 3731) United Kingdom: +44 203 481 5237 (or +44 131 460 1196) France: +33 1 7037 9729 (or +33 1 7037 2246) Singapore: +65 3158 7288 (or +65 3165 1065) Canada: +1 438 809 7799 (or +1 204 272 7920) Access 3 Listeners can also access the meeting through the Company's investor relations website at https://ir.miniso.com/. The replay will be available approximately two hours after the conclusion of the live event at the Company's investor relations website at https://ir.miniso.com/. About MINISO Group MINISO Group is a global value retailer offering a variety of trendy lifestyle products featuring IP design. The Company serves consumers primarily through its large network of MINISO stores, and promotes a relaxing, treasure-hunting and engaging shopping experience full of delightful surprises that appeals to all demographics. Aesthetically pleasing design, quality and affordability are at the core of every product in MINISO's wide product portfolio, and the Company continually and frequently rolls out products with these qualities. Since the opening of its first store in China in 2013, the Company has built its flagship brand "MINISO" as a globally recognized retail brand and established a massive store network worldwide. For more information, please visit https://ir.miniso.com/. Exchange Rate The U.S. dollar (US$) amounts disclosed in this press release, except for those transaction amounts that were actually settled in U.S. dollars, are presented solely for the convenience of the readers. The conversion of Renminbi (RMB) into US$ in this press release is based on the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of September 30, 2024, which was RMB7.0176 to US$1.0000. The percentages stated in this press release are calculated based on the RMB amounts. Non-IFRS Financial Measures In evaluating the business, MINISO considers and uses adjusted net profit, adjusted net margin, adjusted EBITDA, adjusted EBITDA margin, adjusted basic and diluted net earnings per share and adjusted basic and diluted net earnings per ADS as supplemental measures to review and assess its operating performance. The presentation of these non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. MINISO defines adjusted net profit as profit for the period excluding equity-settled share-based payment expenses. MINISO calculates adjusted net margin by dividing adjusted net profit by revenue for the same period. MINISO defines adjusted EBITDA as adjusted net profit plus depreciation and amortization, finance costs and income tax expense. Adjusted EBITDA margin is computed by dividing adjusted EBITDA by revenue for the period. MINISO computes adjusted basic and diluted net earnings per ADS by dividing adjusted net profit attributable to the equity shareholders of the Company by the number of ADSs represented by the number of ordinary shares used in the basic and diluted earnings per share calculation on an IFRS basis. MINISO computes adjusted basic and diluted net earnings per share in the same way as it calculates adjusted basic and diluted net earnings per ADS, except that it uses the number of ordinary shares used in the basic and diluted earnings per share calculation on an IFRS basis as the denominator instead of the number of ADSs represented by these ordinary shares. MINISO presents these non-IFRS financial measures because they are used by the management to evaluate its operating performance and formulate business plans. These non-IFRS financial measures enable the management to assess its operating results without considering the impacts of the aforementioned non-cash and other adjustment items that MINISO does not consider to be indicative of its operating performance in the future. Accordingly, MINISO believes that the use of these non-IFRS financial measures provides useful information to investors and others in understanding and evaluating its operating results in the same manner as the management and board of directors. These non-IFRS financial measures are not defined under IFRS and are not presented in accordance with IFRS. These non-IFRS financial measures have limitations as analytical tools. One of the key limitations of using these non-IFRS financial measures is that they do not reflect all items of income and expense that affect MINISO's operations. Further, these non-IFRS financial measures may differ from the non-IFRS information used by other companies, including peer companies, and therefore their comparability may be limited. These non-IFRS financial measures should not be considered in isolation or construed as alternatives to profit, net profit margin, basic and diluted earnings per share and basic and diluted earnings per ADS, as applicable, or any other measures of performance or as indicators of MINISO's operating performance. Investors are encouraged to review MINISO's historical non-IFRS financial measures in light of the most directly comparable IFRS measures, as shown below. The non-IFRS financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting the usefulness of such measures when analyzing MINISO's data comparatively. MINISO encourages you to review its financial information in its entirety and not rely on a single financial measure. For more information on the non-IFRS financial measures, please see the table captioned "Reconciliation of Non-IFRS Financial Measures" set forth at the end of this press release. 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 words or phrases such as "may", "will", "expect", "anticipate", "aim", "estimate", "intend", "plan", "believe", "is/are likely to", "potential", "continue" or other similar expressions. Among other things, the quotations from management in this announcement, as well as MINISO's strategic and operational plans, contain forward-looking statements. MINISO may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC") and The Stock Exchange of Hong Kong Limited (the "HKEX"), 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 MINISO'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: MINISO's mission, goals and strategies; future business development, financial conditions and results of operations; the expected growth of the retail market and the market of branded variety retail of lifestyle products in China and globally; expectations regarding demand for and market acceptance of MINISO's products; expectations regarding MINISO's relationships with consumers, suppliers, MINISO Retail Partners, local distributors, and other business partners; competition in the industry; proposed use of proceeds; and relevant government policies and regulations relating to MINISO's business and the industry. Further information regarding these and other risks is included in MINISO's filings with the SEC and the HKEX. All information provided in this press release and in the attachments is as of the date of this press release, and MINISO undertakes no obligation to update any forward-looking statement, except as required under applicable law. Investor Relations Contact: Email: ir@miniso.com Phone: +86 (20) 36228788 Ext.8039 MINISO GROUP HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in thousands) As at As at December 31, 2023 September 30, 2024 (Audited) (Unaudited) RMB'000 RMB'000 US$'000 ASSETS Non-current assets Property, plant and equipment 769,306 1,277,392 182,027 Right-of-use assets 2,900,860 3,843,144 547,644 Intangible assets 19,554 10,191 1,452 Goodwill 21,643 22,029 3,139 Deferred tax assets 104,130 115,147 16,408 Other investments 90,603 120,450 17,164 Trade and other receivables 135,796 195,405 27,845 Prepayments - 72,000 10,260 Term deposits 100,000 104,075 14,831 Interests in equity-accounted investees 15,783 34,365 4,897 4,157,675 5,794,198 825,667 Current assets Other investments 252,866 3,612,614 514,793 Inventories 1,922,241 2,297,067 327,329 Trade and other receivables 1,518,357 1,759,469 250,721 Cash and cash equivalents 6,415,441 1,716,150 244,549 Restricted cash 7,970 618,931 88,197 Term deposits 210,759 336,393 47,936 10,327,634 10,340,624 1,473,525 Total assets 14,485,309 16,134,822 2,299,192 MINISO GROUP HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED) (Expressed in thousands) As at As at December 31, 2023 September 30, 2024 (Audited) (Unaudited) RMB'000 RMB'000 US$'000 EQUITY Share capital 95 95 14 Additional paid-in capital 6,331,375 4,942,844 704,350 Other reserves 1,114,568 1,047,906 149,325 Retained earnings 1,722,157 3,534,024 503,594 Equity attributable to equity shareholders of the Company 9,168,195 9,524,869 1,357,283 Non-controlling interests 23,022 40,094 5,713 Total equity 9,191,217 9,564,963 1,362,996 LIABILITIES Non-current liabilities Contract liabilities 40,954 35,736 5,092 Loans and borrowings 6,533 5,911 842 Other payables 12,411 45,518 6,486 Lease liabilities 797,986 1,608,605 229,224 Deferred income 29,229 35,548 5,066 887,113 1,731,318 246,710 Current liabilities Contract liabilities 324,028 381,289 54,333 Loans and borrowings 726 739 105 Trade and other payables 3,389,826 3,674,473 523,608 Lease liabilities 447,319 482,256 68,721 Deferred income 6,644 6,573 937 Current taxation 238,436 293,211 41,782 4,406,979 4,838,541 689,486 Total liabilities 5,294,092 6,569,859 936,196 Total equity and liabilities 14,485,309 16,134,822 2,299,192 MINISO GROUP HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Expressed in thousands, except for per ordinary share and per ADS data) Three months ended September 30, Nine months ended September 30, 2023 2024 2023 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB'000 RMB'000 US$ '000 RMB'000 RMB'000 US$ '000 Revenue 3,791,154 4,522,577 644,462 9,997,484 12,281,320 1,750,074 Cost of sales (2,207,456) (2,492,601) (355,193) (5,956,394) (6,861,558) (977,764) Gross profit 1,583,698 2,029,976 289,269 4,041,090 5,419,762 772,310 Other income 13,437 5,327 759 17,061 18,025 2,569 Selling and distribution expenses (640,889) (996,461) (141,995) (1,558,855) (2,518,549) (358,890) General and administrative expenses (170,552) (236,208) (33,659) (490,257) (654,781) (93,306) Other net income 953 36,758 5,238 42,209 78,454 11,180 Reversal of credit loss on trade and other receivables 1,666 13,170 1,877 6,454 9,564 1,362 Impairment loss on non-current assets - - - (3,448) (5,104) (727) Operating profit 788,313 852,562 121,489 2,054,254 2,347,371 334,498 Finance income 69,366 25,067 3,572 149,907 99,673 14,203 Finance costs (11,481) (17,227) (2,455) (29,758) (57,822) (8,240) - - - Net finance income 57,885 7,840 1,117 120,149 41,851 5,963 Share of profit of an equity-accounted investees, net of tax - 2,009 286 - 2,310 329 Profit before taxation 846,198 862,411 122,892 2,174,403 2,391,532 340,790 Income tax expense (227,923) (214,090) (30,508) (538,210) (565,832) (80,630) Profit for the period 618,275 648,321 92,384 1,636,193 1,825,700 260,160 Attributable to: Equity shareholders of the Company 612,591 641,765 91,450 1,617,427 1,811,867 258,189 Non-controlling interests 5,684 6,556 934 18,766 13,833 1,971 Earnings per share for ordinary shares -Basic 0.49 0.52 0.07 1.30 1.46 0.21 -Diluted 0.49 0.52 0.07 1.29 1.45 0.21 Earnings per ADS (Each ADS represents 4 ordinary shares) -Basic 1.96 2.08 0.30 5.20 5.84 0.83 -Diluted 1.96 2.08 0.30 5.16 5.80 0.83 MINISO GROUP HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED) (Expressed in thousands) Three months ended September 30, Nine months ended September 30, 2023 2024 2023 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB'000 RMB'000 US$ '000 RMB'000 RMB'000 US$ '000 Profit for the period 618,275 648,321 92,384 1,636,193 1,825,700 260,160 Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of financial statements of foreign operations (17,880) 8,863 1,263 36,952 15,708 2,238 Other comprehensive (loss)/income for the period (17,880) 8,863 1,263 36,952 15,708 2,238 Total comprehensive income for the period 600,395 657,184 93,647 1,673,145 1,841,408 262,398 Attributable to: Equity shareholders of the Company 596,574 645,096 91,924 1,653,673 1,823,139 259,795 Non-controlling interests 3,821 12,088 1,723 19,472 18,269 2,603 MINISO GROUP HOLDING LIMITED RECONCILIATION OF NON-IFRS FINANCIAL MEASURES (Expressed in thousands, except for per share, per ADS data and percentages) Three months ended September 30, Nine months ended September 30, 2023 2024 2023 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB'000 RMB'000 US$'000 RMB'000 RMB'000 US$'000 Reconciliation of profit for the period to adjusted net profit: Profit for the period 618,275 648,321 92,384 1,636,193 1,825,700 260,160 Add back: Equity-settled share-based payment expenses 23,769 37,883 5,398 60,071 102,390 14,590 Adjusted net profit 642,044 686,204 97,782 1,696,264 1,928,090 274,750 Adjusted net margin 16.9 % 15.2 % 15.2 % 17.0 % 15.7 % 15.7 % Attributable to: Equity shareholders of the Company 636,360 679,461 96,821 1,677,498 1,913,891 272,727 Non-controlling interests 5,684 6,743 961 18,766 14,199 2,023 Adjusted net earnings per share(1) -Basic 0.51 0.55 0.08 1.35 1.54 0.22 -Diluted 0.51 0.55 0.08 1.34 1.53 0.22 Adjusted net earnings per ADS (Each ADS represents 4 ordinary shares) -Basic 2.04 2.20 0.31 5.40 6.16 0.88 -Diluted 2.04 2.20 0.31 5.36 6.12 0.87 Reconciliation of adjusted net profit for the period to adjusted EBITDA: Adjusted net profit 642,044 686,204 97,782 1,696,264 1,928,090 274,750 Add back: Depreciation and amortization 132,868 222,259 31,672 311,872 555,390 79,142 Finance costs 11,481 17,227 2,455 29,758 57,822 8,240 Income tax expense 227,923 214,090 30,508 538,210 565,832 80,630 Adjusted EBITDA 1,014,316 1,139,780 162,417 2,576,104 3,107,134 442,762 Adjusted EBITDA margin 26.8 % 25.2 % 25.2 % 25.8 % 25.3 % 25.3 % Note: (1) Adjusted basic and diluted net earnings per share are computed by dividing adjusted net profit attributable to the equity shareholders of the Company by the number of ordinary shares used in the basic and diluted earnings per share calculation on an IFRS basis. MINISO GROUP HOLDING LIMITED UNAUDITED ADDITIONAL INFORMATION (Expressed in thousands, except for percentages) Three months ended September 30, Nine months ended September 30, 2023 2024 YoY 2023 2024 YoY RMB'000 RMB'000 US$'000 RMB'000 RMB'000 US$'000 Revenue Mainland China 2,495,777 2,711,673 386,410 8.7 % 6,786,431 7,738,402 1,102,713 14.0 % -MINISO Brand(1) 2,306,566 2,438,555 347,491 5.7 % 6,259,026 7,031,354 1,001,960 12.3 % -TOP TOY Brand 180,664 271,645 38,709 50.4 % 491,531 700,417 99,808 42.5 % -Others(2) 8,547 1,473 210 (82.8) % 35,874 6,631 945 (81.5) % Overseas 1,295,377 1,810,904 258,052 39.8 % 3,211,053 4,542,918 647,361 41.5 % 3,791,154 4,522,577 644,462 19.3 % 9,997,484 12,281,320 1,750,074 22.8 % Notes: (1) "MINISO Brand" refers to the revenue generated from MINISO brand including revenue from offline stores, e-commerce and others in mainland China. (2) "Others" refers to revenue generated from other operating segments such as "WonderLife", which was a secondary brand targeting on lower-tier cities in mainland China, aggregated and presented as "others". As the MINISO brand increasingly penetrated into lower-tier cities in mainland China, "WonderLife" has become marginalized. MINISO GROUP HOLDING LIMITED UNAUDITED ADDITIONAL INFORMATION NUMBER OF MINISO STORES IN MAINLAND CHINA As of September 30, 2023 December 31, 2023 September 30, 2024 YoY YTD(1) By City Tiers First-tier cities 499 522 563 64 41 Second-tier cities 1,554 1,617 1,771 217 154 Third- or lower-tier cities 1,749 1,787 1,916 167 129 Total 3,802 3,926 4,250 448 324 Note: (1) "YTD" refers to the period starting from January 1, 2024 to September 30, 2024. MINISO GROUP HOLDING LIMITED UNAUDITED ADDITIONAL INFORMATION NUMBER OF MINISO STORES IN OVERSEAS MARKETS As of September 30,2023 December 31, 2023 September 30,2024 YoY YTD(1) By Regions Asia excluding China 1,264 1,333 1,572 308 239 North America 140 172 294 154 122 Latin America 514 552 598 84 46 Europe 218 231 260 42 29 Others 177 199 212 35 13 Total 2,313 2,487 2,936 623 449 Note: (1) "YTD" refers to the period starting from January 1, 2024 to September 30, 2024.
SHANGHAI, Nov. 27, 2024 /PRNewswire/ -- Everest Medicines (HKEX 1952.HK, "Everest", or the "Company"), a biopharmaceutical company focused on the discovery, clinical development, manufacturing and commercialization of innovative therapeutics, today announced that it will hold investor calls on the data results from EVER001 Phase 1b/2a clinical study in primary membranous nephropathy. EVER001 is a next-generation covalent reversible Bruton's tyrosine kinase (BTK) inhibitor, and Everest owns the global rights to develop EVER001 for the treatment of renal diseases. The English session of the conference call will be held at 9:00 AM on Dec. 4, 2024 Beijing Time (8:00 PM U.S. Eastern Time on Dec. 3, 2024) and the Mandarin session of the conference call will be held at 10:30 AM Beijing Time on the same day (9:30 PM U.S. Eastern Time on Dec. 3, 2024). The conference calls can be accessed by the following links: For English Session: Time: 9:00 AM Beijing Time, Wednesday, Dec. 4, 2024 (8:00 PM U.S. Eastern Time on Dec. 3, 2024) Pre-Registration Link: https://www.acecamptech.com/eventDetail/60510700 Webcast Link: https://www.acecamptech.com/meeting_live/70512679/774680?event_id=60510700 Alternatively, participants may dial in to the conference call using below dial-in information: United States: +1-646-2543594 (EN)Chinese Mainland: +86-10-58084166 (EN) +86-10-58084199 (CN)Hong Kong, China: +852-30051313 (EN) +852-30051355 (CN)United Kingdom: +44-12-1368-0466 (EN)International: +1-866-6363243 (EN)Password: 842080 For Mandarin Session: Time: 10:30 AM Beijing Time, Wednesday, Dec. 4, 2024 (9:30 PM U.S. Eastern Time on Dec. 3, 2024) Webcast Link: https://s.comein.cn/n3arj55s Alternatively, participants may dial into the conference call using below dial-in information: United States: +1-646-3578788 +1-408-7093255Chinese Mainland: 400-969-8928 400-806-3263Hong Kong, China: +852-301-83602Taiwan, China: +886-226563394 +886-277417882Singapore: +65-64075649 +65-66220840United Kingdom: +44-2070970018International: +86-2362737123Password: 377570 The replay of English session will be available shortly after the call and can be accessed by visiting the Company's website at http://www.everestmedicines.com. About EVER001 EVER001 (previously known as XNW1011) is a next-generation covalent reversible Bruton's tyrosine kinase (BTK) inhibitor in development globally for the treatment of renal diseases. BTK is an essential component of the B-cell receptor signaling pathways that regulate the survival, activation, proliferation, and differentiation of B lymphocytes. Targeting BTK with small molecule inhibitors has been demonstrated to be an effective treatment option for B-cell lymphomas and autoimmune diseases. Based in part on results from a completed phase 1 study with healthy subjects conducted by SinoMab in China, EVER001 exhibited high selectivity, excellent pharmacokinetics properties, robust target engagement and a safety profile that supports continued clinical development. Under an exclusive licensing agreement with Evopoint Biosciences and SinoMab BioScience, Everest owns the global rights to develop, produce and commercialize EVER001 for the treatment of renal diseases. About Everest Medicines Everest Medicines is a biopharmaceutical company focused on discovering, developing, manufacturing and commercializing transformative pharmaceutical products and vaccines that address critical unmet medical needs for patients in Asian markets. The management team of Everest Medicines has deep expertise and an extensive track record from both leading global pharmaceutical companies and local Chinese pharmaceutical companies in high-quality discovery, clinical development, regulatory affairs, CMC, business development and operations. Everest Medicines has built a portfolio of potentially global first-in-class or best-in-class molecules in the company's core therapeutic areas of renal diseases, infectious diseases and autoimmune disorders. For more information, please visit its website at www.everestmedicines.com. Forward-Looking Statements: This news release may make statements that constitute forward-looking statements, including descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the business operations and financial condition of the Company, which can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, or other factors, some of which are beyond the control of the Company and are unforeseeable. Therefore, the actual results may differ from those in the forward-looking statements as a result of various factors and assumptions, such as future changes and developments in our business, competitive environment, political, economic, legal and social conditions. The Company or any of its affiliates, directors, officers, advisors or representatives has no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this news release, except as required by law.
Maintained Operational Profitability for the Third Consecutive Quarter Operating Expenses as a Percentage of Revenues Decreased 160 Basis Points YoY Held Positive Operating Cash Flow for Three Consecutive Quarters SHANGHAI, Nov. 27, 2024 /PRNewswire/ -- 111, Inc. ("111" or the "Company") (NASDAQ: YI), a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China, today announced its unaudited financial results for the third quarter ended September 30, 2024. Third Quarter 2024 Highlights Net revenues were RMB3.6 billion (US$513.1 million), remaining relatively flat compared to the same quarter last year. Gross segment profit (1) was RMB 210.6 million (US$ 30.0 million) increased by 10.5% year-over-year. Total operating expenses were RMB208.2 million (US$29.7 million), an improvement of 23.2% compared to RMB271.0 million in the same quarter of last year. As a percentage of net revenues, total operating expenses decreased by 160 basis points to 5.8% from 7.4% in the same quarter of last year, demonstrating continuous improvement in the Company's operational efficiency. Income from operations was RMB2.4 million (US$0.3 million), compared to loss from operations of RMB80.4 million in the same quarter of last year. 111 maintained operational profitability for the third consecutive quarter. Non-GAAP income from operations (2) was RMB7.1 million (US$1.0 million), compared to Non-GAAP loss from operations of RMB54.0 million in the same quarter of last year. Net cash from operating activities was RMB109.9 million (US$15.7 million). The Company has achieved positive operating cash flow for three consecutive quarters. (1) Gross segment profit represents net revenues less cost of goods sold. (2) Non-GAAP income from operations represents income from operations excluding share-based compensation expenses. Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, commented, "While the macroeconomic environment in China continues to present challenges, we are proud of our ability to maintain operational profitability for the third consecutive quarter. This achievement is a testament to the strength of our business model as a one-stop shopping platform that offers the most comprehensive selection of pharmaceutical products at competitive prices. It also highlights our commitment to operational efficiency across the organization. As a result, income from operations in Q3 reached RMB2.4 million, a significant improvement from an operational loss of RMB80.4 million in the prior year." Mr. Liu added, "We gained greater operational efficiency through diligent cost management, ongoing infrastructure investments, and effective staffing arrangements, all of which has enabled us to navigate an unfavorable consumer spending environment while delivering solid performance results. Operating expenses were 5.8% of revenues, a reduction of 160 basis points compared to the previous year, while non-GAAP operating expenses as a percentage of revenues decreased by 100 basis points to 5.7%. We aim to lead the pharmaceutical e-commerce sector in efficiency and sharpen our competitive advantages. As we scale and optimize operations, we expect further cost savings, which will be reinvested into growth initiatives, including technological advancements, market expansion, and client base growth, driving future profitability." "We are strengthening our core competitiveness in digitalization through advancements across multiple areas, laying a strong foundation for an agile, highly efficient, and customer-centric business that can swiftly adapt to evolving industry needs. Additionally, we've bolstered our supply chain with an expanded transshipment network and new fulfillment centers, further enhancing our service capabilities." "Despite challenges, we are still confident in the long-term opportunities ahead. Our investments in AI and digital technologies are not only providing industry-leading efficiency and reshaping the healthcare value chain, but also positioning us to capture significant shifts in the pharmaceutical industry—particularly the unstoppable trend of digital transformation, the growing demand for out-of-hospital drug distribution, and the expansion of the silver economy. By deepening our partnerships with pharmaceutical companies, expanding our fulfillment network, refining our digital platforms, and prioritizing new growth engines, we are well-positioned to engage more industry stakeholders, meet the needs of a broad customer base, and generate sustained growth." Third Quarter 2024 Financial Results Net revenues were RMB3.6 billion (US$513.1 million), representing a decrease of 1.8% from RMB3.7 billion in the same quarter of last year. (In thousands RMB) For the three months ended September 30, 2023 2024 YoY B2B Net Revenue Product 3,556,749 3,514,298 -1.2 % Service 20,671 21,731 5.1 % Sub-Total 3,577,420 3,536,029 -1.2 % Cost of Products Sold(3) 3,406,320 3,340,998 -1.9 % Segment Profit 171,100 195,031 14.0 % Segment Profit % 4.8 % 5.5 % (In thousands RMB) For the three months ended September 30, 2023 2024 YoY B2C Net Revenue Product 82,538 61,031 -26.1 % Service 5,287 3,615 -31.6 % Sub-Total 87,825 64,646 -26.4 % Cost of Products Sold 68,301 49,061 -28.2 % Segment Profit 19,524 15,585 -20.2 % Segment Profit % 22.2 % 24.1 % (3) For segment reporting purposes, purchase rebates are allocated to the B2B segment and B2C segments primarily based on the amount of cost of products sold for each segment. Cost of products sold does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistic staff, logistic centers rental expenses and depreciation expenses, which are recorded in the fulfillment expenses. Cost of service revenue is recorded in the operating expense. Operating costs and expenses were RMB3.6 billion (US$512.8 million), representing a decrease of 3.9% from RMB3.7 billion in the same quarter of last year. Cost of products sold was RMB3.4 billion (US$483.1 million), representing a decrease of 2.4% from RMB3.5 billion in the same quarter of last year. Fulfillment expenses were RMB100.0 million (US$14.2 million), representing a decrease of 1.6% from RMB101.6 million in the same quarter of last year. Fulfillment expenses accounted for 2.8% of net revenues this quarter, maintaining the same as last year. Selling and marketing expenses were RMB77.0 million (US$11.0 million), representing a decrease of 19.4% from RMB95.5 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB1.6 million for the quarter and RMB5.1 million for the same quarter last year, respectively, selling and marketing expenses as a percentage of net revenues accounted for 2.1% in the quarter as compared to 2.5% in the same quarter of last year. General and administrative expenses were RMB14.4 million (US$2.0 million), representing a decrease of 68.7% from RMB45.8 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB2.3 million for the quarter and RMB16.8 million for the same quarter last year, respectively, general and administrative expenses as a percentage of net revenues accounted for 0.3% in the quarter as compared to 0.8% in the same quarter of last year. Technology expenses were RMB17.5 million (US$2.5 million), representing a decrease of 30.9% from RMB25.4 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB0.9 million for the quarter and RMB4.5 million for the same quarter last year, respectively, technology expenses as a percentage of net revenues accounted for 0.5% in the quarter as compared to 0.6% in the same quarter of last year. Income from operations was RMB2.4 million (US$0.3 million), compared to loss from operations of RMB80.4 million in the same quarter of last year. Non-GAAP income from operations was RMB7.1 million (US$1.0 million), compared to non-GAAP loss from operations of RMB54.0 million in the same quarter of last year. Net loss was RMB3.5 million (US$0.5 million), representing an improvement of 96% from RMB83.5 million in the same quarter of last year. As a percentage of net revenues, net loss amounted to 0.1% in the quarter, down from 2.3% in the same quarter of last year. Non-GAAP net income (4) was RMB1.3 million (US$0.2 million), compared to non-GAAP net loss of RMB57.1 million in the same quarter of last year. Net loss attributable to ordinary shareholders was RMB17.1 million (US$2.4 million), representing an improvement of 82% from RMB93.3 million in the same quarter of last year. As a percentage of net revenues, net loss attributable to ordinary shareholders accounted for 0.5% in the quarter, down from 2.5% in the same quarter of last year. Non-GAAP net loss attributable to ordinary shareholders (5) was RMB12.4 million (US$1.8 million), representing an improvement of 82% from RMB66.9 million in the same quarter of last year. As a percentage of net revenues, non-GAAP net loss attributable to ordinary shareholders, accounted for 0.3% in the quarter, down from 1.8% in the same quarter of last year. (4) Non-GAAP net income represents net income excluding share-based compensation expenses, net of tax. Considering the impact of accretion of redeemable non-controlling interest for the third quarter 2024, non-GAAP net income is used as a meaningful measurement of the operation performance of the Company. (5) Non-GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. As of September 30, 2024, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB614.4 million (US$87.6 million), compared to RMB673.7 million as of December 31, 2023. To date, the Company has a total outstanding amount of RMB1.1 billion, which has been included in the balances of redeemable non-controlling interests and accrued expenses and other current liabilities, owed to a group of investors of 1 Pharmacy Technology pursuant to their equity investments made in 2020 as previously disclosed. 111 received redemption requests from certain of such investors in accordance with the terms of their initial investments in 1 Pharmacy Technology. Following communication and negotiation, the Company has reached agreements and/or commitment letters with investors representing approximately 90% of the total amount to reschedule the repayments, allowing for phased repayments at extended periods, if the holders exercise their redemption right. The Company has paid a portion of the repurchase funds upon signing of the agreements. Additionally, the Company is in ongoing discussions with investors holding the remaining approximately 10% of the total amount. For more information about the terms of 111's arrangements with these investors, see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources" in the Company's annual report for the fiscal year ended December 31, 2023. Conference Call 111's management team will host an earnings conference call at 7:30 AM U.S. Eastern Time on Wednesday, November 27, 2024 (8:30 PM Beijing Time on the same day). Details for the conference call are as follows: Event Title: 111, Inc. Third Quarter 2024 Unaudited Financial ResultsRegistration Link: https://s1.c-conf.com/diamondpass/10042738-te7sgd.html All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique Registration ID, which can be used to join the conference call. Please dial in 15 minutes before the call is scheduled to begin and provide the Direct Event passcode and unique Registration ID you have received upon registering to join the call. A telephone replay of the call will be available after the conclusion of the conference call until December 4, 2024 via: China: 4001 209 216United States: +1 855 883 1031International: +61 7 3107 6325Conference ID: 10042738 A live and archived webcast of the conference call will be available on the website at https://edge.media-server.com/mmc/p/3nkscjv6. Use of Non-GAAP Financial Measures In evaluating the business, the Company considers and uses non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS, as supplemental measures to review and assess its operating performance. The Company defines non-GAAP income (loss) from operations as income (loss) from operations excluding share-based compensation expenses. The Company defines non-GAAP net income (loss) as net loss excluding share-based compensation expenses, net of tax. The Company defines non-GAAP net loss attributable to ordinary shareholders as net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. The Company defines non-GAAP loss per ADS as net loss attributable to ordinary shareholders per ADS excluding share-based compensation expenses, net of tax per ADS. The presentation of these 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 U.S. GAAP. The Company believes that non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in income (loss) from operations and net loss. Share-based compensation expenses is a non-cash expense that varies from period to period. As a result, management excludes the items from its internal operating forecasts and models. Management believes that the adjustments for share-based compensation expenses provide investors with a reasonable basis to measure the company's core operating performance, in a more meaningful comparison with the performance of other companies. The Company believes that non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the management in their financial and operational decision-making. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, or non-GAAP loss per ADS is that it does not reflect all items of income and expense that affect the Company's operations. 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 most comparable U.S. GAAP 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. Reconciliation of the non-GAAP financial measures to the most comparable U.S. GAAP measures is included at the end of this press release. Exchange Rate Information Statement This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.0176 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of September 30, 2024. Forward-Looking Statements This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as 111's strategic and operational plans, contain forward-looking statements. 111 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, 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. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to the Company's ability comply with extensive and evolving regulatory requirements, its ability to compete effectively in the evolving PRC general health and wellness market, its ability to manage the growth of its business and expansion plans, its ability to achieve or maintain profitability in the future, its ability to control the risks associated with its pharmaceutical retail and wholesale businesses, and the Company's ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and 111 does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. About 111, Inc. 111, Inc. (NASDAQ: YI) ("111" or the "Company") is a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China. The Company provides consumers with better access to pharmaceutical products and healthcare services directly through its online retail pharmacy, 1 Pharmacy, and indirectly through its offline virtual pharmacy network. The Company also offers online healthcare services through its internet hospital, 1 Clinic, which provides consumers with cost-effective and convenient online consultation, electronic prescription service, and patient management service. In addition, the Company's online platform, 1 Medicine, serves as a one-stop shop for pharmacies to source a vast selection of pharmaceutical products. With the largest virtual pharmacy network in China, 111 enables offline pharmacies to better serve their customers with cloud-based services. 111 also provides an omni-channel drug commercialization platform to its strategic partners, which includes services such as digital marketing, patient education, data analytics, and pricing monitoring. For more information on 111, please visit: http://ir.111.com.cn/. For more information, please contact: 111, Inc.Investor RelationsEmail: ir@111.com.cn 111, Inc.Media Relations Email: press@111.com.cnPhone: +86-021-2053 6666 (China) 111, Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) As of As of December 31, 2023 September 30, 2024 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 603,523 531,981 75,807 Restricted cash 20,025 32,430 4,621 Short-term investments 50,143 50,000 7,125 Accounts receivable, net 536,823 425,159 60,585 Notes receivable 77,598 80,853 11,521 Inventories 1,419,396 1,532,170 218,332 Prepayments and other current assets 225,823 234,295 33,388 Total current assets 2,933,331 2,886,888 411,379 Property and equipment, net 34,340 25,558 3,642 Intangible assets, net 2,256 1,643 234 Long-term investments 2,000 1,000 142 Other non-current assets 13,310 15,684 2,235 Operating lease right-of-use asset 103,799 98,909 14,094 Total assets 3,089,036 3,029,682 431,726 LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT Current liabilities: Short-term borrowings 338,075 168,517 24,013 Accounts payable 1,588,693 1,912,109 272,474 Accrued expense and other current liabilities 818,295 569,246 81,116 Total current liabilities 2,745,063 2,649,872 377,603 Long-term operating lease liabilities 62,624 63,969 9,116 Other non-current liabilities 5,245 8,331 1,187 Total liabilities 2,812,932 2,722,172 387,906 MEZZANINE EQUITY Redeemable non-controlling interests 870,825 943,774 134,487 SHAREHOLDERS' DEFICIT Ordinary shares Class A 32 33 5 Ordinary shares Class B 25 25 3 Treasury shares (5,887) (5,887) (839) Additional paid-in capital 3,169,114 3,167,794 451,407 Accumulated deficit (3,819,249) (3,864,151) (550,637) Accumulated other comprehensive income 72,514 72,602 10,346 Total shareholders' deficit (583,451) (629,584) (89,715) Non-controlling interest (11,270) (6,680) (952) Total deficit (594,721) (636,264) (90,667) Total liabilities, mezzanine equity and deficit 3,089,036 3,029,682 431,726 111, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands, except for share and per share data) For the three months ended September 30, For the nine months ended September 30, 2023 2024 2023 2024 RMB RMB US$ RMB RMB US$ Net revenues 3,665,245 3,600,675 513,092 10,839,503 10,553,474 1,503,858 Operating costs and expenses: Cost of products sold (3,474,621) (3,390,059) (483,080) (10,204,779) (9,926,727) (1,414,547) Fulfillment expenses (101,602) (99,977) (14,247) (299,202) (276,559) (39,409) Selling and marketing expenses (95,523) (76,954) (10,966) (274,880) (237,724) (33,875) General and administrative expenses (45,839) (14,367) (2,047) (126,235) (50,747) (7,231) Technology expenses (25,386) (17,549) (2,501) (75,243) (54,225) (7,727) Other operating (expenses) income, net (2,696) 602 86 (2,723) 1,941 277 Total operating costs and expenses (3,745,667) (3,598,304) (512,755) (10,983,062) (10,544,041) (1,502,512) (Loss) Income from operations (80,422) 2,371 337 (143,559) 9,433 1,346 Interest income 2,362 1,533 218 6,517 5,574 794 Interest expense (5,433) (7,810) (1,113) (14,525) (23,067) (3,287) Foreign exchange gain (loss) 79 642 91 (1,095) 40 6 Other income (loss), net 38 (193) (28) 4,552 (116) (17) Loss before income taxes (83,376) (3,457) (495) (148,110) (8,136) (1,158) Income tax expense (102) (5) (1) (102) (93) (13) Net loss (83,478) (3,462) (496) (148,212) (8,229) (1,171) Net loss attributable to non-controlling interest 4,315 848 121 7,837 (431) (61) Net loss attributable to redeemable non-controlling interest 7,253 438 62 12,529 1,168 166 Adjustment attributable to redeemable non-controlling interest (21,391) (14,931) (2,128) (54,481) (37,410) (5,331) Net loss attributable to ordinary shareholders (93,301) (17,107) (2,441) (182,327) (44,902) (6,397) Other comprehensive loss Unrealized gains of available-for-sale securities, 1,013 (407) (58) 3,936 (753) (107) Realized gains of available-for-sale debt securities (841) 407 58 (3,558) 896 128 Foreign currency translation adjustments (1,690) (1,184) (169) 4,234 (55) (8) Comprehensive loss (94,819) (18,291) (2,610) (177,715) (44,814) (6,384) Loss per ADS: Basic and diluted (1.10) (0.20) (0.02) (2.16) (0.52) (0.08) Weighted average number of shares used in computation of loss per share Basic and diluted 169,088,015 171,938,537 171,938,537 168,179,779 171,526,062 171,526,062 111, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the three months ended September 30, For the nine months ended September 30, 2023 2024 2023 2024 RMB RMB US$ RMB RMB US$ Net cash provided by (used in) operating activities 35,208 109,865 15,656 (250,230) 311,563 44,397 Net cash provided by (used in) investing activities 5,163 49,845 7,103 91,913 (141) (20) Net cash provided by (used in) financing activities 110,452 (110,510) (15,748) 204,230 (370,453) (52,789) Effect of exchange rate changes on cash and cash equivalents, and restricted cash 2,621 (313) (45) 3,514 (106) (15) Net increase (decrease) in cash and cash equivalents, and restricted cash 153,444 48,887 6,966 49,427 (59,137) (8,427) Cash and cash equivalents, and restricted cash at the beginning of the period 612,774 515,524 73,462 716,791 623,548 88,855 Cash and cash equivalents, and restricted cash at the end of the period 766,218 564,411 80,428 766,218 564,411 80,428 111, Inc. Unaudited Reconciliation of GAAP and Non-GAAP Results (In thousands, except for share and per share data) For the three months ended September 30, For the nine months ended September 30, 2023 2024 2023 2024 RMB RMB US$ RMB RMB US$ (Loss) Income from operations (80,422) 2,371 337 (143,559) 9,433 1,346 Add: Share-based compensation expenses 26,402 4,756 678 74,818 15,122 2,155 Non-GAAP (loss) income from operations (54,020) 7,127 1,015 (68,741) 24,555 3,501 Net loss (83,478) (3,462) (496) (148,212) (8,229) (1,171) Add: Share-based compensation expenses, net of tax 26,402 4,756 678 74,818 15,122 2,155 Non-GAAP net (loss) income (57,076) 1,294 182 (73,394) 6,893 984 Net loss attributable to ordinary shareholders (93,301) (17,107) (2,441) (182,327) (44,902) (6,397) Add: Share-based compensation expenses, net of tax 26,402 4,756 678 74,818 15,122 2,155 Non-GAAP net loss attributable to ordinary shareholders (66,899) (12,351) (1,763) (107,509) (29,780) (4,242) Loss per ADS(6): Basic and diluted (1.10) (0.20) (0.02) (2.16) (0.52) (0.08) Add: Share-based compensation expenses per ADS(6), net of tax 0.32 0.06 0.00 0.88 0.18 0.02 Non-GAAP loss per ADS(6) (0.78) (0.14) (0.02) (1.28) (0.34) (0.06) (6) Every one ADS represents two Class A ordinary shares.
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