17 Education & Technology Group Inc. Announces Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results

BEIJING, March 25, 2025 (GLOBE NEWSWIRE) -- 17 Education & Technology Group Inc. $(YQ)$ ("17EdTech" or the "Company"), a leading education technology company in China, today announced its unaudited financial results for the fourth quarter and the year ended December 31, 2024.

Fourth Quarter 2024 Highlights(1)

   -- Net revenues were RMB36.6 million (US$5.0 million), compared with net 
      revenues of RMB47.3 million in the fourth quarter of 2023. 
 
   -- Gross margin was 33.6%, compared with 43.4% in the fourth quarter of 
      2023. 
 
   -- Net loss was RMB63.7 million (US$8.7 million), compared with net loss of 
      RMB98.4 million in the fourth quarter of 2023. 
 
   -- Net loss as a percentage of net revenues was negative 174.2% in the 
      fourth quarter of 2024, compared with negative 207.9% in the fourth 
      quarter of 2023. 
 
   -- Adjusted net loss2 (non-GAAP), which excluded share-based compensation 
      expenses of RMB23.7 million (US$3.2 million), was RMB40.1 million (US$5.5 
      million), compared with adjusted net loss (non-GAAP) of RMB81.8 million 
      in the fourth quarter of 2023. 
 
   -- Adjusted net loss (non-GAAP) as a percentage of net revenues was negative 
      109.5% in the fourth quarter of 2024, compared with negative 172.8% 
      adjusted net loss (non-GAAP) as a percentage of net revenues in the 
      fourth quarter of 2023. 

Fiscal Year 2024 Highlights

   -- Net revenues were RMB189.2 million (US$25.9 million), compared with net 
      revenues of RMB171.0 million in 2023. 
 
   -- Gross margin was 36.6%, compared with 47.2% in 2023. 
 
   -- Net loss was RMB192.9 million (US$26.4 million), compared with net loss 
      of RMB311.8 million in 2023. 
 
   -- Net loss as a percentage of net revenues was negative 102.0% in 2024, 
      compared with negative 182.4% in 2023. 
 
   -- Adjusted net loss (non-GAAP), which excluded share-based compensation 
      expenses of RMB61.9 million (US$8.5 million), was RMB131.0 million 
      (US$17.9 million), compared with adjusted net loss (non-GAAP) of RMB228.1 
      million in 2023. 
 
   -- Adjusted net loss (non-GAAP) as a percentage of net revenues was negative 
      69.2% in 2024, compared with negative 133.4% of adjusted net loss as a 
      percentage of net revenues in 2023. 
 
 
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. 
2  Adjusted net income (loss) represents net income (loss) 
    excluding share-based compensation expenses. 
 

Mr. Andy Liu, Founder, Chairman and Chief Executive Officer of the Company, commented, "We managed to deliver strong results with healthy top-line growth of 11% year-over-year for the full year, fueled by strategic market expansion and new contract acquisitions."

"As we continue to evolve our products and services, leveraging AI for enhanced automation and user experience, we received encouraging feedback and market recognition from users. Looking ahead, with a strong pipeline of AI-enhanced products and a customer-centric roadmap, we are poised to deliver sustainable growth and industry-leading innovations in the future," he concluded.

Mr. Michael Du, Director and Chief Financial Officer of the Company commented, "In the fourth quarter, our teaching and learning SaaS offering under subscription model experienced three-digit growth compared to the same quarter last year, bolstered by strong retention rates and multi-year subscription renewals. As we enhance operating efficiency, operating expenses decreased by 34% compared to the same quarter last year, resulting in a 35% reduction in net loss on a GAAP basis."

Fourth Quarter 2024 Unaudited Financial Results

Net Revenues

Net revenues for the fourth quarter of 2024 were RMB36.6 million (US$5.0 million), representing a year-over-year decrease of 22.7% from RMB47.3 million in the fourth quarter of 2023. This was mainly due to (i) the reduction in net revenues from district-level projects as we prioritize our resources on school-based projects under subscription model, and (ii) a higher proportion of contracts under the SaaS subscription model we signed in the fourth quarter of 2024 which requires longer period of revenue recognition.

Cost of Revenues

Cost of revenues for the fourth quarter of 2024 was RMB24.3 million (US$3.3 million), representing a year-over-year decrease of 9.2% from RMB26.8 million in the fourth quarter of 2023, which was mainly due to fewer district-level project deliveries for our teaching and learning SaaS offerings, as a result of the growing proportion of recurring revenue under subscription model that requires fewer hardware and software deliveries.

Gross Profit and Gross Margin

Gross profit for the fourth quarter of 2024 was RMB12.3 million (US$1.7 million), compared with RMB20.6 million in the fourth quarter of 2023.

Gross margin for the fourth quarter of 2024 was 33.6%, compared with 43.4% in the fourth quarter of 2023.

Total Operating Expenses

The following table sets forth a breakdown of operating expenses by amounts and percentages of revenue during the periods indicated (in thousands, except for percentages):

 
                           For the three months ended December 31, 
                       2023                 2024                    Year- 
                    RMB       %         RMB     USD      %        over-year 
                  --------  -----      ------  ------  -----      --------- 
Sales and 
 marketing 
 expenses           29,903   63.2%     20,183   2,765   55.2%         -32.5% 
Research and 
 development 
 expenses           40,930   86.4%     16,969   2,325   46.4%         -58.5% 
General and 
 administrative 
 expenses           52,000  109.8%     44,206   6,056  120.8%         -15.0% 
                   -------  -----      ------  ------  ----- 
Total operating 
 expenses          122,833  259.4%     81,358  11,146  222.4%         -33.8% 
                   =======  =====      ======  ======  ===== 
 

Total operating expenses for the fourth quarter of 2024 were RMB81.4 million (US$11.1 million), including RMB23.7 million (US$3.2 million) of share-based compensation expenses, representing a year-over-year decrease of 33.8% from RMB122.8 million in the fourth quarter of 2023.

Sales and marketing expenses for the fourth quarter of 2024 were RMB20.2 million (US$2.8 million), including RMB4.3 million (US$0.6 million) of share-based compensation expenses, representing a year-over-year decrease of 32.5% from RMB29.9 million in the fourth quarter of 2023. This was mainly due to efficiency improvements in marketing and sales work force and expenses compared with the same period last year.

Research and development expenses for the fourth quarter of 2024 were RMB17.0 million (US$2.3 million), including RMB3.9 million (US$0.5 million) of share-based compensation expenses, representing a year-over-year decrease of 58.5% from RMB40.9 million in the fourth quarter of 2023. The decrease was primarily due to the decrease in the share-based compensation and efficiency improvements in our research and development work force and expenses compared with the same period last year.

General and administrative expenses for the fourth quarter of 2024 were RMB44.2 million (US$6.1 million), including RMB15.5 million (US$2.1 million) of share-based compensation expenses, representing a year-over-year decrease of 15.0% from RMB52.0 million in the fourth quarter of 2023. This was primarily attributable to staff optimization in line with business adjustment.

Loss from Operations

Loss from operations for the fourth quarter of 2024 was RMB69.1 million (US$9.5 million), compared with RMB102.3 million in the fourth quarter of 2023. Loss from operations as a percentage of net revenues for the fourth quarter of 2024 was negative 188.8%, compared with negative 216.0% in the fourth quarter of 2023.

Net Loss

Net loss for the fourth quarter of 2024 was RMB63.7 million (US$8.7 million), compared with net loss of RMB98.4 million in the fourth quarter of 2023. Net loss as a percentage of net revenues was negative 174.2% in the fourth quarter of 2024, compared with negative 207.9% in the fourth quarter of 2023.

Adjusted Net Loss (non-GAAP)

Adjusted net loss (non-GAAP) for the fourth quarter of 2024 was RMB40.1 million (US$5.5 million), compared with adjusted net loss (non-GAAP) of RMB81.8 million in the fourth quarter of 2023. Adjusted net loss (non-GAAP) as a percentage of net revenues was negative 109.5% in the fourth quarter of 2024, compared with negative 172.8% of adjusted net loss as a percentage of net revenues in the fourth quarter of 2023.

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

Fiscal Year 2024 Unaudited Financial Results

Net Revenues

Net revenues in 2024 were RMB189.2 million (US$25.9 million), representing a year-over-year increase of 10.7% from RMB171.0 million in 2023, mainly due to the increased number of teaching and learning SaaS contracts and the recurring revenue generated from on-going projects.

Cost of Revenues

Cost of revenues in 2024 was RMB120.0 million (US$16.4 million), representing a year-over-year increase of 33.0% from RMB90.3 million in 2023, which was due to the increase in project deliveries for our teaching and learning SaaS offerings during the period.

Gross Profit and Gross Margin

Gross profit in 2024 was RMB69.2 million (US$9.5 million), representing a year-over-year decrease of 14.2% from RMB80.7 million in 2023.

Gross margin in 2024 was 36.6%, compared with 47.2% in 2023.

Total Operating Expenses

(MORE TO FOLLOW) Dow Jones Newswires

March 25, 2025 05:00 ET (09:00 GMT)