Tarena Renewal in FY 2021: Full-Year Net Revenue Up 25.7%, Q4 Positive Cash Flow 130 Million

NEW YORK--(BUSINESS WIRE)-- On March 16, Tarena International, Inc. (NASDAQ: TEDU) released its unaudited financial results for the fourth quarter and the whole financial year of 2021.

Tarena Renewal in FY 2021 (Photo: Business Wre)

According to the financial data, the net turnover of Tarena in the fourth quarter of 2021 was RMB655 million, up 0.8% year-on-year, exceeding the estimate given in the previous quarter. In the whole year of 2021, the net revenue of Tarena was RMB2,387 million, up 25.7% year-on-year, a new high since its listing.

Q4 Operating Cash Flow Reaching RMB130 Million, Childhood & Adolescent Quality Education Business Revenue Increasing by 62.3% for the Whole Year

In the fourth quarter of 2021, Tarena's cash receipts reached a quarterly high during the year, which brought our operating cash flow in the fourth quarter to approximately RMB130 million. By the end of 2021, the balance of our cash reserve reached RMB430 million.

Looking back at the whole year of 2021, the two major business segments of Tarena, adult professional education and childhood & adolescent quality education, have achieved growth. Among them, the adult professional education business achieved annual revenue of RMB1,150 million, up 1.2% year-on-year; the annual revenue of the childhood & adolescent quality education business increased from RMB762 million in 2020 to RMB1,236 million, an increase of 62.3% year-on-year.

Both Annual Net Revenue of RMB2,387 Million and Gross Profit of RMB1,185 Million Setting New Records Since Listing

According to the financial data, the rapid growth of the revenue of Tarena's childhood & adolescent quality education business in 2021 has brought a year-on-year increase in gross profit of 285.3% for the business.

This helped the gross profit of Tarena reach RMB1,185 million in 2021, up 42.6% over 2020, stopping the continuation of the annual gross profit downward trend since 2019 through 2020, and creating a new record for gross profit since the listing, exceeding the historical record of RMB1,167 million in 2018.

At the same time, the net revenue of RMB2,387 million in the financial year 2021 also exceeded RMB2,085 million in 2018, creating another new record since our listing.

Annual Operating Loss Down 54.2% with Operating Margin Improving Significantly

In 2021, with growth in both revenue and gross profit, Tarena's continuous effective control of costs and expenses is also reaping results.

Tarena's operating loss in the fourth quarter fell to RMB60.36 million, down 29.1%, and our operating margin improved by 3.9 percentage points to -9.2% from -13.1% in the same period of 2020.

For 2021, Tarena's operating loss fell from RMB806 million in 2020 to RMB369 million, down 54.2% year-on-year. Operating margin improved significantly from -42.5% in 2020 to -15.5% in 2021.

Optimizing Operational Efficiency to Increase Production Capacity Per Single Learning Center: Adult Professional Education Reaching RMB11.28 Million, and Childhood & Adolescent Quality Education Up 55.4% Year-on-year

Through continuous optimization of operational efficiency and organizational structure, Tarena's production capacity per single learning center and per employee for both adult professional education and childhood & adolescent quality education in 2021 have been improved.

Among them, the annual revenue of the adult professional education per single learning center was about RMB11.28 million, up 16.1% year-on-year, and the annual revenue of the childhood & adolescent quality education per single learning center reached RMB5.22 million, up 55.4% year-on-year.

The increase in production capacity is not only single-center revenue, On the financial report telephone conference, Tarena's CEO SUN Ying said that the company's total number of headcounts fell by 1.7% from 10,181 at the end of the fourth quarter of 2020 to 10,009 at the end of the fourth quarter of 2021, while the productivity per capita increased by 37.1% from about RMB172 thousand in the same period of 2020 to about RMB236 thousand in 2021.

At the same time, post-tutoring students' satisfaction continues to rise. In the fourth quarter of 2021, the employment rate of trainees from Tarena's adult professional education six months upon graduation remained above 90%, and the proportion of student renewal and word-of-mouth promotional activities of our childhood & adolescent quality education continued to increase, reaching 70.8%. In 2021, the renewal rate of students who have enrolled for more than one year exceeded over 83.2%.

"Looking back on 2021, our abilities to develop and deliver products based on the Online-Merge-Offline (OMO) model, strong offline learning centers operation capabilities and customer acquisition capabilities have continued to enhance our core competitive advantages," said SUN Ying. "Meanwhile, our measures to optimize business structure and uplift operational efficiency enabled us to cope with the negative impacts arising from the sporadic occurrence of COVID-19 cases."

SUN Ying said that, looking ahead, Tarena will continue to uplift operational efficiency, improve profitability by increasing productivity per single learning center, rather than depending on newly opened centers as a driving force for revenue growth, and achieve the goal of "turn from net loss to net profit" as soon as possible.