Tarena reports net revenues of $56.1M in Q1 2023

Tarena International, Inc. (NASDAQ: TEDU), a Beijing-based provider of IT professional education and IT-focused supplementary STEAM education services in China, announced Monday its unaudited financial results for the first quarter ended March 31, 2023.The company’s total net revenues decreased by 38.2% to RMB385.1 million (US$56.1 million) in the first quarter of 2023 from RMB623.5 million in the same period of 2022. The decrease in revenues was primarily due to a reduction in student enrollment from the second half of the fourth quarter of last year and the earlier part of this quarter, particularly for IT professional education. Additionally, the Company suspended courses and services for almost the entire month of January, resulting in a dent in revenues.The cost of revenues decreased by 30.4% to RMB184.1 million (US$26.8 million) in the first quarter of 2023, from RMB264.6 million in the same period of 2022. The decrease was mainly attributable to a reduction in headcount and the resulting decrease in personnel and related welfare costs. Rental costs also decreased as the number of teaching centers decreased compared to the same period of 2022.Gross profit decreased by 44.0% YoY to RMB201.0 million (US$29.3 million). Gross margin narrowed to 52.2% in the first quarter of 2023, compared to 57.6% in the same period of 2022, as revenues decline in the quarter is greater than the reduction in the cost of revenues."The overall financial performance for the first quarter of 2023 indicates that the execution of our prudent financial and operational strategy has paid off amid the uncertain environment, with net operating cash outflow narrowing year-over-year. While we temporarily closed centers early in the quarter, leading to a year-over-year reduction in cash receipts, we strictly controlled our cash expenditures. By implementing effective cost reductions and efficiency enhancements, aided by increasing enrollments in our STEAM education services since February, as well as the general economic recovery following the Chinese New Year, we strove to minimize the impact of the macro headwinds," remarked Ying Sun, Tarena's Chief Executive Officer.Sun continued, "As we enter the second quarter, our businesses have gradually recovered and our STEAM education services are expected to achieve a year-on-year increase. Additionally, to further focus on our core competence in IT-focused supplementary STEAM education services and IT professional education services for the To-C market, we would carve out the college-collaboration related business, which is expected to close soon.""Going forward, we will continue to optimize our operational efficiency. As the business environment stabilizes, we are confident that we are well positioned to capitalize on a large and ever-evolving IT education market in China and continue to deliver enhanced shareholder value," concluded Sun.