After being listed and traded on the Nasdaq Global Select Market, Meten EdtechX Education Group Ltd. (METX) recently releases its unaudited financial results for the fourth quarter of 2019 and the first quarter of 2020. The revenue in Q1 2020 was 181.6 million yuan, a decrease of 42.3% year-on-year. While the net loss in Q1 2020 was 101.7 million yuan, an increase of 141.0% year-on-year. Besides, net loss in Q4 2019 showed an increase of 521.1%.

The financial report indicates that the revenue in Q4 2019 and the total revenue in FY2019 did not fluctuate significantly. Specifically, the former was down 1.9% year-on-year to 352.9 million yuan and the latter was up 1.7% year-on-year to 1,447.9 million yuan. Additionally, the gross profit in Q4 2019 was 156.4 million yuan, a decrease of 17.5% year-on-year, whereas the gross profit in FY2019 decreased from 796.2 million yuan in FY2018 to 692.5 million yuan. The decline was due to the one-off investment undertaken to upgrade the company’s curriculum, integrate the business of ABC Junior, and accept a share of WEBi’s student contracts after its wind-down.

Besides, selling and marketing expenses in Q1 2020 decreased by 36.8% to 68.6 million yuan, compared with 108.6 million yuan in Q1 2019, mainly due to less marketing activities as learning centers closed during the COVID-19 pandemic, which also impacted the total revenues for Q1 2020, pointed out by the financial report. Meanwhile, the 48.6% increase in online revenues only partially offset the impact of the learning center closures. 

Meten EdtechX expects that the company will see a more rapid revenue growth when the 132 learning centers fully resume in July 2020. Under the COVID-19 crisis, many schools are transitioning to online learning, Meten also believes that the company will benefit from this trend.