Q3 net revenues decreased by 3.2% year-over-yearQ3 New student enrollments increased by 44.7% year-over-year Q3 net income reached RMB168.1 million BEIJING, Nov. 23, 2022 /PRNewswire/ — Sunlands Technology Group (NYSE: STG) (“Sunlands” or the “Company”), a leader in China’s online post-secondary and professional education, today announced its unaudited financial results for the third quarter ended September 30, 2022. Third Quarter 2022 Financial and Operational Snapshots Net revenues were RMB576.2 million (US$81.0 million), representing a 3.2% decrease year-over-year.Gross billings (non-GAAP) were RMB365.5 million (US$51.4 million), representing a 21.0% decrease year-over-year.Gross profit was RMB491.3 million (US$69.1 million), representing a 4.0% decrease year-over-year.Net income was RMB168.1 million (US$23.6 million), representing an 81.1% increase year-over-year.Net income margin, defined as net income as a percentage of net revenues, increased to 29.2% from 15.6% in the third quarter of 2021.New student enrollments were 134,987, representing a 44.7% increase year-over-year.As of September 30, 2022, the Company’s deferred revenue balance was RMB1,798.6 million (US$252.8 million). New student enrollments for a given period refers to the total number of orders placed by students that newly enroll in at least one course during that period, including those students that enroll and then terminate their enrollment with us, excluding orders of our low-price courses. (In June 2019, we introduced low-price courses, including “mini courses” and “RMB1 courses,” to strengthen our competitiveness and improve customer experience. We offer such low-price courses mainly in the formats of recorded videos or short live streaming.) “Despite the macroeconomic uncertainty and shifting industry landscape, we delivered encouraging results in the third quarter with sequential topline growth, further bottom-line improvement and increased new student enrollments. These achievements testified to the effectiveness of our strategic initiatives to prioritize profitability and healthy growth,” said Mr. Tongbo Liu, Chief Executive Officer of Sunlands. “With a leaner and more efficient organization, we further refined our product strategy in the third quarter. We focused more on margin accretive programs and allocated our capital and human resources accordingly to expand our course offerings in these programs, leading to an optimized product lineup and more diversified course content. Additionally, as we continued to hone our services to increase our user stickiness and cross-selling opportunities, we transformed our student acquisition methods, focusing more on users’ lifetime value instead of investing heavily in marketing activities. Thanks to these measures, our new student enrollments for the quarter rose by 44.7% year-over-year and 11.8% quarter-over-quarter, despite a 23.9% year-over-year and 8.2% quarter-over-quarter decline in sales and marketing expenses. Looking ahead, we are confident that our proven business strategies and continued commitment to delivering premium and tailored courses to more students will help us navigate current challenges and achieve meaningful growth,” concluded Mr. Liu. Ms. Selena Lu Lv, Chief Financial Officer of Sunlands, commented, “We are pleased with our third quarter results amid an uncertain macro environment. Our net revenues reached RMB576.2 million during the quarter, exceeding the high end of our guidance range by 6.7% despite the slight 3.2% year-over-year decrease. Benefitting from our dedicated efforts and measured steps in cost control and operational efficiency enhancement, our third quarter operating expenses declined by 24.5% year-over-year and 7.4% quarter-over-quarter. As a result, we maintained our profitability with a net income of RMB168.1 million, up 81.1% year-over-year and 46.7% quarter-over-quarter. Our net income margin for the quarter remained solid at 29.2%, expanding 13.6 percentage points year-over-year and 8.6 percentage points quarter-over-quarter. Moving forward, we will continue to prudently manage costs and expenses, enrich our course offerings and further optimize our operations, aiming for continued success and additional shareholder value.” Financial Results for the third quarter of 2022 Net Revenues In the third quarter of 2022, net revenues decreased by 3.2% to RMB576.2 million (US$81.0 million) from RMB595.1 million in the third quarter of 2021. The decrease was mainly driven by the decline in gross billings. Cost of Revenues Cost of revenues increased by 2.2% to RMB84.9 million (US$11.9 million) in the third quarter of 2022 from RMB83.1 million in the third quarter of 2021. The increase was primarily due to increased service fees paid to educational institutions and increased cooperation costs. Gross Profit Gross profit decreased by 4.0% to RMB491.3 million (US$69.1 million) in the third quarter of 2022 from RMB512.0 million in the third quarter of 2021. Operating Expenses In the third quarter of 2022, operating expenses were RMB325.0 million (US$45.7 million), representing a 24.5% decrease from RMB430.6 million in the third quarter of 2021. Sales and marketing expenses decreased by 23.9% to RMB269.1 million (US$37.8 million) in the third quarter of 2022 from RMB353.5 million in the third quarter of 2021. The decrease was mainly due to: (i) lower spending on branding and marketing activities; and (ii) declined compensation expenses related to our sales and marketing personnel. General and administrative expenses decreased by 29.6% to RMB44.4 million (US$6.2 million) in the third quarter of 2022 from RMB63.2 million in the third quarter of 2021. The decrease was mainly due to a decrease in rental expenses. Product development expenses decreased by 17.5% to RMB11.5 million (US$1.6 million) in the third quarter of 2022 from RMB14.0 million in the third quarter of 2021. The decrease was mainly due to a decrease in compensation expenses to our product development personnel. Other Income Other income decreased by 58.6% to RMB5.3 million (US$0.7 million) in the third quarter of 2022 from RMB12.9 million in the third quarter of 2021. Net Income As a result of the foregoing, net income for the third quarter of 2022 was RMB168.1 million (US$23.6 million), compared with RMB92.8 million in the third quarter of 2021. Basic and Diluted Net Income Per Share Basic and diluted net income per share was RMB24.08 (US$3.38) in the third quarter of 2022. Cash and Cash Equivalents and Short-term Investments As of September 30, 2022, the Company had RMB678.8 million (US$95.4 million) of cash and cash equivalents and RMB170.1 million (US$23.9 million) of short-term investments, compared with RMB626.7 million of cash and cash equivalents and RMB184.2 million of short-term investments as of December 31, 2021. Deferred Revenue As of September 30, 2022, the Company had a deferred revenue balance of RMB1,798.6 million (US$252.8 million), compared with RMB2,348.2 million as of December 31, 2021. Capital Expenditures Capital expenditures were incurred primarily in connection with information technology (“IT”) infrastructure equipment and leasehold improvements necessary to support the Company’s operations. Capital expenditures were RMB1.3 million (US$0.2 million) in the third quarter of 2022, compared with RMB1.8 million in the third quarter of 2021. Financial Results for the First Nine Months of 2022 Net Revenues In the first nine months of 2022, net revenues decreased by 9.1% to RMB1,744.5 million (US$245.2 million) from RMB1,918.9 million in the first nine months of 2021. Cost of Revenues Cost of revenues decreased by 4.9% to RMB272.9 million (US$38.4 million) in the first nine months of 2022 from RMB286.8 million in the first nine months of 2021. Gross Profit Gross profit decreased by 9.8% to RMB1,471.7 million (US$206.9 million) from RMB1,632.1 million in the first nine months of 2021. Operating Expenses In the first nine months of 2022, operating expenses were RMB1,022.0 million (US$143.7 million), representing a 36.8% decrease from RMB1,616.8 million in the first nine months of 2021. Sales and marketing expenses decreased by 39.2% to RMB857.0 million (US$120.5 million) in the first nine months of 2022 from RMB1,409.1 million in the first nine months of 2021. General and administrative expenses decreased by 17.5% to RMB129.5 million (US$18.2 million) in the first nine months of 2022 from RMB157.1 million in the first nine months of 2021. Product development expenses decreased by 30.0% to RMB35.5 million (US$5.0 million) in the first nine months of 2022 from RMB50.7 million in the first nine months of 2021. Other Income Other income for the first nine months of 2022 was RMB19.7 million (US$2.8 million), compared with RMB42.3 million in the first nine months of 2021. The decrease was primarily because value-added tax exemption offered by the relevant authorities as part of the national COVID-19 relief effort came to an end in April 2021. Net Income Net income for the first nine months of 2022 was RMB462.1 million (US$65.0 million), compared with RMB61.6 million in the first nine months of 2021. Basic and Diluted Net Income Per Share Basic and diluted net income per share was RMB68.07 (US$9.57) in the first nine months of 2022, compared with RMB9.69 in the first nine months of 2021. Capital Expenditures Capital expenditures were incurred primarily in connection with IT infrastructure equipment and leasehold improvements necessary to support the Company’s operations. Capital expenditures were RMB2.5 million (US$0.4 million) in the first nine months of 2022, compared with RMB11.2 million in the first nine months of 2021. Outlook For the fourth quarter of 2022, Sunlands currently expects net revenues to be between RMB520 million to RMB540 million, which would represent a decrease of 8.3% to 11.7% year-over-year. The above outlook is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to substantial uncertainty. Exchange Rate The Company’s business is primarily conducted in China and all revenues are denominated in Renminbi (“RMB”). This announcement contains currency conversions of RMB amounts into U.S. dollars (“US$”) solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.1135 to US$1.00, the effective noon buying rate for September 30, 2022 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on September 30, 2022, or at any other rate. Conference Call and Webcast Sunlands’ management team will host a conference call at 6:30 AM U.S. Eastern Time, (7:30 PM Beijing/Hong Kong time) on November 23, 2022, following the quarterly results announcement. The dial-in details for the live conference call are: International: +1-412-902-4272 US toll free: +1-888-346-8982 Mainland China toll free: 400-120-1203 Hong Kong toll free: 800-905-945 Hong Kong: +852-3018-4992 Please dial in 10 minutes before the call is scheduled to begin. When prompted, ask to be connected to the call for “Sunlands Technology Group.” Participants will be required to state their name and company upon entering the call. A live webcast and archive of the conference call will be available on the Investor Relations section of Sunlands’ website at http://www.sunlands.investorroom.com/. A replay of the conference call will be available 1 hour after the end of the conference call until November 30, 2022, by dialing the following telephone numbers: International: +1-412-317-0088 US toll free: +1-877-344-7529 Replay access code: 3978249 About Sunlands Sunlands Technology Group (NYSE: STG) (“Sunlands” or the “Company”), formerly known as Sunlands Online Education Group, is the leader in China’s online post-secondary and professional education. With a one to many, live streaming platform, Sunlands offers various degree and diploma-oriented post-secondary courses as well as online professional courses and educational content, to help students prepare for professional certification exams and attain professional skills. Students can access its services either through PC or mobile applications. The Company’s online platform cultivates a personalized, interactive learning environment by featuring a virtual learning community and a vast library of educational content offerings that adapt to the learning habits of its students. Sunlands offers a unique approach to education research and development that organizes subject content into Learning Outcome Trees, the Company’s proprietary knowledge management system. Sunlands has a deep understanding of the educational needs of its prospective students and offers solutions that help them achieve their goals. About Non-GAAP Financial Measures We use gross billings, EBITDA, non-GAAP Operating cost and expense, non-GAAP loss/income from operations and Non-GAAP net loss/income per share, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. We define gross billings for a specific period as the total amount of cash received for the sale of course packages, net of the total amount of refunds paid in such period. Our management uses gross billings as a performance measurement because we generally bill our students for the entire course tuition at the time of sale of our course packages and recognize revenue proportionally over a period. EBITDA is defined as net loss/income excluding depreciation and amortization, interest expense, interest income, and income tax expenses/benefit. We believe that gross billings and EBITDA provide valuable insight into the sales of our course packages and the performance of our business. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, their most directly comparable financial measure prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP measure has been provided in the tables included below. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP financial measures. As gross billings, EBITDA, operating cost and expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, sales and marketing expenses excluding share-based compensation expenses, product development expenses excluding share-based compensation expenses, non-GAAP net loss/income exclude share-based compensation expenses, and basic and diluted net loss/income per share excluding share-based compensation expenses have material limitations as an analytical metric 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. In light of the foregoing limitations, you should not consider gross billings and EBITDA as a substitute for, or superior to, their respective most directly comparable financial measures prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. Safe Harbor Statement This press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and 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,” “confident” and similar statements. Sunlands 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 report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Sunlands’ beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: Sunlands’ goals and strategies; its expectations regarding demand for and market acceptance of its brand and services; its ability to retain and increase student enrollments; its ability to offer new courses and educational content; its ability to improve teaching quality and students’ learning results; its ability to improve sales and marketing efficiency and effectiveness; its ability to engage, train and retain new faculty members; its future business development, results of operations and financial condition; its ability to maintain and improve technology infrastructure necessary to operate its business; competition in the online education industry in China; relevant government policies and regulations relating to Sunlands’ corporate structure, business and industry; and general economic and business condition in China Further information regarding these and other risks, uncertainties or factors is included in the Sunlands’ filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Sunlands does not undertake any obligation to update such information, except as required under applicable law. For investor and media enquiries, please contact: Sunlands Technology GroupInvestor RelationsEmail: [email protected] The Piacente Group, Inc. Brandi PiacenteTel: +1-212-481-2050Email: [email protected] Yang SongTel: +86-10-6508-0677Email: [email protected] UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except for share and per share data, or otherwise noted) As of December 31, As of September 30, 2021 2022 RMB RMB US$ ASSETS Current assets Cash and cash equivalents 626,715 678,763 95,419 Restricted cash 50,008 – – Short-term investments 184,159 170,088 23,911 Prepaid expenses and other current assets 176,349 114,399 16,082 Deferred costs, current 89,353 52,719 7,411 Total current assets 1,126,584 1,015,969 142,823 Non-current assets Property and equipment, net 857,648 831,982 116,958 Intangible assets, net 2,761 1,834 258 Right-of-use assets 362,335 344,215 48,389 Deferred costs, non-current 109,020 83,811 11,782 Long-term investments 54,844 62,730 8,818 Deferred tax assets 39,265 30,354 4,267 Other non-current assets 40,163 43,814 6,159 Total non-current assets 1,466,036 1,398,740 196,631 TOTAL ASSETS 2,592,620 2,414,709 339,454 LIABILITIES AND SHAREHOLDERS’ DEFICIT LIABILITIES Current liabilities Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to Sunlands Technology Group of RMB197,467 and RMB168,160 as of December 31, 2021 and September 30, 2022, respectively) 586,043 530,783 74,618 Deferred revenue, current (including deferred revenue, current of the consolidated VIEs without recourse to Sunlands Technology Group of RMB295,958 and RMB368,117 as of December 31, 2021 and September 30, 2022, respectively) 1,266,948 1,052,068 147,897 Lease liabilities, current portion (including lease liabilities, current portion of the consolidated VIEs without recourse to Sunlands Technology Group of RMB8,366 and RMB22,330 as of December 31, 2021 and September 30, 2022, respectively) 14,310 28,783 4,046 Long-term debt, current portion (including long-term debt, current portion of the consolidated VIEs without recourse to Sunlands Technology Group of nil and nil December as of December 31, 2021 and September 30, 2022, respectively) 38,654 38,654 5,434 Total current liabilities 1,905,955 1,650,288 231,995 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-continued (Amounts in thousands, except for share and per share data, or otherwise noted) As of December 31, As of September 30, 2021 2022 RMB RMB US$ Non-current liabilities Deferred revenue, non-current (including deferred revenue, non-current of the consolidated VIEs without recourse to Sunlands Technology Group of RMB257,071 and RMB256,755 as of December 31, 2021 and September 30, 2022, respectively) 1,081,231 746,490 104,940 Lease liabilities, non-current portion (including lease liabilities, non-current portion of the consolidated VIEs without recourse to Sunlands Technology Group of RMB318,598 and RMB311,665 as of December 31, 2021 and September 30, 2022, respectively) 404,133 392,033 55,111 Deferred tax liabilities (including deferred tax liabilities of the consolidated VIEs without recourse to Sunlands Technology Group of RMB2,312 and RMB2,111 as of December 31, 2021 and September 30, 2022, respectively) 21,782 8,090 1,137 Other non-current liabilities (including other non-current liabilities of the consolidated VIEs without recourse to Sunlands Technology Group of RMB963 and RMB963 as of December 31, 2021 and September 30, 2022, respectively) 11,698 8,152 1,146 Long-term debt, non-current portion (including long-term debt, non-current portion of the consolidated VIEs without recourse to Sunlands Technology Group of nil and nil as of December 31, 2021 and September 30, 2022, respectively) 181,973 152,982 21,506 Total non-current liabilities 1,700,817 1,307,747 183,840 TOTAL LIABILITIES 3,606,772 2,958,035 415,835 SHAREHOLDERS’ DEFICIT Class A ordinary shares (par value of US$0.00005, 796,062,195 shares authorized; 2,085,939 and 2,460,939 shares issued as of December 31, 2021 and September 30, 2022, respectively; 1,839,553 and 2,123,691 shares outstanding as of December 31, 2021 and September 30, 2022, respectively) 1 1 – Class B ordinary shares (par value of US$0.00005, 826,389 shares authorized; 826,389 and 826,389 shares issued and outstanding as of December 31, 2021 and September 30, 2022, respectively) – – – Class C ordinary shares (par value of US$0.00005, 203,111,416 shares authorized; 4,002,930 and 4,002,930 shares issued and outstanding as of December 31, 2021 and September 30, 2022, respectively) 1 1 – Treasury stock – – – Accumulated deficit (3,456,073) (2,992,738) (420,712) Additional paid-in capital 2,364,313 2,311,240 324,909 Accumulated other comprehensive income 82,532 143,823 20,218 Total Sunlands Technology Group shareholders’ deficit (1,009,226) (537,673) (75,585) Non-controlling interest (4,926) (5,653) (796) TOTAL SHAREHOLDERS’ DEFICIT (1,014,152) (543,326) (76,381) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT 2,592,620 2,414,709 339,454 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) For the Three Months Ended September 30, 2021 2022 RMB RMB US$ Net revenues 595,128 576,208 81,002 Cost of revenues (83,103) (84,902) (11,935) Gross profit 512,025 491,306 69,067 Operating expenses Sales and marketing expenses (353,508) (269,056) (37,823) Product development expenses (13,980) (11,532) (1,621) General and administrative expenses (63,156) (44,443) (6,248) Total operating expenses (430,644) (325,031) (45,692) Income from operations 81,381 166,275 23,375 Interest income 3,144 2,200 309 Interest expense (3,042) (2,487) (350) Other income, net 12,853 5,325 749 Gain on disposal of subsidiaries – 1,709 240 Income before income tax expenses and loss from equity method investments 94,336 173,022 24,323 Income tax expenses (1,110) (4,225) (594) Loss from equity method investments (431) (713) (100) Net income 92,795 168,084 23,629 Less: Net loss attributable to non-controlling interest (2,506) (1) – Net income attributable to Sunlands Technology Group 95,301 168,085 23,629 Net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 14.16 24.08 3.38 Weighted average shares used in calculating net income per ordinary share: Basic and diluted 6,729,197 6,981,447 6,981,447 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) For the Three Months Ended September 30, 2021 2022 RMB RMB US$ Net income 92,795 168,084 23,629 Other comprehensive (loss)/income, net of tax effect of nil: Change in cumulative foreign currency translation adjustments (1,105) 32,103 4,513 Total comprehensive income 91,690 200,187 28,142 Less: comprehensive loss attributable to non-controlling interest (2,506) (1) – Comprehensive income attributable to Sunlands Technology Group 94,196 200,188 28,142 SUNLANDS TECHNOLOGY GROUP RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) For the Three Months Ended September 30, 2021 2022 RMB RMB Net revenues 595,128 576,208 Less: other revenues (26,497) (28,525) Add: tax and surcharges 41,674 11,394 Add: ending deferred revenue 2,540,886 1,798,558 Add: ending refund liability 222,266 204,961 Less: beginning deferred revenue (2,690,221) (1,998,062) Less: beginning refund liability (220,745) (199,028) Gross billings (non-GAAP) 462,491 365,506 Net income 92,795 168,084 Add: income tax expenses 1,110 4,225 depreciation and amortization 9,561 8,939 interest expense 3,042 2,487 Less: interest income (3,144) (2,200) EBITDA (non-GAAP) 103,364 181,535 SUNLANDS TECHNOLOGY GROUP RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) For the Three Months Ended September 30, 2021 2022 RMB RMB Cost of revenues (83,103) (84,902) Less: Share-based compensation expenses in cost of revenues (39) – Non-GAAP cost of revenues (83,064) (84,902) Sales and marketing expenses (353,508) (269,056) Less: Share-based compensation expenses in sales and marketing expenses 13 – Non-GAAP sales and marketing expenses (353,521) (269,056) General and administrative expenses (63,156) (44,443) Less: Share-based compensation expenses in general and administrative expenses (67) – Non-GAAP general and administrative expenses (63,089) (44,443) Operating costs and expense (513,747) (409,993) Less: Share-based compensation expenses (93) – Non-GAAP operating costs and expense (513,654) (409,993) Income from operations 81,381 166,275 Less: Share-based compensation expenses (93) – Non-GAAP income from operations 81,474 166,275 Net income attributable to Sunlands Technology Group 95,301 168,085 Less: Share-based compensation expenses (93) – Non-GAAP net income attributable to Sunlands Technology Group 95,394 168,085 Net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 14.16 24.08 Non-GAAP net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 14.18 24.08 Weighted average shares used in calculating net income per ordinary share: Basic and diluted 6,729,197 6,981,447 Weighted average shares used in calculating Non-GAAP net income per ordinary share: Basic and diluted 6,729,197 6,981,447 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) For the Nine Months Ended September 30, 2021 2022 RMB RMB US$ Net revenues 1,918,934 1,744,513 245,240 Cost of revenues (286,811) (272,859) (38,358) Gross profit 1,632,123 1,471,654 206,882 Operating expenses Sales and marketing expenses (1,409,068) (857,031) (120,480) Product development expenses (50,669) (35,465) (4,986) General and administrative expenses (157,103) (129,538) (18,210) Total operating expenses (1,616,840) (1,022,034) (143,676) Income from operations 15,283 449,620 63,206 Interest income 13,157 9,208 1,294 Interest expense (8,029) (7,764) (1,091) Other income 42,301 19,667 2,765 Impairment loss on long-term investments – (500) (70) Gain on disposal of subsidiaries – 1,709 240 Income before income tax expenses and loss from equity method investments 62,712 471,940 66,344 Income tax expenses (963) (8,568) (1,204) Loss from equity method investments (155) (1,317) (185) Net income 61,594 462,055 64,955 Less: Net loss attributable to non-controlling interest (3,586) (1,280) (180) Net income attributable to Sunlands Technology Group 65,180 463,335 65,135 Net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 9.69 68.07 9.57 Weighted average shares used in calculating net income per ordinary share: Basic and diluted 6,729,197 6,806,672 6,806,672 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) For the Nine Months Ended September 30, 2021 2022 RMB RMB US$ Net income 61,594 462,055 64,955 Other comprehensive (loss)/income, net of tax effect of nil: Change in cumulative foreign currency translation adjustments (7,841) 61,291 8,616 Total comprehensive income 53,753 523,346 73,571 Less: comprehensive loss attributable to non-controlling interest (3,586) (1,280) (180) Comprehensive income attributable to Sunlands Technology Group 57,339 524,626 73,751 SUNLANDS TECHNOLOGY GROUP RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) For the Nine Months Ended September 30, 2021 2022 RMB RMB Net revenues 1,918,934 1,744,513 Less: other revenues (58,208) (86,520) Add: tax and surcharges 119,873 55,815 Add: ending deferred revenue 2,540,886 1,798,558 Add: ending refund liability 222,266 204,961 Less: beginning deferred revenue (3,024,443) (2,348,179) Less: beginning refund liability (232,859) (243,236) Gross billings (non-GAAP) 1,486,449 1,125,912 Net income 61,594 462,055 Add: income tax expenses 963 8,568 depreciation and amortization 28,266 28,100 interest expense 8,029 7,764 Less: interest income (13,157) (9,208) EBITDA (non-GAAP) 85,695 497,279 SUNLANDS TECHNOLOGY GROUP RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Amounts in thousands) For the Nine Months Ended September 30, 2021 2022 RMB RMB Cost of revenues (286,811) (272,859) Less: Share-based compensation expenses in cost of revenues (45) (33) Non-GAAP cost of revenues (286,766) (272,826) Sales and marketing expenses (1,409,068) (857,031) Less: Share-based compensation expenses in sales and marketing expenses 72 (4,166) Non-GAAP sales and marketing expenses (1,409,140) (852,865) General and administrative expenses (157,103) (129,538) Less: Share-based compensation expenses in general and administrative expenses (324) (2,982) Non-GAAP general and administrative expenses (156,779) (126,556) Operating costs and expense (1,903,651) (1,294,893) Less: Share-based compensation expenses (297) (7,181) Non-GAAP operating costs and expense (1,903,354) (1,287,712) Income from operations 15,283 449,620 Less: Share-based compensation expenses (297) (7,181) Non-GAAP income from operations 15,580 456,801 Net income attributable to Sunlands Technology Group 65,180 (463,335) Less: Share-based compensation expenses (297) (7,181) Non-GAAP net income attributable to Sunlands Technology Group 65,477 (470,516) Net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 9.69 68.07 Non-GAAP net income per share attributable to ordinary shareholders of Sunlands Technology Group: Basic and diluted 9.73 69.13 Weighted average shares used in calculating net income per ordinary share: Basic and diluted 6,729,197 6,806,672 Weighted average shares used in calculating Non-GAAP net income per ordinary share: Basic and diluted 6,729,197 6,806,672 View original content:https://www.prnewswire.com/news-releases/sunlands-technology-group-announces-unaudited-third-quarter-2022-financial-results-301685944.html SOURCE Sunlands Technology Group Source link The content is by PR Newswire. 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