FAST NEWS: 17 Education revenue plunges on project delivery delays
The latest: Online tutoring services provider 17 Education & Technology Group Inc. (YQ.US) reported Wednesday that its first-quarter revenue plunged by 96% to just 9.27 million yuan ($1.3 million), while its net loss more than tripled to 92.5 million yuan.
Looking up: The company’s first-quarter cost of revenue was 7.0 million, a 92.4% decrease from 91.8 million in the same period last year, which was largely in line with the revenue decrease.
Take Note: Covid disruptions in China at the end of last year led to delays in the bidding and delivery processes for some of the company’s major projects, affecting its revenue recognition in the first quarter.
Digging Deeper: Founded in 2011 and listed on the Nasdaq in 2020, 17 Education operates an advanced K-12 smart education platform. Its revenue plunged 75.7% to 530 million yuan last year following a crackdown on extracurricular tutoring for K-12 students by China’s Ministry of Education that began in 2021. Following the crackdown, the company has shifted to a new business model that focuses on providing school districts and educators with digital products and services to help with lesson planning and delivery, homework-related activities and academic assessments.
Market Reaction: 17 Education’s shares rose 1.9% in New York during the regular trading day on Wednesday, but fell 4.7% to $1.01 in after-hours trading after the quarterly results were announced. The stock now trades near the lower end of its 52-week range.
Translation by Jony Ho
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