RISE Education Cayman (REDU) Tops Q2 EPS by 14c

RISE Education Cayman (NASDAQ: REDU) reported Q2 EPS of ($0.13), $0.14 better than the analyst estimate of ($0.27).

Second Quarter of 2020 Financial and Operational Summary

• Total revenues were RMB165.0 million (US$23.4 million) in the second quarter of 2020, compared with RMB109.0 million for the preceding quarter and RMB367.1 million for the second quarter of 2019.
• Net loss attributable to RISE was RMB58.0 million (US$8.2 million) in the second quarter of 2020, compared with net loss of RMB103.8 million for the preceding quarter and net income of RMB21.2 million for the second quarter of 2019.
• Non-GAAP net loss attributable to RISE was RMB51.6 million (US$7.3 million) in the second quarter of 2020, compared with non-GAAP net loss of RMB99.5 million for the preceding quarter and non-GAAP net income of RMB54.8 million for the second quarter of 2019.
• Adjusted EBITDA[1] loss was RMB44.5 million (US$6.3 million) in the second quarter of 2020, compared with adjusted EBITDA loss of RMB108.0 million for the preceding quarter and adjusted EBITDA income of RMB89.0 million for the second quarter of 2019.
• Students in class[2] for Rise regular courses (including Rise Start and Rise On programs) were 50,572 as of June 30, 2020, a decrease of 2013 from 52,585 as of March 31, 2020 and an increase of 35 from 50,537 as of June 30, 2019.
• New students enrolled[3] for Rise regular courses in the second quarter of 2020 were 3,749, compared with 1,507 for the preceding quarter and 6,133 for the second quarter of 2019. New students enrolled for other Rise courses, which were taught online (including Rise Up, Can-Talk, other Rise online courses and courses provided by The Edge learning centers) were 1,185 in the second quarter of 2020, compared with 669 for the preceding quarter and 2,996 for the second quarter of 2019. The online small group class, which enrolled 31,882 students in the preceding quarter, was a temporary product offered to students only in March. In the second quarter, we offered an upgraded version, the dual-teacher online small group class.
• The total number of the Company's learning centers was 485, consisting of 88 self-owned (including 2 operated by The Edge) and 397 franchised learning center.

Ms. Lihong Wang, Chairwoman and Chief Executive Officer of RISE, commented, "After we weathered a challenging environment in the first quarter, we are very pleased to report significantly improved results today. Our business recovery in the second quarter was strong and encouraging. The migration of our offline courses online in the quarter was a huge success. Our ability to swiftly transition our regular courses online and our ability to manage the concurrent operations of online and offline models underpinned our performance, and it has further proved that our platform is robust, reliable, and stable. The high attendance rate of our online courses has demonstrated the strength of our brand and customer loyalty. Our new student enrollments have shown a strong V-shaped recovery in the second quarter, thanks to the newly-developed channels and new marketing tools we adopted during the quarter, as well as innovative incentive schemes we provided to our sales team and our customers. We have seen the strong upward enrollment momentum continuing into the third quarter. We are well on track to implement our OMO strategy and I firmly believe that we are well-positioned to capture the tremendous opportunities ahead and emerge as a leading OMO educator in China."

Ms. Jiandong Lu, Chief Financial Officer of RISE, added, "We experienced a very robust and encouraging recovery of our business in the second quarter, and we are very pleased to see that strong momentum carried into the beginning of the second half of 2020. The cost control initiatives we implemented during the first quarter continued to play out in the second quarter. We are in the process of optimizing class scheduling and class size to further increase classroom capacity and utilization in the near term. These positive developments, coupled with the planned opening of 3 new learning centers in the second half of this year, give us confidence in our ability to deliver further growth and create greater value for our shareholders in the months ahead."

For earnings history and earnings-related data on RISE Education Cayman (REDU) click here.

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