After the US stock market on March 12, Liuli said that he announced the fourth quarter and full year financial results for 2019. According to the financial report, Liuli said that this quarter's revenue growth rate fell to the lowest point in history, and the net loss amount also expanded further year-on-year. Due to the dismal performance of the financial report and the impact of the crash of the US stock market, after the release of the financial report, as of March 12, Eastern Time closed, Liuli said that the stock price reported $ 4.48, a decrease of 8.01%, and a 64.16% decline from the issue price of $ 12.5.
On the education track, Liuli said that the pioneering "AI + education" business model has brought a lot of attention to it. After gaining a firm foothold in the adult education market and accumulating a certain number of users, Liuli said that he has also started his journey to the United States. Just based on its performance after listing, the trend of Liuli's share price disappointed the outside world, perhaps because of its unsatisfactory financial performance.
Before the financial report was issued, the country faced the test of new coronary pneumonia, and all the primary and secondary schools in the country were delayed due to the epidemic situation. This has also caused many online education stocks to usher in a round of high growth. Returning to the financial results for this quarter, why does Fluent say that this quarter's revenue growth showed a Waterloo-like decline?
Revenue increased by 3.1% year-on-year, net loss increased by 25.83% year-on-year
According to the financial report, Liuli said that the fourth quarter net revenue was 231.4 million yuan, an increase of 3.1% year-on-year; the net loss was 205.6 million yuan (about 29.5 million US dollars), compared with 163.4 million yuan in the same period last year. , A year-on-year increase of 25.83%. For the full year of 2019, Fluent said it recorded a net revenue of 1.032 billion yuan, an increase of 60.6% year-on-year, and a full-year net loss of 574.8 million yuan, an increase of 17.76% year-on-year.
As of the time of the article's publication after the financial report was released, Liuli said that after-hours stock price was $ 4.50, after-hours it rose slightly by 0.45%, and the market value was $ 220 million.
(Picture Snowball)
Regarding paid user data, in the fourth quarter, Liuli said that the financial report disclosed that about 700,000 paying users had purchased the company's courses and services, which was about 30% less than the same period in 2018. For the whole year of 2019, paying users only increased by 20% year-on-year. The growth of paying users stagnated this quarter, which may also have become an important reason for fluctuating revenue growth.
In terms of other core indicators, the financial report shows that in 2019, Fluent said revenue was 1.0232 billion yuan, compared with 6.372 yuan last year, a year-on-year increase of 60.6%. The net loss for the whole year was 574.8 million yuan (82.6 million US dollars), compared with 488.1 million yuan in 2018. For the whole year of 2019, the gross profit was 749.7 million yuan, and the gross profit margin was 73.3%. For the whole year of 2018, it was 72.6%.
As of December 31, 2019, the company's cash, cash equivalents, restricted cash and short-term investments totaled 552.6 million yuan, a year-on-year decrease of 26.1% from 747.8 million yuan in the same period last year. As of December 31, 2019, the company's deferred revenue (current and non-current) was 690.6 million yuan, an increase of 44.6% from the 477.6 million yuan in the same period last year.
Judging from the financial report of Liuliu, its performance in terms of revenue and net profit is "poor". The revenue growth rate is weak, and the net loss limit is further expanded. This shows that Liuli said that the current business model is difficult to continue the so-called high Growth, which may also become an important point that it is not valued by investors. Returning to this financial report's performance itself, what data performance has dragged down Liuli's revenue growth?
Paid users have shrunk by about 30% over the same period. Fluently said that the growth of paying players has stalled
The increase in the number of paying users has always been an important data that investors value the growth potential of Fluent. However, not only did the users of Fluent say not increase during the same period, but they contracted by about 30%. The implication is that Liuli said that not only did users not increase in the fourth quarter, but also shrinking, Liuli said that it could not retain paying users.
According to previous data, Liuli said the growth in paid user data revealed a crisis. In the third quarter of 2019, Liuli said that the growth of independent paying users compared to the second quarter and the same period of the previous year had stalled, and both were 900,000 after deduplication. In the second quarter of 2019, Liuli said that there were 900,000 paying users, compared with 700,000 in the same period last year. In the first quarter of 2019, approximately 1.1 million paying users purchased company courses and services.
In terms of revenue sources, paid user revenue is also an important data source for fluency. As the growth of paying users has stagnated or even shrunk, this has caused Liuli to report a year-on-year decline in revenue growth this quarter. Why does fluent say that paying users are stagnant?
On the one hand, it is said that adult users in the paid user cluster have lower payment needs than the K12 group. According to the financial report data, Liuli said that among the current active users, adult users account for 60%, but there are many uncertainties in their payment. The field of K12 that is just needed for education is huge. K12's good money is the truth of the education industry. Behind K12 is a group of Chinese-style anxious parents. Under anxiety, they are willing to pay and take the most money from their psychological accounts to change their minds. But the main group that Liuli said is obviously not in K12, but in the adult market, which means that it is difficult to retain more paying users in the adult market.
Although Liuliu also began to transform its layout into the children ’s market, hoping to increase the paid conversion rate of users who just need it, but during the quarter Liuliu did not disclose specific data on children ’s business, which also shows that Liuliu has not yet received a return from this business In terms of revenue, it still depends on the revenue growth of the adult user group.
On the other hand, the external competition pressure is great. Fluent said that it did not establish a strong competitive advantage. On the track of education, Liuli said that in the face of competition from strong rivals such as the good future and New Oriental, its competitive advantage is not enough to highlight. Although it initially attracted a lot of attention with the "AI + education" label, it did not build its moat. Other platforms also rely on AI technology, and AI education has gradually become popular. In the absence of product and technical advantages, Liuli said that it is difficult to snatch more users from competitors.
Sales and marketing expenses increased by more than 40% year-on-year
In the current quarter, Liuli said that the net loss amount should not be underestimated. The year-on-year loss also expanded further, up 42.2 million yuan from the same period last year. Since going public, Liuli said that it has been in a loss stage, and the loss for the whole year is much more loss year by year. Revenue growth is not strong, coupled with rising net losses, Liuli said that the high-growth myth propaganda seems to be faced by its financial performance.
Why does the loss increase? This is mainly because the operating expenses of Liuli said that the year-on-year growth and expansion, and high sales expenses are also one of the reasons for squeezing the company's profits. The company's losses have increased, in other words, fluently said that the traffic dividend is gradually disappearing, and the company has not found a viable profit path. The rising cost of channel promotion has led to an increase in the cost of customer acquisition. Fluent said he was in trouble.
In the fourth quarter, Liuli said that sales and marketing expenses were 266.9 million yuan, an increase of 10.4% year-on-year. For the whole year of 2019, sales and marketing expenses were 969.4 million yuan, a year-on-year increase of 37.4%, and the percentage of net income fell from 110.7% to 94.7%. Although Fluent said it also consciously spent on controlling this cost, but from these two data, Liuli said that controlling the cost still had little effect.
For online education platforms, in order to expand the growth of the number of users, especially to convert these users into paying users, it really costs a lot of sales and marketing costs, and this has become a major part of these online education platforms. Pain points. After all, they also very much hope the value of the money spent, and can also retain these paying users, but after all, the reality is far from ideal.
For fluency in open source, if you can't control the cost very carefully, it is likely to leave some hidden dangers for future growth. Under the premise that revenue growth rate is greatly reduced, cost expenditure is expanding. Liuli said that the loss crisis has become more prominent. In addition, the problem of the difficulty of obtaining customer costs has not been solved, and it is difficult to realize the profitability of Liuli.
Under the epidemic, revenue fell further and fluently said that it was more and more difficult to reverse the growth dilemma
Before the release of this financial report, the occurrence of new coronary pneumonia will have no small impact on all walks of life. For the online education industry, because students have delayed the start of classes, online classes at home have become a hot demand, which has caused many online education stocks to increase several times. Although it is also an online education, Liuli said that during this period the stock price did not increase much.
After the release of this financial report, for the Q1 performance in 2020, Liuli said that the expected net income is between 190 million and 210 million yuan, a decrease of about 17.1% -25% year-on-year. From the perspective of revenue forecasts, the impact of the epidemic on fluency is not small. It is likely that the growth of paying users will decrease again, and revenue will decline sharply.
At present, the user base of Fluent said is still concentrated on adult users, and the possibility of paying for courses and products by adult user groups during the epidemic is still not very high. Therefore, Liuli said that the growth of paying users in its main user base will be further reduced.
At the same time, although there is an acceleration of the layout of the children's market in children to tap the growth potential of this market, fluently said that the popularity and influence of the children's market in the epidemic period are still not low. They did not let it capture more K12 user groups during the epidemic period Market demand. From this point of view, it is still difficult to reduce the amount of loss in 2020, and it is still more difficult to reduce the amount of losses. It is still unknown when to achieve profitability.
Conclusion
On February 3, Goldman Sachs downgraded Liuli's rating from "neutral" to "sell" with a target price of $ 2.6. The investment agency's downgrading of Liuli's rating shows that its current revenue growth is declining. In addition, it has been in a loss stage. There is still some doubts about the future development potential of Liuli's market. Especially after the release of this financial report, Liuli said that the dilemma is even greater, and reversing losses to achieve profitability may still face a big test.
At present, Liuli said that he also put some emphasis on the development of children's business, trying to use this business to bring new growth points in revenue, but it is still in the stage of pre-investment cost development. This area has potential for development, and it is likely to be an important strategy to reverse the worries of the outside world. But fluently said whether it can stand firm in the children's market, the American Stock Research Institute will continue to pay attention to the dynamics behind it.
Source of this article: American Stock Research Institute, please indicate the copyright
