As a typical case of "survival with broken arms" in education and training institutions after the double reduction, Dongfang Selection, which relied on Dong Yuhui to turn the tables against the wind, undoubtedly pointed out a way for this confused track. Many former K12 education and training track companies have also joined the ranks of live streaming, including Good Future (Tal.).us)。
Zhitong Financial APP learned that as early as November 2022, Xueersi, a brand of Good Future, released its full-category Douyin e-commerce live broadcast room "Scholar Youpin", but compared with the overnight explosion of Oriental Selection, the average sales of Xueersi e-commerce half a year after its establishment were less than 100,000 yuan.
However, compared with Dongfang Selection, which has embarked on the parallel development of multiple industries such as live streaming and cultural tourism, Good Future does not seem to focus too much on the live broadcast track, but focuses more on serving the original K12 customer group through quality education and training and AIGC, and has received positive feedback on performance.
Single-quarter revenue exceeded expectations, and the loss narrowed by 536%
Zhitong Financial APP learned that recently, Good Future announced its Q3 quarter of fiscal year 2024 ending November 30, 2023.
According to the financial report, the company's Q3 quarterly net revenue was 3$7.4 billion, up from $2.4 billion in the year-ago quarter$3.3 billion, an increase of 605%, exceeding the previous market expectation of 3$3 billion; Driven by total revenue growth, Good Future's gross profit for the current period reached US$200 million, compared with 1300 million US dollars, an increase of 544%;At the same time, the current operating loss of Good Future was 321850,000 US dollars, down 21%;Net loss attributable to the company was 239460,000 US dollars, a loss of 5,157 from the same period last year90,000 US dollars, the current loss narrowed by 536%。
In short, in the three months ended November 30, 2023, Good Future achieved a high revenue growth rate and a year-on-year narrowing of net loss.
From a business perspective, after the "double reduction", Good Future repositioned itself as an intelligent learning solution provider and readjusted its business focus: learning services and other services and learning content solutions.
Today, the learning services business is the main revenue for Good Future**. According to the company's previously released fiscal year 2023 annual report, Good Future mainly provides learning services through small class classes, personalized quality services and ** courses; At the same time, a series of learning programs have been launched, such as Science and Creativity, Coding and Programming, Humanities and Aesthetics, etc.
From the perspective of revenue composition, quality education is still the largest revenue of good future learning services**. The increase in revenue from this business was driven by the recovery of offline activities since Q1 and the increase in the number of full-price fees. After the growth in Q1 and Q2, Good Future continued to accelerate its expansion in core businesses such as quality education in Q3, which can be seen from the current cost and expense side.
In the Q3 quarter of fiscal year 2024, Good Future continued its business expansion strategy in the previous Q2 quarter and accelerated its investment in quality education and intelligent learning hardware.
According to the data, the company's current operating costs and expenses were 4$0.6 billion, compared to $2.6 billion in the same period last year$6.6 billion, an increase of 524%。Among them, the company's marketing expenses increased to 1US$7.3 billion, up 73. year-on-year3%;Administrative expenses increased to 1$1.1 billion, up 19% year-on-year.
In addition, as of the end of the third fiscal quarter, the balance of deferred revenue of Good Future reached 5$0.8 billion, compared to $2.8 billion in the same period last year$3.7 billion, a significant increase of 11435%, which confirms the growth of the company's learning service business.
From the perspective of cash flow, as of the Q3 quarter, the net cash flow from operating activities reached 2$4.7 billion, in addition to the company's 21 in the current period$9.3 billion in cash and cash equivalents, 9$7.4 billion in short-term investments and 3$2.9 billion in restricted cash.
Is the smart hardware + AIGC path recognized by the market?
In fact, since the second half of last year, the stock price of Good Future has been climbing. The recovery of its valuation proves that the market is gradually recognizing its development path after transformation, and smart hardware + AIGC may be the key to supporting the valuation. For a good future, quality education may only be a transition, and intelligent hardware plus AIGC is the ultimate direction of its development.
According to the "2022 China Education Intelligent Hardware Industry Report", the growth potential of the education intelligent hardware track is huge, and the market size is expected to exceed 100 billion yuan in 2024, with a compound annual growth rate of 26%.
Behind the market, there will be more than 230 new registered companies in the field of smart hardware in 2021 and more than 80 in 2022; Since January last year, there have been more than 20 newly registered enterprises in this field, with an average registration growth rate of 355%。As of the first half of last year, there were more than 70 financing events in the field of educational hardware, with a financing amount of more than 3 billion yuan.
In order to gain a first-mover advantage in the follow-up competition, leading education and technology companies such as Good Future have begun to try to develop the landing scenario of AI + education hardware, and the certainty brought by the release of education vertical products is one of the important reasons why the stock price of Good Future will rise sharply in the secondary market in 2023.
But it is not easy for a good future to rely only on smart hardware to support the follow-up stock price. Since the promulgation of the double reduction policy, more and more education and training companies have begun to join the learning machine track. For example, companies such as New Oriental, Squirrel AI, and Homework Gang have also launched their own special learning machines and continue to iterate new products. On the other hand, the penetration rate and market share of offline channels such as traditional learning tablets in the sinking market are relatively high. According to the data, the market share of the top five sellers of traditional learning tablets in 2020 is as high as 80%.
Mojing e-commerce data shows that in the cycle from June 2022 to May 2023, the market share of Xueersi learning machine on mainstream e-commerce platforms is 57%, ranking fifth, lower than Xiaodu's 213% and 11 of iFLYTEK3%。
Therefore, for a good future, if you want to "involute" in the field of learning machines, you need a technical job that you can handle. In this context, the AI model has become a technical barrier that must be built in the future.
As a manufacturer of education and training in the field of intelligent hardware, Xueersi has accumulated a large number of famous teachers in the off-campus training business in the past 20 years, and more than 95% of the built-in more than 10 million minutes of high-quality Xueersi self-research resources are recorded by Xueersi S-level teachers. The relatively mature first-chain system and rich user data have laid the data foundation for the future training of AI large models. In November last year, Xueersi's large model has passed the relevant filing jointly announced by seven national ministries and commissions, becoming the first batch of vertical large models in the education field that have passed the record in China.
It's just that on the B side of the company's vigorous investment in the content solution business, the current smart hardware + AIGC business of the future is mainly contributed to revenue through Xueersi learning machines, and the proportion of its total revenue is still far lower than that of the learning service business based on quality education, from the perspective of pure input-output ratio, the cost performance of the content solution business is far less than that of the learning service business, but the gradual growth of investment has begun to erode the company's gross profit margin. It can be seen from the Q3 fiscal quarter data that the company's gross profit margin for the current period increased from 55 in the same period last year8% to 536%。
However, it can be seen from the rising stock price of Good Future that Wall Street's favor for AI technology is obviously greater than that of the pure education business. However, if Good Future wants to further improve its valuation level, the revenue performance of the AIGC+ smart hardware business may be indispensable.