GSX stock exploded higher on February 19, 2020, after the company reported more than 400% revenue growth YoY.

GSX Techedu Inc. (NYSE: GSX), a leading online K-12 large-class after-school tutoring service provider in China, announced its unaudited financial results for the fourth quarter and full year ended December 31, 2019.

Quarterly Results:

  • Net Revenues up by 412.9% Year-Over-Year
  • Net Income up by 658.7% Year-Over-Year
  • Non-GAAP net income up by 616.7% Year-Over-Year
  • Cash, cash equivalents, short-term and long-term investments totaled up by 1,056.7% Year-Over- Year

Fiscal Year Results:

  • Net Revenues up by 432.3%
  • Net Income up by 1,050.3%
  • Non-GAAP net income up by 1,020.7%

Fourth Quarter 2019 Highlights:

  • Net revenues increased 412.9% year-over-year to RMB935.0 million.
  • Gross billings[2] increased 396.3% year-over-year to RMB1,578.6 million.
  • Income from operations increased 604.2% year-over-year to RMB167.6 million, from RMB23.8 million in the same period of 2018.
  • Non-GAAP income from operations increased 572.2% year-over-year to RMB190.9 million, from RMB28.4 million in the same period of 2018.
  • Net income increased 658.7% year-over-year to RMB174.5 million, from RMB23.0 million in the same period of 2018.
  • Non-GAAP net income increased 616.7% year-over-year to RMB197.8 million, from RMB27.6 million in the same period of 2018.
  • Cash and cash equivalents, short-term investments and long-term investments totaled RMB2,735.7 million as of December 31,2019, compared to RMB236.5 million as of December 31, 2018.
  • Total enrollments increased 290.2% year-over-year to 1,120,000.

Larry Xiangdong Chen, GSX’s founder, Chairman and CEO, commented, “As you can see from the stellar performance, GSX came a long way in the fourth quarter of 2019 by many measures. We take great pride in seeing our revenues and gross billings growth occupying leading position in the online education industry. From the beginning, we have been offering our customers compelling value by focusing on online live large class business. We extremely focus on delivering teaching quality, strengthening organizational capability, improving operational efficiency, as well as attracting intelligent, education-loved and dedicated talents. As 2020 unfolds, we continue to be committed to hiring and retaining top-notch teachers and talented professionals, investing significantly into technology and content development, and spending wisely in high ROI channels to expand and leverage our customer base, as we move to establish an enduring brand. We will continue our growth with emphasis on effectiveness and profitability strategy as we have been doing over the past three years.”

Shannon Shen, CFO of GSX, added, “Net revenue, gross billings and net income all hit record highs during the quarter. Net revenue surged 412.9% year-over-year to RMB935.0 million during the quarter which propelled full year net revenue to RMB2.11 billion. Gross billings for the year reached RMB3.36 billion while net income was RMB226.6 million and non-GAAP net income was amounted to RMB286.9 million. Revenues from our core K-12 large online live classes maintained lightspeed growth, increasing 468% year-over-year during the quarter driven by paid enrollments which increased 410% year-over-year. These phenomenal results during the quarter are a direct result of our augmented organizational capabilities, effective execution of our corporate strategy, and improving operational efficiency. Going forward, we will continue to enhance the quality of our courses and services and leverage technology to optimize operational efficiency in order to generate long-term sustainable growth healthy.”

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