Yonyou Network Technology (600588) Q3 2024 earnings summary

Executive summary

• Revenue for Q3 2024 was RMB 1.93 billion, down 17.3% year-over-year; nine-month revenue was RMB 5.74 billion, up 0.5% year-over-year.

• Net loss attributable to shareholders for Q3 was RMB 661 million; nine-month net loss was RMB 1.46 billion, both widening from last year.

• Cloud services revenue grew 8.6% year-over-year to RMB 4.29 billion; subscription revenue up 27.8%.

• Core BIP product revenue rose 18% year-over-year; subscription-related contract liabilities increased 31.7%.

• Company continued to prioritize cloud and subscription business, with 833,400 cumulative paying cloud customers.

Financial highlights

• Q3 operating cash flow was negative RMB 525 million; nine-month operating cash flow was negative RMB 2.05 billion.

• Basic and diluted EPS for Q3 was -0.20; for nine months, -0.44.

• Gross margin for nine months was 48.8%, down from 49.7% year-over-year.

• Total assets at quarter-end were RMB 23.46 billion, down 8.1% from year-end 2023.

• Shareholders' equity decreased 14% to RMB 8.74 billion.

Outlook and guidance

• Management expects continued focus on cloud and subscription business, with ongoing cost control and personnel optimization.

• Subscription contract liabilities and customer base expected to support future revenue growth.