PR Newswire | Mar 3, 2021 05:40AM EST

03/03 04:39 CST

Boqii Announces Fiscal 2021 Third Quarter Unaudited Financial Results--23.2% year-over-year revenue growth---51.5% year-over-year GMV growth-- SHANGHAI, March 3, 2021

SHANGHAI, March 3, 2021 /PRNewswire/ -- Boqii Holding Limited ("Boqii" or the "Company") (NYSE: BQ), a leading pet-focused platform in China, today announced its unaudited financial results for the third quarter of fiscal year 2021 (the quarter ended December 31, 2020).

Fiscal Q3 2021 Operational and Financial Highlights

* Total revenues were RMB312.9 million (US$48.0 million), an increase of 23.2% from RMB254.1 million in the same quarter of fiscal year 2020. * Net loss was RMB81.9 million (US$12.6 million), compared to net loss of RMB56.4 million in the same quarter of fiscal year 2020. * Adjusted net loss was RMB30.5 million (US$4.7million), representing a decrease of 49.8% from the adjusted net loss of RMB60.8 million in the same quarter of fiscal year 2020. * EBITDA[1] was a loss of RMB79.2 million (US$12.1 million), representing a 109.2% setback from a loss of RMB37.9 million in the same quarter of fiscal year 2020. * Total GMV[2] was RMB763.8 million (US$117.1 million), an increase of 51.5% from RMB504.0 million in the same quarter of fiscal year 2020. * Active buyers were 1.5 million, an increase of 21.0% from 1.3 million in the same quarter of fiscal year 2020.

CEO & CFO Quote

"Solid Q3 results were a testament to Boqii's relentless efforts on execution and user engagement," said Mr. Hao Liang, Boqii's Founder, Chairman and Chief Executive Officer. "We continued to influence pet parents with an extensive and appealing selection of content and products, fostering stronger user bonding and stickiness. We endeavor to build a pet ecosystem that provides full lifecycle coverage and a seamlessly integrated online and offline channel that offers an unparalleled customer experience."

Ms. Yingzhi (Lisa) Tang, Boqii's Co-Founder, Co-CEO and CFO commented: "We had another strong quarter, generating solid operational and financial results. Total revenues grew 23.2% year over year to RMB312.9 million. Adjusted net loss improved significantly from RMB60.8 million in the same quarter of last fiscal year to RMB30.5 million. Notably, during the quarter we considerably improved our operating efficiency, manifested in lower fulfillment cost and reduced inventory turnover days. As a result, our adjusted net loss decreased by 49.8% year-on-year to RMB30.5 million. These results demonstrated our strong execution and potential to translate promising topline growth to profitability. Looking ahead, we will continue to drive rapid growth by expanding user reach and providing all-round user care. This will deliver differentiated growth by attracting high value customers in a large growing addressable market, thus further consolidating our position as an industry leader."

^^[1]EBITDA refers to net loss excluding income tax expenses, interest expense,interest income, depreciation and amortization expenses, but including all theprofessional expenses in relation to initial public offering. EBITDA is aNon-GAAP financial measurement. Please refer to "Non-GAAP financialmeasurement".

^^[2]GMV refers to gross merchandise volume, which is the total value ofconfirmed orders placed with us and sold through distribution model or dropshipping model where we act as a principal in the transaction regardless ofwhether the products are delivered or returned, calculated based on the listedprices of the ordered products without taking into consideration any discounts.The total GMV amount (i) includes GMV of products sold by Xingmu, (ii) excludesproducts sold through consignment model and (iii) excludes the value ofservices offered by us. GMV is subject to future adjustments (such as refunds)and represents only one measure of the Company's performance and should not berelied on as an indicator of our financial results, which depend on a varietyof factors.

Fiscal Third Quarter Financial Results

Total revenues were RMB312.9 million (US$48.0 million), representing an increase of 23.2% from RMB254.1 million in the same quarter of fiscal year 2020. The increase was primarily due to the continued organic growth of our business.

2020 2019 % Revenues Dec. change(in RMB million) Dec. QuarterYoY Quarter

Revenues from product sales 312.3 253.3 23.3

? Boqii Mall 114.1 91.3 25.0

? Third party e-commerce platforms 198.2 162.0 22.4

Revenues from online marketing and information 0.6 0.8 (29.9)services

Total 312.9 254.1 23.2

Gross profitwas RMB56.1 million (US$8.6 million), an increase of 19.0% from RMB47.2 million in the same quarter of fiscal year 2020.

Gross margin was 17.9%, compared with 18.6% in the same quarter of fiscal 2020.

Operating expenseswere RMB150.5 million, an increase of 67.3% from RMB90.0 million in the same quarter of fiscal year 2020. Operating expenses as a percentage of total revenues was 48.1%, compared to 35.4% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expenses, amounting to RMB51.4 million. Pursuant to the Amended and Restated 2018 Global Share Plan, the performance condition for options granted thereunder was satisfied upon completion of the first public offering; and as a result, the company, upon the completion of this offering, recorded RMB44.1 million of cumulative share-based compensation expenses for those options for which the vesting conditions have been satisfied as of such date. For the three months ended December 31, 2020, additional RMB7.3 million of share-based compensation expense was recorded.

* Fulfillment Expenses were RMB33.6 million, a decrease of 7.9% from RMB36.5 million in the same quarter of fiscal year 2020. Fulfillment expenses as a percentage of total revenues were 10.7 %, compared to 14.3% in the same quarter of fiscal year 2020. The decrease was mainly due to: (i) the improved utilization of warehouses by adjusting inventory mix; (ii) relocation of warehouses across China to be more cost-efficient; and (iii) lower delivery service prices through renegotiation with third-party delivery service providers. * Sales and marketing expenses were RMB55.1 million, an increase of 53.2% from RMB36.0 million in the same quarter of fiscal year 2020. Sales and marketing expenses as a percentage of total revenue were 17.6%, compared to 14.2% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expense of RMB 11.6 million. * General and administrative expenses were RMB61.8 million, an increase of 252.7% from RMB17.5 million in the same quarter of fiscal year 2020. General and administrative expenses as a percentage of total revenue were 19.8%, compared to 6.9% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expense of RMB 39.8 million.

Operating loss[3]was RMB93.6 million (US$14.3 million), an increase of 119.0% compared to RMB42.7 million in the same quarter of fiscal year 2020.

EBITDA[4]was a loss of RMB79.2 million (US$12.1 million), representing a 109.2% setback from a loss of RMB37.9 million in the same quarter of fiscal year 2020.

Net losswas RMB81.9 million (US$12.6 million), compared to net loss of RMB56.4 million in the same quarter of fiscal year 2020.

Adjustednet loss was RMB30.5 million (US$4.7million), representing a decrease of 49.8% from the adjusted net loss of RMB60.8 million in the same quarter of fiscal year 2020.

Diluted net earnings per sharewas RMB1.61(US$0.25), compared to diluted net loss per share of RMB4.12 in the same quarter of fiscal year 2020.

Total cash and cash equivalents and short-term investments were RMB475.4 million (US$72.9 million), compared to RMB127.8 million in the second quarter of fiscal year 2021.

^[3] Impacted by share-based compensation expenses of RMB51.4 million, RMB44.1million of which were incurred upon the completion of our initial publicoffering.

^[4] Impacted by share-based compensation expenses of RMB51.4 million, RMB44.1million of which were incurred upon the completion of our initial publicoffering.

Conference Call

Boqii's management will hold a conference call to discuss the financial results at 8:00 AM on Wednesday, March 3, 2021, U.S. Eastern Time (9:00 PM on Wednesday, March 3, 2021, Beijing/Hong Kong Time).

To join the conference, please dial in 15 minutes before the conference is scheduled to begin using below numbers.

Phone Number

International 1-412-317-6061

United States 1-888-317-6003

Hong Kong 852 800-963976

Mainland China86 4001-206115

Passcode 6025289

A replay of the conference call may be accessed by phone at the following numbers until March 10, 2021.

Phone Number

International 1-412-317-0088

United States 1-877-344-7529

Replay Access Code10152708

A live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.boqii.com/.

About Boqii Holding Limited

Boqii Holding Limited (NYSE: BQ) is China's largest pet-focused platform We are the leading online destination for pet products and supplies in China with our broad selection of high-quality products including global leading brands, local emerging brands, and our own private label, Yoken and Mocare, offered at competitive prices. Our online sales platforms, including Boqii Mall and our flagship stores on third-party e-commerce platforms, provide customers with convenient access to a wide selection of high-quality pet products and an engaging and personalized shopping experience. Our Boqii Community provides an informative and interactive content platform for users to share their knowledge and love for pets.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding such risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Non-GAAPFinancial Measures

The Company uses non-GAAP financial measures, namely adjusted net loss, EBITDA and EBITDA margin, in evaluating its operating results and for financial and operational decision-making purposes. The Company defines (i) adjusted net loss as net loss excluding fair value change of derivative liabilities and share-based compensation expenses, (ii) EBITDA as net loss excluding income tax expenses, interest expense, interest income, depreciation and amortization expenses, and (iii) EBITDA margin as EBITDA as a percentage of total revenues. The Company believes adjusted net loss, EBITDA and EBITDA margin enhance investors' overall understanding of its financial performance and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. As these non-GAAP financial measures have limitations as analytical tools and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliation of GAAP and Non-GAAP Results." The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.5250 to US$1.00, the noon buying rate in effect on December 31, 2020 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB, as the case may be, at any particular rate or at all.

For investor and media inquiries, please contact:

In China:

Boqii Holding LimitedInvestor RelationsTel: +86-21-6882-6051Email: ir@boqii.com

The Blueshirt GroupMs. Susie WangEmail: susie@blueshirtgroup.com

In the United States:

The Blueshirt GroupMs. Julia QianEmail: julia@blueshirtgroup.com

BOQII HOLDING LIMITEDUNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS(All amounts in thousands, except for share and per share data, unlessotherwise noted)

As of As of As of March 31, December 31, December 31, 2020 2020 2020

RMB RMB US$

ASSETS

Current assets:

Cash and cash equivalents 88,352 363,858 55,764

Short-term investments - 111,576 17,100

Accounts receivable, net 44,980 35,756 5,480

Inventories, net 63,056 85,588 13,117

Prepayments and other current assets 76,720 131,955 20,223

Amounts due from related parties 5,982 8,326 1,276

Total current assets 279,090 737,059 112,960

Non-current assets:

Property and equipment, net 4,981 7,525 1,153

Intangible assets 33,538 30,537 4,680

Operating lease right-of-use assets 14,951 31,074 4,762

Long-term investments 73,432 74,970 11,490

Goodwill 40,184 40,184 6,158

Other non-current asset 11,019 3,372 517

Total non-current assets 178,105 187,662 28,760

Total assets 457,195 924,721 141,720

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT

Current liabilities

Short-term borrowings 75,223 44,598 6,835

Accounts payable 88,005 67,884 10,404

Salary and welfare payable 4,465 6,987 1,071

Accrued liabilities and other current liabilities 37,883 43,160 6,615

Amounts due to related parties, current 45 1,920 294

Other debts, current 76,252 - -

Contract liabilities 7,702 6,638 1,017

Operating lease liabilities, current 7,969 8,123 1,245

Derivative liabilities 14,351 10,956 1,679

Total current liabilities 311,895 190,266 29,160

Non-current liabilities

Deferred tax liabilities 10,591 9,586 1,469

Operating lease liabilities, non-current 5,375 21,205 3,250

Long-term borrowings 53,148 71,227 10,916

Other debts, non-current 165,774 427,123 65,459

Amounts due to related parties, non-current 11,521 - -

Total non-current liabilities 246,409 529,141 81,094

Total liabilities 558,304 719,407 110,254

Mezzanine equity

Series A convertible redeemable preferred shares (US$ 0.001 par value; 11,000,000 shares authorized, 10,340,000 and nil 484,122 - - shares issued and outstanding as of March 31, 2020 and December 31, 2020, respectively)

Series B convertible redeemable preferred shares Series B convertible redeemable preferred shares (US$ 0.001 par value; 10,000,000 shares authorized, 9,067,384 and nil 527,682 - - shares issued and outstanding as of March 31, 2020 and December 31, 2020, respectively)

Series C convertible redeemable preferred shares (US$ 0.001 par value; 6,000,000 shares authorized, 5,518,101 and nil 420,419 - - shares issued and outstanding as of March 31, 2020 and December 31, 2020, respectively)

Series D convertible redeemable preferred shares (US$ 0.001 par value; 3,000,000 and 0 shares authorized, 2,526,026 188,183 - - and nil shares issued and outstanding as of March 31, 2020 and December 31, 2020, respectively)

Series D-1 convertible redeemable preferred shares (US$ 0.001 par value; 3,000,000 shares authorized, 164,282 - - 2,178,530 and nil shares issued and outstanding as of March 31, 2020 and December 31, 2020, respectively)

Series D-2 convertible redeemable preferred shares (US$ 0.001 par value; 2,000,000 shares authorized, 89,464 - - 1,182,803 and nil shares issued and outstanding as of March 31, 2020 and December 31, 2020, respectively)

Series E convertible redeemable preferred shares (US$ 0.001 par value;3,000,000 and 7,000,000 shares authorized, 78,553 - - 1,042,623 and nil shares issued and outstanding as of March 31, 2020 and December 31, 2020, respectively)

Redeemable non-controlling interests - 5,808 890

Receivable for issuance of preferred shares (94,758) - -

Total mezzanine equity 1,857,947 5,808 890

Stockholders' equity/(deficit):

Ordinary Shares (US$0.001 par value;153,000,000 ordinary shares authorized and 22,238,454 issued and outstanding as 139 - - of March 31, 2020; nil shares issued and outstanding as of December 31, 2020)

Class A ordinary shares (US$0.001 par value; nil shares authorized, issued and outstanding shares as of March 31, - 404 62 2020; 129,500,000 shares authorized, 55,860,157 shares issued and outstanding as of December 31, 2020)

Class B ordinary shares (US$0.001 par value; nil shares authorized, issued and outstanding shares as of March 31, - 82 13 2020; 15,000,000 shares authorized, 12,204,604 shares issued and outstanding as of December 31, 2020)

Additional paid-in capital - 3,300,358 505,802

Statutory reserves 2,627 2,891 443

Accumulated other comprehensive income/(loss) 11,204 (23,180) (3,552)

Accumulated deficit (2,016,758) (2,718,965) (416,700)

Receivable for issuance of ordinary shares (9) (407,962) (62,523)

Total Boqii Holding Limited shareholders' equity/(deficit) (2,002,797) 153,628 23,545

Non-controlling interests 43,741 45,878 7,031

Total shareholders' equity/(deficit) (1,959,056) 199,506 30,576

Total liabilities, mezzanine equity and shareholders' deficit 457,195 924,721 141,720

Notes for all the condensed consolidated financial schedules presented:

Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based onthe certified exchange rate ofUSD1.00=RMB6.5250 on December 31, 2020 published by the Federal Reserve Board.

BOQII HOLDING LIMITEDUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(All amounts in thousands, except for share and per share data, unlessotherwise noted)

Three Months Ended December 31, Nine Months Ended December 31,

2019 2020 2020 2019 2020 2020

RMB RMB US$ RMB RMB US$

Net revenues:

Product sales 253,295 312,371 47,873 611,334 778,186 119,262

Onlinemarketing and 791 555 85 2,297 2,368 363informationservices

Total revenues 254,086 312,926 47,958 613,631 780,554 119,625

Total cost of (206,904) (256,784) (39,354) (485,708) (638,507) (97,856)revenue

Gross profit 47,182 56,142 8,604 127,923 142,047 21,769

Operatingexpenses:

Fulfillment (36,451) (33,557) (5,143) (91,946) (96,225) (14,747)expenses

Sales andmarketing (35,977) (55,107) (8,446) (103,340) (121,393) (18,604)expenses

General andadministrative (17,523) (61,811) (9,473) (44,457) (95,376) (14,617)expenses

Other income, 34 740 113 2,391 1,045 160net

Loss from (42,735) (93,593) (14,345) (109,429) (169,902) (26,039)operations

Interest income 130 5,471 838 348 11,674 1,789

Interest (17,212) (6,990) (1,071) (41,555) (20,549) (3,149)expense

Other (losses)/ (1,196) 12,552 1,924 (2,701) 16,328 2,502gain, net

Fair valuechange of 4,417 - - 5,850 10,409 1,595derivativeliabilities

Loss beforeincome tax (56,596) (82,560) (12,654) (147,487) (152,040) (23,302)expenses

Income taxes 122 603 92 202 412 63expenses

Share ofresults of 64 22 3 (486) (55) (8)equityinvestees

Net loss (56,410) (81,935) (12,559) (147,771) (151,683) (23,247)

Less: Netincomeattributable tothe 1,395 1,242 190 3,611 2,138 328non-controllinginterestshareholders

Net lossattributable to (57,805) (83,177) (12,749) (151,382) (153,821) (23,575)Boqii HoldingLimited

Less: Accretionon convertibleredeemablepreferred (33,794) 195,935 30,028 (156,004) 120,873 18,525shares toredemptionvalue

Less: Deemeddividend to - - - (741) (12,547) (1,923)preferredshareholders

Net income/(loss) attributableto Boqii (91,599) 112,758 17,279 (308,127) (45,495) (6,973)Holding Limited's ordinaryshareholders

Net loss (56,410) (81,935) (12,559) (147,771) (151,683) (23,247)

Othercomprehensiveincome/(loss):

Foreigncurrencytranslation (839) (24,062) (3,688) 1,729 (35,579) (5,453)adjustment, netof nil tax

Unrealizedsecurities 1,960 - - 2,291 1,195 183holding gains

Totalcomprehensive (55,289) (105,997) (16,245) (143,751) (186,067) (28,517)loss

Less: Totalcomprehensivelossattributable to 1,395 1,242 190 3,611 2,138 328non- controllinginterestshareholders

Totalcomprehensiveloss (56,684) (107,239) (16,435) (147,362) (188,205) (28,845)attributable toBoqii Holding Limited

Net earnings/(loss) pershareattributable toBoqii Holding Limited'sordinaryshareholders

- basic (4.12) 1.68 0.26 (13.86) (0.68) (0.10)

- diluted (4.12) 1.61 0.25 (13.86) (0.68) (0.10)

Weightedaverage numberof ordinaryshares

- basic 22,238,454 67,156,580 67,156,580 22,238,454 67,156,580 67,156,580

- diluted 22,238,454 70,041,375 70,041,375 22,238,454 67,156,580 67,156,580

Notes for all the condensed consolidated financial schedules presented:

Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based onthe certified exchange rate of USD1.00=RMB6.5250 on December 31, 2020published by the Federal Reserve Board.

Boqii Holding Limited

Reconciliation of GAAP and Non-GAAP Results

(In thousands)

Three Months Ended Nine Months Ended December 31, December 31,

2019 2020 2019 2020

RMB RMB RMB RMB

Net loss (56,410) (81,935) (147,771) (151,683)

Fair value change of derivative (4,417) - (5,850) (10,409)liabilities

Share-based compensation - 51,422 - 51,422

Adjusted Net loss (60,827) (30,513) (153,621) (110,670)

Three Months Ended Nine Months Ended December 31, December 31,

2019 2020 2019 2020

RMB RMB RMB RMB

Net loss (56,410) (81,935) (147,771) (151,683)

Income tax expenses (122) (603) (202) (412)

Interest expenses 17,212 6,990 41,555 20,549

Interest income (130) (5,471) (348) (11,674)

Depreciation and amortization 1,581 1,784 3,142 5,135

EBITDA^[5] (37,869) (79,235) (103,624) (138,085)

EBITDA Margin^[6] (14.9%) (25.3%) (16.9%) (17.7%)

^[5], [6] Impacted by share-based compensation expenses of RMB51.4 million,RMB44.1 million of which were incurred upon thecompletion of our initial public offering.

Notes for all the condensed consolidated financial schedules presented:

Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based onthe certified exchange rate of USD1.00=RMB6.5250on December 31, 2020 published by the Federal Reserve Board.

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SOURCE Boqii Holding Limited