UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) ...

Exhibit 99.1 17 Education & Technology Group Inc. Announces Fourth Quarter and Fiscal Year 2023 Unaudited Financial Results BEIJING, China, March 21, 2024 — (GLOBE NEWSWIRE) — 17 Education & Technology Group Inc. (NASDAQ: YQ) ("17EdTech" or the "Company"), a leading education technology company in China, today announced its unaudited financial results for the fourth quarter and the year ended December 31, 2023. Fourth Quarter 2023 Highlights 1 • Net revenues were RMB47.3 million (US$6.7 million), compared w ...

17 Education & Technology Group, Inc. (NASDAQ:YQ) Q4 2023 Earnings Conference Call March 20, 2024 9:00 PM ET Company Participants Lara Zhao - IR Manager Michael Chao Du - Director & CFO Conference Call Participants Operator Good evening and good morning, ladies and gentlemen, and thank you for standing by for 17EdTech's Fourth Quarter 2023 and full year earnings conference call. [Operator Instructions]. As a reminder, today's conference call is being recorded. I will now turn the meeting over to your host f ...

BEIJING, March 21, 2024 (GLOBE NEWSWIRE) -- 17 Education & Technology Group Inc. (NASDAQ:YQ) ("17EdTech" or the "Company"), a leading education technology company in China, today announced its unaudited financial results for the fourth quarter and the year ended December 31, 2023. Fourth Quarter 2023 Highlights1 Net revenues were RMB47.3 million (US$6.7 million), compared with net revenues of RMB39.6 million in the fourth quarter of 2022.Gross margin was 43.4%, compared with 52.1% in the fourth quarter of 2 ...

17 Education & Technology Group Inc. (NASDAQ:YQ) Q3 2023 Earnings Conference Call December 5, 2023 8:00 PM ET Company Participants Lara Zhao - Investor Relations Manager Michael Du - Director & Chief Financial Officer Conference Call Participants Operator Good evening and good morning, ladies and gentlemen. And thank you for standing by for 17EdTech's Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I'll now turn the meeting over ...

Exhibit 99.1 17 Education & Technology Group Inc. Announces Third Quarter 2023 Unaudited Financial Results BEIJING, China, December 7, 2023 — (GLOBE NEWSWIRE) — 17 Education & Technology Group Inc. (NASDAQ: YQ) ("17EdTech" or the "Company"), a leading education technology company in China, today announced its unaudited financial results for the third quarter of 2023. Third Quarter 2023 Highlights 1 • Net revenues were RMB45.1 million (US$6.2 million), compared with net revenues of RMB124.6 million in the th ...

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) This section provides an overview of the company's financial performance for Q2 and H1 2023, along with management's strategic commentary [Second Quarter 2023 Highlights](index=1&type=section&id=1.1%20Second%20Quarter%202023%20Highlights) 17 Education & Technology Group Inc. experienced a 48.1% year-over-year decrease in net revenues, a decline in gross margin, and an expansion of both net loss and adjusted net loss in Q2 2023 | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenues | 69.2 million | 133.5 million | -48.1% | | Gross Margin | 48.3% | 52.2% | -3.9 pp | | Net Loss | 47.9 million | 26.4 million | +81.4% | | Net Loss as % of Net Revenues | -69.2% | -19.8% | -49.4 pp | | Adjusted Net Loss (non-GAAP) | 28.6 million | 3.6 million (Net Income) | Loss Widened | | Adjusted Net Loss as % of Net Revenues | -41.2% | 2.7% (Net Income) | -43.9 pp | [First Half 2023 Highlights](index=1&type=section&id=1.2%20First%20Half%202023%20Highlights) The company experienced a significant year-over-year decline in net revenues for H1 2023, coupled with poor gross margin performance and a substantial widening of both net loss and adjusted net loss | Metric | H1 2023 (RMB) | H1 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenues | 78.5 million | 366.9 million | -78.6% | | Gross Margin | 45.5% | 57.6% | -12.1 pp | | Net Loss | 140.5 million | 51.2 million | +174.4% | | Net Loss as % of Net Revenues | -178.9% | -14.0% | -164.9 pp | | Adjusted Net Loss (non-GAAP) | 92.6 million | 13.5 million (Net Income) | Loss Widened | | Adjusted Net Loss as % of Net Revenues | -117.9% | 3.7% (Net Income) | -121.6 pp | [Management Commentary](index=2&type=section&id=1.3%20Management%20Commentary) Management expressed satisfaction with the steady progress of core teaching and learning programs, emphasizing distribution network expansion and new business model establishment, while noting industry recognition for product inclusion in national smart education directories and a commitment to AI-driven product development and user experience enhancement, alongside financial improvements including revenue rebound, gross margin recovery, and narrowed losses through cost control - CEO Andy Liu reported stable progress in core teaching and learning programs, confirmed revenue, expanding distribution networks, and new business models to facilitate business expansion[6](index=6&type=chunk) - The company's products were included in the National Smart Education Product and Service Provider Directory, signifying industry recognition for its professional services, market-leading technology, and solutions in education digitalization[6](index=6&type=chunk) - CFO Michael Du noted that in Q2 2023, the company actively addressed challenges, capitalized on new opportunities, translated newly won projects into operational and financial progress, achieved a rapid revenue rebound, restored gross margin to normal levels, and significantly narrowed both net loss and adjusted net loss[6](index=6&type=chunk) [Second Quarter 2023 Unaudited Financial Performance](index=2&type=section&id=Second%20Quarter%202023%20Unaudited%20Financial%20Performance) This section details the company's unaudited financial results for the second quarter of 2023, covering revenues, costs, margins, operating expenses, and profitability metrics [Net Revenues](index=2&type=section&id=2.1%20Net%20Revenues) Net revenues for Q2 2023 were **RMB 69.2 million**, a 48.1% year-over-year decrease but a 6.5x sequential increase, primarily due to resource reallocation towards core teaching and learning SaaS business | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | Q1 2023 (RMB) | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 69.2 million | 133.5 million | 9.27 million | -48.1% | +650% | - The year-over-year decrease in net revenues was primarily due to the company's strategic focus on core teaching and learning SaaS business, leading to reduced net revenues from other educational services[7](index=7&type=chunk) [Cost of Revenues](index=2&type=section&id=2.2%20Cost%20of%20Revenues) Cost of revenues for Q2 2023 was **RMB 35.8 million**, a 43.9% year-over-year decrease, largely consistent with the decline in net revenues | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Cost of Revenues | 35.8 million | 63.8 million | -43.9% | [Gross Profit and Gross Margin](index=2&type=section&id=2.3%20Gross%20Profit%20and%20Gross%20Margin) Gross profit for Q2 2023 was **RMB 33.5 million**, a 52.0% year-over-year decrease, with gross margin at **48.3%**, down from 52.2% in the prior year period | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Gross Profit | 33.5 million | 69.7 million | -52.0% | | Gross Margin | 48.3% | 52.2% | -3.9 pp | [Operating Expenses](index=2&type=section&id=2.4%20Operating%20Expenses) Total operating expenses for Q2 2023 were **RMB 91.3 million**, a 12.1% year-over-year decrease, including **RMB 19.4 million** in share-based compensation expenses, with sales and marketing expenses increasing while general and administrative expenses significantly declined due to business adjustments and personnel optimization | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Total Operating Expenses | 91.3 million | 103.8 million | -12.1% | | Share-based Compensation Expenses | 19.4 million | 30.1 million | -35.6% | [Sales and Marketing Expenses](index=3&type=section&id=2.4.1%20Sales%20and%20Marketing%20Expenses) Sales and marketing expenses for Q2 2023 were **RMB 21.6 million**, an 85.2% year-over-year increase, primarily due to a lower base in the prior year period resulting from a one-time reversal of expenses related to the cessation of K-12 online tutoring services | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Sales and Marketing Expenses | 21.6 million | 11.7 million | +85.2% | | Share-based Compensation Expenses | 4.9 million | 3.4 million | +44.1% | - Sales and marketing expenses increased by **85.2%** year-over-year, primarily due to a lower base in Q2 2022 which included a one-time expense reversal[11](index=11&type=chunk) [Research and Development Expenses](index=3&type=section&id=2.4.2%20Research%20and%20Development%20Expenses) Research and development expenses for Q2 2023 were **RMB 36.8 million**, representing a 3.0% year-over-year increase | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Research and Development Expenses | 36.8 million | 35.7 million | +3.0% | | Share-based Compensation Expenses | 6.9 million | 7.2 million | -4.2% | [General and Administrative Expenses](index=3&type=section&id=2.4.3%20General%20and%20Administrative%20Expenses) General and administrative expenses for Q2 2023 were **RMB 32.9 million**, a 41.7% year-over-year decrease, primarily attributable to personnel optimization following business adjustments | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 32.9 million | 56.4 million | -41.7% | | Share-based Compensation Expenses | 7.6 million | 19.5 million | -61.0% | - The decrease in general and administrative expenses was primarily due to personnel optimization following business adjustments[13](index=13&type=chunk) [Loss from Operations](index=3&type=section&id=2.5%20Loss%20from%20Operations) Loss from operations for Q2 2023 expanded to **RMB 57.8 million** from RMB 34.1 million in the prior year, with the operating loss as a percentage of net revenues deteriorating from -25.5% to -83.5% | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Loss from Operations | 57.8 million | 34.1 million | +69.5% | | Loss from Operations as % of Net Revenues | -83.5% | -25.5% | -58.0 pp | [Net Loss](index=3&type=section&id=2.6%20Net%20Loss) Net loss for Q2 2023 significantly widened to **RMB 47.9 million** from RMB 26.4 million in the prior year, with net loss as a percentage of net revenues deteriorating from -19.8% to -69.2% | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Net Loss | 47.9 million | 26.4 million | +81.4% | | Net Loss as % of Net Revenues | -69.2% | -19.8% | -49.4 pp | [Adjusted Net Loss (non-GAAP)](index=3&type=section&id=2.7%20Adjusted%20Net%20Loss%20(non-GAAP)) Adjusted net loss (non-GAAP) for Q2 2023 was **RMB 28.6 million**, a significant widening from an adjusted net income of RMB 3.6 million in the prior year period, with the adjusted net loss as a percentage of net revenues deteriorating from 2.7% to -41.2% | Metric | Q2 2023 (RMB) | Q2 2022 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Net Loss (non-GAAP) | 28.6 million | 3.6 million (Net Income) | Loss Widened | | Adjusted Net Loss as % of Net Revenues | -41.2% | 2.7% (Net Income) | -43.9 pp | [Financial Position and Liquidity](index=3&type=section&id=Financial%20Position%20and%20Liquidity) This section provides an overview of the company's financial position and liquidity, focusing on cash, cash equivalents, restricted cash, short-term investments, and term deposits [Cash and Cash Equivalents, Restricted Cash, Short-term Investments, and Term Deposits](index=3&type=section&id=3.1%20Cash%20and%20Cash%20Equivalents%2C%20Restricted%20Cash%2C%20Short-term%20Investments%2C%20and%20Term%20Deposits) As of June 30, 2023, the company's total cash and cash equivalents, restricted cash, short-term investments, and term deposits amounted to **RMB 585.7 million**, a decrease from RMB 639.5 million as of March 31, 2023 | Metric | June 30, 2023 (RMB) | March 31, 2023 (RMB) | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents, Restricted Cash, Short-term Investments, and Term Deposits | 585.7 million | 639.5 million | -8.4% | [Company Overview and Disclosures](index=3&type=section&id=Company%20Overview%20and%20Disclosures) This section provides an overview of 17 Education & Technology Group Inc., including its business model, non-GAAP financial measures, exchange rate information, safe harbor statement, and contact details [About 17 Education & Technology Group Inc.](index=4&type=section&id=4.1%20About%2017%20Education%20%26%20Technology%20Group%20Inc.) 17 Education & Technology Group Inc. is a leading Chinese education technology company offering smart in-school classroom solutions and data-driven teaching, learning, and assessment products to teachers, students, and parents, leveraging its experience to provide SaaS products for digital transformation in Chinese schools, focusing on core scenarios like homework and classroom instruction to enhance student learning efficiency through personalized content and data insights - 17 Education & Technology Group Inc. is a leading education technology company in China, providing smart in-school classroom solutions and data-driven teaching, learning, and assessment products for teachers, students, and parents[24](index=24&type=chunk) - The company focuses on providing teaching and learning SaaS products to facilitate the digital transformation and upgrade of Chinese schools, with an emphasis on improving the efficiency and effectiveness of core teaching scenarios such as homework assignments and classroom instruction[24](index=24&type=chunk) - Products leverage the company's technology and data insights to provide personalized and targeted learning and practice content, aiming to enhance student learning efficiency[24](index=24&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=4.2%20Non-GAAP%20Financial%20Measures) Management uses adjusted net income (loss) as a non-GAAP financial measure to assess comparative operating performance and future prospects, excluding share-based compensation expenses to reflect ongoing business, but it has limitations, may not be comparable to other companies' non-GAAP measures, and should not substitute GAAP results - Adjusted net income (loss) is net loss excluding share-based compensation expenses, used by management to understand the company's comparative operating performance and future prospects[20](index=20&type=chunk)[21](index=21&type=chunk) - This non-GAAP measure aids management and investors in understanding and evaluating core operating performance, but it has limitations, excludes items affecting operating income, and may not be comparable to non-GAAP measures used by other companies[21](index=21&type=chunk)[22](index=22&type=chunk) [Exchange Rate Information](index=4&type=section&id=4.3%20Exchange%20Rate%20Information) The company primarily operates in China, with all revenues denominated in RMB; for reader convenience, USD amounts in periodic reports are converted using the June 30, 2023, Federal Reserve Board H.10 statistical release exchange rate of **1.00 USD = 7.2513 RMB** - The company's operations are primarily in China, with all revenues denominated in RMB[23](index=23&type=chunk) - The USD conversion rate is the noon buying rate for RMB in New York City, as certified by the Federal Reserve Board H.10 statistical release on June 30, 2023, which was **1.00 USD = 7.2513 RMB**[23](index=23&type=chunk) [Safe Harbor Statement](index=5&type=section&id=4.4%20Safe%20Harbor%20Statement) This announcement contains forward-looking statements protected by the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995, which involve inherent risks and uncertainties that could cause actual results to differ materially, and the company undertakes no obligation to update them unless required by applicable law - This announcement contains forward-looking statements protected by the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995[26](index=26&type=chunk) - Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those in the statements, and the company undertakes no obligation to update them unless required by law[26](index=26&type=chunk) [Conference Call Information](index=3&type=section&id=4.5%20Conference%20Call%20Information) The company will host a conference call on August 28, 2023, at 9:00 PM U.S. Eastern Time (9:00 AM Beijing Time on August 29, 2023) to discuss Q2 2023 financial results, requiring pre-registration for dial-in access, with live and archived webcasts available on the investor relations website - The conference call will be held on August 28, 2023, at **9:00 PM U.S. Eastern Time** (9:00 AM Beijing Time on August 29, 2023)[18](index=18&type=chunk) - Participants are required to pre-register via the designated link: preregister.vevent.com/register/BI99159278b686419fbad714269178fdd2[18](index=18&type=chunk) - Live and archived webcasts of the conference call will be available at https://ir.17zuoye.com/[18](index=18&type=chunk) [Investor and Media Inquiries](index=5&type=section&id=4.6%20Investor%20and%20Media%20Inquiries) Investors and media may contact Ms. Lara Zhao, Investor Relations Manager at 17 Education & Technology Group Inc., via email at ir@17zuoye.com for inquiries - For investor and media inquiries, please contact Ms. Lara Zhao, Investor Relations Manager at 17 Education & Technology Group Inc., via email: ir@17zuoye.com[27](index=27&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and non-GAAP reconciliations [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=5.1%20Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets were **RMB 841.8 million**, a decrease from RMB 980.5 million on December 31, 2022, with total liabilities at **RMB 189.7 million** and total shareholders' equity at **RMB 652.1 million** | Metric | December 31, 2022 (RMB in thousands) | June 30, 2023 (RMB in thousands) | June 30, 2023 (USD in thousands) | | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | Cash and cash equivalents | 707,895 | 259,933 | 35,846 | | Restricted cash | 10,231 | 33,904 | 4,676 | | Short-term investments | 19,531 | 7,373 | 1,017 | | Term deposits | — | 284,441 | 39,226 | | Accounts receivable | 34,824 | 58,286 | 8,038 | | Prepaid expenses and other current assets | 140,894 | 142,837 | 19,698 | | **Total Current Assets** | **913,375** | **786,992** | **108,531** | | Property and equipment, net | 32,295 | 24,674 | 3,403 | | Right-of-use assets | 30,052 | 20,781 | 2,866 | | Long-term investments | — | 5,003 | 690 | | Other non-current assets | 4,802 | 4,363 | 602 | | **Total Assets** | **980,524** | **841,813** | **116,092** | | **LIABILITIES** | | | | | Operating lease liabilities, non-current | 7,534 | 4,863 | 671 | | **Total Liabilities** | **221,661** | **189,705** | **26,162** | | **SHAREHOLDERS' EQUITY** | | | | | Share capital | 338 | 340 | 47 | | Additional paid-in capital | 10,954,822 | 10,965,149 | 1,512,163 | | Accumulated other comprehensive income | 62,689 | 86,107 | 11,875 | | Accumulated deficit | (10,258,965) | (10,399,428) | (1,434,147) | | **Total Shareholders' Equity** | **758,863** | **652,108** | **89,930** | | **Total Liabilities and Shareholders' Equity** | **980,524** | **841,813** | **116,092** | [Unaudited Condensed Consolidated Statements of Operations (Three Months Ended June 30, 2023)](index=8&type=section&id=5.2%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20(Three%20Months%20Ended%20June%2030%2C%202023)) For the three months ended June 30, 2023, the company reported net revenues of **RMB 69.2 million** and gross profit of **RMB 33.5 million**, with total operating expenses of **RMB 91.3 million** leading to an operating loss of **RMB 57.8 million** and a net loss of **RMB 47.9 million** | Metric | 2022 (RMB in thousands) | 2023 (RMB in thousands) | 2023 (USD in thousands) | | :--- | :--- | :--- | :--- | | Net Revenues | 133,492 | 69,246 | 9,549 | | Cost of Revenues | (63,773) | (35,766) | (4,932) | | Gross Profit | 69,719 | 33,480 | 4,617 | | Sales and Marketing Expenses | (11,650) | (21,581) | (2,976) | | Research and Development Expenses | (35,709) | (36,796) | (5,074) | | General and Administrative Expenses | (56,441) | (32,904) | (4,538) | | Total Operating Expenses | (103,800) | (91,281) | (12,588) | | Loss from Operations | (34,081) | (57,801) | (7,971) | | Interest income | 1,581 | 8,069 | 1,113 | | Foreign currency exchange (loss) gain | (18) | 148 | 20 | | Other income, net | 6,087 | 1,639 | 226 | | Loss before income tax expense and share of income from equity method investments | (26,431) | (47,945) | (6,612) | | Income tax expense | — | — | — | | Share of income from equity method investments | — | 19 | 3 | | Net Loss | (26,431) | (47,926) | (6,609) | | Net Loss per Ordinary Share (basic and diluted) | (0.05) | (0.10) | (0.01) | | Net Loss per ADS (basic and diluted) | (0.50) | (1.00) | (0.10) | Share-based Compensation Expenses Details (Three Months Ended June 30, 2023) | Share-based Compensation Expenses | 2022 (RMB in thousands) | 2023 (RMB in thousands) | 2023 (USD in thousands) | | :--- | :--- | :--- | :--- | | Sales and Marketing Expenses | 3,368 | 4,890 | 674 | | Research and Development Expenses | 7,175 | 6,870 | 947 | | General and Administrative Expenses | 19,516 | 7,614 | 1,050 | | **Total** | **30,059** | **19,374** | **2,671** | [Unaudited Condensed Consolidated Statements of Operations (Six Months Ended June 30, 2023)](index=10&type=section&id=5.3%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20(Six%20Months%20Ended%20June%2030%2C%202023)) For the six months ended June 30, 2023, the company reported net revenues of **RMB 78.5 million** and gross profit of **RMB 35.7 million**, with total operating expenses of **RMB 197.6 million** leading to an operating loss of **RMB 161.8 million** and a net loss of **RMB 140.5 million** | Metric | 2022 (RMB in thousands) | 2023 (RMB in thousands) | 2023 (USD in thousands) | | :--- | :--- | :--- | :--- | | Net Revenues | 366,938 | 78,519 | 10,828 | | Cost of Revenues | (155,558) | (42,776) | (5,899) | | Gross Profit | 211,380 | 35,743 | 4,929 | | Sales and Marketing Expenses | (33,647) | (43,409) | (5,986) | | Research and Development Expenses | (133,185) | (81,069) | (11,180) | | General and Administrative Expenses | (107,742) | (73,086) | (10,079) | | Total Operating Expenses | (274,574) | (197,564) | (27,245) | | Loss from Operations | (63,194) | (161,821) | (22,316) | | Interest income | 3,646 | 15,843 | 2,185 | | Foreign currency exchange (loss) gain | 185 | 161 | 22 | | Other income, net | 8,166 | 5,351 | 738 | | Loss before income tax expense and share of income from equity method investments | (51,197) | (140,466) | (19,371) | | Income tax expense | — | — | — | | Share of income from equity method investments | — | 3 | — | | Net Loss | (51,197) | (140,463) | (19,371) | | Net Loss per Ordinary Share (basic and diluted) | (0.10) | (0.29) | (0.04) | | Net Loss per ADS (basic and diluted) | (1.00) | (2.90) | (0.40) | Share-based Compensation Expenses Details (Six Months Ended June 30, 2023) | Share-based Compensation Expenses | 2022 (RMB in thousands) | 2023 (RMB in thousands) | 2023 (USD in thousands) | | :--- | :--- | :--- | :--- | | Sales and Marketing Expenses | 7,348 | 9,957 | 1,373 | | Research and Development Expenses | 14,360 | 13,834 | 1,908 | | General and Administrative Expenses | 42,996 | 24,078 | 3,321 | | **Total** | **64,704** | **47,869** | **6,602** | [Reconciliations of Non-GAAP Measures (Three Months Ended June 30, 2023)](index=9&type=section&id=5.4%20Reconciliations%20of%20Non-GAAP%20Measures%20(Three%20Months%20Ended%20June%2030%2C%202023)) For the three months ended June 30, 2023, the company's net loss was **RMB 47.9 million**, which, after adding back **RMB 19.4 million** in share-based compensation expenses, resulted in an adjusted net loss (non-GAAP) of **RMB 28.6 million** | Metric | 2022 (RMB in thousands) | 2023 (RMB in thousands) | 2023 (USD in thousands) | | :--- | :--- | :--- | :--- | | Net Loss | (26,431) | (47,926) | (6,609) | | Share-based Compensation Expenses | 30,059 | 19,374 | 2,671 | | Income tax impact | — | — | — | | **Adjusted Net Income (Loss)** | **3,628** | **(28,552)** | **(3,938)** | [Reconciliations of Non-GAAP Measures (Six Months Ended June 30, 2023)](index=11&type=section&id=5.5%20Reconciliations%20of%20Non-GAAP%20Measures%20(Six%20Months%20Ended%20June%2030%2C%202023)) For the six months ended June 30, 2023, the company's net loss was **RMB 140.5 million**, which, after adding back **RMB 47.9 million** in share-based compensation expenses, resulted in an adjusted net loss (non-GAAP) of **RMB 92.6 million** | Metric | 2022 (RMB in thousands) | 2023 (RMB in thousands) | 2023 (USD in thousands) | | :--- | :--- | :--- | :--- | | Net Loss | (51,197) | (140,463) | (19,371) | | Share-based Compensation Expenses | 64,704 | 47,869 | 6,602 | | Income tax impact | — | — | — | | **Adjusted Net Income (Loss)** | **13,507** | **(92,594)** | **(12,769)** |

17 Education & Technology Group Inc. (NASDAQ:YQ) Q1 2023 Earnings Conference Call June 14, 2023 9:00 PM ET Company Participants Lara Zhao - Investor Relations Manager Andy Liu - Founder, Chairman and CEO Michael Du - Director and CFO Conference Call Participants Operator Good evening and good morning, ladies and gentlemen. And thank you for standing by for 17EdTech’s First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After management’s prepared remarks, ther ...

[17 Education & Technology Group Inc. First Quarter 2023 Financial Results](index=1&type=section&id=17%20Education%20%26%20Technology%20Group%20Inc.%20First%20Quarter%202023%20Financial%20Results) [Financial Highlights](index=1&type=section&id=First%20Quarter%202023%20Highlights) The company experienced a **96.0% year-over-year decline in net revenues to RMB 9.3 million**, a **gross margin drop to 24.4%**, and a **significant increase in net loss to RMB 92.5 million** Q1 2023 Key Financial Metrics | Metric | Q1 2023 | Q1 2022 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Net Revenues | RMB 9.3 million | RMB 233.4 million | -96.0% | | Gross Margin | 24.4% | 60.7% | -36.3 ppt | | Net Loss | RMB 92.5 million | RMB 24.8 million | Increased by 273% | | Adjusted Net Loss (non-GAAP) | RMB 64.0 million | RMB 9.9 million (Income) | N/A | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributed Q1 2023's poor performance to COVID-related project delays but anticipates future revenue recognition from recent major in-school SaaS project wins - The CEO stated that the COVID outbreak in Q4 2022 caused delays in bidding and delivery processes, adversely affecting financial performance[3](index=3&type=chunk) - The company has recently won multiple landmark projects, including a **RMB 116 million** project in Shanghai's Minhang District and a **RMB 20 million** project in Beijing's Xicheng District[3](index=3&type=chunk) - The CFO noted that revenues from these new major projects are expected to be delivered and recognized in financial statements over the upcoming quarters[3](index=3&type=chunk) [Detailed Financial Performance Analysis](index=2&type=section&id=First%20Quarter%202023%20Unaudited%20Financial%20Results) Project delays severely impacted financial performance, leading to a **96.0% revenue drop** and a **significant increase in operating and net losses**, despite a **37.8% reduction in total operating expenses** [Revenues and Gross Profit](index=2&type=section&id=Revenues%20and%20Gross%20Profit) Net revenues plummeted **96.0% to RMB 9.3 million** due to project delays, causing gross profit to decrease **98.4% to RMB 2.3 million** and gross margin to contract to **24.4%** Q1 2023 vs Q1 2022 Revenue and Gross Profit (RMB) | Metric | Q1 2023 (RMB) | Q1 2022 (RMB) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Net Revenues | 9.3 million | 233.4 million | -96.0% | | Cost of Revenues | 7.0 million | 91.8 million | -92.4% | | Gross Profit | 2.3 million | 141.7 million | -98.4% | | Gross Margin | 24.4% | 60.7% | -36.3 ppt | [Operating Expenses](index=2&type=section&id=Total%20Operating%20Expenses) Total operating expenses decreased **37.8% to RMB 106.3 million**, primarily due to **significant reductions in R&D (-54.6%) and G&A (-21.7%) expenses** from workforce optimization Q1 2023 Operating Expenses Breakdown (RMB) | Expense Category | Q1 2023 (RMB) | Q1 2022 (RMB) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Sales and marketing | 21.8 million | 22.0 million | -0.8% | | Research and development | 44.3 million | 97.5 million | -54.6% | | General and administrative | 40.2 million | 51.3 million | -21.7% | | **Total Operating Expenses** | **106.3 million** | **170.8 million** | **-37.8%** | - The decrease in R&D and G&A expenses was primarily attributed to workforce optimization and continuous expense management[10](index=10&type=chunk)[11](index=11&type=chunk) [Profitability](index=2&type=section&id=Profitability) Loss from operations widened to **RMB 104.0 million**, with net loss increasing to **RMB 92.5 million**, and adjusted net loss (non-GAAP) reversing to **RMB 64.0 million** Q1 2023 vs Q1 2022 Profitability (RMB) | Metric | Q1 2023 (RMB) | Q1 2022 (RMB) | | :--- | :--- | :--- | | Loss from Operations | (104.0 million) | (29.1 million) | | Net Loss | (92.5 million) | (24.8 million) | | Adjusted Net (Loss)/Income | (64.0 million) | 9.9 million | [Financial Position](index=4&type=section&id=Financial%20Position) As of March 31, 2023, the company held **RMB 639.5 million** in cash and equivalents, with total assets at **RMB 896.5 million** and total liabilities at **RMB 204.3 million** Key Balance Sheet Items (RMB) | Item | March 31, 2023 (RMB) | December 31, 2022 (RMB) | | :--- | :--- | :--- | | Cash, Restricted Cash, & Short-term Investments | 639.5 million | 737.7 million | | Total Assets | 896.5 million | 980.5 million | | Total Liabilities | 204.3 million | 221.7 million | | Total Shareholders' Equity | 692.2 million | 758.9 million | [Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the detailed unaudited financial statements for Q1 2023, including Consolidated Balance Sheets, Statements of Operations, and GAAP to non-GAAP reconciliations [Consolidated Balance Sheets](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2023, the balance sheet shows total assets of **RMB 896.5 million**, total liabilities of **RMB 204.3 million**, and total shareholders' equity of **RMB 692.2 million** Balance Sheet Summary as of March 31, 2023 (RMB thousands) | Category | Amount (RMB thousands) | | :--- | :--- | | **Total Current Assets** | **833,878** | | Total Non-current Assets | 62,630 | | **TOTAL ASSETS** | **896,508** | | **Total Current Liabilities** | **197,104** | | Total Non-current Liabilities | 7,232 | | **TOTAL LIABILITIES** | **204,336** | | **TOTAL SHAREHOLDERS' EQUITY** | **692,172** | [Consolidated Statements of Operations](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) The Q1 2023 statement of operations details the **RMB 92.5 million net loss**, with net loss per ADS at **(RMB 1.90)**, reflecting revenues of **RMB 9.3 million** and operating expenses Q1 2023 Income Statement Summary (RMB thousands) | Line Item | Q1 2023 (RMB thousands) | | :--- | :--- | | Net revenues | 9,273 | | Gross profit | 2,263 | | Total operating expenses | (106,283) | | Loss from operations | (104,020) | | **Net loss** | **(92,537)** | | Net loss per ADS (Basic and diluted) | (1.90) | - Total share-based compensation expenses included in operating expenses for Q1 2023 amounted to **RMB 28.5 million**[31](index=31&type=chunk) [Reconciliation of Non-GAAP Measures](index=10&type=section&id=Reconciliations%20of%20non-GAAP%20measures%20to%20the%20most%20comparable%20GAAP%20measures) This section reconciles the **GAAP net loss of RMB 92.5 million** to the **non-GAAP adjusted net loss of RMB 64.0 million** for Q1 2023 by excluding share-based compensation Q1 2023 GAAP to Non-GAAP Reconciliation (RMB thousands) | Description | Amount (RMB thousands) | | :--- | :--- | | Net Loss (GAAP) | (92,537) | | Add: Share-based compensation | 28,495 | | **Adjusted net loss (Non-GAAP)** | **(64,042)** | [Supplementary Information](index=4&type=section&id=Supplementary%20Information) This section provides logistical details, including earnings call information, non-GAAP measure definitions, the currency exchange rate, and the safe harbor statement for forward-looking statements - The company defines Adjusted net income (loss) as net income (loss) excluding share-based compensation expenses[17](index=17&type=chunk) - The exchange rate used for convenience translation to USD for the March 31, 2023 period was **US$1.00 = RMB 6.8676**[20](index=20&type=chunk) - The company will hold a conference call on June 14, 2023, at 9:00 p.m. U.S. Eastern Time to discuss the results[16](index=16&type=chunk)

User Base and Market Reach - The company has cumulatively serviced over 1.0 million verified teacher users, more than 50.0 million verified student users, and close to 50.0 million registered parent users, utilized in over 70,000 K-12 schools across more than 300 cities in China[186]. - As of December 31, 2022, the company's teaching and learning SaaS offerings are utilized in over 90 cities across 29 provincial-level regions in mainland China[188]. - In Minhang District, Shanghai, 100% of the 128 public schools have adopted the teaching and learning SaaS offering, serving over 120,000 students and completing over 16 million homework assignments[186]. Product Offerings and Development - The teaching and learning SaaS offerings were launched in September 2021, integrating software and hardware to provide data-driven recommendations for educational authorities and schools[185]. - The smart in-school classroom solution includes over 18 million homework questions and assessment sets, providing a comprehensive educational content library[184]. - The personalized self-directed learning product launched in December 2021 constituted the majority of revenue from other educational products and services in 2022[193]. - The teaching and learning SaaS offerings are designed to improve the efficiency of homework assignments and related teaching scenarios, reducing the burden on both teachers and students[185]. - The company aims to develop products and services that align with China's digital transformation in public schools[280]. Regulatory Compliance and Challenges - The company ceased offering K-12 Academic AST Services by December 31, 2021, in compliance with PRC regulations[181]. - The evolving regulatory environment poses significant uncertainties regarding compliance with PRC laws and regulations, which could adversely affect the company's business and financial condition[218]. - The Ministry of Education (MOE) requires all Academic After-School Tutoring (AST) Institutions for compulsory education to register as non-profit by the end of 2021, suspending student enrollment and fee charging until registration is complete[218]. - The company is actively monitoring regulatory changes and is taking necessary measures to ensure compliance with new requirements[218]. Financial Performance - Net revenues decreased by 75.7% to RMB531.1 million (US$77.0 million) in 2022, down from RMB2,184.5 million in 2021[275]. - The company generated a net loss of RMB177.9 million (US$25.8 million) in 2022, following losses of RMB1,441.9 million and RMB1,339.9 million in 2021 and 2020, respectively[275]. - The company expects its teaching and learning SaaS offerings to become an increasingly important source of net revenue going forward, given the significant market potential[284]. - The majority of net revenues in 2022 from other educational products and services came from personalized self-directed learning products, indicating a shift in focus towards user-facing products[284]. Operational Efficiency and Cost Management - The company reported a decrease in research and development expenses as a percentage of net revenues from 47.5% in 2020 to 34.4% in 2022, indicating improved operational scale and cost control capabilities[288]. - Sales and marketing expenses accounted for 84.9% of net revenues in 2020, which decreased to 14.9% in 2022, reflecting a substantial reduction in absolute amounts due to regulatory requirements and cost optimization efforts[289]. - Compensation costs, a major component of cost of revenues, decreased from RMB 327.6 million (25.3% of net revenues) in 2020 to RMB 112.4 million (21.0% of net revenues) in 2022[288]. Corporate Structure and Governance - The company has established a wholly-owned subsidiary in the British Virgin Islands and multiple subsidiaries in mainland China to streamline its corporate structure[174]. - The corporate structure includes significant shareholdings by Mr. Andy Chang Liu, who holds 99% in key subsidiaries[260]. - The company has established three committees under the board of directors: audit, compensation, and nominating and corporate governance[358]. Intellectual Property and Technology - As of December 31, 2022, the company had registered 304 trademarks, 137 patents, 96 software copyrights, and 115 domain names in China, highlighting its commitment to intellectual property protection[210]. - The company has a team of 164 technology professionals focused on enhancing technological capabilities, including automatic speech recognition and computer vision[199]. - The automatic speech recognition technology evaluated over 300 million audio messages daily, significantly improving local evaluation accuracy[200]. Social Responsibility and Community Engagement - The company engages in corporate social responsibility initiatives under the brand 17 Cares, focusing on improving K-12 education quality in impoverished regions in China[206]. - The company competes by offering diversified educational functions, high-quality localized content, and data-driven insights, aiming to grow the number of paid users efficiently[207]. Cash Flow and Investments - Net cash used in operating activities in 2022 was RMB 463.9 million (US$ 67.3 million), compared to RMB 1,506.7 million in 2021[325]. - Cash, cash equivalents, and restricted cash at the end of 2022 were RMB 718.1 million (US$ 104.1 million), down from RMB 1,180.9 million in 2021[322]. - Capital expenditures were RMB 2.8 million (US$ 0.4 million) in 2022, significantly lower than RMB 129.4 million in 2021[329]. Employee and Shareholder Information - The company had a total of 480 employees as of December 31, 2022, with the majority based in mainland China[364]. - The beneficial ownership of directors and executive officers includes 14.4% of total ordinary shares and 80.9% of aggregate voting power[367]. - As of February 28, 2023, options to purchase 11,208,163 ordinary shares under the 2015 Share Option Plan have been granted and remain outstanding[344].