West Coast Community Bancorp

Second-quarter 2023 total net revenue was RMB 545 million, down 16% year over year from RMB 649 million. Gross profit was RMB 278.5 million and gross margin was 51.1%. Operating loss was RMB 6.8 million versus operating income of RMB 48 million a year ago, and net income was RMB 8.3 million compared with RMB 47.9 million last year; non-GAAP operating loss was RMB 0.9 million and non-GAAP net income was RMB 9.2 million. For the core segments, IT-focused supplementary STEAM revenue was RMB 647.7 million, in line with Q2 2022, while IT professional education revenue fell 34.8% year over year and 47% quarter over quarter. Cash, cash equivalents and restricted cash were RMB 368.1 million as of June 30, 2023, down RMB 5.9 million from December 31, 2022. Management did not provide formal next-quarter or full-year financial guidance on the call.

Nancy Ying Sun framed the quarter as evidence that the business is recovering as external conditions normalize. She highlighted better customer acquisition, stronger word-of-mouth, supportive policy trends for programming and STEAM education, and a more focused strategy after carving out the college collaboration business. Her tone was cautiously optimistic, emphasizing that the company is sharpening operations, adjusting course offerings toward digital transformation and AI, and aiming to improve long-term profitability.

Xiaobo Shao emphasized the financial turnaround from Q1, with revenue up 42% sequentially and operating loss improving to RMB 6.8 million from RMB 58.8 million. He cited lower cost of revenues of RMB 266.3 million, gross profit of RMB 278.5 million, and gross margin of 51.1%, while operating expenses fell 13.1% to RMB 285.5 million. He also noted RMB 76.6 million in proceeds from the disposition of two buildings, capex of RMB 11.6 million, and period-end cash, cash equivalents and restricted cash of RMB 368.1 million.

An analyst asked what drove the quarter-over-quarter improvement beyond the better operating environment. Nancy said the main drivers were improved social mobility and customer acquisition, stronger word-of-mouth from camps and competitions, and favorable policy support for programming and STEAM education. No other questions were taken before the call ended.