Press Release: Viomi Technology Co., Ltd Reports Second Half and Full Year 2023 Unaudited Financial Results

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Non-GAAP operating loss([1]) was RMB52.1 million (US$7.3 million), compared to RMB150.9 million for the second half of 2022.

NET LOSS

Net loss attributable to ordinary shareholders of the Company decreased by 84.0% to RMB29.7 million (US$4.2 million), compared to RMB185.9 million for the second half of 2022, primarily due to the Company's efforts to improve operational efficiency.

Non-GAAP net loss attributable to ordinary shareholders([2]) of the Company was RMB30.9 million (US$4.4 million), compared to RMB180.3 million for the second half of 2022.

 
([1]) "Non-GAAP operating loss" is defined as loss from operation excluding 
share-based compensation expenses. See "Use of Non-GAAP Measures" and 
"Reconciliation of GAAP and Non-GAAP Results" included in this press release. 
([2]) "Non-GAAP net loss attributable to ordinary shareholders of the Company" 
is defined as net loss attributable to ordinary shareholders of the Company 
excluding share-based compensation expenses. See "Use of Non-GAAP Measures" 
and "Reconciliation of GAAP and Non-GAAP Results" included in this press 
release. 
 

BALANCE SHEET

As of December 31, 2023, the Company had cash and cash equivalents of RMB491.7 million (US$69.3 million), restricted cash of RMB144.6 million (US$20.4 million), short-term deposits of RMB365.8 million (US$51.5 million), and short-term investments of RMB70.4 million (US$9.9 million), compared to RMB737.1 million, RMB76.1 million, RMB171.5 million, and RMB197.1 million, respectively, as of December 31, 2022.

Full Year 2023 Financial Results

REVENUE

Net revenues were RMB2,493.4 million (US$351.2 million), compared to RMB3,232.7 million for 2022.

   -- IoT @ Home portfolio. Revenues from the IoT @ Home portfolio decreased by 
      24.6% to RMB1,220.9 million (US$172.0 million) from RMB1,619.9 million 
      for 2022. 
 
   -- Home water solutions. Revenues from home water solutions decreased by 
      11.3% to RMB604.0 million (US$85.1 million) from RMB681.1 million for 
      2022. 
 
   -- Consumables. Revenues from consumables decreased by 12.3% to RMB314.4 
      million (US$44.3 million) from RMB358.4 million for 2022. 
 
   -- Small appliances and others. Revenues from small appliances and others 
      decreased by 38.2% to RMB354.1 million (US$49.9 million) from RMB573.3 
      million for 2022. 

GROSS PROFIT

Gross profit was RMB569.5 million (US$80.2 million), compared to RMB737.1 million for 2022. Gross margin was 22.8%, compared to 22.8% for 2022.

OPERATING EXPENSES

Total operating expenses decreased by 31.9% to RMB706.2 million (US$99.5 million) from RMB1,036.5 million for 2022.

Research and development expenses decreased by 25.7% to RMB222.9 million (US$31.4 million) from RMB300.0 million for 2022.

Selling and marketing expenses decreased by 34.7% to RMB401.8 million (US$56.6 million) from RMB614.9 million for 2022.

General and administrative expenses decreased by 33.0% to RMB81.5 million (US$11.5 million) from RMB121.7 million for 2022.

LOSS FROM OPERATIONS

Loss from operations decreased by 57.0% to RMB119.2 million (US$16.8 million) from RMB277.3 million for 2022.

Non-GAAP operating loss([3]) was RMB119.0 million (US$16.8 million), compared to RMB257.8 million for 2022.

NET LOSS

Net loss attributable to ordinary shareholders of the Company was RMB84.7 million (US$11.9 million), compared to RMB275.5 million for 2022.

Non-GAAP net loss attributable to ordinary shareholders([4]) of the Company was RMB84.6 million (US$11.9 million), compared to RMB256.0 million for 2022.

 
([3]) "Non-GAAP operating loss" is defined as loss from operation excluding 
share-based compensation expenses. See "Use of Non-GAAP Measures" and 
"Reconciliation of GAAP and Non-GAAP Results" included in this press release. 
([4]) "Non-GAAP net loss attributable to ordinary shareholders of the Company" 
is defined as net loss attributable to ordinary shareholders of the Company 
excluding share-based compensation expenses. See "Use of Non-GAAP Measures" 
and "Reconciliation of GAAP and Non-GAAP Results" included in this press 
release. 
 

Conference Call

The Company's management will host a conference call at 8:00 a.m. Eastern Time on Monday, March 25, 2024 (8:00 p.m. Beijing/Hong Kong time on March 25, 2024) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

 
United States (toll free):    +1 888-346-8982 
International:                +1 412-902-4272 
Hong Kong, SAR (toll free):   800-905-945 
Hong Kong, SAR:               +852 3018-4992 
Mainland China (toll free):   400-120-1203 
Conference ID:                6672974 
 

A telephone replay will be available one hour after the call until April 1, 2024, by dialing:

 
United States:              +1 877-344-7529 
International:              +1 412-317-0088 
Replay Access Code:         6672974 
 

Additionally, a live and archived webcast of the conference call will be available at http://ir.viomi.com.

About Viomi Technology

Viomi's mission is to redefine the future home via the concept of IoT @ Home.

Viomi has developed a unique IoT @ Home platform consisting of an ecosystem of innovative IoT-enabled smart home products, together with a suite of complementary consumable products and value-added businesses. This platform provides an attractive entry point into the consumer home, enabling consumers to intelligently interact with a broad portfolio of IoT products in an intuitive and human-like manner to make daily life more convenient, efficient and enjoyable, while allowing Viomi to grow its household user base and capture various additional scenario-driven consumption events in the home environment.

For more information, please visit: http://ir.viomi.com.

Use of Non-GAAP Measures

The Company uses non-GAAP operating income, non-GAAP net income, non-GAAP net income attributable to ordinary shareholders of the Company, non-GAAP basic and diluted net income per ordinary share and non-GAAP basic and diluted net income per American depositary share ("ADS"), which are non-GAAP financial measures, in evaluating its operating results and for financial and operational decision-making purposes. Non-GAAP operating income is income from operations excluding share-based compensation expenses. Non-GAAP net income is net income excluding share-based compensation expenses. Non-GAAP net income attributable to ordinary shareholders of the Company is net income attributable to ordinary shareholders excluding share-based compensation expenses. Non-GAAP basic and diluted net income per ordinary share is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. Non-GAAP basic and diluted net income per ADS is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ADS used in the calculation of non-GAAP basic and diluted net income per ADS. The non-GAAP adjustments do not have any tax impact as share-based compensation expenses are non-deductible for income tax purpose.

The Company believes that non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, which are non-cash charges, and these measures provide useful information about the Company's operating results, enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.

Non-GAAP financial measures should not be considered in isolation or construed as alternative to income from operations, net income, or any other measure of performance or as an indicator of the Company's operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. We encourage investors and others to review its financial information in its entirety and not rely on a single financial measure. Reconciliations of the Company's non-GAAP financial measures to the most directly comparable GAAP measures are included at the end of this press release.

Exchange Rate

The Company's business is primarily conducted in China and the significant majority of revenues generated are denominated in Renminbi ("RMB"). This announcement contains currency conversions of RMB amounts into U.S. dollars ("US$") solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.0999 to US$1.00, the effective noon buying rate for December 29, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on for December 29, 2023, or at any other rate.

Safe Harbor Statement

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