RYB Education (NYSE: RYB), a service provider of early childhood education in China, announced its unaudited financial results for the third quarter ended September 30, 2019 on Tuesday.
RYB reported its net revenues increased by 24.0% to $43.7 million, compared with $35.3 million for the third quarter of 2018. The key driver of it was a 26.8% increase in service revenues. It is primarily due to the increased tuition fees and the increased number of students enrolled at directly operated facilities, which was 30,184 as of September 30, 2019, compared with 23,010 as of September 30, 2018. Besides that, the product revenues for the third quarter of 2019 also increased by 2.8%.
The company's gross margin increased 360 bps to 7.1%, which was due to the higher utilization rate at directly operated facilities, increased average tuition fees from a student-mix shift and increased average selling price.
As of the third quarter is a typical low season. So, despite the strong performance of RYB's kindergartens, the company's net revenue in the third quarter was still slightly lower than expected. Hao Gu, the chief financial officer of RYB, pointed out that this was due to the lower than expected revenue of the play-and-learn center franchise operations in RYB, reported by BJ News.
Net loss attributable to ordinary shareholders of RYB for the third quarter of 2019 was $3.3 million, compared with $4.3 million for the third quarter of 2018.
The company said its total operating expenses for the first nine months of 2019 were $20.0 million, compared with $20.6 million for the same period last year.
Gu said, "Looking ahead, we will continue to strike a balance between stable growth and improved profitability, by practicing disciplined cost management while still making sound investments that will lead the way to our long-term vision."
The stock of RYB has slightly decreased by 4 cents per share.