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Red, yellow and blue reported revenue growth and loss narrowing

On November 20, red, yellow and blue (NYSE: RYB) released the third quarter financial report of 2019. As of September 30, its revenue was $43.7 million, an increase of 24% over the same period last year, and its net loss was $3.3 million, a year-on-year decrease of 23.2%.

The increase in enrollment has weakened the loss pressure of red, yellow and blue. According to the financial report, the number of students in red, yellow and blue this quarter was 30200, an increase of 31% over the same period last year, and drove the tuition income to increase by 26.8% to US $39.5 million. Red, yellow and blue said in the financial report that this was mainly due to the growth of the utilization rate of direct operated parks and the acquisition of a children's education group in Singapore.

Raising product prices has also become a way for red, yellow and blue to expand revenue. In addition to parent-child kindergartens and kindergartens, Zhudou education, which serves preschool groups, is regarded as one of the main businesses of red, yellow and blue. During the quarter, products such as Zhudou education brought revenue of $4.2 million, a year-on-year increase of 2.8%.

While the revenue increased, red, yellow and blue slowed down the investment in operating costs. According to the financial report, its operating cost in the third quarter of 2019 was US $40.6 million, a year-on-year increase of 19.3%, and the sales expense was the same as that in the same period last year. Gu Hao, chief financial officer of red, yellow and blue, said in the financial report that 'strict cost management will continue to be implemented in the future to achieve stable growth and improve profitability'.

For the fourth quarter of 2019, the revenue of red, yellow and blue is expected to be US $49 million to US $51 million, an increase of 9% to 13% over the same period last year.