Fourth quarter gross margin increased to 23.0% from 19.8% quarter-over-quarter.<\/i><\/b><\/p>\n
Full-year gross margin improved to 22.8% from 22.6% year-over-year. <\/i><\/b><\/p>\n
GUANGZHOU, China<\/span><\/span>, March 27, 2023<\/span><\/span> \/PRNewswire\/ — Viomi Technology Co., Ltd (“Viomi” or the “Company”) (NASDAQ: VIOT), a leading IoT @ Home technology company in China<\/span>, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2022<\/span>.<\/p>\n Fourth Q<\/b>uarter 2022 Financial and Operating Highlights <\/b><\/p>\n Full Year 2022 Financial and Operating Highlights<\/b><\/p>\n Mr. Xiaoping Chen<\/span>, Founder and CEO of Viomi, commented, “Due to the adverse impact of the COVID-19 pandemic and macro headwinds, we experienced a year-over-year decline in revenues in the fourth quarter of 2022 and our business scale was greatly affected by external factors and strategic adjustments throughout 2022. Nevertheless, our gross margin increased by 3.2% quarter-over-quarter in the fourth quarter of 2022, benefiting from our product portfolio optimization efforts. Our full-year gross margin in 2022 also kept stable as compared with 2021 despite<\/span> fluctuations throughout the year. To adapt to the uncertainties in the macro environment of 2022, we implemented optimization measures across our business as we strove to improve our operating results and positioned ourselves to thrive in the post-pandemic era.<\/p>\n “First, to strengthen our product portfolio, we leveraged our competitive advantages and continued to enhance our core product categories with upgraded functionalities. Equipped with industry-leading technology, our AI water purification products, Viomi’s longest-standing category, achieved a 6% year-over-year sales growth in the fourth quarter despite various challenges. Going forward, we will strengthen our efforts to optimize distribution channels, hone our existing technological advantages, and further deepen the market penetration of our products. We will also expand our footprint overseas with products such as air conditioners, washing machines and refrigerators to accelerate the recovery of our business scale.<\/p>\n “Furthermore, to improve our operational efficiency, we implemented more disciplined cost control measures during 2022. As a result, both selling and marketing expenses and research and development expenses decreased in the fourth quarter of 2022 compared with the prior year period. In particular, selling and marketing expenses as the proportion of net revenues narrowed compared with that in the second quarter of 2022 on a similar revenue scale. We will continue to optimize costs, streamline organizational structure and improve operational efficiency to boost profitability,” Mr. Chen commented.<\/p>\n “While refining our business operations, we remained firmly committed to bringing more useful and user-friendly, whole-house intelligent solutions to consumers and continuously improving the intelligent experience of our products. In October 2022<\/span>, we hosted the virtual 2022 Fall Software Launching Event, ‘AI: Helpful 2.0’. This online event focused on software upgrades and product iteration across four dimensions, including healthcare, energy conservation and environmental protection, proactive intelligence, and natural interaction, further improving our one-stop IoT home solutions from the software side. In November 2022<\/span>, Viomi’s one-stop IoT home solution platform, HomeMap app, was awarded the Precision Science and Technology Award by the Ministry of Science and Technology of China<\/span> and the National Office for Science and Technology Awards of China<\/span>. Furthermore, during the year, we received approvals to establish both our Doctoral Workstation of Guangdong Province<\/span> and our Foshan Enterprise Postdoctoral Workstation, which will facilitate talent cultivation and project incubation of Viomi. As a leading technology brand, Viomi will continue to devote resources to research and development and focus on technological innovation, driving progress industry-wide.”<\/p>\n Mr. Chen concluded, “The market potential for whole-house intelligence is tremendous. and Viomi has already completed the layout of the ‘one-stop IoT home’ solution. As we progress through 2023, we will maintain sufficient financial reserves and strictly control costs to provide strong support for our brand development and product upgrades. Meanwhile, we will steadily expand our business domestically and introduce new product categories in overseas markets as we seek to accelerate the recovery of our profitability and achieve healthy and sustainable growth.”<\/p>\n Fourth Quarter 2022 Financial Results<\/b><\/p>\n REVENUE<\/i><\/b><\/p>\n Net revenues were RMB910.5 million<\/span> (US$132.0 million<\/span>), compared to RMB1,332.8 million<\/span> for the fourth quarter of 2021. The decline was mainly due to a decrease in revenues from IoT@Home portfolio and small appliances and others.<\/p>\n – IoT @ Home portfolio.<\/i> Revenues from IoT @ Home portfolio decreased by 48.1% to RMB359.2 million<\/span> (US$52.1 million<\/span>) from RMB692.0 million<\/span> for the fourth quarter of 2021. The decline was primarily due to SKU adjustments for smart kitchen products.<\/p>\n – Home water solutions<\/i>. Revenues from home water solutions increased by 6.0% to RMB279.2 million<\/span> (US$40.5 million<\/span>) from RMB263.3 million<\/span> for the fourth quarter of 2021. The increase was primarily driven by an increase in revenues from larger flux water purifiers as a result of the product portfolio adjustment within this category.<\/p>\n – Consumable<\/i>s.<\/i> Revenues from consumables decreased by 3.5% to RMB116.2 million<\/span> (US$16.8 million<\/span>) from RMB120.4 million<\/span> for the fourth quarter of 2021.<\/p>\n – Small appliances and others.<\/i> Revenues from small appliances and others decreased by 39.3% to RMB155.9 million<\/span> (US$22.6 million<\/span>) from RMB257.1 million<\/span> for the fourth quarter of 2021, primarily due to the continued product portfolio adjustment within this category.<\/p>\n GROSS PROFIT<\/i><\/b><\/p>\n Gross profit was RMB209.7 million<\/span> (US$30.4 million<\/span>), compared to RMB341.5 million<\/span> for the fourth quarter of 2021. Gross margin was 23.0%, compared to 25.6% for the fourth quarter of 2021. The decline was primarily due to a decrease in the selling price of certain clean-up products as a result of product portfolio adjustments.<\/p>\n OPERATING EXPENSES<\/i><\/b><\/p>\n Total operating expenses decreased by 19.4% to RMB274.7 million<\/span> (US$39.8 million<\/span>) from RMB340.7 million<\/span> for the fourth quarter of 2021, primarily due to a decrease in selling and marketing expenses, partially offset by an increase in general and administrative expenses.<\/p>\n Research and development expenses <\/i>decreased by 23.6% to RMB74.7 million<\/span> (US$10.8 million<\/span>) from RMB97.8 million<\/span> for the fourth quarter of 2021, mainly due to a decrease in research and development experts and related salaries, as well as the Company’s continued efforts in R&D efficiency improvement.<\/p>\n Selling and marketing expenses <\/i>decreased by 29.7% to RMB151.1 million<\/span> (US$21.9 million<\/span>) from RMB214.8 million<\/span> for the fourth quarter of 2021, mainly due to a decrease in logistics and marketing expenses.<\/p>\n General and administrative expenses<\/i> increased by 74.5% to RMB48.9 million<\/span> (US$7.1 million<\/span>), compared to RMB28.0 million<\/span> for the fourth quarter of 2021, primarily due to an increase in the estimated allowance for accounts and notes receivables from a third party client recognized in the same period.<\/p>\n LOSS\/INCOME<\/i><\/b> FROM OPERATIONS<\/i><\/b><\/p>\n Loss from operations was RMB59.3 million<\/span> (US$8.6 million<\/span>), compared to income from operations of RMB9.1 million<\/span> for the fourth quarter of 2021.<\/p>\n Non-GAAP operating loss[1]<\/sup> was RMB54.5 million<\/span> (US$7.9 million<\/span>), compared to non-GAAP operating income of RMB19.9 million<\/span> for the fourth quarter of 2021.<\/p>\n NET LOSS\/INCOME<\/i><\/b><\/p>\n Net loss attributable to ordinary shareholders of the Company was RMB106.3 million<\/span> (US$15.4 million<\/span>), compared to net income attributable to ordinary shareholders of the Company of RMB22.7 million<\/span> for the fourth quarter of 2021. The difference between loss from operations and net loss in 2022 was mainly due to an increase in the valuation allowance of deferred tax asset provided, which caused an increase in income tax expenses.<\/p>\n Non-GAAP net loss attributable to ordinary shareholders[2]<\/sup> of the Company was RMB101.6 million<\/span> (US$14.7 million<\/span>), compared to non-GAAP net income attributable to ordinary shareholders of the Company of RMB33.5 million<\/span> for the fourth quarter of 2021.<\/p>\n [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.<\/span><\/p>\n [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.<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n BALANCE SHEET<\/i><\/b><\/p>\n As of December 31, 2022<\/span>, the Company had cash and cash equivalents of RMB737.1 million<\/span> (US$106.9 million<\/span>), restricted cash of RMB76.1 million<\/span> (US$11.0 million<\/span>), short-term deposits of RMB171.5 million<\/span> (US$24.9 million<\/span>) and short-term investments of RMB197.1 million<\/span> (US$28.6 million<\/span>), compared to RMB587.0 million<\/span>, RMB35.8 million<\/span>, nil and RMB828.9 million<\/span>, respectively, as of December 31, 2021<\/span>.<\/p>\n Full Year 2022 Financial Results<\/b><\/p>\n REVENUE <\/i><\/b><\/p>\n Net revenues were RMB3,232.7 million<\/span> (US$468.7 million<\/span>), compared to RMB5,303.8 million<\/span> for 2021.<\/p>\n – IoT @ Home portfolio.<\/i> Revenues from IoT @ Home portfolio decreased by 52.4% to RMB1,619.9 million<\/span> (US$234.9 million<\/span>) from RMB3,401.0 million<\/span> for 2021.<\/p>\n – Home water solutions<\/i>. Revenues from home water solutions decreased by 8.3% to RMB681.1 million<\/span> (US$98.7 million<\/span>) from RMB742.9 million<\/span> for 2021.<\/p>\n – Consumables.<\/i> Revenues from consumables decreased by 2.4% to RMB358.4 million<\/span> (US$52.0 million<\/span>) from RMB367.0 million<\/span> for 2021.<\/p>\n – Small appliances and others.<\/i> Revenues from small appliances and others decreased by 27.7% to RMB573.3 million<\/span> (US$83.1 million<\/span>) from RMB792.9 million<\/span> for 2021.<\/p>\n GROSS PROFIT<\/i><\/b><\/p>\n Gross profit was RMB737.1 million<\/span> (US$106.9 million<\/span>), compared to RMB1,198.1 million<\/span> for 2021. Gross margin improved to 22.8% from 22.6% for 2021.<\/p>\n OPERATING EXPENSES<\/i><\/b><\/p>\n Total operating expenses decreased by 10.7% to RMB1,036.5 million<\/span> (US$150.3 million<\/span>) from RMB1,160.5 million<\/span> for 2021.<\/p>\n Research and development expenses <\/i>decreased by 3.8% to RMB300.0 million<\/span> (US$43.5 million<\/span>) from RMB311.8 million<\/span> for 2021.<\/p>\n Selling and marketing expenses <\/i>decreased by 18.1% to RMB614.9 million<\/span> (US$89.2 million<\/span>) from RMB751.0 million<\/span> for 2021.<\/p>\n General and administrative expenses<\/i> increased by 24.5% to RMB121.7 million<\/span> (US$17.6 million<\/span>), compared to RMB97.7 million<\/span> for 2021.<\/p>\n LOSS\/INCOME<\/i><\/b> FROM OPERATIONS<\/i><\/b><\/p>\n Loss from operations was RMB277.3 million<\/span> (US$40.2 million<\/span>), compared to income from operations of RMB64.7 million<\/span> for 2021.<\/p>\n Non-GAAP operating loss was RMB257.8 million<\/span> (US$37.4 million<\/span>), compared to non-GAAP operating income of RMB112.1 million<\/span> for 2021.<\/p>\n NET LOSS\/INCOME <\/i><\/b><\/p>\n Net loss attributable to ordinary shareholders of the Company was RMB275.5 million<\/span> (US$39.9 million<\/span>), compared to net income attributable to ordinary shareholders of the Company of RMB88.6 million<\/span> for 2021.<\/p>\n Non-GAAP net loss attributable to ordinary shareholders of the Company was RMB256.0 million<\/span> (US$37.1 million<\/span>), compared to non-GAAP net income attributable to ordinary shareholders of the Company of RMB136.0 million<\/span> for 2021.<\/p>\n Conference Call<\/b><\/p>\n The Company’s management will host a conference call at 8:00 a.m. Eastern Time on Monday<\/span>, March 27, 2023 (8:00 p.m.<\/span> Beijing<\/span>\/Hong Kong<\/span> time on March 27, 2023<\/span>) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:<\/p>\n United States (toll free):<\/span><\/p>\n<\/td>\n +1 888-346-8982<\/span><\/p>\n<\/td>\n<\/tr>\n International:<\/span><\/p>\n<\/td>\n +1 412-902-4272<\/span><\/p>\n<\/td>\n<\/tr>\n Hong Kong, SAR (toll free):<\/span><\/p>\n<\/td>\n 800-905-945<\/span><\/p>\n<\/td>\n<\/tr>\n Hong Kong, SAR:<\/span><\/p>\n<\/td>\n +852 3018-4992<\/span><\/p>\n<\/td>\n<\/tr>\n Mainland China (toll free):<\/span><\/p>\n<\/td>\n 400-120-1203<\/span><\/p>\n<\/td>\n<\/tr>\n Conference ID:<\/span><\/p>\n<\/td>\n 1826420<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n A telephone replay will be available one hour after the call until April 3, 2023<\/span> by dialing:<\/p>\n\n
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