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Atour Lifestyle Holdings Limited Reports First Quarter of 2024 Unaudited Financial Results

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SHANGHAI, China, May 23, 2024 (GLOBE NEWSWIRE) — Atour Lifestyle Holdings Limited (“Atour” or the “Company”) (NASDAQ: ATAT), a leading hospitality and lifestyle company in China, today announced its unaudited financial results for the first quarter ended March 31, 2024.

First Quarter of 2024 Operational Highlights

As of March 31, 2024, there were 1,302 hotels with a total of 148,149 hotel rooms in operation across Atour’s hotel network, representing a rapid increase of 34.5% and 31.6% year-over-year in terms of the number of hotels and hotel rooms, respectively. As of March 31, 2024, there were 674 manachised hotels under development in our pipeline.

The average daily room rate4 (“ADR”) was RMB430 for the first quarter of 2024, compared with RMB443 for the same period of 2023 and RMB438 for the previous quarter.

The occupancy rate4 was 73.3% for the first quarter of 2024, compared with 72.5% for the same period of 2023 and 78.4% for the previous quarter.

The revenue per available room4 (“RevPAR”) was RMB328 for the first quarter of 2024, compared with RMB337 for the same period of 2023 and RMB358 for the previous quarter.

The GMV5 generated from our retail business was RMB495 million for the first quarter of 2024, representing an increase of 277.4% year-over-year.

“We delivered a solid performance in the first quarter of 2024,” said Mr. Haijun Wang, Founder, Chairman and CEO of Atour. “We maintained our rapid pace in hotel openings to close the quarter with a total of 1,302 hotels in operation, a year-over-year increase of 34.5%. We also maintained a healthy RevPAR during the quarter. Furthermore, our retail business continued to thrive, with quarterly GMV soaring by 277.4% year-over-year to RMB495 million. We will remain dedicated to deepening our insights into customers’ needs and crafting distinctive products and services, thus elevating the ‘Chinese experience’ while creating a virtuous cycle and achieving greater synergies between the accommodation and retail businesses. Meanwhile, we have proudly published our 2023 Environmental, Social and Governance report in May. Looking ahead, we will holistically strengthen our commitment to ESG, augmenting our contributions to society and the industry’s sustainable development,” concluded Mr. Wang.

First Quarter of 2024 Unaudited Financial Results

(RMB in thousands)

   Q1 2023 Q1 2024
     
Revenues:      
Manachised hotels   446,798 836,111
Leased hotels   187,310 168,049
Retail   112,933 416,591
Others   26,895 47,542
Net revenues   773,936 1,468,293
       

Net revenues. Our net revenues for the first quarter of 2024 increased by 89.7% to RMB1,468 million (US$203 million) from RMB774 million for the same period of 2023, mainly driven by the growth in manachised hotel and retail businesses.

    Q1 2023 Q1 2024
(RMB in thousands)      
Operating costs and expenses:      
Hotel operating costs   (381,632 ) (662,169 )
Retail costs   (61,517 ) (206,103 )
Other operating costs   (10,137 ) (9,826 )
Selling and marketing expenses   (56,009 ) (174,711 )
General and administrative expenses   (193,204 ) (76,655 )
Technology and development expenses   (16,790 ) (24,181 )
Total operating costs and expenses   (719,289 ) (1,153,645 )
           

Operating costs and expenses for the first quarter of 2024 were RMB1,154 million (US$160 million), including RMB3 million share-based compensation expenses, compared with RMB719 million, including RMB142 million share-based compensation expenses for the same period of 2023.

Other operating income, net for the first quarter of 2024, was RMB10 million (US$1.4 million), compared with RMB7 million for the same period of 2023.

Income from operations for the first quarter of 2024 was RMB325 million (US$45 million), compared with RMB62 million for the same period of 2023.

Income tax expense for the first quarter of 2024 was RMB89 million (US$12 million), compared with RMB53 million for the same period of 2023.

Net income for the first quarter of 2024 was RMB258 million (US$36 million), representing an increase of 1326.0% year-over-year compared with RMB18 million for the same period of 2023.

Adjusted net income (non-GAAP) for the first quarter of 2024 was RMB261 million (US$36 million), representing an increase of 63.4% year-over-year compared with RMB160 million for the same period of 2023.

Basic and diluted income per share/American depositary share (ADS). For the first quarter of 2024, basic income per share was RMB0.62 (US$0.09), and diluted income per share was RMB0.62 (US$0.09). Basic income per ADS for the first quarter of 2024 was RMB1.87 (US$0.26), and diluted income per ADS was RMB1.85 (US$0.26).

EBITDA (non-GAAP) for the first quarter of 2024 was RMB351 million (US$49 million), representing an increase of 291.3% year-over-year compared with RMB90 million for the same period of 2023.

Adjusted EBITDA (non-GAAP) for the first quarter of 2024 was RMB354 million (US$49 million), representing an increase of 53.1% year-over-year compared with RMB231 million for the same period of 2023.

Cash flows. Operating cash inflow for the first quarter of 2024 was RMB143 million (US$20 million). Investing cash inflow for the first quarter of 2024 was RMB37 million (US$5 million). Financing cash inflow for the first quarter of 2024 was RMB20 million (US$3 million).

Cash and cash equivalents and restricted cash. As of March 31, 2024, the Company had a total balance of cash and cash equivalents and restricted cash of RMB3 billion (US$422 million).

Debt financing. As of March 31, 2024, the Company had total outstanding borrowings of RMB92 million (US$13 million), and the unutilized credit facility available to the Company was RMB420 million.

_________________
1Adjusted net income (non-GAAP) is defined as net income excluding share-based compensation expenses.
2EBITDA (non-GAAP) is defined as earnings before interest expense, interest income, income tax expense and depreciation and amortization.
3Adjusted EBITDA (non-GAAP) is defined as EBITDA excluding share-based compensation expenses.
4Excludes hotel rooms that were previously requisitioned by the government for quarantine needs in response to the COVID-19 outbreak or otherwise became unavailable due to temporary hotel closures. ADR and RevPAR are calculated based on tax–inclusive room rates.
“ADR” refers to the average daily room rate, which means room revenue divided by the number of rooms in use for a given period;
“Occupancy rate” refers to the number of rooms in use divided by the number of available rooms for a given period;
“RevPAR” refers to revenue per available room, which is calculated by total revenues during a period divided by the number of available rooms in our hotels during the same period.
5“GMV” refers to gross merchandise value, which is the total value of confirmed orders placed and paid for by our end customers with us or our franchisees, as the case may be, and sold as part of our retail business, where the ordered products have been dispatched, regardless of whether they are delivered or returned, calculated based on the prices of the ordered products net of any discounts offered to our end customers.

Conference Call

The Company will host a conference call at 7:00 AM U.S. Eastern time on Thursday, May 23, 2024 (or 7:00 PM Beijing/Hong Kong time on the same day). 

A live webcast of the conference call will be available on the Company’s investor relations website at https://ir.yaduo.com, and a replay of the webcast will be available following the session.

For participants who wish to join the conference call via telephone, please pre-register using the link provided below. Upon registration, each participant will receive a set of participant dial-in numbers and a personal PIN to join the conference call.

Details for the conference call are as follows: 

Event Title: Atour First Quarter 2024 Earnings Conference Call
Pre-registration Link: https://register.vevent.com/register/BI99d7f8d3920a46dca89c706f4c0e575a

Use of Non-GAAP Financial Measures

To supplement the Company’s unaudited consolidated financial results presented in accordance with U.S. Generally-Accepted Accounting Principles (“GAAP”), the Company uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission: adjusted net income, which is defined as net income excluding share-based compensation expenses; EBITDA, which is defined as earnings before interest expense, interest income, income tax expense and depreciation and amortization; adjusted EBITDA, which is defined as EBITDA excluding share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and non-GAAP results” set forth at the end of this release.

The Company believes that EBITDA is widely used by other companies in the hospitality industry and may be used by investors as a measure of the financial performance. Given the significant investments that the Company has made in leasehold improvements and other fixed assets of leased hotels, depreciation and amortization comprises a significant portion of the Company’s cost structure. The Company believes that EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization attributable to capital expenditures. Adjusted net income and adjusted EBITDA provide meaningful supplemental information regarding the Company’s performance by excluding share-based compensation expenses, as the investors can better understand the Company’s performance and compare business trends among different reporting periods on a consistent basis, excluding share-based compensation expenses, which are not expected to result in cash payment. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to the Company’s historical performance. The Company believes these non-GAAP financial measures are also useful to investors in allowing for greater transparency with respect to supplemental information used regularly by Company management in financial and operational decision-making. The accompanying tables provide more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

The use of these non-GAAP measures has certain limitations, as the excluded items have been and will be incurred, and are not reflected in the presentation of these non-GAAP measures. Each of these items should also be considered in the overall evaluation of the results. The Company compensates for these limitations by providing the disclosure of the relevant items both in its reconciliations to the U.S. GAAP financial measures and in its consolidated financial statements, all of which should be considered when evaluating the performance of the Company.

In addition, these measures may not be comparable to similarly titled measures utilized by other companies, as these companies may not calculate these measures in the same manner as the Company does.

About Atour Lifestyle Holdings Limited

Atour Lifestyle Holdings Limited (NASDAQ: ATAT) is a leading hospitality and lifestyle company in China, with a distinct portfolio of lifestyle hotel brands. Atour is the leading upper midscale hotel chain in China and is the first Chinese hotel chain to develop scenario-based retail business. Atour is committed to bringing innovations to China’s hospitality industry and building new lifestyle brands around hotel offerings.
For more information, please visit https://ir.yaduo.com.

Investor Relations Contact

Atour Lifestyle Holdings Limited
Email: ir@yaduo.com

Piacente Financial Communications
Email: Atour@tpg-ir.com
Tel: +86-10-6508-0677

—Financial Tables and Operational Data Follow—

ATOUR LIFESTYLE HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share data and per share data, or otherwise noted)
             
    As of   As of
    December 31,   March 31,
    2023   2024
    RMB   RMB   USD1
Assets            
Current assets            
Cash and cash equivalents   2,840,807   3,048,408   422,200
Short-term investments   751,794   711,525   98,545
Accounts receivable   162,101   164,553   22,790
Prepayments and other current assets   251,900   270,544   37,470
Amounts due from related parties   115,900   135,085   18,709
Inventories   119,078   105,711   14,641
Total current assets   4,241,580   4,435,826   614,355
Non-current assets            
Restricted cash   946   946   131
Contract costs   98,220   105,440   14,603
Property and equipment, net   266,120   280,378   38,832
Operating lease right-of-use assets   1,712,580   1,662,001   230,184
Intangible assets, net   4,247   4,240   587
Goodwill   17,446   17,446   2,416
Other assets   100,939   93,435   12,942
Deferred tax assets   144,947   160,832   22,275
Total non-current assets   2,345,445   2,324,718   321,970
Total assets   6,587,025   6,760,544   936,325
             
Liabilities and shareholders’ equity            
Current liabilities            
Operating lease liabilities, current   295,721   316,113   43,781
Accounts payable   594,545   443,512   61,426
Deferred revenue, current   406,066   381,768   52,874
Salary and welfare payable   189,823   132,487   18,349
Accrued expenses and other payables   684,391   759,669   105,213
Income taxes payable   136,201   169,241   23,440
Short-term borrowings   70,000   90,000   12,465
Amounts due to related parties   1,104   1,979   274
Total current liabilities   2,377,851   2,294,769   317,822
Non-current liabilities            
Operating lease liabilities, non-current   1,583,178   1,524,968   211,206
Deferred revenue, non-current   369,455   400,041   55,405
Long-term borrowings, non-current portion   2,000   2,000   277
Other non-current liabilities   194,452   210,318   29,129
Total non-current liabilities   2,149,085   2,137,327   296,017
Total liabilities   4,526,936   4,432,096   613,839

_______________________
1Translations of balances in the consolidated financial statements from RMB into US$ for the first quarter of 2024 and as of March 31, 2024 are solely for readers’ convenience and were calculated at the rate of US$1.00=RMB7.2203, representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on March 29, 2024.

ATOUR LIFESTYLE HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share data and per share data, or otherwise noted)
             
    As of   As of
    December 31,   March 31,
    2023   2024
    RMB   RMB   USD1
Shareholders’ equity            
Class A ordinary shares   244     244     34  
Class B ordinary shares   56     56     8  
Additional paid in capital   1,555,773     1,558,915     215,907  
Retained earnings   507,226     764,384     105,866  
Accumulated other comprehensive income   4,769     12,278     1,700  
Total equity attributable to shareholders of the Company   2,068,068     2,335,877     323,515  
Non-controlling interests   (7,979 )   (7,429 )   (1,029 )
Total shareholders’ equity   2,068,089     2,328,448     322,486  
Commitments and contingencies   —     —     —  
Total liabilities and shareholders’ equity   6,587,025     6,760,544     936,325  
ATOUR LIFESTYLE HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(All amounts in thousands, except share data and per share data, or otherwise noted)
             
    Three Months Ended
    March 31,   March 31,
    2023     2024  
    RMB   RMB   USD1
Revenues:            
Manachised hotels   446,798     836,111     115,800  
Leased hotels   187,310     168,049     23,275  
Retail   112,933     416,591     57,697  
Others   26,895     47,542     6,584  
Net revenues   773,936     1,468,293     203,356  
Operating costs and expenses:            
Hotel operating costs   (381,632 )   (662,169 )   (91,709 )
Retail costs   (61,517 )   (206,103 )   (28,545 )
Other operating costs   (10,137 )   (9,826 )   (1,361 )
Selling and marketing expenses   (56,009 )   (174,711 )   (24,197 )
General and administrative expenses   (193,204 )   (76,655 )   (10,617 )
Technology and development expenses   (16,790 )   (24,181 )   (3,349 )
Total operating costs and expenses   (719,289 )   (1,153,645 )   (159,778 )
Other operating income, net   7,230     10,009     1,386  
Income from operations   61,877     324,657     44,964  
Interest income   4,843     13,519     1,872  
Gain from short-term investments   5,354     9,592     1,328  
Interest expense   (1,927 )   (673 )   (93 )
Other (expenses) income, net   551     (466 )   (65 )
Income before income tax   70,698     346,629     48,006  
Income tax expense   (52,626 )   (88,921 )   (12,315 )
Net income   18,072     257,708     35,691  
Less: net income attributable to non-controlling interests   197     550     76  
Net income attributable to the Company   17,875     257,158     35,615  
             
Net income   18,072     257,708     35,691  
Other comprehensive income (loss)            
Foreign currency translation adjustments, net of nil income taxes   (2,080 )   7,509     1,040  
Other comprehensive income (loss), net of income taxes   (2,080 )   7,509     1,040  
Total comprehensive income   15,992     265,217     36,731  
Comprehensive income attributable to non-controlling interests   197     550     76  
Comprehensive income attributable to the Company   15,795     264,667     36,655  
Net income per ordinary share            
—Basic   0.05     0.62     0.09  
—Diluted   0.04     0.62     0.09  
Weighted average ordinary shares used in calculating net income per ordinary share            
—Basic   393,958,225     412,841,106     412,841,106  
—Diluted   412,310,616     416,114,169     416,114,169  
ATOUR LIFESTYLE HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of RMB, except share data and per share data, or otherwise noted)
             
    Three Months Ended
    March 31,   March 31,
    2023     2024  
    RMB   RMB   USD1
             
Cash flows from operating activities:            
Net cash generated from operating activities   361,657     143,236     19,838  
Cash flows from investing activities:            
Payment for purchases of property and equipment   (17,619 )   (12,615 )   (1,747 )
Payment for purchases of intangible assets   —     (282 )   (39 )
Payment for purchases of short-term investments   (1,328,350 )   (2,664,000 )   (368,959 )
Proceeds from maturities of short-term investments   1,332,460     2,713,861     375,865  
Net cash generated from (used in) investing activities   (13,509 )   36,964     5,120  
Cash flows from financing activities:            
Proceeds from borrowings   40,000     20,000     2,770  
Repayment of borrowings   (980 )   —     —  
Net cash generated from financing activities   39,020     20,000     2,770  
Effect of exchange rate changes on cash and cash equivalents and restricted cash   (1,402 )   7,401     1,025  
Net increase in cash and cash equivalents and restricted cash   385,766     207,601     28,753  
Cash and cash equivalents and restricted cash at the beginning of the period   1,590,107     2,841,753     393,578  
Cash and cash equivalents and restricted cash at the end of the period   1,975,873     3,049,354     422,331  
ATOUR LIFESTYLE HOLDINGS LIMITED
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(In thousands of RMB, except share data and per share data, or otherwise noted)
             
    Three Months Ended
    March 31,   March 31,
    2023     2024  
    RMB   RMB   USD1
             
Net income (GAAP)   18,072     257,708     35,691  
Share-based compensation expenses, net of tax effect of nil2   141,580     3,142     436  
Adjusted net income (non-GAAP)   159,652     260,850     36,127  
 
    Three Months Ended
    March 31,   March 31,
    2023     2024  
    RMB   RMB   USD1
             
Net income (GAAP)   18,072     257,708     35,691  
Interest income   (4,843 )   (13,519 )   (1,872 )
Interest expense   1,927     673     93  
Income tax expense   52,626     88,921     12,315  
Depreciation and amortization   21,897     17,149     2,375  
EBITDA (non-GAAP)   89,679     350,932     48,602  
Share-based compensation expenses   141,580     3,142     436  
Adjusted EBITDA (non-GAAP)   231,259     354,074     49,038  

_______________________
2The share-based compensation expenses were recorded at entities in PRC. Share-based compensation expenses were non-deductible expenses in PRC. Therefore, there is no tax impact for share-based compensation expenses adjustment for non-GAAP financial measures.

Key Operating Data

  Number of Hotels   Number of Rooms
  Opened in Q1 2024 Closed in Q1 2024 As of March 31, 2024   As of March 31, 2024
Manachised hotels 97 4 1,271   143,633
Leased hotels – 1 31   4,516
Total 97 5 1,302   148,149
Brand Positioning                             As of March 31, 2024
Properties Rooms
Manachised Leased  
A.T. House Luxury – 1 214
Atour S Upscale 61 8 10,126
ZHOTEL Upscale 1 – 52
Atour Upper midscale 958 21 112,444
Atour X Upper midscale 130 – 14,121
Atour Light Midscale 121 1 11,192
Total   1,271 31 148,149
  All Hotels in Operation
  Three Months Ended
March 31, 2023		   Three Months Ended
December 31, 2023		   Three Months Ended
March 31, 2024
           
Occupancy rate3(in percentage)          
Manachised hotels 72.1%   78.2%   73.1%
Leased hotels 80.4%   84.5%   79.3%
All hotels 72.5%   78.4%   73.3%
           
ADR3(in RMB)          
Manachised hotels 437.2   432.8   426.0
Leased hotels 544.8   557.9   541.6
All hotels 442.9   437.7   430.0
           
RevPAR3(in RMB)          
Manachised hotels 330.5   353.1   323.7
Leased hotels 463.7   495.3   455.2
All hotels 336.8   358.2   327.9
  Hotels in Operation for More Than 18 Months in Q1 20244
  Number of hotels   Same-hotel Occupancy3
(in percentage)		   Same-hotel ADR3
(in RMB)		   Same-hotel RevPAR3
(in RMB)
  Q1 2023 Q1 2024   Q1 2023 Q1 2024   Q1 2023 Q1 2024   Q1 2023 Q1 2024
                       
Manachised hotels 813 813   73.1% 74.7%   438.4 431.5   335.8 335.3
Leased hotels 30 30   80.3% 79.3%   543.2 541.6   463.1 455.2
All hotels 843 843   73.4% 74.9%   443.8 436.9   341.8 340.8

_______________________
3Excludes hotel rooms that were previously requisitioned by the government for quarantine needs in response to the COVID-19 outbreak or otherwise became unavailable due to temporary hotel closures. ADR and RevPAR are calculated based on tax-inclusive room rates.
4For any given quarter, we define “same-hotel” to be a hotel that has operated for a minimum of 18 calendar months as of the 15th day (inclusive) of any month within that quarter. The OCC, ADR and RevPAR presented above represent such metrics generated by “same hotels” in the first quarter of 2024, compared to the corresponding metrics generated by these “same hotels” during the same period in 2023.


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