Boqii Announces Fiscal 2022 Third Quarter Unaudited Financial Results

SHANGHAI,March 3,2022 -- Boqii Holding Limited ("Boqii" or the "Company") (NYSE: BQ),a leading pet-focused platform in China,today announced its unaudited financial results for the third quarter of fiscal year 2022 (the quarter ended December 31,2021).

Fiscal Q3 2022 Operational and Financial Highlights

Total revenues were RMB 332.6 million (US$ 52.2 million),representing an increase of 6.3% from RMB312.9million in the same quarter of fiscal year 2021.

Net losswas RMB28.8 million (US$4.5 million),representing an improvement from net loss of RMB81.9 million in the same quarter of fiscal year 2021.

Adjustednet loss was RMB25.4 million (US$4.0 million),representing an improvement from adjusted net loss of RMB30.5 million in the same quarter of fiscal year 2021.

EBITDA[1]was a loss of RMB25.6 million (US$4.0 million),representing an improvement from a loss of RMB79.2 million in the same quarter of fiscal year 2021.

Total GMV[2]was RMB816.5 million (US$128.1 million),representing an increase of 6.9% from RMB763.8 million in the same quarter of fiscal year 2021.

Active buyerswere 1.9 million,representingan increase of 26.3% from 1.5 million in the same quarter of fiscal year 2021.

[1]EBITDA refers to net loss excluding income tax expenses,interest expense,interest income,depreciation and amortization expenses. EBITDA is a Non-GAAP financial measurement. Please refer to "Non-GAAP financial measurement".

[2]GMV refers to gross merchandise volume,which is the total value of confirmed orders placed with us and sold through distribution model or drop shipping model where we act as a principal in the transaction regardless of whether the products are delivered or returned,calculated based on the listed prices of the ordered products without taking into consideration any discounts. The total GMV amount (i) includes GMV of products sold by Xingmu,(ii) excludes products sold through consignment model and (iii) excludes the value of services offered by us. GMV is subject to future adjustments (such as refunds) and represents only one measure of the Company's performance and should not be relied on as an indicator of our financial results,which depend on a variety of factors.

CEO & CFO Quote

Mr. Hao Liang,Boqii's Founder,Chairman and Chief Executive Officercommented,"We maintained continuous topline growth in the third fiscal quarter of 2022 amidst challenging market conditions. On top of that,we are pleased to report fast-improving profit margins,highlighting the progress we made in achieving profitability. We also announced a strategic partnership with Evetsoft Pet Hospital Software and furthered our pet care supply chain readiness,to provide pets with better care at more accessible price points."

Ms. Yingzhi (Lisa) Tang,Boqii's Co-Founder,Co-CEO and CFO commented: "Continuous growth momentum from online marketing,information services,and other revenue once again exhibited the strength of our vertical platform and unique value propositions to other players in the industry chain. Our improved gross margin also demonstrated our ability to achieve profitability. We are committed to bringing the best-in-class products and services closer to our ever-increasing customer base and industry partners,to capture theenormous opportunities in the pet industry."

Fiscal Q3 2022 Financial Results

Total revenueswere RMB332.6 million (US$52.2 million),representing an increase of 6.3% from RMB312.9 million in the same quarter of fiscal year 2021. The increase was primarily due to the continued organic growth of our business.

Revenues

(in million)

Three Months Ended

December 31

%

2021

2020

change

RMB

RMB

YoY

Product sales

317.4

312.3

1.6%

· Boqii Mall

121.3

114.1

6.3%

· Third party e-commerce platforms

196.1

198.2

(1.1%)

Online marketing and information services and other revenue

15.2

0.6

2433.3%

Total

322.6

312.9

6.3%

Gross profit was RMB76.9 million (US$12.1 million),representing an increase of 37% from RMB56.1 million in the same quarter of fiscal year 2021.

Gross marginwas 23.1%,representing an increase from17.9% in the same quarter of fiscal year 2021.

Operating expenseswere RMB108.2 million,representing a decrease of 28.1% from RMB150.5 million in the same quarter of fiscal year 2021.Operating expenses as a percentage of total revenues was 32.5%,representing a decrease from 48.1% in the same quarter of fiscal year 2021. The decrease was primarily due to share-based compensation expensesincurred in fiscal year 2021. Pursuant to the Amended and Restated 2018 Global Share Plan,the performance condition for options granted thereunder was satisfied upon completion of our IPO; and as a result,the company,upon the completion of the IPO,recorded RMB44.1 million of cumulative share-based compensation expenses for those options for which the vesting conditions had been satisfied as of such date.

Fulfillment Expenses wereRMB37.7 million,representing an increase of 12.2% from RMB33.6 million in the same quarter of fiscal year 2021. Fulfillment expenses as a percentage of total revenues was 11.3%,compared to 10.7% in the same quarter of fiscal year 2021. The increase was primarily due to the increased handling expenses and packaging cost.

Sales and marketing expenses were RMB48.3 million,representing a decrease of 12.4% from RMB55.1 million in the same quarter of fiscal year 2021. Sales and marketing expenses as a percentage of total revenue was 14.5%,representing a decrease from17.6% in the same quarter of fiscal year 2021. The decrease was primarily due to the decrease of share-based compensation expense of RMB11.4 million compared with the same quarter of fiscal year 2021.

General and administrative expenses were RMB22.3 million,representinga decrease of 64% from RMB61.8 million in the same quarter of fiscal year 2021. General and administrative expenses as a percentage of total revenue was 6.7%,representing a decrease from19.8% in the same quarter of fiscal year 2021. The decrease was primarily due to: (i) the decrease of share-based compensation expense of RMB35.7 million compared with the same quarter of fiscal year 2021;(ii) the decrease of professional fees of RMB3.9 million incurred in connection with our IPO in the same quarter of fiscal year 2021.

Operating loss was RMB31.3 million (US$4.9 million),representing an improvement from a loss of RMB93.6 million in the same quarter of fiscal year 2021.

EBITDA was a loss of RMB25.6 million (US$4.0 million),representing an improvement from a loss of RMB79.2 million in the same quarter of fiscal year 2021.

Net loss was RMB28.8 million (US$4.5 million),representing an improvement from to net loss of RMB81.9 million in the same quarter of fiscal year 2021.

Adjustednet loss was RMB25.4million (US$4.0million),representing an improvement fromadjusted net loss of RMB30.5 million in the same quarter of fiscal year 2021.

Diluted net loss per sharewas RMB0.41 (US$0.06),representing an improvement fromdiluted net loss per share of RMB1.61 in the same quarter of fiscal year 2021.

Total cash and cash equivalents and short-term investmentswere RMB315.7 million (US$49.5 million),compared to RMB339.4 million as of September 30,2021.

Conference Call

Boqii's management will hold a conference call to discuss the financial results at 8:00 AM on Wednesday,2022,U.S. Eastern Time (9:00 PM on Wednesday,Beijing/Hong Kong Time).

To join the conference,please dial in 15 minutes before the conference is scheduled to begin using below numbers.

Phone Number

International

1-412-317-6061

United States

1-888-317-6003

Hong Kong

852 800-963976

Mainland China

86 4001-206115

Passcode

9147363

A replay of the conference call may be accessed by phone at the following numbers until March 10,2022.

Phone Number

International

1-412-317-0088

United States

1-877-344-7529

Replay Access Code

8462589

A live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.boqii.com/.

About Boqii Holding Limited

Boqii Holding Limited (NYSE: BQ) is a leading pet-focused platform in China. We are the leading online destination for pet products and supplies in China with our broad selection of high-quality products including global leading brands,local emerging brands,and our own private label,Yoken and Mocare,offered at competitive prices. Our online sales platforms,including Boqii Mall and our flagship stores on third-party e-commerce platforms,provide customers with convenient access to a wide selection of high-quality pet products and an engaging and personalized shopping experience. Our Boqii Community provides an informative and interactive content platform for users to share their knowledge and love for pets.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts,including statements about the Company's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties,and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases,forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company may also make written or oral forward-looking statements in its reports filed with,or furnished to,the U.S. Securities and Exchange Commission,in its annual reports to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Statements that are not historical facts,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding such risks,uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release,and the Company does not undertake any duty to update such information,except as required under applicable law.

Non-GAAPFinancial Measures

The Company uses non-GAAP financial measures,namely adjusted net loss,adjusted net loss margin,EBITDA and EBITDA margin,in evaluating its operating results and for financial and operational decision-making purposes. The Company defines (i) adjusted net loss as net loss excluding fair value change of derivative liabilities and share-based compensation expenses,(ii) adjusted net loss margin as adjusted net loss as a percentage of total revenues,(iii) EBITDA as net loss excluding income tax expenses,depreciation and amortization expenses,(iv) EBITDA margin as EBITDA as a percentage of total revenues. The Company believes adjusted net loss,EBITDA and EBITDA margin enhance investors' overall understanding of its financial performance and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. As these non-GAAP financial measures have limitations as analytical tools and may not be calculated in the same manner by all companies,they may not be comparable to other similarly titled measures used by other companies. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures,which should be considered when evaluating the Company's performance. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures,please see the section of the accompanying tables titled,"Reconciliation of GAAP and Non-GAAP Results." The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated,all translations from RMB to USD were made at the rate of RMB 6.3726 to US$1.00,the noon buying rate in effect on December 31,2021 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB,as the case may be at any particular rate or at all.

For investor and media inquiries,please contact:

In China:Boqii Holding Limited

Investor Relations

Tel: +86-21-6882-6051

Email:ir@boqii.comDLK Advisory Limited

Tel: +852-2857-7101

Email: ir@dlkadvisory.comBoqii Holding LimitedUnaudited Consolidated Balance Sheets(In thousands,except share and per share data)As of

March 31,

2021As of

December 31,

2021As ofDecember 31,

2021RMBRMBUS$ASSETSCurrent assets:Cash and cash equivalents292,237176,02627,622Short-term investments168,546139,64821,914Accounts receivable,net45,73253,9918,472Inventories,net91,551123,31619,351Prepayments and other current assets85,261106,65016,736Amounts due from related parties11,46523,4303,677Total current assets694,792623,06197,772Non-current assets: Property and equipment,net8,3867,4031,162Intangible assets29,53726,5444,165Operating lease right-of-use assets29,23442,0656,601Long-term investments74,33094,88714,890Goodwill40,18440,6846,384Other non-current asset4,1114,140650Total non-current assets185,782215,72333,852Total assets880,574838,784131,624LIABILITIES,MEZZANINE EQUITY AND SHAREHOLDERS' DEFICITCurrent liabilities Short-term borrowings85,566152,42623,919Accounts payable71,848100,23515,729Salary and welfare payable6,3098,6191,353Accrued liabilities and other current liabilities30,05535,4745,567Amounts due to related parties,current9109,9811,566Contract liabilities3,86610,5341,653Operating lease liabilities,current8,06310,1971,600Derivative liabilities9,9969,6351,512Total current liabilities216,613337,10152,899Non-current liabilities Deferred tax liabilities8,9588,2161,289Operating lease liabilities,non-current19,99730,5654,796Long-term borrowings68,075--Other debts,non-current433,292251,14139,410Total non-current liabilities530,322289,92245,495Total liabilities746,935627,02398,394Mezzanine equityRedeemable non-controlling interests5,9466,3741,000Total mezzanine equity5,000Stockholders' equity:Class A ordinary shares (US$0.001 par value; 129,500,000 shares authorized,54,505,108 and 55,703,708 shares issued and outstanding as of March 31 and December 31,2021,respectively)36437258Class B ordinary shares (US$0.001 par value; 15,000,13,037,729 shares issued and outstanding as of March 31 and December,31,respectively)828213Additional paid-in capital3,272,6123,295,010517,059Statutory reserves3,0473,203503Accumulated other comprehensive loss(20,172)(33,675)(5,284)Accumulated deficit(2,759,882)(2,866,435)(449,807)Receivable for issuance of ordinary shares(413,377)(235,556)(36,964)Total Boqii Holding Limited shareholders' equity82,674163,00125,578Non-controlling interests45,01942,3866,652Total shareholders' equity127,693205,38732,230Total liabilities,mezzanine equity and shareholders' equity880,624Boqii Holding LimitedUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(All amounts in thousands,except for share and per share data,unless otherwise noted)Three Months Ended December 31,Nine Months Ended December 31,202020212021202020212021RMBRMBUS$RMBRMBUS$Net revenues:Product sales312,371317,43949,813778,186895,022140,449Online marketing and information services55515,1662,3802,36841,5506,520Total revenues312,926332,60552,193780,554936,572146,969Total cost of revenue(256,784)(255,686)(40,123)(638,507)(747,566)(117,309)Gross profit56,14276,91912,070142,047189,00629,659Operating expenses:Fulfillment expenses(33,557)(37,655)(5,909)(96,225)(100,174)(15,719)Sales and marketing expenses(55,107)(48,257)(7,573)(121,393)(137,711)(21,610)General and administrative expenses(61,811)(22,282)(3,497)(95,376)(65,056)(10,209)Other income,net7402031,0458714Loss from operations(93,593)(31,255)(4,906)(169,902)(113,848)(17,865)Interest income5,4713,47054511,67413,3342,092Interest expense(6,990)(4,935)(774)(20,549)(16,994)(2,667)Other (losses)/gain,net12,5523,25451116,3283,659574Fair value change of derivative liabilities-92014410,4091,331209Loss before income tax expenses(82,560)(28,546)(4,480)(152,040)(112,518)(17,657)Income taxes expenses603159254121,406221Share of results of equity investees22(382)(60)(55)45271Net loss(81,935)(28,769)(4,515)(151,683)(110,660)(17,365)Less: Net income/(loss) attributable to the non-controlling interest shareholders1,242(1,011)(159)2,138(4,694)(737)Net loss attributable to Boqii Holding Limited(83,177)(27,758)(4,356)(153,821)(105,966)(16,628)Less: Accretion on convertible redeemable preferred shares to redemption value195,935--120,873--Less: Accretion on redeemable non-controlling interests to redemption value-(145)(23)-(428)(67)Less: Deemed dividend to preferred shareholders---(12,547)--Net income/(loss)attributable to Boqii Holding Limited's ordinary shareholders112,758(27,903)(4,379)(45,495)(106,394)(16,696)Net loss(81,365)Other comprehensive loss:Foreign currency translation adjustment,net of nil tax(24,062)(7,738)(1,214)(35,579)(13,503)(2,119)Unrealized securities holding gains---1,195--Total comprehensive loss(105,997)(36,507)(5,729)(186,067)(124,163)(19,484)Less: Total comprehensive income/(loss) attributable to non-controlling interest shareholders1,694)(737)Total comprehensive loss attributable to Boqii Holding Limited(107,239)(35,496)(5,570)(188,205)(119,469)(18,747)Net earnings/(loss) per share attributable to Boqii Holding Limited's ordinary shareholders — basic1.68(0.41)(0.06)(0.68)(1.57)(0.25)— diluted1.61(0.41)(0.06)(0.68)(1.57)(0.25)Weighted average number of ordinary shares— basic67,156,58067,861,41967,735,74467,744— diluted70,041,37567,744Boqii Holding LimitedReconciliation of GAAP and Non-GAAP Results(In thousands,except % and per share data)Three Months Ended

December 31,2020Three Months Ended

December 31,2021Nine Months Ended

December 31,2020Nine Months Ended

December 31,2021Net loss(81,769)(151,660)Fair value change of derivative liabilities-(920)(10,409)(1,331)Share-based compensation51,4224,31251,42214,215Adjusted Net Loss(30,513)(25,377)(110,670)(97,776)Adjusted Net Loss Margin(9.8%)(7.6%)(14.2%)(10.4%)Three Months Ended

December 31,660)Income tax expenses(603)(159)(412)(1,406)Interest expenses6,9904,93520,54916,994Interest income(5,471)(3,470)(11,674)(13,334)Depreciation and amortization .1,7841,9055,1355,790EBITDA(79,235)(25,558)(138,085)(102,616)EBITDA Margin(25.3%)(7.7%)(17.7%)(11.0%)Notes for all the condensed consolidated financial schedules presented:Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.3726 on December 31,2021 published by the Federal Reserve Board.

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