Boqii Announces Fiscal 2021 Second Quarter Unaudited Financial Results

SHANGHAI,Nov. 16,2020 -- Boqii Holding Limited ("Boqii" or the "Company") (NYSE: BQ),a leading pet-focused platform in China,today announced its unaudited financial results for the second quarter of fiscal year 2021 ended September 30,2020.

Fiscal Q2 2021 Operational and Financial Highlights

Total revenues were RMB229.2 million (US$33.8million),representing an increase of 34.3% from RMB170.6 million in the same quarter of fiscal year 2020.

Net loss was RMB27.5 million (US$4.0 million),compared to net loss of RMB43.5 million in the same quarter of fiscal year 2020.

EBITDA[1] was a loss of RMB23.4 million (US$3.4 million),representing a 23.5% improvement from a loss of RMB30.6 million in the same quarter of fiscal year 2020.

Total GMV[2]was RMB563.3 million (US$82.7 million),representing an increase of 70.0% from RMB331.4 million in the same quarter of fiscal year 2020.

Active buyers were 1.3 million,representing an increase of 15.0% from RMB1.1 million in the same quarter of fiscal year 2020.

Mr. Hao Liang,Boqii's Founder,Chairman and Chief Executive Officer commented: "In October 2020,Boqii successfully completed its IPO on the NYSE and became the first publicly traded pet-focused platform company in China,which marked a significant milestone not only for Boqii but also for the whole pet industry in China. As a newly public company,Boqii generated a strong quarter with solid operational and financial growth. Year on year quarterly GMV grew by 70% to RMB563.3 million while active buyers grew by 15% to 1.3 million. These solid results demonstrated our strong brand recognition,robust distribution capabilities as well as the greater user engagement in our community. Going forward,we will continue to innovate with a keen focus on delivering a seamless user experience,with our mission to empower the pet ecosystem and instill love and trust into pet parenting."

Mr. Liang continued: "In August,we started the 'Pet Hundred-Million Yuan Sales Club',an established strategic partnership with JD.com aiming to generatehundred-million sales in year 2020 from our products and online stores,and promote the iterative upgrade of both parties' operating systems. In September,we signed another strategic cooperation agreement with China Animal Husbandry Group to provide products and solutions for pet health. We are planning to develop more partnerships with other renowned platforms and large corporations to deliver best solutions and enhance our value proposition for fast-growing demand in the pet industry. We also recorded strong sales recently during the Singles' Day Global Shopping Festival. Over the 11-day period from November 1 to November 11,we generated a total GMV of RMB 244.5 million,a 39.97% increase from last year Singles' Day Shopping Festival."

Ms. Yingzhi (Lisa) Tang,Boqii's Co-Founder,Co-CEO and CFO commented: "We generated healthy revenue growth of 34.3% year-over-year during this quarter. Most notably,the percentage of revenue we generated from Boqii Mall reached 41.2%,significantly increasing from 29.0% in the same quarter of last fiscal year. We remain committed to developing Boqii Mall,and this result reflects our effort to provide a better user experience and product selection on our platform. We will invest heavily in technology,optimize our content and product offerings to drive impulse purchases and meet strong user demand."

[1] EBITDA refers to net loss excluding income tax expenses,interest expense,interest income,depreciation and amortization expenses,but including all the professional expenses in relation to initial public offering. EBITDA is a Non-GAAP financial measurement. Please refer to "Reconciliation of GAAP and Non-GAAP Results."

[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.

Fiscal Second Quarter Financial Results

Total revenueswere RMB229.2million (US$33.8 million),representing an increase of 34.3% from RMB170.6 million in the same quarter of fiscal year 2019. The increase was primarily due to more revenue generated from Boqii Mall,which represented 41.2% of our total revenue versus 29.0% in the same quarter of fiscal year 2020.

Revenues

(in RMB million)

2020

Sep. Quarter

2019

Sep. Quarter

% change

YoY

Revenues from product sales

227.9

169.7

+34.3%

· Boqii Mall

94.4

49.5

+90.8%

· Third party e-commerce platforms

133.5

120.2

+11.1%

Revenues from online marketing and information services

1.3

0.9

+43.8%

Total

229.2

170.6

+34.3%

Gross profit was RMB42.6 million (US$6.3 million),an increase of 15.5% from RMB36.9 million in the same quarter of fiscal year 2020.

Gross marginwas 18.6%,a decrease of 304 basis points from 21.6% in the same quarter of fiscal year 2020. The decrease in gross margin was mainly due to the increased contribution of revenue from Boqii Mall,where we offer more favorable pricing to our valued users.

Operating expenses were RMB77.1 million,an increase of 12.9% from RMB 68.3 million in the same quarter of fiscal year 2020. Operating expenses as a percentage of total revenues was 33.6%,compared to 40.0% in the same quarter of fiscal year 2020.

Fulfillment Expenses wereRMB29.0 million,an increase of 18.1% from RMB 24.6 million in the same quarter of fiscal year 2020. Fulfillment expenses as a percentage of total revenues were 12.7 %,compared to 14.4% in the same quarter of fiscal year 2020. The decrease was mainly due to: (i) the improved utilization of warehouses by adjusting inventory mix; (ii) relocation of warehouses across China in a more cost-efficient method; and (iii) lower delivery service prices through renegotiation with third-party delivery service providers.

Sales and marketing expenses were RMB31.3 million,a decrease of 5.3% from RMB 33.1 million in the same quarter of fiscal year 2020. Sales and marketing expenses as a percentage of total revenue were 13.7%,compared to 19.4% in the same quarter of fiscal year 2020. The decrease was mainly due to lower customer acquisition costs and more cost-efficient customer services.

General and administrative expenses were RMB16.7 million,an increase of 57.7% from RMB 10.6 million in the same quarter of fiscal year 2020. General and administrative expenses as a percentage of total revenue were 7.3%,compared to 6.2% in the same quarter of fiscal year 2020. The increase was primary due to professional expenses incurred for the initial public offering,as well as increased employee salaries and benefits.

Operating loss was RMB34.2 million (US$5.0 million),an increase of 9.0% compared to RMB31.4 million in the same quarter of fiscal year 2020.

EBITDA was a loss of RMB23.4 million (US$3.4 million),representing a 23.5% improvement from a loss of RMB30.6 million in the same quarter of fiscal year 2020.

EBITDA marginincreased 772 basis points to (10.2%),compared to (17.9%) in the same quarter of fiscal 2020.

Net loss was RMB27.5million (US$4.0million),compared to net loss of RMB43.5 million in the same quarter of fiscal year 2020.

Adjustednet loss was RMB35.8 million (US$5.3 million),representing a decrease of 20.6% from the adjusted net loss of RMB45.0 million in the same quarter of fiscal year 2020.

Diluted net loss per sharewas RMB3.06 (US$0.50),compared to diluted net loss per share of RMB3.98 in the same quarter of fiscal year 2020.

Initial Public Offering

On October 2,2020,Boqii completed its initial public offering ("IPO") of 7,000,000 million American Depositary Shares ("ADSs"),at US$10.00 per ADS. Each ADS represents 0.75 of a Class A ordinary share of the Company. The Company raised a total of US$70 million in gross proceeds from the IPO,before deducting underwriting discounts and commissions as well as other offering expenses.

Conference Call

Boqii's management will hold a conference call to discuss the financial results at 8:00 AM on Monday,November 16,U.S. Eastern Time (9:00 PM on November 16,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

9244495

A replay of the conference call may be accessed by phone at the following numbers until November 23,2020.

Phone Number

International

1-412-317-0088

United States

1-877-344-7529

Replay Access Code

10149804

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 China's largest pet-focused platform 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,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,(ii) EBITDA as net loss excluding income tax expenses,and (iii) 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 RMB6.7896 to US$1.00,the noon buying rate in effect on September 30,2020 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.comThe Blueshirt Group

Ms. Susie Wang

Email: susie@blueshirtgroup.comIn the United States:The Blueshirt Group

Ms. Julia Qian

Email: julia@blueshirtgroup.comBOQII HOLDING LIMITEDUNAUDITED CONSOLIDATED BALANCE SHEETS(All amounts in thousands,except for share and per share data,unless otherwise noted)

Pro forma

Pro forma

As of

March 31,

2020

As of

September 30,

2020

As of

September 30,

2020

As ofSeptember 30,

2020

RMB

RMB

US$

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents88,352

127,756

18,816

127,816Accounts receivable,net44,980

38,801

5,714

38,714Inventories,net63,056

70,516

10,386

70,386Prepayments and other current assets76,720

157,555

23,205

157,205Amounts due from related parties5,982

6,645

980

6,645

980Total current assets279,090

401,273

59,101

401,101Non-current assets:

Property and equipment,net4,981

7,550

1,112

7,112Intangible assets33,538

31,538

4,645

31,645Operating lease right-of-use assets14,951

33,365

4,914

33,914Long-term investments73,432

74,948

11,039

74,039Goodwill40,184

40,184

5,918

40,918Other non-current asset11,019

41,348

6,090

41,090Total non-current assets178,105

228,933

33,718

228,718Total assets457,195

630,206

92,819

630,819LIABILITIES,MEZZANINE EQUITY AND

SHAREHOLDERS' DEFICIT

Current liabilities

Short-term borrowings75,223

44,352

6,532

44,532Accounts payable88,005

70,258

10,349

70,349Salary and welfare payable4,465

6,503

958

6,503

958Accrued liabilities and other current liabilities37,883

53,066

7,816

53,816Amounts due to related parties,current45

3,042

448

3,042

448Other debts,current76,252

17,408

2,564

17,564Contract liabilities7,702

4,013

591

4,013

591Operating lease liabilities,current7,969

8,402

1,237

8,237Derivative liabilities14,351

1,565

230

1,565

230Total current liabilities311,895

208,609

30,725

208,725Non-current liabilities

Deferred tax liabilities10,591

10,192

1,501

10,501Operating lease liabilities,non-current5,375

22,944

3,379

22,379Long-term borrowings53,148

49,504

7,291

49,291Other debts,non-current165,774

473,865

69,793

473,793Amounts due to related parties,non-current11,521

1,030

152

1,030

152Total non-current liabilities246,409

557,535

82,116

557,116Total liabilities558,304

766,144

112,841

766,841

Mezzanine equity

Series A convertible redeemable preferred shares (US$

0.001 par value; 11,000 shares authorized,

10,340,000 shares issued and outstanding as of March

31,2020 and September 30,respectively; and nil

outstanding on a pro-forma basis as of September 30,

2020)484,122

531,746

78,316

-

-Series B convertible redeemable preferred shares Series B

convertible redeemable preferred shares (US$ 0.001

par value; 10,9,067,384

shares issued and outstanding as of March 31,2020 and

September 30,respectively; and nil outstanding

on a pro-forma basis as of September 30,2020)527,682

581,017

85,575

-

-Series C convertible redeemable preferred shares (US$

0.001 par value; 6,

5,518,101 shares issued and outstanding as of March

31,

2020)420,419

380,838

56,091

-

-Series C+ convertible redeemable preferred shares( US$

0.001 par value; 8,nil and

6,734,459 shares issued and outstanding as of March

31,

2020)-

662,521

97,579

-

-Series D convertible redeemable preferred shares (US$

0.001 par value; 3,

2,526,026 shares issued and outstanding as of March

31,

2020)188,183

180,939

26,649

-

-Series D-1 convertible redeemable preferred shares (US$

0.001 par value; 3,178,530 shares issued and outstanding as of March

31,

2020)164,282

164,803

24,273

-

-Series D-2 convertible redeemable preferred shares (US$

0.001 par value; 2,

1,182,803 shares issued and outstanding as of March

31,

2020)89,464

92,284

13,592

-

-Series E convertible redeemable preferred shares (US$

0.001 par value; 3,000 and 7,000 shares

authorized,1,042,623 and 5,885,210 shares issued and

outstanding as of March 31,

2020,respectively; and nil outstanding on a pro-forma

basis as of September 30,2020)78,553

455,811

67,134

-

-Receivable for issuance of preferred shares(94,758)

(402,722)

(59,314)

-

-Total mezzanine equity1,857,947

2,647,237

389,895

-

-Stockholders' deficit:

Ordinary Shares(US$0.001 par value;153,000 and

149,00 ordinary shares authorized; 22,238,454

ordinary shares issued and outstanding as of March 31,

2020 and September 30,2020: nil shares issued and

outstanding on a pro-forma basis as of September 30,

2020)139

139

20

-

-Class A ordinary shares (US$0.001 par value; nil shares

authorized,issued and outstanding shares as of

September 30,2020; 129,500,

49,777,032 shares issued and outstanding on a pro-

forma basis as of September 30,2020)-

-

-

333

49Class B ordinary shares (US$0.001 par value; nil shares

authorized,2020; 15,

13,037,729 shares issued and outstanding on a pro-

forma basis as of September 30,2020)-

-

-

82

12Additional paid-in capital-

-

-

3,049,684

449,168Statutory reserves2,627

2,891

426

2,891

426Accumulated other comprehensive loss11,204

882

130

882

130Accumulated deficit(2,016,758)

(2,831,724)

(417,067)

(2,067)Receivable for issuance of ordinary shares(9)

-

-

(402,314)Total Boqii Holding Limited shareholders' deficit (2,002,797)

(2,827,812)

(416,491)

(180,574)

(26,596)Non-controlling interests43,741

44,637

6,574

44,636

6,574Total shareholders' deficit(1,959,056)

(2,783,175)

(409,917)

(135,938)

(20,022)Total liabilities,mezzanine equity and shareholders' deficit457,819

(a) On a pro forma basis to reflect (i) the re-designation of 12,204,604 ordinary shares held by Merchant Tycoon Limited and beneficially owned by Hao (Louis) Liang,Yingzhi (Lisa) Tang and Di (Jackie) Chen into Class B ordinary shares on a one-for-one basis immediately prior to the completion of the initial public offering (which was completed on October 2,2020),(ii) the automatic conversion and re-designation of 833,125 Series C preferred shares held by Merchant Tycoon Limited and beneficially owned by Hao (Louis) Liang,Yingzhi (Lisa) Tang and Di (Jackie) Chen into Class B ordinary shares on a one-for-one basis immediately prior to the completion of the initial public offering,(iii) the re-designation of all of the remaining ordinary shares into Class A ordinary shares on a one-for-one basis immediately prior to the completion of the initial public offering,(iv) the automatic conversion of 10,000 Series A preferred shares into 7,844,137 ordinary shares on a 1:0.76 basis,and re-designation of such as-converted ordinary shares into 7,137 Class A ordinary shares on a one-for-one basis immediately prior to the completion of the initial public offering,(v) the automatic conversion of 9,384 Series B preferred shares into 8,557,980 ordinary shares on a 1:0.94 basis,and re-designation of such as-converted ordinary shares into 8,980 Class A ordinary shares on a one-for-one basis immediately prior to the completion of the initial public offering,(vi) the automatic conversion of 6,459 Series C+ preferred shares into 6,883,520 ordinary shares on a 1:1.02 basis,and re-designation of such as-converted ordinary shares into 6,520 Class A ordinary shares on a one for-one basis immediately prior to the completion of the initial public offering,(vii) the automatic conversion and re-designation of all of the remaining issued and outstanding preferred shares into 16,457,545 Class A ordinary shares on a one-for-one basis immediately prior to the completion of the initial public offering.(b) The unaudited pro forma information does not include the impact of share-based compensation expense for share options which was expected to record upon the completion of the initial public offering.BOQII HOLDING LIMITEDUNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(All amounts in thousands,unless otherwise noted)

Three Months Ended September 30,

Six Months Ended September 30,

2019

2020

2020

2019

2020

2020

RMB

RMB

US$

RMB

RMB

US$

Net revenues:

Product sales169,685

227,883

33,563

358,039

465,815

68,607Online marketing and information services909

1,307

193

1,506

1,813

267Total revenues170,594

229,190

33,756

359,545

467,628

68,874Total cost of revenue(133,679)

(186,555)

(27,477)

(278,804)

(381,723)

(56,222)Gross profit36,915

42,635

6,279

80,741

85,905

12,652Operating expenses:

Fulfillment expenses(24,584)

(29,037)

(4,277)

(55,495)

(62,669)

(9,230)Sales and marketing expenses(33,081)

(31,342)

(4,616)

(67,363)

(66,286)

(9,763)General and administrative expenses(10,585)

(16,697)

(2,459)

(26,934)

(33,565)

(4,944)Other income/(expense),net(25)

258

38

2,357

305

45Loss from operations(31,360)

(34,183)

(5,035)

(66,694)

(76,310)

(11,240)Interest income136

4,487

661

218

6,203

914Interest expense(12,228)

(6,416)

(945)

(24,343)

(13,559)

(1,997)Other (losses)/gain,net(1,240)

879

129

(1,505)

3,776

556Fair value change of derivative liabilities1,553

8,303

1,223

1,433

10,409

1,533Loss before income tax expenses(43,139)

(26,930)

(3,967)

(90,891)

(69,481)

(10,234)Income taxes expenses55

(500)

(74)

80

(191)

(28)Share of results of equity investees(377)

(20)

(3)

(550)

(77)

(11)Net loss(43,461)

(27,450)

(4,044)

(91,361)

(69,749)

(10,273)Less: Net income attributable to the non-controlling interest

shareholders885

617

91

2,216

896

132Net loss attributable to Boqii Holding Limited(44,346)

(28,067)

(4,135)

(93,577)

(70,645)

(10,405)Less: Accretion on convertible redeemable preferred shares

to redemption value(44,089)

(39,925)

(5,880)

(122,210)

(75,062)

(11,055)Less: Deemed dividend to preferred shareholders-

-

-

(741)

(12,547)

(1,848)Net loss attributable to Boqii Holding Limited's ordinary

shareholders(88,435)

(67,992)

(10,015)

(216,528)

(158,254)

(23,308)

Net loss(43,273)Other comprehensive income/(loss):

Foreign currency translation adjustment,net of nil tax2,478

(10,716)

(1,578)

2,568

(11,517)

(1,696)Unrealized securities holding gains157

-

-

331

1,195

176Total comprehensive loss(40,826)

(38,166)

(5,622)

(88,462)

(80,071)

(11,793)Less: Total comprehensive loss attributable to non-

controlling interest shareholders885

617

91

2,216

896

132Total comprehensive loss attributable to Boqii Holding

Limited(41,711)

(38,783)

(5,713)

(90,678)

(80,967)

(11,925)

Net loss per share attributable to Boqii Holding Limited's

ordinary shareholders

— basic(3.98)

(3.06)

(0.45)

(9.74)

(7.12)

(1.05)— diluted(3.98)

(3.06)

(0.45)

(9.74)

(7.12)

(1.05)Weighted average number of ordinary shares

— basic22,454

22,454— diluted22,454Pro forma net loss per share attributable to Boqii Holding

Limited's ordinary shareholders

— basic

(0.48)

(0.07)

(1.26)

(0.19)— diluted

(0.48)

(0.07)

(1.26)

(0.19)Pro forma weighted average number of ordinary shares

— basic

59,073,717

59,717

55,870,406

55,406— diluted

59,406Boqii Holding LimitedReconciliation of GAAP and Non-GAAP Results(All amounts in thousands,except for %,

2019

2020

2019

2020

RMB

RMB

RMB

RMB

Net loss(43,450)

(91,749)Fair value change of derivative liabilities(1,553)

(8,303)

(1,433)

(10,409)Adjusted Net loss(45,014)

(35,753)

(92,794)

(80,158)

Three Months Ended September 30,749)Income tax expenses(55)

500

(80)

191Interest expenses12,228

6,416

24,343

13,559Interest income(136)

(4,487)

(218)

(6,203)Depreciation and amortization821

1,601

1,561

3,351EBITDA(30,603)

(23,420)

(65,755)

(58,851)EBITDA Margin(17.9%)

(10.2%)

(18.3%)

(12.6%)