Boqii Announces Fiscal 2021 Third Quarter Unaudited Financial Results

SHANGHAI,March 3,2021 --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 2021 (the quarter ended December 31,2020).

Fiscal Q3 2021 Operational and Financial Highlights

Total revenues were RMB312.9 million (US$48.0 million),an increase of 23.2% from RMB254.1 million in the same quarter of fiscal year 2020.

Net loss was RMB81.9 million (US$12.6 million),compared to net loss of RMB56.4 million in the same quarter of fiscal year 2020.

Adjusted net loss was RMB30.5 million (US$4.7million),representing a decrease of 49.8% from the adjusted net loss of RMB60.8 million in the same quarter of fiscal year 2020.

EBITDA[1] was a loss of RMB79.2 million (US$12.1 million),representing a 109.2% setback from a loss of RMB37.9 million in the same quarter of fiscal year 2020.

Total GMV[2]was RMB763.8 million (US$117.1 million),an increase of 51.5% from RMB504.0 million in the same quarter of fiscal year 2020.

Active buyers were 1.5 million,an increase of 21.0% from 1.3 million in the same quarter of fiscal year 2020.

CEO & CFO Quote

"Solid Q3 results were a testament to Boqii's relentless efforts on execution and user engagement," said Mr. Hao Liang,Boqii's Founder,Chairman and Chief Executive Officer. "We continued to influence pet parents with an extensive and appealing selection of content and products,fostering stronger user bonding and stickiness. We endeavor to build a pet ecosystem that provides full lifecycle coverage and a seamlessly integrated online and offline channel that offers an unparalleled customer experience."

Ms. Yingzhi (Lisa) Tang,Boqii's Co-Founder,Co-CEO and CFO commented: "We had another strong quarter,generating solid operational and financial results. Total revenues grew 23.2% year over year to RMB312.9 million. Adjusted net loss improved significantly from RMB60.8 million in the same quarter of last fiscal year to RMB30.5 million. Notably,during the quarter we considerably improved our operating efficiency,manifested in lower fulfillment cost and reduced inventory turnover days. As a result,our adjusted net loss decreased by 49.8% year-on-year to RMB30.5 million. These results demonstrated our strong execution and potential to translate promising topline growth to profitability. Looking ahead,we will continue to drive rapid growth by expanding user reach and providing all-round user care. This will deliver differentiated growth by attracting high value customers in a large growing addressable market,thus further consolidating our position as an industry leader."

[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 "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.

Fiscal Third Quarter Financial Results

Total revenueswere RMB312.9 million (US$48.0 million),representing an increase of 23.2% from RMB254.1 million in the same quarter of fiscal year 2020. The increase was primarily due to the continued organic growth of our business.

Revenues

(in RMB million)

2020

Dec.

Quarter

2019

Dec.

Quarter

%

change

YoY

Revenues from product sales

312.3

253.3

23.3

·Boqii Mall

114.1

91.3

25.0

·Third party e-commerce platforms

198.2

162.0

22.4

Revenues from online marketing and information services

0.6

0.8

(29.9)

Total

312.9

254.1

23.2

Gross profit was RMB56.1 million (US$8.6 million),an increase of 19.0% from RMB47.2 million in the same quarter of fiscal year 2020.

Gross marginwas 17.9%,compared with 18.6% in the same quarter of fiscal 2020.

Operating expenses were RMB150.5 million,an increase of 67.3% from RMB90.0 million in the same quarter of fiscal year 2020. Operating expenses as a percentage of total revenues was 48.1%,compared to 35.4% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expenses,amounting to RMB51.4 million. Pursuant to the Amended and Restated 2018 Global Share Plan,the performance condition for options granted thereunder was satisfied upon completion of the first public offering; and as a result,the company,upon the completion of this offering,recorded RMB44.1 million of cumulative share-based compensation expenses for those options for which the vesting conditions have been satisfied as of such date. For the three months ended December 31,2020,additional RMB7.3 million of share-based compensation expense was recorded.

Fulfillment Expenses were RMB33.6 million,a decrease of 7.9% from RMB36.5 million in the same quarter of fiscal year 2020. Fulfillment expenses as a percentage of total revenues were 10.7 %,compared to 14.3% 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 to be more cost-efficient; and (iii) lower delivery service prices through renegotiation with third-party delivery service providers.

Sales and marketing expenses were RMB55.1 million,an increase of 53.2% from RMB36.0 million in the same quarter of fiscal year 2020. Sales and marketing expenses as a percentage of total revenue were 17.6%,compared to 14.2% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expense of RMB 11.6 million.

General and administrative expenses were RMB61.8 million,an increase of 252.7% from RMB17.5 million in the same quarter of fiscal year 2020. General and administrative expenses as a percentage of total revenue were 19.8%,compared to 6.9% in the same quarter of fiscal year 2020. The increase was primarily due to share-based compensation expense of RMB 39.8 million.

Operating loss[3]was RMB93.6 million (US$14.3 million),an increase of 119.0% compared to RMB42.7 million in the same quarter of fiscal year 2020.

EBITDA[4]was a loss of RMB79.2 million (US$12.1 million),representing a 109.2% setbackfrom a loss of RMB37.9 million in the same quarter of fiscal year 2020.

Net loss was RMB81.9 million (US$12.6 million),compared to net loss of RMB56.4 million in the same quarter of fiscal year 2020.

Adjustednet loss was RMB30.5 million (US$4.7million),representing a decrease of 49.8% from the adjusted net loss of RMB60.8 million in the same quarter of fiscal year 2020.

Diluted net earnings per sharewas RMB1.61 (US$0.25),compared to diluted net loss per share of RMB4.12 in the same quarter of fiscal year 2020.

Total cash and cash equivalents and short-term investmentswere RMB475.4 million (US$72.9 million),compared to RMB127.8 million in the second quarter of fiscal year 2021.

[3] Impacted by share-based compensation expenses of RMB51.4 million,RMB44.1 million of which were incurred upon the completion of our initial public offering.

[4]Impacted by share-based compensation expenses of RMB51.4 million,RMB44.1 million of which were incurred upon the completion of our initial public offering.

Conference Call

Boqii's management will hold a conference call to discuss the financial results at 8:00 AM on Wednesday,2021,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

6025289

A replay of the conference call may be accessed by phone at the following numbers until March 10,2021.

Phone Number

International

1-412-317-0088

United States

1-877-344-7529

Replay Access Code

10152708

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) isChina'slargest pet-focused platform We are the leading online destination for pet products and supplies inChinawith our broad selection of high-quality products including global leading brands,local emerging brands,and our own private label,YokenandMocare,offered at competitive prices. Our online sales platforms,includingBoqii 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. OurBoqii Communityprovides 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 and share-based compensation expenses,(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 RMB6.5250 to US$1.00,the noon buying rate in effect on December 31,2020 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 LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands,except for share and per share data,unless otherwise noted)

As of

March 31,

2020

As of

December 31,

2020

RMB

RMB

US$ASSETS

Current assets:

Cash and cash equivalents88,352

363,858

55,764Short-term investments-

111,576

17,100Accounts receivable,net44,980

35,756

5,480Inventories,net63,056

85,588

13,117Prepayments and other current assets76,720

131,955

20,223Amounts due from related parties5,982

8,326

1,276Total current assets279,090

737,059

112,960Non-current assets:

Property and equipment,net4,981

7,525

1,153Intangible assets33,538

30,537

4,680Operating lease right-of-use assets14,951

31,074

4,762Long-term investments73,432

74,970

11,490Goodwill40,184

40,184

6,158Other non-current asset11,019

3,372

517Total non-current assets178,105

187,662

28,760Total assets457,195

924,721

141,720LIABILITIES,MEZZANINE EQUITY AND

SHAREHOLDERS' DEFICIT

Current liabilities

Short-term borrowings75,223

44,598

6,835Accounts payable88,005

67,884

10,404Salary and welfare payable4,465

6,987

1,071Accrued liabilities and other current liabilities37,883

43,160

6,615Amounts due to related parties,current45

1,920

294Other debts,current76,252

-

-Contract liabilities7,702

6,638

1,017Operating lease liabilities,current7,969

8,123

1,245Derivative liabilities14,351

10,956

1,679Total current liabilities311,895

190,266

29,160Non-current liabilities

Deferred tax liabilities10,591

9,586

1,469Operating lease liabilities,non-current5,375

21,205

3,250Long-term borrowings53,148

71,227

10,916Other debts,non-current165,774

427,123

65,459Amounts due to related parties,non-current11,521

-

-Total non-current liabilities246,409

529,141

81,094Total liabilities558,304

719,407

110,254

Mezzanine equity

Series A convertible redeemable preferred shares (US$ 0.001

par value; 11,000,000 shares authorized,10,340,000 and nil

shares issued and outstanding as of March 31,2020 and

December 31,respectively)484,122

-

-Series B convertible redeemable preferred shares Series B

convertible redeemable preferred shares (US$ 0.001 par

value; 10,9,067,384 and nil

shares issued and outstanding as of March 31,respectively)527,682

-

-Series C convertible redeemable preferred shares (US$ 0.001

par value; 6,5,518,101 and nil

shares issued and outstanding as of March 31,respectively)420,419

-

-Series D convertible redeemable preferred shares (US$ 0.001

par value; 3,000 and 0 shares authorized,2,526,026

and nil shares issued and outstanding as of March 31,2020

and December 31,respectively)188,183

-

-Series D-1 convertible redeemable preferred shares

(US$ 0.001 par value; 3,

2,178,530 and nil shares issued and outstanding as of March

31,2020 and December 31,respectively)164,282

-

-Series D-2 convertible redeemable preferred shares

(US$ 0.001 par value; 2,

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

March 31,respectively)89,464

-

-Series E convertible redeemable preferred shares (US$ 0.001

par value;3,000 and 7,042,623 and nil shares issued and outstanding as of March

31,respectively)78,553

-

-Redeemable non-controlling interests-

5,808

890Receivable for issuance of preferred shares(94,758)

-

-Total mezzanine equity1,857,947

5,808

890Stockholders' equity/(deficit):

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

shares authorized and 22,238,454 issued and outstanding as

of March 31,2020; nil shares issued and outstanding as of

December 31,2020)139

-

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

authorized,issued and outstanding shares as of March 31,

2020; 129,500,55,860,157 shares

issued and outstanding as of December 31,2020)-

404

62Class B ordinary shares (US$0.001 par value; nil shares

authorized,

2020; 15,12,204,604 shares

issued and outstanding as of December 31,2020)-

82

13Additional paid-in capital-

3,300,358

505,802Statutory reserves2,627

2,891

443Accumulated other comprehensive income/(loss)11,204

(23,180)

(3,552)Accumulated deficit(2,016,758)

(2,718,965)

(416,700)Receivable for issuance of ordinary shares(9)

(407,962)

(62,523)Total Boqii Holding Limited shareholders' equity/(deficit) (2,002,797)

153,628

23,545Non-controlling interests43,741

45,878

7,031Total shareholders' equity/(deficit)(1,959,056)

199,506

30,576Total liabilities,mezzanine equity and shareholders' deficit457,720

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=RMB6.5250 on December 31,2020 published by the Federal Reserve Board.

BOQII HOLDING LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(All amounts in thousands,unless otherwise noted)

Three Months Ended December 31,

Nine Months Ended December 31,

2019

2020

2020

2019

2020

2020

RMB

RMB

US$

RMB

RMB

US$

Net revenues:

Product sales253,295

312,371

47,873

611,334

778,186

119,262Online marketing and information services791

555

85

2,297

2,368

363Total revenues254,086

312,926

47,958

613,631

780,554

119,625Total cost of revenue(206,904)

(256,784)

(39,354)

(485,708)

(638,507)

(97,856)Gross profit47,182

56,142

8,604

127,923

142,047

21,769Operating expenses:

Fulfillment expenses(36,451)

(33,557)

(5,143)

(91,946)

(96,225)

(14,747)Sales and marketing expenses(35,977)

(55,107)

(8,446)

(103,340)

(121,393)

(18,604)General and administrative expenses(17,523)

(61,811)

(9,473)

(44,457)

(95,376)

(14,617)Other income,net34

740

113

2,391

1,045

160Loss from operations(42,735)

(93,593)

(14,345)

(109,429)

(169,902)

(26,039)Interest income130

5,471

838

348

11,674

1,789Interest expense(17,212)

(6,990)

(1,071)

(41,555)

(20,549)

(3,149)Other (losses)/gain,net(1,196)

12,552

1,924

(2,701)

16,328

2,502Fair value change of derivative liabilities4,417

-

-

5,850

10,409

1,595Loss before income tax expenses(56,596)

(82,560)

(12,654)

(147,487)

(152,040)

(23,302)Income taxes expenses122

603

92

202

412

63Share of results of equity investees64

22

3

(486)

(55)

(8)Net loss(56,410)

(81,935)

(12,559)

(147,771)

(151,683)

(23,247)Less: Net income attributable to the non-controlling interest shareholders1,395

1,242

190

3,611

2,138

328Net loss attributable to Boqii Holding Limited(57,805)

(83,177)

(12,749)

(151,382)

(153,821)

(23,575)Less: Accretion on convertible redeemable preferred shares

to redemption value(33,794)

195,935

30,028

(156,004)

120,873

18,525Less: Deemed dividend to preferred shareholders-

-

-

(741)

(12,547)

(1,923)Net income/(loss)attributable to Boqii Holding Limited's ordinary shareholders(91,599)

112,758

17,279

(308,127)

(45,495)

(6,973)

Net loss(56,247)Other comprehensive income/(loss):

Foreign currency translation adjustment,net of nil tax(839)

(24,062)

(3,688)

1,729

(35,579)

(5,453)Unrealized securities holding gains1,960

-

-

2,291

1,195

183Total comprehensive loss(55,289)

(105,997)

(16,245)

(143,751)

(186,067)

(28,517)Less: Total comprehensive loss attributable to non-

controlling interest shareholders1,138

328Total comprehensive loss attributable to BoqiiHolding

Limited(56,684)

(107,239)

(16,435)

(147,362)

(188,205)

(28,845)

Net earnings/(loss) per share attributable to Boqii

Holding Limited's ordinary shareholders

— basic(4.12)

1.68

0.26

(13.86)

(0.68)

(0.10)— diluted(4.12)

1.61

0.25

(13.86)

(0.68)

(0.10)Weighted average number of ordinary shares

— basic22,454

67,156,580

67,580

22,580— diluted22,454

70,041,375

70,375

22,580

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=RMB6.5250 on December 31,2020

published by the Federal Reserve Board.

Boqii Holding LimitedReconciliation of GAAP and Non-GAAP Results(In thousands)

Three Months Ended December 31,

2019

2020

2019

2020

RMB

RMB

RMB

RMB

Net loss(56,935)

(147,683)

Fair value change of derivative liabilities(4,417)

-

(5,850)

(10,409)

Share-based compensation-

51,422

-

51,422

Adjusted Net loss(60,827)

(30,513)

(153,621)

(110,670)

Three Months Ended December 31,683)

Income tax expenses(122)

(603)

(202)

(412)

Interest expenses17,212

6,990

41,555

20,549

Interest income(130)

(5,471)

(348)

(11,674)

Depreciation and amortization1,581

1,784

3,142

5,135

EBITDA[5](37,869)

(79,235)

(103,624)

(138,085)

EBITDA Margin[6](14.9%)

(25.3%)

(16.9%)

(17.7%)

[5],[6] Impacted by share-based compensation expenses of RMB51.4 million,RMB44.1 million of which were incurred upon the

completion of our initial public offering.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=RMB6.5250

on December 31,2020 published by the Federal Reserve Board.