Dingdong (Cayman) Limited Announces Fourth Quarter 2021 Financial Results

SHANGHAI,Feb.15,2022 -- Dingdong (Cayman) Limited ("Dingdong" or the "Company") (NYSE: DDL),a leading and fastest-growing on-demand e-commerce company in China,with advanced supply chain capabilities,today announced its unaudited financial results for the fourth quarter ended December 31,2021.

Fourth Quarter 2021 Highlights:

GMV for the fourth quarter of 2021 increased by 59.6% year over year to RMB 6,004.0 million (US$ 942.2 million) from RMB 3,762.5 million in the same quarter of 2020.

Total revenues for the fourth quarter of 2021 increased by 72.0% year over year to RMB 5,483.5 million (US$ 860.5 million) from RMB 3,187.5 million in the same quarter of 2020.

Total number of orders fulfilled for the fourth quarter of 2021 increased by 63.1% year over year to 100.1 million from RMB 61.4 million in the same quarter of 2020.

Mr. Changlin Liang,Founder and Chief Executive Officer of Dingdong,stated,

"In fact,Q4 was our best quarter since inception,marking year-over-year revenue growth of over 70% and significant efficiency optimization. In December,the overall Non-GAAP net loss margin narrowed to less than 13%,and Shanghai was fully profitable. At the end of Q4,we had RMB 5.2 billion in cash reserves. We are on the fast track of quality development,and we have sufficient cash to last us before full profitability in the near future.

Shanghai is the first city we entered and has continued innovating and iterating,constructing precedents and experiences for our nationwide operations. We have found the path to profitability in this city and expect the whole Yangtze River Delta to be the next,and the whole company will follow suit soon.

We have two firm beliefs: consumption upgrade and product capabilities being our primary growth driver. Many internet retailers adopt a low pricing strategy,and the idea of consumption downgrade has been widespread. However,we maintain strong confidence in the consumption upgrade trend for the younger generations,who pursue quality life,especially when it comes to food. Therefore,we are committed to meeting that need. In addition,in the internet industry,traffic operation was the core competitiveness in the first half of the game. As a result,several monopolistic traffic platforms were created with marketing activities such as the "Double 11" that marked the peak of traffic operation. But in the second half of the game,product capabilities that take us back to the nature of shopping are the primary driver of growth.

2021 has had its ups and downs,and 2022 is also destined to be extraordinary. We do not comment much on stock prices,but we agree with Benjamin Graham: the market was a voting machine in the short term but a weighing machine in the long run. In this sense,Dingdong is committed to building substance. Specifically,it is substantial to develop product capabilities,win over customers with quality products,develop a supply chain and physical R&D and processing capabilities,and invest long-term in infrastructure. On the contrary,focusing on traffic operations,price wars,retail platforms,or short-term profitability is trivial. Having a couple of champion products or marketing successes is of much less substance than striving for a better life for the customers in the long run.

Substantiality is what matters. It is our core competitiveness and will create long-term value. So let's be patient because time will tell."

Ms. Le Yu,Chief Strategy Officer of Dingdong,

"Overall,we achieved solid revenue growth in Q4 and greatly optimized the operation efficiency with net loss narrowed substantially. As we advance,we will be committed to building robust product capabilities,making them our core strengths that drive Dingdong to meet the growing needs of the people for a better life.

Lastly,guidance for Q1 2022. Q1 is typically a slow season for the urban grocery market because of the Chinese New Year,which may lead to a decline in revenue on a sequential basis. In addition,the overtime labor costs incurred during the CNY may impact the fulfillment costs. Despite these factors,we still expect a small dip in the net loss and a substantial improvement of the operating cash outflow in Q1 from Q4 2021."

Fourth Quarter 2021 Financial Results

Total revenueswere RMB 5,483.5 million (US$ 860.5 million),representing an increase of 72.0% from the same period of 2020,primarily driven by the robust growth in the Company's GMV.

Product Revenues were RMB 5,413.9million (US$ 849.6million),an increase of 72.1% from RMB 3,145.5million in the same quarter of 2020,primarilydriven by the increase in the number of orders.

Service Revenues were RMB 69.6million (US$ 10.9million),an increase of 65.6% from RMB 42.0million in the same quarter of 2020,primarily driven by the increase in the number of customers subscribing to Dingdong membership.

Total operating costs and expenses wereRMB 6,523.2 million (US$ 1,023.6 million),an increase of 47.7% from RMB 4,415.8 million in the same quarter of 2020,with a detailed breakdown as below.

Cost of Goods Sold were RMB 3,964.8 million (US$ 622.2million),an increase of 46.4% from RMB 2,707.7million in the same quarter of 2020,primarily driven bythe increase in total revenue. Gross margin was27.7%,significantly improved from 15.1% in the same quarter of 2020.

Fulfillment expenses were RMB 1,786.3million (US$ 280.3million),an increase of 47.3% from RMB 1,212.6million in the same quarter of 2020,primarily driven bythe increase in total revenues.

Sales and marketing expenses were RMB 358.0million (US$ 56.2million),an increase of 38.3% from RMB 258.9million in the same quarter of 2020,mainly due to theincreased spending on sales and marketing activities to acquire new customers.

General and administrative expenses were RMB 129.4million (US$ 20.3million),an increase of 22.9% from RMB 105.3million in the same quarter of 2020,mainly due to the increased business scale of the Company.

Product development expenses were RMB 284.7million (US$ 44.7million),an increase of 117.0% from RMB 131.2million in the same quarter of 2020,mainly due to the increased investments in: i) the Company's supply chain system to further improve efficiency and reduce operating costs; ii) the agricultural technology to empower upstream partners.

Loss from operationswas RMB 1,039.7 million (US$ 163.1 million),compared with operating loss of RMB 1,228.3 million in the same quarter of 2020.

Net losswas RMB 1,096.3 million (US$ 172.0 million),compared with net loss of RMB 1,245.5 million in the same quarter of 2020.

Non-GAAP net loss,which is a non-GAAP measure that excludes share-based compensation expenses,was RMB 1,034.1 million (US$ 162.3 million),compared with non-GAAP net loss of RMB 1,238.8 million in the same quarter of 2020.

Basic and diluted net loss per share were RMB 3.38 (US$ 0.53),compared with RMB 20.57 in the same quarter of 2020. Non-GAAP net loss per share,basic and diluted,was RMB 3.19 (US$ 0.50),compared with RMB 20.47 in the same quarter of 2020. The weighted average number of ordinary shares outstanding used to compute the basic and diluted net loss per share and non-GAAP net loss per share was 64,908,700 in the fourth quarter of 2020. All the then outstanding convertible redeemable preferred shares were not included in the computation until July 2021 when converted into ordinary shares after the Company's IPO.

Cash and cash equivalents and short-term investmentswere RMB 5,231.1 million (US$ 820.9 million) as of December 31,2021,compared with RMB 2,382.4 million as of December 31,2020.

Conference Call

The Company's management will hold an earnings conference call at 7:00 A.M. Eastern Time on Tuesday,February 15,2022 (8:00 P.M. Beijing Time on the same day) to discuss the financial results. The presentation and question and answer session will be presented in both Mandarin and English. Listeners may access the call by dialing the following numbers:

International:

1-412-317-6061

United States Toll Free:

1-888-317-6003

Mainland China Toll Free:

4001-206115

Hong Kong Toll Free:

800-963976

Conference ID:

2562159 (Bilingual English & Mandarin Chinese,primary channel)

Conference ID:

0886124 (Simultaneous English interpretation,listen-only)

A live webcast of the earnings conference call can be accessed at https://ir.100.me. An archived webcast will be available through the same link following the call. A replay of the conference call will be available through February 22,2022 by dialing the following numbers:

International:

1-412-317-0088

United States:

1-877-344-7529

Access Code (Mandarin Chinese)

1984499

Access Code (English)

9782558

Please visit Dingdong's Investor Relations website at https://ir.100.me on February 15,2022 to view the earnings release and accompanying presentation prior to the conference call.

About Dingdong (Cayman) Limited

Dingdong (Cayman) Limited is a leading and fastest-growing on-demand e-commerce company in China providing users with fresh produce,meat and seafood,and other daily necessities through a convenient and excellent shopping experience supported by an extensive self-operated frontline fulfillment grid. From its core product category of fresh groceries,Dingdong has expanded to provide other daily necessities to grow into a leading one-stop online shopping destination in China for consumers to make purchases for their daily lives. At the same time,Dingdong is working to modernize China's traditional agricultural supply chain through standardization and digitalization,empowering upstream farms and suppliers to make their production more efficient and tailored to actual demand.

For more information,please visit: www.100.me.

Use of Non-GAAP Financial Measures

The Company uses non-GAAP measures,such as non-GAAP net loss,non-GAAP net loss attributable to ordinary shareholders,non-GAAP net loss per share,non-GAAP fulfillment expenses,non-GAAP sales and marketing expenses,and non-GAAP general and administrative expenses in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses,which are non-cash charges and do not correlate to any operating activity trends. The Company believes that the non-GAAP financial measures provide useful information about the Company's results of operations,enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools,and when assessing the Company's operating performance,cash flows or liquidity,investors should not consider them in isolation,or as a substitute for net loss,cash flows provided by operating activities or other consolidated statements of operations and cash flows data prepared in accordance with U.S. GAAP. The Company's definition of non-GAAP financial measures may differ from those of industry peers and may not be comparable with their non-GAAP financial measures.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures,all of which should be considered when evaluating the Company's performance.

For more information on the non-GAAP financial measures,please see thetables captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this announcement.

Exchange Rate Information

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

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continue," or other similar expressions. Among other things,business outlook and quotations from management in this announcement,as well as Dingdong's strategic and operational plans,contain forward-looking statements. Dingdong may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission,in its interim and 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,including but not limited to statements about Dingdong's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: Dingdong's goals and strategies; Dingdong's future business development,financial conditions,and results of operations; the expected outlook of theon-demande-commercemarket in China; Dingdong's expectations regarding demand for and market acceptance of its products and services; Dingdong's expectations regarding its relationships with its users,clients,business partners,and other stakeholders; competition in Dingdong's industry; and relevant government policies and regulations relating to Dingdong's industry,and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the Securities and Exchange Commission. All information provided in this announcement and in the attachments is as of the date of the announcement,and the Company undertakes no duty to update such information,except as required under applicable law.

For investor inquiries,please contact:

Dingdong Fresh

ir@100.me

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of RMB and US$)

As of

December

31,2020

December

31,2021

December

31,2021

RMB

RMB

US$

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

1,376,153

662,768

104,003

Restricted cash

74,295

7,664

1,203

Short-term investments

1,006,245

4,568,346

716,873

Accounts receivable,net

38,805

191,519

30,054

Amounts due from related parties

10,100

-

-

Inventories

386,431

537,472

84,341

Advance to suppliers

37,133

86,711

13,607

Prepayments and other current assets

97,878

461,843

72,472

Total current assets

3,027,040

6,516,323

1,022,553

Non-current assets:

Property and equipment,net

272,691

472,371

74,125

Operating lease right-of-use assets

1,503,222

2,245,571

352,379

Other non-current assets

121,459

185,793

29,156

Total non-current assets

1,897,372

2,903,735

455,660

TOTAL ASSETS

4,924,412

9,420,058

1,478,213

LIABILITIES,MEZZANINE EQUITY

AND SHAREHOLDERS' (DEFICIT) /EQUITY

Current liabilities:

Accounts payable

1,579,948

2,058,624

323,043

Customer advances and deferred revenue

140,404

243,480

38,207

Accrued expenses and other current liabilities

857,738

653,261

102,511

Salary and welfare payable

136,960

244,740

38,405

Operating lease liabilities,current

594,787

969,494

152,135

Short-term borrowings

1,234,522

3,121,046

489,760

Current portion of long-term borrowings

86,500

57,875

9,082

Warrant liabilities

108,160

-

-

Total current liabilities

4,739,019

7,348,520

1,153,143

Non-current liabilities:

Long-term borrowings

58,375

-

-

Operating lease liabilities,non-current

871,685

1,244,096

195,226

Other non-current liabilities

-

69,373

10,886

Total non-current liabilities

930,060

1,313,469

206,112

TOTAL LIABILITIES

5,669,079

8,661,989

1,359,255

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

(Amounts in thousands of RMB and US$)

As of

December

31,2021

December

31,2021

RMB

RMB

US$

(Unaudited)

LIABILITIES,MEZZANINE EQUITY

AND SHAREHOLDERS' (DEFICIT)/EQUITY (CONTINUED)

Mezzanine equity:

Redeemable convertible preferred shares

5,174,910

-

-

Redeemable noncontrolling interests

-

30,000

4,708

TOTAL MEZZANINE EQUITY

5,910

30,000

4,708

Shareholders' (deficit)/equity:

Ordinary shares

1

4

1

Additional paid-in capital

151,657

13,685,062

2,147,485

Treasury stock

-

(7,042)

(1,105)

Accumulated deficit

(6,048,274)

(12,765,713)

(2,003,219)

Accumulated other comprehensive loss

(22,961)

(184,242)

(28,912)

TOTAL SHAREHOLDERS' (DEFICIT)/EQUITY

(5,919,577)

728,069

114,250

TOTAL LIABILITIES,MEZZANINE EQUITY

AND SHAREHOLDERS' (DEFICIT)/EQUITY

4,213

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands of RMB and US$,except for number of shares and per share data)

For the three months ended

December 31,

2020

2021

2021

RMB

RMB

US$

(Unaudited)

Revenues:

Product revenues

3,145,452

5,413,928

849,563

Service revenues

42,024

69,594

10,921

Total revenues

3,187,476

5,483,522

860,484

Operating costs and expenses:

Cost of goods sold

(2,707,696)

(3,964,800)

(622,164)

Fulfillment expenses

(1,212,625)

(1,786,262)

(280,303)

Sales and marketing expenses

(258,894)

(357,971)

(56,173)

Product development expenses

(131,219)

(284,740)

(44,682)

General and administrative expenses

(105,340)

(129,417)

(20,309)

Total operating costs and expenses

(4,415,774)

(6,523,190)

(1,023,631)

Loss from operations

(1,228,298)

(1,039,668)

(163,147)

Interest income

5,087

12,167

1,909

Interest expenses

(9,431)

(25,975)

(4,076)

Other income

8,965

15,130

2,375

Other expenses

(17,254)

(48,620)

(7,630)

Changes in fair value of warrant liabilities

(4,592)

-

-

Loss before income tax

(1,523)

(1,086,966)

(170,569)

Income tax expenses

-

(9,373)

(1,471)

Net loss

(1,096,339)

(172,040)

Accretion of redeemable convertible preferred shares

(89,659)

-

-

Net loss attributable to ordinary shareholders

(1,335,182)

(1,040)

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands of RMB and US$,except for number of shares and per share data)

For the three months ended

December 31,

2020

2021

2021

RMB

RMB

US$

(Unaudited)

Net loss per share:

Basic and diluted

(20.57)

(3.38)

(0.53)

Weighted average common shares outstanding used in net loss per

share computation

64,700

324,708,900

324,900

Other comprehensive loss,net of tax of nil:

Foreign currency translation adjustments

(23,165)

(99,105)

(15,551)

Comprehensive loss

(1,268,688)

(1,195,444)

(187,591)

Accretion of redeemable convertible preferred shares

(89,659)

-

-

Comprehensive loss attributable to ordinary shareholders

(1,358,347)

(1,591)

DINGDONG (CAYMAN) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands of RMB and US$)

For the three months ended

December 31,

2020

2021

2021

RMB

RMB

US$

(Unaudited)

Net cash used in operating activities

(922,408)

(1,761,736)

(276,455)

Net cash used in investing activities

(336,820)

(1,287)

(166,068)

Net cash generated from financing activities

787,091

413,536

64,893

Effect of exchange rate changes on cash and cash equivalents and restricted

cash

(51,206)

(27,197)

(4,268)

Net decrease in cash and cash equivalents and restricted cash

(523,343)

(2,433,684)

(381,898)

Cash and cash equivalents and restricted cash at the beginning of the

period

1,973,791

3,104,116

487,104

Cash and cash equivalents and restricted cash at the end of the period

1,450,448

670,432

105,206

DINGDONG (CAYMAN) LIMITED

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(Amounts in thousands of RMB and US$,except for number of shares and per share data)

For the three months ended

December 31,

2020

2021

2021

RMB

RMB

US$

(Unaudited)

Net loss

(1,523)

(1,339)

(172,040)

Add: share-based compensation expenses (1)

6,740

62,287

9,774

Non-GAAP net loss

(1,238,783)

(1,034,052)

(162,266)

Net loss attributable to ordinary shareholders

(1,182)

(1,774

Non-GAAP net loss attributable to ordinary shareholders

(1,328,442)

(1,266)

Net loss per share:

Basic and diluted

(20.57)

(3.38)

(0.53)

Add: share-based compensation expenses

0.10

0.19

0.03

Non-GAAP net loss per share:

Basic and diluted

(20.47)

(3.19)

(0.50)

(1) Share-based compensation expenses are recognized as follows:

For the three months ended

December 31,

2020

2021

2021

RMB

RMB

US$

(Unaudited)

Fulfillment expenses

1,674

11,981

1,880

Sales and marketing expenses

314

6,246

980

Product development expenses

2,295

28,075

4,406

General and administrative expenses

2,457

15,985

2,508

Total

6,740

62,287

9,774

DINGDONG (CAYMAN) LIMITED

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(Amounts in thousands of RMB and US$)

The following tables set forth a breakdown of our operating expenses,share-based compensation expense and

operating expenses excluding share-based compensation expenses by function for the periods indicated.

For the three months ended

December 31,

2020

2021

2021

RMB

RMB

US$

(Unaudited)

Operating expenses:

Fulfillment expenses

1,625

1,262

280,303

Sales and marketing expenses

258,894

357,971

56,173

Product development expenses

131,219

284,740

44,682

General and administrative expenses

105,340

129,417

20,309

Total operating expenses

1,078

2,558,390

401,467

Share-based compensation expenses:

Fulfillment expenses

1,508

Total share-based compensation expenses

6,774

Operating expenses excluding share-based compensation

expenses:

Fulfillment expenses

1,210,951

1,774,281

278,423

Sales and marketing expenses

258,580

351,725

55,193

Product development expenses

128,924

256,665

40,276

General and administrative expenses

102,883

113,432

17,801

Total operating expenses excluding share-based compensation

expenses:

1,701,338

2,496,103

391,693

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