Viomi Proposes To Expand Overseas, Optimize Costs; Clocks 32% Revenue Decline In Q4 As COVID-19, Macro Pose Headwinds

Viomi Technology Co Ltd VIOT reported a fourth-quarter FY22 revenue decline of 31.7% year-on-year to $132.02 million (RMB910.55 million), beating the analyst consensus of $128.42 million.
Segments: The IoT @ Home portfolio revenues decreased by 48.1% Y/Y to $52.1 million, driven by SKU adjustments for smart kitchen products.
Revenues from home water solutions increased by 6.0% Y/Y to $40.5 million, driven by revenue growth from larger flux water.
Revenues from consumables declined by 3.5% Y/Y to $16.8 million.
Revenues from small appliances and others declined by 39.3% Y/Y to $22.6 million, primarily due to the continued product portfolio adjustment.
Drivers: The cumulative household users rose to 7.7 million, up from 6.6 million a year ago.
Percentage of household users with at least two connected products expanded by 100 bps to 22.5%.
Margin: The gross margin declined by 260 bps to 23% due to discounts on certain clean-up products.
Non-GAAP EPS loss was $(0.07).
Viomi held $171.35 million in cash and equivalents.
Mr. Xiaoping Chen, Founder and CEO of Viomi commented, "Due to the adverse impact of the COVID-19 pandemic and macro headwinds, we experienced a year-over-year decline in revenues in the fourth quarter of 2022 and our business scale was greatly affected by external factors and strategic adjustments throughout 2022...Going forward, we will strengthen our efforts to optimize distribution channels, hone our existing technological advantages, and further deepen the market penetration of our products. We will also expand our footprint overseas with products such as air conditioners, washing machines, and refrigerators to accelerate the recovery of our business scale."
"Furthermore, to improve our operational efficiency, we implemented more disciplined cost control measures during 2022. As a result, both selling and marketing expenses and research and development expenses decreased in the fourth quarter of 2022 compared with the prior year period. In particular, selling and marketing expenses as the proportion of net revenues narrowed compared with that in the second quarter of 2022 on a similar revenue scale. We will continue to optimize costs, streamline organizational structure and improve operational efficiency to boost profitability," Mr. Chen added.
Price Action: VIOT shares closed lower by 3.52% at $0.96 on Friday.

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