Ladies and gentlemen, thank you for standing by. Welcome to Sunlands' fourth quarter and full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I would now like to turn the call over to your host today, Yuhua, Sunlands' IR representative. Please go ahead. Yuhua, your line is open.
Hello, everyone, and thank you for joining Sunlands' fourth quarter and full year 2022 earnings conference call. The company's financial and operating results were issued in our press release via Newswire services earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting our IR website. Participants on today's call will be our CEO, Mr. Tongbo Liu, our CFO, Selena Lu Lv, and our Financial Controller, Hangyu Li. Selena will provide an update on our operational performance on behalf of our CEO, Mr. Liu, and then Hangyu will give you an overview of our financial performance on behalf of Selena. Management will be beginning with prepared remarks, and the call will conclude with a Q&A session.
Before I hand it over to the management, I'd like to remind you of Sunlands' Safe Harbor statement in relation to today's call. Except for the historical information contained herein, certain of the matters discussed in this conference call are forward-looking statements. These statements are based on current trends, estimates and projections, and therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. For more information about potential risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission. With that, I will now turn the call over to our CFO, Selena Lu Lv.
Thank you, Yuhua Ye. Hello, everyone. Welcome to Sunlands' fourth quarter and full year 2022 earnings call, conference call. Thanks to your unwavering execution of our balanced growth and profitability strategy, we concluded 2022 with sustained growth in both new student enrollments and our bottom line in the fourth quarter. We maintained our disciplined cost management practices and streamlined operations to boost our efficiency and profitability. Driving our quarterly net income to RMB 181 million in the fourth quarter, and our full year net income to RMB 643 million, more than triple that of 2021. During the quarter, we also sharpened our strategic focus on diversifying our course content, enhancing our course and service quality, and improving student acquisition efficiency, leading to a 48.2% year-over-year increase and a 19.5% quarter-over-quarter increase in the new student enrollments.
As we strove to expand our margins while keeping long-term health, healthy growth in mind, we continuously optimized our product mix in 2022. Given the structural shift in industry, we focused largely on refining our master's degree-oriented and professional skills programs. Over the past several quarters, consumers have become more conservative with their discretionary spending due to the uncertain impact of the macro environment on their work and life. This consumer sentiment has created challenges in the market demand for costly continuing education programs. Despite the difficult market conditions, we also seized the new opportunities as they arose. In response to the national policy of building a lifelong learning society and enriching adults' lives through education, we gradually adjusted our course content offerings to reflect the market dynamics. We directed more of our resources to those trending programs.
For example, we further pursued the opportunities, filling the ongoing market demand for skill and interest courses by expanding our professional certification and skills programs, which yielded encouraging results. In addition to exam preparation courses for certifications, we added a diverse range of skill, interest, and hobby courses that cater to a wider student age group. These targeted courses frequently attract students who belong to tight-knit, highly specific interest communities, making it easy to generate word-of-mouth publicity among them. This also creates more cross-selling opportunities and allows us to expand user lifetime value, thereby enhancing our user acquisition efficiency. In the meantime, the job market remains competitive amid an uncertain macro environment. Prompting working professionals to continue to adopt our convenient and efficient platform for the ongoing education and professional exam preparation they need to stay relevant.
Driven by sustained demand for our certification programs and the rising popularity of our skill and interest courses, new student enrollments for our professional certification preparation, professional skills and interest programs in the fourth quarter grew 82.7% year-over-year, and 22.4% quarter-over-quarter. For the full year of 2022, new student enrollments for these programs increased by 59.8%. Alongside our continued product mix optimization, we have been prudently exploring new monetization opportunities to drive our future growth. As we mentioned last quarter, we innovatively combined the sales of merchandise with courses to create additional value for our students. Going forward, we will continue to delve into the research of other potential revenue streams to diversify our product and service offerings, enhancing our resilience against the various challenges.
Last but not least, in the fourth quarter, we remained focused on cost efficiency and refined operations to help us navigate the persistent macro uncertainties despite the lifting of the pandemic restrictions. We'll continue to streamline our organization to boost efficiency and agility. Meanwhile, we have kept a close eye on our operating expenses to ensure every penny is well spent. The disciplined expense control led to a year-over-year decrease of 10.5 percentage points in sales and marketing expenses as a percentage of net revenues in the fourth quarter. Such decrease did not result in a decline in new student enrollments, which speaks to the effectiveness of our student acquisition and expense management strategies. Given this, we believe our keen focus and cost control and efficiency enhancement will prepare us to emerge stronger when new opportunities arrive.
As we progress into 2023, we remain committed to refining our products and services to fulfill a wider age group's learning needs while amplifying our operational efficiency improvement efforts to support our long-term sustainable growth. That concludes Tongbo's prepared remarks. I will turn the call over to our Financial Controller, Hangyu, to run through our financials on behalf of me.
Thank you, Selena. Hello, everyone. Amid a persistently challenging macro environment, our net revenues came in at RMB 578.6 million in the fourth quarter, representing a 1.7% year-over-year decrease, but beating the high end of our guidance range by 7.1%. As we continue to execute cost reduction and efficiency optimization measures, we successfully brought our fourth quarter operating expenses down by 16.1% year-over-year, which contributed to enhanced profitability as reflected in our 20% year-over-year increase in net income. Our net income margin also expanded further to 31.3% in the fourth quarter from 25.6% in the same period of 2021, and 29.2% in the prior quarter.
In 2023, we'll continue to deepen our strategy, balancing by business growth and profitability as we strive to create incremental value for our stakeholders. Let me walk you through some of our key financial results for the fourth quarter of 2022. All comparisons are year-over-year. All numbers are in RMB unless otherwise noted. In the fourth quarter of 2022, net revenues were RMB 578.6 million, a decrease of 1.7% year-over-year. Cost of revenues decreased by 15.8% to RMB 75.3 million in the fourth quarter of 2022, from RMB 89.4 million in the fourth quarter of 2021. The decrease was primarily due to declined compensation expenses related to reduction in the headcount of our cost of revenues personnel, including teachers and mentors.
Gross profit increased by 0.8% to CNY 503.3 million, from CNY 499.5 million in the fourth quarter of 2021. In the fourth quarter of 2022, operating expenses were CNY 336 million, representing a 16.1% decrease from CNY 400.5 million in the fourth quarter of 2021. Sales and marketing expenses decreased by 19.7% to CNY 272.5 million in the fourth quarter of 2022, from CNY 339.4 million in the fourth quarter of 2021. The decrease was primarily due to lower spending on branding and marketing activities and declined compensation expenses related to reduction in the headcount of our sales and marketing personnel. Also contributing were declined rental expenses attributed to the early termination of certain lease contracts.
General and administrative expenses increased by 11.1% to RMB 56.1 million in the first quarter of 2022, from RMB 50.5 million in the first quarter of 2021. The increase was mainly due to the increase in professional service fees. Product development expenses decreased by 30.8% to RMB 7.4 million in the first quarter of 2022, from RMB 10.7 million in the fourth quarter of 2021. The decrease was mainly due to declined compensation expenses related to reduction in the headcount of our product development personnel. Other income in the fourth quarter of 2022 was RMB 4.9 million, compared with other expenses of RMB 3.1 million in the first quarter of 2021.
Net income for the fourth quarter of 2022 was RMB 181 million, compared with RMB 150.8 million in the fourth quarter of 2021. Basic and diluted net income per share was RMB 26.03 in the fourth quarter of 2022. As of December 31st, 2022, the company had RMB 757.4 million of cash equivalents and restricted cash, and RMB 70.5 million of short-term investments. As of December 31st, 2022, the company had a deferred revenue balance of RMB 1,690.9 million, compared with RMB 2,348.2 million as of December 31st, 2021. Capital expenditures were incurred primarily in connection with IT infrastructure equipment and the leasehold improvement necessary to support the company's operations.
Capital expenditures were CNY 0.7 million in the fourth quarter, compared with CNY 5.2 million in the fourth quarter of 2021. For more of our 2022 full year financial results, please refer to our earnings press release for further details. Now for our outlook. For the first quarter of 2023, Sunlands currently expects net revenues to be between CNY 530 million and CNY 550 million, which would represent a decrease of 10.3%-13.6% year-over-year. This outlook is based on the current market conditions and reflects the company's management's current and preliminary estimates of the market, operating conditions and customer demand, which are all subject to change. That concludes Selena's prepared remarks. With that, I'd like to open up the call to the questions. Operator?
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your questions to management in Chinese, please immediately repeat your question in English. We will pause now while we assemble our roster. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star then one. Once again, we'll pause to assemble our roster. At this time, we are showing no further questions, so this will conclude our question and answer session.
Now, I would like to turn the conference back over to you, Yuhua, for any closing remarks.
Once again, thank you everyone for joining today's call. We look forward to speaking with you again soon. Good day and good night.
Thank you. This concludes this conference call. You may now disconnect your lines. Have a wonderful day. Thank you.