Good evening and good morning ladies and gentlemen and thank you for standing by for 17 Education & Technology Group Inc. 's First Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded. I'll now like to turn the meeting over to your host for today's call, Ms. Lara Zhao, 17 Education & Technology Group Inc. 's Investor Relations Manager. Please proceed, Lara.
Thank you operator. Hello everyone and thank you for joining us today. Our earnings release was distributed earlier today and is available on our IR website. Joining us today are Mr. Andy Chang Liu, Founder, Chairman, and Chief Executive Officer, and Mr. Michael Chao Du, Director and Chief Financial Officer. Andy will walk you through our latest business performance and strategies, followed by Michael, who will discuss our financial performance and guidance. They will be available to answer your questions during the Q&A section after the prepared remarks. Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results, performance or achievements to differ materially. Further information regarding these or other risks, uncertainties or factors is included in the company's filings with the U.S. SEC. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under applicable law. I will now turn the call over to our Chairman and Chief Executive Officer to review some of our business development and strategic direction. Andy, please go ahead.
Thank you Lara. Hello everyone. Thank you for joining us on our first quarter 2022 earnings call. We are pleased to report solid performance in the first quarter. Before we dive into the details, let me provide some quick highlights. First, net revenue was RMB 233.4 million, 11.1% higher than the top end of the estimates provided in March. Second, our operational efficiency continued to improve at the same time, resulting in a substantially narrowed GAAP business net loss compared with the same period in 2021. This allowed us to achieve a positive adjusted net income for the second quarter in a row. Third, our new business strategies continued to gain momentum. We saw new opportunities as the COVID-19 pandemic and favorable government policy helped evolve market needs and drove new demands for our service.
Now, let me go into some details. We delivered solid operational and financial results. Net revenue reached RMB 233.4 million, which was 11.1% higher than the high end of our guidance provided last quarter. It's worth mentioning that this was achieved without any legacy, unlike K-12 after-school tutoring services revenues. Our profitability continued to improve as we continue to enhance our cost structures and operational efficiency. For the first quarter, operating expenses decreased by 82.1% year-over-year, and as a percentage of the revenue as well.
Although we recorded a net loss of RMB 24.8 million on a GAAP basis in the first quarter of 2022, we achieved RMB 9.9 million of adjusted net income, compared with an adjusted net loss of RMB 588.8 million in the first quarter of 2021. For our teaching and learning service business, we continue to see positive trends and demands for our offerings. Earlier this year, the Ministry of Education clearly put forward the need to speed up the implementation of digitizing the education industry. On March 1st, a national public service platform for smart education in primary and secondary schools was officially launched. All of these signal that the digital transformation of China's education has entered a new era where its focuses center around teaching and learning scenarios and emphasize services and daily application.
In May, the Beijing Municipal Education Commission issued the document called Opinions on Further Purchasing Quality External Education Resources for Compulsory Education, explicitly supporting the procurement of third-party services to enrich the education resources for public schools, including curriculum resources, management services, and family education and guidance services. During the last few months, China has experienced a number of regional COVID outbreaks. During these outbreaks, we have seen additional demands and opportunities for education bureaus and schools for our teaching and learning style offerings, especially online homework modules, to cope with periods where physical offline schooling was not possible. A number of districts and cities in economically developed regions have already in detail discussions with us on the procurement of our online homework SaaS component. Specifically, all elementary and secondary schools in Shanghai moved to online learning starting in March.
We have developed a multi-channel integrated online education platform which combined with the Air Classroom, live broadcast interactive platform, and Minhang Smart Homework feature based on our existing modules for Minhang District, Shanghai, delivering a one-stop solution that solves multiple problems. Recently, the National Public Service Platform for Educational Resources also officially announced the results of the Three Classrooms application case collection. Among them, the attempt made by 17 Education & Technology Group Inc. using technology to enhance balanced education was successfully selected as a national education Three Classrooms innovative application case. Our pilot projects of model school and district continue to progress in the genuine data insights that brought recognition by schools and educational authorities. During the quarter, we officially released the data reports for pilot schools and districts in two districts in Shanghai and several cities in Jiangsu Province.
They were well-recognized by schools, local education authorities, and we believe to be of high value to facilitate personalized teaching and learning process. Xinzhuang Middle School in Minhang District, Shanghai, a school serviced by us, has been recommended by local authorities as an excellent online teaching case for its innovative automatic homework review functions. Another key component of our teaching and learning SaaS offering, our proprietary smart pen, Yunci, has won the highest honor of the 2022 German Red Dot Award for its humanized design and excellent quality. The Red Dot Award is one of the world's three major design awards and an international recognition of creativity and design. The Yunci smart pen realizes pen and paper interaction through dot matrix technology, helping teachers to complete accurate learning data collection and learning diagnosis, to facilitate personalized teaching and learning process for teachers and students.
It is a combination of online and offline that creates a closed loop for the high-quality homework with personalized homework as the core. We are also building a nationwide agent network to help reach wider areas to distribute our teaching and learning SaaS offerings. Official partnership agreements were signed with over 50 distribution agents. Among them, there were Intel, Bank of China, and CETC, Bank of China, Intel, and Bank of Communications. In the meantime, we are continuously improving our self-directed learning products based on additional student and parent feedback, as well as latest regulatory requirements. We have also launched an accompanying hardware to enhance the study experience with our self-directed learning product and the mobile app, leveraging our experiences, technical services, technical reserves, content, and data insights over the year. We are confident and determined to continue creating value with our new business strategies in the education technology sector.
We have a clear strategy to continue to invest into our teaching and learning SaaS business to facilitate education authorities and schools to implement the digital transformation and upgrading of the public Chinese education sector. We will continue to develop digital applications and SaaS resources to help improve teaching and learning efficiencies. For our self-directed learning products, we believe it has captured the needs of a wide range of groups of families in a post Double Reduction era and has a great potential. We will continue to enhance the effectiveness and user experience of our self-directed learning products with more targeted personalization and content enrichment. We will continue our efforts to build our business into a healthy and sustainably growing business. Now, I will turn the call over to Michael, our CFO, to walk you through our latest financial performance. Thank you.
Thanks Andy and thank you everyone for joining the call. I will now walk you through our financial and operating results. Please note that all financial data I talk about will be presented in RMB terms. I would like to remind everyone that the quarterly result we present here should be taken with care, and references to our potential future performance are subject to impacts from seasonality, one-off events as a result of the series of regulations introduced in 2021, and a corresponding adjustment to our business model, organization, and workforces, among others. The first quarter of 2022 is the first quarter of operations after we officially ceased our online K-12 school tutoring services and general revenue purely from our ongoing businesses. We are delighted to report the second consecutive profitable quarter on an adjusted basis, delivering our guidance that we provided earlier.
From a top-line perspective, we recorded a net revenues of RMB 233.4 million, 11.1% higher than the top end of our estimate provided earlier. It represented almost 20 x growth from the K-12 after school tutoring revenue of RMB 11.2 million in the first quarter of 2021. Gross margin was 6.7% this quarter, improving from 60.4% in the first quarter of 2021. Our operational efficiency continued to improve. Total operating expenses for the first quarter of 2022 decreased to RMB 117.8 million, from RMB 953.2 million in the first quarter of 2021, representing a year-over-year decrease of 82.1%.
Net loss decreased significantly to RMB 24.8 million for the first quarter of 2022 from RMB 659.7 million in the same period of 2021. Net loss as a percentage of revenue was -10.6% in the first quarter of 2022, narrowing from -139% in the first quarter of 2021. On adjusted basis, our adjusted net income, which excludes share-based compensation expenses, was positive RMB 9.9 million for the first quarter of 2022, compared with an adjusted net loss of RMB 659.7 million in the same period of 2021. We continue to see our business progressing towards the right direction with continuous improvement in operational efficiency and profitability.
Next, I will go through our first quarter financials in greater detail. Net revenue was RMB 233.4 million. If looking from a whole, this represented a year-over-year decrease of 50.8% from RMB 474.2 million in the first quarter of 2021. The decrease was mainly due to the cessation of our online K-12 tutoring services by the end of 2021 to be in compliance with the latest PRC regulations, which prohibits the provision of tutoring services, related to academic subjects for K-12 students.
However, when compared with the net revenues, excluding those from online K-12 tutoring services of the same period last year, our revenue actually increased significantly from RMB 11.2 million last year to RMB 233.4 million during the same period this year. This represented a growth of nearly 20x . The majority of net revenues for the first quarter of 2022 was from the company's personalized self-directed learning products, and to a less extent, from our teaching and learning services. The latter has a longer cycle to finish the bidding process and to deliver so that the revenue can be recognized, as the majority of the clients were educational authorities in public schools.
Cost of revenue for the first quarter of 2022 was RMB 91.8 million, representing a year-over-year decrease of 51.1% from RMB 187.6 million in the first quarter of 2021, which was largely in line with the cessation of our online K-12 tutoring services under the new regulatory and business environment. Gross profit was RMB 141.7 million, representing a year-over-year decrease of 50.6% from RMB 286.6 million in the first quarter of 2021. Gross margin for the first quarter of 2022 was 60.7%, improving from 60.4% in the first quarter of 2021. Moving over to the expenses side.
Total operating expenses were RMB 170.8 million, representing a year-over-year decrease of 82.1% from RMB 953.2 million in the first quarter of 2021. The total operating expenses for the first quarter of 2022 include the RMB 34.6 million of share-based compensation expenses. Sales and marketing expenses for the first quarter of 2022 were RMB 22 million, which included RMB 4 million of share-based compensation expenses. This represented a year-over-year decrease of 96.4% from RMB 613.5 million in the first quarter of 2021.
This was mainly due to decrease in promotional cost expenses and advertising expenditure as a result of the change in regulatory environment, as well as optimization since the regulatory change to be in line with the business adjustment. R&D expenses were RMB 97.5 million, including RMB 7.2 million of share-based compensation expenses. This represented a year-over-year decrease of 53.6% from RMB 209.9 million in the first quarter of 2021. The decrease was again primarily attributable to staff optimization and expense saving measures in line with the business adjustment. G&A expenses were RMB 51.3 million. This included RMB 23.5 million of share-based compensation expenses.
It represented a year-over-year decrease of 60.5% from RMB 129.7 million the first quarter of 2021. The decrease was primarily attributed to the staff optimization and extensive saving measures in line with the business adjustment. Loss from operations was RMB 29.1 million compared with RMB 666.6 million the first quarter of 2021. Loss from operations as a percentage of net revenues for the first quarter of 2022 was -12.5%, improving from a -140.5% the first quarter of 2021. Net loss was RMB 24.8 million compared with a net loss of RMB 659.7 million the first quarter of 2021.
Net loss as a percentage of revenue was -10.6% in the first quarter of 2022 compared with -139.1% in the first quarter of 2021. Adjusted net income on a non-GAAP basis was RMB 9.9 million compared with an adjusted net loss of RMB 588.8 million in the first quarter of 2021. Adjusted net income as a percentage of net revenue was 4.2% in the first quarter of 2022, which substantially improved from -124.2% in the first quarter of 2021. With that, I will now provide our business outlook.
Based on our current estimates, total revenues for the second quarter of 2022 are expected to be between RMB 100 million and RMB 120 million. This estimated net revenues for the second quarter of 2022 is expected to be derived entirely from our ongoing businesses after our business transformation and will not include revenues from the legacy online K-12 tutoring services. This estimated range represents a significant increase year-over-year as compared with the relatively small base of the net revenue generated from the online K-12 tutoring services for the second quarter of 2021. The above forecast reflects 17 Education & Technology Group Inc.'s current and preliminary review and is therefore subject to change.
Please refer to the safe harbor statement below for the factors that could cause actual results to differ materially from those contained in any forward-looking statement. With that concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session. Thanks.
Certainly. We will now begin the question and answer session. To ask a question on the phone, please press star one and wait for your name to be announced. If you would like to cancel your request, please press the pound or hash key. Once again, to ask question, please press star one. As a reminder, if you'd like to ask question, please press star one. As there are no more questions on the line, I'd like to hand the call back to the management for closing. Thank you. That concludes.
Thank you.
Oh, please go ahead.
Thank you operator. In closing, on behalf of 17 Education & Technology Group Inc. management team, we'd like to thank you for your participation on today's call. If you require any further information, please feel free to reach out to us directly. Thank you for joining us today. This concludes the call.
Ladies and gentlemen, that concludes the conference call today. You may now disconnect your lines.