China Online Education Group Sponsored ADR Stock price
Is China Online Education Group Sponsored ADR a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $61.10m | Revenue (TTM) = $95.60m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $22.14m | Revenue (TTM) = $95.60m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
China Online Education Group Sponsored ADR Stock Analysis
Analyst Opinions
8 Analysts have issued a China Online Education Group Sponsored ADR forecast:
Analyst Opinions
8 Analysts have issued a China Online Education Group Sponsored ADR forecast:
China Online Education Group Sponsored ADR Events
Past Events
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SEP
15
Q2 2026 Earnings Call
3 days ago
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JUN
12
Q1 2026 Earnings Call
3 months ago
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MAR
27
Q4 2025 Earnings Call
6 months ago
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DEC
8
Q3 2025 Earnings Call
9 months ago
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NOV
4
Deutsche Bank ADR Virtual Investor Conference 2025
11 months ago
|
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SEP
3
Q2 2025 Earnings Call
about one year ago
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StocksGuide Free
China Online Education Group Sponsored ADR — Q2 2026 Earnings Call
1. Management Discussion
Hello, ladies and gentlemen. Thank you for standing by for 51Talk Online Education Group's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I will now turn the call over to your host, Mr. David Chung, Investor Relations for the company. Please go ahead, David.
Thank you. Hello, everyone, and welcome to the Second Quarter 2026 Earnings Conference Call of 51Talk. The company's results were issued by Newswire services earlier today and are posted online. You can download the earnings press release and sign up for the company's distribution list by visiting ir.51talk.com.
Mr. Jack Huang, our CEO; and Ms. Cindy Tang, our CFO, will begin with some prepared remarks. Following the prepared remarks, there will be a Q&A session.
Before we continue, please note that the discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.
Further information regarding this and other risks and uncertainties is included in the company's Form 20-F and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under the applicable law.
Please also note that the earnings press release and this conference call include discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. 51Talk's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.
I will now turn the call over to our CEO, Jack Huang. Jack, please go ahead.
Thank you, David. Hello, everyone. Thank you very much for joining our conference call today. Gross billings for the second quarter reached USD 39.3 million, once again exceeding the high end of our guidance announced in June 2026 and representing a growth of 38.1% year-over-year.
Demand across our key markets remains robust. We generated USD 4.9 million of net operating cash inflow during the quarter. On July 1, we launched our next-generation learning product, Global Communicator, built with our strategic partner, Oxford University Press. The world students learn in, the characters they meet and the lessons themselves are all generated end-to-end by our AI-powered content production platform. The same platform will power new regions, new languages and even new subjects. It is the foundation for what we build next.
Our priority for the remainder of 2026 is to sustain healthy growth by building on last year's success. Following an exceptionally strong quarter in Q3 2025, we are investing more efficiently in the third quarter of 2026, moving us towards profitability and long-term shareholder value.
With that, I will now turn the call over to Cindy, our CFO.
Thank you, Jack. Now let me walk you through our second quarter financial details. Net revenues for the second quarter were USD 32.4 million, a 58.8% increase from the same quarter last year, largely driven by the increase of active students with attended lesson consumption. Gross margin for the second quarter was 73.9%. Gross billings grew by 38.1% from the same quarter last year to USD 39.3 million.
Q2 operating expenses were USD 26 million, an increase of 41.8% compared to the same quarter last year. Specifically, this has been driven by Q2 sales and marketing expenses of USD 19.3 million, a 48.8% increase from the same quarter last year, primarily attributable to higher sales personnel costs driven by headcount growth in the sales and marketing team as well as increased marketing and branding expenses from intensified promotional activities.
Q2 product development expenses were USD 2.4 million, a 96.6% increase from the same quarter last year. Finally, Q2 general and administrative expenses were USD 4.3 million, broadly flat compared to the same quarter last year. Overall, second quarter operating loss narrowed to USD 2.1 million from USD 3.2 million in the same quarter last year, and net loss attributable to the company's ordinary shareholders was USD 3.1 million compared with USD 3.5 million in the same quarter last year.
Q2 GAAP and non-GAAP earnings per ADS were negative USD 0.51 and USD 0.43, respectively. The company's total cash, cash equivalents and time deposits were USD 40.1 million at the end of the second quarter. Advances from students were USD 86.7 million at the end of the second quarter.
Looking forward to the third quarter of 2026, we currently expect the net gross billings to be between USD 41 million and USD 43 million. The above outlook is based on our current market conditions and reflects the company's current and preliminary estimates of the market and operating conditions and customer demand, which are all subject to change.
This concludes our prepared remarks. We will now open the line for questions. Operator, please go ahead.
[Operator Instructions]
As we are reaching the end of our conference call, I'd like to turn the call back over to the company for closing remarks. Mr. David, please go ahead.
Thank you once again for joining us today. If you have further questions, please contact 51Talk's Investor Relations through the contact information provided on our website.
This concludes this conference call. You may now disconnect your lines. Thank you.
China Online Education Group Sponsored ADR — Q1 2026 Earnings Call
1. Management Discussion
Hello, ladies and gentlemen. Thank you for standing by for 51Talk Online Education Group's First Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I will now turn the call over to your host, Mr. David Chung, Investor Relations for the company. Please go ahead, David.
Thank you. Hello, everyone, and welcome to the First Quarter 2026 Earnings Conference Call of 51Talk. The company's results were issued by Newswire Services earlier today and are posted online. You can download the earnings press release and sign up for the company's distribution list by visiting ir.51talk.com. Mr. Jack Huang, our CEO; and Ms. Cindy Tang, our CFO, will begin with some prepared remarks. Following the prepared remarks, there will be a Q&A session.
Before we continue, please note that the discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's Form 20-F and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under the applicable law.
Please also note that earnings press release and this conference call include discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. 51Talk's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.
I will now turn the call over to our CEO, Jack Huang. Jack, please go ahead.
Thank you, David. Hello, everyone. Thank you very much for joining our conference call today. We delivered a solid set of results this quarter, highlighted by 52% year-over-year gross billings growth, exceeding the high-end of our guidance and a narrowing sequential operating loss, despite the seasonal softness typical of the first quarter. We remain committed to refining our products and services to be more localized and better tailored to students across each of our markets with a particular focus on enhancing the user experience.
Underlying demand for English learning remains robust across our key markets, and we are optimistic about their growth potential. We have accelerated the development of our platform, our tutor network and our AI-plus-human learning experience. We expect the next generation of our learning product to begin rolling out later this year, offering our customers a significantly more personalized and engaging experience. Our AI-native approach enables us to deliver this upgrade with greater efficiency. We are confident in our long-term growth trajectory and remain committed to disciplined capital allocation and creating value for our shareholders.
With that, I will now turn the call over to Cindy, our CFO.
Thank you, Jack. Now let me walk you through our first quarter financial details. Net revenues for the first quarter were USD 31.2 million, a 70.9% increase from the same quarter last year, largely driven by the increase of active students with attended lesson consumption. Gross margin for the first quarter was 73.7%. Gross billings grew by 51.9% from the same quarter last year to USD 33.3 million.
Q1 operating expenses were USD 24.4 million, an increase of 57.2% compared to the same quarter last year. Specifically, this has been driven by Q1 sales and marketing expenses of USD 17.9 million, a 59% increase from the same quarter last year, primarily attributable to higher sales personnel costs driven by headcount growth in the sales and marketing team as well as increased marketing and branding expenses from promotional activities. Q1 product development expenses were USD 1.9 million, an 84.9% increase from the same quarter last year.
Finally, Q1 general and administrative expenses were USD 4.6 million, a 42% increase from the same quarter last year. Overall, first quarter operating loss narrowed to USD 1.4 million from USD 1.5 million in the same quarter last year, while net loss attributable to the company's ordinary shareholders was USD 2.3 million compared with USD 1.7 million in the same quarter last year. Q1 GAAP and non-GAAP earnings per ADS were negative USD 0.39 and USD 0.3, respectively. The company's total cash, cash equivalents and time deposits were USD 35.5 million at the end of the first quarter. Advances from students were USD 78.9 million at the end of the first quarter.
Looking forward to the second quarter of 2026, we currently expect the net gross billings to be between USD 36 million and USD 38 million. The above outlook is based on our current market conditions and reflects the company's current and preliminary estimate of the market and operating conditions and customer demand, which are all subject to change.
Operator, please go ahead.
[Operator Instructions] The first question comes from Linda Bolton Weiser with Water Tower Research.
2. Question Answer
I just wanted to ask a little bit more if you could give details -- further details about the next version of your platform rolling that's out later this year. Could you give us specifics about the timing of the rollout and then what some of the enhanced features are?
Okay. Thank you very much for your question. So the next-generation product that we are developing right now is a new -- is a product with foreign tutors and as well as a lot of AI features and integrated with with a lot of gamification functions, especially we integrated the new types of technology platform in terms of the gamification. So -- and we will integrate more about the user data and with the LLM analysis, so that we can better serve our customers in terms of their learning outcomes and in terms of their personalized learning journey. Okay, thank you.
As we are nearing the end of our conference call, I'd like to turn the call back over to the company for closing remarks. Mr. David, please go ahead.
Thank you once again for joining us today. If you have further questions, please contact 51Talk's Investor Relations through the contact information provided on our website. Thank you.
This concludes the conference call. You may now disconnect your line. Thank you.
China Online Education Group Sponsored ADR — Q4 2025 Earnings Call
1. Management Discussion
Hello, ladies and gentlemen. Thank you for standing by for 51Talk Online Education Group's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded.
I will now turn the call over to your host, Mr. David Chung, Investor Relations for the company. Please go ahead, David.
Hello, everyone, and welcome to the Fourth Quarter 2025 Earnings Conference Call of 51Talk. The company's results were issued by Newswire services earlier today and are posted online. You can download the earnings press release and sign up for the company's distribution list by visiting ir.51talk.com.
Mr. Jack Huang, our CEO; and Ms. Cindy Tang, our CFO, will begin with some prepared remarks. Following the prepared remarks, there will be a Q&A session.
Before we continue, please note that the discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.
Further information regarding this and other risks and uncertainties is included in the company's Form 20-F and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under the applicable law.
Please also note that earnings press release and this conference call include discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. 51Talk's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.
I will now turn the call over to our CEO, Jack Huang. Jack, please go ahead.
Okay. Thank you, David. Hello, everyone. Thank you very much for joining our conference call today. 2025 has been a transformational year for 51Talk as we began to reap the rewards of our strategic investments made over the past several years.
Full year gross billings reached USD 127.6 million, representing a year-over-year growth of 83.4%, while net revenues grew 88.6% year-over-year to USD 95.6 million. These results may mark a significant milestone as gross billings surpassed and net revenues approached the USD 100 million threshold for the first time since we embarked on our global expansion strategy, providing compelling validation that our business model can scale effectively on a global basis.
Net operating cash inflow also surpassed the USD 10 million mark, reaching USD 11.8 million in 2025 further evidence that we are building a sustainable and scalable business model.
Looking ahead to 2026, we are committed to expand our growth trajectory based on the foundation we built over the past years. We are focused on consolidating the transformational gains of the past year and further enhancing our user experience.
With that, I will now turn the call over to Cindy, our CFO.
Thank you, Jack. Now let me walk you through our fourth quarter financial details. Net revenue for the fourth quarter was USD 30.6 million, an 88.6% increase from the same quarter last year, largely driven by the increase of active students with attended lesson consumption.
Gross margin for the fourth quarter was 72.4%. Gross billings grew by 72.0% from the same quarter last year to USD 36.8 million. Q4 operating expenses were USD 27.4 million, an increase of 103.6% compared to the same quarter last year. Specifically, this has been driven by Q4 sales and marketing expenses of USD 20.4 million, a 101.6% increase from the same quarter last year, primarily attributable to the rise in marketing and branding expenses resulting from intensified marketing and branding activities as well as higher sales personnel costs related to increases in the number of sales and marketing personnel.
Q4 product development expenses were USD 1.6 million, a 72.2% increase from the same quarter last year. Finally, Q4 general and administrative expenses were USD 5.4 million, a 123.9% increase from the same quarter last year.
Overall, Q4 operating loss was USD 5.2 million, while net loss attributable to the company's ordinary shareholders was USD 6.5 million, a 504.3% and 368.8% increase from the same quarter last year, respectively.
Q4 GAAP and non-GAAP earnings per ADS were negative USD 1.08 and USD 1.03, respectively. The company's total cash, cash equivalents and time deposits were USD 39.0 million at the end of the fourth quarter. Advances from students were USD 76.6 million at the end of the fourth quarter.
Looking forward to the first quarter of 2026, we currently expect the net gross billings to be between USD 29.0 million and USD 31.0 million. The above outlook is based on our current market conditions and reflect the company's current and preliminary estimate of the market and operating conditions and customer demand, which are all subject to change.
This concludes our prepared remarks. We will now open the line for questions. Operator, please go ahead.
[Operator Instructions] The first question today comes from Christo Lee with China Merchants.
2. Question Answer
So I have 2 questions. The first one is, can you give us an update on how the conflict in the Middle East is affecting your operations? And what's the revenue exposure? And how should we think about the risk to the business? And my second question is, can you share with us any guidance or outlook for this year?
Okay. Thank you very much for your questions. So let's start from the first question. This is a fair question in this timing. So our answer is our operations right now in the Middle East are normal and the markets we serve are not the war parties to the conflict and our teams on the ground are safe and operational. Where we have seen some impact is around the travel restrictions in the region. Beyond that, we are mindful that the rising tensions do affect the sentiment of the people, both among local -- our local employees and our customers.
On the employee side, we have strong local leadership and will be adaptive. We are managing the customer side proactively, and we are confident to navigate potential fluctuation of customer sentiment.
Beyond this, I want to explain more about the Q1 seasonality, which is the Ramadan, with this Ramadan falling from February 18 to March 19 this year, squarely across most of the quarter. And after that, after the Ramadan was about nearly 1 week of the Eid. So we anticipated the natural shift in terms of the lesson activity as we do every year in Q1, and we have planned accordingly.
So let's move on to the next question about the guidance or outlook for 2026. First of all, I want to say that we are not usually providing official full year guidance, but we can give investors a sense of direction. So we have confidence that in 2026, our gross billings, net revenues and operating cash flow will all continue to grow healthily. In 2025, we made significant front-loaded investments in new markets, in technology, in our teams. In 2026, we expect to harvest those investments. We will also be focused on improving the unit economies across every market we operate in. So we expect our cash-generating capability to remain robust over the course of the year. Thank you.
[Operator Instructions] There are no further questions at this call. I'd like to turn the call back over to the company for closing remarks.
Thank you once again for joining us today. If you have further questions, please contact 51Talk's Investor Relations through the contact information provided on our website. Thank you, and goodbye.
This concludes the conference call. You may now disconnect your lines. Thank you.
China Online Education Group Sponsored ADR — Q3 2025 Earnings Call
1. Management Discussion
Hello, ladies and gentlemen. Thank you for standing by for 51Talk Online Education Group's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded.
I will now turn the call over to your host, Mr. David Chung, Investor Relations for the company. Please go ahead, David.
Thank you. Hello, everyone, and welcome to the Third Quarter 2025 Earnings Conference Call of 51Talk. The company's results were issued by Newswire services earlier today and are posted online. You can download the earnings press release and sign up for the company's distribution list by visiting ir.51talk.com. Mr. Jack Huang, our CEO; and Ms. Cindy Tang, our CFO, will begin with some prepared remarks. Following the prepared remarks, there will be a Q&A session.
Before we continue, please note that the discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's Form 20-F and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under the applicable law.
Please also note that earnings press release and this conference call include discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. 51Talk's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.
I will now turn the call over to our CEO, Jack Huang. Jack, please go ahead.
Okay. Thank you, David. Hello, everyone. Thank you very much for joining our conference call today. I am very pleased to report that the third quarter of 2025, represented another period of strong performance for our company.
The gross billings reached USD 40.5 million, surpassing our previously issued guidance and demonstrating robust sequential growth of 42.1% quarter-over-quarter and triple-digit year-over-year growth of 104.6% Crucially, we achieved this rapid expansion while maintaining positive net operating cash flow, which further solidifies our cash position and stands as a testament to our disciplined execution.
Our active student base reached 112,600 during this quarter, marking a significant milestone as we surpassed 100,000 active students for the first time since we embarked on our global expansion strategy more than 3 years ago. We remain confident in both the substantial opportunity presented by the global market and our team's ability to execute our strategic vision and drive sustainable long-term value.
As we enter the fourth quarter of 2025, we consolidate recent rapid growth and expand business momentum with existing and new clients. We continue to build bridges and enable our customers to exchange on a global stage as demonstrated by our recent participation in COP30 held in Brazil in November 2025. Our students from 5 countries participated in this event, demonstrating the increasingly diversified nature of our portfolio and our successful reach into new markets. We remain focused on executing our strategic priorities while maintaining disciplined capital allocation to drive long-term shareholder value.
With that, I will now turn the call over to Cindy, our CFO.
Thank you, Jack. Now let me walk you through our third quarter financial details. Third quarter net revenues were USD 26.3 million, an 87.5% increase from the same quarter last year, largely driven by the increase of active students with attended lesson consumption. Gross margin for the third quarter was 73.3%. Gross billings grew by 104.6% from the same quarter last year to USD 40.5 million.
Q3 operating expenses were USD 23.4 million, an increase of 97.9%, compared to the same quarter last year. Specifically, this has been driven by Q3, sales and marketing expenses of USD 17.5 million, 114.7% increase from the same quarter last year due to the rise in marketing and branding expenses resulting from intensified marketing and branding activities as well as higher sales personnel costs related to increases in the number of sales and marketing personnel.
Q3 product development expenses were USD 1.6 million, an 87.8% increase from the same quarter last year. Finally, Q3 general and administrative expenses were USD 4.3 million, a 52.5% increase from the same quarter last year. Overall, Q3 operating loss was USD 4.2 million while net loss attributable to ordinary shareholders was USD 4.8 million, a 428.9% and 669.4% increase from the same quarter last year, respectively.
Q3 GAAP and non-GAAP earning per ADS were negative USD 0.8 and USD 0.74 respectively. The company's total cash, cash equivalents and time deposits were USD 36.6 million at the end of the third quarter. Advances from students was USD 70.7 million at the end of the third quarter.
Looking forward to the fourth quarter of 2025, we currently expect the net gross billings to be between USD 35 million and USD 38 million. The above outlook is based on our current market conditions and reflect the company's current and preliminary estimates of the market and operating conditions and customer demand, which are all subject to change. This concludes our prepared remarks. We will now open the line for questions. Operator, please go ahead.
[Operator Instructions] We have no questions at this time. I'd like to turn the call back over to the company for closing remarks.
Thank you once again for joining us today. If you have further questions, please contact 51Talk's Investor Relations through the contact information provided on our website.
This concludes this conference call. You may now disconnect your lines. Thank you.
China Online Education Group Sponsored ADR — Deutsche Bank ADR Virtual Investor Conference 2025
1. Question Answer
Hello, and welcome to the Deutsche Bank Virtual Investor Conference, dbVIC. This is Zafar Aziz from the Deutsche Bank team. I'm pleased to welcome our next presentation by 51Talk from China.
Before I introduce our speaker, a few points to note. [Operator Instructions]
All of today's presentation is recorded and can be accessed by the Deutsche Bank website, adr.db.com.
I'm happy now to hand over to 51Talk.
Good morning, everyone, or good afternoon. My name is David Chung. I'm the Investor Relations VP at 51Talk. Thank you for joining us today. In the next 5 to 10 minutes, I'll be walking you through how 51Talk, as an NYSE American-listed company with ticker code COE, is combining localization, technology and people in building an online education business globally. After that, we'll open the floor for questions.
Let's start with the big picture. 51Talk is an AI-driven EdTech platform serving young learners around the world. We're not just offering English lessons, we're providing an integrated, adaptive learning experience that combines proprietary curriculum, high-quality tutors and advanced technology. Our goal is to make high-impact education accessible and relevant in every market we enter.
What makes our platform different is our integrated approach. We've built our solution on 4 pillars: a proprietary curriculum with over 500 hours of refined content, a rigorous AI-enhanced tutor recruitment process, USD 100 million invested in our proprietary technology, and a 360-degree parent and student support model. In the next couple of slides, you'll see how each pillar reinforces the others to deliver results.
First, our curriculum is fully animated, interactive and aligned with CEFR global standards. Second, our tutors are selected through a stringent process with only the best making it through. Every tutor then benefits from AI tools and ongoing training, ensuring quality and consistency at scale. Third, our technology platform is robust and scalable. We have low latency videos, gamified classrooms and features like virtual makeup for tutors. Finally, our 360-degree support ensures every student has a personalized learning path and ongoing guidance from a dedicated learning partner, maximizing both engagement and satisfaction.
Global presence means local adaptation. In every market, our curriculum is customized to fit local school requirements and cultural expectations. Local teams provide direct support and guidance, and our marketing is tailored to reach parents and students where they are. This proven approach has helped us build trust and drive engagement in diverse regions from East Asia to the Middle East and beyond.
AI powers every part of our operations. Our tech stack includes large language models, proprietary infrastructure and advanced automation, all supporting everything from telemarketing to personalized student support. We've developed tools for tutor screening, lesson personalization and adaptive feedback, all designed to improve efficiency and outcomes.
Let's look at some AI application highlights. In tutor recruitment, AI evaluates pronunciation and accent. For every new hire, AI assists in screening, interviewing and training, reducing cost and speeding up onboarding while maintaining high standards. AI also enables truly personalized learning. Every student receives an individualized model and learning path with real-time feedback through features like AI coaches, lesson memos and situational practice. This personalization drives better engagement, faster progress and higher satisfaction.
Our sales process is also optimized by AI, which has already improved our conversion rates and reduced idle times during the sales process. AI supports students during lessons, helping them deliver higher-quality instructions. We have also recently saw our first paying student complete an AI-powered trial class.
Turning to our numbers. Following our China divestment, we are now fully focused on international markets, audited in the U.S. and headquartered in Singapore. Revenues are growing, margins consistently exceed 70% and our cash position is strong. We're expanding with discipline, focusing on profitable and sustainable growth, not just headline numbers.
To close, 51Talk is uniquely positioned at the intersection of global reach, local expertise and cutting-edge applications of AI. We're committed to unlocking long-term value in the EdTech sector, one student, one market at a time.
Thank you for your time. We can now open up for questions.
Okay. The first question that we have is, how does AI affect our business?
So that's a very common question that we do get asked by investors. We believe that online education is one of the industries that's most affected by AI. AI will change everything that we do, but exactly when and how, that's -- we're still trying to find out. But it will definitely happen faster than a lot of people expect.
So at the moment, there are clearly a lot of very good people around the world working on AI and its application in education. And some of them, they work for us. In order to make sure we don't fall behind in this AI race, we use AI to improve everything that we do in the current existing product. We partially use AI tutors. We use AI sales agents. We have AI study reports, and we use AI to customize courses.
If you imagine what's possible with AI and its applications in education, we are probably doing most of it right now. And as a second stream, we are making soft launches on products that don't have human teachers at all. So this helps us to continue to learn and improve, and maybe in the longer term, even replace ourselves. In the end, we believe that who actually decides the best way forward, the best way to learn are the students.
It's important to remember that it is actually in our business, in the K-12 space, it's not easy to keep a 5-year-old motivated to learn for 30 minutes. It is not actually about -- or at least not just knowledge transfer, but it's about keeping the child engaged, making them open their mouth and interact in a new language. That's what parents expect from us. And that's in our KPIs, that's one of the operating metrics that we look at and management continues to drive. And we believe that's something that we are good at. And using AI will just make us continue to be better in that aspect. Okay, I hope that answers the question.
The next question that we have is, what are the key markets that we operate in and if there are plans to open up new markets in the future?
So expanding into new markets is definitely a very key part of our growth. Our product is actually the core product, it's the one-to-one online English K-12 product. And it's -- so our growth is really about geographic growth currently. So growing into new markets, new areas with the same product. Right now, we are already in Southeast Asia, like Thailand, Malaysia. We're continuing to test and go into and further -- and penetrate into new markets like Vietnam and Indonesia. We are also in Arabic markets. And as we continue to explore new markets, Spanish-speaking regions is another potentially very big opportunity for us, as we see.
In selecting a market, we generally look for a relatively large middle-class children population, low cost of acquisitions in terms of traffic and marketing. These are important to justify our unit economics and operating cash flow, which we manage very diligently.
And then the focus is on making this core product in terms of the marketing and in terms of the actual services fit each location. So localization is important. We have -- we build local offices. We have experienced leaders and train new staff in our proven methods. So we send experienced leaders from different locations into the new regions to expand into new markets.
For the product side, obviously, we would adapt and change and to match the local languages, the customs, the colors and styles of the local communities.
So all of these take time and a lot of efforts to build. But once we are in the market, what we find is that it's very hard -- once we've done that, what we find is that it's very hard for local competitors to match this mix of central strength, so the core product, the core infrastructure that we have and then the on-the-ground local teams that we have.
Okay. Moving on to the next question. Got it. Okay. So if there are any new products or services that are coming in next year, how do we actually distinguish 51Talk against competitors?
So this, I guess this is a bit of continuing from the earlier question. We're always on the lookout for what our student needs are, and we're always trying to add and improve our products that is complementary to our existing one-to-one K-12 English product. This may mean other subjects or exam preparation in different markets.
As we discussed earlier, different markets, our experience is that different markets have different needs, and they can be quite unique. So in certain markets, we may offer market-specific programs or services that we operate in. And for that, for every new initiative, we check the market size if we can -- if we have the resources to do it well, the competition that's currently out there and why we are the best to take on this opportunity.
Education is a really local business. Every market has a different school system. Every market is different in terms of where and when students study after school. The student learning habits and behaviors are different. But we believe what we're good at is sending in our people to new markets and building up the local teams and adapting our product and marketing to fit the local needs of local students and parents, and we've been doing that and continuing to show results in the past few years.
Okay. Okay, the next question is more financial numbers related. So it's about we're making losses in the P&L, but our cash position is actually strengthening. What was the logic behind that?
So yes, thank you for taking the time to study our financial statements. So if you look at our P&L, we are making an accounting net loss. So on an accounting revenue recognition basis, we are actually making a net loss after deducting all the operating expenses for that period. And the reason for that is that in education, we spend money to get students now, but lessons happen later. So we receive the cash upfront, but the accounting recognition of income and profit comes in the future when the students actually take the classes.
So actually, as you can see, when we are growing, we have another metric, which is what we call billings. That's the cash that we receive upfront. Our billings, which is not an accounting item, but it's something that we disclose as a top line cash income item. Our billings are higher than our revenues as we grow. And that's why on the balance sheet, you continue to see the cash balance or the cash and cash equivalents continue to grow. And that's because as we discussed earlier, we are very diligent on making sure our operating cash flow continues to grow.
So if you want to see kind of the true value of the operating cash flows, you can look at our billings, subtract the costs for that given period, and that would give you an indication of the cash profitability for a given period.
Additionally, you also see that our balance sheet in shareholders' equity, that's negative as well. And again, that will translate over time to positive as retained earnings. It's recognized. So as revenue gets recognized over time, we have high retained earnings. So that will make the shareholders' equity trend positive over time.
And then I think there's a follow-up question about that, which is if we need capital to fund growth.
So our belief is that we would grow with the cash that we receive from our students, from the parents paying for our products and services and not by growing with the cash that we receive from investors. We want to let our users, our students and parents, decide on our future.
And when you look at our recent filings, you can see that our CEO has continued to buy back shares in the open market. So we think that's another strong signal that should give that the company is not in immediate need to raise capital to fund growth.
And I think that's it. So thank you for having us. And we look forward -- if there's any further questions, please feel free to visit the 51Talk IR website, and you can see our e-mails there and you can e-mail us with any further questions. Thank you so much.
China Online Education Group Sponsored ADR — Q2 2025 Earnings Call
1. Management Discussion
Hello, ladies and gentlemen. Thank you for standing by for 51Talk Online Education Group's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I will now turn the call over to your host, Mr. David Chung, Investor Relations for the company. Please go ahead, David.
Hello everyone. And welcome to the Second Quarter 2025 Earnings Conference Call of 51Talk. The company's results were issued via Newswire Services earlier today and are posted online. You can download the earnings press release and sign up for the company's distribution list by visiting ir.51talk.com. Mr. Jack Huang, our CEO; and Ms. Cindy Tang, our CFO, will begin with some prepared remarks. Following the prepared remarks, there will be a Q&A session. Before we continue, please note that the discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's Form 20-F and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under the applicable law.
Please also note that earnings press release and this conference call include discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. 51Talk's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our CEO, Jack Huang. Jack, please go ahead.
Thank you, David. Hello, everyone. Thank you very much for joining our conference call today. Q2 2025 has been a strong quarter for us. The gross billing exceeded our guidance, reflecting healthy demand and disciplined execution. We expect this positive momentum to carry into the second half of 2025. Our third quarter guidance reflects our confidence in the company's trajectory. We have also deepened our investments in enhancing user experience and service quality. We believe these initiatives will strengthen our competitive position and create durable long-term value for our shareholders.
AI remains integral to our strategy and operations with applications spanning across the company. We remain steadfast in our commitment to developing robust infrastructure and systems necessary to embed AI across our products and processes with the objective of delivering an exceptional learning experience to our students at scale. With that, I will now turn the call over to Cindy, our CFO.
Thank you, Jack. Now let me walk you through our second quarter financial details. Second quarter net revenues were USD 20.4 million, a 86.1% increase from the same quarter last year largely driven by the increase of active students with attended lesson consumption. Gross margin for the second quarter was 74.6%. Gross billings grew by 79.7% from the same quarter last year to USD 28.5 million. Q2 operating expenses were USD 17.9 million, an increase of 53.5% compared to the same quarter last year.
Specifically, this has been driven by Q2 sales and marketable expenses of USD 12.8 million, a 74.8% increase from the same quarter last year due to the rise in marketing and branding expenses resulting from marketing and branding activities as well as higher sales personnel costs related to increases in the number of sales and marketing personnel. Q2 product development expenses were USD 1.2 million, a 45.5% increase from the same quarter last year. Finally, Q2 general and administrative expenses was USD 3.9 million, a 39.1% increase from the same quarter last year.
Overall, Q2 operating loss was USD 2.7 million, while net loss attributable to ordinary shareholders was USD 3 million, a 12.7% and 144.7% increase from the same quarter last year, respectively. Q2 GAAP and non-GAAP earning per ADS were negative USD 0.52 and USD 0.46, respectively. The company's total cash, cash equivalents and time deposits were USD 30.9 million at the end of the second quarter. Advances from students were USD 56.4 million at the end of the second quarter.
Looking forward to the third quarter of 2025, we currently expect the net gross billings to be between USD 36.5 million and USD 37.5 million. The above outlook is based on our current market conditions and reflect the company's current and preliminary estimates of the market and operating conditions and customer demand, which are all subject to change. This concludes our prepared remarks. We will now open the line for questions. Operator, please go ahead.
[Operator Instructions] The first question today comes from [ Toby Lu ], a private investor. Please go ahead.
Dear management team, congratulations for the good results. Yes. So I have 2 questions. The first question is I noticed that we have changed the accounting firm with the Ernst & Young so could you please describe the reasons that -- why we changed it from Marcum to Ernst & Young and yes, so what was the consideration behind that. Thank you.
Thank you very much. This is your first question, right?
Yes.
Okay. So first of all, we really want to express our appreciation to our auditor Marcum. We believe they have their service quality and they are very professional in terms of the accounting. But as you know, a lot of investors they ask -- they have -- a lot of them have the mandate about the auditor, especially some of them have the mandate about the Big 4. So that's -- I think that is the key reason that we choose E&Y for the auditor.
Yes. So basically, this means that the change of the auditing firm is a way for us to enlarge our investor base so that some investors may be after we change the auditing firm, we can fill their investment criteria, right?
Yes. We think with the big 4, after we changed the auditor to the Big 4 to E&Y, some of the investors -- some of the potential investors they can buy the stock of COE.
Yes, yes. Got it. Got it. Yes. And my second question is also related to investors. So I've noticed that actually, our stock is trading with a relatively low liquidity and the beta spread is are usually quite large compared to other stocks to have the similar market cap. So is there any intention for us to increase the liquidity, for example, like conducting some stock split or maybe other incentives to increase our turnover rates or maybe to lower the beta spread.
Thank you for your question. Yes, you are right. Our liquidity is low. But for now, we have -- we don't have a new plan to do any risks or other alternatives to increase it yet because now we are actually focusing on doing our business to improve our operations, which we believe will provide more sustainable and fundamental value to our investors. But in the future, we will also consider all these alternatives. But now we don't have a recent plan yet.
[Operator Instructions] There are no further questions at this time. I'd like to hand the conference back over to the company for any closing remarks.
Thank you once again for joining us today. If you have further questions, please contact 51Talk's Investor Relations through the contact information provided on our website.
This concludes the conference call. You may now disconnect your lines. Thank you.
Financial data from China Online Education Group Sponsored ADR
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Dec '25 |
+/-
%
|
||
| Revenue | 96 96 |
-
100%
|
|
| - Direct Costs | 25 25 |
-
26%
|
|
| Gross Profit | 71 71 |
-
74%
|
|
| - Selling and Administrative Expenses | 80 80 |
-
83%
|
|
| - Research and Development Expense | 5.48 5.48 |
-
6%
|
|
| EBITDA | - - |
-
-
|
|
| - Depreciation and Amortization | - - |
-
-
|
|
| EBIT (Operating Income) EBIT | -14 -14 |
-
-15%
|
|
| Net Profit | -17 -17 |
-
-18%
|
|
In millions USD.
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Company Profile
China Online Education Group engages in the operation of an online education platform in China. Its online and mobile education platforms enable students across China to take live interactive english lessons with overseas foreign teachers, on demand. The company was founded by Jia Jia Huang, Ting Shu, and Li Ming Zhang in November 2012 and is headquartered in Beijing, China.
StocksGuide Premium
| Head office | Cayman Islands |
| CEO | Mr. Huang |
| Employees | 729 |
| Founded | 2011 |
| Website | ir.51talk.com |
