51Talk Online Education Group Announces Third Quarter 2024 Results

PR Newswire

SINGAPORE, Dec. 13, 2024

SINGAPORE, Dec. 13, 2024 /PRNewswire/ -- 51Talk Online Education Group ("51Talk" or the "Company") (NYSE American: COE), a global online education platform with core expertise in English education, today announced its unaudited results for the third quarter ended September 30, 2024.

Third Quarter 2024 Financial and Operating Highlights

   -- Gross billings[1] for the third quarter of 2024 were US$19.8 million, an 
      80.7% growth from the third quarter of 2023. 
 
   -- Net revenues were US$14.0 million for the third quarter of 2024, a 79.4% 
      increase from the third quarter of 2023. 
 
   -- The number of quarterly active students with attended lesson consumption 
      was approximately 65,700 in the third quarter of 2024, representing an 
      82.5% increase from the third quarter of 2023. 
 
Key Financial and Operating 
Data                           For the three months ended 
                              ---------------------------- 
                              September 30,  September 30,      Y-o-Y 
                                  2023           2024           Change 
                              -------------  -------------  -------------- 
 
Net Revenues (in US$ 
 millions)                         7.8           14.0           79.4 % 
                                                            2.4 percentage 
Gross Margin                     76.3 %         78.7 %          points 
Gross Billings (in US$ 
 millions)                        10.9           19.8           80.7 % 
 
Active students with 
 attended lesson 
 consumption([2]) (in 
 thousands)                       36.0           65.7           82.5 % 
 
 
 
([1]) Gross billings for a specific period, which is one of the Company's key 
operating data, are defined as the total amount of cash received and 
receivable from third party payment platforms for the sale of course packages 
and services in such period, net of the total amount of refunds in the same 
period. The gross billings data included herein was from the Company's 
business system and converted with quarterly corresponding exchange rate, 
which may result in differences with bank records. 
([2]) An "active student with attended lesson consumption" for a given period 
refers to a student who attended at least one paid lesson, excluding those 
students who only attended paid live broadcasting lessons or trial lessons. 
 

"Our growth momentum has been well sustained into the third quarter, with gross billings once again surpassing our earlier guidance. Looking ahead, we are confident in our ability to maintain our growth momentum going forward. We are committed to our localization strategies around the world, while actively pursuing opportunities to extend service offerings with supplementary products for our existing students," stated Jack Jiajia Huang, Founder, Chairman, and Chief Executive Officer of 51Talk.

"Furthermore, we would highlight that in our commitment to sustainable growth, we have successfully maintained an upward trajectory in our operating cash flow in the past two quarters. This is evidenced by the improvement in our cash balance over the quarter, and we anticipate that this positive trend will continue in the coming periods."

"The acceleration of AI adoption, across our group has become a significant driver this quarter. We have observed improvements in lead conversion rates, tutor management, and student classroom experiences, all powered by AI. Our deep understanding of customer needs, combined with the strategic implementation of AI technologies, aligns with our objective of becoming a globally leading EdTech company," Jack Jiajia Huang concluded.

Third Quarter 2024 Financial Results

Net Revenues and Gross Margin

Net revenues for the third quarter of 2024 were US$14.0 million, a 79.4% increase from US$7.8 million for the same quarter last year. The number of active students with attended lesson consumption was approximately 65,700 in the third quarter of 2024, a 82.5% increase from 36,000 for the same quarter last year.

Cost of revenues for the third quarter of 2024 was US$3.0 million, a 60.7% increase from US$1.9 million for the same quarter last year. The increase was primarily due to the increase in total service fees paid to teachers, mainly resulting from an increased number of paid lessons.

Gross profit for the third quarter of 2024 was US$11.1 million, an 85.3% increase from US$6.0 million for the same quarter last year.

Gross margin for the third quarter of 2024 was 78.7%, compared with 76.3% for the same quarter last year.

Operating Expenses

Total operating expenses for the third quarter of 2024 were US$11.8 million, a 20.6% increase from US$9.8 million for the same quarter last year. The increase was mainly due to the increase in sales and marketing expenses.

Sales and marketing expenses for the third quarter of 2024 were US$8.2 million, an 18.3% increase from US$6.9 million for the same quarter last year. The increase was mainly due to higher sales personnel costs related to increases in the number of sales and marketing personnel. Excluding share-based compensation expenses, non-GAAP sales and marketing expenses for the third quarter of 2024 were US$8.1 million, an 18.5% increase from US$6.9 million for the same quarter last year.

Product development expenses for the third quarter of 2024 were US$0.8 million, a 3.3% decrease from US$0.9 million for the same quarter last year. Excluding share-based compensation expenses, non-GAAP product development expenses for the third quarter of 2024 were US$0.8 million, a 1.7% decrease from US$0.8 million for the same quarter last year.

General and administrative expenses for the third quarter of 2024 were US$2.8 million, a 38.6% increase from US$2.0 million for the same quarter last year. The increase was primarily due to higher general and administrative personnel costs. Excluding share-based compensation expenses, non-GAAP general and administrative expenses for the third quarter of 2024 were US$2.7 million, a 42.9% increase from US$1.9 million for the same quarter last year.

Loss from Operations

Operating loss for the third quarter of 2024 was US$0.8 million, compared with operating loss of US$3.9 million for the same quarter last year.

Non-GAAP operating loss for the third quarter of 2024 was US$0.6 million, compared with non-GAAP operating loss of US$3.6 million for the same quarter last year.

Net Loss Attributable to the Company's Ordinary Shareholders

Net loss attributable to the Company's ordinary shareholders for the third quarter of 2024 was US$0.6 million, compared with net loss of US$3.9 million for the same quarter last year.

Excluding share-based compensation expenses of US$0.2 million, non-GAAP net loss for the third quarter of 2024 was US$0.4 million, compared with non-GAAP net loss of US$3.6 million for the same quarter last year.

Basic and diluted net loss per share attributable to ordinary shareholders for the third quarter of 2024 was US$0.002, compared with basic and diluted net loss per share of US$0.01 for the same quarter last year.

Excluding share-based compensation expenses of US$0.2 million, non-GAAP basic and diluted net loss per share attributable to ordinary shareholders for the third quarter of 2024 was US$0.001, compared with non-GAAP basic and diluted net loss per share attributable to ordinary shareholders of US$0.01 for the same quarter last year.

Basic and diluted net loss per American depositary share ("ADS") attributable to ordinary shareholders for the third quarter of 2024 was US$0.11, compared with basic and diluted net loss per ADS of US$0.68 for the same quarter last year. Each ADS represents 60 Class A ordinary shares.

Excluding share-based compensation expenses of US$0.2 million, non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders for the third quarter of 2024 was US$0.07, compared with non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders of US$0.64 for the same quarter last year.

Balance Sheet

As of September 30, 2024, the Company had total cash, cash equivalents and time deposits of US$25.6 million, compared with US$23.4 million as of December 31, 2023.

The Company had advances from students([3]) of US$39.7 million as of September 30, 2024, compared with US$27.2 million as of December 31, 2023.

 
([3]) "Advances from students" is defined as the amount of obligation to 
transfer goods or service to students or business partners for which 
consideration has been received from students in advance. The deposits from 
students are also presented in the total amount of "advances from students." 
 

Outlook

For the fourth quarter of 2024, the Company currently expects net gross billings to be between $20.5 million and $21.0 million, which would represent a sequential growth of 3.7% to 6.2%.

The foregoing outlook is based on current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

Conference Call

The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on December 13, 2024 (9:00 PM Singapore/Hong Kong time on December 13, 2024).

Dial-in details for the earnings conference call are as follows:

 
United States (toll free):    1-888-346-8982 
International:                1-412-902-4272 
Singapore (toll free):        800-120-6157 
Mainland China (toll free):   4001-201203 
Hong Kong (toll free):        800-905945 
Hong Kong (local toll):       852-301-84992 
 

Participants should dial-in at least 5 minutes before the scheduled start time and ask to be connected to the call for "51Talk Online Education Group."

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