51Talk Online Education Group (AMEX:COE) Q4 2025 Earnings Call Transcript

51Talk Online Education Group (AMEX:COE) Q4 2025 Earnings Call Transcript March 27, 2026

Operator: 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.

David Chung: 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.

Jiajia Huang: 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.

Chun Tang: 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.

Q&A Session

Operator: [Operator Instructions] The first question today comes from Christo Lee with China Merchants.

Christo Lee: 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?

Jiajia Huang: 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: [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.

David Chung: 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.

Operator: This concludes the conference call. You may now disconnect your lines. Thank you.