Q4 2025 51Talk Online Education Group Earnings Call

March 27, 2026

Speaker #1: Hello, ladies and gentlemen. Thank you for standing by for 51Talk Online Education Group's fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode.

Operator: Hello, ladies and gentlemen. Thank you for standing by for 51Talk Online Education Group's Q4 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. 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.

Speaker #1: 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.

Speaker #2: Hello, everyone, and welcome to the fourth quarter 2025 earnings conference call of 51Talk. The company's results were issued via newswire services earlier today and are posted online.

David Chung: Hello, everyone, and welcome to the Q4 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 Wang, 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.

Speaker #2: You can download the earnings press release and sign up for the company's distribution list by visiting ir.51talk.com. Mr. Jack Wong, our CEO, and Ms. Cindy Tang, our CFO, will begin with some prepared remarks.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

David Chung: 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 US 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'll now turn the call over to our CEO, Jack Wang. Jack, please go ahead.

Speaker #2: 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.

Speaker #2: 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 Wong.

Speaker #2: Jack, please go ahead.

Speaker #3: 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 U.S.

Jack 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. We began to reap the rewards of our strategic investments made over the past several years. Full-year gross billings reached $127.6 million, representing a year-over-year growth of 83.4%, while net revenues grew 88.6% year-over-year to $95.6 million. These results may mark a significant milestone as gross billings surpassed and the net revenues approached the $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.

Speaker #3: Dollar 127.6 million, representing a year-over-year growth of 83.4%, while net revenues grew 88.6% year-over-year to $95.6 million. These results may mark a significant milestone as gross billings surpassed, and net revenues approached, the U.S.

Speaker #3: Dollar 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.

Speaker #3: Net operating cash, cash inflow, also surpassed the U.S. dollar 10 million mark, reaching U.S. dollar 11.8 million U.S. dollars in 2025. Further evidence that we are building a sustainable and scalable business model.

Jack Jiajia Huang: Net operating cash cash inflow also surpassed the $10 million mark, reaching $11.8 million in 2025. Further evidence that we are building a sustainable and a 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.

Speaker #3: Looking ahead to 2026, we are committed to expanding 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.

Speaker #3: With that, I will now turn the call over to Cindy, our CFO.

Speaker #1: Thank you, Jack. Now let me walk you through our fourth-quarter financial details. Net revenue for the fourth quarter was $30.6 million, an 88.6% increase from the same quarter last year, driven by the increase of active students with attended lesson consumption.

Cindy Tang: Thank you, Jack. Now let me walk you through our Q4 financial details. Net revenue for the Q4 was $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 Q4 was 72.4%. Gross billings grew by 72.0% from the same quarter last year to $36.8 million. Q4 operating expenses were $27.4 million, an increase of 103.6% compared to the same quarter last year.

Speaker #1: Gross margin for the fourth quarter was 72.4%. Gross billings grew by 72.0% from the same quarter last year to $36.8 million. Q4 operating expenses were $27.4 million.

Speaker #1: dollars, an increase of 103.6% compared to the same quarter last year. Specifically, this has been driven by Q4 sales and marketing expenses of $20.4 million.

Cindy Tang: Specifically, this has been driven by Q4 sales and marketing expenses of $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 $1.6 million, a 72.2% increase from the same quarter last year. Finally, Q4 general and administrative expenses were $5.4 million, a 123.9% increase from the same quarter last year.

Speaker #1: $2.1 billion, 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.

Speaker #1: As well as higher sales personnel costs related to increases in the number of sales and marketing personnel. Q4 product development expenses were $1.6 million U.S.

Speaker #1: Dollars, a 72.2% increase from the same quarter last year. Finally, Q4 general and administrative expenses were $5.4 million, a 123.9% increase from the same quarter last year.

Speaker #1: Overall, Q4 operating loss was 5.2 million U.S. dollars, while net loss attributable to the company's ordinary shareholders was 6.5 million U.S. dollars. A 504.3% and 368.8% increase from the same quarter last year, respectively.

Cindy Tang: Overall, Q4 operating loss was $5.2 million, while net loss attributable to the company's ordinary shareholders was $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 -$1.08 and -$1.03, respectively. The company's total cash equivalents, and time deposits were $39.0 million at the end of Q4. Advances from students were $76.6 million at the end of Q4. Looking forward to Q1 2026, we currently expect net gross billings to be between $29.0 million and $31.0 million.

Speaker #1: Q4 GAAP and non-GAAP earnings per ADS were negative 1.08 U.S. dollars and 1.03 U.S. dollars, respectively. The company's total cash equivalents and time deposits were 39.0 million U.S.

Speaker #1: Dollars, at the end of the fourth quarter. Advances from students were $76.6 million at the end of the fourth quarter, looking forward to the first quarter of 2026.

Speaker #1: We currently expect the net gross billings to be between $29.0 million and $31.0 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.

Cindy Tang: The above outlook is based on our current market conditions and reflects the company's current and preliminary estimates of the market, operating conditions, and customer demands, which are all subject to change. This concludes our prepared remarks. We will now open the line for questions. Operator, please go ahead.

Speaker #1: This concludes our prepared remarks. We will now open the line for questions. Operator, please go ahead.

Speaker #4: We will now begin the question-and-answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Please ask your questions. You may re-enter the queue if you have further questions. At this time, we will pause momentarily to assemble our roster. The first question today comes from Crystal Li with China Merchants. Please go ahead.

Speaker #4: If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. Please ask your questions.

Speaker #4: You may re-enter the queue if you have further questions. At this time, we will pause momentarily to assemble our roster. The first question today comes from Crystal Lee with China Merchant.

Speaker #4: Please go ahead.

Speaker #5: Thank you, Tax Management, for taking my questions. So, I have two questions. The first one is: can you give us an update on how the conflict in the Middle East is affecting your operations?

Crystal Li: Thank you, senior management, for taking my questions. I have two 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? My second question is, can you share with us any guidance or outlook for this year? Thank you.

Speaker #5: 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?

Speaker #5: Thank you.

Speaker #3: Okay, thank you very much for your questions. So, let's start from the first question. This is a fair question at this time. So, our answer is: our operations right now in the Middle East are normal.

Jack Jiajia Huang: Okay. Thank you very much for your questions. Let's start from the first question. This is a fair question at this time. Our answer is our operations right now in the Middle East are normal. The markets we serve are not the warring 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 our local employees and our customers. On the employee side, we have strong local leadership and we'll be adaptive.

Speaker #3: And the markets we serve are not the warring 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.

Speaker #3: Beyond that, we are mindful that the rising tensions do affect the sentiment of the people, both among our local employees and our customers.

Speaker #3: On the employee side, we have strong local leadership, and we will be adaptive. We are managing the customer side proactively, and we are confident to navigate potential fluctuation of customer sentiment.

Jack Jiajia Huang: 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 Ramadan. With this Ramadan falling from 18 February to 19 March this year, squarely across most of the quarter. After Ramadan, there was nearly 1 week of Eid. We anticipated the natural shift in terms of the lesson activity as we do every year in Q1, and we have planned accordingly. Let's move on to the next question about the guidance or outlook for 2026.

Speaker #3: Beyond this, I want to explain more about Q1. This is a narrative, which is the Ramadan, with this Ramadan falling from February 18th to March 19th this year, squarely across most of the quarter.

Speaker #3: And after that, after the Ramadan, was about nearly one week of the Eid. So we anticipated the natural shift in terms of the lesson activity as we do every year in Q1.

Speaker #3: And we have planned accordingly. So let's move on to the next question about the guidance or outlook for 2026. First, I want to say that we are not usually providing official full-year guidance.

Jack Jiajia Huang: 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. 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. We expect our cash generating capability to remain robust over the course of the year. Thank you.

Speaker #3: 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.

Speaker #3: In 2025, we made significant front-loaded investments in new markets, in technology, and in our teams. In 2026, we expect to harvest those investments. We will also be focused on improving the unit economics across every market we operate in.

Speaker #3: So, we expect our cash-generating capability to remain robust over the course of the year. Thank you.

Speaker #5: Thanks. That's very helpful.

Crystal Li: Thanks. That's very helpful.

Speaker #4: As a reminder, if you would like to ask a question, please press star, then 1 to join the question queue. That's star, then 1 to ask a question.

Operator: As a reminder, if you would like to ask a question, please press star then one to join the question queue. That's star then one to ask a question. There are no further questions at this call. I'd like to turn the call back over to the company for closing remarks.

Speaker #4: There are no further questions at this time. I'd like to turn the call back over to the company for closing remarks.

Speaker #6: 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.

Jack Jiajia Huang: Thank you once again for joining us today. If you have further questions, please contact 51Talk investor relations through the contact information provided on our website. Thank you and goodbye.

Speaker #6: Thank you. Goodbye.

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

Q4 2025 51Talk Online Education Group Earnings Call

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