51Talk Online Education Group Announces the Results for the Fourth Quarter and Full Year 2024

, /PRNewswire/ -- 51Talk Online Education Group ("51Talk" or the "Company") (NYSE American: COE), a global online education platform with core expertise in English education, announced its unaudited results for the fourth quarter and full year ended December 31, 2024. Full Year 2024 Financial and Operating Highlights Gross billings[1] for 2024 were US$69.6 million, a 74.4% growth from 2023. Net revenues were US$50.7 million for 2024, an 87.0% increase from US$27.1 million for 2023. The number of active students with attended lesson consumption was approximately 95,000 in 2024, representing an 87.0% increase from approximately 50,800 in 2023. Fourth Quarter 2024 Financial and Operating Highlights Gross billings for the fourth quarter of 2024 were US$21.4 million, a 93.4% growth from the fourth quarter of 2023. Net revenues were US$16.2 million for the fourth quarter of 2024, a 117.3% increase from US$7.5 million for the fourth quarter of 2023. The number of active students with attended lesson consumption was approximately 74,200 in the fourth quarter of 2024, representing an 83.2% increase from approximately 40,500 for the fourth quarter of 2023. Key Financial and Operating Data For the three months ended For the year ended Jun. 30, Sept. 30, Dec. 31, Dec. 31, 2024 2024 2024 2024 Net Revenues (in US$ millions) 11.0 14.0 16.2 50.7 Gross Margin 78.1 % 78.7 % 77.5 % 78.0 % Gross Billings (in US$ millions) 15.9 19.8 21.4 69.6 Active students with attended lesson consumption[2] (in thousands) 54.4 65.7 74.2 95.0 [1] Gross billings for a given period, which is one of the Company's key operating data, is 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 such period. The gross billings data included herein was from the Company's business system and converted with quarterly corresponding exchange rate, which may lead to 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. "We concluded FY24 with gross billings growing by 74.4% year-over-year and net revenues increasing by 87.0% year-over-year. Even more encouraging is that we achieved this while strengthening our cash position, delivering a full year positive operating cash flow of US$5.8 million," stated Jack Jiajia Huang, Founder, Chairman, and Chief Executive Officer of 51Talk. "Throughout FY24, we made significant progress in building out our local teams and developing more localized marketing and product content. We are also expanding into new geographic markets to drive further growth." "In 2024, we've already seen the benefits of integrating AI into our operations, reflected in the improvement of operational efficiency and a narrowing of operating losses. We believe 2025 will continue to be a pivotal year for AI adoption and further efficiency improvements. Specifically, AI will enable more personalized course plans and exercises tailored to students' proficiency levels, as well as enhanced progress tracking," concluded Jack Jiajia Huang. Fourth Quarter 2024 Financial Results Net Revenues and Gross Margin Net revenues for the fourth quarter of 2024 were US$16.2 million, a 117.3% increase from US$7.5 million for the same quarter last year. The number of active students with attended lesson consumption was approximately 74,200 in the fourth quarter of 2024, an 83.2% increase from approximately 40,500 for the same quarter last year. Cost of revenues for the fourth quarter of 2024 was US$3.7 million, a 95.4% 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 fourth quarter of 2024 was US$12.6 million, a 124.6% increase from US$5.6 million for the same quarter last year. Gross margin for the fourth quarter of 2024 was 77.5%, compared with 75.0% for the same quarter last year. Operating Expenses Total operating expenses for the fourth quarter of 2024 were US$13.4 million, a 35.6% increase from US$9.9 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 fourth quarter of 2024 were US$10.1 million, a 40.9% increase from US$7.2 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 and higher marketing expenses. Excluding share-based compensation expenses, non-GAAP sales and marketing expenses for the fourth quarter of 2024 were US$10.1 million, a 41.1% increase from US$7.2 million for the same quarter last year. Product development expenses for the fourth quarter of 2024 were US$0.9 million, an 8.0% increase from US$0.9 million for the same quarter last year. Excluding share-based compensation expenses, non-GAAP product development expenses for the fourth quarter of 2024 were US$0.9 million, a 10.0% increase from US$0.8 million for the same quarter last year. General and administrative expenses for the fourth quarter of 2024 were US$2.4 million, a 28.0% increase from US$1.9 million for the same quarter last year. Excluding share-based compensation expenses, non-GAAP general and administrative expenses for the fourth quarter of 2024 were US$2.2 million, a 32.2% increase from US$1.7 million for the same quarter last year. Loss from Operations Operating loss for the fourth quarter of 2024 was US$0.9 million, compared with operating loss of US$4.3 million for the same quarter last year. Non-GAAP operating loss for the fourth quarter of 2024 was US$0.7 million, compared with non-GAAP operating loss of US$4.1 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 fourth quarter of 2024 was US$1.4 million, compared with net loss of US$5.7 million for the same quarter last year. Excluding share-based compensation expenses of US$0.2 million, non-GAAP net loss attributable to the Company's ordinary shareholders for the fourth quarter of 2024 was US$1.2 million, compared with non-GAAP net loss of US$5.4 million for the same quarter last year. Basic and diluted net loss per share attributable to ordinary shareholders for the fourth quarter of 2024 was US$0.004, compared with basic and diluted net loss per share of US$0.02 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 fourth quarter of 2024 was US$0.003, compared with non-GAAP basic and diluted net loss per share attributable to ordinary shareholders of US$0.02 for the same quarter last year. Basic and diluted net loss per American depositary share ("ADS") attributable to ordinary shareholders for the fourth quarter of 2024 was US$0.24, compared with basic and diluted net loss per ADS of US$0.99 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 fourth quarter of 2024 was US$0.20, compared with non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders of US$0.95 for the same quarter last year. Balance Sheet As of December 31, 2024, the Company had total cash, cash equivalents, time deposits of US$29.2 million, compared with US$23.4 million as of December 31, 2023. The Company had advances from students[3] of US$45.1 million as of December 31, 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." Full Year 2024 Financial Results Net Revenues and Gross margin Net revenues for 2024 were US$50.7 million, an 87.0% increase from US$27.1 million for 2023. The number of active students with attended lesson consumption was approximately 95,000 for 2024, an 87.0% increase from approximately 50,800 for the last year. Cost of revenues for 2024 was US$11.2 million, a 76.6% increase from US$6.3 million for 2023. 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 2024 was US$39.5 million, a 90.1% increase from US$20.8 million for 2023. Gross margin for 2024 was 78.0%, compared with 76.7% for 2023. Operating Expenses Total operating expenses for 2024 were US$47.6 million, a 38.1% increase from US$34.5 million for 2023. The increase was mainly due to the increase in sales and marketing expenses and general and administrative expenses. Sales and marketing expenses for 2024 were US$33.4 million, a 41.3% increase from US$23.6 million for 2023. The increase was mainly due to higher sales personnel costs related to the increase in the number of sales and marketing personnel and the increased in marketing expenses. Excluding share-based compensation expenses, non-GAAP sales and marketing expenses for 2024 were US$33.3 million, a 41.6% increase from US$23.5 million for 2023. Product development expenses for 2024 were US$3.6 million, a 15.6% increase from US$3.1 million for 2023. Excluding share-based compensation expenses, non-GAAP product development expenses for 2024 were US$3.5 million, a 18.7% increase from US$2.9 million for 2023. General and administrative expenses for 2024 were US$10.6 million, a 37.4% increase from US$7.7 million for 2023. The increase was primarily due to higher administrative personnel costs related to the increase in the number of general and administrative personnel. Excluding share-based compensation expenses, non-GAAP general and administrative expenses for 2024 were US$9.9 million, a 38.8% increase from US$7.1 million for 2023. Loss from Operations Operating loss for 2024 was US$8.0 million, compared with operating loss of US$13.7 million for 2023. Excluding share-based compensation expenses of US$0.9 million, non-GAAP operating loss for 2024 was US$7.1 million, compared with non-GAAP operating loss of US$12.8 million for 2023. Net Loss Attributable to the Company's Ordinary Shareholders Net loss for 2024 was US$7.2 million, compared with net loss of US$15.0 million for 2023. Excluding share-based compensation expenses of US$0.9 million, non-GAAP net loss for 2024 was US$6.3 million, compared with non-GAAP net loss of US$14.1 million. Basic and diluted net loss per share attributable to ordinary shareholders for 2024 was US$0.02, compared with basic and diluted net loss per share of US$0.04 for 2023. Excluding share-based compensation expenses of US$0.9 million, non-GAAP basic and diluted net loss per share attributable to ordinary shareholders for 2024 was US$0.02, compared with non-GAAP basic and diluted net loss per share attributable to ordinary shareholders of US$0.04 for 2023. Basic and diluted net loss per American depositary share attributable to ordinary shareholders for 2024 was US$1.25, compared with basic and diluted net loss per ADS of US$2.64 for 2023. Each ADS represents 60 Class A ordinary shares. Excluding share-based compensation expenses of US$0.9 million, non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders for 2024 was US$1.09, compared with non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders of US$2.48 for 2023. Outlook For the first quarter of 2025, the Company currently expects net gross billings to be between US$21.5 million and US$22.0 million, which would represent a sequential growth of 0.5% to 2.9% and an increase of approximately 71.2% to 75.2% from the same quarter last year. The above 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 March 21, 2025 (8:00 PM Singapore/Hong Kong time on March 21, 2025). 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." Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.51talk.com. A replay of the conference call will be accessible until March 28, 2025, by dialing the following telephone numbers: United States (toll free): 1-877-344-7529 International: 1-412-317-0088 Replay Access Code: 2569063 About 51Talk Online Education Group 51Talk Online Education Group (NYSE American: COE) is a global online education platform with core expertise in English education. The Company's mission is to make quality education accessible and affordable. The Company's online and mobile education platforms enable students to take live interactive English lessons, on demand. The Company connects its students with a large pool of highly qualified teachers that it assembled using a shared economy approach, and employs student and teacher feedback and data analytics to deliver a personalized learning experience to its students. Use of Non-GAAP Financial Measures In evaluating its business, 51Talk considers and uses the following measures defined as non-GAAP financial measures by the SEC as supplemental metrics to review and assess its operating performance: non-GAAP sales and marketing expenses, non-GAAP product development expenses, non-GAAP general and administrative expenses, non-GAAP operating expenses, non-GAAP operating income/(loss), non-GAAP net income/(loss), non-GAAP net income/(loss) attributable to ordinary shareholders, and non-GAAP net income/(loss) attributable to ordinary shareholders per share and per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this press release. 51Talk believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding share-based compensation expenses that may not be indicative of its operating performance from a cash perspective. 51Talk believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to 51Talk's historical performance. 51Talk computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. 51Talk believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation expenses that have been and will continue to be for the foreseeable future a significant recurring expense in the 51Talk's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying table at the end of this press release provides more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures. Safe Harbor Statement This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "aims", "future", "intends", "plans", "believes", "estimates", "likely to" and similar statements. Among other things, 51Talk's quotations from management in this announcement, as well as 51Talk's strategic and operational plans, contain forward-looking statements. 51Talk may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about 51Talk's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: 51Talk's goals and strategies; 51Talk's expectations regarding demand for and market acceptance of its brand and platform; 51Talk's ability to retain and increase its student enrollment; 51Talk's ability to offer new courses; 51Talk's ability to engage, train and retain new teachers; 51Talk's future business development, results of operations and financial condition; 51Talk's ability to maintain and improve infrastructure necessary to operate its education platform; competition in the online education industry in its international markets; the expected growth of, and trends in, the markets for 51Talk's course offerings in its international markets; relevant government policies and regulations relating to 51Talk's corporate structure, business and industry; general economic and business condition in the Philippines, its international markets and elsewhere; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in 51Talk's filings with the SEC. All information provided in this press release is as of the date of this press release, and 51Talk does not undertake any obligation to update any forward-looking statement, except as required under applicable law. 51TALK ONLINE EDUCATION GROUP UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) As of Dec. 31, Dec. 31, 2023 2024 US$ US$ ASSETS Current assets Cash and cash equivalents 21,298 27,758 Time deposits 2,091 1,430 Prepaid expenses and other current assets 6,394 10,906 Total current assets 29,783 40,094 Non-current assets Property and equipment, net 138 363 Intangible assets, net 92 80 Right-of-use assets 723 2,888 Deferred tax assets 72 57 Other non-current assets 348 460 Total non-current assets 1,373 3,848 Total assets 31,156 43,942 LIABILITIES AND SHAREHOLDERS' DEFICITS Current liabilities Advances from students 27,214 45,064 Accrued expenses and other current liabilities 6,189 6,644 Amounts due to related parties 4,077 2,853 Lease liabilities 590 1,242 Taxes payable 1,060 1,100 Total current liabilities 39,130 56,903 Non-current liabilities Lease liabilities 41 1,441 Other non-current liabilities 176 310 Total non-current liabilities 217 1,751 Total liabilities 39,347 58,654 Total shareholders' deficits (8,340) (15,000) Noncontrolling interests 149 288 Total deficits (8,191) (14,712) Total liabilities and shareholders' deficits 31,156 43,942 51TALK ONLINE EDUCATION GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except for number of shares and per share data) For the three months ended For the year ended Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31, 2023 2024 2024 2023 2024 US$ US$ US$ US$ US$ Net revenues 7,471 14,047 16,236 27,111 50,692 Cost of revenues (1,868) (2,985) (3,651) (6,322) (11,164) Gross profit 5,603 11,062 12,585 20,789 39,528 Operating expenses Sales and marketing expenses (7,182) (8,171) (10,121) (23,637) (33,388) Product development expenses (864) (839) (933) (3,088) (3,571) General and administrative expenses (1,867) (2,838) (2,389) (7,727) (10,615) Total operating expenses (9,913) (11,848) (13,443) (34,452) (47,574) Loss from operations (4,310) (786) (858) (13,663) (8,046) Interest income 67 57 27 165 229 Other expenses/(income), net (1,253) 145 (421) (1,416) 771 Loss before income tax expenses (5,496) (584) (1,252) (14,914) (7,046) Income tax expenses (171) (51) (162) (118) (276) Net loss (5,667) (635) (1,414) (15,032) (7,322) Net loss attributable to noncontrolling interests - (17) (36) - (87) Net loss attributable to the Company's ordinary shareholders (5,667) (618) (1,378) (15,032) (7,235) Weighted average number of ordinary shares used in computing basic and diluted loss per share 342,841,445 347,705,165 348,918,600 341,070,214 347,119,359 51TALK ONLINE EDUCATION GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except for number of shares and per share data) For the three months ended For the year ended Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31, 2023 2024 2024 2023 2024 US$ US$ US$ US$ US$ Net loss per share attributable to ordinary shareholders Basic and diluted (0.02) (0.00) (0.00) (0.04) (0.02) Net loss per ADS attributable to ordinary shareholders Basic and diluted (0.99) (0.11) (0.24) (2.64) (1.25) Share-based compensation expenses are included in the operating expenses as follows: Sales and marketing expenses (31) (27) (30) (149) (117) Product development expenses (45) (29) (32) (179) (118) General and administrative expenses (170) (149) (145) (582) (699) 51TALK ONLINE EDUCATION GROUP Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures (In thousands except for number of shares and per share data) For the three months ended For the year ended Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31, 2023 2024 2024 2023 2024 US$ US$ US$ US$ US$ Sales and marketing expenses (7,182) (8,171) (10,121) (23,637) (33,388) Less: Share-based compensation expenses (31) (27) (30) (149) (117) Non-GAAP sales and marketing expenses (7,151) (8,144) (10,091) (23,488) (33,271) Product development expenses (864) (839) (933) (3,088) (3,571) Less: Share-based compensation expenses (45) (29) (32) (179) (118) Non-GAAP product development expenses (819) (810) (901) (2,909) (3,453) General and administrative expenses (1,867) (2,838) (2,389) (7,727) (10,615) Less: Share-based compensation expenses (170) (149) (145) (582) (699) Non-GAAP general and administrative expenses (1,697) (2,689) (2,244) (7,145) (9,916) Operating expenses (9,913) (11,848) (13,443) (34,452) (47,574) Less: Share-based compensation expenses (246) (205) (207) (910) (934) Non-GAAP operating expenses (9,667) (11,643) (13,236) (33,542) (46,640) Loss from operations (4,310) (786) (858) (13,663) (8,046) Less: Share-based compensation expenses (246) (205) (207) (910) (934) Non-GAAP loss from operations (4,064) (581) (651) (12,753) (7,112) 51TALK ONLINE EDUCATION GROUP Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures (In thousands except for number of shares and per share data) For the three months ended For the year ended Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31, 2023 2024 2024 2023 2024 US$ US$ US$ US$ US$ Income tax expenses (171) (51) (162) (118) (276) Less: Tax impact of Share-based compensation expenses - - - - - Non-GAAP income tax expenses (171) (51) (162) (118) (276) Net loss, all attributable to the Company's ordinary shareholders (5,667) (618) (1,378) (15,032) (7,235) Less: Share-based compensation expenses (246) (205) (207) (910) (934) Non-GAAP net loss, all attributable to theCompany's ordinary shareholders (5,421) (413) (1,171) (14,122) (6,301) Weighted average number of ordinary shares used in computing basic and diluted loss per share 342,841,445 347,705,165 348,918,600 341,070,214 347,119,359 Non-GAAP net loss per share attributable to ordinary shareholders Basic and Diluted (0.02) (0.00) (0.00) (0.04) (0.02) Non-GAAP net loss per ADS attributable to ordinary shareholders Basic and Diluted (0.95) (0.07) (0.20) (2.48) (1.09) SOURCE 51Talk Online Education Group WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

51Talk Online Education Group Announces the Results for the Fourth Quarter and Full Year 2024

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