• Gross Billings: Increased by 74.4% year-over-year for the full year 2024.
• Net Revenues: Increased by 87% year-over-year for the full year 2024; Q4 net revenues were $16.2 million, a 117.3% increase from the same quarter last year.
• Operating Cash Flow: Positive $5.8 million for the full year 2024.
• Gross Margin: 77.5% for the fourth quarter.
• Q4 Operating Expenses: $13.4 million, a 35.6% increase from the same quarter last year.
• Q4 Sales and Marketing Expenses: $10.1 million, a 40.9% increase from the same quarter last year.
• Q4 Product Development Expenses: $0.9 million, an 8.0% increase from the same quarter last year.
• Q4 General and Administrative Expenses: $2.4 million, a 28% increase from the same quarter last year.
• Q4 Operating Loss: $0.9 million.
• Net Loss Attributable to Shareholders: $1.4 million, a 75.7% decrease from the same quarter last year.
• Q4 GAAP and Non-GAAP Earnings per ADS: Negative $0.24 and $0.2, respectively.
• Total Cash Equivalent and Time Deposits: $29.2 million at the end of the fourth quarter.
• Advances from Students: $45.1 million at the end of the fourth quarter.
• Q1 2025 Gross Billing Outlook: Expected to be between $21.5 million and $22 million.

• Warning! GuruFocus has detected 4 Warning Signs with COE.

Release Date: March 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Gross billings grew by 74.4% year-over-year, indicating strong demand and business growth.
• Net revenues increased by 87% year-over-year, showcasing significant financial improvement.
• The company achieved a full year positive operating cash flow of $5.8 million, strengthening its cash position.
• Integration of AI into operations has improved operational efficiency and narrowed operating losses.
• Gross margin for the fourth quarter was 77.5%, reflecting effective cost management and profitability.

Negative Points

• Q4 operating expenses increased by 35.6% compared to the same quarter last year, driven by higher sales and marketing costs.
• Q4 sales and marketing expenses rose by 40.9%, indicating increased spending to drive growth.
• Q4 product development expenses increased by 8.0%, reflecting higher investment in product innovation.
• Q4 operating loss was $0.9 million, indicating the company is still not profitable.
• Net loss attributable to the company's ordinary shareholders was $1.4 million, despite improvements from the previous year.

Q & A Highlights

Q: Can you elaborate on the factors driving the significant increase in net revenues for the fourth quarter? A: Jack Huang, CEO, explained that the 117.3% increase in net revenues to $16.2 million was primarily driven by a rise in active students and lesson consumption. The company has been focusing on expanding its geographic reach and integrating AI to enhance operational efficiency, which has contributed to this growth.

Q: What are the expectations for gross billings in the first quarter of 2025? A: Cindy Tang, CFO, stated that the company expects gross billings to be between $21.5 million and $22 million. This outlook is based on current market conditions and reflects preliminary estimates of market and operating conditions and customer demands.

Q: How has the integration of AI impacted the company's operations? A: Jack Huang, CEO, noted that AI integration has improved operational efficiency and helped narrow operating losses. AI is expected to further enhance personalized course plans and progress tracking, which will be pivotal in 2025.

Q: What were the main contributors to the increase in operating expenses during the fourth quarter? A: Cindy Tang, CFO, highlighted that operating expenses increased by 35.6% to $13.4 million, driven mainly by a 40.9% rise in sales and marketing expenses due to higher personnel costs and increased marketing activities.

Q: Can you provide more details on the company's cash position at the end of the fourth quarter? A: Cindy Tang, CFO, reported that the company's total cash equivalents and time deposits were $29.2 million. Additionally, advances from students amounted to $45.1 million, indicating a strong cash position.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.