BEIJING, June 14, 2019 /PRNewswire/ — China Online Education Group (“51Talk” or the “Company”) (NYSE: COE), a main online education platform in China, with core knowledge in English education, today introduced its unaudited financial effects for the primary quarter ended March 31, 2019.
First Quarter 2019 Financial and Operating Highlights Net sales were RMB323.0 million (US$48.1 million), a 23.Zero% growth from RMB262.6 million for the primary quarter of 2018. Gross billings were RMB452.5 million (US$67.4 million), a 27.4% growth from RMB355.Three million for the first quarter of 2018.\ Gross margin was sixty-seven—Three%, compared with 64.6% for the first zone of 2018. The non-GAAP net loss turned into RMB59.5 million, a fifty-five .1% lower from RMB132.Four million for the fourth area of 2018. Operating coins inflow turned into RMB8.Four million (US$1.2 million).
“We had a stable begin in 2019, with both revenues and gross billings topping the excessive stop of our guidance,” said Mr. Jack Jiajia Huang, Founder, Chairman, and Chief Executive Officer of 51Talk. “Our first region effects mirror the hit and steady execution of our strategic tasks which awareness on our flourishing K-12 one-on-one mass-market software in China’s lower-tier cities. “We preserve to streamline our business to consciousness our sources on providing outstanding programs for the growing K-12 market. With a strong presence in large part saturated tier-one towns, we are keenly focused on bringing our packages to China’s huge and underserved markets in non-tier-one towns. Through centered marketing and developing referrals, our services are being properly obtained in those regions, with gross billings usually developing. In the primary sector, our gross billings from non-tier-one towns accounted for seventy two.8% of our K-12 mass-marketplace one-on-one services compared to sixty-three .0% a year ago. Our purpose, as we circulate thru the year, is to continue to make getting to know handy throughout China by bringing our instructional offerings to underserved markets wherein we can leverage our current packages. At the same time, we can attempt to enhance our era and path services to create an additional fee for our students, teachers, and all of our stakeholders,” Mr. Huang concluded.
Mr. Min Xu, Chief Financial Officer of 51Talk, delivered, “The diligent execution of our K-12 penetration and alignment approach contributed to our improved bottom line and healthful growth within the first zone. We reduced our Non-GAAP internet loss by using fifty-five .1% to RMB59. Five million, from RMB132.4 million for the fourth zone of 2018, and our one-on-one business gross billings grew through 37—Four% 12 months-over-yr. In addition, consolidated gross margin increased with the aid of 270 foundation points to sixty-seven.Three% and gross profit elevated by 28.1% to RMB217.2 million, each on a yr-over-yr foundation. Through more suitable product excellent and enhancing services, emphasis on referrals, and prudent value manage, we believe continuous calibration of those levers will assist our persisted boom and in addition, improve our backside line.”
Net revenues for the primary quarter of 2019 have been RMB323.0 million (US$48.1 million), a 23—zero% growth from RMB262.6 million for the primary quarter of 2018. The growth turned into generally attributed to an increase in the variety of lively students. The number of energetic college students for the primary zone of 2019 changed into about 227, four hundred, a 19.2% growth from about a hundred ninety,800 for the first zone of 2018. Net sales from one-on-one services for the first sector of 2019 have been RMB295.5 million (US$44.Zero million), a 20.Four% increase from RMB245.Five million for the primary region of 2018. Net revenues from small class offerings for the primary region of 2019 had been RMB27.5 million (US$four.1 million), as compared with RMB17.1 million for the first zone of 2018.
Cost of Revenues
The cost of revenues for the primary sector of 2019 was RMB105.7 million (US$15.8 million), a thirteen.Eight% growth from RMB92.Nine million for the primary sector of 2018. The boom changed into primarily driven with the aid of an increase in general carrier charges paid to teachers, in particular, because of an expanded wide variety of paid instructions. The cost of sales of one-on-one services for the primary quarter of 2019 became RMB90.8 million (US$13.Five million), a 12—Zero% boom from RMB81.1 million for the primary area of 2018. The cost of revenues of small magnificence services for the first quarter of 2019 changed into RMB14.9 million (US$2.2 million), a 26.1% increase from RMB11.Eight million for the primary quarter of 2018.
Gross Profit and Gross Margin
Gross profit for the primary quarter of 2019 become RMB217.2 million (US$32.4 million), a 28.1% increase from RMB169.6 million for the first sector of 2018. The gross margin for the primary region of 2019 changed to 67.3%, compared with 64.6% for the primary sector of 2018.