51Talk Online Education Group Q4 FY2025 earnings call

2025 was a transformational year for Five One Talk as they began to reap rewards of strategic investments made over past several years. Full-year growth billions reached US dollar 127.6 million with net revenues growing 88.6% year-over-year to 95.6 million U.S. dollar. Looking ahead to 2026, they are committed to expand growth trajectory based on past years' foundation, focused on consolidating transformational gains and enhancing user experience.

Full-year growth billions reached US 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 U.S. dollar. Net revenue for the fourth quarter was $30.6 million, an 88.6% increase from the same quarter last year. 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, with sales and marketing expenses $20.4 million (a 101.6% increase), product development expenses $1.6 million (a 72.2% increase), and general and administrative expenses $5.4 million (a 123.9% increase). Q4 operating loss was $5.2 million, net loss attributable to the company's ordinary shareholders was $6.5 million. Q4 GAAP and non-GAAP earning 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 $39.9 at the end of the fourth quarter. Advances from students was 76.6 million US dollars at the end of the fourth quarter.

Looking forward to the first quarter of 2026, currently expect the net close billings to be between 29.0 million US dollars and 31.0 million US dollars. In 2026, confident that gross billings, net revenues, and operating cash flow will all continue to grow healthily, expecting to harvest investments made in 2025 and focus on improving unity economies across markets, with cash-generating capability remaining robust.

Operations in Middle East are normal but affected by travel restrictions in the region. Rising tensions affect sentiment of local employees and customers. Also, Q1 seasonality with Ramadan falling across most of the quarter and impact on lesson activity.

Q: 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 can you share with us any guidance or outlook for this year?

A: Our operations right now in the Middle East are normal, markets served are not war partners to the conflict, teams on the ground are safe and operational. Impact seen around travel restrictions, and rising tensions affect employee and customer sentiment. Managed proactively. For 2026, not usually providing official four-year guidance but confident gross billings, net revenues, and operating cash flow will grow healthily, expect to harvest 2025 investments and focus on improving unity economies across markets with robust cash-generating capability