51Talk Online Education Group

Hello, ladies and gentlemen. Thank you for standing by for China Online Education Group's first quarter 2020 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Judy Piao, Investor Relations for the company. Please go ahead, Judy.

Thank you. Hello, everyone, and welcome to the first quarter 2020 earnings conference call of China Online Education Group, also known as Fanwenhawk. 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 the IR section of its website at ir.51talk.com. Mr. Jack Huang, our CEO, and Mr. Min Xu, our CFO, will begin with some prepared remarks. Following the prepared remarks, Mr. Li Min Zhang, our COO, will also join the call for our Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements. made under safe harbor provision of the U.S. Private Security Replication Reform Act of 1995. Forward-looking statements involved inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other results and uncertainties is included in the Company's Form 20-F and other public filings as filed with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that File 1 Talk's earnings specialist And this conference call includes discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Five on Top'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 Huang. Please go ahead.

Hello everyone, thank you very much for joining our earnings call today. We started 2020 with a strong 52.2% year-over-year growth in net revenues, 10% points higher than the growth rate implied by the high end of our guidance. In particular, K-12 one-on-one mass market net revenues increased 77% year-over-year to 404 million RMB. This performance was driven by, one, our continued strategic focus and successful execution of our K-12 one-on-one mass market offerings in non-tier-one cities. students taking more lessons at home during the COVID-19 outbreak. And three, an increasing awareness of both our brand and online education. Benefiting from these factors, our growth buildings grew sequentially to 597 million RMB. This growth was even more impressive in that it came versus our fourth quarter peak season. Our K-12 one-on-one mass market growth billings increased 45% year-over-year to R&D $564 million, reaching 94% of our total growth billings. Our first quarter active students increased to 286,000 from 257,000 for the last quarter, up 11% sequentially. During the virus outbreak, aside from giving out free online classes and one-on-one English lessons to K-12 students in Wuhan, and other impacted regions in China, as we previously announced. We also gave the medical supplies to the Philippines in an effort to contribute to the country's pandemic recovery efforts. Our employees, especially those in Wuhan, overcame many challenges arising from COVID-19 outbreaks. In the first quarter of 2020, almost all of our colleagues in Wuhan worked from home, while only about half of the colleagues in other regions could come to the company office. I am very proud of our employees who have made extraordinary efforts to help students maintain their study continuity through the outbreak. With these efforts, we were able to largely preserve productivity and operational efficiencies during the lockdown period. We worked closely with our Filipino teachers to ensure they could conduct classes effectively at home to meet the rising demand of our students, promoting further integration of the educational resources of China and the Philippines. These These unprecedented times have further highlighted and reinforced both the value and the natural progression of online education in China. We have seen increasing penetration of online education in non-tier 1 cities due to the COVID-19 outbreak. These, together with our strong performance in the first quarter, provide us even further confidence in our chosen pathway to sustain top-line growth and profitability, especially as we further fine-tune our products and services and continue to enhance our core business focus on K-12 one-on-one mass market offerings in non-tier-one cities. With that, I will now turn the call over to Jimmy.