This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk04: Hello, ladies and gentlemen. Thank you for standing by for 51 Talk Online Education Group's third quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Mr. David Chung, Investor Relations for the company. Please go ahead, David.
spk03: Hello, everyone, and welcome to the third quarter 2023 earnings conference call of 510 Talk. The company's results were issued via Newswire Services early today and are posted online. You can download the earnings press release and sign up for the company's distribution list by visiting ir.51talk.com. Mr. Jaguar, our CEO, and Ms. Cindy Tang, our CFO, will begin with some prepared remarks. Following the prepared remarks, there will be a Q&A session. Before we continue, please note that the discussion will contain forward-looking statements made under the same public provisions of the U.S. Private Securities Medication Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, a company's results may be materially different from the views expressed today. Further information regarding risks and other risks and uncertainties is included in the company's Form 20-S 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 payments except as required under the applicable law. Please also note that earnings questionnaires and discontents calls include discussion of unauthenticated tax financial information as well as unaudited non-GAAP financial measures. 5.1 Talk's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I'll now turn the call over to our CEO, Jack Wang.
spk02: Jack, please go ahead. Jack Wang Thank you, David. Hello, everyone. Thank you for joining our conference call today. Our growth continued in the third quarter with growth feelings coming in at the high end of the guidance. During the quarter, we focused on our growth activities in our selected markets where we see high potential and benefit from early mover advantage. In fact, we have continued to localize our material to adapt to the local audiences. Although we are still very much in the expansion mode, we are achieving positive cash flow. Our cash increased by US dollar 1.2 million compared to the previous quarter. We remain committed to our sustainable growth approach. In terms of technology, we focus on how innovative AI can firstly further enhance our products through more personalized and interactive functionality to help our customers practice in a more engaging way. Secondly, we deploy generated AI to empower our service teams to guide our students and their parents more effectively through the course cycle. We equally use large batch models to enhance our curriculum by creating more personalized, adaptive course materials. With that, I will now turn the call over to Cindy, our CFO.
spk01: Thank you, Jack. Our business momentum carried into the third quarter as net revenues were 7.8 million U.S. dollars, representing 25.0% sequential growth. Growth margin for the third quarter was 76.3%. Gross billings grew by 11.3% quarter over quarter to 10.9 million U.S. dollars at the high end of guidance. Q3 operating expenses were 9.8 million U.S. dollars, an increase of 25.0% compared to the last quarter. Specifically, this has been driven by Q3 sales and marketing expenses of 6.9 million U.S. dollars, a 35.2% sequential increase from Q2 due to further increases in marketing and branding spend. Q3 product development expenses was $0.9 million, a 25.1% sequential increase due to increased research and development projects and personnel. Finally, Q3 general and administrative expenses were 2.0 million U.S. dollars, slattish compared to Q2. Overall, Q3 operating loss was 3.9 million U.S. dollars, while net loss was 3.9 million U.S. dollars, a 30.5% and 33.3% sequential increase from Q2, respectively. Q3 gap and non-gap earning per ABS were negative 0.68 U.S. dollars, and 0.64 U.S. dollars, respectively. The company's total cash, cash equivalents, and time deposits were 22 million U.S. dollars at the end of the third quarter. Advances from students were 23.7 million U.S. dollars at the end of the third quarter. Looking forward to the fourth quarter of 2023, we currently expect the net gross billing to be between $11.0 million and $11.5 million. The above outlook is based on our current market conditions and reflects the company's current and preliminary estimates of the market and operating conditions and customer demands, which are all subject to change. This concludes our prepared remarks. We will now open the line for questions. Operator, please go ahead.
spk04: Yes, thank you. At this time, we will begin the question-and-answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your question, your handset, rather, before pressing the keys. To withdraw your question, please press star, then 2. For the benefit of all participants on today's call, please limit yourself to two questions. If you have additional questions, you may re-enter the question queue. Please ask your question in Chinese first and follow up with an English translation. At this time, we will pause momentarily to assemble the roster. And once again, please press star, then 1, if you would like to ask a question. All right. At this time, I would like to return the call back over to the company for closing remarks. Mr. David, please go ahead.
spk03: Thank you once again for joining us today. If you have further questions, please contact Blackwood Folks in General Relations for the contact information provided on our website.
spk04: Thank you. Thank you. This concludes this conference call. We disconnect your line at this time. Thank you.
Disclaimer