The earnings call for the second quarter of 2024 revealed some interesting insights into the financial performance of the company. The positive points highlighted during the call included strong growth in Q2, exceeding guidance, a 75.1% increase in net revenues from the same quarter last year, a gross margin of 78.1%, and a 61.3% growth in gross billings. Strategic investments in diverse markets were also noted to be yielding positive results.
However, there were also negative points discussed during the call. Q2 operating expenses increased by 39.7% compared to the same quarter last year, with sales and marketing expenses rising by 43.6% due to higher personnel costs. Product development expenses increased by 22.6%, and general and administrative expenses increased by 35.8%. The overall Q2 operating loss was reported to be USD2.4 million, with a net loss of USD1.3 million.
During the Q&A session, several interesting questions were raised by analysts. One question focused on the company’s expansion into new markets such as Southeast Asia, Japan, and the Middle East. The company confirmed that they are utilizing AI technology to enhance the interactivity and personalization of lessons, while still primarily using Filipino tutors as part of their core product.
Another question addressed the market size outside of China, with the company expressing confidence in the potential of markets in developing countries like Thailand, Malaysia, and Vietnam, as well as developed countries like Japan and Korea. They expect substantial growth in these markets over the next 5 to 10 years.
Financial performance for the quarter was also discussed, with net revenues reaching USD11 million, a 75.1% increase from the same quarter last year. Gross margin was reported at 78.1%, and gross billings grew by 61.3% to USD15.9 million. Operating expenses increased by 39.7%, leading to an operating loss of USD2.4 million and a net loss of USD1.3 million.
Looking ahead to the third quarter of 2024, the company expects net gross billings to be between USD17 million and USD18 million, based on current market conditions and customer demand. They also highlighted their strategic priorities for the near future, including global expansion based on local needs and platform strength enabled by AI.
Overall, the earnings call provided valuable insights into the company’s financial performance, strategic priorities, and outlook for future growth. For a more detailed analysis, readers are encouraged to refer to the full earnings call transcript available online.
