Detailed narrative
Top-line and billings momentum
Net revenues reached $31.2M, up 70.9% YoY, which management attributed to growth in active students with attended lesson consumption. Gross billings — the leading demand indicator — grew 51.9% YoY to $33.3M (the CEO rounded this to 52%), exceeding the high end of prior guidance.
The revenue-growing-faster-than-billings gap reflects recognition of previously deferred student advances. Underlying demand for English learning was described as robust across the company's key international markets.
Cost structure and marketing intensity
Gross margin held at 73.7%. Total operating expenses rose 57.2% YoY to $24.4M. Sales and marketing was the dominant line at $17.9M (up 59% YoY, ~57% of net revenue), driven by higher sales personnel costs from headcount growth plus increased marketing and branding from promotional activities.
Product development expense jumped 84.9% to $1.9M as the company builds its next-generation platform, while G&A rose 42% to $4.6M. The business remains customer-acquisition-led, with growth funded by elevated S&M spend.
Profitability and losses
Operating loss narrowed slightly to $1.4M from $1.5M a year earlier, which management framed as improvement despite typical Q1 seasonal softness. However, net loss attributable to ordinary shareholders widened to $2.3M from $1.7M YoY, indicating below-operating-line pressure (e.g., FX, tax, or non-operating items not itemized on the call).
GAAP loss per ADS was $0.39 and non-GAAP loss per ADS was $0.30, both on a per-ADS basis for this foreign private issuer.
Balance sheet and liquidity
Total cash, cash equivalents and time deposits stood at $35.5M at quarter-end. Advances from students — prepaid tuition and a proxy for booked-but-unrecognized demand — were $78.9M, roughly 2.4x quarterly net revenue, providing a sizable deferred-revenue cushion. The CEO reiterated a commitment to disciplined capital allocation, though no buyback or dividend was quantified.
Product roadmap and AI strategy
Management is developing a next-generation learning product it expects to begin rolling out later in 2026. It combines foreign (native-English) tutors with AI features, gamification, and LLM-based analysis of user data to personalize learning journeys and improve outcomes. The CEO emphasized an AI-native approach enabling the upgrade to be delivered with greater efficiency.
Specific launch timing and pricing were not disclosed when an analyst pressed for detail.
Call format note
This was an unusually brief call: prepared remarks from the CEO and CFO followed by a single analyst question. Segment or geographic P&L splits, unit/student counts, comp-style metrics, and capital-return figures were not disclosed, so several structured sections are legitimately sparse rather than padded.