51Talk's Q3 2025: Contradictions Emerge on Earnings Call Format, Auditing Firm Shifts, and Stock Liquidity Plans

Business Commentary:

* Strong Revenue and Growth in Active Students: - 51Talk's gross billings reached $40.5 million in Q3 2025, surpassing guidance and showing a 42.1% Q1Q growth and a 104.6% year-over-year increase. - The growth in gross billings is attributed to the increase in the active student base, which reached 112,600, marking a significant milestone.

• Increased Operating Expenses:
• 51Talk's operating expenses were $23.4 million in Q3, an 97.9% increase from the same quarter last year.
• This increase was primarily driven by higher sales and marketing expenses due to intensified marketing and branding activities, as well as increased sales personnel costs.

• Consolidated Cash Position:
• The company achieved positive net operating cash flow, maintaining a strong cash position with $36.6 million in cash equivalents and time deposits at the end of Q3.
• This solid cash position is a result of disciplined execution and cash flow management despite rapid expansion and increased operating expenses.

• Fourth Quarter Outlook:
• For Q4 2025, 51Talk anticipates net gross billings between $35 million and $38 million.
• This outlook reflects the company's current market conditions and preliminary estimates of market and operating conditions, which may be subject to change.
  

Contradiction Point 1

Earnings Call Participation and Format

It involves a significant change in the earnings call format and the presence of questions, which impacts transparency and investor engagement.

What is the impact of recent European regulatory changes, including tariffs and supply chain adjustments, on Q2 revenue projections? - Not specified

2025Q3: No questions were asked during the call. - Not specified

None - Operator

2023Q3: 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 ir.51talk.com. Mr. Jack Huang, 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. - David Chung(Investor Relations)

Contradiction Point 2

Investor Mandates for Auditing Firm

It involves a change in the auditing firm, which may impact investor confidence and trust in the company's financial reporting.

Not specified? - Not specified

2025Q1: Are there any questions at this time? - Operator

Why did 51Talk switch from Marcum to Ernst & Young as its auditing firm, and what were the reasons? - Toby Lu (Private Investor)

2025Q3: No questions were asked during the call. - Not specified

Contradiction Point 3

Stock Liquidity Improvement Measures

It involves the company's approach to enhancing stock liquidity, which could impact trading dynamics and investor interest.

The user has not provided a specific question to simplify. Please provide the full text of the question you'd like me to condense. - Not specified

2025Q2: The change to Ernst & Young was driven by investor mandates, as many investors prefer the 'Big 4' auditing firms. 51Talk appreciated Marcum's service quality but sought to expand its investor base by meeting these requirements. - Jiajia Huang(CEO)

Are there plans to conduct a stock split to increase stock liquidity by reducing beta spread and boosting turnover? - Toby Lu (Private Investor)

2025Q3: No questions were asked during the call. - Not specified