BEIJING, March 5, 2021 /PRNewswire/ -- 29-year-old Tinny Blair makes every lesson with her beloved Chinese kids enjoyable through music, one of her life's greatest pleasures. She became a familiar face to English language learners in China after appearing in several popular television variety shows where she showcased her talents as well as her fun personality.
Tinny uses the Beijing-based 51Talk online education platform to conduct her online English lessons along with 30,000 other Filipinos. 51Talk is China's largest online English education company, and is publicly traded on the New York Stock Exchange (COE). It brings together students and teachers for live, online English lessons.
51Talk's financial results in the fourth quarter of 2020
The company maintains leading position in market share and strong market penetration in China and the Philippines and it continues to do well even in the fourth quarter of 2020, a year when the Covid-19 pandemic hit the world hard.
51Talk registered a non-GAAP net income of RMB38.6 million and its GAAP net income is RMB31.8 million, amounting to the company's fifth consecutive quarter of profitability, first in its trade to achieve it. The company's fourth quarter net revenues maintained strong growth momentum and grew 34.7% year-over-year to reach RMB535.1 million.
The company continued to maintain a high gross margin of more than 70% and record high gross billings of RMB720.9 million. The company also recorded historically high operating cash flow of RMB188.5 million, a year-over-year increase of RMB167.1 million.
"Despite 2020 presenting an array of unforeseen challenges, our strong pre-established foundational groundwork allowed us to not only manage this tumultuous period but in fact benefit from the shifting environment as we took advantage of new opportunities." said Jack Jiajia Huang, Founder, Chairman and Chief Executive Officer of 51Talk.
According to the financial results released, full year net revenues grew 38.9% to RMB2.1 billion. 2020 operating cash flow rose 80.8% to reach a historical high of RMB719.3 million, compared with RMB397.9 million in 2019, further strengthening the company's financial position for future growth. 2020 also witnessed remarkable growth in new paying students which increased 60.0% year-over-year.
"I'm extremely proud that we concluded a turbulent 2020 with solid operating and financial results, evidenced by sustained revenue growth and the first profitable year in our company history," said Xu Min, Chief Financial Officer of 51Talk, as 51Talk recorded Non-GAAP net income of RMB173.7 million for 2020, compared to a net loss of RMB87.7 million in 2019.
Filipino teachers are important to 51Talk's business model
51Talk's "Education for All" strategy, its downward market penetration approach, and its high-quality "Filipino Teachers' One-On-One Model" have helped the leading platform achieve excellent results in the fourth quarter of 2020.
Teachers like Tinny enjoy the perks, pay, and convenience of a home-based livelihood especially now in the age of the pandemic. 51Talk had been keen in choosing Filipino teachers with high cost performance and offers one-on-one courses to its students. Beside every Filipino teacher, a Chinese tutor was there to follow the study process, monitoring the performance and offering needed services when necessary.
51Talk is bringing opportunities to Filipinos. In 2020, nearly five million Filipinos have lost their jobs due to the hazardous Covid-19 disease. The company announced in 2020 that it opened its doors to attract 30,000 Filipinos teachers to help alleviate the nation's problem.
Besides, the company also aimed at training over 100,000 Filipinos English teachers within five years and launched a special program targeting on helping teachers with certain needs. English teachers on 51Talk platform are with qualifications. Their pay is higher than the average salary in the Philippines.
"Being in 51Talk is more than just a teaching experience. I'm very happy to be in 51Talk and to see my students grow not just intellectually, but also in character," said Tinny, "I would love to witness their transformation in becoming a better person and to be with them in their highs and lows. In everything I do, I ensure that I do all things with love." Her feeling is shared by many.
51Talk's strong market growth has made it possible for its online teachers, who mostly reside in the Philippines, to enjoy better profits with their one-on-one courses. Instead of allocating too much resources in traditional advertising and marketing, 51Talk focused on teaching quality and effectiveness as well as word-of-mouth referrals, to greatly reduce operating costs.
The company was also trying hard to improve its local appearance in the Philippines. It has launched six training centers around the country, offering hiring, training and consultation services to online English teachers and 126 third-party operation centers. 51Talk now has over 1,200 staff based in the Philippines, developing programs and campaigns to create awareness about the benefits of being an online English teacher.
In China, parents prefer Filipino teachers compared with counterparts from Europe and United States, according to the CTR Market Research.
Although Filipinos are not native English speakers, the Philippine education system as well as businesses, use the English language, and thus the country consistently maintains top English proficiency ratings. Filipino teachers have been studying and learning English as a second language for years, so they are equipped with a deeper and more technical understanding of how to teach the English language.
Filipinos also take pride in their strong customer service. They are generally mild-mannered, modest, passionate, enthusiastic, cheerful and patient, which are ideal qualities to possess in order to effectively teach English to young kids.
In addition, there is no time difference between the Philippines and China, so students and teachers can easily connect with more flexible class schedules. With all these advantages, Filipino teachers have gradually become the face of online English teachers in China.
User growth, brand promotion key to 2021's market expansion
"As we head further into 2021, we are focusing on user growth and enhanced brand promotions to drive market share expansion." Huang said.
To achieve this goal, 51Talk will continue to optimize its learning experiences through upgraded product offerings and an enriched curriculum mix, develop innovative AI-powered robotic tutors with the aim of enhancing overall learning efficiency, and integrate more interactive features into its textbooks to make its courses more interesting and engaging to young children, according to Huang.
The company is also diversifying its curriculum portfolio to provide a holistic learning experience, through investing in R&D, upgrading services to students, and expanding its teacher operations.
51Talk targets to further increase its branding and marketing efforts to heighten brand awareness as it seeks for future growth. In 2021, experience stores will continue to be a major part of its online merge offline strategy to boost market penetration in non-tier-one cities. There are more than 100 experience stores in 20 provinces in China till the end of 2020.
By providing students across China with access to quality English education, 51Talk is achieving its mission of helping China speak with the world. 51Talk firmly believes that English education should not be a luxury, and that education for all is its goal. 51Talk will strive to provide quality English education to more families in 2021.