Core Points - The presentation is part of the Deutsche Bank Virtual Investor Conference, highlighting 51Talk from China [1] Company Overview - 51Talk is being introduced as a key participant in the conference, indicating its relevance in the current market [1]

Summary of 51Talk Online Education Conference Call Company Overview - **Company**: 51Talk Online Education (NYSEAM:COE) - **Industry**: EdTech, focusing on online English education for K-12 students globally - **Headquarters**: Singapore, with a focus on international markets following the divestment from China [2][5] Core Business Model - **AI-Driven Platform**: 51Talk combines localization, technology, and human resources to create an integrated adaptive learning experience [2][3] - **Curriculum**: Over 500 hours of proprietary, animated, and interactive content aligned with CEFR global standards [3] - **Tutor Recruitment**: A rigorous AI-enhanced process ensures high-quality tutors, supported by ongoing training and AI tools [3][4] - **Technology**: Investment of $100 million in proprietary technology, featuring low-latency videos and gamified classrooms [3][4] - **Support Model**: A 360-degree support system for students and parents, ensuring personalized learning paths [3][4] Market Strategy - **Global Presence**: Focus on local adaptation of curriculum and marketing strategies to fit cultural expectations in various regions [4][10] - **Key Markets**: Currently operating in Southeast Asia (Thailand, Malaysia), exploring Vietnam, Indonesia, and Arabic markets, with potential expansion into Spanish-speaking regions [9][10] - **Market Selection Criteria**: Targeting regions with a large middle-class population of children and low customer acquisition costs [9][10] Financial Performance - **Revenue Growth**: Despite accounting net losses, revenues are growing, with margins consistently exceeding 70% [5][13] - **Cash Position**: Strong cash position due to higher billings than recognized revenues, indicating healthy cash flow management [13][15] - **Future Growth Funding**: Plans to grow using cash received from students rather than relying on investor capital [16] AI Integration - **AI Applications**: AI is utilized in tutor recruitment, lesson personalization, and sales optimization, enhancing engagement and efficiency [4][5][8] - **Future Developments**: Ongoing soft launches of products without human teachers to further explore AI's potential in education [8] Competitive Advantage - **Local Expertise**: Building local teams and adapting products to meet specific market needs, making it difficult for local competitors to replicate [10][11] - **Continuous Improvement**: Commitment to enhancing existing products based on student needs and market demands [11][12] Conclusion - **Long-Term Value**: 51Talk is positioned to unlock long-term value in the edtech sector through a combination of global reach, local expertise, and advanced AI applications [5][6]

Core Insights - 51Talk successfully hosted its second hackathon with the theme "Embrace AI, Lead the Era," gathering over 140 innovative ideas from global employees [1] - The hackathon serves as a key vehicle for 51Talk's "AI First" strategy, marking a milestone in the comprehensive intelligent upgrade of its business [1] Group 1: AI Integration in Education - The hackathon showcased AI's deep empowerment and systematic reconstruction capabilities in educational scenarios, with projects focusing on optimizing teaching content and enhancing resource production efficiency [3] - AI dynamic engines enable real-time optimization of teaching materials, while AI video generation technology significantly improves the adaptability and production efficiency of educational resources [3] - Innovative learning models, such as "context + games + parent-child interaction," effectively stimulate interest and enhance memory retention [3] Group 2: Operational Efficiency and Business Empowerment - AI facilitates instant and precise analysis of errors in exam papers, improving the efficiency of grading and student assessment while significantly reducing human resource input [3] - AI-driven sales insights and intelligent calling systems transition sales management from experience-driven to data-driven, enhancing conversion efficiency and user targeting accuracy [3] Group 3: Evolution of AI Strategy - The innovative ideas from the hackathon reflect the ongoing evolution of 51Talk's long-term AI strategy, exemplified by the launch of the "Koala AI Foreign Teacher" product [4] - 51Talk has established a closed-loop training system that integrates AI throughout the entire teaching process, from pre-class preparation to post-class evaluation, pioneering scalable personalized services in the industry [4] - The AI intelligent sales system has achieved the industry's first fully automated closing case, reducing customer acquisition costs by 52% and exceeding marginal profit growth expectations by 35% [4] Group 4: Future Outlook - The successful hackathon indicates that 51Talk is entering a "deep water zone" in the large-scale implementation of "AI + Education" [4] - The company aims to continuously innovate its technological core with AI as a strategic engine, providing smarter and more efficient learning experiences for global learners [4] - 51Talk aspires to set an industry benchmark through its practices, driving the internet education sector towards a new era of intelligent transformation [4]

Core Viewpoint - 51Talk has experienced significant stock price growth, outperforming major indices, driven by its expansion in the English training market and AI innovations [1] Company Performance - As of the latest market close, 51Talk's stock price rose by 12.15% to $55.560, marking a year-to-date increase of over 170% [1] - In Q2 2025, total cash revenue reached approximately $28.5 million, a year-on-year increase of 79%, with active student numbers growing by 68% to 91,300 [1] - The group's revenue for the same period was $20.4 million, reflecting an 86% year-on-year growth, with a gross margin of 75% [1] - The company projects Q3 2025 total cash revenue to grow by 85-90% year-on-year, driven by market expansion and brand promotion activities [1] Market Position - 51Talk currently holds about 0.5% market share in the expansive English training market, which has a total potential market size of approximately $16.9 billion outside of China [1] - The forward price-to-sales ratio for 51Talk is 1.6, lower than the industry average of 2.0, indicating attractive valuation [1] - The projected sales growth rate is 57% CAGR for 2025-2027, with a price-to-sales growth ratio of 0.03, significantly below the industry average of 0.1 [1]

Core Viewpoint - 51Talk has experienced significant stock price growth, outperforming major indices, driven by its expansion in the English training market and AI innovations [1] Company Performance - As of the latest market close, 51Talk's stock price rose by 12.15% to $55.560, marking a year-to-date increase of over 170% [1] - In Q2 2025, total cash revenue reached approximately $28.5 million, a year-on-year increase of 79%, with active student numbers growing by 68% to 91,300 [1] - The group's revenue for the same quarter was $20.4 million, reflecting an 86% year-on-year growth, with a gross margin of 75% [1] - The company projects Q3 2025 total cash revenue to grow by 85-90% year-on-year, driven by market expansion and promotional activities [1] Market Position - 51Talk currently holds about 0.5% market share in the expansive English training market, which has a total potential market size of approximately $16.9 billion outside of China [1] - The forward price-to-sales ratio for 51Talk is 1.6, lower than the industry average of 2.0, indicating attractive valuation [1] - The projected sales growth rate for 2025-2027 is 57%, with a price-to-sales growth ratio of 0.03, significantly below the industry average of 0.1 [1]

Market Performance - The three major U.S. stock indices collectively rose, with the Dow Jones up 0.6%, S&P 500 up 1%, and Nasdaq up 1.32% [1] - The Philadelphia Semiconductor Index surged over 3%, with notable gains from companies like Supermicro (up over 8%) and Kioxia (up over 6%) [2] Technology Sector Highlights - Apple officially launched its M5 chip, which utilizes a third-generation 3nm process, achieving over four times the peak performance in AI computing compared to the previous M4 chip [2] - The M5 chip is now integrated into the new 14-inch MacBook Pro, iPad Pro, and Apple Vision Pro, with pre-orders already open [2] Chinese Stocks Performance - The Nasdaq Golden Dragon China Index rose over 2%, with significant increases from New Oriental and WeRide, both up over 7% [3] - Major Chinese tech stocks like Alibaba, JD.com, and Baidu also saw gains of over 2% [3] Commodity Market - Spot gold prices exceeded $4,210 per ounce, marking a new historical high with a year-to-date increase of over 60% [5] - Spot silver prices broke through $53 per ounce, also reaching a new historical high [5] Cryptocurrency Market - Bitcoin rose to $113,451.1, with a 24-hour increase of 1.35%, while Ethereum reached $4,202.2, up 5.18% in the same period [6]

Core Insights - 51Talk is emerging as a new star in the vast English training market, currently holding a market share of approximately 0.5% in a potential global market size of $16.9 billion outside of China, driven by market expansion and AI innovation [1][2] Group 1: Company Overview - 51Talk is a leading one-on-one online English education platform targeting K12 students, founded in 2011 and listed in 2016 [2] - The company strategically shifted its focus to overseas markets due to regulatory changes in China, completely divesting from its mainland operations, and now operates in Hong Kong, the Middle East and North Africa, and Southeast Asia [2] - Prior to the "double reduction" policy, 51Talk's total cash revenue peaked at RMB 2.7 billion in 2020, with a high single-digit net profit margin [2] Group 2: Growth Potential - The overseas total revenue compound annual growth rate (CAGR) is expected to exceed 80% from 2022 to 2024 [2] - The projected price-to-sales ratio for 51Talk is 1.6 times for 2026, lower than the industry average of 2.0 times, indicating attractive valuation [1] Group 3: Financial Performance - In Q2 2025, total cash revenue reached $28.5 million, a year-on-year increase of 79%, with active student numbers growing by 68% to 91,300 [3] - Group revenue for the same period was $20.4 million, reflecting an 86% year-on-year growth, with a gross margin of 75% [3] - The company projects total cash revenue for Q3 2025 to grow by 85-90% year-on-year, driven by ongoing market expansion and brand promotion activities [3] Group 4: Key Growth Drivers - Two main drivers are identified for sustained growth: 1) AI efficiency improvements, including content development, AI teachers, recruitment and training tools, free trial classes, real-time translation, and operational management [3] 2) Localization efforts, with local offices established in various regions and customized course packages to meet individual needs, alongside localized marketing content and offline activities to enhance brand awareness and user engagement [3]

Summary of 51Talk Online Education Conference Call Company Overview - **Company**: 51Talk Online Education Group (NYSEAM: COE) - **Industry**: EdTech, focusing on online English education for young learners globally - **Headquarters**: Singapore - **Business Model**: AI-driven platform providing personalized learning experiences through a combination of proprietary curriculum, high-quality tutors, and advanced technology [2][5][6] Key Points and Arguments Business Strategy - **Integrated Approach**: 51Talk combines localization, technology, and human resources to create a unique online education experience [2][3] - **Curriculum**: Over 500 hours of animated, interactive content aligned with CEFR global standards [3] - **Tutor Recruitment**: A rigorous AI-enhanced process ensures high-quality tutors, with ongoing training and support [3][4] - **Technology Investment**: $100 million invested in proprietary technology to enhance learning experiences [3] - **Support Model**: A 360-degree support system for students and parents to maximize engagement and satisfaction [3] Market Expansion - **Current Markets**: Active in Southeast Asia (Malaysia, Thailand), Middle East, and testing in Vietnam and Indonesia [8] - **Future Plans**: Exploring opportunities in Arabic and Spanish-speaking regions, focusing on markets with large middle-class populations [8][9] Product Development - **Core Product**: Personalized one-on-one English courses for K-12 students [9] - **Complementary Products**: Plans to introduce additional subjects and exam preparations based on market needs [9][11] Competitive Advantage - **Local Adaptation**: Strong local teams and tailored marketing strategies differentiate 51Talk from local competitors and pure AI products [12][14] - **Centralized Infrastructure**: Proprietary curriculum and trained tutors provide a competitive edge over local offline centers [13][15] AI Integration - **AI Applications**: AI is utilized in tutor recruitment, lesson personalization, and sales optimization, enhancing overall efficiency and outcomes [4][5][16] - **Future of AI in Education**: While AI will play a significant role, human tutors remain essential for engagement, especially with younger students [16][18] Financial Performance - **Revenue Growth**: Revenues are increasing with margins consistently exceeding 70% [5] - **Cash Position**: The company collects payments upfront, leading to a growing cash balance despite operating losses [19][20] - **Sustainable Growth**: Focus on cash flow management to ensure sustainable growth without relying on investor capital [22] Active Student Growth - **Market Penetration**: Significant growth in active students, particularly in the Middle East, driven by branding campaigns and market investments [23] Regulatory Landscape - **Diversified Portfolio**: All revenues are now generated outside of Mainland China, reducing regulatory risks associated with the Chinese market [24] Stock Performance and Future Outlook - **Market Capitalization**: Aiming for a market cap of $200 million to apply for a listing on the main board [26] - **Gross Billings Guidance**: Expected gross billings of $37 to $38 million for Q3 2025, indicating confidence in growth potential [26][27] Additional Important Insights - **Founder’s Confidence**: The continued share purchases by the Founder and CEO signal confidence in the company's value [22] - **Engagement with Local Authorities**: Ongoing communication with local authorities to stay informed about changes in the education landscape [24]

Summary of 51Talk Online Education Group Conference Call Company Overview - **Company**: 51Talk Online Education Group (NYSEAM:COE) - **Industry**: Online Education / EdTech - **Focus**: AI-driven platform providing English language education to young learners globally [2][3] Core Business Model - **Integrated Learning Experience**: Combines proprietary curriculum, high-quality tutors, and advanced technology [2] - **Curriculum**: Over 500 hours of animated, interactive content aligned with CEFR global standards [3] - **Tutor Recruitment**: AI-enhanced process ensuring high-quality tutor selection and ongoing training [3] - **Technology Investment**: $100 million invested in proprietary technology, including low-latency video and gamified classrooms [3] - **Support Model**: Offers free 360-degree support for students and parents, enhancing engagement and satisfaction [3] Market Strategy - **Global Presence**: Customizes curriculum to fit local school requirements and cultural expectations [4] - **Current Markets**: Active in Southeast Asia (Thailand, Malaysia), testing in Vietnam and Indonesia, and exploring opportunities in the Middle East and Spanish-speaking regions [7][8] - **Market Selection Criteria**: Focus on regions with a large middle-class children population and low customer acquisition costs [8] Product Development - **Adaptation to Local Needs**: Develops market-specific programs based on local educational requirements and student needs [8][9] - **Future Products**: Plans to introduce new products and services tailored to different markets, including exam preparation and various subjects [8] AI Integration - **AI Applications**: Utilizes AI for tutor recruitment, personalized learning paths, and sales optimization [5][10] - **AI in Education**: Acknowledges the transformative potential of AI in online education, with ongoing developments in AI-powered tutoring and course customization [10][11] Financial Performance - **Revenue Growth**: Post-China divestment, the company is focused on international markets with strong revenue growth and margins exceeding 70% [5] - **Cash Position**: Maintains a strong cash position while pursuing disciplined, profitable growth [5] Conclusion - **Long-term Value Creation**: Committed to unlocking value in the edtech sector through a combination of global reach, local expertise, and advanced AI applications [6]

Core Insights - 51Talk emphasizes the importance of localized innovation in its overseas expansion, moving away from mere model replication to adapting to local preferences [3][4] - The company identifies a shift in language learning from "I can read" to "I can talk" and ultimately "I can lead the conversation," highlighting the evolving value of language education towards a composite capability [3][4] - 51Talk's new educational product system focuses on globalization, scientific foundations, and personalized pathways, with the launch of the new AI tutor, Koala AI [4][5] Globalization Strategy - 51Talk has established a "dual-wheel drive" ecosystem, providing customized language solutions to over 1,500 leading domestic enterprises, while also adapting to local educational standards and teaching methods in foreign markets [5][6] - The company aims to ensure that users in different countries can learn languages in ways that resonate with their preferences [5] Scientific Approach - The company collaborates with renowned educators to shift language education from merely teaching language to fostering comprehensive skills such as critical thinking and communication [5] Personalized Education - The newly launched Koala AI tutor integrates 1.2 billion course data points and real teaching scenarios, offering a more human-like teaching experience [6] - The AI tutor employs a unique three-layer intelligent collaboration mechanism to adapt to students' needs in real-time, enhancing the learning experience [6] - 51Talk has achieved significant milestones, including over 100 million classes taught, operations in over 50 countries, and a user base exceeding 10 million [6]