Core Insights - Speak has achieved a significant milestone by surpassing $100 million in Annual Recurring Revenue (ARR), making it the first known AI language learning product to reach this level [1][2] - Despite being far from industry giant Duolingo's $1 billion annual revenue, Speak's growth trajectory indicates strong market demand for AI-driven language learning solutions [2] Company Performance - Speak's downloads have exceeded 15 million, with a daily retention rate of approximately 40% [2] - Since entering the B2B market, Speak has acquired over 500 corporate clients, including notable companies like KPMG and Hyundai [2] - The majority of Speak's users, both B2C and B2B, are based in South Korea, where the service is primarily purchased for employees [2] Market Trends - The demand for AI language learning products has surged, with other products also experiencing rapid growth; for instance, another AI speaking practice product saw its ARR increase over 20 times in four months, from around $1 million to over $5 million [5][10] - New entrants like Supernova, an AI English learning product from India, are also emerging, targeting users in smaller cities with a focus on affordable and pressure-free English speaking practice [5][6] Product Features - Speak's core features include 24/7 AI tutors that allow users to practice speaking anytime without the pressure of human judgment [6] - The product supports multiple native languages, which lowers the learning barrier for beginners and enhances user comfort [6] - Personalization is emphasized across products, with tailored practice paths and instant feedback based on user proficiency and progress [10]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was €35.5 billion, which was below expectations but represented a 2% increase year-over-year [5][31] - Gross margin improved to 39.8%, exceeding the guided range and reflecting a 200 basis point increase from the previous quarter [8][32] - Adjusted EBITDA loss for the quarter was €6.9 million, which was below the guided range but showed an 8% improvement quarter-over-quarter [11][35] - Cash costs, defined as labor costs and operating expenses excluding R&D, decreased by 34% year-over-year [9][34] Business Line Data and Key Metrics Changes - AC sales totaled €22.4 million, accounting for approximately 63% of global revenue, down 16% compared to the previous quarter and down 5% year-over-year [16] - DC sales reached €5.8 million, representing a 34% increase year-over-year and a 40% increase sequentially [18][31] - Software, services, and other categories generated €7.3 million, reflecting an 11% year-over-year increase [20][21] Market Data and Key Metrics Changes - North America contributed €11 million or 31% of total revenue, with a 1318% increase at constant FX compared to the same period last year [15] - The European market contributed €23.6 million or 66% of total revenue, reflecting a 3% increase year-over-year [13] - The Canadian market saw a 49% decline compared to the same period last year, impacting overall performance [15][28] Company Strategy and Development Direction - The company plans to reinforce its sales organization and integrate different sales teams across product segments for improved efficiency [11][39] - A new CEO has been appointed to drive expansion in strategic markets and develop scalable commercial models [11] - The focus remains on restoring revenue growth and achieving profitability through operational efficiency and strategic investments [12][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex environment characterized by volatile market demand and evolving regulations [12] - The company is well-positioned for growth with a strong brand, complete product portfolio, and efficient organizational structure [12] - Future guidance for 2025 expects revenue in the range of €36 million to €39 million and a gross margin between 38% and 40% [41] Other Important Information - The company reached a standstill agreement with its banking partners to temporarily suspend payments on its €179 million debt [36] - Inventory levels decreased by 34% year-over-year, allowing for more efficient operations [37] Q&A Session Summary Question: Market share trends in Europe - Management indicated that market share varies by product line and country, with stable or increasing shares in countries like Spain, France, and the UK, while some regions like the Netherlands and Italy saw declines [44][46] Question: Announcement regarding €179 million debt - The standstill agreement matures on December 9, and further announcements are expected before that date [48][50]

Financial Performance - Q1 2025 revenue reached €376 million, a 13% year-over-year decrease[8] - North America experienced a 142% year-over-year revenue increase[8] - Q1 gross margin was 381%[8] - Adjusted EBITDA loss for Q1 was €78 million[8] - Q1 cash costs decreased by 32% year-over-year[8] Revenue Breakdown - Europe accounted for 68% of Q1 2025 revenue, totaling €255 million[11] - North America contributed 30% of Q1 2025 revenue, amounting to €114 million[11] - APAC represented 1% of Q1 2025 revenue, with €300k[11] - LATAM also accounted for 1% of Q1 2025 revenue, generating €480k[11] - AC sales made up 68% of Q1 2025 revenue, reaching €256 million[13] - DC sales comprised 11% of Q1 2025 revenue, totaling €4 million[13] - Software, Services & Others contributed 21% of Q1 2025 revenue, amounting to €8 million[13] Financial Position - Cash and cash equivalents and financial investments totaled €406 million[31] - Loans and borrowings amounted to €199 million[31] - Consolidated inventory was €636 million, a 29% year-over-year reduction[31] - Capex for Q1 was €07 million[31]