China Online Education Group (NYSE:COE) Q1 2019 Earnings Conference Call - Final Transcript
Jun 14, 2019 • 08:00 am ET
Hello, ladies and gentlemen. Thank you for standing by for China Online Education Group's First Quarter 2019 Earnings Conference Call. At this time all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. (Operator Instructions)
I will now turn the call over to your host, Ms. Judy Piao, Investor Relations for the Company. Please go ahead, Judy.
Hello, everyone, and welcome to the first quarter earnings conference call of China Online Education Group, also known as 51Talk. 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 the IR section of its website at ir.51talk.com.
Mr. Jack Huang, our Chief Executive Officer; and Mr. Min Xu, our CFO, will begin with some prepared remarks. Following the prepared remarks, Mr. Liming Zhang, our Chief Operating Officer, will also join the call for our Q&A session.
Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the Company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the Company's Form 20-F and other public filings as filed with the US Securities and Exchange Commission.
The Company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please also note that 51Talk's earnings press release and this conference call includes discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. 51Talk's press release contains a reconciliation of unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.
I will now turn the call over to our CEO, Jack Huang. Please go ahead.
Okay. Hello, everyone. Thank you very much for joining us for our first quarter earnings conference call. We had a solid start in 2019, with both revenues and gross billings topping the high-end of our guidance.
Our first quarter results reflect the successful and a consistent execution of our strategies, which focused on our call K-12 one-on-one mass-market program in China's lower tier places. We continue to streamline our business to focus our resources on providing high quality programs for the growing K-12 market. Our growth strategy is sharply focused on bringing our programs to China's large and underserved markets in non-tier-one cities. Our live online in this offerings are a good match to growing demand in tier-two and tier-three cities. We are capitalizing on this opportunity. We are actively marketing our services here, and it is working.
Our referral rates are growing as evidenced by our expanding gross billings. In fact in the first quarter, our gross billings from non-tier-one cities accounted for a impressive 72.8% of our K-12 mass-market one-on-one offerings. This compares to just 63%