China Distance Education Holdings Limited (NYSE:DL) Q2 2020 Earnings Conference Call - Final Transcript

May 22, 2020 • 08:00 am ET

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China Distance Education Holdings Limited (NYSE:DL) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good evening and thank you for joining us for the China Distance Education Holdings Limited Second Quarter Fiscal Year 2020 Earnings Conference Call. On today's call, we will have Mr. Zhengdong Zhu, Chairman and CEO, and Mr. Mark Marostica, co-CFO. During management's prepared remarks, all participants will be in a listen-only mode. Following management's prepared remarks, we will open the call for questions.

Before we start, we remind listeners that this conference call contains Forward-Looking Statements. These statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The outlook for the third quarter of fiscal year 2020, oral statements from management on this call, as well as the company's strategic and operational plans in particular the impact of COVID-19 on our business, the solutions we adopt to address COVID-19, the revision of revenue guidance and balancing growth and profitability, as well as the anticipated benefits of strategic growth initiatives including the promotion of the company's lifelong learning ecosystem among other things, may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding this and other risks is included in the company's annual report on Form 20-F and in other documents that the company has filed with the Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements except as required under applicable law.

As a reminder, this conference call is being recorded. In addition, the presentation, we will be referring to during the course of the call, can be downloaded from the company's Investor Relations website. Further, a live and archived webcast of this conference call will also be available on the company's IR website at ir.cdeledu.com.

I will now turn the call over to Mr. Zhu. Mr. Zhu, please go ahead.

Executive
Zhengdong Zhu

[Foreign Speech]

Thank you everyone for joining our second quarter fiscal year 2020 earnings conference call. Our operating results were distributed earlier via Internet newswire services and are also posted on our website, where a slide presentation is available as well.

[Foreign Speech]

If you will now refer to the presentation, I will begin on Slide 4 with an overview of our financial results.

[Foreign Speech]

In the second quarter of fiscal 2020, our revenue increased by 8.1% year-over-year at the low end of our guidance range. Second quarter revenue growth was driven by net revenue from online education services, which was up 19.9% year-over-year, primarily attributable to the robust revenue growth of our accounting vertical. Our socially responsive actions to support our students during the COVID-19 outbreak, which included offering both free and significantly discounted online courses had a dampening effect on our second quarter revenue growth and led to a 34.5% year-over-year decline in our cash receipts from online course registration in the second quarter.

Total enrollment for the quarter, however, nearly doubled compared to the year ago period, due to the