GSX Techedu Inc (NYSE:GSX) Q2 2020 Earnings Conference Call - Final Transcript

Sep 02, 2020 • 08:00 am ET


GSX Techedu Inc (NYSE:GSX) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the GSX Techedu Inc. second-quarter 2020 earnings conference call. [Operator instructions] Please note, this event is being recorded on September 2, 2020.

I would now like to hand the conference over to your first speaker today, Ms. Sandy Qin, IR senior manager of GSX. Thank you. Please go ahead.

Sandy Qin

Thank you, operator. Hello, everyone, and thank you for joining us. GSX earnings release was distributed earlier today and is available on the company's IR website. On the call with me today are Mr.

Larry Chen, GSX founder, chairman, and chief executive officer; and Ms. Shannon Shen, chief financial officer. Larry will give a general overview and then Shannon will discuss the financials. Following the prepared remarks, Larry and Shannon will be available to answer your questions.

Before we begin, I would like to remind you that this conference call contains forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control and may cause the company's actual results, performance or achievements to differ materially. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the SEC.

The company does not undertake any obligation to update any forward-looking statements, except as required in the applicable law. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this conference call will be available on GSX investor relations website at You are also welcome to subscribe to our quarterly revenue letters through the same website.

It is now my pleasure to introduce Larry. Larry, please go ahead.

Larry Chen

Thank you, Sandy. Good evening, and good morning to you all. Thank you for joining us today. First, we are pleased to see that the country has continued to flatten the curve of new COVID-19 cases over the last few months.

Against this backdrop, we made a concerted effort to deliver another robust quarter. Net revenues hit a record high supported by our focused strategy and notable organizational capabilities. The numbers say it all. Our net revenues and gross billings once again both maintained over four times year-over-year growth Our K-12 net revenues, in particular, have been growing more than fivefold year over year for over 10 consecutive quarters, which had further solidified our position among the top-tier players in the education sector.

We are thrilled to report that growth in paid course enrollment has accelerated to 332% year over year from 259% in the prior year. Not only did we maintain our high-speed growth, but we also remained profitable for the eighth consecutive quarter and non-GAAP profitable for the ninth consecutive quarter. Moreover, we generated net operating cash inflow of 528 million, which