China Online Education Group (NYSE:COE) Q2 2020 Earnings Conference Call - Final Transcript
Sep 08, 2020 • 08:00 am ET
Jack Jiajia Huang
three years old to five years old, aiming to broaden our student base and build good study habits from a young age through our platform. We also held tournaments for our flagship China Youth Talk speech contest between April and August. This high-profile event attracted more than 500,000, K-12 aged contestants from across the country and showcased the achievements among some of the most talented youth.
In the second quarter, we embarked on a brand uplift efforts in the Philippines to further burnish our already strong appeal among existing and potential instructors. A highlight of this campaign is the appointment of Ms. Pia Wurtzbach as our the brand ambassador in the Philippines. She's a former Miss Universe with strong popularity among our target instructor demographic. With her appointment and our continuous promotion efforts, we further strengthened our leadership position in online education and effectively promoted teaching careers at 51Talk for Filipinos with high English proficiency, passion for teaching and familiarity with the Chinese culture.
Additionally, on September, 2, at the K-12 Online Education Service and Evaluation Standard conference, we presented the first enterprise standards for K-12 online education industry, which we believe is an important step forward in the maturity of our industry and the standardization of the service scope and requirements for K-12 online education enterprises.
In summary, we are proud of our second quarter achievements, both financially and operationally. The firm's organizational foundation built over the years, coupled with our focus in the K-12 one-on-one mass-market in non-Tier 1 cities has helped us emerge today in a stronger, better position. As we move into the second half of 2020, I look forward to continuing to execute on our mission, bringing our strong value proposition to the market and a long-term benefit to all our stakeholders.
With that, I will now turn the call over to our CFO, Xu Min.
Thank you, Jack. Hello, everyone. I'm pleased to report another strong quarter marked by both continued top line growth and robust profitability, driven by our strategy to pursue healthy growth while keeping a close eye on operational efficiencies.
During the second quarter, we achieved non-GAAP net income of RMB39.6 million, as our net revenues and gross billings continue to expand. Excluding the RMB17.9 million favorable impact of government-related COVID-19 relief benefits received in the second quarter, our non-GAAP net profits would have been -- profit margin would have been 4.4%, compared with a non-GAAP net margin of negative 7.8% for the second quarter of last year.
In addition, we are pleased to record operating cash inflow, a key metric of our financial health of RMB172.1 million. I should also highlight our successful follow-on public offering during the quarter, which further strengthened our balance sheet and stimulated investor interest. I am confident that the Company is on the right track for continued growth and profitability.
So now let me walk you through our second quarter financial details. Net revenues for the second quarter were RMB493.5 million, a 40% increase from