China Online Education Posts Mixed Q2 Results

China Online Education Group COE reported second-quarter FY21 sales growth of 17.5% year-on-year, to RMB579.8 million ($89.8 million), missing the analyst consensus of $90.92 million.
Gross billings decreased 18.7% Y/Y to RMB549.9 million ($85.2 million). Active students rose 35.7% Y/Y to 404,700.
The gross margin for the quarter expanded 180 basis points Y/Y to 72.7%.
The operating loss for the quarter was RMB(33.8) million or $(5.2) million.
The company held RMB1.64 billion ($254.4 million) in cash and equivalents as of June 30, 2021. Operating cash outflow totaled RMB69.7 million ($10.8 million).
Non-GAAP loss per ADS was $(0.13) and Non-GAAP loss per share was $(0.01). The analysts had expected $(0.31).
Outlook: China Online Education currently expects Q3 net revenues of RMB550.0 million - RMB555.0 million, representing an increase of 2.1% - 3.1% from RMB538.5 million last year. This implies revenue of $85.18 million - $85.95 million, versus the consensus of $98.16 million.
Price Action: COE shares are trading higher by 10.5% at $3.15 in premarket on the last check Tuesday.

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