Hello, ladies and gentlemen. Thank you for standing by for 51Talk Online Education Group's third quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I would now turn the call over to your host, Mr. David Chung, Investor Relations for the company. Please go ahead, David.
Hello, everyone, and welcome to the third quarter 2023 earnings conference call of 51Talk. The company's results were issued via Newswire Services early today and are posted online. You can download the earnings press release and sign up for the company's distribution list by visiting ir.51talk.com.
Mr. Jack Huang, our CEO, and Ms. Cindy Tang, our CFO, will begin with some prepared remarks. Following the prepared remarks, there will be a Q&A session. Before we continue, please note that the discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. 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 risks and other risks and uncertainties is included in the company's Form 20-F and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under the applicable law.
Please also note that earnings press release and this conference call include discussion of unaudited financial information, as well as unaudited non-GAAP financial measures. 51Talk's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I'll now turn the call over to our CEO, Jack Huang. Jack, please go ahead.
Thank you, David. Hello, everyone. Thank you for joining our conference call today. Our growth continued in the third quarter, with gross billings coming in at the high end of the guidance. During the quarter, we focused on our growth activities in our selected markets, where we see high potential and benefit from early mover advantage.
In fact, we have continued to localize our material to adapt to the local audiences. Although we are still very much in expansion mode, we are achieving positive cash flow. Our cash increased by $1.2 million compared to the previous quarter. We remain committed to our sustainable growth approach. In terms of technology, we focus on how generative AI can firstly further enhance our products through more personalized and interactive functionality to help our customers practice in a more engaging way.
Secondly, we deploy generative AI to empower our service teams to guide our students and their parents more effectively through the course cycle. We equally use Large Language Models to enhance our curriculum by creating more personalized, adaptive course materials. With that, I will now turn the call over to Cindy, our CFO.
Thank you, Jack. Our business momentum carried into the third quarter, as net revenues were $7.8 million, representing 25.0% sequential growth. Gross margin for the third quarter was 76.3%. Gross billings grew by 11.3% quarter-over-quarter to $10.9 million at the high end of guidance.
Q3 operating expenses were $9.8 million, an increase of 25.0% compared to the last quarter. Specifically, this has been driven by Q3 sales and marketing expenses of $6.9 million, a 35.2% sequential increase from Q2 due to further increases in marketing and branding spend. Q3 product development expenses was $0.9 million, a 25.1% sequential increase due to increased research and development projects and personnel.
Finally, Q3 general and administrative expenses were $2.0 million, flattish compared to Q2. Overall, Q3 operating loss was $3.9 million, while net loss was $3.9 million, a 30.5% and 33.3% sequential increase from Q2, respectively.
Q3 GAAP and non-GAAP earnings per ADS were -$0.68 and $0.64, respectively. The company's total cash, cash equivalents and time deposits were $22.9 million at the end of the third quarter. Advances from students were $23.7 million at the end of the third quarter. Looking forward to the fourth quarter of 2023, we currently expect the net gross billings to be between $11.0 million and $11.5 million.
The above outlook is based on our current market conditions and reflect the company's current and preliminary estimates of the market and operating conditions and customer demands, which are all subject to change. This concludes our prepared remarks. We will now open the line for questions. Operator, please go ahead.
Yes, thank you. At this time, we will begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset, rather, before pressing the keys. To withdraw your question, please press star then two.
For the benefit of all participants on today's call, please limit yourself to two questions. If you have additional questions, you may reenter the question queue. Please ask your question in Chinese first and follow up with an English translation.
At this time, we will pause momentarily to assemble the roster. And once again, please press star, then one if you would like to ask a question. All right, at this time, I would like to return the call back over to the company for any closing remarks. Mr. David, please go ahead.
Thank you once again for joining us today. If you have further questions, please contact 51Talk investor relations through the contact information provided on our website. Thank you.
Thank you. This concludes this conference call. You may disconnect.