Hello, and welcome to Virtual Investor Conferences. On behalf of OTC Markets, we're very pleased you joined us for our quarterly Small Cap Growth Conference. Our first presentation of the day is from 51Talk Online Education Group. Please note attendees may submit questions and view our presenters' availability for meetings by clicking "Questions" and "Book Meeting" in the top toolbar. At this point, I'm very pleased to welcome David Chung. He's the Vice President of Investor Relations at 51Talk Online Education Group, which trades on the New York Stock Exchange under the symbol COE. Welcome back, David.
Thank you, John. Good morning, everyone. My name is David Chung, and I'm the Vice President of Investor Relations at 51Talk. Thank you for joining us today. In the next five to 10 minutes, I'll be walking you through how 51Talk, as an NYSE American-listed company with ticker code COE, is combining localization, technology, and people in building an online education business globally. After that, we can open the floor for questions. Let's start with the big picture. 51Talk is an AI-driven edtech platform serving young learners around the world. We're not just offering English lessons; we're providing an integrated, adaptive learning experience that combines proprietary curriculum, high-quality tutors, and advanced technology. Our goal is to make high-impact education accessible and relevant in every market we enter. What makes our platform different is our integrated approach.
We've built our solution on four pillars: a proprietary curriculum with over 500 hours of refined content, a rigorous AI-enhanced tutor recruitment process, $100 million invested in our proprietary technology, and a free 360-degree parent and student support model. In the next couple of slides, you will see how each pillar reinforces the others to deliver results. First, our curriculum is fully animated, interactive, and aligned with CEFR global standards. Second, our tutors are selected through a stringent process, with only the best making it through. Every tutor then benefits from AI tools and ongoing training, ensuring quality and consistency at scale. Third, our technology platform is robust and scalable. We have low-latency videos, gamified classrooms, and features like virtual makeup for tutors. Finally, our 360-degree support ensures every student has a personalized learning path and ongoing guidance from a dedicated learning partner, maximizing both engagement and satisfaction.
Global presence means local adaptation. In every market, our curriculum is customized to fit local school requirements and cultural expectations. Local teams provide direct support and guidance, and our marketing is tailored to reach parents and students where they are. This proven approach has helped us build trust and drive engagement in diverse regions, from East Asia to the Middle East and beyond. AI powers every part of our operations. Our tech stack includes LLMs, proprietary infrastructure, and advanced automation, supporting everything from telemarketing to personalized student support. We have developed tools for tutor screening, lesson personalization, and adaptive feedback, all designed to improve efficiency and outcomes. Let's look at some of the AI application highlights. In tutor recruitment, AI evaluates pronunciation and accent. For every new hire, AI assists in screening, interviewing, and training, reducing cost and speeding up onboarding while maintaining high standards.
AI also enables truly personalized learning. Every student receives an individualized model and learning path with real-time feedback through features like AI coaches, lesson memos, and situational practice. This personalization drives better engagement, faster progress, and higher satisfaction. Our sales process is also optimized by AI, which has already improved our conversion rates and reduced idle times during the sales process. AI supports tutors during lessons, helping them deliver higher quality instructions. We recently saw our first paying student complete an AI-powered trial class as well. Turning to our numbers, following our China divestment, we're now fully focused on the international markets, audited in the U.S. and headquartered in Singapore. Revenues are growing, margins consistently exceed 70%, and our cash position is strong. We're expanding with discipline, focusing on profitable and sustainable growth, not just headline numbers.
To close, 51Talk is uniquely positioned at the intersection of global reach, local expertise, and cutting-edge applications of AI. We're committed to unlocking long-term value in the edtech sector, one student, one market at a time. Thank you for your time. We can now open up for questions. Okay, just looking through the questions here. The first question we have is about our operations and new markets. Okay, so the question is, what are the key markets you're operating and any plans to open new markets in the next three years? As mentioned in our presentation, expanding to new markets is a key part of our growth process. We are already active in Southeast Asia, like Malaysia and Thailand, and we're testing new markets like Vietnam and Indonesia.
We're also very active in the Middle East, in the Arabic markets, and we're constantly looking for new markets in terms of opportunities, for example, in the English—sorry, sorry—Spanish-speaking regions. In selecting a market, we generally look for a relatively large middle-class children population, a low cost of acquisition as well, to justify the unit economics and our operating cash flows. Once we have identified that, the focus is then on making our marketing and services fit each location. We invest and build local offices with experienced leaders and train new staff with our proven methods. We also adapt our products to match local languages, customs, and styles. All of these take time, but once we're set in a market, it's hard for the local competition to match our mix of central operational strength and on-the-ground local teams. Okay, looking at the next question.
Okay, the next question we have is about the products and services that we have and how we distinguish ourselves against our competitors. In terms of looking at—in terms of the products and services that we have, when we look at our current student base, we are always working and studying to see how we can further improve and add value to our existing student base through additional products and services that fit with our core product, which is the one-on-one K-12 English lessons classes. In different markets, this could mean different services and products. Specifically, in certain markets, this could be other subjects such as maths or science, or it could actually be exam preparations in other markets, helping students get into schools, for example.
We see that each market has very different and unique needs, and we offer market-specific programs or services in the market that we operate. Again, similar to going into a new market, for every new initiative, we check the market size. If we have the expertise and ability to address the market well, being able to build the product ourselves, the competition surrounding that market, and whether we are actually the best to take on the market and offer this product or services. Remembering that education is a local business. Every market has a different school system. Every market is different in terms of where and when students study after school, their learning behaviors, and habits.
What we are good at is actually sending our people to new markets and building up the local teams, hiring local talents, and training them to adapt our product and marketing to fit the needs of the local students and parents. In that respect, we haven't really seen anyone in the market doing this better than us in terms of competition. The third question is regarding the drivers behind our revenue growth. This is one that we get asked quite a lot. Our core product, as mentioned, is the K-12 one-on-one English lessons. That's our core key product. Our focus has always been to continue to expand into new markets and further increase penetration in existing ones. In terms of driving revenue growth, the key would be expanding into new markets and further penetration with our core product.
What we mean specifically also is that for the markets, for the key markets that we operate in, we're pushing very hard to become leaders there as well. We believe that in the next couple of years, 2025-2026, growth will continue to build as we further tailor our offerings to local needs. Our goal is also to have sustainable and profitable growth. For us, our target is to have positive or break-even cash flow, operating cash flow each quarter. The target is to have positive cash flow for the full year of 2025. Okay, the fourth question is about AI. Do we see AI replacing human tutors in teaching? In online education, we see online education as one of the industries that will be most affected by AI. AI will change a lot of the things that we do, but when and exactly how, nobody knows yet.
What we expect, it will happen faster than most. The changes, though, will happen faster than most people expect. There are a lot of very bright people around the world working on addressing these problems and finding new solutions right now. And some of them, they work for us. They work for 51Talk. In order to make sure we do not fall behind, we, as mentioned in the presentation, we are already using AI to improve everything that we do in our existing product. We partially use AI tutors. We use AI sales agents. We create AI study reports. We use AI to customize courses. If you imagine what is possible, we are probably doing a lot of that right now already. As a second stream, we are also making soft launches of products that do not use human teachers at all.
This helps us to learn and improve and maybe, in the longer term, even replace ourselves. The ones who eventually decide what is the best way to learn are our students. It is not easy to keep a five-year-old child motivated to learn for 30 minutes. It is not just about knowledge transfer. It is about keeping the child engaged, making them open their mouth and interact in a new language. That is what parents expect from us when they purchase our products and services. That is exactly what we are good at. We will continue to use AI to make this customer experience even better in the future. Okay, just looking through some of the questions. Okay, I guess one question that—okay, this question we do get quite a lot, and it is worthwhile to just address here again—is: do we still have a business in China?
If not, are there possibilities of re-entering? This is obviously a very interesting question now, considering that some of our peers have their businesses picking up again with the adjustments in the new regulatory environment. For us, our core business remains using foreign teachers to teach our students. We need to continue to monitor the regulatory stands regarding this. That said, what we are actually very good at is actually using Chinese talent and Chinese R&D capabilities to teach students around the world in a localized way. Only a few, very few, can do this well. We see from our experience so far, we see the global education market without China; it is still very large.
At this stage, we think we can create shareholder value and build higher entry barriers by doing what we can do better than most and not compete very intensively in China. The environment can change, and maybe at one time, it would make sense for us and for our shareholders for us to serve Chinese students with the technology products that we have already developed. That is not something that we consider for now. To sum up, our focus is to continue to expand into new markets around the world and not looking at the China market right now. Okay, I guess just one last question. This is really about—we are kind of still a small company right now.
What is our goal, and what is sort of how big can we really become over the long term? We definitely believe that we can become, over the long term, there's a very big opportunity for us to address. We also understand, though, that it will really depend on our actual strategy and execution. As mentioned earlier, there are really three areas. As mentioned earlier, education is a local business, and every market has a different school system. Each market is different in terms of how students spend their time. Again, what we are good at is having a localized team and sending our experienced people to train the local teams and making the products fit the local needs and the local needs of the students and parents.
In the market, we believe we are very unique and very strong in combining these two elements to compete with our competitors. That is one. The second thing is in terms of technology, in particular AI. Again, we have our R&D center in Beijing, China. China is a global leader in EdTech, and our brand name in China is very strong. This gives us access to some of the best talent, and that helps us make a world-class product. Finally, last but not least, AI, we believe, is going to do 80% of the job, but in our business, it cannot do the complete 100% of the job. That remaining 20%, which we believe is the critical 20%, still needs to be done by humans, and especially for teaching preschool students or primary school students.
We have that experience in training and operating a large teacher force at scale. Again, we have not seen anyone doing this better than us. In short, we have everything it takes to succeed, and it will depend on us if we are able to execute well. Thank you. I think I am almost out of time. If there are more questions, please feel free to visit us at ir.51talk.com, and you can email us or leave us your email, and then we will get back to you with any questions that you have. Thank you so much.