Hello and welcome to the Deutsche Bank virtual investor conference, dbVIC. This is Zafar Aziz from the Deutsche Bank team. I'm pleased to welcome our next presentation by 51Talk from China. Before I introduce our speaker, a few points to note. Please click on the questions box to ask a question. All of today's presentations will be recorded and can be accessed via the Deutsche Bank website, adr.db.com. I'm happy now to hand over to 51Talk.
Good morning, everyone. Or good afternoon. My name is David Chung. I'm the Investor Relations VP at 51Talk. Thank you for joining us today. In the next 5 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'll 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 360-degree parent and student support model. In the next couple of slides, you'll 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 large language models, Proprietary Infrastructure, and advanced automation. All supporting everything from telemarketing to personalized student support. We've developed tools for tutor screening, lesson personalization, and adaptive feedback. All designed to improve efficiency and outcomes. Let's look at some 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 students during lessons, helping them deliver higher quality instructions. We've also recently. Saw our first paying student complete an AI-powered trial class. Turning to our numbers, following our China divestment, we are now fully focused on 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, the first question that we have is, "How does AI affect our business?" So that's a very common question that we do get asked by investors. We believe that online education is one of the industries that's most affected by AI. AI will change everything that we do, but exactly when and how, that's what we're still trying to find out. But it will definitely happen faster than a lot of people expect. So at the moment, there are clearly a lot of very good people around the world working on AI and its application in education. And some of them, they work for us.
In order to make sure we don't fall behind in this AI race, we use AI to improve everything that we do in the current existing product. We partially use AI tutors. We use AI sales agents. We have AI study reports, and we use AI to customize courses. If you imagine what's possible with AI and its applications in education, we are probably doing most of it right now. And as a second stream, we are making soft launches on products that don't have human teachers at all. So this helps us to continue to learn and improve, and maybe in the longer term, even replace ourselves. In the end, we believe that who actually decides the best way forward, the best way to learn, are the students.
It's important to remember that it is actually in our business, in the K-12 space, it's not easy to keep a five-year-old motivated to learn for 30 minutes. It is not actually about or at least not just knowledge transfer, but it's about keeping a child engaged, making them open their mouth, and interact in a new language. That's what parents expect from us. And that's in our KPIs. That's one of the operating metrics that we look at, and management continues to drive. And we believe that's something that we're good at. And using AI will just make us continue to be better in that aspect. Okay. Hope that answers the question. The next question that we have is, what are the key markets that we operate in, and if there are plans to open up new markets in the future?
So expanding into new markets is definitely a very key part of our growth. Our product is actually the core product. It's the one-to-one online English K-12 product. And it's so. Our growth is really about geographic growth currently. So growing into new markets, new areas with the same product. Right now, we are already in Southeast Asia, like Thailand, Malaysia. We're continuing to test and go into and penetrate into new markets like Vietnam and Indonesia. We are also in Arabic markets. And as we continue to explore new markets, Spanish-speaking regions is another potentially very big opportunity for us, as we see. In selecting a market, we generally look for a relatively large middle-class children population. Low cost of acquisitions in terms of traffic and marketing. These are all important to justify our unit economics and operating cash flow, which we manage very diligently.
And then the focus is on making this core product in terms of the marketing and in terms of the actual services fit each location. So localization is important. We build local offices. We have experienced leaders and train new staff in our proven methods. So we send experienced leaders from different locations into the new regions to expand into new markets. For the product side, obviously, we would adapt and change to match the local languages, the customs, the colors, and the styles of the local communities. So all of these take time and a lot of efforts to build. But once we are in the market, what we find is that it's very hard.
Once we've done that, what we find is that it's very hard for local competitors to match this mix of central strengths, so the core product, the core infrastructure that we have, and then the on-the-ground local teams that we have. Okay, moving on to the next question. Got it. Okay, so if there are any new products or services that are coming in next year, how do we actually distinguish 51Talk against competitors? So I guess this is a bit of continuing from the earlier question. We're always on the lookout for what our students' needs are, and we're always trying to add and improve our products that is complementary to our existing one-to-one K-12 English product. This may mean other subjects or exam preparation in different markets. As we discussed earlier, different markets, our experience is that different markets have different needs, and they can be quite unique.
So in certain markets, we may offer market-specific programs or services that we operate in. And for that, for every new initiative, we check the market size, if we have the resources to do it well. The competition that's currently out there, and why we are the best to take on this opportunity. Education is a really local business. Every market has a different school system. Every market is different in terms of where and when students study after school. The student learning habits and behaviors are different. But we believe what we're good at is sending in. Our people to new markets and building up the local teams. And adapting our product and marketing to fit the local needs of local students and parents. And we've been doing that. And continuing to show results in the past few years. Okay. Okay, the next question is more financial numbers-relate d.
So it's about we're making losses in the P&L, but our cash position is actually strengthening. What's the logic behind that? So yes, thank you for taking the time to study our financial statements. So if you look at our P&L, we are making an accounting net loss. So on a accounting revenue recognition basis, we are actually making a net loss after deducting all the operating expenses for that period. And the reason for that is that in education, we spend money to get students now, but lessons happen later. So we receive the cash upfront. But the accounting recognition of income and profit comes in the future when the students actually take the classes. So actually, as you can see, when we're growing, we have another metric, which is what we call billings. That's the cash that we receive upfront.
Our billings, which is not an accounting item, but it's something that we disclose as a top-line cash income item. Our billings are higher than our revenues as we grow. And that's why on the balance sheet, you continue to see the cash balance or the cash and cash equivalents continue to grow. And that's because, as we discussed earlier, we are very diligent in making sure our operating cash flow continues to grow. So if you want to see kind of the true value of the operating cash flows, you can look at our billings, subtract the costs for that given period. And that will give you an indication of the cash profitability for a given period. Additionally, you will also see that our balance sheet in shareholders' equity, that's negative as well. And again, that will translate over time to positive as retained earnings, it's recognized.
So as revenue gets recognized over time, we have high retained earnings. So that would make the shareholders' equity trend positive over time. And then I think there's a follow-up question about that, which is if we need capital to fund growth. So our belief is that we would grow with the cash that we receive from our students, from the parents paying for our products and services, and not by growing with the cash that we receive from investors. We want to let our users, our students, and parents decide on our future. And when you look at our recent filings, you can see that our CEO has continued to buy back shares in the open market. So we think that's another strong signal that should give that the company is not in immediate need to raise capital to fund growth. And I think that's it.
So thank you for having us. And we look forward. If there's any further questions, please feel free to visit the 51Talk IR website, and you can see our emails there, and you can email us with any further questions. Thank you so much.