Fallout from the Covid-19 pandemic continues to benefit China’s online education industry in the second quarter of 2020, with online language-training platform 51Talk turning losses into gains during the period.

In the quarter through June, U.S.-listed Beijing-based 51Talk reported net profit of 32.8 million yuan ($4.6 million), in sharp contrast to its net loss of 33.2 million yuan in the same period last year, according to the company’s quarterly earnings report released on Tuesday.

During the period between April and June, 51Talk grew its net revenues by 40% to 493.5 million yuan, roughly 85% of which was due to sales of its core K-12 one-on-one courses, which generated 417.9 million yuan in revenue, up 61% year-on-year.

“These results were fueled by the continued optimization of our K-12 one-on-one mass market strategy in non-tier-one cities as well as the overall growing market awareness and acceptance of online education brought about by the effects of the Covid-19 pandemic,” 51Talk founder, chairman and CEO Huang Jiajia said in a statement.

Operating cash inflow was 172.1 million yuan in the second quarter, up from 99.2 million yuan a year earlier. Operating cash inflow is a key metric of a company’s financial health status.

The number of 51Talk’s active users reached 298,200 in the second quarter, compared with 233,400 in the same period last year.

In the third quarter, 51Talk said it expects its net revenues to reach between 525 million yuan and 532 million yuan, representing a year-on-year increase of 28.5% to 30.2%.

Last week, GSX Techedu, a U.S.-listed Chinese online education firm which is being probed by U.S. securities regulator over allegations from short sellers that it inflated revenues, also reported strong second-quarter results showing a year-on-year jump of more than 400% in sales of its online K-12 courses during the period.

Contact reporter Ding Yi (yiding@caixin.com)

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