[Abstract] About 1 million paying users purchased courses and services of English Liulishuo in the fourth quarter of 2018, up 150% from 400,000 in the same period last year; Till December 31^st of 2018,the total number of registered users was 110.3 million. Compare with the data 61.3 million of December 31^st , 2017.

The English Liulishuo (NYSE: LAIX) released its unaudited financial report for the fourth quarter and the full year of December 31, 2018. According to the financial report, the net revenue of English Liulishuo  was RMB 224.5 million (about US$32.6 million), an increase of 195.1% from RMB 76.10 million in the same period of last year; the net loss was RMB 163.4 million (about US$ 23.8 million). In comparison, the net loss for the same period of last year was RMB 110.9 million.

The net revenue of English Liulishuo in 2018 was RMB 637.2 million (about 92.7 million US dollars), an increase of 284.9% from RMB 165.6 million in the same period of last year. The net loss was RMB 488.1 million (about US$ 71 million),compared with the same period of RMB 242.8 million in the last year.

“The year of 2018 is a milestone for us because we successfully completed an initial public offering on the New York Stock Exchange on September 27, 2018. We believe in the funds raised through initial public offerings and additional brand recognition will bring meaningful value to our business in the next few years," Wang Wei, the chairman and CEO of English Liulishuo ,said.“We are pleased to report a fourth quarter revenue of RMB 224.5 million, a year-on-year increase of 195.1%. Such outstanding performance has benefited from the continued strong growth of our overall business and user expansion.”

“As a pioneer in the artificial learning-driven English learning market, we are benefiting from China’s growing educational upgrades. We are pleased to see that our advanced platform has interactive, customized courses and services that attract more and more users. The total number of registered users and paying users increased by about 80.5% and 201.1% respectively in 2018. When we started a new year with excitement and optimism, we believe that we will be committed to: (1) Advance Our proprietary artificial intelligence technology; (2) to provide innovative and differentiated products; (3) to create a superior personalized learning experience that enhances user engagement, learning efficiency and efficiency, which is what sets us apart. It's also why we can be successful in the long run. Although we still have a long way to go because we are in the early stages of AI-driven Education 3.0. We are still committed to empowering everyone to realize their full potential."

First, the fast revenue growth

Liulishuo said that the net revenue of the fourth quarter was RMB 224.5 million (US$32.6 million), an increase of 195.1% from RMB 76.10 million in the same period of last year. The net revenue’s year-on-year rapid growth of English Liulishuo was attributed to the growth of the company's business and the increase in the company's paid user base, as well as the increasing use of company-specific artificial intelligence teachers by Chinese users, as an effective learning method and a better alternative to traditional English learning.

Second, the rapid growth of gross bill income

The fourth quarter gross receipt income of English Liulishuo was 359 million RMB (about 52.2 million US dollars), an increase of 171.7% over the same period of the previous year of 132.2 million RMB.

Third, the number of paid users is growing rapidly

About 1 million paying users purchased courses and services of English Liulishuo in the fourth quarter, up 150% from 400,000 in the same period of last year; Till December 31^st of 2018,the total number of registered users was 110.3 million. And the data was 61.3 million in the same period of last year.

Fourth, operating expenses increased substantially

The total operating expenses of English Liulishuo for the fourth quarter was RMB 312.5 million (US$45.5 million), an increase of 88.8% from RMB 165.6 million in the same period of last year. Among this, sales and marketing expenses were RMB 241.7 million (US$35.2 million), an increase of 77.5% from RMB 136.2 million in the same period of last year; R&D expenditure was RMB 53.7 million (US$7.8 million), increased by 148.4% compared with RMB 21.6 million in the same period of last year. General and administrative expenses were RMB 17.1 million  (approximately USD 2.5 million), an increase of 120.0% from RMB 7.8 million in the same period of the previous year.

As scalable business models and high revenue growth of English Liulishuo , sales and marketing expenses percentage of net revenue fell from 171.0% in 2017 to 110.7% in 2018.

Fifth, Performance continues to suffer losses

The fourth quarter net loss of English Liulishuo was 163.4 million RMB (about 23.8 million US dollars), compared with 110.9 million RMB in the same period last year. The basic and diluted loss per share attributable to ordinary shareholders was RMB 3.41 (approximately US$0.50), compared to RMB 6.05 for the same period last year. The net loss of English Liulishuo in the fourth quarter expanded year-on-year, while the diluted loss per common share decreased due to the expansion of the total equity base after listing.

Not in accordance with US GAAP, the adjusted net loss of the fourth quarter was157 million RMB (US$22.8 million), compared with108.6 million RMB in the same period of last year.