LAIX INC. COMPANY PRESENTATION - May 2021
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LAIX INC. COMPANY PRESENTATION May 2021
LAIX LIFE EMPOWERED BY AI TO REACH (X)INFINITE POSSIBILITIES OUR MISSION: EDUCATION FOR ALL, STARTING FROM ENGLISH
1 BUSINESS HIGHLIGHTS
OUR JOURNEY
Beijing
Mountain View,
CA Princeton,
NJ
Shanghai
Dr. Yi Wang Mr. Zheren Hu Dr. Hui Lin
Founder / CEO Founder / CTO Founder / Chief Scientist
4
OUR PATH TO TRANSFORM LEARNING
2020
Launched AIX
Course in Kids
2019 Liulishuo app
Launched Kids
Liulishuo
2018
2017 Launched Liuli Reading
Launched Authentic course in the English Introduced AI
2016 Pronunciation course Liulishuo app teacher ALIX
Launched LingoChamp
2015 Launched paid
in the English
for the global market
Started to develop Liulishuo app
courses in the
AI English teacher Liuli Reading
2014 English Liulishuo
app 50 Most Innovative
2013 Launched online Companies for 2018 by
Authentic
Launched the learners’ Pronunciation
Forbes China Launched Bell, a one-
English community stop course to improve
Liuliba in the Launched enterprise
Liulishuo mobile overall spoken English
English learning services in
app
Liulishuo app the English Liulishuo
100 Most Promising
Launched the app
Private AI Companies
IELTS Liulishuo
in the World for 2018
Awarded app Launched Darwin, an
by CB Insights
“Selected Apps of upgraded and fully
the Year” by Creation of AI teacher Enterprise
Learning Services adaptive version of
Apple App Store DongNi
Listed on NYSE
Monetization
5
OUR FREEMIUM BUSINESS MODEL
Effective Registered Users Active Users First Purchase Repurchase
Customer
Acquisition
DongNi Standard Course DongNi Standard Course
RMB99 for 30-day
RMB499 for 180-day
RMB998 for 12-month
App stores, Tra Authentic Pronunciation
search ffic
engines and RMB1,688 for 180-day DongNi Select Course
social media RMB2,188 for 12 month
platforms RMB4,399 for 12-month
Free Courses Liuli Reading
Traffic
轻松学 RMB199 for 100-day
RMB388 for 180-day
Kids Products
Multiple ways RMB499 for 12-month AIX Courses
Word-of- Rich and
mouth to drive RMB3,898 for 24-month
engaging RMB5,198 for 36-month
viral free content conversion Kids Products
growth
ffic Phonics Course
Tra
RMB798 for 12-month
AIX Courses Other new products ...
RMB1,898 for 12-month
Offline
marketing
activities
6
OUR PROPRIETARY AI TECHNOLOGIES
Learning Process for Language and Most Other Subjects
Teaching Practicing Assessment Feedback
Human Teacher Hard to give detailed Time consuming to
Long class One-size-fits-all
and personalized give personalized
preparation times content
assessment feedback
AI Teacher Adaptive learning Adaptive learning Advanced auto- Real-time
and knowledge based on users’ scoring engine and personalized
tracing technology proficiency levels speech recognition feedback in a
to personalize and according to technologies variety of formats
learning process past learning and through an
practice data Adaptive, interactive, gamified
Natural language personalized, real- interface
processing to Address mistakes time language
provide feedback on that users make in proficiency
questions real time assessment and
personalized
advice
7
STRONG PRODUCT DEVELOPMENT CAPABILITIES
52.4Bn Sentences and 3.89Bn Minutes
of Users Conversations Recorded (1)
Data-Driven
Product Development Philosophy Data Feedback Loop
User Experience
Supported by designers, Leverage
product managers, engineers, learning data to
ops and OSAs improve our
products
Content
Backed by content
development team Refresh course
Feed- content in weeks
(vs. years in
back
Education traditional
Loop education)
Pedagogies
Backed by renowned
education experts
Select most
AI Technologies effective
Supported by AI pedagogical
experts and practices for
users
scientists
Note:
1 As of December 31, 2020 8
ENGAGING USER EXPERIENCE
Real-time Feedback Gamification Pop Culture Social Human Touch
■ Users can receive real- ■ Gamified exercises/ ■ Lessons in pop culture ■ Our “Liuliba” is a social ■ Online Study Advisors
time performance texts to recap what has themes community where users (OSAs) monitor and
feedback to track their been learnt ■ Makes learning can create content to encourage users in
progress and view their ■ Visualized learning interesting showcase their English WeChat-based study
rankings on leader progress to motivate skills or share study groups
boards users tips ■ Maintains human touch
■ Motivates users to in learning process
share their learning
progress
9
2 FINANCIAL HIGHLIGHTS
NET REVENUES AND HIGHLY VISIBLE FUTURE REVENUES
Net Revenues Deferred Revenues Revenue Recognition Method
(RMB MM) (RMB MM)
1,023.2
972.6 696.0 689.3
Deferred revenues Deferred revenues
Beginning balance Ending balance
637.2 477.6
Deferred rev.
Addition to deferred recognized as net
revenues revenues
this year
228.3
198.5
Gross billings
recognized as net
revenues this year
2018 2019 2020 2020 Q1 2021 Q1 2018 2019 2020
Gross Billings Net Revenue
This year This year
11MARGIN EXPANSION WITH IMPROVED PROFITABILITY
Gross Margin Net (Loss) / Income
(RMB MM)
77.6%
75.4%
65.5%
12.2
2020 Q1 2020 Q4 2021 Q1
(34.7)
2020 Q1 2020 Q4 2021 Q1
(197.0)
Continued improvement in gross margin Break-even for the first-time ever in 1Q2021
12SCALABLE BUSINESS MODEL WITH IMPROVING OPERATING LEVERAGE
Cost of Revenues Sales and Marketing Expenses
(RMB MM) (RMB MM)
(92.9)
(44.4)
(78.8) (264.7)
(174.7) (705.4)
(801.4)
(969.4)
(273.5) (277.2)
(22.4%) (46.8)%
(27.4)% (26.7%) (82.4)%
(28.5%) (94.7)%
(34.5%) (110.7)%
(115.9)%
2018 2019 2020 2020 Q1 2021 Q1 2018 2019 2020 2020 Q1 2021 Q1
Cost of revenues As % of net revenues Sales and marketing expenses As % of net revenues
13SCALABLE BUSINESS MODEL WITH IMPROVING OPERATING LEVERAGE
(CONT’D)
Research and Development Expenses General and Administrative Expenses
(RMB MM) (RMB MM)
(33.7) (22.1) (18.7)
(65.4)
(111.0)
(59.2)
(19.6)% (153.5)
(20.9)%
(24.3)%
(155.2)
(25.9)% (17.0)%
(190.7) (9.7)% (9.4)%
(10.3)% (11.4)%
(213.9) (15.0)%
2018 2019 2020 2020 Q1 2021 Q1 2018 2019 2020 2020 Q1 2021 Q1
Research and development expenses As % of net revenues General and administrative expenses As % of net revenues
14SCALABLE BUSINESS MODEL WITH IMPROVING OPERATING LEVERAGE
(CONT’D)
(Loss) / Income from Operations Adjusted Net (Loss) / Income
(RMB MM) (RMB MM)
6.5% 9.6%
12.8 19.0
(41.9)%
(37.6)%
(53.6)%
(196.5) (189.2)
(69.5)% (53.6)%
(69.5)%
(365.8) (82.9)%
(407.6)
(442.6) (87.6)%
(442.6)
(548.1)
(548.1)
2018 2019 2020 2020 Q1 2021 Q1
2018 2019 2020 2020 Q1 2021 Q1
(Loss)/Income from Operations Operating Margin Adjusted Net (Loss)/Income Adjusted Net (Loss)/Income Margin
15THANK YOU
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