New Oriental's Q4 2025 Earnings Call: Contradictions in Growth Guidance, Margins, and Restructuring Strategies

Guidance for overseas-related business growth, revenue growth expectations, margin expansion expectations, shareholder return program, and East buy business restructuring are the key contradictions discussed in New Oriental Education & Technology Group's latest 2025Q4 earnings call.



Revenue Growth and Strategic Focus:
- New Oriental Education & Technology Group reported a 18.7% year-over-year increase in total net revenue (excluding East Buy and live streaming business) for Q4 2025.
- The growth was primarily driven by the company's new ventures, indicating a strategic focus on expanding these initiatives to enhance operational consistency and long-term value creation.

Operational Efficiency Improvement:
- The non-GAAP operating margin improved by 410 basis points to 6.5% in Q4 2025, demonstrating effective cost reduction and efficiency improvements.
- This improvement was attributed to the company's cost control measures and operational enhancements, aimed at driving profitability across business lines.

Overseas Test Prep and Studies Consulting Growth:
- The overseas test prep business recorded a 15% year-over-year revenue increase, and the overseas studies consulting business reported an 8% year-over-year revenue increase in Q4 2025.
- These figures reflect the ongoing demand and strategic focus on these segments, despite some external challenges such as economic conditions and international relations changes.

New Educational Business and AI Integration:
- New educational business initiatives reported a 33% year-over-year revenue increase, highlighting progress in areas like non-academic tutoring and intelligence learning systems.
- The integration of AI, including innovations like intelligent learning systems and AI-powered devices, has contributed to enhanced learning outcomes and customer retention, driving overall momentum.

Shareholder Return and Capital Allocation:
- The company announced a 3-year shareholder return plan, committing to allocate at least 50% of net income to shareholder returns through dividends and/or share repurchases.
- This move signals appreciation for shareholder support and a focus on delivering value, with future capital allocation decisions to be determined pending the audit of fiscal year 2025.