New Oriental's Strong Q2 Results: A Beacon of Resilience in the Educational Landscape

New Oriental Education and Technology Group Inc. (NYSE: EDU/ 9901.SEHK), a leading provider of private educational services in China, has reported robust financial results for the second fiscal quarter ended November 30, 2024. The company's revenue and bottom line performance have demonstrated remarkable resilience and growth, reflecting its commitment to maintaining a healthy market share and creating sustainable value for customers and shareholders in the long term.



New Oriental's total net revenues increased by 19.4% year over year to US$1,038.6 million for the second fiscal quarter of 2025. Excluding revenues generated from East Buy private label products and livestreaming business, total net revenues increased by 31.3% year over year to US$894.2 million. This strong top line performance was driven by the company's diverse business lines and new educational business initiatives.



New Oriental's operating income decreased by 9.8% year over year to US$19.3 million for the second fiscal quarter of 2025. However, operating income, excluding operating loss generated from East Buy private label products and livestreaming business, increased by 102.5% year over year to US$25.0 million. Net income attributable to New Oriental increased by 6.2% year over year to US$31.9 million for the second fiscal quarter of 2025.

New Oriental's key remaining business lines have depicted a propitious trend, with the overseas test prep business recording a revenue increase of 47% in dollar terms or 50% in RMB terms year over year for this quarter. The overseas study consulting business recorded a revenue increase of approximately 32% in dollar terms or 35% in RMB terms year over year for this quarter. The adults and university students business recorded a revenue increase of approximately 43% in dollar terms or 46% increase in RMB terms year over year for this quarter.

New Oriental's new educational business initiatives have maintained strong momentum, with revenue growth of 42.6% year over year in the second fiscal quarter of 2025. These initiatives include non-academic tutoring courses and intelligent learning system and devices business. The non-academic tutoring courses, offered in around 60 cities, have recorded elevated penetration, especially in higher-tier cities, with a total of approximately 786,000 student enrollments in this quarter. The top 10 cities in China contribute over 60% of the revenue of this business. The intelligent learning system and devices business has been adopted in around 60 cities, with approximately 994,000 student enrollments in this fiscal quarter.

New Oriental's focus on operational efficiency and cost control has significantly contributed to its bottom line performance. The company's unwavering efforts in this area have led to a streamlined cost structure and the use of fewer resources, ultimately driving sustainable profitability. New Oriental's operating margin and non-GAAP operating margin reached 2.5% and 5.9% for the second fiscal quarter of 2025, respectively.

In conclusion, New Oriental's strong Q2 results reflect the company's resilience and commitment to maintaining a healthy market share and creating sustainable value for customers and shareholders in the long term. The company's diverse business lines, new educational business initiatives, and focus on operational efficiency and cost control have all contributed to its impressive financial performance. As the educational landscape continues to evolve, New Oriental is well-positioned to capitalize on new opportunities and maintain its leading position in the private educational services industry.