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- **Revenue Growth**: Q2 net revenue up 14.7% YoY to $1.19 billion, with K-12 business driving +20%+ Q3 growth.
- **Profit Expansion**: Non-GAAP net income +68.6% YoY to $72.9 million, operating margin up 470bps YoY.
- **New Initiatives**: AI investments boosting retention and efficiency, East Buy SPUs expanded to 801.
- **Guidance**: Full FY2026 revenue expected +8-12% YoY, with $300M share buyback underway.
- **Cost Control**: Selling expenses down 1.1% YoY, operating cash flow $323.5M.

**【Management Opening Remarks】**
- CFO Zhihui Yang highlighted a strong Q2 performance with total net revenue growing 14.7% YoY to $1.19 billion, driven by core education and new initiatives.
- Non-GAAP operating income surged 206.9% to $89.1 million, with non-GAAP net income up 68.6% to $72.9 million.
- Key segments showed resilience: K-9 education grew faster than previous quarter, overseas test prep +4% YoY, and adults/university students +13% YoY.

**【CFO Financial Commentary】**
- Operating expenses totaled $1.12 billion (+10.4% YoY), with cost of revenues up 11.8% to $566.9 million.
- Selling & marketing expenses decreased 1.1% YoY to $194 million, reflecting cost control.
- Non-GAAP net income attributable to New Oriental was $72.9 million, up 68.6% YoY.
- Cash & cash equivalents stood at $1.84 billion, with $323.5 million in Q2 operating cash flow.

**【Outlook & Guidance】**
- Q3 2026 revenue expected in $1.31-1.35 billion range (11-14% YoY growth).
- Full FY2026 revenue guidance raised to $5.29-5.49 billion (8-12% YoY growth).
- Share buyback program authorized for up to $300 million, with $86.3 million repurchased as of January 27.

**【Q&A Highlights】**
- **K-12 Growth**: Q3+20% YoY growth expected, driven by 10% learning center expansion and higher retention rates.
- **Overseas Business**: Test prep +4% YoY, study consulting -3% YoY, with plans to merge test prep & consulting units for efficiency gains.
- **AI Impact**: AI investments improving customer retention, operational efficiency, and new product development.
- **Margin Expansion**: Non-GAAP operating margin up 470bps YoY in Q2, with further expansion expected in H2.
- **East Buy Contribution**: Private label SPUs expanded to 801, with vending machines now profitable in select cities.

New Oriental Education & Technology Group Inc. (EDU) Q2 2026 Earnings Call Transcript

- **Revenue Growth**: 6.1% YoY to $1.13B, with new educational initiatives up 15% and K-12 K-9 business targeting 20%+ growth.
- **Profitability**: Non-GAAP operating margin 22% (+100bps YoY), supported by $190M dividend & $300M buyback plan.
- **Strategic Focus**: AI-powered learning devices, non-academic tutoring (60 cities), and East Buy e-commerce expansion driving long-term growth.
- **Risk Management**: Conservative guidance for overseas business (-low single digits YoY) amid external headwinds.

**【CFO Financial Commentary】**
- Total net revenue increased 6.1% YoY to $1.13 billion, driven by strong operational efficiency and cost management.
- Non-GAAP operating margin improved 100bps to 22%, with non-GAAP net income of $258.3 million (+1.6% YoY).
- Key business segments:
  - Overseas test prep: +1% YoY
  - Adults/university students: +14% YoY
  - New educational initiatives: +15% YoY (non-academic tutoring & AI learning systems)
- East Buy e-commerce: Nutritional food line outperformed, with 10% YoY growth in deferred revenue.

**【Q&A Highlights】**
- **K-12 Growth Acceleration**: Q2 K-9 revenue expected +20% YoY, driven by 80%+ student retention rates. Full-year K-12 growth target: 20%+ for K-9, double-digit for high school.
- **Shareholder Return Plan**: $190M dividend (50% payout ratio) + $300M share buyback program. ETR may remain elevated due to dividend withholding taxes.
- **SBC Expense**: Q1 SBC jumped to $23.3M due to 3-year equity grants; expect similar quarterly levels.
- **Overseas Business**: Test prep younger age group (+25% YoY), consulting non-US/UK markets outperform. Q2 overseas revenue expected -low single digits YoY.
- **Margin Outlook**: Q2 operating margin expansion to exceed Q1, with focus on cost control across all business lines.

New Oriental Education & Technology Group Inc. (EDU) Q1 2026 Earnings Call Transcript

- **Q4 Growth Stars**: Core education (+18.7% YoY), AI-driven devices, and tourism (+71% YoY) lead the charge.
- **Profitability Boost**: Non-GAAP margin up 410 bps to 6.5%, fueled by cost control and AI investments.
- **FY26 Outlook**: Q1 cautious (2%-5% growth), but full-year target of 5%-10% reflects accelerating growth post-Q1.
- **Shareholder Value**: $700M buyback completed; 50%+ of FY26 profits to be returned via dividends/buybacks.
- **Risks**: Economic uncertainty weighs on overseas business; tourism faces model refinement.

**【Management Opening Remarks】**
- Q4 2025 total net revenue (excluding East Buy) grew 18.7% YoY, driven by new ventures like non-academic tutoring and AI-powered learning devices.
- Non-GAAP operating margin improved 410 bps to 6.5%, reflecting cost control and efficiency gains.
- Key businesses showed strong growth: overseas test prep (+15%), adults/university students (+17%), and new education initiatives (+33% YoY).

**【CFO Financial Commentary】**
- **Core Education Performance**: 
  - Overseas test prep revenue up 15% YoY; overseas study consulting up 8%.
  - Non-academic tutoring rolled out to 60 cities, with top 10 cities contributing 60% of revenue.
  - AI learning devices tested in 60 cities, showing improved customer retention.
- **Integrated Tourism Growth**: Study tours and camps grew 71% YoY, with 55 cities contributing 50% of revenue.
- **AI Investments**: $28M spent on OMO platform upgrades; launched AI-powered learning devices and smart study solutions.
- **East Buy Update**: Private label products gained market share; FY25 revenue growth driven by multichannel strategy.

**【Key Financial Details】**
- Operating expenses: $1.25B (11.2% YoY increase), driven by G&A (+9.1%) and share-based compensation (+11%).
- Net income: $7.1M (73.7% YoY decline); Non-GAAP net income: $98.1M (59.4% YoY growth).
- Cash flow: $399.1M from operations; capital expenditures $65.9M.
- Deferred revenue: $1.95B (9.8% YoY increase).

**【FY 2026 Guidance】**
- **Q1 2026**: Revenue $1.46B-$1.51B (2%-5% YoY), conservative due to high base and Chinese New Year timing.
- **Full Year 2026**: Revenue $5.15B-$5.39B (5%-10% YoY), with growth accelerating post-Q1.
- **Shareholder Return Plan**: 50%+ of FY26 GAAP net income allocated to dividends and buybacks.

**【Q&A Highlights】**
- **Q1 Drag Factors**: Economic uncertainty, early Chinese New Year, and East Buy restructuring.
- **Margin Outlook**: Cost control to drive 100-150 bps margin expansion in FY26.
- **Learning Center Expansion**: 10%-15% new centers, focused on high-growth cities.
- **Tourism Business**: Slower growth in FY26 as model matures; FY25 revenue up 71% YoY.
- **Dividend Preference**: Board considering regular dividend vs. buybacks based on market conditions.

New Oriental Education & Technology Group Inc. (EDU) Q4 2025 Earnings Call Transcript

- **Revenue Growth**: Core education business (excluding East Buy) up 21.2% YoY, driven by new ventures.
- **Margin Expansion**: Operating margins improved to 12.1% (GAAP) and 13.3% (Non-GAAP).
- **Q4 Guidance**: $1.01-1.04 billion (10-13% YoY growth in USD, 12-15% in RMB).
- **AI Impact**: AI tools enhance learning outcomes, reduce costs, and boost efficiency.
- **Share Repurchase**: $695.5 million repurchased under $700 million program; considering additional returns.
- **Risks**: Overseas business growth constrained by macroeconomic and geopolitical factors.


**【CEO & CFO Opening Remarks】**
- Total net revenue (excluding East Buy) grew 21.2% YoY, driven by new ventures like nonacademic tutoring (+35%), smart education solutions, and integrated tourism (+85%).
- Operating margins improved to 12.1% (GAAP) and 13.3% (Non-GAAP), excluding East Buy contributions.
- Q4 2025 revenue guidance: $1.01-1.04 billion (10-13% YoY growth in USD, 12-15% in RMB).

**【Business Segment Breakdown】**
1. **Overseas Test Prep & Consulting**: 
   - Test prep revenue +7% YoY, consulting +21% YoY.
   - Anticipate 5-10% growth in Q4, 0-5% in FY26 due to macroeconomic headwinds.
2. **Adult & University Students**: +17% YoY, driven by demand for career training and exam prep.
3. **New Ventures**: 
   - Nonacademic tutoring expanded to 60 cities, top 10 cities contribute 60% of revenue.
   - AI-powered learning devices in 60 cities, top 10 cities account for 50%.
4. **Integrated Tourism**: 
   - Conducted 55-city study tours, targeting K-12 and university students.
   - Senior travel products launched in 30 provinces, contributing 50% of segment revenue.

**【AI & Technology Investments】**
- AI tools (essay grading, speaking assessment) improve learning outcomes and reduce teacher workload.
- AI content creation platform enhances lesson planning efficiency.
- AI-driven FAQ database cuts sales training costs and boosts conversion rates.

**【Cost Control & Margin Expansion】**
- Q4 2025: Non-GAAP operating margin for core education business expected to expand YoY.
- FY26: Target 5%+ headquarters expense ratio (vs. 6% in FY25), 10-15% new learning center capacity expansion.

**【Share Repurchase & Dividends】**
- Repurchased $695.5 million of ADSs under $700 million program.
- Board considering additional shareholder returns (dividends/repurchase) in FY26.

**【Q&A Highlights】**
- **K-9 Enrollment Growth**: 15% YoY (lower than expected due to timing and enrollment consolidation).
- **Learning Devices vs. Offline Courses**: Devices complement offline courses, with users up 54% YoY.
- **Margin Sustainability**: Cost control measures (facility utilization, workforce efficiency) to offset top-line growth deceleration.
- **Overseas Business Risk**: Geopolitical tensions and economic slowdowns may limit recovery.


New Oriental Education & Technology (EDU)-23 Apr 25-2025 Q3 Earnings call transcript

- **Revenue Outperformance**: Core education revenue grew 31.3% YoY, driven by 43% expansion in new ventures like non-academic tutoring and smart devices.
- **Profitability Improvement**: Operating margin expanded to 2.8% (non-GAAP 3.2%), supported by deferred revenue growth of 19.2% YoY.
- **East Buy Contribution**: Private label GMV reached 37% of total, with offline vending machines now integrated into learning centers.
- **Q3 Guidance Caution**: 18-21% YoY growth reflects macroeconomic headwinds, but management targets margin expansion through selective learning center expansion.
- **Shareholder Value**: $700 million buyback program (54% executed) and $100 million dividend highlight commitment to returns amid cautious growth.


**【Management Opening Remarks】**
- Sisi Zhao welcomed participants and outlined the agenda, emphasizing the company's commitment to transparency and long-term value creation.
- The call highlighted the exclusion of East Buy's private label products and livestreaming business from core education metrics to better reflect operational performance.

**【CFO Financial Overview】**
- **Revenue Growth**: Total net revenue increased 19.4% YoY, with core education business (excluding East Buy) up 31.3% YoY. New ventures, including non-academic tutoring and smart education, contributed 43% YoY growth.
- **Profitability**: Operating margin reached 2.8% (non-GAAP 3.2%), driven by cost control and expanding learning centers. Deferred revenue grew 19.2% YoY to $1.96 billion.
- **East Buy Performance**: Private label GMV contributed 37% of total GMV over six months, with offline vending machines now operational in learning centers.
- **Financial Health**: Cash and short-term investments totaled $4.8 billion, supporting a $700 million share buyback program (with $542.8 million executed as of January 2025) and a $100 million special dividend.

**【Q3 2025 Guidance】**
- Core education revenue (excluding East Buy) expected to grow 18-21% YoY ($1.007-1.033 billion), reflecting macroeconomic uncertainty and high-end business slowdowns.
- Management prioritizes balancing revenue growth with margin expansion, targeting learning center expansion in high-performing cities.

**【Key Business Updates】**
- **Non-Academic Tutoring**: 994,000 student enrollments across 60 cities, with top 10 cities contributing 60% of revenue.
- **Smart Education Devices**: 50% revenue from top 10 cities, leveraging AI and ChatGPT for personalized learning.
- **Tourism Business**: 233% YoY growth, with study tours operating in 55 cities and senior travel offerings in 30 provinces.
- **OMO Platform Investment**: $30.9 million spent on platform upgrades to enhance user experience and support service diversification.

**【Q&A Highlights】**
- **Macro Impact**: High-end overseas test prep and one-on-one tutoring growth slowed to 15% YoY (vs. 20% prior guidance), driven by economic uncertainty.
- **New Business Momentum**: Non-academic tutoring and smart devices maintain 40%+ YoY growth, with ASP increases offsetting volume growth.
- **Learning Center Efficiency**: New centers breakeven within six months, with utilization rates improving due to prior expansion.
- **Regulatory Compliance**: Management remains neutral on regulatory risks, focusing on obtaining local licenses for new learning centers.
- **Shareholder Returns**: Board to discuss 2025 dividend policy in July; buyback program extended to May 2025 with no cap on execution pace.


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