EDU

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:00 a.m. ET Executive President and Chief Financial Officer - Zhihui Yang Investor Relations - Sisi Zhao Operator: Good evening, and thank you for standing by for New Oriental's FY 2026 Fourth Quarter Results Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. I'd now like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao. Sisi Zhao: Thank you. Hello, everyone, and welcome to New Oriental's Fourth Fiscal Quarter 2026 Earnings Conference Call. Our financial results for the period were released earlier today and are available on the company's website as well as on Newswire Services. Today, Stephen Yang, Executive President and Chief Financial Officer; and I will share New Oriental's latest earnings results and business updates in detail with you. After that, Stephen and I will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the view expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on New Oriental's Investor Relations website at investor.neworiental.org. I will now first turn the call over to Mr. Yang. Stephen, please go ahead. Zhihui Yang: Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. We're pleased to bring you another quarter of remarkable results with revenue and income growth that have once again exceeded expectations. Our performance this quarter reflects not only the continued strength of our core business, but also the outstanding contributions of East Buy and our new creative ventures. Taken together, these assets have energized our strategic ambitions as we look ahead with confidence in the year to come. We're particularly pleased that despite the economic headwinds and external challenges, our relentless efforts to deliver the very best to our customers are yielding strong results. In this quarter, total net revenue grew 23% year-over-year to $1,529.5 million. Non-GAAP operating income rose 34.7% to $110 million, while operating margins for both the quarter and the fiscal year 2026 showed healthy increments. Both our core business and new initiatives continue to score meaningful traction this quarter. Breaking it down, overseas test prep business recorded a revenue increase of 6% year-over-year for the fourth quarter of 2026. Overseas study consulting business recorded a revenue increase of about 1% year-over-year for this quarter. Our adults and university students business recorded a revenue increase of 29% year-over-year for this quarter. Our non-academic tutoring business has been rolled out to around 60 existing cities. Market penetration has signed steady growth, particularly across high-tier cities. The top 10 cities contributed around 60% of this business. Our intelligent learning system and device business that leveraged our teaching expertise and data analytics to provide adaptive learning solutions has been launched in around 60 cities. We're encouraged by the enhanced customer retention and scalability with top 10 cities contributing over 50% of this business. In summary, our new educational business initiatives delivered a 25% year-over-year revenue increase in this quarter. Moving on to our integrated tourism-related business; encompassing study tours and research camp for K-12 and university students as well as cultural tours for middle age and senior travelers, for culture travel, Chinese study tour, global study tour and camp education products continue to deliver meaningful value to customers through knowledge generation, personal growth and deep cultural [ emissions ]. Our student programs now operate in about 55 cities nationwide with the top 10 cities generates over 50% of the segment revenue. And our premium adult tourism offerings span around 30 provinces domestically and select international destinations. We're also expanding into senior health and wellness tourism with an asset-light model, forging partnerships with over 45 wellness facilities across key destinations, including Hainan, Yunnan and Guanxi. With our OMO teaching platform, we have continued to invest in revamping and upgrading the system. During this quarter, we invested $31.2 million to improve and maintain our OMO platform, which enable us to provide and interrupt high-quality instructions to students that cater to their individual learning needs. Beyond upgrading the OMO system, we continue to embed AI across our ecosystem, including driving product innovation and transforming our internal operations to enhance capabilities, improve efficiency and provide greater support to our staff. In terms of the product innovation, we are proud to share that our proprietary AI-powered personalized learning platform has successfully completed the first phase of deployment, achieving meaningful sales with just 25 days of inauguration. Unlike a general proposed large language model, our AI platform is built on a highly specialized vertical learning system, proposedly designed to reflect rooted assets of New Oriental. This encouraging initial performance is a validation of the platform's market traction and product market fit. We look forward to propelling the development of the AI-driven products and solutions to further broaden our operational excellence and market impact. Turning to the East Buy's fiscal year 2026 performance. East Buy remains firmly committed to the 3 high product standards, high safety standards, high product quality and high cost performance while delivering attentive customer service for families. On the platform front, East Buy made significant strides in its multi-platform live streaming strategy on Douyin, launching 11 new vertical live streaming accounts and expanding its channel matrix to 18 channels in total. East Buy also launched a suite of the innovative operational programs, including streamer recruitment campaigns and annual suppliers that has proven effective to strengthen internal operational teams, deepen long-term strategic partnerships with suppliers and elevate the customer engagement. Charting the new course in fiscal year 2027, East Buy will accelerate its expansion of its private label portfolio across food and daily necessities, scale up product R&D and quality control to uphold 3 high standards and advance its app membership ecosystem. By leveraging New Oriental's extensive nationwide network, East Buy will further expand its offline experience footprint to engage a broader customer base, collectively optimizing operational efficiency, its supply chain network and laying a solid foundation for sustainable long-term growth. Now I would like to share the latest updates of an exciting new strategic initiative that we have been piloting since the last quarter. New Oriental Home, a platform designed to serve the entire family unit from children to parents to seniors through a full life cycle, full spectrum approach. New Oriental Home assembled our education service, East Buy offerings and cultural tourism products into one unified ecosystem in a single app. Families can conveniently access, manage and redeem service tailored to each member, enable seamless cross-category engagement and deeper household level relationships. The platform has demonstrated strong early traction with scenario-based marketing and integrated service anchoring solid user activation, retention and acquisition. Notably, we have seen retention for Grade 7 students increased by 10 basis points from summer to autumn this year. Customers find the earn and redeem experience rewarding and are engaged to explore a broader range of the offerings within our ecosystem, thereby lowering our cost of spend on customer acquisition as well. This integrated loyalty framework has been particularly effective as it's not only strengthen retention, but also transform customer engagement into actionable data, enabling us to create incentives for our customers and staff. At the same time, the leverage synergies New Oriental Home generated across all business lines, including East Buy, combined with highly personalized offerings have overall accelerated cross-selling, improved conversion efficiency and optimized overall operating cost. We have launched this pilot program in 69 cities as test beds, including Hangzhou, Suzhou, Xi'an and [indiscernible] with over 950,000 registered families by the end of this quarter. The platform has achieved cumulative activity participation rates of around 70% and the latest campaign activation rate is 23%, significantly outperforming many public domain e-commerce platforms. These results affirm the high reach and precision advantage of our education-focused private domain ecosystem, and we look forward to build on the promising momentum in the quarter ahead. Now I will turn the call over to Sisi to share with you about the key financials. Sisi, please go ahead. Sisi Zhao: Okay. Thank you, Stephen. Let me now walk you through the key financial highlights for the quarter. Operating costs and expenses for the quarter were $1,443.7 million, representing a 15.3% increase year-over-year. Cost of revenues increased by 25.9% year-over-year to $717.3 million. Selling and marketing expense increased by 23.9% year-over-year to $262.5 million. G&A expenses for the quarter increased by 13.2% year-over-year to $463.9 million. Impairment of goodwill was nil compared to $60.3 million in the same period of the prior fiscal year. Total share-based compensation expenses, which were allocated to related operating costs and expenses, decreased by 20.7% to $22.7 million in this quarter. Operating income was $85.8 million compared to an operating loss of $8.7 million in the prior-year period. Non-GAAP income from operations for the quarter, excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisition and impairment of goodwill was $110 million, representing a 34.7% increase year-over-year. Net income attributable to New Oriental for the quarter was $62.2 million, representing a 775.8% increase year-over-year. Basic and diluted net income per ADS attributable to New Oriental were $0.40 and $0.39, respectively. Non-GAAP net income attributable to New Oriental for the quarter was $87.8 million, representing a decrease of 10.5% year-over-year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were $0.56 and $0.55, respectively. Net cash inflow generated from operations for the fourth quarter of 2026 was approximately $518.7 million and capital expenditure for the quarter were $99 million. Turning to the balance sheet. As of May 31, 2026, New Oriental had cash and cash equivalents of $1,821.2 million. In addition, the company had $1,366.8 million in term deposits and $2,372.3 million in short-term investments. New Oriental's deferred revenue, which represents cash collected upfront from customers and related revenue that will be recognized as the services or goods are delivered at the end of the fourth quarter of fiscal year 2026 was $2,242.9 million, an increase of 14.8% as compared to $1,954.5 million year-over-year. Now I'll hand over to Stephen to go through our outlook and guidance. Zhihui Yang: Thank you, Sisi. The healthy results we have delivered in fiscal year 2026 have given us both the fuel and conviction to pursue resilience, sustainable growth and ever-improving service in the year ahead. Approaching summer vacation, we're particularly confident in sustaining momentum for the coming first quarter of fiscal year 2027, with expectations that improving enrollment trends will drive an accelerated revenue growth and the higher overall operational efficiency will bolster our optimism in growing our margins. We will continue to strategically expand capacity and talent, deepening our presence in markets with proven top and bottom line performance while maintaining rigorous resource allocation. Expansion decision will be carefully calibrated throughout the year, guided by the operational readiness and financial results. Alongside our pursuit of new creative initiatives, sustainable profitability and cost discipline remain cornerstones of our business. In the coming quarter, we expect meaningful cost improvement to emerge from the restructuring of our overseas business, which will pave the way for the greater operational efficiency and stronger margin profile in the new year. Looking ahead, we enter fiscal year 2027 with deep confidence in our core education business and new initiatives driven by a genuine passion to create lasting value. We will continue to drive sustainable and healthy growth through product enhancements and quality improvement while further optimizing cost structure and to enhance efficiency and profitability. Our focus remains on long-term value creation, offering investors a clearer view of our strategic trajectory and durable growth we're building for the future. Considering the positive momentum and cost management measures across our business line, we expect total net revenue for the Group in fiscal year 2027 to be in the range of $6,453.9 million to $6,680.3 million, representing a year-over-year increase in the range of 14% to 18%. These expectations reflect our current outlook based on the recent regulatory development and prevailing market conditions, both of which remain subject to change. Additionally, we announced a share repurchase program under which New Oriental is authorized to purchase -- to repurchase up to $300 million of its ADS or common shares over the subsequent 12 months. As of July 28, 2026, yesterday, we had repurchased a total of approximately 51.5 million common shares, including common shares represented by ADS for aggregate consideration of the approximately $274 million from the open market and the share repurchase program. We expect to roll out the share repurchase program for the remainder of the duration in accordance with its terms. Furthermore, to implement our 3-year shareholder return plan adopted in July 2025 for fiscal year 2027, the Board of the Directors of the company has approved an ordinary cash dividend and a new share repurchase program with the total amount of the capital return for the fiscal year 2027 is expected to be approximately $500 million. I would like to go through details in the following. The aggregate amount of the cash dividend for the fiscal year 2027 is expected to approximately $300 million to be paid in 2 installments in December 2026 and June 2027, respectively. Further details regarding the cash dividend program will be decided by the Board of Directors and announced by the company in due course. Pursuant to the share repurchase program for fiscal year 2027, the company may repurchase up to $200 million of its ADS or common shares over the subsequent 12 months following the Board approval. The company's proposed repurchase may be made from time-to-time in the open market at prevailing market price in privately negotiated transactions in block trades and/or through other legally permissible means, depending on market conditions and in accordance with the applicable rules and regulations. The Board of Directors of the company will review this share repurchase program periodically and may authorize adjustment of term and size. The company expects to fund the repurchase out of its existing cash balance. To conclude, New Oriental is steadfastly committed to driving sustainable growth, promising exceptional value to our customers and shareholders and generating long-term returns to our shareholders. We continue to collaborate closely with government authorities across province and municipalities in China, ensuring full compliance with the relevant policies and regulations while adapting our operations responsibly to meet evolving requirements. This is the end of our fiscal year 2026 Q4 summary. At this point, I would like to open the floor for questions. Operator, please open the call for these. Operator: [Operator Instructions] We will now take our first question from the line of Elsie Sheng from CLSA. Yiran Sheng: Congratulations on the very strong results. And it seems the guidance on the 2027 financial year is also higher than expectation. So my question is, can you help us break down the financial year '27 guidance into quarters, especially the trend that you expect in the first quarter of the financial year '27 in terms of revenues and margin? Zhihui Yang: Okay. Thank you. Yes. As you know, I think our strategy in fiscal year 2026 is to enhance the product and service quality. And I think we have seen the good results. The better quality drives the student retention rate up and the Q4 marks another quarter with solid results. And so given the positive momentum, I think including the healthy growth of our K-12 business and the recovery of the East Buy, I think we are now in a more optimistic position regarding our business outlook in fiscal year 2027. So we gave the guidance of the annual guidance in fiscal year 2027 in the range of 14% to 18%. I must mention that, as always, we're still conservative to give the annual guidance. We do expect to beat our annual guidance in fiscal year '27. And from this year, we are making a change to give the guidance on an annual basis. I think it's more -- I think we believe this change better reflects our long-term strategic focus and encourage the investors to evaluate our business performance over a longer term than -- rather than the quarter-to-quarter. And I believe you still interested in the Q1 forecast. And I must say that we are quite confident in sustaining our momentum for the coming first quarter of fiscal year 2027. You saw our deferred revenue at Q4 end was increased by roughly 15%. So I think that's a good sign of the coming quarter of the revenue growth. And we expect the improving summer enrollment trends that we have seen will drive accelerated revenue growth of the education business and the higher operational efficiency. And also, I do believe the East Buy will -- the revenue will be accelerated in Q1. So East Buy will contribute more profit and revenue to the group. And so the -- yes, repeat again, we're quite optimistic about the Q1 performance. Your question is about the margin as well. The margin, we got the margin expansion in Q4 in this quarter, even though we need some margin drag from the overseas-related business and the one-off expenses, roughly $10 million to $15 million from our internal management restructuring in this quarter, but we still getting good margin expansion by 60 basis points up in this quarter. And the -- as for the margin outlook for the next year, fiscal year 2027, I think we'll continue to focus on profitability across all business lines. We'll keep doing the cost control, and we will -- I think we will improve the operational efficiency and to bring more operating leverage in the coming year. So we expect the margin will be expanded in the coming year. And the Q1 margin outlook, I think we're quite confident on the margin expansion in the coming Q1. Operator: We will now take our next question from the line of Jenny Yuan from UBS. Yicheng Yuan: Congrats on the strong quarter results. So my question regarding our revenue outlook, specifically for our K-12 business. So [indiscernible] service acceleration in the fourth quarter, how should we project the revenue growth outlook for the upcoming first quarter and next fiscal year 2027? Zhihui Yang: Yes, we -- I think we had a strong year of the K-12 business growth in fiscal year '26. And as for the guidance of the K-12 business in the new year, I think we -- I would like to guide the K-12 business in total, the K-9 and high school in total, roughly will be expected to increase roughly close to 20%, or around 20% year-over-year. And because I think this enrollment growth trend is good. And also, I think the Q1 revenue growth will be stronger. So this is my guidance of the K-12 business. And don't forget, I think the K-12 business will bring us the higher margin in the coming new year. Operator: We will now take our next question. And the next question comes from Alice Cai from Citi. Alice Cai: Congratulations on the solid and strong result. My question is about the capacity expansion in FY '27 because you've talked about discipline on capacity expansion in FY '26, and that's been part of the margin story. So what -- wondering what's the plan for FY '27? And where is the utilization running now? And also, I have another question about the compliance because we've seen some reports about inspection and individual learning centers. Wondering if there is any risk we should be aware of? Zhihui Yang: Okay. Yes. Thank you, Alice. We -- in fiscal year '26, we added 13% new capacity in total. I think it's based on the expansion control, and we -- I think we did well in the last year. And in the coming new year, we plan to open 10% to 15% new capacity. I think most of the new openings will be in the performance with the top performance of the bottom line and top line in the last year. I think we're happy to see the student retention rate improvement, which will drive the utilization rate up in the existing learning centers. And I think we're quite optimistic on the OMO or some online business development. And so that means we don't need to open too many learning centers in the coming new year. So in one word, I think the top line growth in the coming new year will be higher than the learning center expansion. So it will drive the average utilization rate up again in the coming new year. Your second question is about the regulation. I think, yes, anyway, I think the -- we obey the rules, the policy requirements, I think it's fine because in the last 4, 5 years, we passed all the requirements of the government. I think going forward, my personal view is on the regulation side, I think for me, it's neutral to positive on the regulatory environment. Operator: We will now take our next question. And our next question comes from Timothy Zhao from Goldman Sachs. Timothy Zhao: Congrats on the very solid results. I think my question is regarding the overseas test prep and consulting business. Just wondering if you can give us an update on what you are seeing on the ground and what you have seen from the summer vacation period in terms of the overseas test prep growth? And how do you think about the growth trajectory for this year for this specific segment? And I believe last year, you did a segment merger or integration between the 2 separate business. Just wondering -- wonder if you can give us our -- some margin outlook for this business line? What was the operating margin or contribution margin for the overseas business really last year? And what is your expectation for this year? Zhihui Yang: Thank you, Tim. Your question is about the overseas-related business. I think, yes, everybody knows due to the impact of the economic environment and the international situation, our overseas-related business need some growth pressure in last year. But I think we have shown the resilience in last year. And we believe that we were taking -- I think we are taking the market share, as I said, as always. And so in the coming new year, we expect our overseas-related business will be flattish or low single-digit growth in the coming new year. And I think the Q1 -- roughly the Q1, we -- I think we still believe that we can get some low single-digit growth of the overseas-related business. Yes, we merged the overseas test prep business and the consulting business in Q3 last year. I think the reason that we put it together is to restructure the 2 different management team and to provide the customers one-stop service and to enhance the cost control, reduce some cost and expenses. And roughly the margin of the overseas-related business last year is roughly 15% roughly last year. Sisi Zhao: Including both test prep and consulting. Zhihui Yang: Yes, we put it together. And in the coming year, we believe the margin will be expanded for the overseas-related business because of the cost control, because of the merge of the restructuring, the new team. So yes, we -- I think we have done a lot of jobs, and we will keep doing the cost control in the coming new year. It will drive the margin up of the overseas-related business in the coming new year. Operator: We will now take our next question from the line of Lucy Yu from Bank of America Securities. Lucy Yu: I have a question on the sales and marketing distribution expense in the last quarter. It was up a bit both on a Q-on-Q and Y-o-Y basis. Could you elaborate why is that? And how should we think about the selling and distribution expense in FY '27, especially we have the Oriental Home in place? Zhihui Yang: I think in Q4, the East Buy spend a little bit more money on the marketing that -- it drive the revenue growth up a lot. And so in the coming new year, I do believe the selling and marketing expenses as a percentage of the revenue for the whole group will be down. So it will drive the margin up in the coming new year, Lucy. Lucy Yu: And maybe one more. So for the fourth quarter non-GAAP operating margin expansion, if we excluding East Buy, how about the rest of the education? Is it like flattish or expand as well? Zhihui Yang: If we take out the East Buy's contribution of the Q4, the margin contribution from the East Buy, I think our education business margin roughly flattish. But don't forget, we take the one-off expenses of the restructuring merge of the overseas-related business in Q4. So roughly, we recorded $10 million to $15 million as a one-off expenses in Q4. So if you add it back, the margin is up of the core business, Lucy. Operator: We will now take our next question from the line of D. S. Kim from JPMorgan. D. S. Kim: Thanks for another strong [ dividend ] rate. I think this is now third time in a row. I have a very quick 2 questions, if okay. First, you just mentioned about the cost optimization initiative. And can I ask if this is already done behind us or shall we expect, I don't know, like $5 million, $10 million or some more of this one-off in first quarter? And more importantly, can we try to quantify roughly how much fixed cost savings can we enjoy in 2027 from this? And I have one small follow-up. Zhihui Yang: Thank you D. S. Your question is about the cost control. We started to do the cost control since March last year. And I think we did a great job in the whole year, fiscal year '26. Roughly, we saved $100 million roughly in fiscal year '26. So now we're closely to the end of the Phase 1, cost control Phase 1. So we're [ steady ] into the Phase 2. As I said, in the cost control Phase 2, we will do more like the restructuring of the management teams to do more cost control. And we will use more AI to save the legacy staff cost or extra. So I think in the coming year, we expect the cost control can save more amount than that of last year. So this is our target. D. S. Kim: That's very helpful. Second, a small question. Can I ask, I saw we spent $250 million CapEx, capital expenditure last year. And can I check if we have a budget for 2027? Zhihui Yang: Yes. The CapEx, yes, last year, roughly $250 million. In the coming new year, roughly $250 million to $300 million as the new capacity or some -- the CapEx on the learning path model or some others. So roughly $250 million to $300 million. D. S. Kim: Got it. Just on that, I mean, not to pick on this, but last year, I think our new opening like absolute number of stores were down 40% from a year ago. I think we opened like 170 stores. The year before it was like 270, yet CapEx was flat. And this coming year, CapEx to go up. Is that the delta, the gap because of East Buy? Can I understand that way or if you could comment on that, is it related to new initiative of the East Buy offline store or anything else I'm missing? Zhihui Yang: East Buy is offline store, the CapEx is very tiny. It's very, very, very small number. And I think the -- yes, as I said -- last year, we opened 13% new capacity in terms of the square meters. And in the coming new year, we plan to open 10% to 15% new capacity. And we believe the new capacity growth or new capacity numbers will be lower than the top line growth. So that means it will drive the utilization rate up. And your question about the CapEx, yes, we're building up the new headquarters in [ Chongqing ] and it cost a little bit more money. So the CapEx in the new year will be a little bit more higher than that of last year. D. S. Kim: That makes a lot of sense. Yes, that makes a lot of sense. Operator: We will now go to our next question. And our next question comes from Yikun Zheng from CITIC. Yikun Zheng: Congrats on the strong results. My question is about the competition. Well, last year, the competition in summer season is quite strong. So how do you think of the competition for this summer? And considering the impact of the decline in population and the competition, can we have a 3-year outlook for the K-12 business? Zhihui Yang: The competition, I think in this summer, I think the competition is less than that of last year. I remember in last year's summer, the competition situation. And this year, I think it's better. And so that's why we can give the Q1 guidance higher revenue acceleration in the coming Q1. And so the K-12 business in the coming Q1 and even the whole new year will be accelerated than that of last year. And as for the population, I think, yes, it's an issue. But I think the parents will choose the education company for their kids will be more healthy. And I think the parents love to give their kids the best education in the coming new like 3 or 5 years. And so that means the big players will take more market share from the market. So this is in my opinion based on the current estimation. Operator: [Operator Instructions] We will now take our next question. And the next question comes from Jing Yuan from CICC. Jing Yuan: My question is about the AI adoption, like with the rapid development of AI technology and could management share how the company is leveraging AI in its teaching and learning process? And do you see AI primarily as a tool to transform the teaching model or like a way to improve operational efficiency? Sisi Zhao: Yes. Actually, as for the AI, we have been devoting a lot of efforts and resources into implementing the AI technology into education sector. And in total, for 3 aspects. One is that for all the existing educational products, we are implementing AI technology to enhance the product quality and also enhance the student learning experience. For example, like we embedded AI new functions into our learning device business and also even in class we use the AI tools to help students to improve the teaching and learning efficiency and the learning experience. And also after school, they can use the AI new tools to enhance the learning efficiency. So all these are differentiating us much more than before, more differentiating from all the other competitors because we have enough capital and also we have the technology and all the -- and also the teaching knowledge to use the AI technology to make our products better. So this is one aspect. And the other thing is that we are using AI is even more exciting is that we are piloting a lot of new AI new products. It's not only products, but as we announced this quarter that we have a new platform launched recently. And to use the AI technology and also using our teaching and learning experience and all the teaching and learning settings that we have all these combined together to come up with some new solution. So it's based on the -- to help students how to learn and how to use our teaching knowledge and using all the new AI tools to have some new products. So this is something that we are piloting and still in early stage, but we believe that the platform will be more and more better in the future. And also, we have a series of new products coming. So that's some exciting ones. And also third thing that we are doing is using our -- using the AI technology to improve the working efficiency so that we can save more labor cost. For all functions, like all the teachers and also our teacher assistants and from the -- for all aspects of their working process, we can use AI tools to help them to improve the efficiency so that we don't need to hire as much as new staff -- as many as new staff as before so that we can handle more work than before. So the HR cost can be saved more and efficiency can be improved and also a function of supporting staff as well. So that's all the things that we are using AI to do. And I think in total, we are more differentiating and have more advantage than other competitors in terms of using AI. Yes. So we have the good solution and also can have the AI technology used more and more, better and better in the education sector. Jing Yuan: Thank you. That's very comprehensive. Operator: We are now approaching the end of the conference call. I'll now turn the call over to New Oriental's Executive President and CFO, Stephen Yang, for his closing remarks. Zhihui Yang: Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you very much. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect your lines. Before you buy stock in New Oriental Education & Technology Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and New Oriental Education & Technology Group wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. New Oriental Education & Technology Group (EDU) is back in focus after releasing fourth quarter and full year results, issuing revenue guidance for fiscal 2027, and outlining fresh shareholder return plans. See our latest analysis for New Oriental Education & Technology Group. The latest earnings, new revenue guidance and fresh shareholder return plans from New Oriental Education & Technology Group have coincided with strong recent momentum, with a 1 month share price return of 26.8% and a 1 year total shareholder return of 35.0% supporting a much larger 5 year total shareholder return of 188.0% from a last close of $58.58. If the recent move in New Oriental Education & Technology Group has you thinking about what else is attracting attention, this could be a good moment to uncover 18 top founder-led companies After that sharp move and with a richer mix of dividends and buybacks on the table, the question now is whether New Oriental Education & Technology Group still offers an appealing balance of risk and reward at around $58.58. Against the last close of $58.58, the most followed narrative for New Oriental Education & Technology Group pegs fair value at $70.80, using a 7.75% discount rate and detailed long term earnings assumptions. Read the complete narrative. Want to understand why this narrative points to a higher fair value than today’s price. It leans heavily on compounding revenue, fatter margins, and a richer future earnings multiple. Curious which specific growth path and profitability mix sit behind that story. Result: Fair Value of $70.80 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, New Oriental Education & Technology Group still faces pressure from tighter regulation in some segments, as well as tougher competition that could challenge margins and growth expectations. Find out about the key risks to this New Oriental Education & Technology Group narrative. The first narrative points to New Oriental Education & Technology Group trading below a modeled fair value. Yet on a simple P/E basis the stock looks expensive at 22.2x compared with 17.2x for the US Consumer Services industry, 16x for peers, and a fair ratio of 19.9x. That kind of premium can mean the market is already baking in a lot of good news. The key question is whether you think New Oriental’s future justifies paying more than both its peers and its own fair ratio. See what the numbers say about this price — find out in our valuation breakdown. If this mix of optimism and caution around New Oriental Education & Technology Group resonates with you, now is a good time to review the data yourself and form an independent view. To see which potential upsides analysts are watching most closely, start with the 4 key rewards. If New Oriental Education & Technology Group has sharpened your focus, do not stop here. Use this momentum to broaden your watchlist with other carefully filtered opportunities. Target high yield potential by scanning for companies that meet your income goals through the 9 dividend fortresses. Hunt for quality at a reasonable price by reviewing companies highlighted in the screener containing 21 high quality undiscovered gems. Prioritize resilience by focusing on companies surfaced by the 85 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include EDU. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

BEIJING, July 29, 2026 /PRNewswire/ -- New Oriental Education & Technology Group Inc. (the "Company" or "New Oriental") (NYSE: EDU/ 9901.SEHK), a provider of private educational services in China, today announced its unaudited financial results for the fourth fiscal quarter and fiscal year ended May 31, 2026. Financial Highlights for the Fourth Fiscal Quarter Ended May 31, 2026 Total net revenues increased by 23.0% year over year to US$1,529.5 million for the fourth fiscal quarter of 2026. Operating income increased to US$85.8 million for the fourth fiscal quarter of 2026, compared to an operating loss of US$8.7 million in the prior-year period. Net income attributable to New Oriental increased by 775.8% year over year to US$62.2 million for the fourth fiscal quarter of 2026. Key Financial Results Operating Highlights for the Fourth Fiscal Quarter Ended May 31, 2026 Michael Yu, New Oriental's Executive Chairman, commented, "We are pleased to conclude the final quarter of fiscal year 2026 on a strong note, with continued healthy top line growth of 23.0%. Revenues from overseas test preparation and consulting business increased by approximately 3.6%. In addition, our domestic test preparation business targeting adults and university students grew by approximately 29.1% year over year. Our new educational business initiatives also gained meaningful traction, growing approximately 24.8% year over year. This quarter, our non-academic tutoring courses reached around 60 cities, attracting approximately 1,072,000 student enrollments, and our intelligent learning system and devices were adopted across around 60 cities, with approximately 326,000 active paid users. These results reflect the soundness of our core education strategy and our unwavering commitment to elevating teaching standards and product quality. The consistent growth we have achieved validates our long-term approach and demonstrates its capacity to generate sustainable value. Alongside our growth momentum, we have made significant strides in cost optimization and operational efficiency, advancing these initiatives into a new phase. Our newly established New Oriental Home – a comprehensive customer service platform integrated across all departments – has already served over 950,000 families across 69 cities by the end of this quarter. This infrastructure is designed to deepen customer loyalty and retention, unlock cross-selling potential, and maximize customer lifetime value, all while reducing customer acquisition and marketing costs. We remain steadfast in our commitment to strengthening our brand and delivering lasting value to both our customers and shareholders." Chenggang Zhou, New Oriental's Chief Executive Officer, added, "This fiscal quarter, we continued to execute our strategy of disciplined capacity expansion – one that over the full year has demonstrated remarkable effectiveness in balancing revenue growth with operational efficiency. Equally important, AI has become a central organizational priority, and we have advanced its adoption with clear execution and measurable progress. We further enhanced our OMO teaching system and deepened AI integration across our education ecosystem – embedding AI into existing offerings, refining AI‑powered products, and deploying AI to boost operational efficiency and support for our teaching staff. Together, these efforts position us well for sustained long-term competitive advantage. For FY2026, East Buy continued to offer products under its "Three Highs" standards – safety, quality, and cost performance – backed by reliable service. It launched 11 new Douyin vertical accounts, expanding its channel matrix to 18, with coverage spanning food, fresh produce, nutrition, and more niche categories. It also upgraded its live streaming system and introduced talent recruitment initiatives, supplier summits, and user feedback mechanisms to strengthen its ecosystem. Looking ahead to FY2027, East Buy will expand offline experience stores via New Oriental's learning centers, accelerate private label development, refine membership operations, and improve supply chain efficiency – all in service of driving sustainable long-term growth." Stephen Zhihui Yang, New Oriental's Executive President and Chief Financial Officer, commented, "Despite one-time costs and expenses arising from our internal management restructuring this quarter, we still delivered year over year expansion in Non-GAAP operating margin. This achievement was primarily driven by enhanced operational efficiency, improved utilization within our educational business, and the solid top- and bottom-line performance of East Buy. For the quarter, Non-GAAP operating margin reached 7.2%, up by 60 basis points compared to the same period last fiscal year. For the full fiscal year 2026, Non-GAAP operating margin expanded by 170 basis points, from 11.3% to 13.0%. Looking ahead, we will continue to execute our cost and efficiency initiatives across key business lines in the coming new fiscal year. Building on the structural optimizations already in place, we aim to steadily reduce fixed costs, drive further operational efficiencies, and reinforce the foundation for sustainable, profitable growth." Update on Shareholder Return for the Fiscal Year 2026 In October 2025, the Company announced that, pursuant to its previously adopted three-year shareholder return plan, the board of directors had approved an ordinary dividend of US$0.12 per common share, or US$1.20 per ADS, to be distributed in two installments as part of the shareholder return for the fiscal year 2026. The first and second installments have been fully paid to shareholders and ADS holders. Additionally, as part of the shareholder return for the fiscal year 2026, the Company also announced in October 2025 a share repurchase program, under which the Company is authorized to repurchase up to US$300 million of its ADSs or common shares over the subsequent 12 months. As of July 28, 2026, the Company had repurchased a total of approximately 51.5 million common shares (including common shares represented by ADSs) for an aggregate consideration of approximately US$274.0 million from the open market under this share repurchase program. The Company expects to continue to carry out this share repurchase program for the remainder of its duration in accordance with its terms. Shareholder Return for the Fiscal Year 2027 To implement its three-year shareholder return plan adopted in July 2025 for the fiscal year 2027, the board of directors of the Company has approved an ordinary cash dividend and a new share repurchase program. The aggregate amount of the cash dividend for the fiscal year 2027 is expected to be approximately US$300 million, to be paid in two installments in December 2026 and June 2027, respectively. Further details regarding the cash dividend will be decided by the board of directors and announced by the Company in due course. Pursuant to the share repurchase program for the fiscal year 2027, the Company may repurchase up to US$200 million of its ADSs or common shares over the subsequent 12 months following the board approval. The Company's proposed repurchases may be made from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The board of directors of the Company will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The Company expects to fund the repurchases out of its existing cash balance. Financial Results for the Fourth Fiscal Quarter Ended May 31, 2026 Net Revenues For the fourth fiscal quarter of 2026, New Oriental reported net revenues of US$1,529.5 million, representing a 23.0% increase year over year. The growth was mainly driven by the increase in net revenues from the Company's new educational business initiatives. Operating Costs and Expenses Operating costs and expenses for the quarter were US$1,443.7 million, representing a 15.3 % increase year over year. Cost of revenues increased by 25.9% year over year to US$717.3 million. Selling and marketing expenses increased by 23.9% year over year to US$262.5 million. General and administrative expenses increased by 13.2% year over year to US$463.9 million. Impairment of goodwill was nil, compared to US$60.3 million in the same period of the prior fiscal year. Total share-based compensation expenses, which were allocated to related operating costs and expenses, decreased by 20.7% to US$22.7 million in the fourth fiscal quarter of 2026. Operating Income / Loss and Operating Margin Operating income increased to US$85.8 million for the fourth fiscal quarter of 2026, compared to an operating loss of US$8.7 million in the prior-year period. Non-GAAP income from operations for the quarter, excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions and impairment of goodwill, was US$110.0 million, representing a 34.7% increase year over year. Operating margin for the quarter was 5.6%, compared to negative 0.7% in the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses, amortization of intangible assets resulting from business acquisitions and impairment of goodwill, for the quarter was 7.2%, compared to 6.6% in the same period of the prior fiscal year. Net Income and Net Income per ADS Net income attributable to New Oriental for the quarter was US$62.2 million, representing a 775.8% increase year over year. Basic and diluted net income per ADS attributable to New Oriental were US$0.40 and US$0.39, respectively. Non-GAAP Net Income and Non-GAAP Net Income per ADS Non-GAAP net income attributable to New Oriental for the quarter, excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, (gain)/loss from fair value change of investments, loss/(gain) from equity method investments, impairment of long-term investments, impairment of goodwill, loss/(gain) on disposals of investments and others, as well as tax effects on non-GAAP adjustments, was US$87.8 million, representing a 10.5% decrease year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were US$0.56 and US$0.55, respectively. Cash Flow Net operating cash inflow for the fourth fiscal quarter of 2026 was approximately US$518.7 million and capital expenditures for the quarter were US$99.0 million. Balance Sheet As of May 31, 2026, New Oriental had cash and cash equivalents of US$1,821.2 million. In addition, the Company had US$1,366.8 million in term deposits and US$2,372.3 million in short-term investments. New Oriental's deferred revenue, which represents cash collected upfront from customers and related revenue that will be recognized as the services or goods are delivered, at the end of the fourth quarter of fiscal year 2026 was US$2,242.9 million, an increase of 14.8% as compared to US$1,954.5 million at the end of the fourth quarter of fiscal year 2025. Financial Results for the Fiscal Year Ended May 31, 2026 For the fiscal year 2026 ended May 31, 2026, New Oriental reported net revenues of US$5,661.3 million, representing a 15.5% increase year over year. Operating income was US$643.3 million, representing a 50.2% increase year over year. Non-GAAP operating income, excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions and impairment of goodwill, for the fiscal year 2026 was US$737.6 million, representing a 33.1% increase year over year. Operating margin for the fiscal year 2026 was 11.4%, compared to 8.7% for the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses, amortization of intangible assets resulting from business acquisitions and impairment of goodwill, for the fiscal year 2026, was 13.0%, compared to 11.3% for the same period of the prior fiscal year. Net income attributable to New Oriental for the fiscal year 2026 was US$475.2 million, representing a 27.8% increase year over year. Basic and diluted net income per ADS attributable to New Oriental for the fiscal year 2026 amounted to US$3.01 and US$2.97, respectively. Non-GAAP net income attributable to New Oriental, excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, (gain) /loss from fair value change of investments, loss from equity method investments, impairment of long-term investments, impairment of goodwill, gain on disposals of investments and others, as well as tax effects on non-GAAP adjustments, for the fiscal year 2026 was US$571.1 million, representing a 10.5% increase year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental for the fiscal year 2026 amounted to US$3.62 and US$3.57, respectively. Outlook for the Full Year of FY2027 New Oriental expects total net revenues in the fiscal year 2027 (June 1, 2026 to May 31, 2027) to be in the range of US$6,453.9 million to US$6,680.3 million, representing a year over year increase in the range of 14% to 18%. This forecast reflects New Oriental's current and preliminary view, which is subject to change. The forecast is based on the current USD/RMB exchange rate, which is also subject to change. Conference Call Information New Oriental's management will host an earnings conference call at 8 AM on July 29, 2026, U.S. Eastern Time (8 PM on July 29, 2026, Beijing/Hong Kong Time). Please register in advance of the conference, using the link provided below. Upon registering, you will be provided with participant dial-in numbers, and unique personal PIN. Conference call registration link: https://register-conf.media-server.com/register/BIffe9352b170044a4b248e41d134aed08. It will automatically direct you to the registration page of "New Oriental FY2026 Q4 Earnings Conference Call" where you may fill in your details for RSVP. In the 10 minutes prior to the call start time, you may use the conference access information (including dial in number(s) and personal PIN) provided in the confirmation email received at the point of registering. Joining the conference call via a live webcast: Additionally, a live and archived webcast of the conference call will be available at http://investor.neworiental.org. Listening to the conference call replay: A replay of the conference call may be accessed via the webcast on-demand by registering at https://edge.media-server.com/mmc/p/pdsxxtdn first. The replay will be available until July 29, 2027. About New Oriental New Oriental is a provider of private educational services in China offering a wide range of educational programs, services and products to a varied student population throughout China. New Oriental's program, service and product offerings mainly consist of educational services and test preparation courses, private label products and livestreaming e-commerce, overseas study consulting services, and educational materials and distribution. New Oriental is listed on NYSE (NYSE: EDU) and SEHK (9901.SEHK), respectively. New Oriental's ADSs, each of which represents ten common shares, are listed and traded on the NYSE. The Hong Kong-listed shares are fully fungible with the ADSs listed on NYSE. For more information about New Oriental, please visit http://www.neworiental.org/english/. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the outlook for the full year of fiscal year 2027, quotations from management in this announcement, as well as New Oriental's strategic and operational plans, contain forward-looking statements. New Oriental may also make written or oral forward-looking statements in its reports filed or furnished to the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about New Oriental's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's ability to effectively and efficiently manage changes of its existing business and new business; its ability to execute its business strategies; uncertainties in relation to the interpretation and implementation of or proposed changes to, the PRC laws, regulations and policies regarding the private education industry; its ability to attract students without a significant decrease in course fees; its ability to maintain and enhance its "New Oriental" brand; its ability to maintain consistent teaching quality throughout its school network, or service quality throughout its brand; its ability to achieve the benefits it expects from recent and future acquisitions; the outcome of ongoing, or any future, litigation or arbitration, including those relating to copyright and other intellectual property rights; competition in the private education sector and livestreaming e-commerce business in China; the continuing efforts of its senior management team and other key personnel, health epidemics and other outbreaks in China; and general economic conditions in China. Further information regarding these and other risks is included in its annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. New Oriental does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of this press release, and New Oriental undertakes no duty to update such information, except as required under applicable law. About Non-GAAP Financial Measures To supplement New Oriental's consolidated financial results presented in accordance with GAAP, New Oriental uses the following measures defined as non-GAAP financial measures by the SEC: net income excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, (gain)/loss from fair value change of investments, loss/(gain) from equity method investments, impairment of long-term investments and goodwill, loss/(gain) on disposals of investments and others, as well as tax effects on non-GAAP adjustments; operating income excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, and impairment of goodwill; operating margin excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, and impairment of goodwill; and basic and diluted net income per ADS and per share excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, loss/(gain) from fair value change of investments, loss/(gain) from equity method investments, impairment of long-term investments and goodwill, loss/(gain) on disposals of investments and others, as well as tax effects on non-GAAP adjustments. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this release. New Oriental believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding from each non-GAAP measure certain items that may not be indicative of its operating performance from a cash perspective. New Oriental believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to New Oriental's historical performance and liquidity. New Oriental believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP measures is that they exclude from each non-GAAP measure certain items that have been and will continue to be for the foreseeable future a significant recurring expense in its business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures. Contacts View original content:https://www.prnewswire.com/news-releases/new-oriental-announces-results-for-the-fourth-fiscal-quarter-and-the-fiscal-year-ended-may-31-2026-302837593.html

This article first appeared on GuruFocus. Total Net Revenue: $1,529.5 million, a 23% year-over-year increase. Non-GAAP Operating Income: $110 million, a 34.7% year-over-year increase. Operating Income: $85.8 million, compared to an operating loss of $8.7 million in the prior year period. Net Income: $62.2 million, a 775.8% year-over-year increase. Non-GAAP Net Income: $87.8 million, a 10.5% year-over-year decrease. Operating Costs and Expenses: $1,443.7 million, a 15.3% year-over-year increase. Cost of Revenues: $717.3 million, a 25.9% year-over-year increase. Selling and Marketing Expense: $262.5 million, a 23.9% year-over-year increase. G&A Expenses: $463.9 million, a 13.2% year-over-year increase. Net Cash Inflow from Operations: $518.7 million for the fourth quarter. Capital Expenditure: $99 million for the quarter. Cash and Cash Equivalents: $1,821.2 million as of May 31, 2026. Deferred Revenue: $2,242.9 million, a 14.8% year-over-year increase. Warning! GuruFocus has detected 7 Warning Signs with SLVYY. Is EDU fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. New Oriental Education & Technology Group Inc (NYSE:EDU) reported a 23% year-over-year increase in total net revenue for the fourth quarter of fiscal year 2026. The company's non-GAAP operating income rose by 34.7% to $110 million, indicating strong operational performance. New educational business initiatives delivered a 25% year-over-year revenue increase, showcasing successful diversification efforts. The company's AI-powered personalized learning platform achieved meaningful sales within 25 days of launch, highlighting successful innovation. East Buy's multi-platform live streaming strategy on Douyin expanded to 18 channels, enhancing customer engagement and operational efficiency. Operating costs and expenses increased by 15.3% year over year, impacting overall profitability. Cost of revenues rose by 25.9% year over year, indicating increased expenditure in delivering services. Selling and marketing expenses increased by 23.9% year over year, which could pressure margins if not managed effectively. Non-GAAP net income attributable to New Oriental decreased by 10.5% year over year, reflecting challenges in maintaining profitability. The overseas-related business faced growth pressure due to economic and international challenges, with expectations of low single-digit growth. Q: Can you break down the financial year 2027 guidance into quarters, especially the trend expected in the first quarter in terms of revenue and margin? A: Zhihui Yang, Executive President and CFO, explained that the company is optimistic about fiscal year 2027, expecting a 14% to 18% annual revenue growth. The deferred revenue increased by 15% at the end of Q4, indicating strong Q1 performance. The company anticipates margin expansion due to improved operational efficiency and contributions from East Buy. Q: What is the revenue growth outlook for the K-12 business in the upcoming first quarter and fiscal year 2027? A: Zhihui Yang stated that the K-12 business is expected to grow by approximately 20% year over year. The enrollment growth trend is positive, and the Q1 revenue growth is anticipated to be strong, contributing to higher margins in the new fiscal year. Q: What are the plans for capacity expansion in fiscal year 2027, and how is the company addressing compliance risks? A: Zhihui Yang mentioned that the company plans to expand capacity by 10%-15% in fiscal year 2027, focusing on top-performing markets. The company is committed to complying with regulations and has passed all government requirements in recent years. Q: Can you provide an update on the overseas test prep and consulting business, including growth trajectory and margin outlook? A: Zhihui Yang noted that the overseas-related business faced growth pressure last year but is expected to achieve low single-digit growth in the coming year. The merger of test prep and consulting businesses aims to enhance cost control and improve margins, which were around 15% last year. Q: How is the company leveraging AI in its teaching and learning processes? A: Sisi Zhao, Investor Relations Director, explained that AI is being used to enhance product quality, improve student learning experiences, and increase operational efficiency. AI tools are integrated into learning devices and teaching processes, and new AI-driven products are being piloted to further differentiate New Oriental from competitors. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in New Oriental Education & Technology Group, Inc.? Here are five stocks we like better. Strong fourth-quarter performance: New Oriental’s revenue rose 23% year over year to $1.53 billion, while operating income turned positive at $85.8 million and reported net income surged to $62.2 million. Growth is broadening beyond core education: Adult and university programs, new education initiatives, East Buy e-commerce and the New Oriental Home platform all gained traction, while AI-powered learning tools are being integrated into products and operations. Positive fiscal 2027 outlook and shareholder returns: Management projects 14%–18% revenue growth, expects K-12 revenue to rise about 20%, and plans roughly $500 million in dividends and share repurchases. New Oriental Education & Technology Group (NYSE:EDU) reported fourth-quarter fiscal 2026 revenue growth of 23% year over year, supported by its core education operations, East Buy e-commerce business and newer initiatives, while management forecast fiscal 2027 revenue growth of 14% to 18%. Total net revenue for the quarter reached $1.53 billion. Operating income was $85.8 million, compared with an operating loss of $8.7 million a year earlier. Non-GAAP income from operations rose 34.7% to $110 million. Net income attributable to New Oriental increased 775.8% year over year to $62.2 million, while non-GAAP net income declined 10.5% to $87.8 million. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Basic and diluted net income per American depositary share was $0.40 and $0.39, respectively. On a non-GAAP basis, basic and diluted earnings per ADS were $0.56 and $0.55, respectively. Executive President and Chief Financial Officer Stephen Yang said the company’s core operations and newer businesses both gained traction during the quarter. Overseas test preparation revenue increased 6% year over year, while overseas study consulting revenue rose about 1%. Revenue from programs serving adults and university students increased 29%. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? New educational initiatives delivered a combined 25% year-over-year revenue increase. The company’s non-academic children business had expanded to about 60 cities, with the top 10 cities contributing approximately 60% of revenue. Its intelligent learning system and device business was also available in around 60 cities, and its top 10 markets accounted for more than half of that business’s revenue. Yang said New Oriental’s tourism-related offerings include study tours, research camps, cultural tours and senior health and wellness travel. Student programs operate in approximately 55 cities, while premium adult-tourism products span around 30 Chinese provinces as well as select international destinations. The company has partnered with more than 45 wellness facilities for its asset-light senior tourism offering. → Innovative ETF Strategies That Are Paying Off This Summer The company invested $31.2 million in the quarter to maintain and upgrade its online-merge-offline teaching platform. It is also incorporating artificial intelligence into product development and operations. Investor Relations Director Sisi Zhao said AI is being deployed across existing education products, including learning devices and classroom tools, as well as in internal functions intended to improve employee productivity and reduce staffing needs. Yang said New Oriental’s proprietary AI-powered personalized learning platform completed its first deployment phase and generated sales within 25 days of launch. He described the platform as a specialized learning system built around the company’s education assets rather than a general-purpose large language model. East Buy expanded its multi-platform livestreaming strategy on Douyin during fiscal 2026, adding 11 vertical livestreaming accounts and bringing its channel matrix to 18 channels. Yang said the business plans to expand its private-label food and daily-necessities portfolio, increase product research and quality-control efforts, advance its app membership ecosystem and broaden its offline experience footprint. Management also highlighted its New Oriental Home pilot, a single-app platform combining education services, East Buy offerings and cultural tourism products for households. The pilot had been launched in 69 cities, including Hangzhou, Suzhou, Xi’an and Wuhan, and had more than 950,000 registered families as of the quarter’s end. Yang said the platform’s cumulative activity participation rate was around 70%, while its latest campaign activation rate was 23%. He also said retention for seventh-grade students increased by 10 basis points from summer to autumn, and that the loyalty model has supported cross-selling, conversion and customer-acquisition efficiency. Fourth-quarter operating costs and expenses rose 15.3% to $1.44 billion. Cost of revenues increased 25.9% to $717.3 million, while selling and marketing expenses increased 23.9% to $262.5 million. General and administrative expenses rose 13.2% to $463.9 million. The company recorded no goodwill impairment in the quarter, compared with a $60.3 million impairment charge in the prior-year period. Share-based compensation expenses declined 20.7% to $22.7 million. New Oriental generated $518.7 million in operating cash flow during the quarter and spent $99 million on capital expenditures. As of May 31, it held $1.82 billion in cash and cash equivalents, $1.37 billion in term deposits and $2.37 billion in short-term investments. Deferred revenue rose 14.8% year over year to $2.24 billion. For fiscal 2027, management expects total net revenue of $6.45 billion to $6.68 billion, representing growth of 14% to 18%. Yang said management expects K-12 education revenue to increase by roughly 20%, driven by enrollment trends and higher retention. He also said the company expects first-quarter revenue and margins to expand, with East Buy expected to contribute more revenue and profit. The company plans to add 10% to 15% in new capacity in fiscal 2027, following a 13% capacity increase in fiscal 2026. Yang said revenue growth is expected to outpace capacity expansion, improving learning-center utilization. Capital expenditures are expected to range from $250 million to $300 million, partly reflecting construction of a new headquarters in Changchun. Yang said New Oriental saved roughly $100 million through cost controls in fiscal 2026 and expects additional savings in the coming year through management restructuring and greater AI use. The company expects its overseas-related business to be flat to up low single digits in fiscal 2027, with margins improving from roughly 15% in the prior year through restructuring and expense controls. The board approved a fiscal 2027 shareholder-return plan totaling approximately $500 million, including an expected $300 million cash dividend to be paid in two installments and a new share repurchase authorization of up to $200 million. Separately, the company said it had repurchased approximately 51.5 million common shares, including shares represented by ADSs, for about $274 million as of July 28. New Oriental Education & Technology Group (NYSE: EDU) is one of China's leading providers of private educational services, specializing in language training, test preparation and consulting for overseas study. The company's offerings span a range of subjects, including English language instruction, preparatory courses for examinations such as the TOEFL, GRE and GMAT, and K-12 after-school tutoring. New Oriental's curriculum is delivered through a combination of in-person learning centers and digital platforms, enabling students across various regions to access its educational resources. Founded in 1993 by Michael Yu Minhong in Beijing, New Oriental began as a small language school and quickly expanded its footprint. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "New Oriental Education & Technology Group Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

BEIJING, June 30, 2026 /PRNewswire/ -- New Oriental Education and Technology Group Inc. (the "Company" or "New Oriental") (NYSE: EDU/ 9901.SEHK), a provider of private educational services in China, today announced that it will report its financial results for the fourth quarter ended May 31, 2026, before the U.S. market opens on July 29, 2026. New Oriental's management will host an earnings conference call at 8 AM on July 29, 2026, U.S. Eastern Time (8 PM on July 29, 2026, Beijing/Hong Kong Time). Participants can join the conference using the below options: Dialling-in to the conference call: Please register in advance of the conference, using the link provided below. Upon registering, you will be provided with participant dial-in numbers, and unique personal PIN. Conference call registration link: https://register-conf.media-server.com/register/BIffe9352b170044a4b248e41d134aed08. It will automatically direct you to the registration page of "New Oriental FY2026 Q4 Earnings Conference Call" where you may fill in your details for RSVP. In the 10 minutes prior to the call start time, you may use the conference access information (including dial in number(s) and personal PIN) provided in the confirmation email received at the point of registering. Joining the conference call via a live webcast: Additionally, a live and archived webcast of the conference call will be available at http://investor.neworiental.org. Listening to the conference call replay: A replay of the conference call may be accessed via the webcast on-demand by registering at https://edge.media-server.com/mmc/p/pdsxxtdn first. The replay will be available until July 29, 2027. About New Oriental New Oriental is a provider of private educational services in China offering a wide range of educational programs, services and products to a varied student population throughout China. New Oriental's program, service and product offerings mainly consist of educational services and test preparation courses, private label products and livestreaming e-commerce, overseas study consulting services, and educational materials and distribution. New Oriental is listed on NYSE (NYSE: EDU) and SEHK (9901.SEHK), respectively. New Oriental's ADSs, each of which represents ten common shares, are listed and traded on the NYSE. The Hong Kong-listed shares are fully fungible with the ADSs listed on NYSE. For more information about New Oriental, please visit http://www.neworiental.org/english/. Contacts View original content:https://www.prnewswire.com/news-releases/new-oriental-to-report-fourth-quarter-2026-financial-results-on-july-29-2026-302814138.html

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. New Oriental Education & Technology Group (EDU) just posted third quarter results with higher sales and net income than a year earlier, and lifted full year 2026 revenue guidance while issuing upbeat fourth quarter expectations. See our latest analysis for New Oriental Education & Technology Group. The upbeat earnings release, higher full year 2026 revenue guidance and ongoing capital returns through buybacks and dividends come against a weaker share price backdrop, with a 7 day share price return of 10.6% decline, a 30 day share price return of 4% decline and a year to date share price return of 9.6% decline. The 1 year total shareholder return is 12.6% and the 3 year total shareholder return is 20.4%, pointing to longer term holders still being ahead even after a 5 year total shareholder return of 64.6% loss. If this mix of earnings momentum, buybacks and dividends has your attention, it may be a useful moment to broaden your watchlist and check out 18 top founder-led companies With earnings trending higher, richer full year guidance, ongoing buybacks and dividends, yet a weaker recent share price, you have to ask yourself: is New Oriental undervalued here, or is the market already pricing in future growth? New Oriental Education & Technology Group's most followed narrative puts fair value at $68.34 versus the last close of $52.30, framing the current debate around future earnings power and capital returns. Read the complete narrative. Curious what kind of revenue run rate, margin profile, and future earnings multiple are baked into that fair value? The core assumptions behind this narrative lean heavily on compounding earnings, disciplined capital returns, and a future valuation level that has to reconcile with current sector norms. Result: Fair Value of $68.34 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this depends on overseas study headwinds and tougher competition in K-12 and non-academic segments not reducing growth and margins more than analysts currently model. Find out about the key risks to this New Oriental Education & Technology Group narrative. While the SWS DCF model points to New Oriental shares trading below estimated future cash flow value, the picture changes when you look at the P/E. At 19.8x, the stock sits above both the Consumer Services industry at 16.5x and peers at 16.2x, even though the fair ratio is 26x. That gap leaves you weighing whether this is a valuation cushion or a sign the market is already paying up for execution risk. See what the numbers say about this price — find out in our valuation breakdown. The mixed signals on valuation and earnings momentum might feel hard to reconcile, so it helps to see the full picture for yourself. To understand what the market is optimistic about, review the company's 4 key rewards. If New Oriental has you thinking differently about growth and value, do not stop here. Use screeners to quickly surface other ideas that could fit your portfolio next. Spot potential value candidates early by scanning 53 high quality undervalued stocks that combine quality fundamentals with more modest valuations. Strengthen your quality bias by checking the solid balance sheet and fundamentals stocks screener (43 results) and focus on companies with cleaner finances backing their operations. Get ahead of the crowd by running through the screener containing 25 high quality undiscovered gems before these names are widely followed. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include EDU. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Q3 outperformance: Total net revenue rose 19.8% YoY to $1.42 billion, with non-GAAP operating income up 42.8% to $202.9 million and non-GAAP net income up 34.3% to $152.2 million; management raised fiscal 2026 revenue guidance to $5.56–5.60 billion and maintains a $300 million repurchase authorization while paying a $0.12 per-share ordinary dividend. Margin expansion and near-term restructuring costs: Management attributes margin improvement to cost controls and greater profit contribution from East Buy, but expects one-off Q4 restructuring expenses of roughly 50–100 basis points (~$10–$15 million) as it consolidates overseas operations and optimizes workforce. Strategic diversification and tech investment: New Oriental is investing in its OMO platform ($30.6 million this quarter) and AI across products, piloting a family-focused "New Oriental Home" ecosystem (330k registered families) and expanding East Buy livestreaming, private labels and tourism offerings to drive new revenue streams. Interested in New Oriental Education & Technology Group, Inc.? Here are five stocks we like better. New Oriental Education & Technology Group (NYSE:EDU) reported fiscal 2026 third-quarter results that management said exceeded expectations again, driven by continued growth in its core education businesses, margin expansion, and profit contributions from East Buy. Stephen Zhihui Yang, executive president and chief financial officer, said the company delivered “another quarter of solid results and consistent growth,” adding that the quarter “has once again surpassed expectations,” reinforcing management’s confidence in its strategy and outlook. → Credo Stock Flashes Strong Bullish Signal—Upswing Just Starting Yang said total net revenue grew 19.8% year over year to $1.42 billion. Profitability improved as well, with non-GAAP operating income up 42.8% to $202.9 million and non-GAAP net income attributable to New Oriental up 34.3% to $152.2 million. Investor Relations Director Sisi Zhao provided additional financial detail, noting operating income of $180.3 million, up 44.8% year over year, while net income attributable to New Oriental rose 45.3% to $126.8 million. Basic and diluted net income per ADS attributable to New Oriental were $0.80 and $0.79, respectively. On a non-GAAP basis, basic and diluted net income per ADS were $0.97 and $0.95. → Allbirds Exits Shoes, Pivots to AI With NewBird Rebrand Zhao said operating costs and expenses were $1.24 billion, up 16.9% year over year, including: Cost of revenue of $656.2 million, up 23.4% Selling and marketing expense of $198.8 million, up 9.1% General and administrative expense of $382.1 million, up 10.8% Share-based compensation of $21.1 million, up 30.9% Net cash outflow from operations was approximately $7.5 million for the quarter, and capital expenditures were $68.8 million, Zhao said. → Amazon Stock Up 30%: Is AMZN Still a Buy Before Earnings? In prepared remarks, Yang broke out performance across major lines of business. He said overseas test preparation revenue increased 7% year over year, while overseas study consulting revenue decreased about 4%. Yang said the adults and university students business recorded 15% year-over-year revenue growth. New education initiatives—including non-academic tutoring and the company’s intelligent learning system and devices—grew revenue 23% year over year. On rollout and concentration, Yang said non-academic tutoring had expanded to around 60 existing cities, with the top 10 cities contributing over 60% of that business. Intelligent learning system and devices had also launched in around 60 cities, with the top 10 cities contributing over 50%. Yang also highlighted the company’s integrated tourism-related business. He said student programs, including study tours and research camps, were operating in approximately 55 cities nationwide, with the top 10 cities generating over 50% of the revenue. Adult tourism offerings span around 30 provinces domestically plus select international destinations, he said. Yang added that New Oriental is expanding into senior health and wellness tourism through partnerships with over 40 wellness facilities in Hainan, Yunnan, and Guangxi using an “asset-light model” to pilot the opportunity. During Q&A, Yang attributed the company’s operating margin expansion to “better realization [of] operating leverage and the cost control,” as well as “more profit contribution from East Buy.” He said New Oriental began cost controls in March 2025 and has seen “very good result” over the past 11 months. Looking to the fiscal fourth quarter, Yang said the company expects to realize greater cost control as a result of restructuring and consolidation of its overseas business. He cautioned that there will be one-off expenses tied to these structural adjustments but said management remained confident in fourth-quarter profit margins. In response to questions about the magnitude of the restructuring impact, Yang estimated the negative margin impact at roughly 50 to 100 basis points, or about $10 million to $15 million. He later clarified that the “majority” of the one-off expenses are expected to occur in Q4 and characterized the actions as including workforce and staff optimization, with the goal of reducing fixed costs going into next year. Yang also said the company expects selling and marketing expense as a percentage of revenue to decline next year, as it focuses more on product quality enhancements and relies less on heavy marketing spending. On expansion plans, Yang said New Oriental initially planned to add 10% to 15% of new capacity during the fiscal year. He said net additions of new learning centers in the first three quarters were 8%, and he expects full-year net expansion to be “somewhere around 10%-13%, 14%.” He told analysts the capacity measure he referenced was in square meters and that most new capacity is being built for the K-12 business. Discussing K-12 trends, Yang said the company “beat the guidance again” for the segment in Q3 and has done so “two to three quarters in a row.” For Q4, he said he was “very optimistic” about K-12 revenue growth, attributing momentum to a strategy shift toward product quality enhancements that improved retention and utilization. He described expectations for Q4 K-12 revenue growth of about 15% to 20%, including “K-9” growth of “20% plus” and high school growth of 15% to 20%. For longer-term growth, Yang said New Oriental plans to continue opening “somewhere around 10% or even a little bit more” learning centers next year, while also leveraging online and OMO offerings that do not always require additional physical centers. Yang said the company invested $30.6 million during the quarter to enhance and maintain its online-merge-offline (OMO) teaching platform, aimed at delivering personalized learning across age groups. On artificial intelligence, Zhao said the company is implementing AI across key business lines, embedding AI functions into online and hardware products such as intelligent learning devices, and incorporating AI into offline classes by collecting and using data alongside its teaching experience. She also said AI is being used to improve internal productivity across roles including teachers, salespeople, assistants, and functional staff, and that some labor costs or labor hours have already been reduced. Zhao added that New Oriental has pilot teams exploring new AI-driven education products designed to rely less on human resources while delivering experiences closer to face-to-face teaching. Yang also introduced a strategic shift toward serving customers at the family level rather than as individuals. He said the company launched “New Oriental Home,” a private domain platform integrating education services, East Buy offerings, and cultural tourism products into a unified ecosystem. He said the pilot is live in 12 cities, including Hangzhou, Suzhou, Xi’an, and Wuhan, with more than 330,000 registered families and campaign activation rates of 10% to 15%. Yang said East Buy is executing a multi-platform, multi-account approach by launching specialized vertical livestreaming channels on Douyin, including East Buy Home, East Buy Fruit & Vegetables, and East Buy Nutrition & Health. He said the unit has also worked on optimizing livestream content and engagement initiatives such as streamer recruitment campaigns and supplier conferences. Looking ahead, Yang said East Buy plans to expand private label offerings, strengthen product R&D and quality control, develop its app membership ecosystem, and grow offline presence through vending machines and experience stores. On capital returns, Yang reiterated the company’s fiscal 2026 ordinary dividend of $0.12 per common share (or $1.2 per ADS) to be paid in two installments. He said the first installment has been paid, and the second installment of $0.06 per common share (or $0.6 per ADS) will be paid to holders of record as of May 15, 2026, with expected payment dates around June 2, 2026 for common shareholders and June 5, 2026 for ADS holders. Yang also updated the company’s share repurchase program authorizing up to $300 million in repurchases over 12 months. As of April 21, 2026, he said New Oriental had repurchased approximately 3.3 million ADS for an aggregate consideration of about $184.3 million. For the fiscal fourth quarter, Yang guided for total net revenue of $1.43 billion to $1.47 billion, representing year-over-year growth of 15% to 18%. He said the company raised full-year fiscal 2026 total net revenue guidance to a range of $5.56 billion to $5.60 billion, representing year-over-year growth of 13% to 14%. In closing remarks, Yang said New Oriental remains focused on “balanced growth,” expanding capacity and talent while maintaining quality and disciplined resource allocation, and continuing cost discipline to support sustainable profitability across business lines. New Oriental Education & Technology Group (NYSE: EDU) is one of China's leading providers of private educational services, specializing in language training, test preparation and consulting for overseas study. The company's offerings span a range of subjects, including English language instruction, preparatory courses for examinations such as the TOEFL, GRE and GMAT, and K-12 after-school tutoring. New Oriental's curriculum is delivered through a combination of in-person learning centers and digital platforms, enabling students across various regions to access its educational resources. Founded in 1993 by Michael Yu Minhong in Beijing, New Oriental began as a small language school and quickly expanded its footprint. The article "New Oriental Education & Technology Group Q3 Earnings Call Highlights" was originally published by MarketBeat.