New Oriental Announces Results for the Second Fiscal Quarter Ended November 30, 2024

, /PRNewswire/ --  New Oriental Education & Technology Group Inc. (the "Company" oregon "New Oriental") (NYSE:  EDU/ 9901.SEHK), a supplier of backstage acquisition services successful China, contiguous announced its unaudited fiscal results for the 2nd fiscal 4th ended November 30, 2024, which is the 2nd 4th of New Oriental's fiscal twelvemonth 2025.

Financial Highlights for the Second  Fiscal Quarter Ended November 30, 2024

• Total (EPA:) nett revenues accrued by 19.4% twelvemonth implicit twelvemonth to US$1,038.6 cardinal for the 2nd fiscal 4th of 2025. Total nett revenues, excluding revenues generated from East Buy backstage statement products and livestreaming business, accrued by 31.3% twelvemonth implicit twelvemonth to US$894.2 cardinal for the 2nd fiscal 4th of 2025.
• Operating income decreased by 9.8% twelvemonth implicit twelvemonth to US$19.3 cardinal for the 2nd fiscal 4th of 2025. Operating income, excluding operating nonaccomplishment generated from East Buy backstage statement products and livestreaming business, accrued by 102.5% twelvemonth implicit twelvemonth to US$25.0 cardinal for the 2nd fiscal 4th of 2025.
• Net income attributable to New Oriental accrued by 6.2% twelvemonth implicit twelvemonth to US$31.9 cardinal for the 2nd fiscal 4th of 2025.

Key Financial Results  

Operating Highlights for the Second  Fiscal Quarter Ended November 30, 2024

Michael Yu, New Oriental's Executive Chairman, commented, "We are encouraged by the sustained steadfast apical enactment maturation of 19.4% successful the 2nd fiscal 4th of this year. Total nett revenues, excluding revenues generated from East Buy backstage statement products and livestreaming business, accrued by 31.3% twelvemonth implicit year. Our overseas trial mentation and overseas survey consulting concern accrued by astir 21.1% and 31.0% twelvemonth implicit year, respectively. In addition, the home trial mentation concern targeting adults and assemblage students recorded a maturation of astir 34.9% twelvemonth implicit year. Furthermore, our caller acquisition concern initiatives person maintained  strong momentum this fiscal quarter, with gross maturation of 42.6% twelvemonth implicit year. Among these initiatives, our non-academic tutoring courses were offered successful astir 60 cities, attracting astir 994,000 pupil enrollments successful this fiscal quarter. Simultaneously, our intelligent learning strategy and devices were adopted successful astir 60 cities, with astir 261,000 progressive paid users successful this fiscal quarter. With our beardown acquisition resources, we volition proceed to execute our semipermanent strategy of balancing  healthy and sustainable maturation portion improving profitability, supported by our improving  service prime and operating efficiency."

Chenggang Zhou, New Oriental's Chief Executive Officer, added, "In this fiscal quarter, we intimately monitored  our capableness enlargement to align  with gross maturation and operating efficiency. At the aforesaid time, we continued to give  efforts to revamp  our online-merge-offline teaching strategy and use caller technologies to heighten idiosyncratic acquisition and enactment the maturation of our acquisition offerings. Furthermore, for the archetypal six months  of fiscal twelvemonth 2025, East Buy expanded its backstage statement offerings to 600 SKUs, including healthcare and favored foods. Its backstage statement products contributed astir 37% of full GMV. To scope a wider lawsuit base, East Buy leveraged a multi-platform attack with online shops and livestreaming, and it is besides exploring offline channels done vending machines successful EDU learning centers."

Stephen Zhihui Yang, New Oriental's Executive President and Chief Financial Officer, commented, "Despite the 2nd 4th traditionally being the slowest of the year, we managed to make  a Non-GAAP operating nett of US$27.6 cardinal for the 4th and delivered a flimsy twelvemonth implicit twelvemonth betterment successful  operating borderline for our  core acquisition concern this fiscal quarter. To amended bespeak  New Oriental's halfway acquisition businesses, the pursuing operating borderline numbers successful this fiscal 4th exclude the fiscal results of East Buy's backstage statement products and livestreaming business. Our GAAP operating borderline for the quarter, excluding operating borderline generated from East Buy backstage statement products and livestreaming business,  was 2.8%, representing an betterment of  100 ground points twelvemonth implicit year. Our Non-GAAP operating margin, excluding operating borderline generated from East Buy backstage statement products and livestreaming concern for the quarter,  was 3.2%, representing an betterment of 12 ground points twelvemonth implicit year.  We recorded a affirmative operating currency travel of US$313.3 cardinal this 4th and by the extremity of this fiscal quarter, our currency and currency equivalents, word deposits and short-term investments totaled astir US$4.8 billion. In the 2nd fractional of this fiscal year, we volition proceed  focusing connected enhancing utilization of facilities and improving operational efficiency. We are assured  in  our quality to  create  sustainable worth for our customers and shareholders successful the agelong term."

Recent Development

On August 19, 2024, New Oriental announced its committee of directors approved a peculiar currency dividend of US$0.06 per communal share, oregon US$0.6 per ADS, to holders of communal shares and ADSs of grounds arsenic of the adjacent of concern connected September 9, 2024, Beijing/Hong Kong Time and New York Time, respectively. The outgo day was connected oregon astir September 23, 2024, for holders of communal shares and September 26, 2024, for holders of ADSs. The full currency dividend distributed was astir US$100 million.

Share Repurchase

The Company's committee of directors approved a Share Repurchase Program successful July 2022, nether which the Company is authorized to repurchase up to US$400 cardinal of the Company's ADSs oregon communal shares done the adjacent 12 months. The Company's committee of directors further approved extending the effectual clip of the Share Repurchase Program to May 31, 2025, and expanding the aggregate worth of shares that the Company is authorized to repurchase from US$400 cardinal to US$700 million. As of January 20, 2025, the Company had repurchased an aggregate of astir 11.2 cardinal ADSs for astir US$542.8 cardinal from the unfastened marketplace nether this Share Repurchase Program.

Financial Results for the Second  Fiscal Quarter Ended November 30, 2024

Net Revenues

For the 2nd  fiscal 4th of 2025, New Oriental reported nett revenues of US$1,038.6 million, representing a 19.4% summation twelvemonth implicit year. Net revenues, excluding revenues generated from East Buy backstage statement products and livestreaming business, were US$894.2 million, representing a 31.3% summation twelvemonth implicit year. The maturation was chiefly driven by the summation successful the nett revenues from our acquisition caller concern initiatives.

Operating Costs and Expenses

Operating costs and expenses for the 4th were US$1,019.4  million, representing a 20.2% summation twelvemonth implicit year. Non-GAAP operating costs and expenses for the quarter, which exclude share-based compensation expenses, were US$1,011.1  million, representing a 23.5% summation twelvemonth implicit year. The summation was chiefly owed to the outgo and expenses related to the accelerated capableness enlargement for acquisition businesses and recently integrated tourism-related business.

• Cost of revenues for the 4th accrued by 17.9% twelvemonth implicit twelvemonth to US$498.3 million.
• Selling and selling expenses for the 4th accrued by 26.6% twelvemonth implicit twelvemonth to US$196.1 million.
• General and administrative expenses for the 4th accrued by 20.0% twelvemonth implicit twelvemonth to US$324.9 million. Non-GAAP wide and administrative expenses for the quarter, which exclude share-based compensation expenses, were US$319.4 million, representing a 24.7% summation twelvemonth implicit year.

Total share-based compensation expenses for the quarter, which were allocated to related operating costs and expenses, decreased  by 71.8% to US$8.3 cardinal successful the 2nd  fiscal 4th of 2025.

Operating Income and Operating Margin

Operating income  for the 4th was US$19.3 million, representing a 9.8% alteration  year implicit year. Non-GAAP income from operations for the 4th was US$27.6 million, representing a 45.8% alteration twelvemonth implicit year.

Operating borderline for the 4th was 1.9%, compared to 2.5% successful the aforesaid play of the anterior fiscal year. Non-GAAP operating borderline for the quarter, which excludes share-based compensation expenses, for the 4th was 2.7%, compared to 5.9% successful the aforesaid play of the anterior fiscal year.

Net Income and Net Income per ADS

Net income attributable to New Oriental for the 4th was US$31.9 million, representing a 6.2% summation  year implicit year. Basic and diluted nett income per ADS attributable to New Oriental were US$0.20 and US$0.19, respectively.

Non-GAAP Net Income and Non-GAAP Net Income per ADS

Non-GAAP nett income attributable to New Oriental for the 4th was US$35.5 million, representing a 29.1% alteration twelvemonth implicit year.  Non-GAAP basal and diluted nett income per ADS attributable to New Oriental were US$0.22 and US$0.22, respectively.

Cash Flow

Net operating currency inflow for the 2nd  fiscal 4th of 2025 was astir US$313.3 cardinal and superior expenditures for the 4th were US$60.6 million.

Balance Sheet

As of November 30, 2024, New Oriental had currency and currency equivalents of US$1,418.2 million. In addition, the Company had US$1,443.2 cardinal successful word deposits and US$1,951.4 cardinal successful short-term investment.

New Oriental's deferred revenue, which represents currency collected upfront from customers and related gross that volition beryllium recognized arsenic the services oregon goods are delivered, astatine the extremity of the 2nd 4th of fiscal twelvemonth 2025 was US$1,960.6 million, an summation of 19.2% arsenic compared to US$1,645.0 cardinal astatine the extremity of the 2nd 4th of fiscal twelvemonth 2024.

Financial Results for the Six Months Ended November 30, 2024

For the archetypal six months of fiscal twelvemonth 2025, New Oriental reported nett revenues of US$2,474.1 million, representing a 25.6% summation twelvemonth implicit year.

Operating income for the archetypal six months of fiscal twelvemonth 2025 was US$312.4 million, representing a 37.9% summation twelvemonth implicit year. Non-GAAP operating income for the archetypal six months of fiscal twelvemonth 2025 was US$327.6 million, representing a 10.8% summation twelvemonth implicit year.

Operating borderline for the archetypal six months of fiscal twelvemonth 2025 was 12.6%, compared to 11.5% for the aforesaid play of the anterior fiscal year. Non-GAAP operating borderline for the archetypal six months of fiscal twelvemonth 2025, which excludes share-based compensation expenses, was 13.2%, compared to 15.0% for the aforesaid play of the anterior fiscal year.

Net income attributable to New Oriental for the archetypal six months of fiscal twelvemonth 2025 was US$277.4 million, representing a 41.9% summation twelvemonth implicit year. Basic and diluted nett income per ADS attributable to New Oriental for the archetypal six months of fiscal twelvemonth 2025 amounted to US$1.69 and US$1.68, respectively.

Non-GAAP nett income attributable to New Oriental for the archetypal six months of fiscal twelvemonth 2025 was US$300.3 million, representing a 25.4% summation twelvemonth implicit year. Non-GAAP basal and diluted nett income per ADS attributable to New Oriental for the archetypal six months of fiscal twelvemonth 2025 amounted to US$1.83 and US$1.82, respectively.

East Buy's Financial Highlights for the Six Months Ended  November 30, 2024

New Oriental's subsidiary, East Buy Holding Limited ("East Buy"), a well-known backstage statement products and livestreaming e-commerce level successful China listed connected the Hong Kong Stock Exchange, announced its fiscal results nether International Financial Reporting Standards ("IFRSs") for the archetypal six months of fiscal twelvemonth 2025. East Buy's fiscal accusation successful this conception is presented successful accordance with IFRSs.

For the archetypal six months ended November 30, 2024, East Buy recorded the full gross from continuing operations of RMB2.2 cardinal (US$304.9  million), a 9.3% alteration from the gross from continuing operations of RMB2.4 cardinal successful the aforesaid play of the anterior fiscal year, and recorded a nett nonaccomplishment from continuing operations of RMB96.5  million (US$13.5  million), compared to a nett net from continuing operations of RMB160.7  million successful the aforesaid play of the anterior fiscal year. As determination was the disposal of Time with Yuhui during the reporting period, if we excluded the fiscal interaction from the disposal of Time with Yuhui, which are astir the one-off disbursal incurred and nett generated by Time with Yuhui, the nett net from continuing operations was RMB32.7 cardinal for the six months ended November 30, 2024. East Buy's gross nett from continuing operations was RMB735.1 cardinal (US$102.5 million) and gross nett from continuing operations borderline was 33.6% for the six months ended November 30, 2024.

The translations of RMB amounts into U.S. dollars successful this conception are presented solely for the convenience of the readers. The conversion of RMB into U.S. dollars is based connected the speech complaint acceptable distant successful the H.10 statistical merchandise of the Board of Governors of the Federal Reserve System arsenic of November 30, 2024, which was RMB7.1706  to US$1.00. The percentages stated successful this conception are calculated based connected the RMB amounts.

Outlook for the Third Quarter of the Fiscal Year 2025

New Oriental expects full nett revenues, excluding revenues generated from East Buy backstage statement products and livestreaming business, successful the 3rd  quarter of the fiscal twelvemonth 2025 (December  1, 2024 to February 28, 2025) to beryllium successful the scope of US$1,007.3 cardinal to US$1,032.5 million, representing twelvemonth implicit twelvemonth summation successful the scope of 18% to 21%. The projected summation of gross successful our functional currency is expected to beryllium successful the scope of 20% to 23% for the 3rd 4th of the fiscal twelvemonth 2025.

This forecast reflects New Oriental's existent and preliminary view, which is taxable to change.

Conference Call Information

New Oriental's absorption volition big an net league telephone astatine 8 AM connected January 21, 2025, U.S. Eastern Time (9  PM connected January 21, 2025, Beijing/Hong Kong Time).  

Please registry successful beforehand of the conference, utilizing the nexus provided below. Upon registering, you volition beryllium provided with subordinate dial-in numbers, and unsocial idiosyncratic PIN.

Conference telephone registration link: https://register.vevent.com/register/BI41baa2efc73b4357814a196a50b55d82. It volition automatically nonstop you to the registration leafage of "New Oriental FY2025 Q2 Earnings Conference Call" wherever you whitethorn capable successful your details for RSVP.

In the 10 minutes anterior to the telephone commencement time, you whitethorn usage the league entree accusation (including dial successful number(s) and idiosyncratic PIN) provided successful the confirmation email received astatine the constituent of registering.

Joining the league telephone via a unrecorded webcast:

Additionally, a unrecorded and archived webcast of the league telephone volition beryllium disposable astatine http://investor.neworiental.org.

Listening to the league telephone replay:

A replay of the league telephone whitethorn beryllium accessed via the webcast on-demand by registering astatine https://edge.media-server.com/mmc/p/47p7vdrz first. The replay volition beryllium disposable until January 21, 2026.

About New Oriental

New Oriental is simply a supplier of backstage acquisition services successful China offering a wide scope of acquisition programs, services and products to a varied pupil colonisation passim China. New Oriental's program, work and merchandise offerings chiefly dwell of acquisition services and trial mentation courses, backstage statement products and livestreaming e-commerce, and overseas survey consulting services. New Oriental is listed connected NYSE (NYSE: EDU) and SEHK (9901.SEHK), respectively. New Oriental's ADSs, each of which represents 10 communal shares, are listed and traded connected the NYSE. The Hong Kong-listed shares are afloat fungible with the ADSs listed connected NYSE.

For much accusation astir New Oriental, delight sojourn http://www.neworiental.org/english/.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made nether the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements tin beryllium identified by terminology specified arsenic "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and akin statements. Among different things, the outlook for the 3rd  quarter of fiscal twelvemonth 2025, quotations from absorption successful this announcement, arsenic good arsenic New Oriental's strategical and operational plans, incorporate forward-looking statements. New Oriental whitethorn besides marque written oregon oral forward-looking statements successful its reports filed oregon furnished to the U.S. Securities and Exchange Commission, successful its yearly reports to shareholders, successful property releases and different written materials and successful oral statements made by its officers, directors oregon employees to 3rd parties. Statements that are not humanities facts, including statements astir New Oriental's beliefs and expectations, are forward-looking statements. Forward-looking statements impact inherent risks and uncertainties. A fig of factors could origin existent results to disagree materially from those contained successful immoderate forward-looking statement, including but not constricted to the following: our quality to efficaciously and efficiently negociate changes of our existing concern and caller business; our quality to execute our concern strategies; uncertainties successful narration to the mentation and implementation of oregon projected changes to, the PRC laws, regulations and policies regarding the backstage acquisition industry; our quality to pull students without a important summation successful people fees; our quality to support and heighten our "New Oriental" brand; our quality to support accordant teaching prime passim our schoolhouse network, oregon work prime passim our brand; our quality to execute the benefits we expect from caller and aboriginal acquisitions; the result of ongoing, oregon immoderate future, litigation oregon arbitration, including those relating to copyright and different intelligence spot rights; contention successful the backstage acquisition assemblage and livestreaming e-commerce concern successful China; the continuing efforts of our elder absorption squad and different cardinal personnel, wellness epidemics and different outbreaks successful China; and wide economical conditions successful China. Further accusation regarding these and different risks is included successful our yearly study connected Form 20-F and different documents filed with the Securities and Exchange Commission. New Oriental does not undertake immoderate work to update immoderate forward-looking statement, but arsenic required nether applicable law. All accusation provided successful this property merchandise and successful the attachments is arsenic of the day of this property release, and New Oriental undertakes nary work to update specified information, but arsenic required nether applicable law.

About Non-GAAP Financial Measures

To supplement New Oriental's consolidated fiscal results presented successful accordance with GAAP, New Oriental uses the pursuing measures defined arsenic non-GAAP fiscal measures by the SEC: nett income excluding share-based compensation expenses and summation (loss) from just worth alteration of investments, operating income excluding share-based compensation expenses, operating outgo and expenses excluding share-based compensation expenses, wide and administrative expenses excluding share-based compensation expenses, operating borderline excluding share-based compensation expenses, and basal and diluted nett income per ADS and per stock excluding share-based compensation expenses and summation (loss) from just worth alteration of investments. The presumption of these non-GAAP fiscal measures is not intended to beryllium considered successful isolation oregon arsenic a substitute for the fiscal accusation prepared and presented successful accordance with GAAP. For much accusation connected these non-GAAP fiscal measures, delight spot the tables captioned "Reconciliations of non-GAAP measures to the astir comparable GAAP measures" acceptable distant astatine the extremity of this release.

New Oriental believes that these non-GAAP fiscal measures supply meaningful supplemental accusation regarding its show and liquidity by excluding share-based compensation expenses and summation (loss) from just worth alteration of investments that whitethorn not beryllium indicative of its operating show from a currency perspective. New Oriental believes that some absorption and investors payment from referring to these non-GAAP fiscal measures successful assessing its show and erstwhile readying and forecasting aboriginal periods. These non-GAAP fiscal measures besides facilitate management's interior comparisons to New Oriental's humanities show and liquidity. New Oriental believes these non-GAAP fiscal measures are utile to investors successful allowing for greater transparency with respect to supplemental accusation utilized by absorption successful its fiscal and operational determination making. A regulation of utilizing these non-GAAP measures is that they exclude share-based compensation complaint and summation (loss) from just worth alteration of investments that has been and volition proceed to beryllium for the foreseeable aboriginal a important recurring disbursal successful our business. Management compensates for these limitations by providing circumstantial accusation regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables person much details connected the reconciliations betwixt GAAP fiscal measures that are astir straight comparable to non-GAAP fiscal measures.

Contacts

For capitalist and media inquiries, delight contact:

Ms. Rita Fong                                                                                                     Ms. Sisi Zhao
FTI Consulting (NYSE:)                                                                                                   New Oriental Education & Technology Group Inc.
Tel:             +852 3768 4548                                    Tel:                 +86-10-6260-5568
Email:     rita.fong@fticonsulting.com                   Email: zhaosisi@xdf.cn

Reconciliation betwixt US GAAP and International Financial Reporting Standards

Deloitte Touche Tohmatsu was engaged by the institution to behaviour constricted assurance engagement successful accordance with Hong Kong Standard connected Assurance Engagements 3000 (Revised) "Assurance Engagements Other Than Audits oregon Reviews of Historical Financial Information" ("HKSAE 3000 (Revised)") issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA") connected the reconciliation of the condensed consolidated connection of operations for the six months ended November 30, 2024 and the condensed consolidated equilibrium expanse arsenic of November 30, 2024 of the institution and its subsidiaries (collectively referred to arsenic the "Group") betwixt the accounting policies adopted by the Group of the applicable play successful accordance with the accounting principles mostly accepted successful the United States of America (the "US GAAP") and the International Financial Reporting Standards (the "IFRSs") issued by the International Accounting Standards Board (together, the "Reconciliation").

The constricted assurance engagement undertaken successful accordance with HKSAE 3000 (Revised) involves performing procedures to get capable due grounds astir whether:            

• the related adjustments and reclassifications springiness due effect to those criteria; and
• the Reconciliation reflects the due exertion of the adjustments and reclassifications to the differences betwixt the Group's accounting policies successful accordance with the US GAAP and the IFRSs.

The procedures performed by Deloitte Touche Tohmatsu were based connected their nonrecreational judgment, having respect to their knowing of the management's process connected preparing the Reconciliation, nature, concern show and fiscal presumption of the Group. Given the circumstances of the engagement, the procedures performed included:

(i)           Comparing the "Amounts arsenic reported nether US GAAP" arsenic of and for the six months ended November 30, 2024 successful the Reconciliation arsenic acceptable retired successful the Appendix with the fiscal results arsenic of and for the six months ended November 30, 2024 prepared successful accordance with the US GAAP;

(ii)         Evaluating the appraisal made by the committee of directors successful identifying the differences betwixt the accounting policies successful accordance with the US GAAP and the IFRSs, and the grounds supporting the adjustments and reclassifications made successful the Reconciliation successful arriving astatine the "Amounts arsenic reported nether IFRSs" successful the Reconciliation arsenic acceptable retired successful the Appendix; and

(iii)       Checking the arithmetic accuracy of the computation of the Reconciliation arsenic acceptable retired successful the Appendix.

The procedures performed by Deloitte Touche Tohmatsu successful this constricted assurance engagement alteration successful quality and timing from, and are little successful grade than for, a tenable assurance engagement. Consequently, the level of assurance obtained successful a constricted assurance engagement is substantially little than the assurance that would person been obtained had a tenable assurance engagement been performed. Accordingly, Deloitte Touche Tohmatsu bash not explicit a tenable assurance opinion.

Based connected the procedures performed and grounds obtained, Deloitte Touche Tohmatsu person concluded that thing has travel to their attraction that causes them to judge that:

(I)     The "Amounts arsenic reported nether US GAAP" arsenic of and for the six months ended November 30, 2024 successful the Reconciliation arsenic acceptable retired successful the Appendix is not successful statement with the fiscal results arsenic of and for the six months ended November 30, 2024 prepared successful accordance with the US GAAP;

(ii)     The adjustments and reclassifications made successful the Reconciliation successful arriving astatine the "Amounts arsenic reported nether IFRSs" successful the Reconciliation arsenic acceptable retired successful the Appendix, bash not reflect, successful each worldly respects, the antithetic accounting treatments according to the Group's accounting policies successful accordance with the US GAAP and the IFRSs of the applicable period; and

(iii)    The computation of the Reconciliation arsenic acceptable retired successful the Appendix is not arithmetically accurate.

Appendix

The consolidated fiscal statements are prepared successful accordance with US GAAP, which disagree successful definite respects from IFRSs. The effects of worldly differences betwixt the consolidated fiscal statements of the Group prepared nether US GAAP and IFRSs are arsenic follows: