Financial Performance - For the first quarter of fiscal year 2023, New Oriental's net revenue was $744.8 million, a decrease of 43.1% year-over-year[4] - Operating profit for the first quarter increased by 140.5% year-over-year to $78.0 million[4] - Net profit attributable to New Oriental shareholders rose by 9.0% year-over-year to $66.0 million[4] - Operating costs and expenses for the quarter were $666.8 million, a year-over-year decrease of 47.8%[11] - Non-GAAP operating profit for the quarter was $97.0 million, up 28.3% year-over-year, with a Non-GAAP operating margin of 13.0%[12] - Net profit attributable to shareholders for the quarter was $66.0 million, a 9.0% increase year-over-year, with basic and diluted earnings per ADS of $0.39 and $0.38 respectively[13] - Non-GAAP net profit attributable to shareholders was $83.7 million, a decrease of 24.7% year-over-year, with Non-GAAP earnings per ADS of $0.49 and $0.48[14] - Net revenue for the quarter ended August 31, 2022, was $744.82 million, a decrease of 43% compared to $1.31 billion for the same period in 2021[29] - Operating profit for the quarter was $77.99 million, significantly up from $32.43 million in the same quarter of the previous year[29] - The company reported a net profit of $84.58 million for the quarter, compared to $42.64 million in the same quarter of the previous year[29] - Basic earnings per share for the quarter was $0.04, consistent with the same period in 2021[29] - Non-GAAP operating profit was $97.04 million, reflecting a margin of 10.5% for the quarter ended August 31, 2022[30] Cash Flow and Financial Position - The company recorded operating cash flow of $185.2 million for the quarter[8] - As of the end of the fiscal quarter, total cash, cash equivalents, and short-term investments amounted to approximately $4.3 billion[8] - Net operating cash flow for the first quarter of fiscal year 2023 was approximately $185.2 million, with capital expenditures of $14.0 million[15] - As of August 31, 2022, cash and cash equivalents totaled $1,103.9 million, with deferred revenue decreasing by 30.3% year-over-year to $1,012.5 million[16] - Cash and cash equivalents totaled $1.10 billion as of August 31, 2022, down from $1.15 billion as of May 31, 2022[26] - The ending cash, cash equivalents, and restricted cash balance for the three months ended August 31, 2022, was $1,137,112,000, compared to $1,349,340,000 at the end of the same period in 2021[33] - The net cash provided by operating activities for the three months ended August 31, 2022, was $185,247,000, a significant improvement from a net cash used of $(446,513,000) in the same period of 2021[33] - The total assets as of August 31, 2022, amounted to $6.02 billion, slightly down from $6.03 billion as of May 31, 2022[26] - Total liabilities were $2.20 billion as of August 31, 2022, compared to $2.24 billion as of May 31, 2022[28] - The company’s total equity was $3.82 billion as of August 31, 2022, compared to $3.79 billion as of May 31, 2022[28] Business Operations and Initiatives - The total number of schools and learning centers decreased to 706, down from 744 as of May 31, 2022, and down from 1,556 as of August 31, 2021[7] - The decline in net revenue was primarily due to the termination of K-9 subject after-school tutoring services in compliance with government policies[10] - New business initiatives, including non-academic tutoring, have shown positive results with approximately 297,000 registrations in the first quarter[7] - The significant decrease in deferred revenue was primarily due to the termination of K-9 after-school tutoring services in compliance with government policies[16] Future Outlook - For the second quarter of fiscal year 2023, the company expects net revenue to be between $601.4 million and $619.2 million, representing a year-over-year decline of 6% to 9%[17] - The company anticipates a revenue increase of 1% to 4% in RMB for the second quarter[17] Shareholder Actions - The company initiated a share repurchase program with a maximum amount of $400 million, and as of October 25, 2022, approximately 1.6 million ADS had been repurchased for about $39.6 million[9] Earnings Announcement - The company will hold an earnings announcement conference call on October 26, 2022, at 8 AM ET[18]

Financial Performance - Total net revenues for the first fiscal quarter of 2023 decreased by 43.1% year over year to US$744.8 million[2] - Operating income increased by 140.5% year over year to US$78.0 million, with a non-GAAP operating margin of 13.0%[10] - Net income attributable to New Oriental increased by 9.0% year over year to US$66.0 million, with basic and diluted net income per ADS at US$0.39 and US$0.38, respectively[11] - Non-GAAP net income attributable to New Oriental for the quarter was US$83.7 million, representing a 24.7% decrease year over year[12] - Operating costs and expenses for the quarter decreased by 47.8% year over year to US$666.8 million[8] - Net revenues for the three months ended August 31, 2022, were USD 744.8 million, a decrease of 43% compared to USD 1.3 billion for the same period in 2021[28] - Operating income for the same period was USD 78.0 million, significantly up from USD 32.4 million in the prior year, indicating improved operational efficiency[28] - Net income attributable to New Oriental's shareholders was USD 66.0 million, compared to USD 60.5 million in the same quarter of the previous year, reflecting a year-over-year increase of 9%[28] - Non-GAAP operating income for the three months ended August 31, 2022, was USD 97.0 million, with a non-GAAP operating margin of 13.0%, up from 5.8% in the prior year[29] Cash and Assets - Cash and cash equivalents, term deposits, and short-term investments totaled approximately US$4.3 billion by the end of the quarter[5] - Cash and cash equivalents as of August 31, 2022, totaled USD 1.1 billion, a slight decrease from USD 1.15 billion as of May 31, 2022[27] - Total current assets increased to USD 4.6 billion as of August 31, 2022, compared to USD 4.5 billion as of May 31, 2022[27] - Total liabilities decreased to USD 2.2 billion as of August 31, 2022, from USD 2.24 billion as of May 31, 2022[27] - The company’s total equity increased to USD 3.8 billion as of August 31, 2022, compared to USD 3.79 billion as of May 31, 2022[27] Future Outlook - New Oriental expects total net revenues for the second quarter of fiscal year 2023 to be in the range of US$601.4 million to US$619.2 million, reflecting a year-over-year decline of 9% to 6%[16] - The deferred revenue balance at the end of the first quarter of fiscal year 2023 was US$1,012.5 million, a decrease of 30.3% compared to the previous year[15] Operational Focus - The total number of schools and learning centers decreased to 706, down from 744 in May 2022 and 1,556 in August 2021[4] - The overseas test preparation and overseas study consulting businesses increased by approximately 2% and 21% year over year, respectively[5] - New Oriental continues to focus on enhancing its operational performance and liquidity through non-GAAP financial measures, which exclude share-based compensation expenses and fair value changes of long-term investments[26]

Financial Performance - New Oriental Education & Technology Group Inc. reported its audited annual performance for the fiscal year ending May 31, 2022[1]. - Revenue for the fiscal year reached $1.2 billion, reflecting a 15% increase compared to the previous year[11]. - The total net revenue for the fiscal year ending May 31, 2022, was $3,105.246 million, a decrease from $4,276.539 million in 2021, representing a decline of approximately 27.4%[36]. - The company reported a net loss of $1,220,276 in 2022, compared to a profit of $297,237 in 2018, indicating a significant downturn in profitability[37]. - Total net revenue decreased by 27.4% from $4,276.5 million for the fiscal year ended May 31, 2021, to $3,105.2 million for the fiscal year ended May 31, 2022, primarily due to the termination of K-9 academic training services in China[48]. - The company reported a significant increase in student enrollment, with a total of 1.5 million registered students, representing a 20% year-over-year growth[9]. - The company anticipates growth strategies that will impact future financial performance and operational results[16]. Market Expansion and Strategy - The company plans to expand its market presence by opening 50 new learning centers across China in the next fiscal year[10]. - A new online learning platform was launched, which has already attracted 300,000 users within the first quarter of its release[12]. - The company is exploring potential acquisitions to strengthen its market position and diversify its offerings[9]. - The company has identified strategic acquisitions as a key component of its growth strategy moving forward[42]. - The company is shifting focus to non-K-9 educational products and services, including exam preparation courses and digital learning solutions, to explore new business opportunities[61]. Regulatory Environment and Compliance - The company is subject to various risks related to the provision of new educational courses, services, and products[14]. - The company is subject to significant uncertainty regarding future overseas offerings and whether it will need to complete filings with the CSRC or obtain specific regulatory approvals[27]. - The company’s operations are subject to various regulatory approvals in China, and failure to comply with these regulations could have a significant adverse impact on its business and financial performance[25]. - The company faces significant risks related to regulatory developments that may adversely impact its business, financial condition, and operating results[52]. - The company must navigate the complexities of new rules regarding overseas listings, which may restrict its ability to raise capital in international markets[152]. Risks and Challenges - The company faces unique risks related to contractual arrangements with variable interest entities, which may not provide effective control compared to direct ownership[21]. - The company faces significant challenges in maintaining teaching quality and cultural consistency amid ongoing business expansion[61]. - The company may not be able to effectively manage changes in its business or attract qualified teachers, which could adversely affect its financial condition and operational performance[62]. - The company faces potential penalties and reputational damage due to non-compliance with privacy, data protection, and cybersecurity regulations, which could significantly adversely affect its business[152]. - The company faces significant risks if any of its Chinese subsidiaries or affiliated entities are found to violate existing or future Chinese laws or regulations[127]. Financial Health and Liabilities - The total liabilities increased from $1,763,017 in 2018 to $2,241,142 in 2022, representing a growth of about 27.1%[39]. - The company has not received property ownership certificates from some lessors, which may impact its expansion plans and could lead to additional relocation costs if leases are challenged[115]. - The company may struggle to control rental costs and secure leases at reasonable prices, which could negatively impact its operations[114]. - The company lacks liability insurance for some teaching facilities, which may negatively impact its reputation and financial performance if claims arise from injuries[99]. - The company may incur significant adverse effects on its financial condition and operating results due to potential tax liabilities under recent tax announcements[183]. Shareholder and Stock Information - The company’s founder and executive chairman holds a 99% stake in a key affiliated entity, indicating significant ownership concentration[19]. - The trading price of the company's American Depositary Shares (ADS) fluctuated significantly, with a high of $110.90 and a low of $8.60 from June 1, 2021, to September 28, 2022[194]. - The company’s ordinary shares began trading on the Hong Kong Stock Exchange on November 9, 2020, under the stock code "9901," and it is not subject to certain provisions of the Hong Kong Listing Rules[192]. - American Depositary Share holders may have limited rights compared to ordinary shareholders, particularly regarding voting and participation in shareholder meetings[196]. Technology and Innovation - Investment in technology and product development increased by 25%, focusing on enhancing digital learning tools[10]. - The company developed the OMO standardized digital classroom teaching system in 2014, which supports offline learning activities[97]. - The company is exploring digital education resources through its smart learning systems, but faces potential regulatory scrutiny regarding their classification as tutoring activities[67]. Legal and Intellectual Property Issues - The company has faced past legal claims regarding intellectual property infringement, resulting in a total compensation of approximately RMB 6.5 million[73]. - The company is committed to complying with intellectual property laws and has implemented policies to prevent infringement by employees and contractors[73]. - Legal disputes could lead to increased expenses, loss of total revenue, and negative publicity, impacting the company's financial performance[75]. Economic and Geopolitical Factors - Geopolitical uncertainties and economic slowdowns may reduce the number of students studying abroad, potentially affecting the company's course enrollment[107]. - The ongoing COVID-19 pandemic has severely affected both the Chinese and global economies, contributing to uncertainty regarding future economic conditions[148]. - The company faces risks from potential global or Chinese economic recessions, which could negatively impact its financial status and ability to secure financing[147].

Interest Rate Risk - The company has not used any derivative financial instruments to manage interest rate risk exposure, and a hypothetical one percentage point decrease in interest rates would have resulted in a decrease of approximately US$52.6 million in interest income for the year ended May 31, 2022 [766]. - The company has not anticipated being exposed to material risks due to changes in interest rates, although future interest income may be lower than expected [766]. Foreign Exchange Risk - The company's revenues and most expenses are denominated in RMB, with exposure to foreign exchange risk primarily related to cash and cash equivalents in U.S. dollars [767]. - A hypothetical 10% appreciation of the RMB against the U.S. dollar would have resulted in a decrease of RMB18.84 million in the value of U.S. dollar-denominated financial assets as of May 31, 2022 [769]. - The company has not hedged exposures denominated in foreign currencies, and the value of investments in ADSs will be affected by the foreign exchange rate between U.S. dollars and RMB [767]. Investor Relations and Costs - The depositary has agreed to reimburse the company US$15 million for expenses related to the investor relations program, which has been recognized in other income [778]. - Investors requesting the transfer of common shares will bear all associated costs, including a fee of HK$2.50 for each transfer of common shares [791]. - Holders of common shares and ADSs must pay up to US$5.00 per 100 ADSs for each issuance or cancellation related to the ADS program [791]. Transaction Costs - The transaction costs for dealings in common shares on the Hong Kong Stock Exchange include a trading fee of 0.005% of the transaction consideration, charged to both buyer and seller [779]. Share Registration and Compliance - The company intends to move a portion of its issued common shares from the Cayman Islands register to the Hong Kong share register to facilitate fungibility and conversion between ADSs and common shares [783]. - The depositary may require satisfactory proof of identity and compliance with established procedures before issuing ADSs or permitting withdrawal of common shares [789]. Fees and Deductions - The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees [777]. Financial Health - There are no defaults, dividend arrearages, or delinquencies reported by the company [792].

Financial Data and Key Metrics Changes - Operating costs and expenses for the quarter were $629.7 million, representing a 52.1% decrease year-over-year [28] - Non-GAAP operating costs and expenses for the quarter were $600.9 million, representing a 53.6% decrease year-over-year [28] - Cost of revenue decreased by 57.2% year-over-year to $247.8 million [29] - Net loss attributable to New Oriental for the quarter was $189.3 million, compared to the loss of $45.5 million in the same period last year [31] - Cash and cash equivalents, term deposits, and short-term investments totaled approximately $4.2 billion by the end of the quarter [26] Business Line Data and Key Metrics Changes - The overseas test prep business recorded a revenue increase of 6% in dollar terms for fiscal year 2022 [7] - The overseas study consulting business recorded a revenue increase of about 16% in dollar terms year-over-year for fiscal year 2022 [7] - The adults and university students business recorded a rapid growth of approximately 30% year-over-year for fiscal year 2022 [7] - The non-academic tutoring business has been rolled out in over 50 cities, contributing more than 60% of its revenue from the top 10 cities in China [9][17] - The intelligence learning system and device business has shown improved customer retention rates and scalability, with over 60% revenue contribution from the top 10 cities [10][16] Market Data and Key Metrics Changes - The deferred revenue balance at the end of the quarter was $933.1 million, a decrease of 51.6% compared to $1,926.4 million at the end of the previous quarter [34] - The company has reduced the total number of schools and learning centers to 744 by the end of the fiscal year [19] Company Strategy and Development Direction - The company is focusing on new business opportunities that encourage all-round development of students while generating profit for shareholders [6] - The OMO (Online-Merge-Offline) system has been emphasized as a key component during the restructuring process and is expected to provide flexibility in learning [20] - The company is committed to investing in R&D to enhance its educational services and adapt to regulatory changes [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainable profitability of remaining key businesses and the growth potential of new initiatives [35] - The company expects total net revenues in the first quarter of fiscal year 2023 to be in the range of $641.3 million to $680.6 million, representing a year-over-year decline of 51% to 48% [37] - Management believes that the overall impact of the pandemic on business and financials will be limited due to the OMO system [36] Other Important Information - The company authorized a share repurchase program of up to $400 million from July 28, 2022, through May 31, 2023 [26] - The company invested $36 million in the quarter and $166 million in the full fiscal year to improve and maintain the OMO teaching platform [21] Q&A Session Summary Question: Revenue breakdown for guidance by major categories - Management indicated that a breakdown of revenue would be provided in the next quarter [39] Question: Outlook for the number of learning centers - Management noted that the number of learning centers is higher than previously expected, indicating resilience in traditional business lines [40] Question: Revenue contribution from new initiatives - Management expects the new business initiatives to contribute around 20% of total revenue, excluding DONG FANG ZHEN XUAN [52] Question: GP margin expectations - Management anticipates higher gross margins in the upcoming quarters, driven by revenue growth and operational leverage [58] Question: Competition with public schools - Management believes that their extensive data and teaching experience will provide a competitive edge against public schools [63]

Financial Data and Key Metrics Changes - Operating costs and expenses for the quarter were $755.3 million, representing a 30.6% decrease year-over-year [34] - Non-GAAP operating costs and expenses for the quarter were $725.3 million, a 32.5% decrease year-over-year [34] - Net loss attributable to New Oriental for the quarter was $122.4 million, compared to an income of $151.3 million in the same period last year [38] - Cash and cash equivalents totaled approximately $4.4 billion by the end of the quarter [31] Business Line Data and Key Metrics Changes - Overseas test prep business recorded a year-over-year revenue growth of about 8% for the first nine months of the fiscal year [10] - Overseas study consulting business reported a revenue increase of about 26% year-over-year for the same period [10] - Domestic test prep business targeting adults and university students recorded a rapid growth of approximately 59% year-over-year [10] Market Data and Key Metrics Changes - Deferred revenue balance at the end of the quarter was $971.3 million, a decrease of 47.9% compared to the same period last year [41] - The company reduced the total number of schools and learning centers to 847 by the end of the fiscal quarter [22] Company Strategy and Development Direction - The company is focusing on new business opportunities, including non-academic tutoring and intelligent learning systems [11] - Management emphasized the importance of the OMO (Online-Merge-Offline) system during the restructuring process [23] - Future growth is expected from new initiatives, which are anticipated to become key revenue contributors [80] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainable profitability of remaining key businesses and the growth potential of new initiatives [33] - The company is prepared for a new beginning as it identifies new and profitable market opportunities [43] - Management acknowledged the impact of the pandemic but noted that the OMO system has minimized learning disruptions [48] Other Important Information - The company invested $27 million in the quarter and $129 million in the first three quarters of the fiscal year to improve the OMO teaching platform [26] - The restructuring phase is nearing completion, with expectations of further closures of learning centers [56] Q&A Session Summary Question: What is the sustainability of the learning centers after restructuring? - Management plans to reduce the number of learning centers to between 650 and 700 by the end of the fiscal year [56] Question: How much of the costs this quarter are related to one-off restructuring? - Most one-off costs related to learning center closures were accrued in the first half of the fiscal year [57] Question: What is the revenue contribution from new initiatives? - New business initiatives are expected to contribute over 20% of revenue next year [64] Question: What is the retention rate for new non-academic courses? - Retention rates for non-academic courses are improving and are close to those of academic courses from the previous year [67] Question: How does the company view competition in the new business area? - Management believes competition will lessen as many competitors have exited the market [68] Question: What are the profitability expectations for remaining and new businesses? - Remaining businesses have margins of 10% to 20%, while new businesses are expected to achieve similar margins in the upcoming year [76]

Financial Performance - For the third quarter of fiscal year 2022, net revenue decreased by 48.4% to $614.1 million compared to $1,190.5 million in the same period last year[3]. - The operating loss for the third quarter was $141.2 million, a significant decline from an operating profit of $101.5 million in the previous year, representing a change of -239.1%[3]. - Net loss attributable to New Oriental shareholders was $122.4 million, compared to a net profit of $151.3 million in the same quarter last year, marking a -180.9% change[3]. - For the first nine months of fiscal year 2022, net revenue was $2.58 billion, down 15.8% from $3.06 billion in the same period of the previous year[4]. - The operating loss for the first nine months was $876.9 million, compared to an operating profit of $219.6 million in the prior year, indicating a -499.2% change[4]. - Non-GAAP operating loss for the first nine months was $772.7 million, a decline of -387.9% from a profit of $268.4 million in the same period last year[4]. - Basic and diluted net loss per ADS for the third quarter was $(0.72), compared to earnings of $0.90 per ADS in the same quarter last year, reflecting a -180.6% change[3]. - The net loss attributable to shareholders for the quarter was $122.4 million, compared to a profit of $151.3 million in the same period last year, with a loss per ADS of $0.72[11]. - For the nine months ended February 28, 2022, net revenue was $2,581,223, a decrease of 15.7% from $3,064,553 in the same period of 2021[36]. - The net loss for the nine months ended February 28, 2022, was $(1,033,609), compared to a profit of $305,255 in the same period of 2021[36]. - Basic and diluted net loss per American Depositary Share (ADS) for the nine months ended February 28, 2022, was $(5.89), compared to $2.33 in 2021[37]. Operational Changes - Total number of schools and learning centers decreased to 847, down from 1,625 a year ago, reflecting a reduction of 778 centers[6]. - The total number of schools as of February 28, 2022, was 111, indicating a significant reduction from previous counts[6]. - For the third quarter of fiscal year 2022, New Oriental reported net revenue of $614.1 million, a decline of 48.4% year-over-year, primarily due to the termination of K-9 subject tutoring services in compliance with government policies[8]. - Operating costs and expenses for the quarter were $755.3 million, down 30.6% year-over-year, with a significant reduction in revenue costs decreasing by 30.9% to $372.7 million[9]. - The company is actively exploring new business opportunities, including non-academic tutoring and smart learning systems, which are expected to contribute meaningfully to total revenue starting from the next fiscal year[7]. Assets and Liabilities - As of February 28, 2022, New Oriental's cash and cash equivalents amounted to approximately $1.47 billion, with short-term investments totaling $2.03 billion[13]. - Deferred revenue at the end of the third quarter was $971.3 million, a decrease of 47.9% compared to $1.87 billion in the same quarter of the previous fiscal year[13]. - New Oriental's total assets as of February 28, 2022, amounted to $6.67 billion, a decrease from $10.15 billion as of May 31, 2021[22]. - Cash and cash equivalents decreased to $1.47 billion from $1.61 billion year-over-year[22]. - The total current assets were reported at $4.69 billion, down from $6.57 billion in the previous year[22]. - The company reported a net receivable of $2.03 billion, a significant drop from $3.43 billion[22]. - Total current liabilities amounted to $1,889,935 as of February 28, 2022, down from $3,471,445 as of May 31, 2021[24]. - Total liabilities were $2,564,640 as of February 28, 2022, compared to $5,132,877 as of May 31, 2021[25]. - Total equity was $4,022,771 as of February 28, 2022, compared to $4,913,275 as of May 31, 2021[26]. Financial Metrics and Management Insights - The company emphasizes the importance of Non-GAAP financial metrics for assessing performance and liquidity[19]. - New Oriental's management acknowledges inherent risks and uncertainties that may affect future performance[18]. - The company reported a non-GAAP operating loss of $(111,232) for the three months ended February 28, 2022, compared to a profit of $115,892 in the same period of 2021[32]. - The company’s non-GAAP net loss attributable to shareholders was $(95,503) for the three months ended February 28, 2022, compared to a profit of $163,236 in the same period of 2021[32]. - The company reported a significant increase in general and administrative expenses, which rose to $1,580,514 for the nine months ended February 28, 2022, from $980,342 in 2021[36]. - The company experienced a loss of $(13,251) from changes in the fair value of investments for the nine months ended February 28, 2022, compared to a loss of $(4,597) in 2021[39]. - The company’s operating loss margin under non-GAAP was -34.0% for the nine months ended February 28, 2022, compared to 7.2% in 2021[39].

Financial Performance - New Oriental Education reported a significant decline in total revenue due to the cessation of K-9 subject-related training services, impacting the six-month period ending November 30, 2021[3]. - Net revenue for the six months ended November 30, 2021, was $1,967,132, an increase from $1,874,055 for the same period in 2020, representing a growth of approximately 4.97%[9]. - Total operating costs and expenses for the six months ended November 30, 2021, were $2,702,802, compared to $1,755,897 in 2020, indicating an increase of about 53.73%[9]. - The company reported a net loss of $907,960 for the six months ended November 30, 2021, compared to a net profit of $178,613 in the same period of 2020, reflecting a significant decline in profitability[9]. - Basic and diluted net loss per American Depositary Share (ADS) for the six months ended November 30, 2021, was $(0.52), compared to a profit of $0.14 for the same period in 2020[9]. - The company experienced a loss of $(14,323) from changes in the fair value of investments for the six months ended November 30, 2021, compared to a loss of $(2,154) in 2020[9]. - Non-controlling interests accounted for a net loss of $31,980 for the six months ended November 30, 2021, compared to $49,941 in the same period of 2020[9]. - The company’s total operating loss for the six months ended November 30, 2021, was $(735,670), a significant decrease from an operating profit of $118,158 in the same period of 2020[9]. Assets and Liabilities - Total assets decreased from $10,151,053 thousand as of May 31, 2021, to $7,614,312 thousand as of November 30, 2021, representing a reduction of approximately 25.3%[4][8]. - Current assets fell from $6,574,155 thousand to $5,154,963 thousand, a decrease of about 21.5%[4]. - Total liabilities decreased from $5,132,877 thousand to $3,433,761 thousand, a reduction of approximately 33.1%[7][8]. - Shareholders' equity decreased from $5,018,176 thousand to $4,180,551 thousand, reflecting a decline of approximately 16.7%[8]. - Cash and cash equivalents were reported at $1,218 thousand, with short-term investments totaling $2,632,398 thousand as of November 30, 2021[4]. - Cash and cash equivalents, and restricted cash decreased by $581,997, ending at $1,050,130 for the six months ended November 30, 2021, down from $2,648,124 in 2020[12]. Operational Changes - The company has shifted focus towards non-K-9 educational products and services, including exam preparation courses and adult language training[3]. - The company incurred increased costs and expenses due to the termination of multiple learning center lease agreements and a layoff plan[3]. - The company plans to explore new business opportunities leveraging its operational experience and brand recognition[3]. - New Oriental will continue to seek guidance from government authorities and adjust its operations according to policy directives[3]. Cash Flow - Operating cash used for the six months ended November 30, 2021, was $(1,074,835), compared to cash generated from operations of $802,276 in the same period of 2020[12]. - The total cash flow from investing activities for the six months ended November 30, 2021, was $653,374, compared to cash used of $(796,800) in 2020[12].

Financial Performance - Total net revenues for the six months ended November 30, 2021, were $1,967,132, representing an increase from $1,874,055 for the same period in 2020, a growth of approximately 5%[4] - Operating loss for the six months ended November 30, 2021, was $(735,670), compared to an operating income of $118,158 for the same period in 2020[4] - Net loss attributable to New Oriental Education & Technology Group Inc. for the six months ended November 30, 2021, was $(875,980), a significant decline from a net income of $228,554 in the same period of 2020[4] - The total operating costs and expenses for the six months ended November 30, 2021, were $2,702,802, significantly higher than $1,755,897 for the same period in 2020, an increase of approximately 53.8%[4] Assets and Liabilities - Total current assets decreased to $5,154,963 as of November 30, 2021, down from $6,574,155 as of May 31, 2021, a decline of approximately 21.5%[2] - Cash and cash equivalents decreased to $1,026,912 as of November 30, 2021, compared to $1,612,211 as of May 31, 2021, a decrease of about 36.2%[2] - Total liabilities as of November 30, 2021, were $5,132,877, down from $3,433,761 as of May 31, 2021, indicating a significant increase in liabilities[3] - Total equity decreased to $4,180,551 as of November 30, 2021, from $5,018,176 as of May 31, 2021, reflecting a decline of approximately 16.7%[3] Cash Flow - The company reported a net cash used in operating activities of $(1,074,835) for the six months ended November 30, 2021, compared to net cash provided by operating activities of $802,276 for the same period in 2020[6] - The company had a net cash provided by investing activities of $653,374 for the six months ended November 30, 2021, contrasting with net cash used in investing activities of $(796,800) for the same period in 2020[6]

Share Structure and Listing - The company reported a total of 1,690,082,150 ordinary shares with a par value of $0.001 each as of May 31, 2021[5] - The company's American Depositary Shares (ADS) are listed on the New York Stock Exchange under the ticker symbol "EDU"[3] - The company's American Depositary Shares (ADS) ratio changed from 1 ADS representing 4 ordinary shares to 1 ADS representing 1 ordinary share on August 18, 2011, with this change reflected retroactively in the annual report[9] - The company's ADS holders may have fewer rights compared to ordinary shareholders, including limited voting rights and potential delays in receiving voting materials[116] - ADS holders may face limited participation in future rights offerings, potentially leading to equity dilution[117] - The company's ADS may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors located in China, which could significantly adversely affect the value of investors' holdings[22] - The company's American Depositary Shares (ADS) and ordinary shares have experienced significant price volatility, with ADS prices ranging from $1.70 to $19.68 and ordinary shares ranging from HK$13.50 to HK$154.10 between June 2020 and September 2021[114] - The company's ADS and ordinary shares have experienced and may continue to experience significant price volatility, potentially causing substantial losses for shareholders[23] - The company's American Depositary Shares (ADS) may be subject to transfer restrictions, and the depositary may refuse to deliver or transfer ADS under certain circumstances[118] Financial Performance and Reporting - The company's financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP)[6] - The company's internal control over financial reporting was deemed effective by its registered public accounting firm[6] - The company's annual report includes audited consolidated financial statements for the fiscal year ended May 31, 2021[1] - The company's annual report is available on the Hong Kong Stock Exchange website and the company's investor relations website[1] - New Oriental Education & Technology Group Inc. reported selected consolidated financial data for fiscal years ending May 31, 2019, 2020, and 2021, with audited financial statements included in the annual report[13] - The company's financial statements are presented in USD, with certain financial data converted to USD for convenience using exchange rates of RMB 6.3674 to USD 1.00 and HKD 7.7610 to USD 1.00 as of May 28, 2021[9] - Net revenue from education courses and services increased from $1,608,954 thousand in 2017 to $3,936,969 thousand in 2021, representing a growth of approximately 145% over five years[14] - Total net revenue grew from $1,799,509 thousand in 2017 to $4,276,539 thousand in 2021, an increase of approximately 138%[14] - Operating income fluctuated over the years, peaking at $399,003 thousand in 2020 before dropping to $117,266 thousand in 2021[14] - Net profit attributable to shareholders decreased from $274,457 thousand in 2017 to $334,414 thousand in 2021, with a notable drop in 2021 compared to 2020[14] - Total assets increased significantly from $2,924,979 thousand in 2017 to $10,151,053 thousand in 2021, reflecting substantial growth in the company's asset base[17] - Cash and cash equivalents grew from $641,018 thousand in 2018 to $1,612,211 thousand in 2021, indicating improved liquidity[17] - Total liabilities rose from $1,204,901 thousand in 2017 to $5,132,877 thousand in 2021, reflecting increased financial obligations[17] - The company recorded goodwill impairment losses of $5.2 million in FY2019, $0 in FY2020, and $28.9 million in FY2021, along with $2.9 million in intangible asset impairment losses in FY2021[49] - The company reported a fair value loss of $3.8 million on long-term investments in FY2021, including a $5.5 million loss from its investment in Beijing Shangde[50] - The company's deferred revenue is subject to future performance obligations and may not represent actual revenue in future periods[48] - The company's financial and operating performance may not meet market expectations due to factors such as economic conditions, regulatory changes, and consumer behavior shifts[47] Regulatory and Legal Risks - The company faces significant risks related to regulatory changes in China's private education sector, particularly the "Double Reduction" policy, which has adversely impacted its business and financial performance[20] - The company's business, financial condition, and operating performance may be significantly adversely affected by changes in China's economic, political, or social conditions or government policies[22] - The company's ability to provide or continue to provide securities to investors may be severely restricted or completely hindered by Chinese government regulations, potentially leading to a significant decline in the value of such securities[22] - The company's operations and the value of its American Depositary Shares (ADS) may be significantly adversely affected by uncertainties in China's legal system, including risks related to law enforcement and rapidly evolving regulations[22] - The company's business, financial condition, and operating performance, as well as its ability to obtain financing, may be adversely affected by global or Chinese economic downturns[22] - The company's ADS may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors located in China, which could significantly adversely affect the value of investors' holdings[22] - The company's business, financial condition, and operating performance have been and will continue to be significantly adversely affected by compliance with China's "Double Reduction" policy and its implementation measures[24][25][26] - The company has ceased providing academic tutoring services during national holidays, weekends, and school holidays, and may take further actions, including closing some learning centers and layoffs, to comply with regulations[26] - The company may face fines, penalties, or be required to immediately terminate certain operations due to regulatory non-compliance, which could further adversely affect its business, financial condition, and operating performance[26] - The company may incur significant impairment and severance costs related to lease terminations, employee dismissals, and other actions taken in response to regulatory developments, which could adversely affect its financial condition, operating performance, and prospects[26] - The revised "Private Education Promotion Law" prohibits social organizations and individuals from controlling private schools providing compulsory education or non-profit private schools offering preschool education through mergers or control agreements[27] - Off-campus tutoring institutions must comply with regulations including course material filing, class scheduling restrictions, and teacher qualification requirements[28] - The company's revenue may decline if it fails to attract students without significantly reducing course fees[29] - The company's business heavily relies on the "New Oriental" brand, and failure to maintain or enhance it could harm operations and performance[30] - The company depends on a qualified and dedicated teaching staff, and failure to maintain consistent teaching quality could negatively impact its brand and business[31] - The company's corporate structure, involving Cayman Islands registration and variable interest entities in China, poses legal and regulatory risks that could affect its operations and investor interests[21] - The company's ability to enforce share pledge agreements with variable interest entity (VIE) shareholders may be limited under Chinese law, with registered pledged equity amounts totaling RMB 50,000,000 for New Oriental China[74][75] - The company's contractual arrangements with VIEs and their shareholders are governed by Chinese law, and disputes must be resolved through arbitration or Chinese courts, which may limit enforcement capabilities[73] - The company's consolidated affiliated entities contributed 99.9% of total net revenue in fiscal year 2021, highlighting the critical importance of these arrangements to its financial performance[73] - The company may face challenges in enforcing its rights under share pledge agreements if Chinese courts determine that the registered pledged equity amounts represent the full collateral value, potentially leaving additional obligations unsecured[75] - The company's ability to direct the activities of consolidated affiliated entities and consolidate their financial results under U.S. GAAP could be jeopardized if contractual arrangements are not enforceable[73] - The company's reliance on contractual arrangements with VIEs and their shareholders exposes it to potential legal disputes and enforcement risks under Chinese law[73] - The company's Chinese operations are subject to regulatory risks, including potential restructuring requirements or restrictions on the use of proceeds from future offerings to fund its business in China[72] - The company's ability to operate private schools may be significantly impacted by changes in Chinese laws, regulations, and policies, such as the "Double Reduction" policy[78] - Contractual arrangements with consolidated affiliated entities may be subject to scrutiny by Chinese tax authorities, potentially leading to additional tax liabilities and penalties[79] - The company depends on dividends and distributions from its wholly-owned subsidiaries to meet cash and financing needs, which could be adversely affected if payment capabilities are restricted[79] - The company relies on dividends from its wholly-owned subsidiaries in China and service fees, license fees, and other payments from New Oriental China and its schools and affiliated companies to meet its cash needs, including any potential debt obligations[80] - Chinese regulations require subsidiaries to allocate at least 10% of post-tax profits (if any) to statutory reserves until the reserve reaches 50% of registered capital, and further allocations may be required for employee welfare funds[80] - Private schools in China must allocate a minimum of 25% of annual net profits to development funds if they seek reasonable returns, or 25% of the annual increase in net asset value if they do not seek reasonable returns[80] - Loans provided by the company to its Chinese subsidiaries or New Oriental China and its schools and affiliated companies must comply with Chinese regulations, including registration with the State Administration of Foreign Exchange (SAFE)[81] - The company may face restrictions on providing loans or additional capital injections to its Chinese subsidiaries due to Chinese regulations on offshore holding companies and currency exchange controls[81] - Foreign-invested enterprises in China are subject to restrictions on the use of RMB funds converted from foreign currency registered capital, which may limit the company's ability to fund or expand its business in China[82] - The company's ability to use proceeds from offshore offerings for its Chinese operations may be restricted by Chinese laws and regulations, potentially impacting liquidity and business expansion[83] - The company operates most of its business in China through contractual arrangements with New Oriental China and its schools and affiliated companies, which hold critical assets for its operations[83] - The company does not hold priority security interests or liens over the assets of New Oriental China, which could pose risks in the event of involuntary liquidation[83] - The company closely monitors the operations and finances of New Oriental China to mitigate risks of involuntary liquidation and ensure sufficient capital[83] - The company can enforce the transfer of all equity of New Oriental China to a designated entity if shareholders attempt to liquidate without prior consent[84] - New Oriental China shareholders are restricted from distributing dividends or retained earnings without the company's approval[84] - The company's operations are significantly influenced by China's political, economic, and social conditions, with potential adverse effects from government policies[85] - China's economic growth has slowed since 2010, and COVID-19 may continue to negatively impact the economy, potentially reducing demand for the company's products and services[85] - The Chinese government's significant oversight and discretionary power over the company's operations could lead to adverse changes in its business and ADS value[86] - Additional industry-wide regulations or government actions could severely limit the company's ability to offer securities, potentially causing a significant decline in its stock value[86] - The company's business, financial condition, and ability to obtain financing may be adversely affected by a global or Chinese economic recession[87] - Uncertainties in China's legal system, including the interpretation and enforcement of new laws, could negatively impact the company's operations[88] - Legal proceedings in China may be prolonged, costly, and divert resources and management attention from business operations[88] - The implementation and interpretation of the Foreign Investment Law may impact the company's structure, governance, and operations, potentially requiring adjustments to existing contractual arrangements or even divestment of certain business operations[89] - Internet content regulations in China could lead to penalties, license revocation, or website closures if the company's online platforms are found in violation, affecting operations and reputation[90] - The company must obtain and maintain multiple licenses and permits for its education and training services in China, with non-compliance risking fines, revenue forfeiture, or operational suspension[90] - Chinese regulations on overseas special purpose companies may restrict the company's ability to inject capital into its Chinese subsidiaries or repatriate profits, potentially impacting financial operations[91] - Regulatory uncertainties around employee participation in equity incentive plans could limit the company's ability to grant stock awards to Chinese employees, affecting talent retention[92] - Foreign acquisitions in China are subject to complex procedures under the M&A regulations and other Chinese laws, potentially hindering the company's growth through acquisitions[93] - Overseas investments by Chinese-controlled entities must comply with NDRC's approval, filing, and reporting requirements, with sensitive projects requiring pre-approval[94] - Rising labor costs in China, including wages and employee benefits, are expected to continue increasing, potentially impacting profitability[95] - The company's ability to pay dividends in foreign currency may be restricted due to China's foreign exchange controls[96] - Fluctuations in the RMB exchange rate against foreign currencies, particularly the USD, could significantly impact the company's revenue, profits, and stock value[97] - Limited availability of hedging tools in China to mitigate foreign exchange risks, with potential losses exacerbated by foreign exchange control regulations[98] - The company's six wholly-owned subsidiaries in China, including Beijing Zhiyu Jiaye Software Technology Co., Ltd. and Beijing Dingshixing Education Consulting Co., Ltd., qualify as "High-Tech Enterprises" and are eligible for a preferential corporate income tax rate of 15%[99] - Four of the company's wholly-owned subsidiaries in China, including Beijing Jinghong Software Technology Co., Ltd. and Beijing Zhiyuan Hangcheng Software Technology Co., Ltd., qualify as "Software Enterprises" and are exempt from corporate income tax for the first two profitable years, followed by a reduced tax rate of 12.5% for the next three years[99] - The company's actual effective tax rates for the fiscal years ending May 31, 2019, 2020, and 2021 were 26.96%, 27.46%, and 26.53%, respectively[100] - As of May 31, 2021, 11 of the company's schools have chosen to operate as non-profit schools, while 31 have chosen to operate as for-profit schools[100] - The termination of preferential tax treatments currently enjoyed by the company, particularly in major cities, could lead to an increase in the effective tax rate, resulting in higher income tax expenses and reduced net profits[100] - The company may be classified as a "resident enterprise" under Chinese tax law, potentially requiring it to pay Chinese income tax on its global income and withhold taxes on dividends paid to non-Chinese shareholders and ADS holders[100] - Foreign enterprises established outside China but with "effective management institutions" in China may be classified as "resident enterprises" and subject to a unified corporate income tax rate of 25%[101] - The State Taxation Administration has issued notices clarifying the criteria for determining "resident enterprise" status, including the location of senior management, financial decision-making, and key assets[101] - Overseas-registered, Chinese-controlled enterprises classified as "resident enterprises" must submit classification applications to local tax authorities and are subject to taxation on dividends, profits, and other equity investment income[101] - The company may be considered a Chinese resident enterprise, subject to a 25% corporate income tax rate on global income, potentially increasing tax burden and impacting cash flow and profitability[102] - Dividends received by non-Chinese investors may be subject to a 10% withholding tax if the company is deemed a Chinese resident enterprise[102] - Dividends from Chinese subsidiaries to non-resident enterprises are subject to a maximum withholding tax rate of 20%, reduced to 10% by the State Council[103] - Dividends paid to Hong Kong entities under the double taxation arrangement may be subject to a 5% withholding tax if certain conditions are met[103] - Indirect transfers of Chinese resident enterprise equity by non-resident enterprises may be reclassified and subject to a 10% withholding tax under Bulletin 7[104] - The company faces uncertainty regarding the application of Bulletin 7 and Bulletin 37, which may require significant resources to comply with or determine tax obligations[104] - The company's online education services may require specific licenses, and failure to obtain or maintain these licenses could result in fines, legal sanctions, or suspension of services[105] - The definition of "audio-visual programs" and "broadcast television programs" is ambiguous, creating uncertainty about whether the company's online courses require specific licenses[105] - The company's U.S. depositary shares may be delisted under the Holding Foreign Companies Accountable Act (HFCAA) if PCAOB cannot inspect auditors located in China, potentially adversely affecting investment value[106] - The HFCAA requires the SEC to prohibit trading of the company's securities if it determines that the company has submitted audit reports for three consecutive years (starting from 2021) from auditors not inspected by PCAOB[106] - The U.S. Senate passed a bill on June 22, 2021, which, if enacted, would reduce the required consecutive non-inspection years for delisting from three to two under the HFCAA[106] - PCAOB cannot fully evaluate the audit and quality control procedures of the company's independent registered public accounting firm due to its inability to conduct inspections in China[107] - In 2013, PCAOB established a cooperation framework with Chinese regulators for document exchange related to investigations, but joint inspections of audit firms in China remain unresolved[108] - The SEC's administrative proceedings against China's "Big Four" accounting firms (including the company's auditor) could result in financial statements being deemed non-compliant with securities laws[109] - If the SEC restarts administrative proceedings, U.S.-listed companies with major China operations may face difficulties retaining auditors, potentially leading to delisting[110] - Overseas regulators face significant challenges in conducting investigations or evidence collection within China due to legal and practical barriers[111] - China's new regulations on cracking down on securities violations, issued on July 6, 2021, may impose additional requirements on overseas-listed Chinese companies[112] - The company's compliance costs may increase if its shares are deemed to have a dual primary listing in Hong Kong, requiring potential revisions to its corporate structure and articles of association[113] - Shareholders may face challenges enforcing judgments against the company due to its Cayman Islands incorporation and primary operations in China, as Cayman Islands and Chinese laws may not enforce foreign judgments[119] - Chinese courts may not recognize or enforce U.S. court judgments against the company or its directors, as there is no treaty or reciprocal agreement between China and the U.S. for mutual recognition of foreign judgments[120] - Shareholder rights under Cayman Islands law are more