Financial Performance - For the third fiscal quarter ended February 28, 2023, net revenue increased by 22.8% year-over-year to $754.2 million[3] - Operating profit for the third fiscal quarter rose by 147.1% year-over-year to $66.5 million[3] - Net profit attributable to New Oriental shareholders increased by 166.7% year-over-year to $81.6 million[3] - Non-GAAP operating profit for the third fiscal quarter was $87.9 million, compared to a loss of $111.2 million in the same quarter last year, representing a 179.0% increase[4] - For the first nine months of fiscal 2023, net revenue was $2.14 billion, a decrease of 17.2% compared to $2.58 billion in the same period of fiscal 2022[5] - Non-GAAP net profit attributable to New Oriental shareholders for the first nine months was $196.8 million, compared to a loss of $885.9 million in the same period last year, reflecting a 122.2% increase[5] - Basic earnings per ADS for the third fiscal quarter was $0.49, compared to a loss of $0.72 in the same quarter last year, marking a 167.8% increase[4] - Non-GAAP net profit attributable to shareholders for the third quarter was $95.4 million, a year-over-year increase of 199.9%[13] - The company reported a net profit attributable to shareholders of $81.648 million for the three months ended February 28, 2023, compared to a net loss of $122.439 million in the same period of 2022[26] - Operating profit for the three months ended February 28, 2023, was $66.491 million, a significant improvement from an operating loss of $141.194 million in the same period of 2022[26] - Basic earnings per American Depositary Share (ADS) for the three months ended February 28, 2023, was $0.49, compared to a loss of $0.72 in the same period of 2022[30] - Net profit attributable to New Oriental for the nine months ended February 28, 2023, was $148,382, a significant improvement from a net loss of $(998,419) in the same period of 2022[33] - Basic earnings per American Depositary Share (ADS) for the nine months ended February 28, 2023, was $0.88, compared to a loss of $(5.89) in the same period of 2022[37] Operational Metrics - The total number of schools and learning centers as of February 28, 2023, was 712, an increase of 4 from 708 as of November 30, 2022, but a decrease of 135 from 847 as of February 28, 2022[7] - The total number of schools as of February 28, 2023, was 91[7] - The total number of schools and learning centers reached 712 by the end of the quarter, with significant investments in maintaining the OMO system to enhance operational efficiency[10] - The company achieved a net operating cash flow of approximately $190.5 million for the quarter, with total cash, cash equivalents, and short-term investments amounting to approximately $4.3 billion[11][13] - The deferred revenue balance increased by 19.8% year-over-year to $1.163 billion, reflecting strong demand for educational services[14] - Deferred revenue increased to $1.163 billion as of February 28, 2023, up from $933.062 million as of May 31, 2022, indicating a growth of approximately 24.6%[25] - The company generated a net cash inflow from operating activities of $190.482 million for the three months ended February 28, 2023, compared to a cash outflow of $234.965 million in the same period of 2022[32] - The company reported a cash flow from operating activities of $549,399 for the nine months ended February 28, 2023, compared to $(1,309,800) in the same period of 2022[39] Financial Position - New Oriental reported cash and cash equivalents of $1,329,453,000 as of February 28, 2023, an increase from $1,148,637,000 in the previous year[24] - Total current assets reached $4,700,797,000, up from $4,473,959,000 year-over-year[24] - The net value of intangible assets increased significantly to $27,534,000 from $2,800,000 in the previous year[24] - Goodwill increased to $107,717,000, compared to $70,803,000 in the previous year, indicating growth in acquisitions or market expansion[24] - Non-current restricted cash decreased to $31,175,000 from $45,890,000, reflecting changes in liquidity management[24] - The company has a total asset value of $6,164,297,000, compared to $6,034,666,000 in the previous year, showing overall growth[24] - New Oriental's net receivables increased to $28,850,000 from $16,430,000, indicating improved collection or sales performance[24] - Total liabilities as of February 28, 2023, amounted to $2.288 billion, slightly up from $2.241 billion as of May 31, 2022, indicating a year-over-year increase of about 2.1%[25] - The company’s total equity as of February 28, 2023, was $3.877 billion, an increase from $3.794 billion as of May 31, 2022, reflecting a growth of about 2.2%[25] Strategic Initiatives - The company plans to repurchase up to $400 million of its American Depositary Shares or common stock under a buyback program authorized by the board[9] - The company continues to focus on improving product competitiveness and developing diverse content, contributing to significant revenue growth in its e-commerce segment[10] - The company is focused on expanding its online education services and enhancing its brand presence in the competitive market[20] - New Oriental is actively investing in new product development and technology to enhance its educational offerings[20] - The management anticipates continued growth in the private education sector in China, despite potential risks and uncertainties[21] - The company aims to continue its market expansion and product development strategies to enhance future growth prospects[33] - The company expects net revenue for the fourth fiscal quarter to be between $801.8 million and $822.7 million, representing a year-over-year growth rate of 53% to 57%[17] Cost Management - The company’s operating expenses for the three months ended February 28, 2023, totaled $687.662 million, down from $755.285 million in the same period of 2022, showing a decrease of approximately 8.9%[29] - Total operating expenses for the nine months ended February 28, 2023, were $1,995,197, down 42.4% from $3,458,087 in the same period of 2022[33] - The company experienced a significant reduction in general and administrative expenses, which were $622,772 for the nine months ended February 28, 2023, down from $1,473,816 in the same period of 2022[36]

Financial Performance - Total net revenues for the third fiscal quarter of 2023 increased by 22.8% year over year to US$754.2 million[2]. - Operating income rose by 147.1% year over year to US$66.5 million, with a non-GAAP operating income increase of 179.0% to US$87.9 million[10]. - Net income attributable to New Oriental increased by 166.7% year over year to US$81.6 million, with non-GAAP net income rising by 199.9% to US$95.4 million[11][12]. - Net revenues for the three months ended February 28, 2023, were USD 754.2 million, an increase from USD 614.1 million in the same period of 2022, representing a growth of approximately 22.8%[29]. - Operating income for the same period was USD 66.5 million, compared to an operating loss of USD 141.2 million in the prior year[29]. - Net income attributable to New Oriental's shareholders for the three months ended February 28, 2023, was USD 81.6 million, a significant recovery from a net loss of USD 122.4 million in the same period of 2022[29]. - Non-GAAP net income for the three months ended February 28, 2023, was $95,362, compared to a non-GAAP net loss of $95,503 in the same period last year[31]. - The company reported a net income per ADS of USD 0.49 for the three months ended February 28, 2023, compared to a net loss per ADS of USD 0.72 in the prior year[29]. - The company achieved a non-GAAP net income per ADS of $0.57 for the three months ended February 28, 2023, compared to a non-GAAP net loss per ADS of $0.56 in the same period last year[31]. Cash Flow and Assets - The company reported a positive operating cash flow of US$190.5 million for the quarter, with cash and cash equivalents totaling approximately US$4.3 billion[5][13]. - Cash provided by operating activities for the three months ended February 28, 2023, was $190,482, a turnaround from cash used of $234,965 in the prior year[35]. - Total current assets as of February 28, 2023, were USD 4.7 billion, an increase from USD 4.5 billion as of May 31, 2022[27]. - The company’s cash and cash equivalents were USD 1.3 billion as of February 28, 2023, up from USD 1.1 billion a year earlier[27]. - The cash, cash equivalents, and restricted cash at the end of the period on February 28, 2023, stood at $1,431,001, compared to $1,511,242 at the end of the same period in 2022[35]. Expenses and Liabilities - Operating costs and expenses decreased by 9.0% year over year to US$687.7 million, with general and administrative expenses down by 25.4% to US$215.5 million[8]. - Total liabilities increased to USD 2.3 billion as of February 28, 2023, compared to USD 2.2 billion as of May 31, 2022[27]. - Total operating costs and expenses for the nine months ended February 28, 2023, were $1,995,197, down from $3,458,087 in the same period of 2022, reflecting a reduction of approximately 42.4%[37]. Deferred Revenue and Equity - The deferred revenue balance increased by 19.8% year over year to US$1,163.2 million as of February 28, 2023[14]. - Deferred revenue as of February 28, 2023, was USD 1.2 billion, compared to USD 933.1 million as of May 31, 2022, indicating a growth of approximately 25%[27]. - New Oriental's total equity increased to USD 3.9 billion as of February 28, 2023, from USD 3.8 billion as of May 31, 2022[27]. Business Operations and Strategy - The total number of schools and learning centers was 712 as of February 28, 2023, a decrease of 135 compared to 847 as of February 28, 2022[4]. - East Buy has achieved significant progress in its private label products and livestreaming e-commerce business, contributing to revenue growth[5]. - The company is focused on expanding its educational services and enhancing its brand presence in the competitive private education sector in China[22]. - The company has repurchased approximately 5.1 million ADSs for approximately US$157.6 million under its share repurchase program[6].

Financial Data and Key Metrics Changes - The company achieved a non-GAAP operating margin of 2.6% for the second quarter, a significant improvement from a negative 112.0% in the same period of the prior fiscal year [5][20] - Operating costs and expenses decreased by 55.1% year-over-year to $640.7 million, with non-GAAP operating costs down 55.4% to $621.9 million [18][19] - Net income attributable to New Oriental was $0.7 million compared to a loss of $936.5 million in the same period of the prior fiscal year [20] Business Line Data and Key Metrics Changes - The overseas test prep business recorded a revenue increase of 17% in dollar terms, or 30% in RMB terms year-over-year [7] - The overseas study consulting business saw a revenue increase of about 14% in dollar terms or 27% in RMB terms year-over-year [7] - The adults and university students business recorded a revenue decrease of 9% in dollar terms, but a 2% increase in RMB terms year-over-year [7] Market Data and Key Metrics Changes - The company reported a deferred revenue balance of $1,139.1 million, an increase of 6.9% compared to $1,065.8 million at the end of the second quarter of the prior fiscal year [21] - Koolearn recorded revenue of nearly RMB 2,080.1 million, representing a 590.2% increase from RMB 301.4 million in the same period of the prior fiscal year [14] Company Strategy and Development Direction - The company is focusing on innovative business opportunities and has successfully generated profits from new ventures alongside existing businesses [4][6] - The company plans to continue investing in new initiatives while promoting key remaining businesses to accelerate recovery and pursue profitable growth [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the overall impact of the pandemic will be temporary and manageable, with expectations for total net revenue in Q3 to be between $702.8 million to $719.8 million, representing a year-over-year increase of 14% to 17% [23] - The company anticipates sustainable profitability across its key businesses and expects new initiatives to maintain an upward growth trajectory [22] Other Important Information - The company has cash and cash equivalents totaling approximately $4.2 billion, indicating a healthy financial position [17] - The company authorized a share repurchase of up to $400 million, with approximately $79 million repurchased as of January 16, 2023 [17] Q&A Session Summary Question: Impact of COVID on February quarter and business expectations - Management indicated that the net impact of COVID is small and remains confident that the overall impact will be temporary and manageable [28][30] Question: Growth rates of new business lines post-COVID - Management expects upward growth in new business lines for Q3 and Q4, with significant revenue growth anticipated [33] Question: Revenue breakdown and margin profile for different business lines - The overseas related business contributed roughly 21% of total revenue, with margins expected to be around 10% to 15% for the year [38][39] Question: Third-quarter revenue guidance and profitability - The overseas related business is expected to contribute 24% to 25% of total revenue in Q3, with the school business contributing 43% to 44% [43] Question: Non-academic tutoring enrollment increase drivers - Management noted that the market is strong, and the profitability of new business lines is better than expected, with revenue growth anticipated to accelerate [59]

Financial Performance - For the second quarter of fiscal year 2023, net revenue decreased by 3.1% year-over-year to $638.2 million[3]. - The operating loss for the second quarter was $2.5 million, a significant improvement from an operating loss of $768.1 million in the same period last year[3]. - Net profit attributable to New Oriental shareholders was $0.7 million, compared to a net loss of $936.5 million in the previous year[3]. - For the first half of fiscal year 2023, net revenue was $1.38 billion, down 29.7% from $1.97 billion in the first half of fiscal year 2022[5]. - The operating profit for the first half was $75.5 million, a turnaround from an operating loss of $735.7 million in the same period last year[5]. - Non-GAAP operating profit for the second quarter was $16.3 million, compared to a loss of $737.1 million in the same period last year, representing a 102.2% improvement[4]. - Non-GAAP net profit attributable to New Oriental was $17.8 million for the second quarter, a significant recovery from a loss of $901.6 million in the previous year[4]. - Basic earnings per ADS for the second quarter was $0.00, a recovery from a loss of $5.52 in the same period last year[4]. - For the first six months of FY2023, New Oriental's net revenue was $1,383.0 million, a year-over-year decrease of 29.7%, but the operating profit was $75.5 million compared to a loss of $735.7 million in the same period last year[14]. - The company reported a net profit of $16.6 million for the three months ended November 30, 2022, compared to a net loss of $(950.6) million in the same period last year[26]. - The company reported a net profit of $101,167 for the three months ended November 30, 2022, compared to a net loss of $907,960 in the same period of 2021[33]. Operational Metrics - The total number of schools and learning centers as of November 30, 2022, was 708, an increase of 2 from 706 as of August 31, 2022, but a decrease of 585 from 1,293 as of November 30, 2021[7]. - The total number of schools and learning centers reached 708 by the end of the quarter, with a strategic focus on opportunities in major domestic cities[10]. - The company continues to focus on improving operational efficiency and expanding its educational offerings despite the challenges faced in the market[2]. - The company is actively involved in the online education sector, providing a diverse range of courses and services for students of all ages in China[19]. Cash Flow and Assets - New Oriental's net operating cash flow for Q2 was approximately $173.7 million, with capital expenditures of $11.4 million[13]. - Total current assets increased to $4.6 billion as of November 30, 2022, up from $4.5 billion as of May 31, 2022[24]. - Cash and cash equivalents decreased to $1.03 billion from $1.15 billion over the same period[24]. - New Oriental's cash and cash equivalents totaled approximately $1,029.9 million, with total short-term investments amounting to $2,145.7 million[13]. - Operating cash flow for the six months ended November 30, 2022, was $358,917, compared to a negative cash flow of $(1,074,835) in the prior year[38]. Liabilities and Equity - Total liabilities increased to $2.28 billion as of November 30, 2022, compared to $2.24 billion as of May 31, 2022[25]. - The company’s total equity was $3.74 billion as of November 30, 2022, down from $3.79 billion as of May 31, 2022[25]. Future Outlook - For the third quarter of fiscal year 2023, New Oriental expects net revenue to be between USD 702.8 million and USD 719.8 million, representing a year-over-year growth rate of 14% to 17%[18]. - The anticipated net revenue growth in RMB for the third quarter is projected to be between 24% and 27%[18]. - New Oriental plans to change its name to "East Buy Holding Limited" to align with its current and future business direction[17]. - New Oriental's management will hold an earnings conference call on January 17, 2023, to discuss the financial results and future outlook[18]. Shareholder Actions - New Oriental's share repurchase program authorized up to $400 million, with approximately 3.1 million shares repurchased for a total value of about $79.0 million as of January 16, 2023[9]. Financial Metrics - The company emphasizes the importance of Non-GAAP financial metrics to provide additional insights into its performance and liquidity[21]. - The company’s operating profit margin under non-GAAP was 5.5% for the three months ended November 30, 2022, compared to -37.4% in the same period of 2021[35]. - The company experienced a foreign exchange impact of $(35,997) on cash flow for the three months ended November 30, 2022[32]. - General and administrative expenses were reduced to $465,003 for the three months ended November 30, 2022, down from $1,291,682 in the same period of 2021[33].

Financial Performance - Total net revenues for the second fiscal quarter of 2023 decreased by 3.1% year-over-year to US$638.2 million[2] - Operating loss was US$2.5 million, a significant improvement from the loss of US$768.1 million in the same period of the prior fiscal year[10] - Net income attributable to New Oriental was US$0.7 million, compared to a loss of US$936.5 million in the same period of the prior fiscal year[11] - Non-GAAP operating income for the quarter was US$16.3 million, compared to a loss of US$737.1 million in the same period of the prior fiscal year, marking a 102.2% improvement[3] - The company reported a significant reduction in general and administrative expenses, which decreased from US$822.4 million in the previous year to US$209.0 million[33] - For the three months ended November 30, 2022, New Oriental reported a net income attributable to the company of $732, compared to a net loss of $936,510 for the same period in 2021[35] - Non-GAAP net income attributable to New Oriental for the three months ended November 30, 2022, was $17,750, a significant improvement from a loss of $901,625 in the prior year[35] - The total operating costs and expenses for the three months ended November 30, 2022, were $640,702, down from $1,426,424 in the same period of 2021, reflecting a reduction of approximately 55.1%[35] - The operating margin improved to -0.4% for the three months ended November 30, 2022, compared to -116.7% in the same period of 2021[35] - For the six months ended November 30, 2022, net revenues were $1,383,036, down from $1,967,132 in the same period of 2021, representing a decrease of approximately 29.7%[41] - The company reported an operating income of $75,501 for the six months ended November 30, 2022, compared to an operating loss of $735,670 in the same period of 2021[41] - Non-GAAP operating income for the six months ended November 30, 2022, was $113,347, a significant improvement from a loss of $661,448 in the prior year[43] Cash Flow and Assets - Cash and cash equivalents, term deposits, and short-term investments totaled approximately US$4.2 billion by the end of the fiscal quarter[5] - Net cash flow generated from operations for the second fiscal quarter was approximately US$173.7 million[13] - Deferred revenue balance increased by 6.9% year-over-year to US$1,139.1 million[14] - As of November 30, 2022, New Oriental's total current assets amounted to US$4,617.4 million, an increase from US$4,473.9 million as of May 31, 2022[31] - New Oriental's cash and cash equivalents as of November 30, 2022, were US$1,029.9 million, down from US$1,148.6 million as of May 31, 2022[31] - Cash, cash equivalents, and restricted cash at the end of the period on November 30, 2022, were $1,122,824, compared to $1,050,130 at the end of the same period in 2021[39] - Net cash provided by operating activities for the three months ended November 30, 2022, was $173,670, a turnaround from a cash outflow of $628,322 in the prior year[39] Business Operations - The total number of schools and learning centers was 708 as of November 30, 2022, a decrease of 585 compared to 1,293 as of November 30, 2021[4] - The overseas test preparation and overseas study consulting businesses increased by approximately 17% and 14% year-over-year, respectively[5] - Koolearn recorded revenues of RMB 2,080.1 million (US$293.5 million), a 590.2% increase year-over-year[18] - New Oriental expects total net revenues for Q3 FY2023 to be between US$702.8 million and US$719.8 million, reflecting a year-over-year increase of 14% to 17%[21] - The projected revenue increase in Renminbi for Q3 FY2023 is expected to be in the range of 24% to 27%[22] - The company anticipates ongoing growth in the Chinese private education market, which may impact its future performance positively[26] Corporate Changes - The company plans to change its name from "Koolearn Technology Holding Limited" to "East Buy Holding Limited" to better reflect its business direction[20]

Financial Data and Key Metrics Changes - The non-GAAP operating margin for Q1 2023 was 13%, and the non-GAAP net margin was 11.2%, both higher than the same period last year [7] - Operating income increased by 140.5% year-over-year to $78 million, while non-GAAP income from operations rose by 28.3% year-over-year to $97 million [26] - Net income attributable to New Oriental for the quarter was $66 million, representing a 9% increase year-over-year [26] - Cash and cash equivalents, term deposits, and short-term investments totaled approximately $4.3 billion [23] Business Line Data and Key Metrics Changes - The overseas test prep business recorded a revenue increase of 2% year-over-year [8] - The adults and university students business also saw a revenue growth of about 2% year-over-year [8] - The overseas study consulting business experienced a revenue increase of about 21% year-over-year [8] - New business initiatives contributed approximately 16% of total revenue, with non-academic tutoring being the largest contributor [55] Market Data and Key Metrics Changes - The deferred revenue balance decreased by 30.3% year-over-year, primarily due to the cessation of K-9 academic after-school tutoring services [28] - The top 10 cities in China contributed about 60% of the revenue from the non-academic tutoring business [10] - The revenue contribution from the top 10 cities in China for the intelligence learning system and device business was over 60% [11] Company Strategy and Development Direction - The restructuring process has largely been completed, leading to a new business model that combines existing and innovative business opportunities [6] - The company aims to encourage the all-around development of students while generating profits for shareholders [7] - New Oriental is focusing on expanding its OMO (Online-Merge-Offline) teaching platform and investing in new initiatives to drive growth [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustainable profitability across key businesses and the growth prospects of new initiatives [30] - The company anticipates lower revenue in Q2 due to seasonality in certain business lines, with a projected revenue range of $601.4 million to $619.2 million [32] - Management is cautiously optimistic about the impact of the ongoing pandemic on business operations, thanks to the OMO system [31] Other Important Information - The company invested $31 million in the OMO teaching platform during the quarter to enhance service quality [14] - A share repurchase plan of up to $400 million was authorized by the Board of Directors [23] Q&A Session Summary Question: What was the enrollment number for non-academic courses last quarter or last financial year? - Management indicated that the non-academic courses were newly launched, and last year's numbers were very small, but this quarter saw 297,000 enrollments [35] Question: Is there seasonality for the full year regarding non-academic enrollment? - Management noted that seasonality should not be very apparent for non-academic courses, unlike other businesses [36][37] Question: What drove the strong gross margin this quarter? - The increase in gross margin was attributed to downsizing of learning centers, lower fixed costs, and growth in revenue from Koolearn [40] Question: What is the growth outlook for each line of business? - Management expects strong growth in overseas-related businesses and new initiatives, with significant contributions from the non-academic tutoring and learning device businesses [45] Question: What is the revenue contribution from non-academic tutoring for Q1? - Non-academic tutoring contributed the largest share among new businesses, with overall new businesses contributing roughly 16% of total revenue [55] Question: What is the revenue breakdown for Q1? - The overseas-related business contributed approximately 24-25% of total revenue, while new businesses contributed about 16% [57]

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].