NEW ORIENTAL(EDU) - 2024 Q2 - Quarterly Report

Financial Performance - Total net revenues for the second fiscal quarter of 2024 increased by 36.3% year over year to US$869.6 million[2] - Operating income was US$21.3 million, compared to a loss of US$2.5 million in the same period of the prior fiscal year, representing a 957.8% increase[3] - Net income attributable to New Oriental surged by 4,007.4% year over year to US$30.1 million for the second fiscal quarter of 2024[3] - Non-GAAP net income attributable to New Oriental for the quarter was US$50.2 million, representing a 182.6% increase year over year[13] - New Oriental's net income for the three months ended November 30, 2023, was RMB30,066 (US$4.2 million), compared to RMB732 (US$0.1 million) in the same period of the prior year[30] - Non-GAAP net income attributable to New Oriental for the three months ended November 30, 2023, was $50,158 thousand, compared to $17,750 thousand in the prior year, representing an increase of 182%[32] - For the six months ended November 30, 2023, net revenues were $1,969,621 thousand, a 42.3% increase from $1,383,036 thousand in the same period of 2022[38] - The company reported a net income of $214.866 million for the six months ended November 30, 2023, compared to $101.167 million for the same period in 2022, reflecting a year-over-year increase of approximately 112.3%[52] Business Growth - The total number of schools and learning centers reached 843, an increase of 50 compared to the previous quarter[5] - The overseas test preparation and overseas study consulting businesses grew by approximately 46.5% and 31.7% year over year, respectively[5] - New educational business initiatives achieved 68.3% revenue growth year over year, with approximately 786,000 student enrollments in non-academic tutoring courses[6] - For the first six months ended November 30, 2023, East Buy recorded total revenue of RMB2,795.0 million (US$386.3 million), a 34.4% increase from RMB2,080.1 million in the same period of the prior fiscal year[19] - East Buy's net profit for the same period was RMB249.2 million (US$34.4 million), a 57.4% decrease from RMB585.3 million in the prior fiscal year[19] Cash Flow and Assets - Operating cash flow for the quarter was approximately US$300.6 million, with cash and cash equivalents totaling around US$4.8 billion[6] - New Oriental's total current assets increased to RMB4,976.9 million (US$688.5 million) as of November 30, 2023, from RMB4,413.9 million (US$610.5 million) as of May 31, 2023[29] - New Oriental's cash and cash equivalents increased to RMB1,942.6 million (US$268.5 million) as of November 30, 2023, from RMB1,663.0 million (US$230.5 million) as of May 31, 2023[29] - Cash, cash equivalents, and restricted cash at the end of the period on November 30, 2023, totaled $2,120,746 thousand, up from $1,122,824 thousand a year earlier, marking an increase of 88.9%[36] Liabilities and Equity - Total liabilities for New Oriental increased to RMB3,035.7 million (US$420.5 million) as of November 30, 2023, compared to RMB2,577.7 million (US$360.5 million) as of May 31, 2023[29] - The total liabilities as of November 30, 2023, were $3.036 billion, which is consistent with the previous reporting period[53] - The company’s total equity as of November 30, 2023, was $4.075 billion, a slight decrease from $4.096 billion as of May 31, 2023[53] Future Outlook - New Oriental expects total net revenues in the third quarter of fiscal year 2024 to be in the range of US$1,070.9 million to US$1,093.5 million, representing a year-over-year increase of 42% to 45%[20] Operating Costs - Total operating costs and expenses for the three months ended November 30, 2023, were $848,258 thousand, up from $640,702 thousand in the same period of 2022, reflecting a 32.4% increase[32] - The cost of revenues for the six months ended November 30, 2023, was $860.411 million, up from $638.174 million for the same period in 2022, representing an increase of approximately 34.7%[51] Tax and Fair Value Changes - The provision for income taxes for the six months ended November 30, 2023, was $74.231 million, compared to $26.912 million for the same period in 2022, indicating an increase of approximately 175.5%[52] - The company recognized a gain from fair value change of investments amounting to $18.166 million for the six months ended November 30, 2023, compared to a loss of $1.539 million for the same period in 2022[52] Accounting Policies - The adjustments made in the reconciliation of financial results under IFRSs reflect the different accounting treatments according to the Group's accounting policies, ensuring compliance with both US GAAP and IFRSs[49]