Core Viewpoint - New Oriental Education & Technology Group Inc. reported strong financial results for the second fiscal quarter of 2026, with significant year-over-year growth in revenues, operating income, and net income, indicating a robust recovery and expansion in its educational services business. Financial Highlights - Net revenues for the second fiscal quarter reached US$1,191.4 million, a 14.7% increase from US$1,038.6 million in the same quarter of the previous fiscal year [6][13]. - Operating income surged to US$66.3 million, marking a 244.4% increase compared to US$19.3 million in the prior year [6][16]. - Net income attributable to New Oriental was US$45.5 million, up 42.3% from US$31.9 million year-over-year [6][18]. - Non-GAAP net income attributable to New Oriental increased by 68.6% to US$72.9 million, compared to US$43.2 million in the same quarter of the previous fiscal year [19]. Operational Highlights - The company experienced a 4.1% increase in revenues from overseas test preparation and a 12.8% growth in domestic test preparation targeting adults and university students [8]. - New educational business initiatives saw a remarkable growth of 21.6% year-over-year [8]. - Non-academic tutoring courses attracted approximately 1,058,000 student enrollments, and the intelligent learning system had around 352,000 active paid users [8]. Shareholder Returns - An ordinary dividend of US$0.12 per common share (US$1.20 per ADS) was approved, with the first installment already paid [10]. - A share repurchase program was initiated, allowing for the repurchase of up to US$300 million of ADSs or common shares, with approximately US$86.3 million already utilized for repurchases [11]. Cash Flow and Balance Sheet - Net operating cash inflow for the quarter was approximately US$323.5 million, with capital expenditures of US$23.7 million [20]. - As of November 30, 2025, cash and cash equivalents totaled US$1,842.9 million, alongside US$1,609.9 million in term deposits and US$1,875.2 million in short-term investments [21]. Future Outlook - For the third quarter of fiscal year 2026, total net revenues are expected to be between US$1,313.2 million and US$1,348.7 million, reflecting a year-over-year increase of 11% to 14% [32]. - The full-year revenue guidance has been raised to a range of US$5,292.3 million to US$5,488.3 million, indicating an anticipated year-over-year increase of 8% to 12% [33].

Core Viewpoint - Gaotu Techedu Inc. reported significant financial improvements in Q3 2025, with net revenues increasing by 30.7% year-over-year, reflecting strong market demand and effective operational strategies [3][6][9]. Financial Performance - **Net Revenues**: Increased to RMB 1,579.0 million in Q3 2025 from RMB 1,208.3 million in Q3 2024, marking a 30.7% growth [3][6][9]. - **Gross Billings**: Rose to RMB 1,188.9 million, an 11.2% increase from RMB 1,069.2 million in the same period of 2024 [3][6]. - **Loss from Operations**: Narrowed significantly to RMB 178.0 million from RMB 490.1 million year-over-year, a 63.7% improvement [3][14]. - **Net Loss**: Decreased to RMB 147.1 million compared to RMB 471.3 million in Q3 2024, reflecting a 68.8% reduction [3][17]. - **Non-GAAP Net Loss**: Improved to RMB 137.7 million from RMB 457.2 million in the same quarter of the previous year, a 69.9% decrease [3][17]. - **Operating Cash Outflow**: Reduced to RMB 660.2 million from RMB 714.4 million year-over-year, a 7.6% improvement [3][6]. Operational Efficiency - **Gross Profit**: Increased by 34.0% to RMB 1,043.5 million, with gross profit margin rising to 66.1% from 64.4% in Q3 2024 [11][12]. - **Operating Expenses**: Decreased by 3.7% to RMB 1,221.5 million, attributed to effective cost management [13]. - **User Acquisition Efficiency**: Improved by 12.8% year-over-year, indicating enhanced operational quality [6]. Deferred Revenue and Cash Position - **Deferred Revenue**: Grew to nearly RMB 1.8 billion, up 23.2% year-over-year, providing better revenue visibility for upcoming quarters [6]. - **Cash Position**: As of September 30, 2025, the company had cash and cash equivalents totaling RMB 3,040.4 million, down from RMB 4,094.3 million at the end of 2024 [21]. Shareholder Returns and Future Outlook - **Share Repurchase Program**: Completed an US$80 million share repurchase program and initiated a new US$100 million program [24][25][26]. - **Revenue Guidance**: For Q4 2025, total net revenues are expected to be between RMB 1,628 million and RMB 1,648 million, representing a year-over-year increase of 17.2% to 18.7% [27].

Financial Performance - In the second quarter of 2025, net revenues reached RMB539.0 million (US$75.2 million), representing a 9.5% year-over-year increase from RMB492.2 million in the same period of 2024 [5][9] - Net income surged to RMB126.6 million (US$17.7 million), with a net income margin of 23.5%, reflecting a 54.0% increase compared to the second quarter of 2024 [5][14] - Gross profit increased by 12.9% to RMB469.4 million (US$65.5 million) from RMB415.6 million in the second quarter of 2024 [11] Operational Highlights - New student enrollments totaled 159,154 in the second quarter of 2025, down from 168,296 in the same period of 2024 [9] - Interest-based courses accounted for 77.6% of total revenues, indicating a strategic shift towards these offerings [7] - The company maintained positive operating cash flow for eight consecutive quarters, with substantial cash reserves as of quarter-end [7] Cost Management - Cost of revenues decreased by 9.1% to RMB69.6 million (US$9.7 million) in the second quarter of 2025, primarily due to reduced compensation expenses from headcount reductions [10] - Operating expenses increased slightly by 1.1% to RMB342.6 million (US$47.8 million) compared to RMB338.9 million in the second quarter of 2024 [12] Future Outlook - For the third quarter of 2025, the company expects net revenues to be between RMB500 million to RMB520 million, reflecting a year-over-year increase of 1.8% to 5.8% [26] - The company plans to deepen AI integration across core operations and expand personalized learning solutions to meet the evolving needs of adult learners in China [6]