Financial Data and Key Metrics Changes - Total net revenue increased by 6.1% year over year, reaching $1,412.6 million [4] - Non-GAAP operating margin improved to 22%, a year-over-year increase of 100 basis points [4] - Operating income rose by 6% year over year to $310.8 million [11] - Net income attributable to New Oriental decreased by 1.9% year over year to $240.7 million [12] - Non-GAAP net income decreased by 1.6% year over year to $258.3 million [12] - Deferred revenue increased by 10% year over year to $1,906.7 million [14] Business Line Data and Key Metrics Changes - Overseas test prep business revenue increased by about 1% year over year [5] - Overseas study consulting business revenue increased by about 2% year over year [5] - Adults and university students business revenue increased by 14% year over year [5] - New educational business initiatives recorded a revenue increase of about 15% year over year [7] Market Data and Key Metrics Changes - Non-academic tutoring business expanded to around 60 cities, with top 10 cities contributing over 60% of revenue [6] - Intelligent learning system and device business tested in around 60 cities, with top 10 cities contributing over 50% of revenue [7] - Integrated tourism-related business connected across 55 cities, with top 10 cities contributing over 50% of revenue [7] Company Strategy and Development Direction - The company is focused on enhancing operational resilience and sustainable profitability [4] - Plans to increase presence in cities with stronger performance while managing resources carefully [15] - Continued investments in AI and OMO (online merging offline) systems to improve educational services [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving margins and operational efficiency while maintaining cost control [15] - Guidance for total net revenue in Q2 2026 is projected to be between $1,132.1 million and $1,263.3 million, representing a year-over-year increase of 9% to 12% [16] - Full fiscal year 2026 revenue guidance remains between $5,145.3 million and $5,390.3 million, indicating a year-over-year increase of 5% to 10% [16] Other Important Information - The company announced a cash dividend of $0.12 per common share and a share repurchase program of up to $300 million [17][18] - The effective tax rate for Q1 was higher due to special circumstances, expected to normalize in future quarters [54] Q&A Session Summary Question: Competition landscape in K-12 business - Management noted increased competition during summer but highlighted improved student retention and enrollment in autumn classes [22][23] Question: Share-based compensation increase - The increase in share-based compensation was attributed to grants issued in the previous fiscal year, expected to remain at similar levels in upcoming quarters [28][29] Question: Overseas business growth breakdown - Management indicated that younger age groups in overseas test prep grew over 25% year over year, while consulting business saw strong growth in non-U.S. and U.K. markets [34][35] Question: Operating margin outlook - Management expects continued margin expansion driven by cost control and operational efficiency, with optimism for Q2 [49][50] Question: Tax rate expectations - The effective tax rate was higher in Q1 due to special circumstances, with expectations for it to normalize in future quarters [54]

Financial Data and Key Metrics Changes - Total net revenue increased by 6.1% year-over-year, reaching $1,412.6 million [4] - Non-GAAP operating margin improved to 22%, a year-over-year increase of 100 basis points [4] - Operating income rose by 6% year-over-year to $310.8 million [11] - Net income attributable to New Oriental decreased by 1.9% year-over-year to $240.7 million [12] - Net cash flow from operations was approximately $192.3 million [13] Business Line Data and Key Metrics Changes - Overseas test prep business revenue increased by about 1% year-over-year [5] - Overseas study consulting business revenue increased by about 2% year-over-year [5] - Adults and university students business revenue increased by 14% year-over-year [5] - New educational business initiatives recorded a revenue increase of about 15% year-over-year [7] Market Data and Key Metrics Changes - Non-academic tutoring business expanded to around 60 cities, with top 10 cities contributing over 60% of revenue [6] - Intelligent learning system and device business tested in around 60 cities, with top 10 cities contributing over 50% of revenue [7] - Integrated tourism-related business connected across 55 cities, with top 10 cities contributing over 50% of revenue [7] Company Strategy and Development Direction - The company is focused on enhancing operational resilience and sustainable profitability [4] - Continued investments in new education business initiatives, particularly in AI and OMO systems [8] - Strategic approach to capacity expansion and hiring to ensure quality offerings [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving margins and operational efficiency [15] - Guidance for total net revenue in Q2 2026 is projected to be between $1,132.1 million and $1,263.3 million, representing a year-over-year increase of 9%-12% [16] - Full fiscal year 2026 revenue guidance remains between $5,145.3 million and $5,390.3 million, indicating a year-over-year increase of 5%-10% [16] Other Important Information - Shareholder return plan includes a cash dividend of $0.12 per common share and a share repurchase program of up to $300 million [17][18] - Deferred revenue increased by 10% year-over-year to $1,906.7 million [14] Q&A Session Summary Question: Competition landscape in K-12 business - Management noted increased competition during summer but highlighted improved student retention and enrollment in autumn classes [22][23] Question: Share-based compensation increase - The increase in share-based compensation was attributed to grants issued to management and staff, with expectations of similar levels in upcoming quarters [28][29] Question: Overseas business growth breakdown - Overseas test prep for younger age groups grew over 25% year-over-year, while consulting business saw strong growth in non-U.S. and U.K. markets [34][35] Question: Operating margin outlook - Margin expansion was driven by better utilization and cost control, with expectations for continued improvement throughout the year [48][49] Question: Tax rate expectations - The effective tax rate was higher due to special circumstances, with expectations for it to remain elevated in the near term [53] Question: Shareholder return policy - The company plans to maintain a high payout ratio and continue share buybacks as part of its capital allocation strategy [40][41]

Group 1 - The core viewpoint of the report is that the market pricing for upward fluctuations in funding rates is significantly greater than for downward movements, which is directly related to the "short-term experience" of tight funding at the beginning of the year [1] - The report highlights that the "scar effect" of funding transmission to bond rates is still present, indicating concerns about rising rates [1] - It is expected that the overnight funding rate (DR001) has room for further downward adjustment, with a baseline assumption of returning to a level of 1.4% for narrow fluctuations [1] Group 2 - The optimistic scenario suggests that the DR001 could operate within a range of 30 basis points below the Open Market Operations (OMO) rate [1] - Current concerns regarding medium and short-term bond rates are not about upward movements but rather about the timing of downward adjustments [1]