Financial Data and Key Metrics Changes - Total net revenue for Q4 2025 was RMB 89.1 million, a decrease of 11.7% compared to Q4 2024, primarily due to lower contributions from portfolio training programs and overseas study counseling services [10] - Gross profit for Q4 2025 was RMB 30.2 million, down from RMB 63.7 million in Q4 2024, with a gross margin of 56.4% compared to 63.1% in the prior year [10] - Total operating expenses in Q4 2025 were RMB 73.3 million, an increase from RMB 46.8 million in Q4 2024, primarily due to a one-time goodwill impairment charge of RMB 33.9 million [11] - For the full year 2025, total net revenue was RMB 268.1 million, flat compared to the prior year, with a gross profit of RMB 130.3 million, a decrease of 7.8% from RMB 141.3 million in 2024 [12][13] Business Line Data and Key Metrics Changes - The main revenue contributor in Q4 2025 was the portfolio training service, accounting for 68.8% of total net revenues, while project-based programs accounted for 74.9% of total credit hours delivered [5][10] - Revenues from research-based learning and overseas studies counseling increased by 4.6% in Q4 2025 due to more service delivery for in-school art classes [6] Market Data and Key Metrics Changes - Total student enrollment for Q4 2025 was 921, down from 1,038 in the prior year, reflecting normalized demand for services [16] - Total credit hours delivered decreased by 10.5% compared to the prior year, with project-based programs being the dominant choice [17] Company Strategy and Development Direction - The company aims to maintain its leading position in China's creative arts education industry by leveraging its skilled teaching team, high-quality offerings, and global partnerships [19] - Plans include optimizing the service portfolio, enhancing classroom utilization, expanding online course offerings, and consolidating campuses in less active markets to improve operational efficiency [20] Management's Comments on Operating Environment and Future Outlook - Management noted that overall student demand normalized in 2025 following a surge in enrollment the previous year, impacting revenues [4] - The company has a strong pipeline of research-based learning projects for Q1 2026, including the Finland Sustainable Design & Art Research Program [21] Other Important Information - The company recorded a net loss attributed to ACG of RMB 26.3 million in Q4 2025, compared to a net income of RMB 13.3 million in the prior year [12] - As of December 31, 2025, the company had RMB 85.2 million in cash and cash equivalents, total assets of RMB 408.3 million, and total liabilities of RMB 336.3 million [16] Q&A Session Summary Question: No questions were raised during the Q&A session - The operator noted that there were no questions at this time, and the call was turned back over to the CEO for closing remarks [25]

Financial Data and Key Metrics Changes - Total net revenue for Q4 2025 was RMB 89.1 million, a decrease of 11.7% compared to Q4 2024, primarily due to lower contributions from portfolio training programs and overseas study counseling services [10] - Gross profit for Q4 2025 was RMB 30.2 million, down from RMB 63.7 million in Q4 2024, with a gross margin of 56.4% compared to 63.1% in the prior year [10] - Total operating expenses in Q4 2025 were RMB 73.3 million, an increase from RMB 46.8 million in Q4 2024, primarily due to a one-time goodwill impairment charge of RMB 33.9 million [11] - For the full year 2025, total net revenue was RMB 268.1 million, flat compared to the prior year, with a gross profit of RMB 130.3 million, a decrease of 7.8% from RMB 141.3 million in 2024 [12][13] Business Line Data and Key Metrics Changes - The main revenue contributor in Q4 2025 was the portfolio training service, accounting for 68.8% of total net revenues, while project-based programs accounted for 74.9% of total credit hours delivered [5][10] - Revenues from research-based learning and overseas studies counseling increased by 4.6% in Q4 2025 due to more service delivery for in-school art classes [6] Market Data and Key Metrics Changes - Total student enrollment for Q4 2025 was 921, down from 1,038 in the prior year period, reflecting normalized demand for services [16] - Total credit hours delivered decreased by 10.5% compared to the prior year period [17] Company Strategy and Development Direction - The company aims to maintain its leading position in China's creative arts education industry by leveraging its skilled teaching team, high-quality offerings, and global partnerships [18] - Plans include optimizing the service portfolio, enhancing classroom utilization, expanding online course offerings, and consolidating campuses in less active markets to improve operational efficiency [19] Management's Comments on Operating Environment and Future Outlook - Management noted that overall student demand normalized in 2025 following a surge in enrollment the previous year, impacting revenues [4] - A strong pipeline of research-based learning projects is anticipated for Q1 2026, including the Finland Sustainable Design & Art Research Program [20] Other Important Information - The company recorded a net loss attributed to ACG of RMB 26.3 million in Q4 2025, compared to a net income of RMB 13.3 million in the prior year [12] - As of December 31, 2025, the company had RMB 85.2 million in cash and cash equivalents, total assets of RMB 408.3 million, and total liabilities of RMB 336.3 million [16] Q&A Session Summary Question: No questions were raised during the Q&A session - There were no questions from participants during the call [23]

Financial Data and Key Metrics Changes - Total net revenue for Q4 2025 was RMB 89.1 million, a decrease of 11.7% compared to Q4 2024, primarily due to lower contributions from portfolio training programs and overseas study counseling services [9] - Gross profit for Q4 2025 was RMB 30.2 million, down from RMB 63.7 million in Q4 2024, with a gross margin of 56.4% compared to 63.1% in the prior year [9] - Total operating expenses were RMB 73.3 million in Q4 2025, an increase from RMB 46.8 million in Q4 2024, primarily due to a one-time goodwill impairment charge of RMB 33.9 million [10] - For the full year 2025, total net revenue was RMB 268.1 million, flat compared to the prior year, with a gross profit of RMB 130.3 million, a decrease of 7.8% from RMB 141.3 million in 2024 [11][12] Business Line Data and Key Metrics Changes - The main revenue contributor in Q4 2025 was the portfolio training service, accounting for 68.8% of total net revenues, while project-based programs accounted for 74.9% of total credit hours delivered, up from 66.8% in Q4 2024 [5][9] - Revenues from research-based learning and overseas studies counseling increased by 4.6% in Q4 2025 due to more service delivery for in-school art classes [6] Market Data and Key Metrics Changes - Total student enrollment for Q4 2025 was 921, down from 1,038 in the prior year period, reflecting normalized demand for services [15] - Total credit hours delivered decreased by 10.5% compared to the prior year period [15] Company Strategy and Development Direction - The company aims to maintain its leading position in China's creative arts education industry by leveraging its skilled teaching team, high-quality offerings, and global partnerships [16] - Plans include optimizing the service portfolio, enhancing classroom utilization, expanding online course offerings, and consolidating campuses in less active markets to improve operational efficiency [17] - A strong pipeline of research-based learning projects is anticipated for Q1 2026, including the Finland Sustainable Design & Art Research Program [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that overall student demand normalized in 2025 following a surge in enrollment the previous year, impacting revenues [4] - The company remains focused on driving positive student outcomes and enhancing its service portfolio to cater to diverse student needs [19][20] Other Important Information - The company recorded a net loss attributed to ACG of RMB 26.3 million in Q4 2025, compared to a net income of RMB 13.3 million in the prior year [11] - As of December 31, 2025, the company had RMB 85.2 million in cash and cash equivalents, total assets of RMB 408.3 million, and total liabilities of RMB 336.3 million [15] Q&A Session Summary Question: No questions were raised during the Q&A session - There were no questions from participants during the call [22]

Investment Rating - The report maintains a positive outlook on New Oriental, aligning with the views of CITIC Lyon Research, indicating an upward trend in the company's performance [4]. Core Insights - New Oriental's total revenue for Q2 of FY2026 reached $1.191 billion, representing a year-on-year growth of 14.7%, exceeding both the company's guidance and market expectations [5]. - The management has raised the full-year revenue growth guidance, attributing this to robust growth in K9 business, accelerated growth in high school business, and improved retention rates in elementary business and smart learning hardware [6]. - Continuous cost control measures are expected to support ongoing margin expansion, with the education business margin improving by 3 percentage points year-on-year [7]. - New educational initiatives, such as non-subject training and learning machine subscriptions, are anticipated to drive further growth, with utilization rates showing potential for improvement [8]. Summary by Sections Company Overview - New Oriental, established in 1993, is a leading private education service provider in China, offering services in overseas exam preparation, adult and university student education, and high school tutoring [11]. Financial Performance - For Q2 FY2026, New Oriental's revenue grew by 14.7% year-on-year to $1.191 billion, surpassing guidance by 2% and market consensus by 3% [5]. - The non-GAAP operating margin improved by 4.7 percentage points to 7.5%, exceeding the guidance of a 2.0 percentage point increase [5]. Business Strategy - The company is focusing on efficiency improvements rather than expanding learning centers, which is expected to reduce costs and enhance profitability [7]. - The merger of overseas consulting and exam preparation departments is anticipated to eliminate redundant costs [7]. Market Position - New Oriental's revenue is primarily derived from educational services and exam preparation courses (63.0%), proprietary products and live e-commerce (20.9%), and overseas study consulting services (10.2%) [11].

Financial Performance - New Oriental's Q2 FY2026 revenue increased by 14.7% year-on-year to $1.191 billion, exceeding guidance by 2% and market consensus by 3%[6] - Non-GAAP operating profit for Q2 FY2026 surged by 206.9% to $89 million, with a profit margin improvement of 4.7 percentage points to 7.5%[6] - Non-GAAP net profit attributable to shareholders rose by 68.6% to $73 million in Q2 FY2026[6] Business Segments - Revenue from overseas exam preparation grew by 4.1%, accelerating from 1.0% in Q1 FY2026[6] - Domestic exam preparation revenue increased by 12.8%, slightly down from 14.4% in Q1 FY2026[6] - New education business revenue grew by 21.6%, up from 15.3% in Q1 FY2026[6] Future Outlook - The company expects Q3 FY2026 revenue growth of 11-14%, aligning closely with market expectations[6] - Full-year revenue growth guidance for FY2026 has been raised from 5-10% to 8-12%, indicating stronger confidence in business growth[6] Market Position - New Oriental's market capitalization stands at $9.37 billion as of January 27, 2026[10] - The stock price was $55.97, with a 12-month high of $60.71 and a low of $41.22[10] Risks - Ongoing policy risks in the education sector may impact financial performance and brand value[8] - Structural changes in the education market and the pace of business transformation could significantly affect results[8]