2026-01-28 14:02Financial Data and Key Metrics Changes - Total net revenue grew 14.7% year-over-year to $1.19 billion [4] - Non-GAAP operating income more than tripled, rising 206.9% to $89.1 million [4] - Non-GAAP net income attributable to New Oriental increased 68.6% to $72.9 million [4] - Operating income was $66.3 million, representing a 264.4% increase year-over-year [14] - Net cash flow generated from operations for the quarter was approximately $323.5 million [15] - Total share-based compensation expenses increased by 156.8% to $21.4 million [13] Business Line Data and Key Metrics Changes - K-9 educational business and high school tutoring business recorded accelerated year-over-year revenue growth [6] - Overseas test prep business recorded a revenue increase of 4% year-over-year [6] - Overseas study consulting business recorded a slight decrease of about 3% year-over-year [6] - Adults and university students business recorded a revenue increase of 13% year-over-year [6] - Revenue from non-academic tutoring grew 22% year-over-year [6] Market Data and Key Metrics Changes - The top 10 cities contribute over 60% of revenue from non-academic tutoring [7] - The top 10 cities contribute over 50% of revenue from intelligent learning systems and devices [7] - Domestic and international study tours were held in 55 cities, with the top 10 cities contributing over 50% of revenue [7] Company Strategy and Development Direction - The company is focused on operational efficiency and disciplined resource management to support sustainable profitability [4] - Continued investments in new education initiatives, including non-academic tutoring and intelligent learning systems, are expected to deliver solid results [8] - The company is exploring opportunities in the health and wellness sector for seniors [8] - A strategic approach to capacity expansion and hiring will be maintained to ensure quality is not compromised [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational resilience and growth trajectory, expecting total net revenue for Q3 FY 2026 to be in the range of $1,313.2 million to $1,348.7 million, representing a year-over-year increase of 11%-14% [18] - The full fiscal year 2026 revenue guidance was raised to $5,292.3 million to $5,488.3 million, reflecting an 8%-12% year-over-year increase [19] - Management emphasized the importance of cost discipline and sustainable profitability across all business lines [17] Other Important Information - The company announced a share repurchase program to repurchase up to $300 million of its ADS or common shares over the subsequent 12 months [20] - As of January 27, 2026, approximately 1.6 million ADS had been repurchased for an aggregate consideration of approximately $86.3 million [21] Q&A Session Summary Question: Request for breakdown on segment growth and key drivers for full year guidance - Management highlighted the acceleration in K-12 business growth, expecting around 20% year-over-year growth in Q3 [25] Question: Expected margin expansion from merging test prep and consulting units - Management indicated that merging these units aims to provide better service and reduce costs, with more details expected in the next quarter [32] Question: Elaboration on margin expansion in Q2 - Management noted that margin expansion was driven by better utilization, higher operating leverage, and cost control [36] Question: Future trends for overseas business growth - Management acknowledged challenges but expressed confidence in gaining market share, with expectations of flat growth in the second half of the year [42] Question: Updates on AI initiatives and their impact - Management reported progress on new AI offerings and emphasized that AI is helping improve student retention and operational efficiency [56]