Q4 2025 New Oriental Education & Technology Group Inc Earnings Call

Good evening, and thank you for standing by for knurls FY. 2025 fourth quarter results earnings conference call,

At this time, all participants on a listen-only mode.

After management's prepared remarks, there will be a question-and-answer session.

Today's conference is being recorded if you have any objections, you may now disconnect at this time,

Sisi Zhao: Thank you. Hello, everyone, and welcome to New Oriental's fourth Fiscal Quarter 2025 Earnings Conference call. Our financial results for the period were released earlier today and are available on the company's website, as well as our newsletter services. Today, Zhihui Yang, Executive President and Chief Financial Officer, and I will share New Oriental's latest earnings results and business updates in detail with you. After that, Zhihui and I will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the view expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC.

I would now like to turn the meeting over to your host for today's conference, Miss Sisi Zhao.

Thank you. Hello everyone. And welcome to New orientals for physical quarter 2025 earnings conference. Call our financial results for the period were released earlier today and are available on the company's website as well as our Newsweek services.

Today Stephen young executive president and Chief Financial Officer and I will share your rentals. Latest earnings results and business updates in detail with you after that Stephen and I will be available to answer your questions. Before we continue, please note that the discussion today will contain for looking statements. Made under the Safe Harbor, provisions of the US private security litigation Reform, Act of 1995,

For looking statements.

Sisi Zhao: New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on New Oriental's Investor Relations website at investor.neworiental.org. I will now first turn the call over to Mr. Yang. Zhihui, please go ahead.

Involve inherent risks and uncertainties as such our results may be materially different from the view expressed today, a number of potential risks and uncertainties are outlined in our public filings with the SEC. Your rental does not undertake any obligation to update any forward looking statements, except as required under applicable law,

In addition, a webcast of this conference call will be available on your rentals, investor relations website at investor.org rental.org.

Zhihui Yang: Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. It's that time of the year again. We're pleased to announce that Q4 performance exceeded expectations, demonstrating our strong commitment and capabilities to enhance operational consistency and drive long-term value creation. This quarter's total net revenue, excluding revenues generated from Easter by private label products and a living live streaming business, increased by 18.7% year over year, mainly contributed by the continued expansion of our new ventures. Bottom line-wise, we're delighted to see that our efforts to reduce costs and improve efficiency have proven effective, with non-GAAP operating margin, again, excluding operating margin generated from Easter by, reached 6.5% this quarter, representing an year-over-year improvement of 410 basis points. Our key remaining business remains solid, while our new initiatives have also shown positive momentum.

I'll now first turn the call over to Mr. Young Steven. Please go ahead.

Thank you.

Hello everyone, and thank you for joining us on the call.

It's that time of the year again.

We're pleased to announce that Q4 performance exceeded expectations, demonstrating our strong commitment and capabilities to enhance, operational, consistency, and drive long-term value creation.

These quarters total, net revenue excluding revenues generated from east by private label products and 11 live streaming business increased by 18.7% year-over-year, mainly contributed by the continued expansion of our new Ventures.

Bottom. Likewise, we're delighted to see that our efforts to reduce costs and improve efficiency have proven effective with non Gap. Operating margin again. Excluding operating margin generates from east to buy reached 6.5%. This quarter representing a eeo year Improvement of 410 basis points.

Zhihui Yang: Breaking down, for the fourth quarter of 2025, overseas tax prep business recorded a revenue increase of 15% year over year. Overseas studies consulting business recorded a revenue increase of about 8% year over year. Our adult and university students' business recorded a revenue increase of 17% year over year. At the same time, our continued investments in new education business initiatives, primarily centered on facilitating students' all-around development, have also delivered consistent progress, further driving the company's overall momentum. Firstly, the non-academic tutoring business, which focuses on cultivating students' innovative ability and comprehensive quality, has shown it's been rolled out to around 60 cities. Market penetration has significantly increased, particularly across higher-tier cities. The top 10 cities contribute over 60% of this business.

Our key remaining business remains solid, while our new initiatives have also shown positive momentum.

Breaking down for the fourth quarter of 2025 overseas, has prep business, recorded the revenue increase of 15% year-over-year.

Over studies Consulting business, recorded Revenue, increase of about 8% year-over-year.

As adults and University students, business record the revenue increase of 17% year-over-year.

In the investments, in new education, business initiatives primarily centered on facilitating students, all around development have also delivered consistent progress.

Further driving. The companies overall momentum.

Firstly, we not damaged children business which focus on cultivating students, Innovative ability and comprehensive qualities.

Has shown been raw out to around 60 cities?

Zhihui Yang: Secondly, the intelligent learning system and device business, which utilizes our past teaching experience, data, and technology to provide personalized and targeted learning and exercise content to improve students' learning efficiency, has been tested in around 60 existing cities. We're happy to see improved customer retention and scalability of this new business. The top 10 cities contribute over 50% of this business. In summary, our new educational business initiatives recorded a revenue increase of 33% year over year for the fourth quarter of 2025. Moving to our integrated tourism-related business line, which includes study tour, research camp business for students of K-12 and university students, and tours targeting middle-aged and senior audience, recorded a revenue increase of about 71% year over year for the fourth fiscal quarter of 2025.

Market penetration has significantly increased particularly across higher tier cities, the top 10 cities, contribute over 60% of this business.

Secondly, the intelligent Learning System and device business, which utilize our past teaching experience data and Technology to provide personalized and targeted learning, and exercise content to improve students learning efficiency.

Has been tested in around 60, existing cities.

We're happy to see improved customer retention and scalability of this new business. The top 10 cities contribute over 50% of this business.

in summary, our new educational business initiatives, recorded the revenue increase of 33% year-over-year for the fourth quarter of 2025.

Moving to our integrates tourism related business line, which includes study tour, research Camp, business for student of k12 and University students.

Zhihui Yang: Breaking down, both domestic and international study tours and research camps for K-12 and university students were conducted across 55 cities nationwide, with the top 10 cities contributing over 50% of the revenue. We also provided a series of premium tourism offerings primarily designed to the middle-aged and senior audience across 30 featured provinces in China and internationally. Our product range has also been expanded to now include culture travel, China study tour, global study tour, and camp education. With regard to our OMO system, we continue our efforts in developing and revamping our online merged offline teaching platform while leveraging our educational infrastructure and technological strengths across our key business lines and new initiatives. These efforts aim to deliver more advanced and diversified education services to our customers of all ages.

And towards targeting middle-aged and Senior audience. Recorded the revenue increase of about 71% year-over-year for the fourth, physical quarter of 20125.

Breaking down.

Both domestic and international Study Tours and the research Camp for k12 and University. Students was conducted across, 55 cities Nationwide, with the top 10 cities, contributing over 50% of the revenue.

Also provided a series of premium tourism offerings, primarily designed for middle-agent senior audiences across 30 featured provinces in China and internationally.

Our product range has also been expanded now includes cultural travel.

China, study tour. Global study tour and camp education.

With regard to our OMO system, we continue our efforts in developing and refining our online-merge-offline teaching platform. While leveraging our educational infrastructure and technological strengths across our key business lines and new indices.

Zhihui Yang: A total of $28 million have been invested during the quarter to upgrade and maintain our OMO teaching platform. Beyond OMO, I would like to take this opportunity to highlight our investments in AI and how we integrate it into our teaching ecosystem. Leveraging a combination of open-source large models such as DeepSeq and GPT, along with our self-developed AI technologies, we have developed new innovative education solutions for our students. Recently, we launched two new products. First, a new generation of AI-powered intelligent learning devices. These products feature deep AI integration and equip K-9 students with multifunctional tools, including spoken language coaching, automated essay grading, dictation exercises, classical text recitation, and voice assistant functionality, all designed to enhance learning outcomes while saving the time for both teachers, students, and parents. Second, a new AI-driven smart study solution. This product combines premium content from global sources.

Million dollars have been invested during the quarter to upgrade and maintain our omo teaching platform.

Beyond omo. I would like to take this opportunity to highlight our investments in Ai and how we integrate it into our teaching ecosystem.

Leveraging a combination of Open Source, large models, such as deep seek and gbt along with our self developed AI Technologies, we have developed new, Innovative education Solutions. While our students

Recently, we launched the 2, new products. First a new generation of AI, powered intelligent learning devices.

These products feature deep AI integration and equipped Ka students with multi-functional tools including spoken language coaching.

Automates, the IC reading.

Dictation exercises.

Classical texts with station and voice assessment functionality all designed to enhance learning outcomes. While saving the time for both teachers, students and parents

Zhihui Yang: Our very own accumulated teaching and researching experience and AI technology. These achievements mark key progress in our customer-focused education products, positioning us as a leader in applying AI to the education field. We will continue investing in AI to drive future innovation. Not only does AI help enhance our offerings, but also improves internal efficiency. We have launched an AI content creation platform and student performance feedback application, which helps support lesson planning and strengthen homeschool communication. These tools also provide valuable insights into learning habits and user engagement. Additionally, an AI-powered FAQ database has been created, built from our day-to-day sales conversations, which has significantly reduced training costs for our sales team and improved sales efficiency and conversion rates. Now, I would like to take a moment to talk about Easter By. As I know, many of you are interested in it.

Seconds, a new AI-driven, smart study solution. This product combines premium content from global sources.

Our very own accumulates the teaching and researching experience and AI technology.

This achievements smart key progress in our customer Focus Education products.

Positioning us as a leader in applying AI to the education field.

The world continue investing in AI to drive future innovation.

Not only does AI help enhance our offerings but also improves internal efficiency. We have launched an AI content creation, platform and student performance feedback application with helps support lesson planning, and strengthen the home school communication. These tools also provide valuable insights into learning habits in the user engagement.

Additionally, an AI-powered FAQ database has been created, built from our day-to-day sales conversations, which has significantly reduced training costs for our sales team and improved sales efficiency and conversion rates.

Zhihui Yang: In the fiscal year 2025, Easter By continued to invest in its private label product strategy centered around green, healthy, and quality, high quality, while enriching its product portfolio and exploring new categories. It also achieved breakthroughs in its blockbuster products and product upgrades. With consistent quality and broad consumer appeal, Easter By's private label products have become household staples, gaining greater market recognition. During the reporting period, Easter By further advanced its multi-channel strategy and implemented enhancements to its Easter By app and Easter By mini store, all of which have provided users with improved experience. As the business continues to develop steadily, Easter By has placed greater emphasis on improving operational efficiency and profitability levels to align with the group's overall strategy. Now, I would like to take this opportunity to talk about our share repurchase actions.

No, I would like to, to take moments to talk about the east by. I said, know many of you are interested in it.

In physical year 2025 is the bike, continue to invest in its private label, product strategy, centered around green healthy and quality high quality.

While enriching its product portfolio and exploring new categories. It's also achieved breakthroughs in Blockbuster products and products upgrades.

With consistent quality. And, uh, broad consumer appeal is to buy private. Label products have become household Stables getting greater markets recognition,

During the reporting periods is the buy. Further Advance is multi-channel strategy and implemented. The enhancements to its Easter Buy app and East buy mini store, all of which

Have provided the users, which improved the experience.

As the business continues to develop steadily.

Is the buyer has placed greater emphasis on improving operational, efficiency and profitability levels to align with the groups overall strategy.

Zhihui Yang: As of May 31, 2025, the company repurchased and aggregated approximately 14.5 million ABSs for approximately $700 million from the open market. Now, I will turn the call over to Sisi to share with you about the key financials. Sisi, please go ahead.

No, I would like to take this opportunity to talk about our share repurchase actions. As of May, 31st 2025 the company repurchase and aggregate approximately

14.5 million adss for approximately 700 million dollars from the open markets.

Sisi Zhao: Yeah. Thank you, Zhihui. Now, I'd like to share our key financial details for this quarter. Operating cost expenses for the quarter were $1,251.8 million, representing an 11.2% increase year over year. Cost of revenues increased by 5.1% year over year to $569.9 million. Selling and marketing expenses increased by 1.8% year over year to $211.9 million. G&A expenses increased by 9.1% year over year to $409.8 million. Impairment of goodwill was $60.3 million compared to NIO in the same period of the prior fiscal year. Total share-based compensation expenses, which were allocated to related operating costs and expenses, increased by 11% to $28.6 million in the fourth fiscal quarter of 2025. Operating loss was $8.7 million compared to operating income of $10.5 million in the same period of the prior fiscal year.

Now, I'll turn the call over to Cece to share with you about the key financial statistics. Please, go ahead. Yeah, thank you. Stephen. Now I'd like to share our key financial details for this quarter. Operating cost expenses for the quarter were $1,251.8 million, representing an 11.2% increase year-over-year. Cost of revenues increased by 5.1% year-over-year to $569.9 million. Selling and marketing expenses increased by 1.8% year-over-year to $2,111.9 million.

Impairment of goodwill was $60.3 million compared to Neil in the same period of the prior fiscal year.

Total share based compensation expenses which were allocated to related. Operating costs expenses increased by 11% to 28.6 million in the force fiscal quarter of 20125 operating loss.

Sisi Zhao: Non-GAAP operating income, excluding share-based compensation expenses, amortization of intangible assets resulting from the business acquisitions, and impairment of goodwill assigned to the reporting unit of skin garden business was $81.7 million, representing a 116.3% increase year over year. Net income attributable to New Oriental for the quarter was $7.1 million, representing a 73.7% decrease year over year. Basic and diluted net income per ADS attributable to New Oriental were $0.04 and $0.04, respectively. Non-GAAP net income attributable to New Oriental for the quarter was $98.1 million, representing a 59.4% increase year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were $0.62 and $0.61, respectively. Net cash flow generated from operation for the fourth fiscal quarter of 2025 was approximately $399.1 million, and capital expenditure for the quarter was $65.9 million.

was 8.7 million compared to operating income of 10.5 million in the same period of the prior fiscal year non-gaap operating income excluding share-based compensation expenses,

At intangible assets resulting from the business Acquisitions and the impairment of Goodwill assigned to the reporting re units of kindergarten business.

Worth 81.7, million representing, uh 116.3 increase year-over-year.

In attributable to neural for the quarter where 7.1 million dollars representing a 73.7 million percent decrease year-over-year basic and diluted. Net income per ads, attributable to neural were 4 cents and 4 cents. Respectively, non-gaap net income attributable to the Oriental for the quarter was 98.1 million representing. A 59.4% increase year-over-year, non-gaap basic and diluted net income per Adi.

Yes, attributable to New Oriental, where we reported 62 cents and 61 cents, respectively.

Sisi Zhao: Turning to the balance sheet, as of May 31, 2025, New Oriental had cash and cash equivalents of $1,612.4 million, $1,447.8 million in term deposits, and $1,873.5 million in short-term investments. New Oriental's deferred revenue, which represents cash collected upfront from customers and related revenue that will be recognized as the services or goods were delivered at the end of the fourth fiscal quarter of fiscal year 2025, was $1,954.5 million, an increase of 9.8% as compared to $1,780.1 million at the end of the fourth quarter of fiscal year 2024. Now, I'll hand over to Zhihui to go through our outlook, guidance, and our new shareholder return plan.

Net cash flow generated from operations for the fiscal quarter of 2025 was approximately $399.1 million, and capital expenditures for the quarter were $65.9 million.

Turning to the balance sheet.

as of May 3125 new Oriental had cash and cash equivalents

of 1612.4 million.

1447.8 million in term deposits and 1873.5 million in short-term Investments.

Your rentals deferred revenue which represents cash collected upfront from customers and related Revenue. That will be recognized as the services or goods were delivered.

Zhihui Yang: Thank you, Sisi. As we look ahead for fiscal year 2026, we remain optimistic and committed to not only driving revenue growth, but also placing greater emphasis on upholding profitability across all business lines, supported by various cost control and efficiency enhancement measures. To better reflect our long-term strategic priorities and align with the nature of the education industry, characterized by longer business cycles with seasonality, we're now providing full-year guidance in addition to our quarterly outlook. We believe this expanded guidance offers a more meaningful and accurate reflection of our business performance and strategy, as it smooths out short-term seasonal volatility. We encourage investors to focus on this long-term indicator, which provides a clearer and more comprehensive view of our business, operational progress, and growth trajectory.

At the end of the fourth fiscal quarter of fiscal year 2025, revenue was $1,954.5 million, an increase of 9.8% compared to $1,780.1 million at the end of the fourth quarter of fiscal year 2024. Now, I'll hand over to Stephen to go through our outlook guidance and our new shareholder return plan.

Thank you, Cece.

As we look ahead for fiscal year to launch 26, we remain optimistic and committed to not only driving Revenue growth, but also placing greater emphasis on upholding profitability, across all business lives supported by various cost control and efficiency enhancements measures.

To better reflect our long-term, strategic priorities, and aligned with the nature of the education industry characterized by longer business Cycles with seasonality. We're now providing full year guidance. In addition to our quarterly Outlook, we believe this expanded guidance offers uh more meaningful and accurate reflection of our business performance and strategy as it. Smooths out short-term seasonal volatility.

We encourage investors to focus on this long-term indicator.

Zhihui Yang: We expect total net revenue for the group, including Easter By, in the first quarter of fiscal year 2026, June 1, 2025, to August 31, 2025, to be in the range of $1,464.1 million to $1,507.2 million, representing a year-over-year increase in the range of 2% to 5%. As for the total net revenue for the group, also including Easter By, for the full year 2026, June 1, 2025, to May 31, 2026, we expect to be in the range of $5,145.3 million to $5,390.3 million, representing a year-over-year increase in the range of 5% to 10%. You may notice that our fiscal year '26 Q1 guidance looks relatively conservative. This is primarily because the group has now entered a more stable and sustainable phase, and we're comparing against a high base of the last year Q1, unlike two years ago when we were still undergoing major transformation.

which provides a clearer and more comprehensive view of our business, our personal progress, and growth trajectory.

We expect total net revenue for the group including East by in the first quarter of physical year. 2026, June 1st, 2025 to August 31st 2025 to be in the range of

Between the range of 1,464.1 million to 1,500 and 7.2 million representing a year-over-year increase in the range of 2% to 5%.

As for the total net revenue of Google, also including Easter, we expect to be in the range for the full year 2026, from June 1st, 2025 to May 31st, 2026.

5% to 10%.

You may notice that our physical year 26 q1, guidance, looks relatively conservative. This is primarily because the group has now entered some more stable and sustainable phase. And we're comparing against a high base

of the last year, q1.

Zhihui Yang: Moreover, Easter By's restructuring has not yet taken place in fiscal year '25 Q1 either. Additionally, the earlier timing of the Chinese New Year this year led to temporary class rescheduling, which boosted the revenue recognition in the second half of fiscal year 2025, but will reduce revenue recognition in fiscal year '26 Q1. As a result, we expect the year-over-year revenue growth will accelerate since the second quarter and throughout the rest of the year. Hence, as I mentioned earlier, I would encourage all of you to focus on our annual guidance. Before ending this quarter's earnings summary, I would like to announce that the board approved the three-year shareholder return plan yesterday, effective from fiscal year 2026, as a gesture of appreciation for our shareholders' unwavering support.

unlike 2 years ago, when we were still undergoing major transformation,

Moreover is the best restructure. Restructuring has, not yet taken place in fiscal year.

25 Q either. Additionally the earlier timing of the Chinese New Year, this year led to Temporary class rescheduling which boosted the revenue recognition in second half of its physical year, 2125 but will reduce Revenue recognition in fiscal year 26. Q1

As a result, we expect the year-over-year. Revenue growth will accelerate since the second quarter and throughout the rest of the year. Hence, as I mentioned earlier, I would encourage all of you to focus on our annual guidance.

Before ending this quarters.

Zhihui Yang: Under this plan, no less than 50% of the company's net income attributable to New Oriental for the preceding fiscal year will be allocated to returning value to shareholders through dividend distributions and/or share repurchases. For fiscal year '26, the board will determine the implementation of the plan based on the net income attributed to New Oriental for the fiscal year ended in May 31, 2025, in due course. Now, to conclude, New Oriental remains committed to delivering premium offerings to our customers who are pursuing sustainable growth and profitability and sharing the fruits of our success with our shareholders. We're also in close collaboration with the government authorities in various provinces and the province in China, ensuring compliance with the relevant policies, guidelines, and the related implementations, and adjusting our business operation as required. This is the end of our fiscal year 2025 Q4 summary.

Earnings summary: I would like to announce that the board approved the 3-year shareholder return plan yesterday, effective from fiscal year 2026, as a gesture of appreciation for our shareholders and their unwavering support. Under this plan, no less than 50% of the company's net income attributable to new revenue for the preceding fiscal year will be allocated to returning value to shareholders through dividend distributions and/or share repurchases.

For physical year, 26.

Physically year 2026, the board were determined the implementation of the plan based on the net income attributed to the new Oriental for the fiscal year ended in May 31st 2025 in due course.

Now to conclude, new Oriental, remain committed to delivering, premium offerings to our customers were pursuing sustainable growth and profitability and sharing the foods of our success with our shareholders. We're also in close collaboration with the government of authorities in various provinces and me. Uh, and, and The Province in China ensuring compliance with the relevant policies. Guidelines, and the, the related the implementation.

Patience.

Zhihui Yang: At this point, I would like to open the floor for questions. Operator, please open the call for these. Thank you.

Operator: Thank you. The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask a question, we will take one question at a time from each caller. If you have more than one question, please request to rejoin the queue again after your first question has been addressed. To ask a question, please press star one, one, on your telephone keypad and wait for your name to be announced. To withdraw your question, please do the same and press star one, one, again. Please stand by as we compile the Q&A roster. Just a moment for our first question. First question comes from the line of Felix Liu from UBS. Your line is now open.

And adjusting our business operation is required. This is the end of our physical year 2025 Q4 summary at this point. I would like to open the floor for questions. Operator, please open the call for this. Thank you.

Thank you.

The question and answer session of this conference call will start in a moment.

in order to be fair to all callers, who wish to ask a question,

We will take 1 question at a time from each caller.

If you have more than 1 question, please request to rejoin the queue again. After your first question has been addressed

to ask a question.

Please press star 1, 1 on your telephone keypad.

And wait for your name to be announced.

2. After all your question, please do the same and press star 1 1 1 again.

Please stand by as you compile the Q&A roster.

Just a moment for our first question.

First question comes from the line of Felix Lou from UVS. Your line is now open.

Felix Liu: Finley. Evening. Thank you, management, for taking my question. My question is on your Q1 and the FY 26 guidance. We noticed that Q4 EDU New Oriental core business actually grew pretty fast, but, you know, as you mentioned, there was a seasonal slowdown in Q1. So may I just ask for a more breakdown of your Q1 as well as full-year guidance? What are the, you know, threats on the business that led to this slowdown? And can management share about the drivers for the recovery in growth in, you know, after Q1? Thank you.

Zhihui Yang: Okay. Thank you, Felix. Yeah, as for the Q1 guidance, yeah, and the whole year guidance of fiscal year '26, you know, in the coming Q1, we give the guidance of the revenue growth will be in the range of 2% to 5%. I must mention, firstly, that we're using the conservative method to give the guidance. And there are some following reasons. Number one is, to some extent, I think our business is adversely affected by the economic environment and the international relationship changes. So in the coming Q1, we are comparing the against the high base in last year Q1, both for the core educational business and the Easter By. And number two, you know, as for the K-12 business, we have some cutoff issue because, you know, this year's Chinese New Year was earlier than before.

Some, uh, will be evening. Thank you management for taking my question. Uh, my question is on your Q1 and FY 2026 guidelines. Uh, we noticed that Q4, uh, Edu, Nuance or core business actually grew pretty fast. Um, but, um, you know, as you mentioned, there was a seasonal slowdown in Q1. Uh, so may I just ask for more breakdown of your Q1 as well as for your guidance? Uh, what are the, uh, you know, tracks on the business that led to this, uh, slowdown? And, um, can the management share about the drivers for the recovery in growth, you know, after Q1? Thank you.

Run off 2% to 5%. I must mention, firstly, that we're using the conservative method to give the guidance.

And their uh, there are some uh, some following reasons. Uh, number 1 is 2. Some extent, I think our business uh, adversely affects by the economic environment and the international relation

changes. So in the coming, q1 and we we are comparing the uh the against the high base last year if you want.

Both of the core educational business and the East body.

Zhihui Yang: So that means, you know, some that means, you know, in the second half of fiscal year '25, we had more revenue. And the result is that in the coming Q1, we have less revenue. So this is a cutoff issue. But, you know, as we expect, the K-12 revenue growth will be accelerated in the coming Q2 and the rest of the year in Q3 and Q4 because based on our current estimation of the forecast for the whole year, and the cash we collect already for the Q2 courses. So that's why, as I said, we expect the revenue acceleration since Q2 for the K-12 business. And the last reason is, you know, last year Q1, Easter By restructuring has not yet taken place in Q1. So we will have a hard comparison for Easter By in the coming Q1.

And number 2, you know, as for the K12 business, uh, we have some, uh, the cutoff issue because, you know, uh, uh, in this, this year's Chinese new new year was earlier than than before. So that means, you know some, that means, you know, uh uh, the in the second half of fiscal year 25, we had more Revenue

And the result is that, uh, in the coming Q1, we have less revenue. So this is a cutoff issue.

And uh and uh but you know, as we expect the K12, Revenue growth will be accelerated in the coming Q2 and the rest of the year in Q3 and Q4. Because based on our current uh estimation of this, the forecast for the for the whole year and the cache will collects already for the Q2 courses. So that's why that that's aside. Uh we expect the revenue acceleration since Q2 for the K2 business.

Zhihui Yang: But in the since Q2, it will be better. And, yeah, this time, since this quarter, we start to give the whole year guidance. And we give the guidance of the 5% to 10% year-over-year growth for the whole group. And it shows that the revenue growth acceleration since Q2. And breakdown of the different business lines, I think the overseas related business, yeah, it will negatively impact by the economic environment and international situations change. So we expect the revenue will be down by roughly 4% or 5%. And the K-12 business, I think the K-9 business for the Q1, the revenue growth will be somewhere around 15%, 16% year over year. But we do expect the whole year revenue growth, the K-9 business will be somewhere around 20%.

And uh, and the last reason is, you know, uh, last year, q1 used to buy. Restructuring has not yet. Taken place in q1. So we have, we will have a hard comparison for East Dubai in, in the coming 1. But in the, since Q2, it will be better.

And uh, yeah, this time.

We start to give the the whole Year's guidance. Uh, we give the guidance of the 5% to 10% year-over-year growth for the, for the whole group and it's uh, shows that the, uh, the uh, Revenue growth acceleration since Q2 and, uh, break it down of the, the different business lines. I think the overseas related business. Yeah, it will negatively impact, but the economic,

Zhihui Yang: High school business, Q1 and the whole year will be around year-over-year growth will be around 11% to 12% or even a little bit more. And the college business, the growth rate will be 10% in the Q1 in the coming new year. Felix.

Departments and in international situations change. So, we expect the revenue will be done by roughly 4 to 5%. And, uh, the K12 business, I think the K9 business for the q1. The revenue growth will be somewhere around, uh, 15/16 percent year-over-year, but we do expect the whole year. Revenue growth to K9 business will be somewhere around 20%, High School business q1, and the whole year will be around uh, year-over-year growth will be around 11 to 12% or even a little bit more and the college business, the growth rates will be 10% in the q1 in the coming year.

Philips.

Felix Liu: Okay. Thank you. That's very clear.

Thank you, that's very clear.

Operator: Thank you. Just a moment for our next question, please. Next, we have Lucy Yu from Bank of America. Your line is now open, Lucy.

Thank you. Just a moment for our next question, please.

Lucy Yu: Yes. I have actually a follow-up question on the guidance that you just gave. What is the major difference that you have been revised this quarter versus last quarter when you give the guidance for FY 26? So what has changed in terms of line of business? And secondly, just to clarify on the, sorry, shareholder return program, is it based on reported net income or non-GAAP net income? Thank you.

Next, we have Lucy you from Bank of America. Your line is now open. Let's see.

Uh, thank you. I see I have a actually, a follow-up question on the guidance that you just gave, uh, what is the major difference that you have been revised this quarter versus last quarter, when you get the guidance for, uh, FY 26? So what has changed, uh, in terms of line of business.

Zhihui Yang: Oh, second question answered first. You know, the capital allocation for the next three years is calculated based on the net income, the net income attributable GAAP net income attributable to New Oriental. And I think, yeah, this time we changed the guidance from the non-Easter By to the whole group, yeah, including the Easter By, because, you know, Easter By started to restructure the business since the last year Q1. So in the past four quarters, I think the management of the Easter By fixed the operations. And, you know, Easter By is still we control the Easter By. So I think it's a good time for us to give the guidance of the whole group, including the Easter By. And I think going forward, we will give the guidance for the whole group, including the Easter By. Lucy.

Uh secondly uh just to clarify on the uh sorry the shareholder return program. Is it based on reported net income or non-gaap net income? Thank you.

Uh second question, answer first uh you know the capital allocation uh for the next 3 years is calculate based on the net income.

The net income attributable. GAAP net income.

So in the in past the fork shooter quarters, I think the management of the east, by fixed the, the operations. And uh you know it's by still we we control this by. So uh I think it's a good time for us to give the guidance of the whole including the the east by. And I I think going forward, we will give the guidance for the whole group, including the east by

Lucy Yu: Thank you, Zhihui. One more follow-up. So the guidance revenue growth is all in US dollars or renminbi?

we'll see.

Zhihui Yang: Dollars, in dollars.

Thank you, Stephen. Uh, 1 more follow. So the other guidance, uh, Revenue growth is all in US dollars or remain B.

Lucy Yu: And you are using current rate?

Dollars in dollars.

Zhihui Yang: Yeah. We're using the current exchange rate in the first 45, 50 days of this quarter.

And you are using the current rate.

Yeah, we we're yeah we're using the the current uh the current the exchange rate in the first uh these uh the 45.

Lucy Yu: Okay. Thank you so much.

50 days of this quarter.

Zhihui Yang: Thank you, Lucy.

Okay, thank you so much.

Operator: Thank you. Next, we have Yukin Zhang from Citrix. Your line is now open.

Thank you, Lucy.

Thank you.

Next, we have, "you can jump from acidic." Your line is now open.

Timothy Zhao: Hello. Good evening, Zhihui and Sisi. Thank you for taking that question. The question is about the deceleration of our revenue. So what is the main reason for our revenue deceleration, especially for the non-academic business? So is it because of the competition, or it's just our own adjustment? And if we look in our long term, like in the next three years, how do we think of our growth rate in the next three years? Thank you.

Hello, good evening, Stephen and sister. Thank you for taking my classroom. My crafting is about the the acceleration of our Revenue. So, uh, what is the main reason for our Revenue deterioration? Especially for the non-active, you know, academic business? So, is it because of the competition? Or it's just

Zhihui Yang: I think the revenue slowing down is mainly due to the economic environment and the international relationship change because, you know, we have seen some transparents, you know, some of them doesn't want to send their kids to study abroad in the future. So it will negatively impact our overseas related business. And as for the competition in K-12 field, I think, yeah, the competition is a little bit stronger than that of the last year. But I think it's okay. You know, if you compare the competition level now with a couple of years ago, you know, before the policy, it's much less. And so I think, you know, the market is still huge, especially for the K-9 non-academic courses of the business. So we still guide the K-9 business grow by 20% in the coming year.

Just our own adjustment. And if we like, uh, look in a long-term like in the next 3 years, how do we think of our uh growth rate in next 3 years? Thank you.

I think the run is slowing down. It's mainly, uh, due to the, uh, the the economic environment and the international uh, relationship change because, you know, we have seen some, uh, transparency. You know, some of them, they don't want to send their kids to study abroad in the future. So it will negatively impact our, uh, the overseas business and, uh, as for the competition in, uh, K12 field, I think? Yeah, the competition is a little bit stronger than that of the last year, but I think it's okay. You know, uh, if you compare the competition level now with the a couple of years ago, you know, before the policy is not as much less.

Zhihui Yang: I think, you know, during this macroeconomic situation, I think this is still good. And going forward, yeah, the Q1 is a little bit weak. But, yeah, based on our current estimation, I think the Q2 and the Q3, Q4 will be better. And in the longer term, I still think the K-12 business will be the key growth driver of the whole group.

And, uh, so uh, the I think, you know, the market is still huge, uh, especially for the K9 not. I mean, of course, uh, the the business. So, uh, we still got the, the, uh, K9 business grow by 20% in the community year. I think, uh, you know, during this micro economic situation, I think this is still good.

And, uh, going forward, and, uh, the yeah, the queue has a little bit of weight but the, yeah, based on our current estimation, I think the Q2 and Q3 Q4 will be better.

And uh, in the longer term, I still think the K12 business will be the key roles driver of the whole group.

Timothy Zhao: Yes. Can I have a follow-up question? Is that because if you look at the revenue growth before the policy, maybe our K-12 revenue growth rate can be over 20%. But for now, maybe it's just like around 15%. So if you look at the next few years, would the growth rate for K-12 business going up to the over 20% or just around like 10% to 20%?

Yes. Can I have a follow-up question? Is that? Because if we we uh if you look at the revenue goals before the policy, maybe our K, uh K12 Revenue growth rate can be over 20%. Well, that's for now, maybe it's just like around 15%. So if you look at the next few years with the growth rate for K12 uh business

Zhihui Yang: I think the K-9 business, you know, we do believe we can get the revenue growth by 20%. You know, it's still very good. And the high school business, because we got the all-time high in last fiscal year, so we have a high base. So going forward, I think the revenue growth will be somewhere around 10% to 15% going forward.

like, going up to the over 20% or or just around like 10 to 20%,

Hi, this is, you know, we do believe we can get the revenue Grows by 20%, you know, uh, is is, is still be very good. And uh, and uh, the the high school business because we we got the old times high in last physical year. So we have a high base so going forward, I think the uh, the revenue growth will be somewhere around 10 to 15%.

Timothy Zhao: Okay. Thank you.

Phone forward.

Okay, thank you.

Operator: Thank you. Just a moment for our next question, please. Next, we have Alice Chow from Citibank. Your line is now open, Alice.

Thank you. Just a moment for our next question, please.

Alice Chow: Good evening, Zhihui and Sisi. I have two questions. And first one is on the margin trend. You know, how should we think about the operating margin trend for the FY 26 for the core education business and also the whole business? Because since that we started to provide guidance for the whole business, right? And my second question is on the goodwill impairment. And can you please give us some more color on this? Why was there goodwill associated with kindergarten business to begin with? And will the company continue to divert or scale back non-core business and also like cultural tourism? Thanks.

Next we have Alice Chow from Bank uh City Bank, your line is now open Ellis.

Zhihui Yang: Okay. Thank you, Alice. You know, you were a margin question. You know, let us start with this quarter's margin analysis. You know, in the Q4, in this quarter, we got the 410 basis point margin expansion. I think the margin expansion, even for the Q4 and the whole year, fiscal year '25, was mainly due to the operating leverage and the efficiency enhancement and the cost control. As you know, we started to do the cost control since March this year. And we have seen the good results, which helps to drive the margin up. And I do believe the cost control will help the margin profile in the coming new year, even the Q1 and the whole year, fiscal year '26. As we look at the margin of the Q1, we remain optimistic about the margin profile in Q1, even though we're facing some revenue slowing down.

Um, for the core education business and also the whole business because since that we started to provide guidance for the whole business, right? And my second question, is on the Goodwill impairment, and can you please give us some more color on this? Um, why there was there a good Goodwill associated with kindergarten business to begin with? Um, and we have the company continued to dial that, um, but still that and also like cultural tourism, thanks.

Okay. Uh, thank you Alice, you know, you were a margin question. You know, let us start with the this quarter smarter analysis, you know, in in the, in the Q4, in this quarter, we we, we got the 400 400 410 business for the margin expansion. I think the market extension, uh, even for the Q4, and the whole year physical year, 25, uh, was uh, mainly due to the office and leverage and the uh, the efficiency has that and the cost control as you know, we started to do the cost control since March this year and we have seen the good result which helps to drive the margin up.

And I do believe because control will help the margin profile in the coming year, in the q1 and the whole year, fiscal year 2016.

Zhihui Yang: But we still expect the margin expansion in the coming Q1. And the whole year margin, I think it's a little bit early to make a forecast of the new year margin. But, you know, we're doing the cost control. We care more. We focus more about the profitability than the revenue growth. And so I think we will strive to achieve the margin, you know, profile, the healthy margin profile in the whole year of the fiscal year '26. And so let me summarize. You know, revenue is a little bit slowing down, and we care more about the bottom line. And we will do more cost control and care more about the efficiency enhancements and the more operating leverage to drive the margin up in the coming quarter and the new year. And your second question is about the goodwill impairment of the kindergartens.

Uh as we look at the uh margin of the q1. We remained optimistic about the uh the margin profile in q1. Even though we're facing some Revenue, slowing down, but we still uh expect the margin expansion in the coming q1.

And the whole year margin, I think it's a little bit.

Early to make a forecast of the New Year margin and but you know uh we're doing the cost control. We care more, we focus more about the profitability than the revenue growth. And so I think, uh, we will strive to achieve the margin, uh, you know, profile, the healthy margin profile in the in the whole year, uh, of the, uh, fiscal year 26. And so, uh, let me summarize, you know, revenue is a little bit slowing down and we care more about the, uh, the bottom line, and we will do more cost control and care more about the uh, efficiency enhancement and the more oxygen level to drop the margin up in the coming quarter and the new year.

Zhihui Yang: Oh, you know, we acquired some kindergartens so many years ago. It's roughly 8, 10 years old. And, you know, because of some reasons, the policy and the newborns, you know, decreased. So I think we discussed with the auditors, and, you know, we think the goodwill impairment should be done at this time. So we did the impairment loss of $60 million in this quarter, but it's all. It's one time.

Oh, your second question is about the who will apartment of the kindergartens? Oh, um, you know, we we acquired the some Kindergarten so many years ago. It's a roughly 8, 10 years old. And, uh, you know, because of the some, uh, reasons the policy and the new, uh, the newborns, you know, decreased. So, uh, I think we discussed with the, uh, the uh, Auditors. And, uh, uh, I, you know, we think the good will, uh, impairments should be, uh, done, uh, at this time. So we, uh, we did the impairment loss of 60 million dollars in this quarter but it's all

it's 1 time.

Alice Chow: Okay. May I have a follow-up question? I would like to know more about the cultural tourism. Is there any plan to scale back the business? Thanks.

Zhihui Yang: Can you repeat again? Can you repeat?

Yes, may I have a follow-up question. Um, um, I would like to know more about the, um, culture of children. Is there any plan to go back the business thing?

Alice Chow: Is there any yes. Is there any plan to scale back the cultural tourism?

What can you repeat again?

Um, is there?

Zhihui Yang: Oh, tourism business. Oh, tourism business. Yeah. We started with the tourism business one and a half years ago. And the revenue growth in last fiscal year, fiscal year '25, which, you know, is extremely high. And, you know, most of the business, the tourism business, are, you know, related to the summer camp, study tour, both domestic and internationally. And, but going forward, I think we still need time to build the business model of the tourism. And I think the revenue growth of the tourism business will be slowed down in the new year. And anyway, it's a new business. We need more time to fix the business model of the tourism business. Okay. Thank you.

Any, yes. Is there anyone to do that? Um, the cultural tourism?

Alice Chow: Okay.

To uh, to fix the business model of the tourism business, okay?

Thank you. Okay.

Operator: Thank you. Just a moment for our next question, please. Next, we have Timothy Zhao from Goldman Sachs. Your line is now open.

Thank you. Just a moment for our next question, please.

Next, we have Timothy Xiao from Goldman Sachs. Your line is now open.

Timothy Zhao: Sure. Thank you, Zhihui, for taking my question. I think my question is regarding the profitability and the margin outlook. I think one is regarding the 4.1% margin increase for the core business for the past quarter. Just wondering if you can help quantify the impact from the cost control measures that you have done since March. And going forward into the new year, like how much room that you have for the cost control? And secondly, also on the margin related question is on the capacity expansion. Just wondering, I think for the May quarter, how many new learning centers were newly opened? And what is your learning center or the capacity expansion plan into fiscal year '26? Thank you.

Sure. Um, thank you, Stephen and for taking my question.

Zhihui Yang: Yeah. The margins, yeah. The Q4, we got the margin expansion by 410 basis points up. And it's really hard for us to justify how much from the cost control. But anyway, it's a good result, the cost control, and to stick to the high operating leverage. And going forward, even in the Q1, coming Q1 and the new year, I think the cost control will help us to drive the margin up. And roughly, the cost control will give us the, let's say, the 100 to 150 basis point margin up. So this is a rough estimation. And your second question is about the expansion, right? Yeah. Yeah. Let's see. I think in the Q4, the net add is 9%. It's 8% to 9%, the learning centers.

Uh, I think my question is regarding the profitability and margin Outlook. Uh, I think 1 is regarding the, uh, the 4.1% point margin. Increase for the Corbin is for the past quarter. Just wondering if you can help quantify the impact, from the cost control measures that you have done since March and going forward into the new year like uh, how much room that you have for the for the cost control. And secondly, also on the modern related question, is on the capacity expansion. Uh, just wondering, I think uh, for the make quarter uh how many units, new units centers. Uh uh, were newly opened and what is your Learning Center or the capacity expansion plan into fiscal year 2966. Thank you.

Yeah. The, uh, the margins. Yeah. The, uh, the Q4 we, we got the the margin expansion, uh, by 400, uh, 400, uh, and 10 days this point up and, uh, it's really hard for us to, uh, to justify how much from the cost control. But, uh, it's so anyway, it's a good result because control and the, the, to seek to the high, uh, operating Library.

And going forward, even in the q1 coming q1. And the new year, I think the cost control will help us, uh, to grab the margin, uh, up and, uh, and roughly as, uh, the C control will, uh, uh, uh, give us the, uh, the let's say the 100 to 100, uh, 50 basis point margin up. So this is roughly estimation

Zhihui Yang: And going forward in the coming new year, I think our plan is to monitor the capacity expansion to ensure alignment of revenue growth. So I think as the whole group, we will control the learning center expansion compared to the revenue growth. So we do hope we can have the leverage from the high utilization rate of the new learning centers. So roughly, originally, we plan to open 10% to 15% of the new learning centers. It depends on the revenue growth. And, you know, typically, we set up new learning centers in the second half of the year. So it's, you know, backloaded. And so I think we have one or two quarters to wait to decide how many learning centers we set up in the second half of the year to prepare for the new year.

And, uh, your second question is about the extension, right? Yeah, yeah. This the uh, I think the in the, in the Q4 uh the net at the sniper signs, uh it's 829% the Learning Centers and uh,

And, uh, I going forwards in the coming new year. I think our uh, our uh

Uh, our plan is to, uh, monitor the capacity expansion to ensure alignment of Revenue growth. So I think as the whole group, we will control The Learning Center expansion compared to the revenue worlds. So, we do hope we can have the leverage from the high utilization, uh, rate of the new Learning Centers. So roughly we uh, originally we plan to open 10 to 15% of the new Learning Centers. It, it depends on the revenue world.

And, uh, the uh, and, uh, you know, typically, uh, we set up new Learning Centers new, learn new Learning Centers in second half the year.

Zhihui Yang: And I must mention that we only allow the cities with the best, with a better top line growth and good margins to allow them to open the learning centers, especially for the K-12 business. Yeah.

So it's uh, uh, you know, back loaded. And so uh I think we have 1 or 2 quarters to wait to decide how many Learning Centers we set up in the second half of the, uh, the year to prepare for the new year.

Timothy Zhao: Thank you. Thank you, Zhihui.

And, uh, so and uh, uh, I must mention that we only allow the cities with the best, with the better, uh, Topline growth and Mar a good margins. To allow them to open the, uh, Learning Centers, especially for the health offices. Yeah.

Team, thank you.

Operator: Thank you. Just a reminder, please make sure to ask one question. And if you have more questions, please recue. Next, we have D.S. Kim from JP Morgan. Your line is now open.

Thank you, Stephen.

Thank you. Just a reminder, please make sure to ask 1 question and if you have more questions please reach you.

D.S. Kim: Hi. Thank you. Thanks, Zhihui and Sisi, for taking my question. I just have a few follow-ups from the previous comment, if that's okay. So you earlier mentioned the margin could go up in the first quarter. Were you referring to the group level or core education only? That's the first follow-up to earlier point. And second, can I just double-check? When you say cost control can give us about like 100, 150 bps of margin expansion, is it regarding first quarter or full year? Just as a follow-up. And I have one more question.

Next, we have DS Kim from JP Morgan. Your line is now open.

Hi, uh, thank you. Uh, thanks Stephen and Sissy for taking my question. I just have a few follow-ups, uh, from the previous comment, if that's okay. So you earlier, mentioned the margin could go up in the first order. Uh, were you referring to the group level or core educational need? That's the first follow-up to all your point. And second, can I just double check when you

You say a cost control can give us uh about like 15 50 bits of margin expansion.

Zhihui Yang: For the full year, the cost control. And, you know, yeah, I said because we started, we go back to give the guidance to the whole group. So the margin analysis and guidance is for the group. So what I'm saying is the whole group, the margin expansion will be happening in Q1.

Is it regarding first quarter or full year just as a follow up and I have 1 more uh question.

D.S. Kim: Got it. Thank you. And again, this is kind of a follow-up, but I did a very rough calculation based on the number that you gave us, the breakdown. And I think we are essentially guiding core education, excluding Easter By, to grow about 11%, 12% in fiscal '26 versus, I think last quarter you mentioned 14%, 15% growth. Am I right about this, or can you comment on education on the apples-to-apples guidance versus last quarter? Just want to double-check.

What I'm saying is the whole group the margin uh uh, extension will be happened in q1.

Zhihui Yang: The fiscal year '26, right?

Got it. Thank you. And, um, again, this is kind of follow up, but, uh, I did a very rough calculation based on the number that, uh, you gave us the breakdown. And I think, uh, we are essentially guiding core education, excluding East by to grow about 11%, 12%, in fiscal, 26 versus I think last quarter, you mentioned 1415, uh, percent growth. Am I right about this or can you comment on education on the Apple to Apple guidance, uh, versus last quarter? Just want to double check

D.S. Kim: '26, yes, sir.

Zhihui Yang: Oh, '26, sir. Yeah. It seems to be a little bit lower than, you know, we give the guidance, you know, last quarter. Because, you know, yeah, as I said, the overseas related business, you know, where we I think, you know, it will negatively impact by the macroeconomy and the international relationship change. And so we revised the guidance of the fiscal year '26. I think the overseas related business will be down by, let's say, the 5%, 4% to 5% year over year. And this is for the whole year. So this is a new change compared to the.

The physical year 26, right? Or 26 26. Yes, sir.

26 sir. Yeah.

To be a little bit lower than, you know, we, we get the guidance, You know what last quarter, because, you know, yeah, as I said, the overseas related business, you know, where we? Uh, I think, uh, you know, uh, it will next to the impact, by the microeconomie and the, uh, the uh, the uh, the international relationship change. And, uh, so we revised the guidance of the physical year, 26. I think the overseas related business will be done by. Let's say the uh, 5% for 5.

5% year-over-year.

D.S. Kim: Got it.

Zhihui Yang: Yeah.

And this is for the whole year. So this is the a new change uh compared to the got it.

D.S. Kim: Thank you. So I think that probably implies 11, 12%. If you have the number, if not, that's totally fine. And final question is, in terms of the buyback and dividend, can you give us a little bit of color on how you're thinking about between the two? Like, is it going to depend on the level of share prices, or do you have certain, you know, pockets within that 50% in mind, or dividend at least this much? Any sort of qualitative color would be appreciated. And that's it. Thank you, sir.

Zhihui Yang: I think, you know, first of all, we finished the $700 million share buyback in this quarter in Q4. And also, we paid $100 million special dividends in last year, in this fiscal year, last year's September. And so, you know, we had a board meeting yesterday. And, you know, I'm happy to see the board approve the new capital allocation program, not only for this year, but also for the next three years, from fiscal year '26 to fiscal year '28. So we can monitor the, let's say, the 50% of the net GAAP net income. And now, you know, we haven't yet decided the dividends or the share buyback. I think I will discuss with the board, even Michael, to make a decision to justify either the dividend or share buyback or both. But, you know, one more information.

Thank, thank you. So I I think, uh, that probably implies 11 to 12% if you have the number, if not, that's totally fine. And final question is, uh, in terms of the buyback and dividend, can you give us a little bit of color on how you are thinking about between the 2? Like, is it, is it, is it going to be dependent on the level of your prices or do you have certain, you know, Pockets within that 50% in mind, for dividend at least this much, any sort of qualitative color, would be appreciated? And that's it. Thank you, sir.

uh, I think

you know, uh,

Water in in Q4 and also we we paid 100 million dollars, special dividends, uh, in uh, last year in this physical year, lastly, last year, September. And so, you know, we had a board meeting yesterday and, uh, uh, you know, I have I'm happy to see the board approve, the new capital allocation program, uh, not only for this year, but also, for next 3 years from uh, physical year, 26 to fiscal year 208. So, uh, which amount to the let's say the 50% of the United, gaap, net income.

Zhihui Yang: I think we still need the auditors to give us the final audit report of the fiscal year '25. And I think we will file the '25, the at the end, at the end of roughly at the end of September. So by then, I think we will decide, you know, how much amount to do the capital allocation and waste. Yes.

And, uh, uh, now, you know, we haven't yet decide the, uh, the dividends or the share buyback. I think I will discuss with the board even, uh, Michael to, uh, to, uh, make decisions to to, uh, to justify either, uh, the dividend War share buyback, or both. But, you know, 1 more, uh, uh, the information, I think we still need the, uh, the Auditors to, uh, to, uh, give us the final Audi report of the physical year 25. And I think we will, uh, follow the uh, the the 20th, uh, uh, the, uh, at the end at the end of roughly at the end of the September. So by then, I think we will decide you know how much amount to do the uh, Capital allocation.

D.S. Kim: Thank you. And if I just make a comment on the question, I think many or most investors may prefer, you know, dividend rather than buyback because dividend seems a little more visible and sustainable. So please, please consider, you know, and especially if it is a regular dividend, not in the form of special that we did pre-COVID. So just a two cents from me. And thank you so much for your call.

And ways.

Zhihui Yang: Okay. Thank you, dear. Thank you, your advisors. Thank you.

Yes, thank you. And, uh, if I just make a comment, another question, I I think, uh, many or most investors may prefer, you know, dividend, uh, rather than buy back because, uh, dividend seems a little more visible and sustainable. So please, please, uh, consider, you know, and especially if it is a regular dividend not in the form of special uh that we did pre pre, pre preco. So uh, just a 2 cents from me and thank you so much for, uh, your call. Okay, thank you. Yeah.

Operator: Thank you. Just a moment for our next question, please. Next, we have Charlotte Wei from HSBC. Your line is now open.

Thank you, your advisor. Thank you.

Thank you. Just a moment for our next question, please.

Next, we have a Charlotte way from HSBC. Your line is now open.

Alice Chow: Thank you, Zhihui and Sisi, for taking my question. I have a question which.Regarding

Operator: the non-academic enrollment. So I noticed that this quarter's enrollment growth slowed down quite meaningfully. Can I understand? Could you please provide some color on the reasons? And also, can you share with us the summer enrollment growth for the Q9 non-academic tutoring? And how does it compare to the industry growth trend? Thank you.

Sisi Zhao: Yeah. As I said, you know there is some seasonality impact. Yeah. As I said, you know because of the early Chinese New Year and you know some revenues were reported in Q3 and Q4 last year. And so it will negatively impact the Q1 revenue enrollment. And yeah, Q1, you know, it seems to be low. But I think, you know, based on our numbers, the cash and the student enrollments we have already got from customers for the Q2 courses, I think the numbers are higher than the Q1. So that's why I said we expect the revenue growth will be accelerated in the Q2, finish Q2. And that's why we gave the guidance of the whole year higher than the Q1. And the industry growth, sorry, sorry, I have no idea about the whole industry growth.

Can I can, can could you please provide some color on the reasons and also can you share with us the summer enrollment growth for the K9 non-academic tutoring and how does it compare to the industry growth Trend? Thank you.

uh, yeah, as I said, you know, there's some seasonality impact

Yeah, as I said, you know, because of the early Chinese New Year and you know, some revenues uh, were reported in uh, in in Q3 and Q4 last year. And so, it will negatively impact the q1 revenue enrollment. And uh, yeah q1, uh, is a, uh, a slow, uh, you know, it seems to be low. But, uh, I think, uh, you know, based on our, the numbers, the cash and the student enrollments we have already got from, uh, from customers for the Q2 courses, uh, I think the numbers uh, since uh higher than the q1. So that's why I said we expect the revenue. Uh, growth will be accelerated in the Q2 things Q2, and that's why we we gave the guidance of the whole year higher than the q1.

Sisi Zhao: And it's really hard for me to make a comparison between us and the other competitors. And yeah.

And uh, the, uh, industry growth. Sorry. Sorry. I have no idea about the whole industry works. And uh it uh, it's really hard for, for me to make, uh, comparison, uh, between us and the other competitors.

and uh,

Zhihui Yang: Thank you. Thank you. Just a moment.

yeah.

Thank you.

Operator: No more questions. Thank you.

Sisi Zhao: Okay. Thank you.

Zhihui Yang: Thank you. Just a moment for our next question. Next, we have Alice from CLSA. Your line is now open.

Thank you, just a moment. I have no more questions. Thank you.

Thank you. Thank you. Just a moment for next question.

Next, we have lacation from clsa. Your line is now open.

Felix Liu: Hi. Thank you, Stephen and Sisi. So my question is about the summer. So we are now in the summer. So I would like to see if you have any color on the summer student recruitment, for example, like the new student enrollment growth and also like retention rate. And do you observe any changes on the demand side? Thank you.

Um, hi. Um, thank you, Stephen. And this is so, my question is about the summer. So we, we, we are now, uh, like in the summer. So I would like to see if you have any color on the, uh, summer student recruitment. For example, like the new students, uh, enrollment growth and also like retention rate, and Do You observe any changes on the demand side? Thank you.

Sisi Zhao: The demand, it's a little bit less than we expected, you know, compared to one quarter ago, yeah, because of the whole economic situation. And but you know, but in summary, I think it's still good, you know, for the K-12 business, even for the industry. And I do believe the whole industry is still growing. And I think we are still taking the market share. And yeah, as I said, I think things in the Q2, the revenue growth will be accelerated again. And so yeah. And the student enrollment number in the summer, we haven't finished the enrollment window for the summer. So I think in the next quarter's earnings call, I will show you the number. Show you the number enrollment for the whole summer.

Uh the demands. It's a little bit less than we expected, you know, uh, compared to 1 quarter ago. Yeah.

Because of the, the whole, uh, the economic situation. And but, you know, the um,

Uh, but, but, uh, in summary but, but I think this is still good. Uh, you know, for the, uh, K12 business, even for the industry, and I do believe the whole industry is still growing and, uh, but I think we are, we're still taking the market share.

and uh,

And uh yeah as I said I think things in the future uh the revenue growth will be accelerated again.

And, uh, so yeah. And, uh, the student enrollment number in the summer, we, we, we have, we haven't finished the, uh, enrollments window for the summer. So, I think not in next quarter's earnings call. I will show you the number.

Felix Liu: Okay. Thank you. And about the retention rate.

Share with the other number.

Enrollment for the whole, okay?

Sisi Zhao: The retention rate is still going up. Both for the whole K-9 business and high school business, it's still going up.

Thank you, and about the retention rate.

The return is still going on.

most for the

The, uh, the whole, uh, the uh, K9 business and high school business is still going up.

Felix Liu: Okay. Got it. Thank you.

Okay, got it. Thank you.

Zhihui Yang: Thank you. We are now approaching the end of the conference call. I will now turn the call over to New Oriental's executive president and CFO, Stephen Young, for his closing remarks.

Thank you. Thank you. We are now approaching the end of the conference call.

Sisi Zhao: Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our investor relations representatives. Thank you.

I will now turn the call over to new rentals executive president and CFO Stephan young for his closing remarks.

Zhihui Yang: This concludes today's conference call. Thank you for participating. You may now disconnect.

Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our investor relation Representatives, thank you.

This concludes today's conference call, thank you for participating. You may now disconnect