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New Oriental Reports Strong Q2 FY2026 Revenue Growth and Increased Profitability



01/28/2026


New Oriental Reports Strong Q2 FY2026 Revenue Growth and Increased Profitability
New Oriental Education & Technology Group Inc. (the “Company” or “New Oriental”), a leading provider of private education services in China, today released its unaudited financial results for the second quarter of fiscal year 2026, ending November 30, 2025.

Second Fiscal Quarter 2026 Financial Highlights (Ended November 30, 2025)

  • Net revenues rose 14.7% year-over-year to US$1,191.4 million.
  • Operating income increased 244.4% year-over-year, reaching US$66.3 million.
  • Net income attributable to New Oriental grew 42.3% year-over-year to US$45.5 million.

Key Financial Metrics (in thousands of US$, except per ADS data)

Metric 2Q FY2026 2Q FY2025 Change (%)
Net revenues 1,191,441 1,038,636 14.7
Operating income 66,307 19,255 244.4
Non-GAAP operating income 89,130 29,046 206.9
Net income attributable to New Oriental 45,452 31,931 42.3
Non-GAAP net income attributable to New Oriental 72,908 43,233 68.6
Net income per ADS – basic 0.29 0.20 45.9
Net income per ADS – diluted 0.28 0.19 44.3
Non-GAAP net income per ADS – basic 0.46 0.27 72.9
Non-GAAP net income per ADS – diluted 0.45 0.26 71.8
For the first six months of fiscal year 2026:
Metric 1H FY2026 1H FY2025 Change (%)
Net revenues 2,714,421 2,474,052 9.7
Operating income 377,134 312,405 20.7
Non-GAAP operating income 424,673 330,494 28.5
Net income attributable to New Oriental 286,175 277,361 3.2
Non-GAAP net income attributable to New Oriental 331,163 305,644 8.3
Net income per ADS – basic 1.80 1.69 6.5
Net income per ADS – diluted 1.78 1.68 6.0
Non-GAAP net income per ADS – basic 2.08 1.86 11.8
Non-GAAP net income per ADS – diluted 2.06 1.85 11.4
Notes:
  1. Each ADS represents 10 common shares; Hong Kong-listed shares are fully fungible with NYSE ADSs.
  2. GAAP figures follow U.S. Generally Accepted Accounting Principles.
  3. Non-GAAP measures exclude certain items such as share-based compensation, amortization of acquired intangible assets, investment gains/losses, and related tax effects.
 

Operational Highlights for Q2 FY2026

Michael Yu, Executive Chairman, stated: “We are pleased to report strong top-line growth of 14.7% year-over-year this quarter. Revenue from overseas test preparation rose around 4.1%, while our domestic adult and university test preparation services grew by roughly 12.8%. New educational initiatives expanded by 21.6%, and non-academic tutoring was rolled out in about 60 cities, enrolling 1,058,000 students. Our intelligent learning system and devices are now active in 60 cities, serving 352,000 paid users. Moving forward, we will continue enhancing teaching quality, optimizing costs, and improving operational efficiency. Additionally, we are building a comprehensive cross-departmental customer service system to strengthen loyalty, boost lifetime value, and reduce acquisition costs, all while enhancing brand influence and long-term shareholder value.”

Chenggang Zhou, CEO, added: “This quarter, we balanced careful capacity expansion with operational efficiency. We enhanced our OMO (online-merge-offline) teaching system and integrated AI across our ecosystem to support staff and improve efficiency. East Buy expanded its private label portfolio beyond food into healthcare and home products, increasing sales and profit while planning offline channel expansion and nationwide rollout of smart vending machines.”

Stephen Zhihui Yang, CFO, noted: “Our Non-GAAP operating margin improved significantly to 7.5%, up 470 basis points year-over-year, driven by operational efficiency. We will continue disciplined cost management across all lines to ensure sustainable, profitable growth.”
 

Shareholder Return Update

In October 2025, New Oriental announced a three-year shareholder return plan. For FY2026, an ordinary dividend of US$0.12 per common share (US$1.20 per ADS) will be distributed in two installments; the first installment has been fully paid.

A share repurchase program of up to US$300 million was also launched, with approximately 1.6 million ADSs repurchased for US$86.3 million as of January 27, 2026.
 

Financial Overview – Q2 FY2026

  • Net revenues: US$1,191.4 million, up 14.7% year-over-year, mainly driven by new educational initiatives.
  • Operating expenses: US$1,125.1 million, up 10.4% year-over-year.
    • Cost of revenue: US$556.9 million (+11.8%)
    • Selling & marketing: US$194.0 million (-1.1%)
    • G&A expenses: US$374.3 million (+15.2%)
    • Share-based compensation: US$21.4 million (+156.8%)
  • Operating income: US$66.3 million (+244.4% YoY)
  • Non-GAAP operating income: US$89.1 million (+206.9% YoY)
  • Operating margin: 5.6% (vs 1.9% prior year)
  • Non-GAAP operating margin: 7.5% (vs 2.8% prior year)
  • Net income attributable to New Oriental: US$45.5 million (+42.3% YoY)
  • Basic & diluted net income per ADS: US$0.29 and US$0.28
  • Non-GAAP net income: US$72.9 million (+68.6% YoY)
  • Non-GAAP net income per ADS: US$0.46 (basic), US$0.45 (diluted)
  • Cash flow: Net operating cash inflow of US$323.5 million; capital expenditures of US$23.7 million.
  • Balance sheet: Cash and cash equivalents of US$1,842.9 million; term deposits US$1,609.9 million; short-term investments US$1,875.2 million.
  • Deferred revenue: US$2,161.5 million, up 10.2% YoY.
 

Six-Month Financial Summary – FY2026

  • Net revenues: US$2,714.4 million (+9.7% YoY)
  • Operating income: US$377.1 million (+20.7% YoY)
  • Non-GAAP operating income: US$424.7 million (+28.5% YoY)
  • Operating margin: 13.9% (vs 12.6%)
  • Non-GAAP operating margin: 15.6% (vs 13.4%)
  • Net income attributable to New Oriental: US$286.2 million (+3.2% YoY)
  • Non-GAAP net income: US$331.2 million (+8.3% YoY)
 

East Buy Financial Highlights (First Six Months FY2026)

New Oriental’s subsidiary East Buy Holding Limited, a private-label products and livestreaming e-commerce platform listed in Hong Kong, reported under IFRS:
  • Revenue: RMB2.3 billion (US$323.3 million), +5.7% YoY
  • Net profit: RMB239.0 million (US$33.4 million) vs net loss of RMB96.5 million prior year
  • Gross profit: RMB841.6 million (US$117.7 million), margin 36.4%
Note: USD conversions use average exchange rate RMB7.15/US$1.
 

Outlook – Q3 & Full Year FY2026

  • Q3 FY2026 revenue forecast: US$1,313.2–1,348.7 million (+11% to 14% YoY)
  • Full-year FY2026 revenue guidance: US$5,292.3–5,488.3 million (+8% to 12% YoY)
Forecast is preliminary and may change with USD/RMB exchange rates.

Earnings Conference Call



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