New Oriental Education & Technology Group (EDU) investor relations material

Executive summary

• Q1 FY2027 revenue rose 23.1% YoY to $1,874.5 million, exceeding the guidance upper range; growth was driven mainly by new educational initiatives and East Buy.

• Core education and East Buy expanded operating margins YoY, while East Buy’s faster growth changed revenue mix and kept consolidated operating margin stable.

Financial highlights

• GAAP operating income rose 20.5% to $374.7 million and net income attributable to shareholders rose 13.5% to $273.2 million; Non-GAAP operating income increased 21.2% to $406.8 million and net income rose 16.5% to $300.9 million.

• Basic and diluted EPS were $1.76 and $1.74; Non-GAAP basic and diluted EPS were $1.94 and $1.92.

• Operating costs and expenses rose 23.7% to $1,499.8 million; cost of revenue increased 28.1% to $817.0 million, selling and marketing 30.7% to $262.2 million, and G&A 12.6% to $420.7 million.

• Operating cash flow was $195.4 million and capital expenditure was $65.8 million; cash and equivalents were $1,754.6 million, term deposits $1,441.3 million, and short-term investments $2,422.7 million at Aug. 31, 2026.

• Deferred revenue was $2,121.1 million at quarter-end, up 11.2% YoY from $1,906.7 million.

Outlook and guidance

• FY2027 revenue guidance was reaffirmed at $6,453.9–$6,680.3 million, implying 14%–18% YoY growth; the forecast reflects current market conditions and exchange rates and may change.

• Management expects Q2 group revenue growth to exceed Q1 and East Buy growth to accelerate; core education and East Buy margins are expected to expand in FY2027.

• Annual growth outlook: overseas test prep above 5% in U.S. dollars; new education business high teens to ~20%; high school ~15%; college ~20% or slightly higher.

• Learning center capacity grew 2% QoQ in Q1; FY2027 plans call for 10%–15% center growth, including ~15% for K9, mostly in existing cities.

• Priorities include disciplined capacity expansion, balanced revenue and profit growth, cost efficiency, and measured AI investment to improve products and reduce labor costs.