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

Executive summary

• Q2 FY2026 net revenues rose 14.7% year-over-year to $1.19 billion, with significant profit expansion driven by operational efficiency, disciplined resource management, and new educational business initiatives.

• Non-GAAP operating income surged 206.9% to $89.1 million, and non-GAAP net income rose 68.6% to $72.9 million year-over-year.

• Operating income increased 244.4% to $66.3 million, and net income attributable was $45.5 million, up 42.3% year-over-year.

• Core K-9, high school tutoring, and new initiatives accelerated revenue growth, with East Buy contributing meaningfully to both top and bottom lines.

• For H1 FY2026, net revenues increased 9.7% to $2,714.4 million, and net income reached $286.2 million.

Financial highlights

• Operating costs and expenses increased 10.4% year-over-year to $1,125.1 million; cost of revenues up 11.8% to $556.9 million.

• Selling and marketing expenses decreased 1.1% to $194 million; G&A expenses rose 15.2% to $374.3 million.

• Net cash flow from operations was $323.5 million; capital expenditure was $23.7 million.

• Cash and equivalents totaled $1,842.9 million; deferred revenue increased 10.2% year-over-year to $2,161.5 million.

• Cash, term deposits, and short-term investments totaled over $5.3 billion at quarter-end.

Outlook and guidance

• Q3 FY2026 net revenue expected between $1,313.2 million and $1,348.7 million, up 11%-14% year-over-year.

• Full-year FY2026 net revenue guidance raised to $5,292.3 million-$5,488.3 million, up 8%-12% year-over-year.

• Continued focus on cost discipline, sustainable profitability, and strategic expansion in high-performing cities.