TAL Education Group (TAL) investor relations material

Executive summary

• Net revenues for Q2 FY2026 rose 39.1% year-over-year to $861.4 million, with six-month revenues up 39.0% to $1,436.4 million, driven by growth in both learning services and devices through product innovation and expansion of offerings.

• Net income attributable to shareholders more than doubled year-over-year for both the quarter ($124.1 million) and six months ($155.4 million).

• Continued investment in technology and AI integration to enhance learning experiences and operational efficiency.

• Focused on long-term sustainable growth, balancing short-term financial fluctuations with strategic resource allocation.

• Both enrichment learning programs and learning devices drove revenue growth, supported by ongoing investments in technology and educational innovation.

Financial highlights

• Net revenues reached $861.4 million, up 39.1% year-over-year in USD terms and 38.1% in RMB.

• Gross profit increased 40.8% year-over-year to $491.0 million; gross margin rose to 57.0% from 56.3%.

• Non-GAAP income from operations was $107.8 million, up 67.2% year-over-year.

• Net income attributable was $124.1 million for the quarter, and $155.4 million for six months.

• Cash, cash equivalents, and short-term investments totaled $3,248.8 million as of August 31, 2025.

Outlook and guidance

• Fiscal Q3 expected to be seasonally weaker; focus remains on sustainable long-term growth over short-term results.

• Continued investments in content, technology, and sales channels to support future growth.

• Revenue growth for PayU Small Class expected to gradually taper as business matures.

• Learning device business to see ongoing investment and potential for performance fluctuations.

• Management will continue to allocate resources to key growth areas, aiming for sustainable expansion and transformative learning solutions.