New Oriental Education & Technology Group (EDU) Q3 2025 earnings summary

Executive summary

• Q3 revenue decreased by 2% year-over-year to $1,183.1M, but net revenue excluding East Buy rose 21.2% to $1,038.3M, reflecting strong core educational business and new ventures growth.

• Operating income increased 9.8% year-over-year to $124.5M; net income attributable to shareholders was $87.3M, up 0.1%.

• New business initiatives, including non-academic children’s programs and intelligent learning systems, drove a 35% year-over-year revenue increase, with 408,000 enrollments and 309,000 active device users in Q3.

• Integrated tourism-related business delivered an 85% year-over-year revenue increase, showing strong diversification.

• Continued strategic investments in AI and OMO (online-merge-offline) platforms to enhance educational offerings and operational efficiency.

Financial highlights

• Operating costs and expenses were $1,058.5 million, down 3.2% year-over-year.

• Cost of revenues fell 17.6% to $531.6 million; selling and marketing expenses rose 13% to $182.2 million; G&A expenses increased 19.8% to $344.7 million.

• Operating income was $124.5 million, up 9.8% year-over-year; non-GAAP operating income was $142.1 million, down 0.2%.

• Net income attributable to shareholders was $87.3 million, up 0.1% year-over-year; non-GAAP net income was $113.3 million, down 14.3%.

• Cash and equivalents, term deposits, and short-term investments totaled approximately $4.7 billion as of February 28, 2025.

• Deferred revenue increased 15% year-over-year to $1,749.9 million.

Outlook and guidance

• Q4 net revenue (excluding East Buy) expected to be $1,009.1–$1,036.6 million, a 10–13% year-over-year increase.

• Revenue growth in RMB projected at 12–15% for Q4.

• Non-GAAP operating margin for educational business expected to expand year-over-year in Q4.

• For FY2026, core business lines expected to grow at similar rates as Q4; K-9 new business projected to grow 25–30%, high school business 12–15%, tourism business 15–20%.

• Margin pressure from overseas and tourism-related businesses expected to ease as cost and efficiency initiatives take effect.