New Oriental Education & Technology Group (EDU) Q4 2025 earnings summary

Executive summary

• Q4 FY2025 net revenue (excluding East Buy) rose 18.7% year-over-year, driven by new ventures and operational efficiency improvements.

• Net revenues for Q4 FY2025 rose 9.4% year-over-year to $1,243.2M; full-year revenues up 13.6% to $4,900.3M.

• Non-GAAP Q4 net income increased 59.4% year-over-year to $98.1M; full-year non-GAAP net income up 11.4% to $517.1M.

• New educational business initiatives and tourism-related business lines showed strong growth; AI-powered learning devices and OMO system enhancements launched.

• Shareholder return plan announced: at least 50% of net income to be returned via dividends or buybacks over next three years.

Financial highlights

• Operating costs for the quarter were $1,251.8 million, up 11.2% year-over-year.

• Cost of revenues increased 5.1% to $569.9 million; selling and marketing expenses rose 1.8% to $211.9 million; G&A expenses up 9.1% to $409.8 million.

• Impairment of goodwill was $60.3 million, compared to nil last year.

• Operating loss was $8.7 million, versus operating income of $10.5 million a year ago; non-GAAP operating income was $81.7 million, up 116.3% year-over-year.

• Net income attributable to the company was $7.1 million, down 73.7% year-over-year; non-GAAP net income was $98.1 million, up 59.4%.

• Net cash flow from operations was $399.1 million; capital expenditure was $65.9 million.

• Cash and equivalents totaled $1,612.4 million; term deposits $1,447.8 million; short-term investments $1,873.5 million.

• Deferred revenue at quarter/year-end was $1,954.5 million, up 9.8% year-over-year.

Outlook and guidance

• FY2026 Q1 net revenue expected at $1,464.1–$1,507.2 million, up 2–5% year-over-year.

• FY2026 full-year net revenue expected at $5,145.3–$5,390.3 million, up 5–10% year-over-year.

• Revenue growth expected to accelerate from Q2 onward due to seasonality and high prior-year base.

• K-12 business Q1 revenue growth expected at 15–16% year-over-year; full-year K9 business growth around 20%.

• Overseas-related business expected to decline 4–5% year-over-year in FY2026.

• Margin expansion expected in Q1 and focus on profitability over revenue growth for FY2026.