New Oriental Announces Results for the Third Fiscal Quarter Ended February 29, 2024

BEIJING, April 24, 2024 /PRNewswire/ — New Oriental Education & Technology Group Inc. (the “Company” or “New Oriental”) (NYSE: EDU/ 9901.SEHK), a provider of private educational services in China, today announced its unaudited financial results for the third fiscal quarter ended February 29, 2024, which is the third quarter of New Oriental’s fiscal year 2024.

Financial Highlights for the Third Fiscal Quarter Ended February 29, 2024

  • Total net revenues increased by 60.1% year over year to US$1,207.3 million for the third fiscal quarter of 2024.
  • Operating income increased by 70.6% year over year to US$113.4 million for the third fiscal quarter of 2024.
  • Net income attributable to New Oriental increased by 6.8% year over year to US$87.2 million for the third fiscal quarter of 2024.

Key Financial Results

(in thousands US$, except per ADS(1) data)

3Q FY2024

3Q FY2023

% of change

Net revenues

1,207,286

754,153

60.1 %

Operating income

113,432

66,491

70.6 %

Non-GAAP operating income (2)(3)

140,902

87,895

60.3 %

Net income attributable to New Oriental

87,167

81,648

6.8 %

Non-GAAP net income attributable to New Oriental (2)(3)

104,716

95,362

9.8 %

Net income per ADS attributable to New Oriental – basic

0.53

0.49

7.7 %

Net income per ADS attributable to New Oriental – diluted

0.52

0.48

8.6 %

Non-GAAP net income per ADS attributable to New Oriental – basic (2)(3)(4)

0.63

0.57

10.8 %

Non-GAAP net income per ADS attributable to New Oriental – diluted (2)(3)(4)

0.63

0.56

11.6 %

(in thousands US$, except per ADS(1) data)

 9M FY2024

9M FY2023

% of change

Net revenues

3,176,907

2,137,189

48.6 %

Operating income

339,898

141,992

139.4 %

Non-GAAP operating income (2)(3)

436,559

201,242

116.9 %

Net income attributable to New Oriental

282,619

148,382

90.5 %

Non-GAAP net income attributable to New Oriental (2)(3)

344,192

196,818

74.9 %

Net income per ADS attributable to New Oriental – basic

1.71

0.88

94.3 %

Net income per ADS attributable to New Oriental – diluted

1.69

0.86

96.5 %

Non-GAAP net income per ADS attributable to New Oriental – basic (2)(3)(4)

2.08

1.17

78.4 %

Non-GAAP net income per ADS attributable to New Oriental – diluted (2)(3)(4)

2.05

1.14

79.1 %

(1)  Each ADS represents ten common shares. The Hong Kong-listed shares are fully fungible with the ADSs listed on NYSE.

(2)  GAAP represents Generally Accepted Accounting Principles in the United States of America.

(3)  New Oriental provides net income attributable to New Oriental, operating income and net income per ADS attributable to New Oriental on a non-GAAP basis that excludes share-based compensation expenses and gain from fair value change of investments to provide supplemental information regarding its operating performance. For more information on these non-GAAP financial measures, please see the section captioned “About Non-GAAP Financial Measures” and the tables captioned “Reconciliations of Non-GAAP Measures to the Most Comparable GAAP Measures” set forth at the end of this release.

(4)  The Non-GAAP net income per ADS attributable to New Oriental is computed using Non-GAAP net income attributable to New Oriental and the same number of shares and ADSs used in GAAP basic and diluted EPS calculation.

Operating Highlights for the Third Fiscal Quarter Ended February 29, 2024

  • The total number of schools and learning centers was 911 as of February 29, 2024, an increase of 68 and 199 compared to 843 as of November 30, 2023 and 712 as of February 28, 2023, respectively. The total number of schools was 81 as of February 29, 2024.

Michael Yu, New Oriental’s Executive Chairman, commented, “We are pleased to see a continued acceleration of our growth momentum that exceeded our expectation in the third quarter of fiscal year 2024, characterized by a remarkable top line growth of 60.1%. Our overseas test preparation and overseas study consulting businesses maintained a strong upward trajectory, exhibiting approximately 52.6% and 25.7% growth year over year, respectively. In addition, the domestic test preparation business targeting adults and university students recorded a growth of approximately 53.2% year over year. Moreover, it is also encouraging that our new educational business initiatives have all achieved promising results in this fiscal quarter, with 72.7% revenue growth year over year. Among these new educational business initiatives, our non-academic tutoring courses were offered in around 60 cities, attracting approximately 355,000 student enrollments in this fiscal quarter. Simultaneously, our intelligent learning system and devices were adopted in around 60 cities, with approximately 188,000 active paid users in this fiscal quarter. In addition to our robust growth momentum, our unwavering commitment to enhancing teaching quality and fostering an enriching learning experience for our students is evidenced by our continuous improvement in customer retention rate. I am confident to say New Oriental is well-positioned in its capacity to capture current and future market opportunities, leveraging its well-established brand and abundant educational resources.”

Chenggang Zhou, New Oriental’s Chief Executive Officer, added, “During this fiscal quarter, we continued to expand our capacity in some existing cities with greater growth potential and higher facility utilization, thereby increasing profitability at a moderate pace. Our total number of schools and learning centers increased to 911 by the end of this fiscal quarter. To support the strong recovery of our remaining key businesses and the rapid development of new educational initiatives, we continued to allocate resources to our online-merge-offline teaching system and apply new technologies to enhance the quality of our educational and product offerings. Notably, we made substantial investments in East Buy (东方甄选), enhancing the development of its private label products and its presence in multiple channels to attract a larger customer base with its premium products and innovative livestreaming content. While East Buy continued to grow, it also implemented comprehensive measures, including strengthening its supply chain management system to better control food safety and product quality, expanding product categories and increasing SKUs, to reaffirm its commitment to delivering high-quality products with good value for money.”

Stephen Zhihui Yang, New Oriental’s Executive President and Chief Financial Officer, commented, “Our GAAP operating margin for the quarter was 9.4% and Non-GAAP operating margin for the quarter was 11.7%. Following the promising development in the previous quarters, our educational businesses continued a significant year over year improvement in operating margin in this quarter, driven by strong revenue growth and enhanced utilization of facilities and teaching resources. We recorded a positive operating cash flow of US$109.4 million for this quarter, and by the end of this fiscal quarter, our cash and cash equivalents, term deposits and short-term investments totaled approximately US$4.8 billion. We are confident in achieving healthy growth across all business lines while enhancing operational efficiency and creating sustainable value for our customers and shareholders in the long term.”

Share Repurchase

On July 26, 2022, the Company’s board of directors authorized a share repurchase program, under which the Company may repurchase up to US$400 million of the Company’s ADSs or common shares during the period from July 28, 2022 through May 31, 2023. The Company’s board of directors further authorized to extend such share repurchase program by twelve months through May 31, 2024. As of April 23, 2024, the Company repurchased an aggregate of approximately 6.0 million ADSs for approximately US$195.3 million from the open market under the share repurchase program.

Financial Results for the Third Fiscal Quarter Ended February 29, 2024

Net Revenues

For the third fiscal quarter of 2024, New Oriental reported net revenues of US$1,207.3 million, representing a 60.1% increase year over year. The growth was mainly driven by the increase in net revenues from our educational new business initiatives and East Buy private label products and livestreaming e-commerce business.

Operating Costs and Expenses

Operating costs and expenses for the quarter were US$1,093.9 million, representing a 59.1% increase year over year. Non-GAAP operating costs and expenses for the quarter, which exclude share-based compensation expenses, were US$1,066.4 million, representing a 60.1% increase year over year. The increase was primarily due to the cost and expenses related to the substantial growth in East Buy private label products and livestreaming e-commerce business.

  • Cost of revenues increased by 74.5% year over year to US$644.8 million.
  • Selling and marketing expenses increased by 57.1% year over year to US$161.3 million.
  • General and administrative expenses for the quarter increased by 33.6% year over year to US$287.8 million. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, were US$273.6 million, representing a 40.7% increase year over year.

Total share-based compensation expenses, which were allocated to related operating costs and expenses, increased by 28.3% to US$27.5 million in the third fiscal quarter of 2024.

Operating Income and Operating Margin

Operating income was US$113.4 million, representing a 70.6% increase year over year. Non-GAAP income from operations for the quarter was US$140.9 million, representing a 60.3% increase year over year.

Operating margin for the quarter was 9.4%, compared to 8.8% in the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses, for the quarter was 11.7%, compared to 11.7% in the same period of the prior fiscal year.

Net Income and Net Income per ADS

Net income attributable to New Oriental for the quarter was US$87.2 million, representing a 6.8% increase year over year. Basic and diluted net income per ADS attributable to New Oriental were US$0.53 and US$0.52, respectively.

Non-GAAP Net Income and Non-GAAP Net Income per ADS

Non-GAAP net income attributable to New Oriental for the quarter was US$104.7 million, representing a 9.8% increase year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were US$0.63 and US$0.63, respectively.

Cash Flow

Net operating cash inflow for the third fiscal quarter of 2024 was approximately US$109.4 million and capital expenditures for the quarter were US$80.1 million.

Balance Sheet

As of February 29, 2024, New Oriental had cash and cash equivalents of US$2,013.6 million. In addition, the Company had US$1,570.8 million in term deposits and US$1,175.3 million in short-term investment.

New Oriental’s deferred revenue, which represents cash collected upfront from customers and related revenue that will be recognized as the services or goods are delivered, at the end of the third quarter of fiscal year 2024 was US$1,521.7 million, an increase of 30.8% as compared to US$1,163.2 million at the end of the third quarter of fiscal year 2023.

Financial Results for the Nine Months Ended February 29, 2024

For the first nine months of fiscal year 2024, New Oriental reported net revenues of $3,176.9 million, representing a 48.6% increase year over year.

Operating income was US$339.9 million, representing a 139.4% increase year over year. Non-GAAP income from operations for the first nine months of fiscal year 2024 was US$436.6 million, representing a 116.9% increase year over year.

Operating margin for the first nine months of fiscal year 2024 was 10.7%, compared to 6.6% for the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses for the first nine months of fiscal year 2024, was 13.7%, compared to 9.4% for the same period of the prior fiscal year.

Net income attributable to New Oriental for the first nine months of fiscal year 2024 was US$282.6 million, representing a 90.5% increase year over year. Basic and diluted net income per ADS attributable to New Oriental for the first nine months of fiscal year 2024 amounted to US$1.71 and US$1.69, respectively.

Non-GAAP net income attributable to New Oriental for the first nine months of fiscal year 2024 was US$344.2 million, representing a 74.9% increase year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental for the first nine months of fiscal year 2024 amounted to US$2.08 and US$2.05, respectively.

Outlook for the Fourth Quarter of the Fiscal Year 2024

New Oriental expects total net revenues in the fourth quarter of the fiscal year 2024 (March 1, 2024 to May 31, 2024) to be in the range of US$1,101.5 million to US$1,127.3 million, representing year over year increase in the range of 28% to 31%.

The projected increase of revenue in our functional currency Renminbi is expected to be in the range of 34% to 37% for the fourth quarter of the fiscal year 2024.

This forecast reflects New Oriental’s current and preliminary view, which is subject to change.

Conference Call Information

New Oriental’s management will host an earnings conference call at 8 AM on April 24, 2024, U.S. Eastern Time (8 PM on April 24, 2024, Beijing/Hong Kong Time). 

Please register in advance of the conference, using the link provided below. Upon registering, you will be provided with participant dial-in numbers, and unique personal PIN.

Conference call registration link: https://register.vevent.com/register/BI0b65461f12d9499caeb6af9d65a36784. It will automatically direct you to the registration page of “New Oriental FY2024 Q3 Earnings Conference Call” where you may fill in your details for RSVP.

In the 10 minutes prior to the call start time, you may use the conference access information (including dial in number(s) and personal PIN) provided in the confirmation email received at the point of registering.

Joining the conference call via a live webcast:

Additionally, a live and archived webcast of the conference call will be available at http://investor.neworiental.org.

Listening to the conference call replay:

A replay of the conference call may be accessed via the webcast on-demand by registering at https://edge.media-server.com/mmc/p/bv5iumbf first. The replay will be available until April 24, 2025.

About New Oriental

New Oriental is a provider of private educational services in China offering a wide range of educational programs, services and products to a varied student population throughout China. New Oriental’s program, service and product offerings mainly consist of educational services and test preparation courses, private label products and livestreaming e-commerce and other services, overseas study consulting services, and educational materials and distribution. New Oriental is listed on NYSE (NYSE: EDU) and SEHK (9901.SEHK), respectively. New Oriental’s ADSs, each of which represents ten common shares, are listed and traded on the NYSE. The Hong Kong-listed shares are fully fungible with the ADSs listed on NYSE.

For more information about New Oriental, please visit http://www.neworiental.org/english/.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the outlook for the fourth quarter of fiscal year 2024, quotations from management in this announcement, as well as New Oriental’s strategic and operational plans, contain forward-looking statements. New Oriental may also make written or oral forward-looking statements in its reports filed or furnished to the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about New Oriental’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our ability to effectively and efficiently manage changes of our existing business and new business; our ability to execute our business strategies; uncertainties in relation to the interpretation and implementation of or proposed changes to, the PRC laws, regulations and policies regarding the private education industry; our ability to attract students without a significant increase in course fees; our ability to maintain and enhance our “New Oriental” brand; our ability to maintain consistent teaching quality throughout our school network, or service quality throughout our brand; our ability to achieve the benefits we expect from recent and future acquisitions; the outcome of ongoing, or any future, litigation or arbitration, including those relating to copyright and other intellectual property rights; competition in the private education sector and livestreaming e-commerce business in China; the continuing efforts of our senior management team and other key personnel, health epidemics and other outbreaks in China; and general economic conditions in China. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. New Oriental does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of this press release, and New Oriental undertakes no duty to update such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement New Oriental’s consolidated financial results presented in accordance with GAAP, New Oriental uses the following measures defined as non-GAAP financial measures by the SEC: net income excluding share-based compensation expenses and gain from fair value change of investments, operating income excluding share-based compensation expenses, operating cost and expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, operating margin excluding share-based compensation expenses, and basic and diluted net income per ADS and per share excluding share-based compensation expenses and gain from fair value change of investments. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” set forth at the end of this release.

New Oriental believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based compensation expenses and gain from fair value change of investments that may not be indicative of its operating performance from a cash perspective. New Oriental believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to New Oriental’s historical performance and liquidity. New Oriental believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP measures is that they exclude share-based compensation charge and gain from fair value change of investments that has been and will continue to be for the foreseeable future a significant recurring expense in our business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

Contacts

For investor and media inquiries, please contact:

Ms. Rita Fong                                                    Ms. Sisi Zhao
FTI Consulting                                                   New Oriental Education & Technology Group Inc.
Tel:   +852 3768 4548                                       Tel:   +86-10-6260-5568
Email:   rita.fong@fticonsulting.com                  Email:   zhaosisi@xdf.cn

 

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

As of February 29

As of May 31

2024

2023

(Unaudited)

(Audited)

USD

USD

ASSETS:

Current assets:

Cash and cash equivalents

2,013,627

1,662,982

Restricted cash, current

149,733

110,892

Term deposits, current

1,376,533

855,784

Short-term investments

1,175,306

1,477,843

Accounts receivable, net

30,565

33,074

Inventory, net

96,519

52,689

Prepaid expenses and other current assets, net

275,346

211,240

Amounts due from related parties, current

9,466

9,383

Total current assets

5,127,095

4,413,887

Restricted cash, non-current

25,714

31,553

Term deposits, non-current

194,248

462,734

Property and equipment, net

468,024

359,760

Land use rights, net

3,220

3,321

Amounts due from related parties, non-current

2,937

1,735

Long-term deposits

30,830

26,492

Intangible assets, net

20,234

25,179

Goodwill, net

104,466

105,514

Long-term investments, net

414,460

399,585

Deferred tax assets, net

63,666

55,933

Right-of-use assets

553,057

439,535

Other non-current assets

181,592

67,230

Total assets

7,189,543

6,392,458

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

138,458

69,764

Accrued expenses and other current liabilities

623,548

569,437

Income taxes payable

165,624

118,049

Amounts due to related parties

262

346

Deferred revenue

1,521,733

1,337,630

Operating lease liability, current

178,263

155,752

Total current liabilities

2,627,888

2,250,978

Deferred tax liabilities

25,828

23,849

Unsecured senior notes

14,403

14,653

Operating lease liabilities, non-current

371,341

288,190

Total long-term liabilities

411,572

326,692

Total liabilities

3,039,460

2,577,670

Equity

  New Oriental Education & Technology Group Inc. shareholders’ equity

3,873,873

3,604,348

  Non-controlling interests

276,210

210,440

Total equity

4,150,083

3,814,788

Total liabilities and equity

7,189,543

6,392,458

 

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except for per share and per ADS amounts)

For the Three
Months Ended
February 29

For the Three
Months Ended
February 28

2024

2023

(Unaudited)

(Unaudited)

USD

USD

Net revenues

1,207,286

754,153

Operating cost and expenses (note 1)

Cost of revenues

644,786

369,560

Selling and marketing

161,259

102,631

General and administrative

287,809

215,471

Total operating cost and expenses

1,093,854

687,662

Operating income

113,432

66,491

Gain from fair value change of investments

1,545

6,752

Other income, net

16,841

29,778

Provision for income taxes

(32,703)

(19,339)

(Loss)/Gain from equity method investments

(13,325)

10,598

Net income

85,790

94,280

Add: Net loss/(income) attributable to non-controlling interests

1,377

(12,632)

Net income attributable to New Oriental Education & Technology Group Inc.’s shareholders

87,167

81,648

Net income per share attributable to New Oriental-Basic (note 2)

0.05

0.05

Net income per share attributable to New Oriental-Diluted (note 2)

0.05

0.05

Net income per ADS attributable to New Oriental-Basic (note 2)

0.53

0.49

Net income per ADS attributable to New Oriental-Diluted (note 2)

0.52

0.48

 

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

RECONCILIATIONS OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES

(In thousands except for per share and per ADS amounts)

For the Three
Months Ended
February 29

For the Three
Months Ended
February 28

2024

2023

(Unaudited)

(Unaudited)

USD

USD

General and administrative expenses

287,809

215,471

Less: Share-based compensation expenses in general and administrative expenses

14,226

21,003

Non-GAAP general and administrative expenses

273,583

194,468

Total operating cost and expenses

1,093,854

687,662

Less: Share-based compensation expenses

27,470

21,404

Non-GAAP operating cost and expenses

1,066,384

666,258

Operating income

113,432

66,491

Add: Share-based compensation expenses

27,470

21,404

Non-GAAP operating income

140,902

87,895

Operating margin

9.4 %

8.8 %

Non-GAAP operating margin

11.7 %

11.7 %

Net income attributable to New Oriental

87,167

81,648

Add: Share-based compensation expenses

19,094

20,466

Less: Gain from fair value change of investments

1,545

6,752

Non-GAAP net income attributable to New Oriental

104,716

95,362

Net income per ADS attributable to New Oriental- Basic (note 2)

0.53

0.49

Net income per ADS attributable to New Oriental- Diluted (note 2)

0.52

0.48

Non-GAAP net income per ADS attributable to New Oriental – Basic (note 2)

0.63

0.57

Non-GAAP net income per ADS attributable to New Oriental – Diluted (note 2)

0.63

0.56

Weighted average shares used in calculating basic net income per ADS (note 2)

1,654,982,205

1,669,887,093

Weighted average shares used in calculating diluted net income per ADS (note 2)

1,671,727,365

1,681,414,233

Non-GAAP net income per share – basic

0.06

0.06

Non-GAAP net income per share – diluted

0.06

0.06

 

Notes:

Note 1: Share-based compensation expenses (in thousands) are included in the operating cost and expenses as follows:

For the Three Months
Ended February 29

For the Three Months
Ended February 28

2024

2023

(Unaudited)

(Unaudited)

USD

USD

Cost of revenues

7,405

Selling and marketing

5,839

401

General and administrative

14,226

21,003

Total

27,470

21,404

Note 2: Each ADS represents ten common shares.

 

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the Three
Months Ended
February 29

For the Three
Months Ended
February 28

2024

2023

(Unaudited)

(Unaudited)

USD

USD

Net cash provided by operating activities

109,436

190,482

Net cash provided by investing activities

11,285

147,149

Net cash used in financing activities

(33,492)

(52,594)

Effect of exchange rate changes

(18,901)

23,140

Net change in cash, cash equivalents and restricted cash

68,328

308,177

Cash, cash equivalents and restricted cash at beginning of period

2,120,746

1,122,824

Cash, cash equivalents and restricted cash at end of period

2,189,074

1,431,001

 

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except for per share and per ADS amounts)

For the Nine Months
Ended February 29

For the Nine Months
Ended February 28

2024

2023

(Unaudited)

(Unaudited)

USD

USD

Net revenues

3,176,907

2,137,189

Operating cost and expenses (note 1):

Cost of revenues

1,508,562

1,017,823

Selling and marketing

452,345

296,900

General and administrative

876,102

680,474

Total operating cost and expenses

2,837,009

1,995,197

Operating income

339,898

141,992

Gain from fair value change of investments

8,613

6,705

Other income, net

88,571

87,996

Provision for income taxes

(104,159)

(46,624)

(Loss)/Gain from equity method investments

(36,327)

5,378

Net income

296,596

195,447

Add: Net income attributable to non-controlling interests

(13,977)

(47,065)

Net income attributable to New Oriental Education & Technology Group Inc.’s shareholders

282,619

148,382

Net income per share attributable to New Oriental-Basic (note 2)

0.17

0.09

Net income per share attributable to New Oriental-Diluted (note 2)

0.17

0.09

Net income per ADS attributable to New Oriental-Basic (note 2)

1.71

0.88

Net income per ADS attributable to New Oriental-Diluted (note 2)

1.69

0.86

 

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

RECONCILIATION OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES

(In thousands except for per share and per ADS amounts)

For the Nine Months
Ended February 29

For the Nine Months
Ended February 28

2024

2023

(Unaudited)

(Unaudited)

USD

USD

General and administrative expenses

876,102

680,474

Less: Share-based compensation expenses in general and administrative expenses

56,107

57,702

Non-GAAP general and administrative expenses

819,995

622,772

Total operating cost and expenses

2,837,009

1,995,197

Less: Share-based compensation expenses

96,661

59,250

Non-GAAP operating cost and expenses

2,740,348

1,935,947

Operating income

339,898

141,992

Add: Share-based compensation expenses

96,661

59,250

Non-GAAP operating income

436,559

201,242

Operating margin

10.7 %

6.6 %

Non-GAAP operating margin

13.7 %

9.4 %

Net income attributable to New Oriental

282,619

148,382

Add: Share-based compensation expenses

70,186

55,141

Less: Gain from fair value change of investments

8,613

6,705

Non-GAAP net income attributable to New Oriental

344,192

196,818

Net income per ADS attributable to New Oriental- Basic (note 2)

1.71

0.88

Net income per ADS attributable to New Oriental- Diluted (note 2)

1.69

0.86

Non-GAAP net income per ADS attributable to New Oriental – Basic (note 2)

2.08

1.17

Non-GAAP net income per ADS attributable to New Oriental – Diluted (note 2)

2.05

1.14

Weighted average shares used in calculating basic net income per ADS (note 2)

1,653,742,514

1,686,758,402

Weighted average shares used in calculating diluted net income per ADS (note 2)

1,668,903,402

1,691,361,202

Non-GAAP net income per share – basic

0.21

0.12

Non-GAAP net income per share – diluted

0.20

0.11

 

Notes:

Note 1: Share-based compensation expenses (in thousands) are included in the operating costs and expenses as follows:

For the Nine Months Ended
February 29

For the Nine Months Ended
February 28

2024

2023

(Unaudited)

(Unaudited)

USD

USD

Cost of revenues

18,977

6

Selling and marketing

21,577

1,542

General and administrative

56,107

57,702

Total

96,661

59,250

Note 2: Each ADS represents ten common shares.

 

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the Nine
Months Ended
February 29

For the Nine
Months Ended
February 28

2024

2023

(Unaudited)

(Unaudited)

USD

USD

Net cash provided by operating activities

745,808

549,399

Net cash used in investing activities

(289,912)

(102,350)

Net cash used in financing activities

(51,208)

(170,345)

Effect of exchange rate changes

(21,041)

(40,230)

Net change in cash, cash equivalents and restricted cash

383,647

236,474

Cash, cash equivalents and restricted cash at beginning of period

1,805,427

1,194,527

Cash, cash equivalents and restricted cash at end of period

2,189,074

1,431,001

 

 

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