NEW ORIENTAL-S releases Q1 FY2025 financial results, with a net profit attributable to shareholders of $2.454 billion, up 48.4% year-on-year

According to the financial news from Zhitong Finance APP, New Oriental-S (09901) released its first quarter results ending on August 31, 2024. New Oriental's net revenue was USD 1.4354 billion, a year-on-year increase of 30.5%. Net revenue (excluding revenue generated from self-operated products and live e-commerce business of Dongfang Zhenxuan) was USD 1.2782 billion, up 33.5% year-on-year. The increase was mainly driven by the company's new education-related businesses.

In the first quarter of the 2025 fiscal year, operating profit increased by 42.9% year-on-year to USD 293.2 million, while operating profit (excluding operating losses from self-operated products and live e-commerce business of Dongfang Zhenxuan) increased by 58.4% year-on-year to USD 303.1 million. New Oriental's attributable net profit to shareholders increased by 48.4% year-on-year to USD 245.4 million.

As of August 31, 2024, the total number of schools and learning centers was 1,089, an increase of 64 compared to 1,025 as of May 31, 2024, and an increase of 296 compared to 793 as of August 31, 2023. As of August 31, 2024, the total number of schools was 80.

Chairman of the Board of New Oriental, Yu Minhong, stated: "We are pleased to start the 2025 fiscal year with a steady revenue growth of 30.5%. Net revenue (excluding revenue generated from self-operated products and live e-commerce business of Dongfang Zhenxuan) increased by 33.5% year-on-year. Our overseas exam preparation and consultation businesses grew by approximately 18.8% and 20.7% respectively year-on-year. At the same time, domestic exam preparation services for adults and college students saw a year-on-year growth of about 30.4%. Furthermore, all of our new education-related businesses maintained strong growth momentum this quarter, with revenue increasing by 49.8% year-on-year. Among them, non-subject tutoring services are available in nearly 60 cities, with approximately 484,000 enrollments this fiscal quarter; intelligent learning systems and devices are adopted in around 60 cities, with approximately 323,000 active paying users this quarter. With our abundant educational resources, we will continue to strive towards our long-term vision, seeking growth while achieving a balance between stability and sustainability, and enhancing profitability through improved service quality and operational efficiency."

CEO of New Oriental, Zhou Chenggang, commented: "This quarter, we closely monitored the expansion of teaching spaces to align with revenue growth and operational efficiency. By the end of this quarter, the total number of schools and learning centers increased to 1,089. We continuously strive to enhance the OMO teaching system and utilize new technologies to improve users' experience with educational courses. Meanwhile, driven by the focus on 'high cost-effectiveness' and multi-channel strategies, we are pleased to see Dongfang Zhenxuan expand its own brand products within just two years, establishing 488 SKUs across different categories. Our business spans online platforms, live broadcasts, and strategically expands to offline channels through collaborations with schools under the New Oriental brand and other partners, sharing a common vision to reach a broader consumer base for sustainable growth. Additionally, it is encouraging to see significant growth in our newly integrated cultural and tourism business this fiscal quarter. We have launched high-quality overseas study tours and domestic study camps for K-12 and college students. Furthermore, we are organizing a variety of top-notch cultural and tourism projects targeting all age groups (including middle-aged and elderly people) in 30 distinctive provinces in China and internationally "We believe that starting from this fiscal year, this new business will bring meaningful revenue contributions."

Yang Zhihui, CEO and CFO of New Oriental, pointed out, "To better reflect New Oriental's core education business, the operating profit data for this quarter does not include the financial performance of the self-operated products and live e-commerce business of Dongfang Zhenxuan. Consistent with expectations from the previous quarter, we have increased the operating profit margin of the core education business year-on-year this fiscal quarter. Our GAAP operating profit margin for this quarter (excluding Dongfang Zhenxuan self-operated products and live e-commerce business) is 23.7%, an increase of 370 basis points year-on-year. The Non-GAAP operating profit margin for this quarter (excluding Dongfang Zhenxuan self-operated products and live e-commerce business) is 24.4%, an increase of 220 basis points year-on-year. We achieved a net operating cash flow of $183.2 million this quarter; at the end of this quarter, the total amount of cash and cash equivalents, time deposits, and short-term investments is approximately $4.9 billion. For the remaining time of this fiscal year, we are committed to further increasing utilization rates and improving operational efficiency. We are confident in creating sustainable value for customers and shareholders in the long term."