Technology

New Oriental Announces Results for the Fourth Fiscal Quarter and the Fiscal Year Ended May 31, 2024

Published

2 years ago

July 31, 2024

BEIJING, July 31, 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 fourth fiscal quarter and fiscal year ended May 31, 2024.

Financial Highlights for the Fourth Fiscal Quarter Ended May 31, 2024

Total net revenues increased by 32.1% year over year to US$1,136.7 million for the fourth fiscal quarter of 2024.Operating income decreased by 78.1% year over year to US$10.5 million for the fourth fiscal quarter of 2024.Net income attributable to New Oriental decreased by 6.9% year over year to US$27.0 million for the fourth fiscal quarter of 2024.

Key Financial Results

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

4Q FY2024

4Q FY2023

% of change

Net revenues

1,136,679

860,571

32.1 %

Operating income

10,527

48,054

-78.1 %

Non-GAAP operating income (2)(3)

36,324

78,592

-53.8 %

Net income attributable to New Oriental

26,972

28,959

-6.9 %

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

36,931

62,091

-40.5 %

Net income per ADS attributable to New Oriental – basic

0.16

0.18

-6.9 %

Net income per ADS attributable to New Oriental – diluted

0.16

0.17

-5.8 %

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

0.22

0.38

-40.5 %

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

0.22

0.37

-40.5 %

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

FY2024

FY2023

% of change

Net revenues

4,313,586

2,997,760

43.9 %

Operating income

350,425

190,046

84.4 %

Non-GAAP operating income (2)(3)

472,883

279,834

69.0 %

Net income attributable to New Oriental

309,591

177,341

74.6 %

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

381,123

258,909

47.2 %

Net income per ADS attributable to New Oriental – basic

1.87

1.06

77.2 %

Net income per ADS attributable to New Oriental – diluted

1.85

1.03

79.3 %

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

2.30

1.54

49.4 %

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

2.27

1.51

50.0 %

(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
(loss) 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 Fourth Fiscal Quarter Ended May 31, 2024

The total number of schools and learning centers was 1,025 as of May 31, 2024, an increase of 114 and 277 compared to 911 as of February 29, 2024 and 748 as of May 31, 2023, respectively. The total number of schools was 81 as of May 31, 2024.

Michael Yu, New Oriental’s Executive Chairman, commented, “We are pleased to conclude the final quarter of fiscal year 2024 with a healthy top line growth of 32.1%. Our overseas test preparation and overseas study consulting businesses increased by approximately 17.7% and 17.3% year over year, respectively. In addition, the domestic test preparation business targeting adults and university students recorded a growth of approximately 16.4% year over year. Furthermore, our new educational business initiatives have all sustained strong momentum in this fiscal quarter, with a 50.3% revenue growth year over year. Among these new educational business initiatives, our non-academic tutoring courses were offered in around 60 cities, attracting approximately 875,000 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. On top of the strong growth, it is also encouraging to see the continuous improvement in customer retention rate. We will keep on our effort in enhancing quality of our product offerings and services. We firmly believe in the bright future of these new business initiatives and our strength in capturing the new market opportunity.”

Chenggang Zhou, New Oriental’s Chief Executive Officer, added, “During this fiscal quarter, we accelerated our capacity expansion in some existing cities with greater growth potential and higher facility utilization, thereby increasing profitability. As of the end of this fiscal year, the total number of schools and learning centers increased to 1,025. As our key educational businesses delivered sustainable growth, 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. Upholding the customer-centric strategy, East Buy Holding Limited (“East Buy”) consistently provides customers with healthy, delicious, and cost-effective products. Since the launch of its first private label product in April 2022, East Buy has developed and launched over 400 SKUs within just two years, expanding its product line from agriculture, food and beverage products to a variety of product categories, among which some of its hot-selling products have achieved excellent performance in the market with strong competitiveness.”

Stephen Zhihui Yang, New Oriental’s Executive President and Chief Financial Officer, commented, “Our GAAP operating margin for the quarter was 0.9% and Non-GAAP operating margin for the quarter was 3.2%. Our investment in accelerated capacity expansion and newly-integrated tourism-related business, as well as additional incentives to management and staff have led to the short-term impact on our operating margin in this quarter. We anticipate the pressure on margins for educational businesses will reduce in the next fiscal year as we continue to improve the utilization of facilities and operating efficiency. We will stick to our commitment on creating sustainable value for our customers and shareholders in the long term.”

Recent Development

On November 21, 2023, as part of the Company’s business line reorganization, the Company’s wholly-owned subsidiary and variable interest entity (the “New Oriental Group Entities”) entered into an agreement with East Buy and its subsidiaries and variable interest entity, pursuant to which the New Oriental Group Entities agreed to acquire East Buy’s online education business at an aggregate consideration of RMB1.5 billion. The consideration was agreed by the parties after arm’s length negotiations, with reference to an independent valuation. The acquisition was completed in this fiscal quarter. Upon completion, the online education business was deconsolidated from East Buy’s consolidated financial statements and is now recorded by the Company under educational services.

Share Repurchase

The Company’s board of directors approved a share repurchase program in July 2022, under which the Company is authorized to repurchase up to US$400 million of the Company’s ADSs or common shares through the next twelve months. The Company’s board of directors further approved to extend the effective time of the share repurchase program to May 31, 2025. As of July 30, 2024, the Company repurchased an aggregate of approximately 7.3 million ADSs for approximately US$296.1 million from the open market.

Financial Results for the Fourth Fiscal Quarter Ended May 31, 2024

Net Revenues

For the fourth fiscal quarter of 2024, New Oriental reported net revenues of US$1,136.7 million, representing a 32.1% 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$1,126.2 million, representing a 38.6% increase year over year. Non-GAAP operating costs and expenses for the quarter, which exclude share-based compensation expenses, were US$1,100.4 million, representing a 40.7% 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 and accelerated capacity expansion for educational businesses.

Cost of revenues increased by 38.5% year over year to US$542.4 million.Selling and marketing expenses increased by 40.9% year over year to US$208.2 million.General and administrative expenses for the quarter increased by 37.5% year over year to US$375.5 million. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, were US$355.2 million, representing a 42.3% increase year over year.

Total share-based compensation expenses, which were allocated to related operating costs and expenses, decreased by 15.5% to US$25.8 million in the fourth fiscal quarter of 2024.

Operating Income and Operating Margin

Operating income was US$10.5 million, representing a 78.1% decrease year over year. Non-GAAP income from operations for the quarter was US$36.3 million, representing a 53.8% decrease year over year.

Operating margin for the quarter was 0.9%, compared to 5.6% in the same period of the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses, for the quarter was 3.2%, compared to 9.1% 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$27.0 million, representing a 6.9% decrease year over year. Basic and diluted net income per ADS attributable to New Oriental were US$0.16 and US$0.16, 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$36.9 million, representing a 40.5% decrease year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were US$0.22 and US$0.22, respectively.

Cash Flow

Net operating cash inflow for the fourth fiscal quarter of 2024 was approximately US$376.8 million and capital expenditures for the quarter were US$27.4 million.

Balance Sheet

As of May 31, 2024, New Oriental had cash and cash equivalents of US$1,389.4 million. In addition, the Company had US$1,489.4 million in term deposits and US$2,065.6 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 fourth quarter of fiscal year 2024 was US$1,780.1 million, an increase of 33.1% as compared to US$1,337.6 million at the end of the fourth quarter of fiscal year 2023.

Financial Results for the Fiscal Year Ended May 31, 2024

For the fiscal year 2024 ended May 31, 2024, New Oriental reported net revenues of $4,313.6 million, representing a 43.9% increase year over year.

Operating income from operations for the fiscal year 2024 was US$350.4 million, representing a 84.4% increase year over year. Non-GAAP operating income for the fiscal year 2024 was US$472.9 million, representing a 69.0% increase year over year.

Operating margin for the fiscal year 2024 was 8.1%, compared to 6.3% for the prior fiscal year. Non-GAAP operating margin, which excludes share-based compensation expenses for the fiscal year 2024, was 11.0%, compared to 9.3% for the prior fiscal year.

Net income attributable to New Oriental for the fiscal year 2024 was US$309.6 million, representing a 74.6% increase year over year. Basic and diluted net income per ADS attributable to New Oriental for the fiscal year 2024 amounted to US$1.87 and US$1.85, respectively.

Non-GAAP net income attributable to New Oriental for the fiscal year 2024 was US$381.1 million, representing a 47.2% increase year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental for the fiscal year 2024 amounted to US$2.30 and US$2.27, respectively.

Outlook for the First Quarter of the Fiscal Year 2025

New Oriental expects total net revenues, excluding revenues generated from East Buy private label products and livestreaming business, in the first quarter of the fiscal year 2025 (June 1, 2024 to August 31, 2024) to be in the range of US$1,254.7 million to US$1,283.5 million, representing year over year increase in the range of 31% to 34%.

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 July 31, 2024, U.S. Eastern Time (8 PM on July 31, 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/BIc2dde5e6a20144cfb19927a1c9cff6d0. It will automatically direct you to the registration page of “New Oriental FY2024 Q4 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/o6s9tzw6/ first. The replay will be available until July 31, 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 first quarter of fiscal year 2025, 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 (loss) 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 (loss) 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 (loss) 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 (loss) 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 May 31

2024

2023

(Unaudited)

(Audited)

USD

ASSETS:

Current assets:

Cash and cash equivalents

1,389,359

1,662,982

Restricted cash, current

177,411

110,892

Term deposits, current

1,320,167

855,784

Short-term investments

2,065,579

1,477,843

Accounts receivable, net

29,689

33,074

Inventory, net

92,806

52,689

Prepaid expenses and other current assets, net

309,464

211,240

Amounts due from related parties, current

4,403

9,383

Total current assets

5,388,878

4,413,887

Restricted cash, non-current

22,334

31,553

Term deposits, non-current

169,203

462,734

Property and equipment, net

507,981

359,760

Land use rights, net

4,450

3,321

Amounts due from related parties, non-current

7,273

1,735

Long-term deposits

38,161

26,492

Intangible assets, net

18,672

25,179

Goodwill, net

103,958

105,514

Long-term investments, net

355,812

399,585

Deferred tax assets, net

72,727

55,933

Right-of-use assets

653,905

439,535

Other non-current assets

188,319

67,230

Total assets

7,531,673

6,392,458

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

105,681

69,764

Accrued expenses and other current liabilities

774,805

569,437

Income taxes payable

139,822

118,049

Amounts due to related parties

551

346

Deferred revenue

1,780,063

1,337,630

Operating lease liability, current

199,933

155,752

Total current liabilities

3,000,855

2,250,978

Deferred tax liabilities

19,407

23,849

Unsecured senior notes

14,403

14,653

Operating lease liabilities, non-current

447,994

288,190

Total long-term liabilities

481,804

326,692

Total liabilities

3,482,659

2,577,670

Equity

New Oriental Education & Technology Group Inc. shareholders’ equity

3,775,934

3,604,348

Non-controlling interests

273,080

210,440

Total equity

4,049,014

3,814,788

Total liabilities and equity

7,531,673

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 May 31

2024

2023

(Unaudited)

USD

Net revenues

1,136,679

860,571

Operating cost and expenses (note 1)

Cost of revenues

542,398

391,615

Selling and marketing

208,241

147,793

General and administrative

375,513

273,109

Total operating cost and expenses

1,126,152

812,517

Operating income

10,527

48,054

Gain/(Loss) from fair value change of investments

10,412

(7,565)

Other income, net

35,820

31,349

Provision for income taxes

(5,531)

(19,442)

Loss from equity method investments

(22,606)

(12,480)

Net income

28,622

39,916

Add: Net income attributable to non-controlling interests

(1,650)

(10,957)

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

26,972

28,959

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

0.02

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

0.02

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

0.16

0.18

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

0.16

0.17

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 May 31

2024

2023

(Unaudited)

USD

General and administrative expenses

375,513

273,109

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

20,332

23,587

Non-GAAP general and administrative expenses

355,181

249,522

Total operating cost and expenses

1,126,152

812,517

Less: Share-based compensation expenses

25,797

30,538

Non-GAAP operating cost and expenses

1,100,355

781,979

Operating income

10,527

48,054

Add: Share-based compensation expenses

25,797

30,538

Non-GAAP operating income

36,324

78,592

Operating margin

0.9 %

5.6 %

Non-GAAP operating margin

3.2 %

9.1 %

Net income attributable to New Oriental

26,972

28,959

Add: Share-based compensation expenses

20,371

25,567

Less: Gain/(Loss) from fair value change of
investments

10,412

(7,565)

Non-GAAP net income attributable to New Oriental

36,931

62,091

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

0.16

0.18

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

0.16

0.17

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

0.22

0.38

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

0.22

0.37

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

1,653,165,343

1,653,059,954

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

1,671,292,756

1,668,721,317

Non-GAAP net income per share – basic

0.02

0.04

Non-GAAP net income per share – diluted

0.02

0.04

Notes:

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

For the Three Months Ended May 31

2024

2023

(Unaudited)

USD

Cost of revenues

990

2,743

Selling and marketing

4,475

4,208

General and administrative

20,332

23,587

Total

25,797

30,538

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 May 31

2024

2023

(Unaudited)

USD

Net cash provided by operating activities

376,835

421,609

Net cash (used in)/provided by investing activities

(864,010)

64,939

Net cash used in financing activities

(109,230)

(76,522)

Effect of exchange rate changes

(3,565)

(35,600)

Net change in cash, cash equivalents and restricted cash

(599,970)

374,426

Cash, cash equivalents and restricted cash at beginning of
period

2,189,074

1,431,001

Cash, cash equivalents and restricted cash at end of
period

1,589,104

1,805,427

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

For the Year Ended May 31

2024

2023

(Unaudited)

USD

Net revenues

4,313,586

2,997,760

Operating cost and expenses (note 1):

Cost of revenues

2,050,960

1,409,438

Selling and marketing

660,586

444,693

General and administrative

1,251,615

953,583

Total operating cost and expenses

3,963,161

2,807,714

Operating income

350,425

190,046

Gain/(Loss) from fair value change of investments

19,025

(860)

Other income, net

124,391

119,345

Provision for income taxes

(109,690)

(66,066)

Loss from equity method investments

(58,933)

(7,102)

Net income

325,218

235,363

Add: Net income attributable to non-controlling interests

(15,627)

(58,022)

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

309,591

177,341

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

0.19

0.11

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

0.18

0.10

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

1.87

1.06

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

1.85

1.03

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 Year Ended May 31

2024

2023

(Unaudited)

USD

General and administrative expenses

1,251,615

953,583

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

76,439

81,289

Non-GAAP general and administrative expenses

1,175,176

872,294

Total operating cost and expenses

3,963,161

2,807,714

Less: Share-based compensation expenses

122,458

89,788

Non-GAAP operating cost and expenses

3,840,703

2,717,926

Operating income

350,425

190,046

Add: Share-based compensation expenses

122,458

89,788

Non-GAAP operating income

472,883

279,834

Operating margin

8.1 %

6.3 %

Non-GAAP operating margin

11.0 %

9.3 %

Net income attributable to New Oriental

309,591

177,341

Add: Share-based compensation expenses

90,557

80,708

Less: Gain/(Loss) from fair value change of
investments

19,025

(860)

Non-GAAP net income attributable to New Oriental

381,123

258,909

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

1.87

1.06

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

1.85

1.03

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

2.30

1.54

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

2.27

1.51

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

1,653,597,432

1,678,264,547

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

1,669,499,952

1,685,631,987

Non-GAAP net income per share – basic

0.23

0.15

Non-GAAP net income per share – diluted

0.23

0.15

Notes:

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

For the Year Ended May 31

2024

2023

(Unaudited)

USD

Cost of revenues

19,967

2,749

Selling and marketing

26,052

5,750

General and administrative

76,439

81,289

Total

122,458

89,788

Note 2: Each ADS represents ten common shares.

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the Year Ended May 31

2024

2023

(Unaudited)

USD

Net cash provided by operating activities

1,122,643

971,008

Net cash used in investing activities

(1,153,922)

(37,411)

Net cash used in financing activities

(160,438)

(246,867)

Effect of exchange rate changes

(24,606)

(75,830)

Net change in cash, cash equivalents and restricted cash

(216,323)

610,900

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

1,589,104

1,805,427

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SOURCE New Oriental Education and Technology Group Inc.

Technology

Samsung Selects Chandigarh University Student as ‘Punjab AI State Topper’

Published

26 minutes ago

July 18, 2026

CU Student Devesh Panwar Wins Rs 1 Lakh Award for Developing AI-Based Document Search System

CHANDIGARH, India, July 18, 2026 /PRNewswire/ — A Bachelor of Computer Applications (BCA) student of Chandigarh University, Devesh Panwar, has been named the “Punjab State Topper” in the Artificial Intelligence (AI) under the Samsung Innovation Campus (SIC) AI Program organised by Samsung in collaboration with Telecom Sector Skill Council (TSSC) and training partner Focal Skill Development (Focalyt) to equip Indian youth with industry-relevant in-demand skills in AI, loT, Big Data, and Coding & Programming, preparing them for future careers.

A final-year student of Bachelor of Computer Applications (BCA) at University Institute of Computing (UIC) of Chandigarh University, Devesh Panwar also won a cash award of Rs 1 lakh along with a laptop, and exclusive Samsung rewards for achieving this remarkable milestone under the Samsung Innovation Campus AI Program.

“Being named ‘AI State Topper’ was a moment of profound pride and validation for me. Hard work, intense technical training and a passion for AI culminated in the immense honor of the Punjab State Topper title. Besides getting access to state-of-the-art tools to fuel my future research and development endeavor, I gained world-class knowledge during the Samsung Innovation Campus (SIC) AI Program. It helped me in gaining hands-on experience and applied AI to solve real-world challenges, especially in aeronautical and technical domains,”

During Samsung Innovation Campus (SIC) AI Program, Devesh and his team worked on innovative AI capstone project which was presented before the jury panel as part of the final assessment.

“Our team developed the advanced AI-powered system AI Research Agent, a Retrieval-Augmented Generation (RAG) platform designed for intelligent querying of private document collections. Organizations, researchers, legal professionals, and HR teams often work with large collections of documents. Traditional search methods rely heavily on keyword matching and require significant manual effort to locate relevant information. The project was developed to address the limitations of traditional document search systems, which often struggle with contextual understanding, retrieval accuracy, learning adaptability, and response speed,” said Devesh.

“The developed system demonstrated significant improvements over traditional document retrieval approaches with faster response generation with integration of modern AI techniques, full-stack development, database systems, and intelligent automation into a single practical solution. By combining modern RAG architecture with innovative retrieval and reasoning mechanisms, this system provides a fast, intelligent, and user-friendly solution for knowledge discovery and resume evaluation. This project not only enhanced our technical expertise in Artificial Intelligence and Full-Stack Development but also strengthened our problem-solving, teamwork, and professional communication skills. It stands as a significant achievement of our Samsung Innovation Campus 2025 journey and reflects our commitment to building impactful AI solutions for real-world challenges,” he added.

Congratulating Devesh Panwar for being named “Punjab State Topper” AI under the Samsung Innovation Campus Samsung Innovation Program, Deepinder Singh Sandhu, Senior Managing Director, Chandigarh University, said, “Devesh’s achievement reflects Chandigarh University’s focus on experiential learning and industry-academia collaboration. Through the Samsung Innovation Campus AI Program, CU students gain practical exposure to AI and building solutions for real-world challenges. This accomplishment reflects not only Devesh’s commitment to excellence but also the growing culture of innovation and industry-oriented learning at Chandigarh University,”.

“Since its inception, Chandigarh University has set benchmarks for world-class education with its dynamic hands-on experiential learning model, industry-aligned programs, dynamic fraternity, state-of-the-art infrastructure facilities and impeccable placements. Samsung Innovation Program is also part of our initiatives to develop a future-ready talent pool equipped with advanced capabilities in AI, loT, Big Data, and Coding and Programming. By bridging the gap between theoretical learning and real-world application, this collaboration helps in providing CU’s computer science and computing students exposure to cutting-edge and emerging technologies. CU’s this partnership with Samsung is focused on building future-ready talent equipped with industry-relevant skills in AI and emerging technologies,” Sandhu said.

He said Chandigarh University’s Institute of Computing (UIC) prepares students for a successful career in computing, to create and disseminate computing knowledge and technology. “Chandigarh University carries a vision of crafting next-gen IT professionals who can take up industry challenges effectively and our Institute of Computing (UIC) prepares students for a successful career in computing, to create and disseminate computing knowledge and technology. UIC’s hands-on approach paves the way for a smooth transition to the workforce after graduation. Our students are equipped with the best knowledge, skills and passion to succeed in any number of computing careers. CU’s Institute of Computing renders cutting-edge education ranging from the expertise in traditional software development -to- modern computing technologies. Fully-equipped industry-sponsored labs, industry-aligned curriculum, and accreditations and validations by top companies such as Intel, Microsoft, Google Android, Red Hat etc. give our students an exclusive edge over others,” the Chandigarh University CMD said.

Sandhu said the latest edition of QS World University Rankings has yet again reaffirmed Chandigarh University global standing as a top educational institution. “Continuing its remarkable rise among the world’s leading higher education institutions, Chandigarh University (CU) has made impressive strides in the latest edition of prestigious QS World University Rankings 2027 by securing an overall world rank of 526, an increase of 49 ranks as compared to 575th rank in QS’ 2026 Rankings. This is for the fifth consecutive year that Chandigarh University’s global rankings have witnessed an impressive surge with CU’s world rank going up by an impressive 274 ranks — from the 800th rank in 2023 to 526th in 2027’s Rankings,”.

“As per the latest QS World University Rankings, with All India Rank of 13 among all universities in the country as compared to 16th rank in 2026’s rankings, Chandigarh University now ranks among the top 1% of universities in India and the top 2% of universities in the World, underscoring its growing reputation as a leading institution of higher learning, both in India and globally,” he added.

About Chandigarh University

Chandigarh University is a NAAC A+ Grade University and QS World Ranked University. This autonomous educational institution is approved by UGC and is located near Chandigarh in the state of Punjab. It is the youngest university in India and the only private university in Punjab to be honoured with A+ Grade by NAAC (National Assessment and Accreditation Council). CU offers more than 109 UG and PG programs in the field of engineering, management, pharmacy, law, architecture, journalism, animation, hotel management, commerce, and others. It has been awarded as The University with Best Placements by WCRC.

Website address: https://www.cuchd.in/

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Technology

Samsung Selects Chandigarh University Student as ‘Punjab AI State Topper’

Published

26 minutes ago

July 18, 2026

CU Student Devesh Panwar Wins Rs 1 Lakh Award for Developing AI-Based Document Search System

During Samsung Innovation Campus (SIC) AI Program, Devesh and his team worked on innovative AI capstone project which was presented before the jury panel as part of the final assessment.

About Chandigarh University

Website address: https://www.cuchd.in/

View original content to download multimedia:https://www.prnewswire.com/in/news-releases/samsung-selects-chandigarh-university-student-as-punjab-ai-state-topper-302828991.html

Technology

Black Lake Technologies Shortlisted as SAIL Award TOP30 Finalist and Selected as Global Industrial AI Flagship Case, Showcasing Latest Industrial Agent at WAIC 2026

Published

1 hour ago

July 18, 2026

SHANGHAI, July 18, 2026 /PRNewswire/ — The 2026 World Artificial Intelligence Conference (WAIC) opened in Shanghai on July 17. Shanghai Blacklake Technologies Co., Ltd. (“Black Lake”), an industrial AI company, is showcasing a portfolio of industrial AI agents at the conference. The company has also been named to the Top 30 shortlist for the 2026 WAIC Super AI Leader (SAIL) Award and selected as a Trusted Partner under the Global Call for Trusted Partners for Industrial AI in the Global South.

The accreditations highlight Black Lake’s latest progress in bringing AI into critical manufacturing decision-making workflows and deploying industrial AI capabilities on the shop floor around the world.

This year’s conference attracted over 1,100 exhibiting companies and showcased more than 3,000 exhibits, setting a new record for exhibition scale. The conference delivered a clear signal: as artificial intelligence becomes a common priority across global industries, attention is moving beyond model capabilities toward practical applications in real-world operating environments.

Manufacturing provides a particularly demanding test for this transition. Factory operations are governed by multiple constraints, including process specifications, equipment capabilities, material availability, production capacity, delivery schedules and quality requirements. Therefore, AI has to do so much more than simply comprehend information input. It must make reliable judgments within clearly defined business rules and operational constraints.

Black Lake has focused on industrial digitalization and industrial AI for years, developing and deploying AI applications in a range of factory environments.

At WAIC 2026, the company is presenting industrial AI agents covering order splitting and process planning, quotation and pricing, procurement, production scheduling, quality inspection, and order tracking. These applications are designed to move AI beyond an auxiliary role and into critical manufacturing decision-making workflows.

Traditional industrial software is primarily responsible for data recording, digital workflows, and worker coordination. However, critical decisions such as how to split an order, determine pricing, schedule production, and assess quality risks still depend heavily on the experience of engineers and frontline workers.

Industrial AI agents are intended to convert fragmented industrial knowledge and production experience into decision-making capabilities that can be invoked, reused and continuously refined by software systems.

Order decomposition and process planning are representative examples. After receiving an engineering drawing, a factory typically relies on experienced engineers to identify components, materials and dimensions, define the required manufacturing processes and technical specifications, and establish a basis for subsequent quotation and quality inspection.

The process is highly dependent on individual expertise and represents one of the first critical decision points after an order is received.

Black Lake Technologies’ CAD-to-Process Agent can understand product drawings and, taking into account the factory’s equipment capabilities, process requirements, and production practices, rapidly generate process steps along with the corresponding technical requirements. Drawing analysis that once took hours can now be completed in approximately one minute, achieving an accuracy rate of over 95% in real deployment and providing engineers with stable, efficient decision support. Currently, the industrial agents developed by the company cover core processes including design, scheduling, production, and quality inspection, and have entered the stage of large-scale deployment.

Founded in 2016, Black Lake serves nearly 40,000 factories worldwide. Its customers span more than 30 industries, including food and beverage, automotive components and equipment manufacturing.

By working across factory order management, production and fulfillment workflows, Black Lake has accumulated the technical capabilities and industry knowledge required to support decision-making in complex industrial environments.

In April 2026, Black Lake completed a Series D funding round of nearly RMB 1 billion. The company said the proceeds would primarily be used to accelerate the deployment of its industrial AI products and support its international expansion.

AI-related products are becoming a new source of growth for the company. In a recent interview, Black Lake founder and CEO Zhou Yuxiang said that the company had recorded significant growth in AI-related revenue since the beginning of 2026. He also said that manufacturing customers were taking less time to make purchasing decisions for industrial AI agents.

Zhou expects AI adoption among Chinese factories to increase substantially over the next three to four years.

Unlike consumer-facing AI, which is primarily associated with content generation and personal productivity, industrial AI agents can directly affect production costs, capacity utilization, delivery performance, and product quality. Their commercial value therefore depends largely on whether they can perform specific tasks reliably in complex production environments.

During WAIC 2026, Black Lake was named to the Top 30 shortlist for the 2026 Super AI Leader (SAIL) Award. The SAIL Award is one of WAIC’s major awards and recognizes achievements in technological breakthroughs, application innovation, and industrial value.

Black Lake was also selected as a Trusted Partner under UNIDO’s Global Call for Trusted Partners for Industrial AI in the Global South.

The Global Call was launched under the guidance of the United Nations Industrial Development Organization (UNIDO), in partnership with the Shanghai Artificial Intelligence Research Institute, and in connection with the work of UNIDO AIM Global and its Shanghai-based Centre of Excellence.

The initiative aims to build a curated pool of leading partners to co-develop scalable industrial AI solutions and public goods for the Global South.

For Black Lake, the two accreditations underscore the growing importance of reliability, explainability, and scalability in the evaluation of industrial AI, in addition to the capabilities of AI models.

Global expansion will be a major priority in the company’s next phase of development. Black Lake is currently focusing on Southeast Asia, Latin America and Eastern Europe, adapting its industrial AI agents to the industrial structures, production processes and management requirements of different markets.

Although manufacturing operations vary across countries and regions, manufacturers share similar concerns about efficiency, quality, delivery reliability and production flexibility.

Black Lake is transforming industrial AI capabilities that have been validated in complex factory environments into configurable and deployable products. Through these products, the company aims to work with manufacturers worldwide to explore more efficient, flexible and intelligent approaches to production.

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SOURCE Black Lake