Technology
TAL Education Group Announces Unaudited Financial Results for the Second Fiscal Quarter Ended August 31, 2024 and Issues Notice of Annual General Meeting
Published
2 years agoon
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BEIJING, Oct. 24, 2024 /PRNewswire/ — TAL Education Group (NYSE: TAL) (“TAL” or the “Company”), a smart learning solutions provider in China, today announced its unaudited financial results for the second quarter of fiscal year 2025 ended August 31, 2024 and issued notice of Annual General Meeting.
Highlights for the Second Quarter of Fiscal Year 2025
Net revenues were US$619.4 million, compared to net revenues of US$411.9 million in the same period of the prior year.Income from operations was US$47.6 million, compared to income from operations of US$31.8 million in the same period of the prior year.Non-GAAP income from operations, which excluded share-based compensation expenses, was US$64.5 million, compared to non-GAAP income from operations of US$52.7 million in the same period of the prior year.Net income attributable to TAL was US$57.4 million, compared to net income attributable to TAL of US$37.9 million in the same period of the prior year.Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$74.3 million, compared to non-GAAP net income attributable to TAL of US$58.8 million in the same period of the prior year.Basic and diluted net income per American Depositary Share (“ADS”) were both US$0.09. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.12. Three ADSs represent one Class A common share.Cash, cash equivalents and short-term investments totaled US$3,454.3 million as of August 31, 2024, compared to US$3,303.3 million as of February 29, 2024.
Highlights for the Six Months Ended August 31, 2024
Net revenues were US$1,033.5 million, compared to net revenues of US$687.4 million in the same period of the prior year.Income from operations was US$30.3 million, compared to loss from operations of US$26.0 million in the same period of the prior year.Non-GAAP income from operations, which excluded share-based compensation expenses, was US$65.4 million, compared to non-GAAP income from operations of US$20.4 million in the same period of the prior year.Net income attributable to TAL was US$68.8 million, compared to net loss attributable to TAL of US$7.1 million in the same period of the prior year.Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$103.9 million, compared to non-GAAP net income attributable to TAL of US$39.3 million in the same period of the prior year.Basic and diluted net income per ADS were both US$0.11. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.17.
Financial Data——Second Quarter and First Six Months of Fiscal Year 2025
(In US$ thousands, except per ADS data and percentages)
Three Months Ended
August 31,
2023
2024
Pct. Change
Net revenues
411,931
619,361
50.4 %
Income from operations
31,790
47,622
49.8 %
Non-GAAP income from operations
52,673
64,520
22.5 %
Net income attributable to TAL
37,902
57,431
51.5 %
Non-GAAP net income attributable to TAL
58,785
74,329
26.4 %
Net income per ADS attributable to TAL – basic
0.06
0.09
50.6 %
Net income per ADS attributable to TAL – diluted
0.06
0.09
50.7 %
Non-GAAP net income per ADS attributable to
TAL – basic
0.10
0.12
25.7 %
Non-GAAP net income per ADS attributable to
TAL – diluted
0.10
0.12
25.8 %
Six Months Ended
August 31,
2023
2024
Pct. Change
Net revenues
687,371
1,033,548
50.4 %
(Loss)/Income from operations
(25,983)
30,292
(216.6 %)
Non-GAAP income from operations
20,413
65,396
220.4 %
Net (loss)/income attributable to TAL
(7,135)
68,833
(1,064.7 %)
Non-GAAP net income attributable to TAL
39,261
103,937
164.7 %
Net (loss)/income per ADS attributable to TAL –
basic
(0.01)
0.11
(1,085.2 %)
Net (loss)/income per ADS attributable to TAL –
diluted
(0.01)
0.11
(1,068.4 %)
Non-GAAP net income per ADS attributable to
TAL – basic
0.06
0.17
170.3 %
Non-GAAP net income per ADS attributable to
TAL – diluted
0.06
0.17
169.9 %
“In this quarter we achieved year-on-year revenue growth of 50.4%. AI learning device was one of the faster growing business lines. We are excited about the opportunity to provide for our customers more accessibility to quality learning contents through these AI-power devices,” said Alex Peng, TAL’s President & Chief Financial Officer.
Mr. Peng added: “As for learning services, we will prudently manage our learning center network, balancing operating efficiency and growth rate. Our primary objective for learning service is to offer quality learning experience to our learners both online and offline.”
Financial Results for the Second Quarter of Fiscal Year 2025
Net Revenues
In the second quarter of fiscal year 2025, TAL reported net revenues of US$619.4 million, representing a 50.4% increase from US$411.9 million in the second quarter of fiscal year 2024.
Operating Costs and Expenses
In the second quarter of fiscal year 2025, operating costs and expenses were US$572.0 million, representing a 49.5% increase from US$382.8 million in the second quarter of fiscal year 2024. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$555.1 million, representing a 53.4% increase from US$361.9 million in the second quarter of fiscal year 2024.
Cost of revenues increased by 59.8% to US$270.6 million from US$169.4 million in the second quarter of fiscal year 2024. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 60.7% to US$268.8 million, from US$167.3 million in the second quarter of fiscal year 2024.
Selling and marketing expenses increased by 56.4% to US$181.9 million from US$116.3 million in the second quarter of fiscal year 2024. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 61.6% to US$177.9 million, from US$110.1 million in the second quarter of fiscal year 2024.
General and administrative expenses increased by 23.1% to US$119.5 million from US$97.1 million in the second quarter of fiscal year 2024. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 28.3% to US$108.3 million, from US$84.4 million in the second quarter of fiscal year 2024.
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by 19.1% to US$16.9 million in the second quarter of fiscal year 2025 from US$20.9 million in the same period of fiscal year 2024.
Gross Profit
Gross profit increased by 43.8% to US$348.7 million from US$242.5 million in the second quarter of fiscal year 2024.
Income/(Loss) from Operations
Income from operations was US$47.6 million in the second quarter of fiscal year 2025, compared to income from operations of US$31.8 million in the second quarter of fiscal year 2024. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$64.5 million, compared to Non-GAAP income from operations of US$52.7 million in the same period of the prior year.
Other Income/(Expense)
Other income was US$20.5 million for the second quarter of fiscal year 2025, compared to other income of US$5.0 million in the second quarter of fiscal year 2024.
Impairment Loss on Long-term Investments
Impairment loss on Long-term investment was US$4.9 million for the second quarter of fiscal year 2025, compared to US$30.8 million for the same period of fiscal year 2024.
Income Tax Benefit/(Expense)
Income tax expense was US$25.6 million in the second quarter of fiscal year 2025, compared to US$10.0 million of income tax benefit in the second quarter of fiscal year 2024.
Net Income/(Loss) attributable to TAL Education Group
Net income attributable to TAL was US$57.4 million in the second quarter of fiscal year 2025, compared to net income attributable to TAL of US$37.9 million in the second quarter of fiscal year 2024. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$74.3 million, compared to Non-GAAP net income attributable to TAL of US$58.8 million in the second quarter of fiscal year 2024.
Basic and Diluted Net Income/(Loss) per ADS
Basic and diluted net income per ADS were both US$0.09 in the second quarter of fiscal year 2025. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.12 in the second quarter of fiscal year 2025.
Cash Flow
Net cash used in operating activities for the second quarter of fiscal year 2025 was US$0.6 million.
Cash, Cash Equivalents, and Short-Term Investments
As of August 31, 2024, the Company had US$2,085.9 million of cash and cash equivalents and US$1,368.4 million of short-term investments, compared to US$2,208.7 million of cash and cash equivalents and US$1,094.6 million of short-term investments as of February 29, 2024.
Deferred Revenue
As of August 31, 2024, the Company’s deferred revenue balance was US$517.6 million, compared to US$428.3 million as of February 29, 2024.
Financial Results for the First Six Months of Fiscal Year 2025
Net Revenues
For the first six months of fiscal year 2025, TAL reported net revenues of US$1,033.5 million, representing a 50.4% increase from US$687.4 million in the first six months of fiscal year 2024.
Operating Costs and Expenses
In the first six months of fiscal year 2025, operating costs and expenses were US$1,004.1 million, representing a 38.5% increase from US$724.8 million in the first six months of fiscal year 2024. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$969.0 million, representing a 42.8% increase from US$678.5 million in the first six months of fiscal year 2024.
Cost of revenues increased by 52.4% to US$470.6 million from US$308.9 million in the first six months of fiscal year 2024. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 53.2% to US$466.5 million from US$304.4 million in the first six months of fiscal year 2024 .
Selling and marketing expenses increased by 42.3% to US$304.3 million from US$213.9 million in the first six months of fiscal year 2024. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 47.7% to US$296.0 million from US$200.4 million in the first six months of fiscal year 2024.
General and administrative expenses increased by 13.4% to US$229.2 million from US$202.0 million in the first six months of fiscal year 2024. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 18.9% to US$206.6 million from US$173.7 million in the first six months of fiscal year 2024.
Total share-based compensation expenses allocated to the related operating costs and expenses decreased by 24.3% to US$35.1 million in the first six months of fiscal year 2025 from US$46.4 million in the same period of fiscal year 2024.
Gross Profit
Gross profit increased by 48.7% to US$562.9 million from US$378.5 million in the first six months of fiscal year 2024.
Income/(Loss) from Operations
Income from operations was US$30.3 million in the first six months of fiscal year 2025, compared to loss from operations of US$26.0 million in the same period of the prior year. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$65.4 million, compared to US$20.4 million Non-GAAP income from operations in the same period of the prior year.
Other Income/(Expense)
Other income was US$33.6 million for the first six months of fiscal year 2025, compared to other expense of US$1.8 million in the same period of the prior year.
Impairment Loss on Long-term Investments
Impairment loss on long-term investments was US$8.7 million for the first six months of fiscal year 2025, compared to US$30.8 million for the first six months of fiscal year 2024.
Income Tax Benefit/(Expense)
Income tax expense was US$27.9 million in the first six months of fiscal year 2025, compared to US$6.5 million of income tax benefit in the first six months of fiscal year 2024.
Net Income/(Loss) Attributable to TAL Education Group
Net income attributable to TAL was US$68.8 million in the first six months of fiscal year 2025, compared to net loss attributable to TAL of US$7.1 million in the first six months of fiscal year 2024. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$103.9 million, compared to US$39.3 million Non-GAAP income attributable to TAL in the same period of the prior year.
Cash Flow
Net cash provided by operating activities for the first six months of fiscal year 2025 was US$246.2 million.
Basic and Diluted Net Income/(Loss) per ADS
Basic and diluted net income per ADS were both US$0.11 in the first six months of fiscal year 2025. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.17 in the first six months of fiscal year 2025.
Share Repurchase
In April 2024, the Company’s board of directors authorized to extend its share repurchase program launched in April 2021 by 12 months. Pursuant to the extended share repurchase program, the Company may repurchase up to approximately US$503.8 million of its common shares through April 30, 2025. As of August 31, 2024, the Company has repurchased 499,933 common shares at an aggregate consideration of approximately US$13.1 million under the share repurchase program.
TAL to Hold Annual General Meeting on November 15, 2024
The Company announced that it will hold its annual general meeting of shareholders (the “AGM”) at TAL Building No.1, Courtyard No. 9, Qixin Middle Street, Changping District, Beijing, China, on November 15, 2024 at 3:00PM (Beijing time). No proposal will be submitted to shareholders for approval at the AGM. Instead, the AGM will serve as an open forum for shareholders and beneficial owners of the Company’s ADSs to discuss Company’s affairs with management.
The board of directors of the Company has fixed the close of business on November 4, 2024 (Eastern Standard Time) as the record date (the “Record Date”). Holders of record of the Company’s common shares at the close of business on the Record Date are entitled to notice of the AGM and any adjournment or postponement thereof. Beneficial owners of the Company’s ADSs are welcome to attend the AGM in person.
The notice of the AGM is available on the Investor Relations section of the Company’s website at https://ir.100tal.com/. The Company has filed its annual report on Form 20-F (the “Annual Report”), which includes the Company’s audited financial statements for the fiscal year ended February 29, 2024, with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s Annual Report can be accessed on the Investor Relations section of its website at https://ir.100tal.com, as well as on the SEC’s website at http://www.sec.gov.
Conference Call
The Company will host a conference call and live webcast to discuss its financial results for the second fiscal quarter of fiscal year 2025 ended August 31, 2024 at 8:00 a.m. Eastern Time on October 24, 2024 (8:00 p.m. Beijing time on October 24, 2024).
Please note that you will need to pre-register for conference call participation at
https://register.vevent.com/register/BIb77ca114970c4bd1bfe7d1770af84eac.
Upon registration, you will receive an email containing participant dial-in numbers and unique Direct Event Passcode. This information will allow you to gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.
A live and archived webcast of the conference call will be available on the Investor Relations section of TAL’s website at https://ir.100tal.com/.
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, TAL Education Group’s strategic and operational plans contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, 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 the Company’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: the Company’s ability to continue to provide competitive learning services and products; the Company’s ability to continue to recruit, train and retain talents; the Company’s ability to improve the content of current course offerings and develop new courses; the Company’s ability to maintain and enhance its brand; the Company’s ability to maintain and continue to improve its teaching results; and the Company’s ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company’s reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and TAL Education Group undertakes no duty to update such information or any forward-looking statement, except as required under applicable law.
About TAL Education Group
TAL Education Group is a smart learning solutions provider in China. The acronym “TAL” stands for “Tomorrow Advancing Life”, which reflects our vision to promote top learning opportunities for students through both high-quality teaching and content, as well as leading edge application of technology in the education experience. TAL Education Group offers comprehensive learning solutions to students from all ages through diversified class formats. Our learning solutions mainly cover enrichment learnings programs and some academic subjects in and out of China. Our ADSs trade on the New York Stock Exchange under the symbol “TAL”.
About Non-GAAP Financial Measures
In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the SEC as supplemental metrics to review and assess its operating performance: non-GAAP operating costs and expenses, non-GAAP cost of revenues, non-GAAP selling and marketing expenses, non-GAAP general and administrative expenses, non-GAAP income from operations, non-GAAP net income attributable to TAL, non-GAAP basic and non-GAAP diluted net income per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses. 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 table captioned “Reconciliations of non-GAAP measures to the most comparable GAAP measures” set forth at the end of this release.
TAL believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. TAL believes that both management and investors benefit from 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 TAL’s historical performance and liquidity. TAL computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. TAL 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 non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company’s 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.
For further information, please contact:
Jackson Ding
Investor Relations
TAL Education Group
Tel: +86 10 5292 6669-8809
Email: ir@tal.com
TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
As of
February 29,
2024
As of
August 31,
2024
ASSETS
Current assets
Cash and cash equivalents
$ 2,208,756
$ 2,085,891
Restricted cash-current
167,656
251,072
Short-term investments
1,094,593
1,368,446
Inventory
68,328
82,372
Amounts due from related parties-current
343
394
Prepaid expenses and other current assets
159,498
167,538
Total current assets
3,699,174
3,955,713
Restricted cash-non-current
81,064
43,991
Property and equipment, net
405,319
463,595
Deferred tax assets
4,620
4,061
Rental deposits
16,947
20,406
Intangible assets, net
1,988
1,848
Land use rights, net
189,049
189,763
Amounts due from related parties-non-current
59
60
Long-term investments
284,266
299,330
Long-term prepayments and other non-current assets
14,359
25,585
Operating lease right-of-use assets
231,104
336,573
Total assets
$ 4,927,949
$ 5,340,925
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$ 127,321
$ 167,317
Deferred revenue-current
400,286
485,391
Amounts due to related parties-current
96
111
Accrued expenses and other current liabilities
491,911
555,292
Short-term debt
–
6,347
Operating lease liabilities, current portion
62,604
79,584
Total current liabilities
1,082,218
1,294,042
Deferred revenue-non-current
27,993
32,171
Deferred tax liabilities
2,360
3,662
Operating lease liabilities, non-current portion
176,614
262,357
Total liabilities
1,289,185
1,592,232
Equity
Class A common shares
152
153
Class B common shares
49
49
Additional paid-in capital
4,256,957
4,264,582
Statutory reserve
165,138
164,490
Accumulated deficit
(694,270)
(624,789)
Accumulated other comprehensive loss
(65,928)
(46,630)
Total TAL Education Group’s equity
3,662,098
3,757,855
Noncontrolling interests
(23,334)
(9,162)
Total equity
3,638,764
3,748,693
Total liabilities and equity
$ 4,927,949
$ 5,340,925
TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share, ADS, per share and per ADS data)
For the Three Months Ended
August 31,
For the Six Months Ended
August 31,
2023
2024
2023
2024
Net revenues
$ 411,931
$ 619,361
$ 687,371
$ 1,033,548
Cost of revenues (note 1)
169,382
270,632
308,895
470,640
Gross profit
242,549
348,729
378,476
562,908
Operating expenses (note 1)
Selling and marketing
116,268
181,900
213,925
304,328
General and administrative
97,106
119,499
202,029
229,181
Total operating expenses
213,374
301,399
415,954
533,509
Government subsidies
2,615
292
11,495
893
Income/(loss) from operations
31,790
47,622
(25,983)
30,292
Interest income, net
20,976
20,397
43,957
42,919
Other income/(expense)
5,032
20,466
(1,813)
33,617
Impairment loss on long-term
investments
(30,761)
(4,925)
(30,761)
(8,692)
Income/(loss) before income tax
benefit/(expense) and
income/(loss) from equity
method investments
27,037
83,560
(14,600)
98,136
Income tax benefit/(expense)
10,018
(25,635)
6,499
(27,930)
Income/(loss) from equity method
investments
779
(587)
708
(1,572)
Net income/(loss)
37,834
57,338
(7,393)
68,634
Add: Net loss attributable to
noncontrolling interests
68
93
258
199
Total net income/(loss)
attributable to TAL
Education Group
$ 37,902
$ 57,431
$ (7,135)
$ 68,833
Net income/(loss) per common
share
Basic
$ 0.19
$ 0.28
$ (0.03)
$ 0.34
Diluted
0.19
0.28
(0.03)
0.34
Net income/(loss) per ADS (note 2)
Basic
$ 0.06
$ 0.09
$ (0.01)
$ 0.11
Diluted
0.06
0.09
(0.01)
0.11
Weighted average shares used in
calculating net income/(loss)
per common share
Basic
200,565,383
201,768,916
205,942,678
201,668,024
Diluted
203,859,192
204,949,839
205,942,678
205,166,141
Note1: Share-based compensation expenses are included in the operating costs and expenses as follows:
For the Three Months
Ended August 31,
For the Six Months
Ended August 31,
2023
2024
2023
2024
Cost of revenues
$ 2,081
$ 1,793
$ 4,490
$ 4,155
Selling and marketing expenses
6,134
3,953
13,562
8,328
General and administrative expenses
12,668
11,152
28,344
22,621
Total
$ 20,883
$ 16,898
$ 46,396
$ 35,104
Note 2: Three ADSs represent one Class A common Share.
TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME/(LOSS)
(In thousands of U.S. dollars)
For the Three Months Ended
August 31,
For the Six Months Ended
August 31,
2023
2024
2023
2024
Net income/(loss)
$ 37,834
$ 57,338
$ (7,393)
$ 68,634
Other comprehensive
(loss)/income, net of tax
(20,782)
24,744
(44,595)
17,164
Comprehensive income/(loss)
17,052
82,082
(51,988)
85,798
Add: Comprehensive
(income)/loss attributable to
noncontrolling interests
(452)
2,378
(913)
2,333
Comprehensive income/(loss)
attributable to TAL
Education Group
$ 16,600
$ 84,460
$ (52,901)
$ 88,131
TAL EDUCATION GROUP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands of U.S. dollars)
For the Three Months Ended
August 31,
For the Six Months Ended
August 31,
2023
2024
2023
2024
Net cash (used in)/provided by
operating activities
$ (42,721)
$ (576)
$ 82,795
$ 246,217
Net cash provided by/(used in)
investing activities
181,887
(193,669)
342,802
(318,304)
Net cash used in financing
activities
(82,271)
(6,799)
(233,508)
(6,794)
Effect of exchange rate
changes
(5,406)
3,576
(9,916)
2,359
Net increase/(decrease) in
cash, cash equivalents and
restricted cash
51,489
(197,468)
182,173
(76,522)
Cash, cash equivalents and
restricted cash at the
beginning of period
$ 2,425,591
$ 2,578,422
$ 2,294,907
$ 2,457,476
Cash, cash equivalents and
restricted cash at the end
of period
$ 2,477,080
$ 2,380,954
$ 2,477,080
$ 2,380,954
TAL EDUCATION GROUP
Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures
(In thousands of U.S. dollars, except share, ADS, per share and per ADS data)
For the Three Months
Ended August 31,
For the Six Months
Ended August 31,
2023
2024
2023
2024
Cost of revenues
$ 169,382
$270,632
$ 308,895
$ 470,640
Share-based compensation expense
in cost of revenues
2,081
1,793
4,490
4,155
Non-GAAP cost of revenues
167,301
268,839
304,405
466,485
Selling and marketing expenses
116,268
181,900
213,925
304,328
Share-based compensation expense
in selling and marketing expenses
6,134
3,953
13,562
8,328
Non-GAAP selling and marketing
expenses
110,134
177,947
200,363
296,000
General and administrative
expenses
97,106
119,499
202,029
229,181
Share-based compensation expense
in general and administrative expenses
12,668
11,152
28,344
22,621
Non-GAAP general and
administrative expenses
84,438
108,347
173,685
206,560
Operating costs and expenses
382,756
572,031
724,849
1,004,149
Share-based compensation expense
in operating costs and expenses
20,883
16,898
46,396
35,104
Non-GAAP operating costs and
expenses
361,873
555,133
678,453
969,045
Income/(loss) from operations
31,790
47,622
(25,983)
30,292
Share based compensation expenses
20,883
16,898
46,396
35,104
Non-GAAP income from
operations (note 3)
52,673
64,520
20,413
65,396
Net income/(loss) attributable to
TAL Education Group
37,902
57,431
(7,135)
68,833
Share based compensation expenses
20,883
16,898
46,396
35,104
Non-GAAP net income
attributable to TAL Education
Group (note 3)
$ 58,785
$74,329
$ 39,261
$ 103,937
Net income/(loss) per ADS
Basic
$ 0.06
$ 0.09
$ (0.01)
$ 0.11
Diluted
0.06
0.09
(0.01)
0.11
Non-GAAP Net income per ADS
Basic
$ 0.10
$ 0.12
$ 0.06
$ 0.17
Diluted
0.10
0.12
0.06
0.17
ADSs used in calculating net
income/(loss) per ADS
Basic
601,696,149
605,306,748
617,828,034
605,004,072
Diluted
611,577,576
614,849,517
617,828,034
615,498,423
ADSs used in calculating Non-
GAAP net income per ADS
Basic
601,696,149
605,306,748
617,828,034
605,004,072
Diluted
611,577,576
614,849,517
627,500,331
615,498,423
Note 3: The tax effect of share-based compensation expenses was immaterial in the second quarter and
in the first six months of fiscal year 2025.
SOURCE TAL Education Group
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Technology
Self-Driving Cars Market worth 51,213 thousand units in 2035 | MarketsandMarkets™
Published
3 minutes agoon
November 2, 2026By
DELRAY BEACH, Fla., Nov. 2, 2026 /PRNewswire/ — According to MarketsandMarkets™, the Self-Driving Cars Market is projected to grow from 31,509 thousand units in 2026 and to reach 51,213 thousand units in 2035, at a Compound Annual Growth Rate (CAGR) of 5.5% during the forecast period.
Browse 250 market data Tables and 75 Figures spread through 300 Pages and in-depth TOC on ‘Self-Driving Cars Market’
Self-Driving Cars Market Size & Forecast:
Market Size Available for Years: 2022-20352026 Market Size: 31,509 thousand Units2035 Projected Market Size: 51,213 thousand UnitsCAGR (2026–2035): 5.5%
Self-driving Cars Market Trends & Insights:
Personal mobility is estimated to hold the largest share during the forecast period.The Level 3 segment is to witness the fastest growth in the self-driving cars market during the forecast period.North America is expected to grow significantly during the forecast period.
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Self-driving cars are progressing from controlled testing toward commercial deployment, supported by advances in AI, computing architecture, and vehicle automation. The commercial operation of Level 4 robotaxis in multiple cities is accelerating investment in autonomous driving technologies, including perception, sensor fusion, decision-making software, and high-performance computing. These developments are also influencing passenger vehicle programs, where automakers are expanding Level 2+ driver assistance and developing new off-driving capabilities. Over the next few years, progress in AI models, simulation-based validation, and sensor integration is expected to improve system performance and support the wider deployment of automated driving across vehicle segments. Volkswagen is developing localized AI driving solutions in China through its CARIZON joint venture with Horizon Robotics, aligning its technology strategy with local market requirements. These strategies reflect a broader shift toward controlling software development, computing costs, and system integration. The competitive advantage will depend on how effectively automakers scale validated driving functions across vehicle portfolios, improve affordability, and meet regional regulatory requirements without compromising safety performance.
Hyundai Motor Group Builds an AI Data Strategy to Accelerate Self-driving Technology
In September 2026, Hyundai Motor Group activated its Data Flywheel strategy, linking real-world driving data collection, AI training, simulation, validation, and software deployment. The group is targeting NVIDIA-based Level 2+ production vehicles in the first half of 2028 and Level 2++ vehicles in the second half of 2028, followed by proprietary Atria AI-powered Level 2++ vehicles in the second half of 2029.Hyundai’s two-track strategy allows it to deploy technology developed with NVIDIA while continuing to develop its own end-to-end Atria AI system through 42dot. By standardizing sensor systems across Hyundai, Kia and its technology subsidiaries, the group aims to improve data consistency and software reuse across vehicle platforms. This approach can reduce duplicated development efforts and accelerate the identification of difficult driving scenarios, although the commercial advantage will depend on translating larger data volumes into measurable safety and performance improvements.
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Personal mobility is estimated to hold the largest share during the forecast period.
Personal mobility is emerging as a commercial opportunity in the self-driving cars market, as OEMs focus on making automated driving a practical feature that improves convenience and strengthens premium vehicle differentiation. According to China’s Ministry of Industry and Information Technology, 69.15% of passenger cars sold in January and February 2026 had Level 2 driving assistance, up 10 percentage points year on year. The US National Highway Traffic Safety Administration (NHTSA) added pass or fail assessments for advanced driver assistance systems to its New Car Assessment Program, encouraging automakers to improve safety features that protect drivers and pedestrians. The near-term opportunity lies in expanding assisted driving capabilities across urban roads and highways, while improving the reliability of AI-based perception, navigation, and decision-making. In January 2026, Mercedes-Benz presented MB. DRIVE ASSIST PRO on the new CLA, combining navigation with Level 2 driving assistance for supported urban journeys, with the system already available in China and a US launch planned for later in 2026. The development highlights how OEMs are leveraging automated driving capabilities to enhance the vehicle ownership experience and create opportunities for software-based feature upgrades. For automakers, the competitive advantage depends on delivering reliable automation across more vehicle models and price points, turning driving convenience into a stronger purchase incentive.
The Level 3 segment is to witness the fastest growth in the self-driving cars market during the forecast period.
The Level 3 segment is expected to be the fastest-growing segment in the self-driving cars market as automakers move beyond Level 2 driver assistance toward conditional automation. Adoption remains concentrated in specific driving conditions because Level 3 systems must operate within defined conditions and transfer control back to the driver when required. For instance, in December 2025, China approved its first two Level 3 passenger car models from Changan Automobile and BAIC’s ARCFOX brand. The Changan model was approved for operation during highway traffic congestion at speeds of up to 50 km/h on designated roads in Chongqing, while the ARCFOX model was permitted to operate at speeds of up to 80 km/h on designated roads in Beijing. These restricted approvals show that Level 3 deployment is progressing through controlled operating conditions rather than unrestricted use. Automakers that align system capabilities with approved road conditions and reliable driver handover requirements will be better positioned to expand Level 3 passenger car offerings.
North America is expected to grow significantly during the forecast period.
North America is strengthening its position in the self-driving cars market as automakers expand AI-based driving assistance and autonomous mobility programs. A key focus is extending automation to complex urban environments while maintaining driver supervision in passenger vehicles. In May 2026, Stellantis partnered with Wayve to integrate Wayve’s AI Driver into its STLA Auto Drive platform, targeting supervised, hands-free driving across urban and highway routes, with North American deployment planned from 2028. In a separate development, Volkswagen Group’s MOIA America partnered with Uber to introduce autonomous ID. Buzz vehicles in Los Angeles, with on-road testing and plans to launch ride-hailing services by the end of 2026. The two initiatives highlight distinct development paths in the region: integrating AI-powered driving capabilities into passenger vehicle platforms and deploying autonomous electric vehicles for commercial mobility services. Progress will depend on system validation, regulatory approvals, operational safety, and the ability to handle diverse traffic conditions.
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Top Companies in Self-Driving Cars Market:
The Top Companies in Self-Driving Cars Market are Toyota Motor Corporation (Japan), Volkswagen Group (Germany), BYD Co., Ltd. (China), Stellantis (Netherlands), and Hyundai Motor Group (South Korea).
Self-driving Cars Market – Investment and Funding Scenario
Investment Funding Context
The global self-driving cars market is projected to reach 51,213 thousand units by 2033, from 31,509 thousand units in 2026, at a CAGR of 5.5% during 2026–2035. Growth will be supported by AI-based perception, sensor fusion, and software-defined vehicle architecture. Automakers should prioritize scalable automation platforms, cost optimization, and software integration to strengthen competitiveness and capture future demand.
Revenue Shift Context
Revenue in the global self-driving cars market is shifting toward higher-value ADAS hardware, AI-powered driving software, and advanced perception systems, including cameras, radar, LiDAR, and high-performance computing platforms. Growing adoption of Level 2 and Level 2+ systems is driving demand for sensor fusion, driver monitoring, and hands-free driving capabilities. Additional revenue opportunities are emerging from software licensing, over-the-air upgrades, and technology partnerships. For instance, in February 2026, Waymo raised USD 16 billion to expand its autonomous ride-hailing operations and accelerate technology development. This investment highlights growing capital allocation toward scalable AI-driven autonomy and commercial deployment. Consequently, market value creation is increasingly driven by advanced technology content per vehicle, software monetization, and autonomous mobility services rather than vehicle volumes alone.
Mergers and Acquisitions
From September 2025 to September 2026, eight notable strategic transactions involving major self-driving cars market players were identified, including partnerships, funding rounds, technology agreements, and collaborations. The transactions mainly focused on autonomous driving software development, AI-powered vehicle systems, robotaxi expansion, advanced sensor technologies, and commercialization of self-driving solutions.
SELF-DRIVING CARS MARKET: MERGERS AND ACQUISITIONS, SEPTEMBER 2025 – SEPTEMBER 2026
Month & Year
Deal Type
Company 1
Company 2
Description
September 2026
Agreement
Mercedes-Benz Group AG (Germany)
Wayve (UK)
Mercedes-Benz (Germany) and Wayve (UK) signed an agreement to integrate Wayve’s autonomous driving system into future Mercedes-Benz vehicles, with deployment expected to begin within two years.
July 2026
Partnership
Ford (US)
Apple (US)
Ford (US) partnered with Apple (US) to integrate Apple Maps navigation into Ford’s next-generation Universal Electric Vehicle platform, providing drivers with navigation and route planning capabilities through Apple Maps.
July 2026
Partnership
BMW Group (Germany)
Qualcomm (US)
Qualcomm made an agreement with BMW to supply Snapdragon Digital Chassis solutions for BMW’s future vehicle platforms. The agreement covers cockpit processors, automated driving chips, and AI accelerators for BMW’s next-generation digital and advanced driver assistance systems.
July 2026
Partnership
Waymo LLC (US)
Hyundai Motor Group
Hyundai Motor (South Korea) and Waymo (US) partnered to test Hyundai IONIQ 5 vehicles equipped with Waymo’s sixth-generation Waymo Driver. The test began with an autonomous specialist onboard and is intended to validate the system ahead of fully autonomous operations.
April 2026
Joint Venture
Volkswagen AG (Germany)
Horizon Robotics (China)
Volkswagen partnered with Horizon Robotics through their CARIZON joint venture to develop automated driving solutions for the Chinese market. The joint venture integrates CARIZON’s ADAS solution into Volkswagen vehicles, including the ID. AURA T6.
March 2026
Partnership
BYD (China)
NVIDIA (US), BYD (China), Geely (China), Isuzu (Japan), and Nissan (Japan)
BYD partnered with NVIDIA, Geely, Isuzu, and Nissan to adopt its Hyperion platform for Level 4 autonomous vehicle programs. The platform integrates compute, sensors, networking, and safety systems to support development and deployment of Level 4 autonomous vehicles.
January 2026
Partnership
Mercedes-Benz Group AG (Germany)
NVIDIA Corporation (US), Uber (US)
Mercedes-Benz (Germany), NVIDIA (US), and Uber partnered to develop a global robotaxi platform. The platform will integrate Mercedes-Benz’s MB. OS with NVIDIA’s autonomous driving technologies, enabling highly automated driving applications while allowing Mercedes-Benz to retain control of its core vehicle software.
September 2025
Partnership
Waymo LLC (US)
Lyft (US)
Waymo (US) partnered with Lyft (US) to bring fully autonomous ride-hailing services to Nashville. Waymo will provide autonomous driving technology, while Lyft’s Flexdrive subsidiary will support vehicle fleet management.
Company Revenue Share Details
The top five players are estimated to account for approximately 41%–46% of the self-driving cars market, indicating a moderately concentrated competitive landscape with strong competition among established automotive manufacturers. Leading players such as Toyota Motor Corporation (Japan), Volkswagen AG (Germany), BYD Company Limited (China), Stellantis N.V. (Netherlands), and Hyundai Motor Company (South Korea) are expanding their autonomous driving capabilities across passenger vehicle platforms. Their strategies include ADAS integration, AI-powered driving software, sensor fusion, automated driving platforms, and partnerships with autonomous technology providers to enhance vehicle safety, improve driving automation, and accelerate commercialization across global markets.
Browse Adjacent Market: Automotive and Transportation Market Research Reports & Consulting
Related Reports:
Autonomous Driving Software Market
Autonomous Vehicle Sensor Market
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Technology
Q-Ball Intelligence launches to bring Predictive Intelligence into the AI era
Published
3 minutes agoon
November 2, 2026By
19 years of predictive research, backed by a nine-year real-world investment record returning 235.19%
SAN FRANCISCO, Nov. 2, 2026 /PRNewswire/ — Q-Ball Intelligence today announces its launch as a new AI-native Predictive Intelligence venture, building on nearly two decades of research and practical applications dating back to 2007.
The company is developing a new generation of artificial intelligence capable of identifying emerging signals, recognising patterns and anticipating future developments moving beyond analysing what has happened to understanding what is likely to happen next.
The research behind Q-Ball has already been applied in practice. Between 17 February 2016 and 17 February 2025, a Q-Ball-informed investment portfolio delivered a cumulative return of 235.19%.
For comparison, the portfolio analysis shows returns of 129.86% for OMX Stockholm All-Share Gross Index (OMXSGI), representing the broader Swedish equity market, and 106.55% for OMX Stockholm 30 Index (OMXS30) over the same period. This represents an outperformance of 105.33 and 128.64 percentage points respectively.
The nine-year investment record provides a tangible example of the practical application of predictive research developed under the leadership of Assistant Professor Peter Majanen. It represents an actual investment portfolio record rather than a simulated backtest.
From analysing information to anticipating change
Most analytical systems are designed to process information, identify historical trends and explain developments that have already taken place.
Q-Ball is pursuing a different objective: recognising the signals and changing expectations that may reveal what comes next.
Its predictive methodology connects information, expectations, emerging patterns and momentum with potential catalysts and future outcomes. The objective is to translate complex information into structured, measurable forecasts.
The underlying research originated in 2007 and has evolved through nearly two decades of development and practical application. Q-Ball Intelligence represents the next stage: transforming this foundation into a scalable technology platform designed for international markets.
Building a new Predictive Intelligence platform
Q-Ball is developing an AI-native platform designed to identify relevant signals, assess emerging developments, generate structured forecasts and measure predictions against actual outcomes.
The company’s approach places particular emphasis on understanding changes in expectations and behaviour, rather than relying exclusively on historical data and conventional trend analysis.
By combining predictive methodology with AI-driven analysis, Q-Ball aims to create technology that helps organisations and individuals anticipate change, assess opportunities and make better-informed decisions.
An important part of the development philosophy is accountability: predictions should be structured, time-stamped and evaluated against what actually happens. This creates a foundation for continuous measurement, refinement and learning.
Applications across multiple markets
Q-Ball Intelligence is developing its technology for institutional and commercial customers, with additional applications across financial markets, sports and gaming.
Initial areas of focus include:
Enterprise Predictive Intelligence helping organisations anticipate market developments, changing conditions, emerging risks and strategic opportunities.
Financial Markets developing predictive intelligence for equities and financial markets, identifying emerging patterns and assessing the probability of potential market developments.
Sports and Gaming applying predictive models to sporting outcomes, competitive environments and gaming-related markets.
The company is building these applications on a shared predictive foundation, extending its core intelligence capabilities across different markets and customer segments.
A new chapter for predictive intelligence
“Prediction is not about knowing the future. It is about understanding the present well enough to recognize what the future is beginning to become,” says Peter Majanen, Founder and Chief Predictive Intelligence Architect.
Q-Ball Intelligence aims to establish Predictive Intelligence as a distinct category within the evolving AI landscape moving beyond systems that primarily describe the world towards technology designed to anticipate how it may change.
With research foundations dating back to 2007, the company now enters a new phase focused on technology development, commercialisation and international expansion.
Q-Ball Intelligence Predicting What Comes Next.
About Q-Ball Intelligence
Q-Ball Intelligence is an AI-native Predictive Intelligence venture developing technology designed to identify emerging signals, recognise patterns and anticipate future developments.
Its foundations combine predictive research, proprietary analytical methodology and practical applications developed since 2007. The company is focused on transforming this foundation into a scalable predictive intelligence platform for institutional, commercial and consumer applications.
Website: www.qballintel.com
Press contact:
Richard Sjoberg
Q-Ball Intelligence
press@qballintel.com
www.qballintel.com
Historical performance disclosure: The portfolio return of 235.19% relates to the period 17 February 2016 to 17 February 2025. Benchmark figures are based on Avanza data for OMX Stockholm All-Share Gross Index (OMXSGI) and OMX Stockholm 30 Index (OMXS30) over the same period. Historical performance is not indicative of future results. The historical portfolio performance should not be interpreted as performance generated by the new Q-Ball Intelligence platform or as a guarantee of future investment outcomes.
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SOURCE Q-Ball Intelligence
Technology
NAPCO Security Technologies, Inc. Reports Fiscal Q1 2027 Results
Published
3 minutes agoon
November 2, 2026By
AMITYVILLE, N.Y., Nov. 2, 2026 /PRNewswire/ — NAPCO Security Technologies, Inc. (NASDAQ: NSSC), one of the leading manufacturers and designers of high-tech electronic security equipment, wireless communication devices for intrusion and fire alarm systems and the related recurring service revenues as well as a provider of school safety solutions, today announced financial results for its first quarter of fiscal year 2027. Results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and are also reported adjusting for certain items (“Non-GAAP”). A reconciliation between GAAP and Non-GAAP operating results is provided at the end of this press release.
First Quarter 2027 Financial Results as Compared to First Quarter 2026
Net revenue increased 1.7% to a First Quarter record $50.0 millionRecurring service revenue (“RSR”) increased 11.5% to a Quarterly record $26.1 million, with over 90% gross marginRSR has a prospective annual run rate of approximately $106 million based on October 2026 recurring service revenuesEquipment revenue decreased 7.3% to $23.9 millionGross profit margin increased to 58.7.% vs 56.6% in prior fiscal year quarterNet Income increased 6.9% YoY to a First Quarter record $13.0 millionDiluted Net Income per share increased 5.9% to $0.36Non-GAAP Adjusted EBITDA increased 3.8% to a First Quarter record $15.5 million with an Adjusted EBITDA Margin of 31.0%, compared to $14.9 million with an Adjusted EBITDA Margin of 30.4% in the prior fiscal year quarterThe board declared a quarterly dividend of $.17 per share, payable on January 4, 2027, to shareholders of record on December 14, 2026.
Kevin Buchel, CEO and President, commented, “Our Fiscal Q1 performance reflects continued positive financial results. We achieved record Q1 revenue of $50.0 million and record Q1 Adjusted EBITDA of $15.5 million, which was bolstered by our recurring service revenue. Our RSR continues to deliver gross margins of over 90% and has a prospective run rate of approximately $106 million, a $3 million increase from the run rate we reported in July 2026. While equipment revenue declined year-over-year, the decrease was driven by two locking distributors reducing their purchases during the quarter. Importantly, sell-through at both distributors grew year-over-year and strengthened meaningfully on a sequential basis. We view sell-through as the truest indicator of end-market demand, and these trends reinforce our confidence in the underlying health of the business.
We are pleased to continue our dividend program of which the quarterly dividend will be $0.17 per share, which will be paid on January 4, 2027, to shareholders of record on December 14, 2026.”
Three months ended September 30,
(dollars in thousands)
% Increase/
Financial Highlights
2026
2025
(decrease)
GAAP Results
Net Revenue
$
49,980
$
49,168
1.7
%
Gross Profit
$
29,352
$
27,846
5.4
%
Gross Profit Margin
58.7
%
56.6
%
Operating Income
$
14,117
$
13,643
3.5
%
Net Income
$
13,009
$
12,165
6.9
%
Diluted Earnings Per Share
$
0.36
$
0.34
5.9
%
Non-GAAP Results
Adjusted EBITDA
$
15,509
$
14,942
3.8
%
Adjusted EBITDA Margin
31.0
%
30.4
%
Adjusted EBITDA Per Share
$
0.43
$
0.42
2.4
%
Free Cash Flows
$
2,317
$
11,444
(79.8)
%
Free Cash Flows Margin
4.6
%
23.3
%
Conference Call Information
Management will conduct a conference call at 11 a.m. ET today, November 2, 2026, and in order to participate please go to the Investor Relations section of the Company website at https://investor.napcosecurity.com/events-presentations or choose https://app.webinar.net/ndlaQ1yQy3W. Alternatively, interested parties may participate in the call by dialing (US) 1-800-836-8184 or (International) 1-646-357-8785. A replay of the webcast will be available on the Investor Relations section of the Company’s website.
About NAPCO Security Technologies, Inc.
NAPCO Security Technologies, Inc., is one of the leading manufacturers and designers of high-tech electronic security devices, wireless recurring communication services for intrusion and fire alarm systems as well as a provider of school safety solutions, The Company consists of four Divisions: NAPCO, plus three wholly owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA. Headquartered in Amityville, New York, its products are installed by tens of thousands of security professionals worldwide in commercial, industrial, institutional, residential and government applications. NAPCO products have earned a reputation for innovation, technical excellence and reliability, positioning the Company for growth in the multi-billion dollar and rapidly expanding electronic security market. For additional information on NAPCO, please visit the Company’s web site at http://www.napcosecurity.com.
Safe Harbor Statement
This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management’s judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, but are not limited to, statements relating to supply chain challenges and developments; the growth of recurring service revenues and annual run rate; the strength of our balance sheet; our expectations regarding future results; the introduction of new access control and locking products; the opportunities for school security products; the opportunities for fire alarm products; and our ability to execute our business strategies. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements because of certain factors, including those risk factors set forth in the Company’s filings with the Securities and Exchange Commission, such as our annual report on Form 10-K and quarterly reports on Form 10-Q. Other unknown or unpredictable factors or underlying assumptions subsequently proved to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today’s date, unless otherwise stated, and the Company undertakes no duty to update such information, except as required under applicable law.
*Non-GAAP Financial Measures
Certain non-GAAP measures are included in this press release, including non-GAAP operating income, non-GAAP net income, non-GAAP net income per share (diluted), non-GAAP net income margin, Adjusted EBITDA, Adjusted EBITDA per share (diluted), Adjusted EBITDA per share margin, Free Cash Flow and Free Cash Flow margin. We define non-GAAP net income as GAAP net income plus litigation settlement costs. We define Adjusted EBITDA as GAAP net income plus income tax expense, less net interest income (expense), stock-based compensation, non-recurring legal expenses, litigation settlement costs, and depreciation and amortization expenses. Non-GAAP net income margin is non-GAAP net income divided by revenue. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue. We define Free Cash Flow (FCF) as net cash provided by operating activities less capital expenditures. FCF margin is the FCF divided by revenue. These non-GAAP measures are provided to enhance the user’s overall understanding of our financial performance. By excluding these charges our non-GAAP results provide information to management and investors that is useful in assessing NAPCO’s core operating performance and in comparing our results of operations on a consistent basis from period to period. Our use of non-GAAP financial measures has certain limitations in that such non-GAAP financial measures may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as Adjusted EBITDA, do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. The presentation of this information is not meant to be a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures set forth above.
NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 2026
June 30, 2026
(in thousands, except share data)
Assets
Current Assets
Cash and cash equivalents
$
123,882
$
126,928
Marketable securities
10,734
10,637
Accounts and other receivable, net of allowance for credit losses of $129 and $101 as of
September 30, 2026 and June 30, 2026, respectively
29,248
35,975
Inventories
34,130
30,118
Income tax receivable
1,523
—
Prepaid expenses and other current assets
3,838
4,325
Total Current Assets
203,355
207,983
Inventories – non-current
9,195
9,256
Property, plant and equipment, net
9,202
9,238
Intangible assets, net
2,919
2,990
Deferred income taxes
1,777
4,105
Operating lease – Right-of-use asset
4,838
4,906
Other assets
185
190
Total Assets
$
231,471
$
238,668
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable
$
7,749
$
6,925
Accrued expenses
9,275
8,546
Accrued litigation costs
—
16,000
Accrued salaries and wages
5,036
4,484
Dividends payable
6,081
5,365
Accrued income taxes
—
1,134
Total Current Liabilities
28,141
42,454
Accrued income taxes
—
33
Operating lease liability
5,142
5,179
Total Liabilities
33,283
47,666
Commitments and Contingencies (Note 13)
Stockholders’ Equity
Common Stock, par value $0.01 per share; 100,000,000 shares authorized; 39,883,051 shares
issued; and 35,768,437 shares outstanding as of both September 30, 2026 and June 30, 2026,
respectively.
399
399
Additional paid-in capital
25,628
25,355
Retained earnings
228,331
221,403
Treasury Stock, at cost, 4,114,614 shares as of both September 30, 2026 and June 30, 2026
(56,315)
(56,315)
Accumulated other comprehensive income
145
160
Total Stockholders’ Equity
198,188
191,002
Total Liabilities and Stockholders’ Equity
$
231,471
$
238,668
NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months ended September 30,
2026
2025
(in thousands, except for share and per share data)
Revenue:
Equipment revenue
$
23,850
$
25,739
Service revenue
26,130
23,429
Total revenue
49,980
49,168
Cost of Revenue:
Cost of equipment revenue
18,043
19,046
Cost of service revenue
2,585
2,276
Total cost of revenue
20,628
21,322
Gross Profit
29,352
27,846
Operating Expenses:
Research and development
4,053
3,240
Selling, general, and administrative
12,182
10,963
Litigation settlement
(1,000)
—
Total operating expenses
15,235
14,203
Operating Income
14,117
13,643
Other Income:
Interest income, net
1,117
854
Other income, net
115
138
Income before Provision for Income Taxes
15,349
14,635
Provision for Income Taxes
2,340
2,470
Net Income
$
13,009
$
12,165
Income Per Share:
Basic
$
0.36
$
0.34
Diluted
$
0.36
$
0.34
Weighted Average Number of Shares Outstanding:
Basic
35,768,000
35,658,000
Diluted
35,881,000
35,865,000
NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months ended September 30,
2026
2025
(in thousands)
Cash Flows from Operating Activities
Net Income
$
13,009
$
12,165
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
540
570
Realized gain on sales of marketable securities
(114)
(92)
Charge (recovery) of credit losses
28
(1)
Change to inventory reserve
(109)
(354)
Deferred income taxes
2,328
1,681
Stock-based compensation expense
273
309
Changes in operating assets and liabilities:
Accounts and other receivable
6,699
(561)
Inventories
(3,842)
(177)
Prepaid expenses and other current assets
487
(305)
Income tax receivable
(1,523)
(1,993)
Other assets
5
4
Accounts payable, accrued expenses, accrued litigation costs, accrued salaries and wages,
accrued income taxes
(15,031)
391
Net Cash Provided by Operating Activities
2,750
11,637
Cash Flows from Investing Activities
Purchases of property, plant, and equipment
(433)
(193)
Purchases of marketable securities
(3,570)
(2,540)
Proceeds from sales of marketable securities
3,572
8,407
Net Cash (Used In) Provided by Investing Activities
(431)
5,674
Cash Flows from Financing Activates
Dividends paid
(5,365)
(4,992)
Net Cash Used in Financing Activities
(5,365)
(4,992)
Net (decrease) increase in Cash and Cash Equivalents
(3,046)
12,319
Cash and Cash Equivalents – Beginning
126,928
83,081
Cash and Cash Equivalents – Ending
$
123,882
$
95,400
Supplemental Cash Flow Information
Income taxes paid, net of refunds received
$
2,701
$
3,104
Non-Cash Investing and Financing Transactions
Dividends declared and not paid
$
6,081
$
4,992
NAPCO SECURITY TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL DATA*
(unaudited)
(in thousands, except share and per share data)
Non-GAAP Adjustments
Litigation
Tax
GAAP
Settlement
Adjustments (1)
Non-GAAP
Three months ended September 30, 2026
Revenue
$
49,980
$
—
$
—
$
49,980
Gross Profit
29,352
—
—
29,352
Operating Expenses
15,235
1,000
—
16,235
Operating Income
14,117
(1,000)
—
13,117
Net Income
13,009
(1,000)
108
12,117
Non-GAAP adjusted net income margin
24.2
%
Non-GAAP adjusted net income per share – diluted
$
0.34
Three months ended September 30, 2025
Revenue
$
49,168
$
—
$
—
$
49,168
Gross Profit
27,846
—
—
27,846
Operating Expenses
14,203
—
—
14,203
Operating Income
13,643
—
—
13,643
Net Income
12,165
—
—
12,165
Non-GAAP adjusted net income margin
24.7
%
Non-GAAP adjusted net income per share – diluted
$
0.34
Three months ended September 30,
2026
2025
Denominator:
Weighted average shares outstanding
Basic, as reported
35,768,000
35,658,000
Effect of Dilutive Securities
113,000
207,000
Diluted, (Denominator)
35,881,000
35,865,000
1.
The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.
NAPCO SECURITY TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL DATA*
(unaudited)
(in thousands, except share and per share data)
Three months ended September 30,
2026
2025
Non-GAAP adjusted EBITDA:
Net income, as reported
$
13,009
$
12,165
Interest income, net
(1,117)
(854)
Provision for income taxes
2,340
2,470
Depreciation and amortization
540
570
Non-GAAP EBITDA
14,772
14,351
Adjustments:
Stock based compensation
273
309
Nonrecurring legal expense(1)
1,464
282
Litigation settlement(2)
(1,000)
—
Total adjustments
737
591
Non-GAAP adjusted EBITDA
$
15,509
$
14,942
Non-GAAP adjusted EBITDA margin
31.0
%
30.4
%
Non-GAAP per share data:
Non-GAAP adjusted EBITDA per share – diluted
$
0.43
$
0.42
Denominator:
Weighted average shares outstanding
Basic, as reported
35,768,000
35,658,000
Effect of Dilutive Securities
113,000
207,000
Diluted, (Denominator)
35,881,000
35,865,000
1.
Nonrecurring Legal Expenses, which are net of any insurance reimbursements, are legal fees that are determined not to be of a normal recuring nature and expenses necessary to operate the business
2.
Litigation settlement costs, which are net of any insurance reimbursements, were determined not to be of a recurring nature and costs that are not in the normal cost of business or necessary to operate the business
Three months ended September 30,
(dollars in thousands)
2026
2025
Free cash flow:
Net Cash Provided by Operating Activities
$
2,750
$
11,637
Less: Purchases of property, plant, and equipment
(433)
(193)
Free Cash Flow(1)
$
2,317
$
11,444
Free Cash Flow Margin(1)
4.6
%
23.3
%
1.
Free cash flow is calculated as net cash provided by operating activities less capital expenditures. Free cash flow margin is the free cash flow divided by revenue.
Contacts:
Francis J. Okoniewski
Vice President of Investor Relations
NAPCO Security Technologies, Inc.
Office 800-645-9445 x 374
Mobile 516-404-3597
fokoniewski@napcosecurity.com
View original content:https://www.prnewswire.com/news-releases/napco-security-technologies-inc-reports-fiscal-q1-2027-results-302925823.html
SOURCE NAPCO Security Technologies, Inc.
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