The following is a summary of the New Oriental Education & Technology Group Inc. (EDU) Q3 2024 Earnings Call Transcript:

Financial Performance:

• New Oriental's Q3 operating margin and non-GAAP operating margin reached 9.4% and 11.7%, respectively, surpassing expectations.

• Revenue increase was observed in various businesses: overseas test prep (53%), overseas study consulting (26%), adult and university students' business (53%), and new business initiatives (73%).

• New Oriental reported a net income of $87.2 million, a 6.8% year-over-year increase.

• The organization has a considerable financial reserve with cash and cash equivalent, term deposit, and short-term investment totaling approximately $4.8 billion.

• There are plans for a share repurchase of up to $400 million.

• However, the company's gross profit margin dropped by 5 percentage points year on year, and a larger loss from equity method investments was reported this quarter.

Business Progress:

• Sustained healthy growth is expected into Q4, with promising upward trajectories observed in various businesses.

• New ventures like non-academic tutoring and intelligence learning systems have yielded significant profits, and the cultural tourism business is set to expand its offerings.

• The company invested $25.5 million in its OMO teaching platform, and plans to increase capacity by around 30% for the upcoming fiscal year.

• The company will continue to expand learning centers, specifically targeting high-performing cities.

• Improvements in utilization rates and student retention rates have been reported for high school businesses and non-academic K-9 courses.

• The company has managed to reduce the breakeven point of new learning centers to approximately six months.

• More discussions on further share repurchasing plans or potential dividends are underway with the Board.

More details: New Oriental IR

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