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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