New Oriental Education & Technology Group Inc (EDU) 2025 Q3 法說會逐字稿

Good evening and thank you for standing by for New Oriental's third fiscal quarter 2025 earnings conference call. (Operator Instructions)

晚上好，感謝您參加新東方2025財年第三季財報電話會議。（操作員指示）

Today's conference is being recorded. If you have any objections, you may disconnect at this time. I'd now like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao.

今天的會議正在錄製中。如果您有任何異議，您可以立即斷開連接。現在我想將會議交給今天會議的主持人趙思思女士。

Thank you. Hello, everyone, and welcome to New Oriental's third fiscal quarter 2025 earnings conference call. Our financial results for the period were released earlier today and are available on the company's website as well as our Newswire services.

謝謝。大家好，歡迎參加新東方2025財年第三季財報電話會議。我們該期間的財務業績已於今天早些時候公佈，可在公司網站和我們的新聞專線服務上查閱。

Today, Stephen Yang, Executive President and Chief Financial Officer, and I will share New Oriental's latest earnings results and business updates in detail with you. After that, Stephen and I will be available to answer your questions.

今天，我和新東方執行總裁兼財務長楊志文將與大家詳細分享新東方最新的財報業績和業務動態。之後，史蒂芬和我將回答您的問題。

Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor permissions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the view expressed today.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港許可做出的前​​瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，我們的結果可能與今天表達的觀點有重大不同。

A number of potential risks and uncertainties are outlined in our public filings with the SEC. New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law.

我們向美國證券交易委員會提交的公開文件中概述了許多潛在的風險和不確定性。新東方不承擔更新任何前瞻性聲明的義務，除非適用法律要求。

As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on New Oriental's Investor Relations website at investor.neworiental.org.

提醒一下，本次會議正在錄製中。此外，本次電話會議的網路直播將在新東方投資者關係網站 investor.neworiental.org 上提供。

I will now first turn the call over to Mr. Yang. Stephen, please go ahead.

現在我先將電話轉給楊先生。史蒂芬，請繼續。

Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. Our Q3 results reflect a steady performance reinforcing our ongoing commitment to long-term value creation and official consistency. Despite our revenue decreased by 2% year over year, but the total net revenue, excluding revenues generated from East Buy increased by 21.2% year over year. The continued growth of our new ventures has contributed to the company's revenue, and we anticipate further progress in the future.

謝謝你，茜茜。大家好，感謝您參加我們的電話會議。我們的第三季業績體現出穩定的表現，強化了我們對長期價值創造和官方一致性的持續承諾。儘管我們的營收年減了 2%，但不包括 East Buy 產生的收入在內的總淨收入年增了 21.2%。我們新業務的持續成長為公司的收入做出了貢獻，我們預計未來將取得進一步的進步。

New Oriental's bottom-line performance of our core educational business has also shown stable returns. To better reflect New Oriental's core educational business, we have excluded the operating margin generated from East Buy for this quarter.

新東方核心教育業務的獲利表現也顯示出穩定的回報。為了更能反映新東方的核心教育業務，我們本季剔除了東買產生的營業利潤。

Our operating margin and non-GAAP operating margin, excluding operating margin, non-GAAP operating margin generated from East Bay for the quarter reached 12.1% and 13.3%, respectively, resulted from the substantial efforts invested in our offerings and platforms.

本季度，我們的營業利潤率和非公認會計準則營業利潤率（不包括營業利潤率、非公認會計準則營業利潤率）分別達到了 12.1% 和 13.3%，這得益於我們在產品和平台上投入的巨大努力。

Now I would like to spend some time to talk about each business lines and new initiatives to you in detail. Our key remaining business are showing promising trends, and our new initiatives have demonstrated positive momentum.

現在我想花點時間和大家詳細講一下各個業務線和新舉措。我們剩餘的主要業務呈現出良好的趨勢，我們的新舉措也展現出積極的勢頭。

Breaking down, the overseas test prep business recorded a revenue increase of 7% in dollar terms year over year for this quarter. The overseas study consulting business reported a revenue increase of about 21% in dollar terms year over year for this quarter. The add outs in university students business recorded a revenue increase of 17% in dollar terms year over year for this quarter.

具體來看，本季海外考試補習業務收入以美元計算年增 7%。本季留學諮詢業務收入以美元計算年增約21%。本季度，大學生業務附加收入以美元計算年增 17%。

Meanwhile, our ongoing investments in new educational business initiatives, primarily focused on facilitating students all round development have sustained a steady growth, further driving the Company’s momentum.

同時，我們對新的教育業務計劃的持續投資，主要集中在促進學生的全面發展，保持了穩定的成長，進一步推動了公司的發展勢頭。

Firstly, the non-academic tutoring business, we have now rolled out to around 60 cities for students. We're happy to see increased market penetration in those markets we have tapped into especially in high-tier cities. The top 10 cities contribute over 60% of this business.

首先，非學歷輔導業務目前已涵蓋約60個城市，為學生提供服務。我們很高興看到，我們所進入的市場，尤其是第一線城市的市場滲透率不斷提高。排名前十的城市貢獻了超過60%的業務。

Secondly, the intelligent learning system and device business, we have tested the adoption of this new initiative in approximately 60 existing cities, and we are pleased to see improvement to customer retention and scalability. The top 10 cities contribute approximately 50% of the business.

其次，智慧學習系統和設備業務，我們已經在大約60個現有城市測試了這項新措施的採用，我們很高興看到客戶保留率和可擴展性的提高。排名前十的城市貢獻了約50%的業務。

As for the smart education business, education material and digitalized smart study solutions, they have all continued healthy development. In summary, our new education business initiatives combined have recorded a revenue increase of 35% year over year for this quarter.

智慧教育業務、教育教材及數位化智慧學習解決方案均持續健康發展。總而言之，本季我們的新教育業務計畫合計營收年增 35%。

With regards to our integrated tourism related business line, it performed exceptionally with a revenue increase of 85% year over year for this quarter. We received very positive feedback with our range of culture travel, China study tour, global study tour, and Camp education products.

我們的綜合旅遊相關業務線表現出色，本季營收年增 85%。我們的文化旅遊、中國遊學、全球遊學和營地教育產品系列都收到了非常正面的回饋。

We have also conducted the study tours and research camp, both internationally and domestically from students of K-12 and university age in around 55 cities across the country and top 10 cities revenue contribution is over 50%. Middle-aged, senior audience targeted tours and products are also available in 30 feature province in China and internationally. This business line has begun to demonstrate its potential to contribute meaningful revenue to the group.

我們也在全國約 55 個城市為 K-12 和大學年齡層的學生開展了國際和國內遊學和研究營，排名前 10 位的城市的收入貢獻率超過 50%。針對中老年觀眾群推出的旅遊產品也已涵蓋全國30個省市及國際。該業務線已開始展現出為集團貢獻可觀收入的潛力。

While we are encouraged by positive achievements across our various business lines, we remain committed to provide the best to our customers. We have been and will continue strategically investing in our business to elevate the overall user experience driving greater efficiency and capacity.

雖然我們為各個業務線所取得的正面成就感到鼓舞，但我們仍然致力於為客戶提供最好的服務。我們一直並將繼續對我們的業務進行策略性投資，以提升整體用戶體驗，從而提高效率和容量。

Building on the progress from the previous quarter, we have continued to refine our online merge offline teaching platform. $29.7 million have been invested in this quarter to improve and maintain our OMO teaching platform, which provides us the flexibility to continue our high-quality service to students.

在上一季進展的基礎上，我們持續完善線上線下融合教學平台。本季我們已投資 2,970 萬美元用於改進和維護我們的 OMO 教學平台，這使我們能夠靈活地繼續為學生提供高品質的服務。

Beyond OMO, I would like to take this time to highlight our investments in AI and how we integrate AI to our teaching ecosystem. It is an area we have looked at and invested in over a long period of time. New Oriental has leveraged a combination of open-source large language models such as DeepSeek and GPT and self-developed AI technologies to develop innovative education solutions and enhance learning experience.

除了 OMO 之外，我想藉此機會強調我們在人工智慧方面的投資以及我們如何將人工智慧融入我們的教學生態系統。這是我們長期關注和投資的領域。新東方利用DeepSeek、GPT等開源大型語言模型與自研AI技術結合，開發創新教育解決方案，提升學習體驗。

AI-powered tools such as assay grading, speaking assessments, and error correction, notebooks, deliver intelligent evaluations and customized learning plans, ultimately improving the students' outcomes while saving the time for both teachers and parents.

考試評分、口語評估、糾錯、筆記本等人工智慧工具可提供智慧評估和客製化學習計劃，最終提高學生的成績，同時節省教師和家長的時間。

To further drive internal efficiency, we introduced an AI content creation platform and students' performance feedback applications to support lesson planning and strengthen home-school communication. These tools has also allowed us to collect meaningful data on learning habits and user engagement, giving us deeper insights into how students and families interact with our services.

為了進一步提高內部效率，我們引入了人工智慧內容創作平台和學生成績回饋應用程序，以支援課程規劃並加強家校溝通。這些工具還使我們能夠收集有關學習習慣和使用者參與度的有意義的數據，讓我們更深入地了解學生和家庭如何與我們的服務互動。

In addition, we have built an AI-supported comprehensive FAQ knowledge database with the analysis of our sales conversations. By using the database, we're able to reduce the training cost for our salespeople and boost sales efficiency and conversion rates.

此外，我們也透過銷售對話的分析，建立了一個由人工智慧支援的綜合常見問題知識庫。透過使用資料庫，我們可以降低銷售人員的培訓成本並提高銷售效率和轉換率。

As an industry leader, we are dedicated to driving long-term revenue growth by strengthening our product capability and optimize management efficiency. We look forward to sharing tangible results from our investment in AI integration and their positive impact on our performance.

作為行業領導者，我們致力於透過增強產品能力和優化管理效率來推動長期收入成長。我們期待分享我們在人工智慧整合方面的投資帶來的實際成果及其對我們績效的正面影響。

Now I would like to take this opportunity to talk about our share repurchase actions. The company's Board of Directors further approved extending the effective time of the share repurchase program to May 31, 2025, and increasing the aggregate value of the shares that the company is authorized to repurchase from $400 million to $700 million.

現在我想藉此機會談談我們的股票回購行動。公司董事會進一步批准將股票回購計畫的有效時間延長至2025年5月31日，並將公司授權回購的股票總價值從4億美元增加至7億美元。

As of April 22, 2025, the company repurchased aggregate approximately 14.4 million ADSs for approximately $695.5 million from the open market under the share repurchase program.

截至 2025 年 4 月 22 日，本公司根據股票回購計畫從公開市場回購了總計約 1,440 萬股 A​​DS，總價值約為 6.955 億美元。

Now I will turn the call over to Sisi to share with you about the key financials. Sisi, please go ahead.

現在我將把電話轉給塞西，讓她與大家分享主要的財務狀況。茜茜，請說。

Thank you, Stephen. Now I'd like to share our key financial details for the quarter. Operating costs and expenses for the quarter were $1,058.5 million, representing a 3.2% decrease year over year. Cost of revenues decreased by 17.6% year over year to $531.6 million. Selling and marketing expenses increased by 13% year over year to $182.2 million.

謝謝你，史蒂芬。現在我想分享本季的主要財務細節。本季營運成本和費用為 10.585 億美元，年減 3.2%。收入成本年減 17.6% 至 5.316 億美元。銷售和行銷費用年增13%至1.822億美元。

G&A expenses for the quarter increased by 19.8% year over year to $344.7 million. Total share-based compensation expenses, which are allocated to related operating cost and expenses, decreased by 41.3% to $16.1 million in the third quarter of 2025. Operating income was $124.5 million, representing a 9.8% increase year over year.

本季的一般及行政費用年增 19.8% 至 3.447 億美元。2025 年第三季度，分配給相關營運成本和費用的股權激勵費用總額下降 41.3% 至 1,610 萬美元。營業收入為 1.245 億美元，年增 9.8%。

Non-GAAP income from operations, excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, was $142.1 million, representing a 0.2% decrease year over year.

非公認會計準則營業利潤（不包括股權激勵費用和業務收購產生的無形資產攤銷）為 1.421 億美元，年減 0.2%。

Net income attributable to New Oriental for the quarter was $87.3 million, representing a 0.1% increase year over year. Basic and diluted net income per ADS attributable to New Oriental were $0.54 and $0.54, respectively.

本季歸屬於新東方的淨利為8,730萬美元，較去年同期成長0.1%。新東方每股美國存託憑證基本淨利和稀釋淨利分別為0.54美元和0.54美元。

Non-GAAP net income attributable to New Oriental for the quarter was $113.3 million, representing a 14.3% decrease year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were $0.70 and $0.70, respectively. Net cash flow generated from operations for the third fiscal quarter of 2025 was approximately $1 million, and capital expenditures for the quarter were $52.4 million.

本季歸屬於新東方的非美國通用會計準則淨利潤為1.133億美元，年減14.3%。新東方非美國通用會計準則每股美國存託憑證基本淨利及攤薄淨利分別為0.70美元及0.70美元。2025 財年第三季的經營活動產生的淨現金流約為 100 萬美元，本季的資本支出為 5,240 萬美元。

Turning to the balance sheet. As of February 28, 2025, New Oriental had cash and cash equivalents of $1,418.8 million; $1,411.7 million in term deposits; and $1,853.6 million in short-term investments; totaling approximately $4.7 billion. The company is in a healthy financial position.

轉向資產負債表。截至2025年2月28日，新東方擁有現金及現金等價物14.188億美元； 14.117億美元定期存款；以及18.536億美元的短期投資；總額約47億美元。該公司的財務狀況良好。

New Oriental's deferred revenue, which representing cash collected upfront from customers and related revenue that will be recognized as the services and goods are delivered at the end of the third fiscal quarter of 2025 was $1,749.9 million, an increase of 15% compared to $1,521.7 million at the end of the third quarter of last fiscal year.

新東方的遞延收入（即從客戶處預先收取的現金以及將在2025財年第三季末交付服務和商品時確認的相關收入）為17.499億美元，較上一財年第三季末的15.217億美元增長15%。

Now I'll hand over to Stephen to go through our outlook and guidance.

現在我將把時間交給史蒂芬來介紹我們的展望和指導。

Thank you, Sisi. With the evolving market dynamics, we will remain committed to resilience and focus on achieving steady sustainable growth across our business line in the coming quarter. Leveraging our experience in navigating ships in conditions, we're confident in our ability to advance our business lines as an industry leader.

謝謝你，茜茜。隨著市場動態的變化，我們將繼續致力於復原力，並專注於在下一季實現整個業務線的穩定永續成長。憑藉我們在各種條件下駕駛船舶的經驗，我們有信心能夠作為行業領導者推進我們的業務。

The strong performance of our diverse operations and the depth of the educational resources further strengthen our confidence in sustainable growth. We expect the total net revenue, excluding revenue generated from the East Buy in the coming quarters, March 1, 2025, to May 31, 2025, to be in the range of $1,009.1 million to $1,036.6 million, representing a year-over-year increase in the range of 10% to 13%.

我們多元化業務的強勁表現和教育資源的深度進一步增強了我們對永續成長的信心。我們預計，未來幾季（2025 年 3 月 1 日至 2025 年 5 月 31 日），不包括東區採購產生的收入，總淨收入將在 10.091 億美元至 10.366 億美元之間，年增 10% 至 13%。

We project the increase of the revenue in our functional currency, RMB, is expected to be in the range of 12% to 15% for the first quarter of fiscal year 2025. In addition, the slowdown of the revenue growth of our overseas related business and investments in newly integrated tourism related business has led to the short-term impact on our operating margin this quarter.

我們預計，2025財年第一季度，以功能貨幣人民幣計算的營收增幅預計將在12%至15%之間。此外，海外相關業務收入成長放緩以及新整合的旅遊相關業務投資也導致本季營業利潤率受到短期影響。

We have initiated our cost control and efficiency enhancement across all business lines since this quarter and expect these actions to take effect in the coming quarters. We anticipate the non-GAAP operating margin for the educational business will expand year over year in the coming fourth quarter. I must say that these expectations and forecast reflect our considerations of latest regulatory measures as well as the current preliminary view, which is subject to change.

自本季以來，我們已開始在所有業務線上實施成本控制和效率提升措施，並預計這些措施將在未來幾季內生效。我們預計，教育業務的非公認會計準則營業利潤率將在未來第四季同比增長。必須指出的是，這些預期和預測反映了我們對最新監管措施的考慮以及當前的初步觀點，可能會發生變化。

To conclude, New Oriental is dedicated to delivering premium offerings to our customers while pursuing sustainable growth through our strategic blend of capabilities. We will continue investing in our business and the different application of advanced technologies, including AI. Our aim is to strengthen our competencies driving growth and improve operating efficiency.

總而言之，新東方致力於為客戶提供優質服務，同時透過我們的策略能力組合實現永續成長。我們將繼續投資於我們的業務和包括人工智慧在內的先進技術的不同應用。我們的目標是增強推動成長的能力並提高營運效率。

We will also continue to seek guidance from incorporating with the government authorities in China, ensuring the compliance with the relevant policies, guidelines, and any related implementations, regulations and measures and adjust our business operations as required. As always, we will work diligently to enhance the nation's education level to strengthen its leading position, unlocking further potential across all of our business lines and realizing our position.

我們也將繼續向中國政府部門尋求指導，確保遵守相關政策、指導方針以及任何相關實施、法規和措施，並根據需要調整我們的業務運作。我們將一如既往地努力提高國家的教育水平，鞏固其領先地位，釋放我們所有業務線的更多潛力，實現我們的地位。

This is the end of our fiscal year 2025 Q3 summary. At this point, I would like to open the floor for questions. Operator, please open the call for this. Thank you.

這是我們 2025 財年第三季總結的結尾。現在，我想開始回答大家的提問。接線員，請接通此電話。謝謝。

(Operator Instructions) Felix Liu, UBS.

(操作員指示) 瑞銀 (UBS) 的 Felix Liu。

My question is on the overseas-related businesses. You mentioned that the slowdown in overseas test prep and consulting cost what caused the deceleration in Q4 growth. May I just check what has been the major drivers of the slowdown? Do you think the situation could get worse with these ongoing tariffs? And what is your outlook for this business, especially when do you think growth will bottom out?

我的問題是關於涉海外業務的。您提到海外考試準備和諮詢成本的放緩是導致第四季度成長放緩的原因。我可以查一下造成經濟放緩的主要原因是什麼嗎？您認為持續徵收關稅會使情況變得更糟嗎？您對這項業務的前景如何？特別是您認為何時增長會觸底？

Yeah. I think the overseas-related business, including the overseas test prep and the consulting business, the slowing down is due to the impact of the macro economy situation and the international relations change situation. And so based on our current guidance for the Q4, I think the overseas-related business will be growth in the range 5% to 10% in the Q4.

是的。我認為海外相關業務，包括海外考試輔導和諮詢業務，成長放緩是由於宏觀經濟情勢和國際關係變化情勢的影響。因此，根據我們目前對第四季的指導，我認為第四季度海外相關業務的成長幅度將在 5% 至 10% 之間。

And in the coming new year, we have not finished the budget, but we anticipate the overseas test prep business will grow by 5% to 10% in the new year. And overseas consulting business, I think the growth will be zero or flattish in the coming new year. But what I'm saying now is based on the conservative estimation for the new year, Felix.

而在新的一年裡，我們還沒有完成預算，但我們預計新的一年海外考試輔導業務將成長5%到10%。至於海外諮詢業務，我認為在新的一年成長將為零或持平。但我現在說的是基於對新年保守的估計，菲利克斯。

Lucy Yu, Bank of America Securities.

美國銀行證券公司的 Lucy Yu。

So my question is more on the fourth quarter guidance. You did mention that overseas test prep is going to slow down. May we have a breakdown of the other business growth in the fourth quarter?

所以我的問題比較是關於第四季的指導。您確實提到海外考試準備將會放緩。我們能否詳細了解第四季度其他業務的成長情況？

Yeah. So roughly like based on our forecast for Q4, in the RMB term, the overseas-related business will grow around 8%. And domestic university students business will grow maybe around 19%. And the high school business growth will be around 16%, 17%. And the new K-9 new business, educational business will grow maybe around 30 -- 32% to 35%. So that's the rough estimation based on our current forecast for Q4. This is RMB growth. And if you - on US dollar growth, maybe each line roughly deduct by roughly 2%, 2% to 3%.

是的。因此，大致按照我們對第四季的預測，以人民幣計算，海外相關業務將成長8%左右。國內大學生業務大概會成長19%左右。高中業務成長率將在16%、17%左右。新的 K-9 新業務、教育業務的成長幅度可能在 30% 到 32% 到 35% 左右。這是根據我們對第四季度的當前預測做出的粗略估計。這就是人民幣的增長。如果以美元增長計算，每行可能大約扣除 2%、2% 到 3%。

But we must mention that we're using the conservative method to give the guidance of Q4.

但我們必須提到，我們正在使用保守的方法來給出第四季度的指導。

Yes.

是的。

Alice Cai, Citibank.

花旗銀行的 Alice Cai。

(inaudible) I noticed that K-9 offline enrollment grew by 15% year over year this quarter, which has been lower than the second. While (inaudible) increased by 15% year over year. Let me but start to play offline costs and how much of the lower K-9 (inaudible)

（聽不清楚）我注意到本季 K-9 線下入學人數年增了 15%，低於第二季。而（聽不清楚）年增了 15%。讓我開始玩離線成本和較低的 K-9 的數量（聽不清楚）

Can you repeat again? I think we cannot hear you very clearly. Can you repeat the question again? I think that your --

你能再說一次嗎？我想我們聽不太清楚。你能再重複一次這個問題嗎？我認為你的--

Your line is not clear, Alice.

你的台詞不清楚，愛麗絲。

Alice.

愛麗絲。

Okay, can you hear me now?

好的，你現在聽得到我說話嗎？

A bit better. Yeah. Please state again your question. Thank you.

好一點了。是的。請再次陳述您的問題。謝謝。

Okay. I noticed that K-9 offline enrollment grew by 15% year over year this quarter, which is lower than expected while learning device user increased by 54% year over year. Our learning device starting to [deflate after COVID]. And how much of the lower K-9 grows is simply because the base are getting bigger. Is that clear now?

好的。我注意到本季K-9線下入學人數較去年同期成長15％，低於預期，而學習設備使用者則較去年同期成長54％。我們的學習設備開始[COVID 後放氣]。而下層 K-9 的成長只是因為基數越來越大。現在清楚了嗎？

Yeah. Actually, the enrollments growth for the non-academic tutoring business this year is a little bit impacted by the timing difference of cutoff of each quarter. And also, because we have some enrollments that last year divided into two parts for the spring quarter and autumn quarter. But this year, some cities combined as one enrollment. So that's also explain the relatively slower growth of the enrollments, if you're comparing that with the revenue growth.

是的。事實上，今年非學歷輔導業務的招生人數成長受到各季度截止時間差異的影響。而且，由於我們去年的招生分為春季學期和秋季學期兩部分。但今年有的城市合併為一個招生。因此，如果將其與收入成長進行比較，這也可以解釋入學人數成長相對較慢的原因。

And the learning path for middle school students mainly is also growing very, very fast. And this year, the number of users increased dramatically compared with last year, yes. And next year, we also continue to believe that the K-9 business, including mainly the elementary school, non-academic tutoring and the middle school learning pad business school will continue to drive the overall growth will be the fastest growth category.

而針對中學生的學習路徑主要也在發展得非常非常快。而且今年的用戶數量跟去年相比是大幅增加的，是的。而且明年我們也繼續相信K-9業務，主要包括小學、非學術輔導和中學學習墊業務將繼續推動整體成長，並將成為成長最快的類別。

Yeah. So within the Q4 guidance, the K-9 business, we expect the K-9 business will grow by over 35% year over year in Q4, Alice.

是的。因此，在第四季度的指導中，對於 K-9 業務，我們預計第四季度 K-9 業務將同比增長 35% 以上，Alice。

Timothy Zhao, Goldman Sachs.

高盛的趙蒂姆。

I think you mentioned that in the fourth quarter this year, you do expect the OP margin for the core business to expand on a year-on-year basis. Just wondering how do you think about sustainability of the margin expansion into fiscal year 2026. And what kind of measures that are you going to take to increase the operating efficiency and control cost and how you think about the balance -- the balance in the revenue growth margin? Yeah.

我想您提到過，在今年第四季度，您確實預計核心業務的營業利潤率將比去年同期成長。只是想知道您如何看待利潤率擴張到 2026 財年的可持續性。您將採取哪些措施來提高營運效率和控製成本？您如何看待收入成長幅度的平衡？是的。

As I said, we expect the margin expansion in the coming quarter, Q4. And I think this is mainly due to following reasons. Number one, we started to do the cost control, and the efficiency has been since this quarter. And we do believe it will take effect to help the margin profile in Q4 and the next fiscal year. And secondly, I think we continue to focus on improving the utilization of facilities.

正如我所說，我們預計下一季（第四季）的利潤率將會擴大。我認為這主要有以下幾個原因。第一，我們開始做成本控制，從本季開始效率就提高了。我們確實相信它將有效幫助改善第四季和下一財年的利潤率。其次，我認為我們將繼續致力於提高設施的利用率。

And so we are doing the cost control in all business lines with the companies because of the slowing down. I think it's reasonable to do at this time. And for the new year, fiscal year '26, we do believe we will get the margin expansion for the education business, which excludes in the East Buy, the margin expansion in the new year.

因此，由於經濟放緩，我們正在與公司合作，對所有業務線進行成本控制。我認為此時這樣做是合理的。對於新的一年，即 26 財年，我們確實相信教育業務的利潤率會有所擴大，但不包括東部採購，新的一年的利潤率將會擴大。

Yikun Zheng, CITIC.

鄭毅坤，中信。

My question is about the shareholder buyback plan. We are glad to see that we have almost finished our ongoing purchase plan. So do we have some more shareholders buyback plan in the future by dividend or new repurchase plan?

我的問題是關於股東回購計劃。我們很高興地看到我們正在進行的採購計劃已接近完成。那麼，未來我們是否會透過股利或新的回購計畫來實施更多的股東回購計畫？

Yeah. We almost finished the $700 million share buyback. And as well, we have already paid $100 million special dividend in September last year. And so that is in the last 2 years, 2.5 years, we paid $800 million already.

是的。我們幾乎完成了7億美元的股票回購。此外，我們去年 9 月已支付了 1 億美元的特別股利。在過去的兩年、兩年半里，我們已經支付了 8 億美元。

And going forward, I think in the near future, I think I will discuss with the Board to do the another the capital allocation plan to the investors. And yeah, I know we're pulling up the cash, and we generate the net cash flow and make profit every year. So I think it's reasonable for us to pay the capital allocation to investors. These are the -- some dividends, the regular dividend or the special dividend combined with the share buyback.

展望未來，我想在不久的將來，我會與董事會討論制定另一項針對投資者的資本分配計劃。是的，我知道我們正在籌集現金，我們每年都會產生淨現金流並獲利。所以我認為我們向投資者支付資本配置是合理的。這些是——一些股息，定期股息或與股票回購相結合的特別股息。

Elsie Sheng, CLSA.

里昂證券的 Elsie Sheng。

My question is more about the outlook next year. So you mentioned on the expectation for the growth of overseas business in next financial year. Could you also update your expectation of growth for other business segments in the next year?

我的問題更多的是關於明年的前景。所以您提到了對下一財年海外業務成長的預期。您能否也更新一下對明年其他業務部門成長的預期？

I think Sisi will give you the guidance, yeah.

我想 Sisi 會給你指導，是的。

Yeah. Actually, I think it's reasonable to continue to estimate maybe similar growth with Q4's revenue growth for all the core business lines for next fiscal year. As we said, the continued pressure definitely is from the overseas-related business and -- but we do believe that this business will stabilize. And based on so far estimation, the single-digit growth is okay for us, and it's already conservative for us.

是的。實際上，我認為繼續估計下一財年所有核心業務線的營收成長可能與第四季相似是合理的。正如我們所說，持續的壓力肯定來自海外相關業務——但我們確實相信這項業務將會穩定下來。根據目前的估計，個位數的成長對我們來說是可以接受的，而且已經比較保守了。

And for the new business, K-9 new business should grow at around 25% -- maybe 25% to 30% growth. The high end probably growth is from the middle school session. And also elementary school students because the higher base, our revenue scale is already bigger than before the policy level. And the growth around this kind of level is also something that we feel sustainable and healthy pace.

對於新業務，K-9 新業務應該會成長 25% 左右——可能是 25% 到 30% 的成長。最高端的可能成長是從中學階段開始的。還有小學生因為基數比較高，我們的收入規模已經比政策層面之前更大了。我們認為圍繞這種水平的增長也是可持續且健康的。

And high school business continue maybe around 15% -- 12% to 13% -- 12%, 13% growth conservatively speaking as well. And the tourism business probably around 15% to 20% growth, also conservative estimation for next year. Okay, that's all the core business lines.

高中業務的成長率可能維持在 15% 左右——12% 到 13%——保守地說，也是 12%、13%。而旅遊業大概會成長15%到20%左右，這也是對明年的保守估計。好的，這就是所有核心業務線。

(Operator Instructions) Charlotte Wei, HSBC.

（操作員指示）Charlotte Wei，匯豐銀行。

I have a question related to the new technology development. So how do you expect AI and large language model will reshape the education industry? Can you share with us your strategy and investment plan for this area?

我有一個與新技術開發相關的問題。那麼您預計人工智慧和大型語言模型將如何重塑教育產業？您能否與我們分享您在這方面的策略和投資計畫？

Yeah. As I said, actually, we started to use the AI technology to help the whole process of the teaching and learning from both the teacher side and the students' and parents' side. Yes, as I said, we have issued some AI tools like the as writing speaking acceptance and some error correction or books.

是的。正如我所說，實際上，我們開始使用人工智慧技術來幫助教師、學生和家長整個教學過程。是的，正如我所說，我們已經發布了一些人工智慧工具，例如寫作、口語接受和一些錯誤糾正或書籍。

All this behavior or all these new technologies help us to grasp the more data from the students and to help the students the study outcome even better. But we don't have the plan to do the -- like the big model. I think the investment will be reasonable going forward.

所有這些行為或所有這些新技術幫助我們掌握來自學生的更多數據，並幫助學生取得更好的學習成果。但我們沒有計劃要做——像大模型那樣。我認為未來的投資將是合理的。

And on the other hand, on the cost control side, I think the AI technology can help us to do like some of the sales the salespeople and even some on the G&A side, I think it will make us the work more efficiently. We can save some people and expenses on the selling and marketing expenses and G&A expenses. So it will help us to drive the margin up. So this is another benefit from the AI technology.

另一方面，在成本控制方面，我認為人工智慧技術可以幫助我們做一些銷售工作，銷售人員，甚至一些一般及行政方面的工作，我認為它會讓我們的工作更有效率。我們可以節省一些人員和銷售、行銷費用以及一般行政費用。因此它將幫助我們提高利潤率。這是人工智慧技術的另一個好處。

(Operator Instructions) D.S. Kim, JPMorgan.

（操作員指示）D.S. Kim，摩根大通。

I think most of my questions have already been answered. But to minor stuff, A, can we talk a bit about expansion of the center capacity expansion plan for next year? I got disconnected in the middle. So you may have already discussed that. Sorry if you did that already. That's A.

我想我的大部分問題已經得到解答了。但是對於一些小問題，A，我們可以談談明年中心產能擴張計畫的擴大嗎？我在中途斷線了。您可能已經討論過這個問題了。如果您已經這樣做了，很抱歉。那是 A。

And B, I think we talked a bit about cost control starting this quarter. I'm just wondering what kind of cost control we are planning to do. Like we did involve some rationalization of our workforce, and if that were the case, would there be some one-off expenses related to like the workforce adjustment or when we talk about a good control, it's more about spending less than previous budget. Hence, there wouldn't be any meaningful one-off around there.

B，我想我們從本季開始討論一些成本控制問題。我只是想知道我們計劃進行什麼樣的成本控制。就像我們確實對勞動力進行了一些合理化，如果是這樣的話，是否會有一些與勞動力調整相關的一次性費用，或者當我們談論良好的控制時，更多的是比以前的預算花費更少。因此，那裡不會發生任何有意義的一次性事件。

And now that I think about it, can I ask one more thing? How do we think about the headquarter overhead cost for 2026? I think last year -- or this fiscal year, we are spending probably about mid to high teens more than last year on the headquarter overhead. How should we think about that overhead cost into 2026?

現在我想起來了，我可以再問一件事嗎？我們如何看待2026年的總部管理費用？我認為去年或本財年，我們在總部管理費用上的支出可能比去年增加了百分之五十到百分之十幾。我們應該如何考慮 2026 年的間接成本？

Yeah, three questions. The learning center expansion plan for the new year, right? And so I think we plan to open 10% to 15% new capacity in the new year. It's a little bit less than the fiscal year '25. This is roughly 20% plus and next year, 10% to 15%. And I think it will be almost backloaded in Q3 and Q4 to prepare for the year after next year. So I think our key job is to raise the utilization rates up for the new year fiscal year '26.

是的，三個問題。學習中心新年的擴建計畫是這樣的吧？因此我認為我們計劃在新的一年開放 10% 到 15% 的新產能。這比 25 財年略少一些。今年大概是 20% 以上，明年會是 10% 到 15%。我認為它將在第三季和第四季基本完成，為後年做準備。因此，我認為我們的關鍵工作是提高 26 財年的利用率。

The cost control. I think the cost control assignment it's not a one-time job. So we started to do the cost control in this quarter. And I think we will keep doing the cost control in the whole year of the fiscal year '26. I know we're facing the challenging time of the slowing down of the top-line growth. So I think it's reasonable for us to do the cost control continuously. And so it will help the higher efficiency and the margin profile of the whole company.

成本控制。我認為成本控制任務不是一次性的工作。所以我們在本季開始做成本控制。我認為我們將在26財年全年繼續進行成本控制。我知道我們正面臨著收入成長放緩的挑戰。所以我認為我們持續進行成本控制是合理的。這將有助於提高整個公司的效率和利潤率。

The headquarters' expenses. This year its roughly, the headquarters' quarters expenses is roughly 6% of the total educational revenue and 6% of the total educational core business. (multiple speakers) yeah, 6%, yeah.

總部的開支。今年大概是，總部的宿舍費用大概佔教育總收入的6%，佔教育核心業務的6%。 （多位發言者）是的，6%，是的。

So the ratio would be similar to this year, this year versus next year, we're -- sorry, I missed that part.

因此，今年的比例與明年的比例相似，我們 - 抱歉，我錯過了那部分。

Next year, I think our job is to make the percentage even lower than let's say, the 5%, plus 5% of the total revenue as the headquarters of the expenses. So that means that we will get the leverage on the headquarters' expenses in the fiscal year '26. It will help the margin up.

明年，我認為我們的工作是讓這個比例低於5%，再加上總收入的5%作為總部的開支。這意味著我們將在 26 財年獲得總部支出的槓桿。這將有助於提高利潤率。

Thank you, sir. I think it's really clear, and I agree that we should focus on utilization and efficiency in this hard time manner, we can deliver margin expansion. Thank you so much.

謝謝您，先生。我認為這一點非常清楚，而且我同意我們應該在這種困難時期注重利用率和效率，這樣我們才能實現利潤率的擴大。太感謝了。

(Operator Instructions) D.S. Kim, JPMorgan.

（操作員指示）D.S. Kim，摩根大通。

Sorry, just a follow-up since others no seems to have questions. Since I think earlier you said can new businesses next year, 2026, we expect about 25% to 30% growth in environment term. Can I double check if this is only for K-9, excluding other new businesses? Or new businesses, including K-9 for 25% to 30%?

抱歉，只是跟進一下，因為其他人似乎沒有問題。因為我認為您之前說過明年，也就是 2026 年，會有新業務，我們預期環境方面的成長率約為 25% 到 30%。我可以再確認一下這是否只適用於 K-9，而不是其他新業務嗎？或新業務，包括 K-9，佔 25% 到 30%？

Including everything. So the key ones are the -- yeah, non-academic and pad. And also, we added other minor things together.

包括一切。所以關鍵的是——是的，非學術的和墊子。此外，我們還添加了其他一些小東西。

Thank you. That means K-9 should grow faster than what you gave us, which is not bad actually similar to this quarter. So thank you so much.

謝謝。這意味著 K-9 的成長速度應該比您給我們的要快，這實際上與本季相似，還不錯。非常感謝。

Felix Liu, UBS.

瑞銀的 Felix Liu。

I actually have one additional question on the learning hardware business. I noticed that recently, some of our competitors who also sell learning hardware they launched new models at cheaper -- increasingly cheaper and cheaper prices. So how do you think about our strategy in the learning hardware business? And how should we think about competition pressure from price cuts from other players?

實際上，我還有一個關於學習硬體業務的問題。我注意到最近我們的一些競爭對手也銷售學習硬件，他們推出了更便宜的新款——價格越來越便宜。那麼您如何看待我們在學習硬體業務方面的策略？我們又該如何看待其他參與者降價所帶來的競爭壓力？

Yeah. Actually, we're quite confident on the future of these learning pad device model, especially that we leverage our strength in the educational sector. We have this kind of interactive teaching and learning system.

是的。實際上，我們對這些學習平板設備模型的未來非常有信心，特別是我們利用了我們在教育領域的優勢。我們有這種互動式教學和學習系統。

So we have our users like create the stickiness of our customers. They not only buying the products but also the subscribe, the content and the process of using our system to continue their self study and create the stickiness and can generate recurring revenue. So we're still confident that this is the best model to use and also to leverage our education strength.

因此，我們讓用戶喜歡創造客戶的黏性。他們不僅購買產品，還訂閱、購買內容，並使用我們的系統繼續自學，創造黏性，並產生經常性收入。因此，我們仍然相信這是最好的模式，也是充分利用我們的教育優勢的模式。

And also, by using more and more AI technologies, we are now developing all kinds of apps and new functions embedded into our service process so that the learning experience of our customers will enhance going forward gradually, and also provide more and more technology supported and also with the real teacher supporting learning process for them. So we believe that this business will continue to be the key growth driver for our overall revenue.

此外，透過使用越來越多的人工智慧技術，我們正在開發各種應用程式和新功能嵌入到我們的服務流程中，以便我們客戶的學習體驗將逐步提升，並提供越來越多的技術支持，並有真正的老師為他們支持學習過程。因此我們相信這項業務將繼續成為我們整體收入的主要成長動力。

And also the operating margin. This year, we have already seen this business to generate over 22%, 23% operating margin, which is similar with our other offline teaching class margin. And also, we have confidence that it has potential to continue to enhance the margin because of the involvement of more technology, and we can leverage and save more time for our labor cost and also our teachers can serve more students than before. So the business model is better than even offline training format, yeah.

還有營業利益率。今年我們已經看到這項業務產生了超過22%、23%的營業利潤率，這與我們其他線下教學班的利潤率相似。而且，我們有信心，由於更多技術的參與，利潤率有繼續提高的潛力，我們可以利用和節省更多的勞動成本，我們的老師也可以比以前服務更多的學生。所以這種商業模式甚至比線下培訓模式更好，是的。

Thank you. We are now approaching the end of the conference call. I will now turn the call over to New Oriental's Executive President and CFO, Stephen Yang, for his closing remarks.

謝謝。我們現在即將結束電話會議。現在，我將把電話轉給新東方執行總裁兼財務長楊志飛，請他致閉幕詞。

Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you.

再次感謝您今天加入我們。如果您有任何其他問題，請隨時與我或我們的任何投資者關係代表聯繫。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。