New Oriental Education & Technology Group Inc. (EDU) 2026 Q3 法說會逐字稿

Thank you for standing by for New Oriental's FY 2026 third-quarter results earnings conference call. (Operator Instructions)

感謝您耐心等候新東方 2026 財年第三季度業績電話會議。(接線員指示)

Today's conference is being recorded. If you have any objections, you may disconnect at this time.

今天的會議將被錄音。如您有任何異議，您可於此時中斷連線。

I'd now like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao.

現在我想把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 2026 earnings conference call. Our financial results for the period were released earlier today and are available on the company's website as well as on Newswire services. 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.

謝謝。各位好，歡迎參加新東方 2026 財年第三財季業績電話會議。我們本期的財務業績已於今日稍早發布，可在公司網站以及 Newswire 服務上查閱。今天，新東方執行總裁兼首席財務官楊志輝先生與我將向各位詳細分享新東方最新的業績結果與業務進展。之後，楊先生與我將回答各位的提問。

Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions 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 views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC.

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》安全港條款所作的前瞻性陳述。前瞻性陳述具有內在風險與不確定性。因此，我們的實際結果可能與今天表達的觀點存在重大差異。我們向美國證券交易委員會（SEC）提交的公開文件中列示了若干潛在風險與不確定性。

New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law. 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. I will now first turn the call over to Mr. Yang.

除非適用法律另有要求，新東方不承擔更新任何前瞻性陳述的義務。提醒各位，本次會議正在錄音。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 提供。現在我先把電話交給楊先生。

Stephen, please go ahead.

Stephen，請開始。

Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. I'm glad to share with you that Q3 of this fiscal year marks another quarter of solid results and consistent growth. We're pleased to see that after several consecutive quarters of the revenue growth exceeding expectations, this quarter has once again surpassed expectations.

謝謝你，思思。各位好，感謝大家參加本次電話會議。我很高興與各位分享，本財年第三季度再次取得了穩健的業績與持續的成長。我們很高興看到，在連續數個季度營收成長超出預期之後，本季度再次超出預期。

This reinforces our confidence in the correctness of our strategy and our optimism about future performance. We are even more delighted to see the margin expansion in our core business along with the significant contribution from the outstanding performance of East Buy.

這進一步增強了我們對策略正確性的信心，以及對未來表現的樂觀預期。我們也更欣喜地看到，核心業務利潤率擴張，同時東方甄選的卓越表現帶來了顯著貢獻。

Our focus on operational efficiency and investment on strategic initiatives have begun driven satisfactory performance and continue to lead our path to sustainable profitability. This quarter, total net revenue grew by 19.8% year over year to $1,417.3 million. Non-GAAP operating income rose 42.8% to and $202.9 million, while non-GAAP net income attributable to New Oriental increased 34.3% to $152.2 million.

我們對營運效率的專注以及對策略性舉措的投入，已開始帶動令人滿意的表現，並持續引領我們走向可持續的獲利能力。本季度，淨營收總額同比成長 19.8%，達到 14.173 億美元。非 GAAP營業收入成長 42.8%，至 2.029 億美元；歸屬於新東方的非 GAAP 淨利潤成長 34.3%，至 1.522 億美元。

Both our core business and new initiatives are gaining meaningful traction this quarter. Breaking down, Overseas Test Prep business recorded a revenue increase of 7% year over year for this quarter. Overseas Study Consulting business recorded revenue decrease of about 4% year over year for this quarter. Our Adults and University Students business recorded a revenue increase of 15% year over year this quarter.

本季度，我們的核心業務與新業務舉措均取得了實質性進展。具體來看，出國考試備考業務本季度營收同比成長 7%。出國留學諮詢業務本季度營收同比下降約 4%。成人及大學生業務本季度營收同比成長 15%。

As for our new education initiatives, including non-academic tutoring and our intelligent learning system devices to deliver sustainable revenue that grew 23% year over year this quarter. Our non-dynamic tutoring business have been rolled out to around 60 existing cities. Market penetration has grown steadily, particularly across high-tier cities. The top 10 cities contributed over 60% of this business.

至於我們新的教育業務舉措，包括非學科輔導以及智慧學習系統設備，本季度帶來可持續的營收，同比成長 23%。我們的非學科輔導業務已在約 60 個既有城市落地。市場滲透率穩步提升，尤其是在高線城市。前 10 大城市貢獻了該業務超過 60% 的收入。

Our Intelligent Learning System and Device business that leverages our teaching expertise and data analytics to provide adaptive learning solutions has been launched in around 60 cities. We're encouraged by enhanced customer retention and scalability of this newest business. The top 10 cities contribute over 50% of the business.

我們的智慧學習系統與設備業務，依託教學專長與數據分析提供自適應學習解決方案，已在約 60 個城市推出。我們對這一最新業務的客戶留存提升與可擴展性備受鼓舞。前 10 大城市貢獻了該業務超過 50% 的收入。

Turning to our Integrated Tourism-Related business, which includes study tours and research camp for K-12 and university students as well as new cultural tours for middle aged and senior travelers. We're delighted to -- we are delighted that the Cultural Travel, China study tour, global study tour and camp education products continues to be well received, providing customers with valuable knowledge, personal growth, and cultural enrichment.

接下來談到我們的綜合文旅相關業務，包括面向 K-12 與大學生的研學旅行與研學營，以及面向中老年旅客的新文化旅遊產品。我們很高興——我們很高興看到，文化旅遊、中國研學、全球研學以及營地教育產品持續受到市場歡迎，為客戶帶來有價值的知識、個人成長與文化滋養。

Our student programs now operate in approximately 55 cities nationwide with the top 10 cities generate over 50% of the revenue. And our other top-notch adult tourism offering span around 30 province domestically and select international destinations. We're also expanding into senior health and wellness tourism through partnership with over 40 wellness facilities in Hainan, Yunnan, and Guangxi, utilizing an asset-light model to pilot the emerging opportunity.

我們的學生項目目前在全國約 55 個城市運營，前 10 大城市貢獻了超過 50% 的收入。而我們其他高品質的成人旅遊產品覆蓋國內約 30 個省份及部分海外目的地。我們也正透過與海南、雲南、廣西超過 40 家康養機構合作，以輕資產模式試點拓展銀髮健康與康養旅遊，探索這一新興機會。

We continue to invest in our online merge offline teaching platform, leveraging our educational infrastructure and technology capabilities to deliver advanced and personalized learning experience. across our all age groups. This quarter, we invested $30.6 million to enhance and maintain our OMO platform, which enables us to provide high-quality instruction to students, while adapting to their individual learning needs.

我們持續投入線上融合線下的教學平台（OMO），依託我們的教育基礎設施與技術能力，為各年齡段提供更先進且個性化的學習體驗。本季度，我們投入 3,060 萬美元用於提升與維護 OMO 平台，使我們能在滿足學生個性化學習需求的同時，提供高品質教學。

Turning to East Buy. East Buy remains committed to delivering premium products and service to Chinese families. It has advanced its multi-platform, multi-account strategy by launching specialized vertical live streaming channels on Douyin, including East Buy Home, East Buy Fruit & Vegetables, and East Buy Nutrition and Health.

接下來談到東方甄選。東方甄選仍致力於為中國家庭提供優質產品與服務。其透過在抖音推出專業垂類直播頻道（包括東方甄選家居、東方甄選果蔬、東方甄選營養健康等），推進多平台、多帳號策略。

It also continuously optimize its live streaming content and introduce innovative engagement initiatives, including large-scale live campaigns for streamer recruitment and supplier conferences as part of its efforts to strengthen team capabilities, supplier partnership, and customer engagement.

同時，其持續優化直播內容並推出創新互動舉措，包括面向主播招募的大型直播活動以及供應商大會，以強化團隊能力、供應商合作夥伴關係與客戶互動。

Looking ahead, East Buy will look to expand its private label portfolio, enhanced product R&D and quality control, accelerate app membership ecosystem development, and grow its offline footprint steadily through vending machines and experienced stores. Together, these initiatives will drive greater operational efficiency and advanced supply chain excellence, supporting sustainable long-term growth.

展望未來，東方甄選將擴大自有品牌產品組合，提升產品研發與品質管控，加速 App 會員生態建設，並透過自動販賣機與體驗店穩步拓展線下佈局。上述舉措將共同推動更高的營運效率與更卓越的供應鏈能力，支持可持續的長期成長。

Besides upgrading our OMO system , encouraged by the positive feedback on our AI applications, we continue to integrate AI across our offerings to strengthen core capabilities. Simultaneously, we are expanding the use of AI to streamline internal operation, thereby boosting efficiency and elevating the support for our teachers and staff. Driving innovation in product capabilities and operational excellence continue to fuel our pursuit of the sustainable revenue growth. We look forward to sharing measurable results from our AI investments in the quarters ahead.

除升級我們的 OMO 系統外，受到 AI 應用正面回饋的鼓舞，我們持續在各項產品與服務中整合 AI，以強化核心能力。同時，我們也在擴大 AI 在內部營運中的應用，以簡化流程、提升效率，並加強對教師與員工的支持。持續推動產品能力創新與營運卓越，將繼續助力我們追求可持續的營收成長。我們期待在未來幾個季度分享 AI 投資帶來的可量化成果。

I would also like to take this opportunity to share a new strategic initiative with you. Historically, New Oriental has focused on serving our customers as each individual. Going forward, we're expanding the perspective to serve the entire family units. Given our diversified offering across different age groups and demographics, we're uniquely positioned to adopt full life cycle, full spectrum approach that addresses the evolving needs of each family member from children to parents to seniors.

我也想藉此機會與各位分享一項新的策略性舉措。過去，新東方主要聚焦於以「個體」為單位服務客戶。未來，我們將擴展視角，服務整個家庭單位。憑藉我們覆蓋不同年齡層與人群的多元化產品與服務，我們具備獨特優勢，採取全生命週期、全方位的方法，滿足每位家庭成員從孩子、父母到長者不斷演變的需求。

To support the shift, we launched the New Oriental Home, a private domain platform that integrates our education service, East Buy offerings and cultural tourism products into one unified ecosystem. Through a single app, families can conveniently access, manage, and redeem service tailored to different members, enabling seamless cross-category engagement and deeper household level relationships.

為支持這一轉變，我們推出了「新東方家」，這是一個私域平台，將我們的教育服務、東方甄選產品與文化旅遊產品整合至同一個統一生態中。透過一個 App，家庭可便捷地存取、管理並兌換針對不同成員量身打造的服務，實現跨品類的無縫互動，並建立更深層的家庭層級關係。

This platform is already demonstrating strong user engagement and retention through scenario-based marketing and integrated service offerings, significantly enhancing customer lifetime value. At the same time, the precision driven operations, improve conversion efficiency and optimize overall operating cost. We have now launched this pilot program in 12 cities as test beds, including Hangzhou, Suzhou, Xi'an, and Wuhan, with over 330,000 registered families.

此平台已透過情境式行銷與整合式服務供給，展現出強勁的用戶參與度與留存率，顯著提升客戶終身價值。同時，精準驅動的營運提升轉化效率並優化整體營運成本。我們目前已在12個城市啟動此試點計畫作為測試場域，包括杭州、蘇州、西安與武漢，註冊家庭數已超過33萬戶。

The platform has achieved campaign activation rates of 10% to 15%, significantly outperforming many public domain e-commerce platforms. This performance demonstrates the high reach and precision advantages of our education focused private domain ecosystem.

該平台的活動啟動率達到10%至15%，顯著優於許多公域電商平台。此表現彰顯我們以教育為核心的私域生態系在觸達與精準度方面的優勢。

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

接下來我把電話交給Sisi，請她與各位分享主要財務數據。請開始。

Thank you, Stephen. Let me now walk you through the key financial highlights for the quarter. Operating costs and expenses for the quarter were $1,237 million, representing a 16.9% increase year over year. Cost of revenue increased by 23.4% year over year to $656.2 million. Selling and marketing expenses increased by 9.1% year over year to $198.8 million.

謝謝你，Stephen。接下來我將帶各位回顧本季度的主要財務亮點。本季度營運成本及費用為12.37億美元，年增16.9%。營收成本年增23.4%至6.562億美元。銷售與行銷費用年增9.1%至1.988億美元。

General and administrative expenses for the quarter increased by 10.8% year over year to $382.1 million. Total share-based compensation which were allocated to related operating costs and expenses, increased by 30.9% to $21.1 million in the third quarter of fiscal year 2026.

本季度一般及行政費用年增10.8%至3.821億美元。分攤至相關營運成本及費用的股份基礎薪酬總額，在2026財年第三季度增加30.9%至2,110萬美元。

Operating income was $180.3 million, representing a 44.8% increase year over year. Non-GAAP income from operations for the quarter was $202.9 million, representing a 42.8% increase year over year. Net income attributable to New Oriental for the quarter was $126.8 million, representing a 45.3% increase year over year.

營業利益為1.803億美元，年增44.8%。本季度非GAAP營業利益為2.029億美元，年增42.8%。本季度歸屬於新東方的淨利為1.268億美元，年增45.3%。

Basic and diluted net income per ADS attributable to New Oriental were $0.80 and $0.79, respectively. Non-GAAP net income attributable to New Oriental for the quarter was $152.2 million, representing an increase of 34.3% year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were $0.97 and $0.95, respectively. Net cash outflow generated from operations for the third quarter of fiscal year 2026 was approximately $7.5 million. And capital expenditure for the quarter were $68.8 million.

本季度歸屬於新東方的每ADS基本及攤薄淨利分別為0.80美元與0.79美元。本季度歸屬於新東方的非GAAP淨利為1.522億美元，年增34.3%。本季度歸屬於新東方的每ADS非GAAP基本及攤薄淨利分別為0.97美元與0.95美元。2026財年第三季度營運活動產生的淨現金流出約為750萬美元。本季度資本支出為6,880萬美元。

Turning to the balance sheet. As of February 28, 2026, New Oriental had cash and cash equivalents of $1,783.4 million. In addition, the company had $1,491.7 million in term deposits and $1,953.2 million in short-term investments. New Oriental's deferred revenue, which represents cash collected upfront from customers and related revenue that will be recognized as the services or goods are delivered at the end of the third fiscal quarter of 2026 was $1,885.9 million, an increase of 7.8% as compared to $1,749.9 million year over year.

接著看資產負債表。截至2026年2月28日，新東方的現金及現金等價物為17.834億美元。此外，公司有14.917億美元的定期存款以及19.532億美元的短期投資。新東方的遞延收入（代表向客戶預先收取的現金，以及將於服務或商品交付時確認的相關收入）在2026財年第三季度末為18.859億美元，較去年同期的17.499億美元增加7.8%。

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

現在我把時間交回Stephen，請他說明我們的展望與指引。

Thank you, Sisi. The healthy results we achieved this quarter reinforced confidence in our operational resilience and growth trajectory. Looking ahead, we remain focused on balanced growth, advancing both revenue and profitability in parallel. We will expand capacity and talent strategically, ensuring the growth does not come at the expense of quality.

謝謝你，Sisi。我們本季度取得的穩健成果，進一步強化了我們對營運韌性與成長軌跡的信心。展望未來，我們仍將聚焦於均衡成長，同步推進營收與獲利能力。我們將策略性擴充產能與人才，確保成長不以犧牲品質為代價。

We plan to deepen our presence in markets with proven top and bottom-line performance while maintaining disciplined resource allocation. We will calibrate the pace and scale of new openings throughout the year, aligning expansion decisions with operational needs and financial results.

我們計畫在已證明具備營收與獲利表現的市場深化布局，同時維持嚴謹的資源配置紀律。我們將在全年調整新開點的節奏與規模，使擴張決策與營運需求及財務表現相一致。

Cost of discipline and sustainable profitability across all business lines continue to be foundational to our strategy. In the coming quarter, what I mean is in the coming Q4, we expect greater cost control to be realized as a result of restructuring and the consolidation of our overseas business, a certain level of fixed expense will be reduced enable us to pave the way for higher operational efficiency and a better margin profile next year. There will be certain one-off expenses in the coming quarter related to the structural adjustments. Even so, we remain confident in our fourth quarter profit margin.

成本紀律與各業務線的可持續獲利能力，仍是我們策略的基石。在下一季度，也就是即將到來的第四季度，我們預期因重組及海外業務整併而帶來更強的成本控管成效，部分固定費用將降低，使我們得以為明年更高的營運效率與更佳的利潤結構鋪路。下一季度將有一些與結構調整相關的一次性費用。即便如此，我們仍對第四季度的利潤率充滿信心。

Looking ahead to next fiscal year, we have strong confidence in our core education business and East Buy. We will continue to drive sustainable and healthy growth through product enhancements and quality improvements, while further optimizing operational costs and enhance the efficiency and profitability.

展望下一財年，我們對核心教育業務與東方甄選（East Buy）充滿信心。我們將持續透過產品強化與品質提升，推動可持續且健康的成長，同時進一步優化營運成本並提升效率與獲利能力。

Considering the positive momentum and cost management measures across our business lines, we expect the total net revenue for the group in the fourth quarter of fiscal year 2026 to be in the range of $1,429.6 million to $1,466.9 million, representing a year-over-year increase in the range of 15% to 18%.

考量各業務線的正向動能與成本管理措施，我們預期2026財年第四季度集團總淨營收將介於14.296億至14.669億美元之間，年增幅度約為15%至18%。

Driven by the encouraging growth across various business lines, New Oriental raised the full-year guidance of total net revenue in fiscal year 2026. June 1, 2025, to May 31, 2026, to be in the range of $5,561.4 million. to $5,598.7 million, representing year-over-year increase in the range of 13% to 14%. These expectations reflect our current outlook based on recent regulatory developments and the prevailing market conditions also risks remain subject to change.

受各業務線令人鼓舞的成長所帶動，新東方上調了2026財年全年總淨營收指引。2025年6月1日至2026年5月31日的總淨營收預計介於55.614億至55.987億美元之間，年增幅度約為13%至14%。上述預期反映我們基於近期監管進展與當前市場狀況的最新展望，但相關風險仍可能變動。

I'd also like to give you an update on our shareholder return plan for fiscal year 2026. In October 2025, we announced that pursuant to its previously adopted a three-year shareholder return plan, the Board of Directors has approved an ordinary dividend of $0.12 per common share or $1.2 per ADS to be distributed in two installments as part of the shareholders' return for the fiscal year 2026. As of today, the first installment has been fully paid to shareholders and ADS holders.

我也想向各位更新我們2026財年的股東回饋計畫。在2025年10月，我們宣布依據先前採納的三年期股東回饋計畫，董事會已核准普通股每股0.12美元或每ADS 1.2美元的普通股股利，將分兩期發放，作為2026財年股東回饋的一部分。截至今日，第一期已全數支付予股東及ADS持有人。

The second installment $0.06 per common share or $0.6 per ADS will be paid to holders of common shares and holders of ADS of record as of the close of business on May 15, 2026, Beijing, Hong Kong time and New York time, respectively, with the expected payment date to be on or around June 2, 2026 and June 5, 2026, for holders of common shares and holders of ADS, respectively.

第二期普通股每股0.06美元或每ADS 0.6美元，將支付給截至2026年5月15日（分別以北京/香港時間及紐約時間）營業結束時登記在冊的普通股持有人與ADS持有人；預計付款日期約為2026年6月2日（普通股持有人）及2026年6月5日（ADS持有人）。

Additionally, we announced that a share repurchase program under which New Oriental is authorized to repurchase up to $300 million of its ADS or common shares over the subsequent 12 months in open market. As of April 21, 2026, yesterday, we had repurchased a total of approximately 3.3 million ADSs for an aggregate consideration of approximately $184.3 million from the open market, under this share repurchase program.

此外，我們宣布一項股份回購計畫，授權新東方在隨後12個月內於公開市場回購最多3億美元的ADS或普通股。截至2026年4月21日（即昨日），在該回購計畫下，我們已於公開市場回購合計約330萬股ADS，總對價約為1.843億美元。

In closing, New Oriental remains firmly committed to sustainable growth, delivering exceptional value to our customers, and generating long-term returns to our shareholders. We continue to maintain close collaboration with the government authorities in China, ensuring full compliance with relevant policies and regulations and adapting our operations to evolving requirements.

最後，新東方仍堅定致力於可持續成長，為客戶提供卓越價值，並為股東創造長期回報。我們將持續與中國政府主管部門保持緊密合作，確保全面遵守相關政策與法規，並使我們的營運適應不斷演進的要求。

This is the end of our fiscal year 2026 Q3 summary. At this point, I would like to open the floor for questions. Operator, please open the call for these. Thank you.

以上為我們2026財年第三季度的摘要。接下來，我想開放提問。接線員，請開放電話會議進行提問。謝謝。

(Operator Instructions) Jenny Yan, UBS.

(接線員指示) 瑞銀，Jenny Yan。

(spoken in foreign language)

(以外語發言)

Congrats on the strong set of results this quarter. My question is about margin trends. So we know that OP margins expanded meaningfully by 2.3 percentage points this quarter, which is very impressive. So could management please help us break down the key drivers behind this margin expansion? And in addition, what is your view, your outlook for margin trends in next quarter and for the next fiscal year?

恭喜本季取得強勁的業績。我的問題關於利潤率趨勢。我們知道本季營業利潤率（OP margin）顯著擴張了2.3個百分點，表現非常亮眼。請管理層協助拆解本次利潤率擴張背後的主要驅動因素？另外，您對下季以及下一財年的利潤率趨勢有何看法與展望？

Yeah. Thank you, Jenny. I think that's a good question about margin. Let us start with the margin analysis this quarter. Even though we meet some margin drag from the overseas related business, but we still have good margin expansion by 230 basis points up.

好的。謝謝你，Jenny。我認為這是個關於利潤率的好問題。我們先從本季的利潤率分析開始。儘管海外相關業務對利潤率造成一些拖累，但我們仍實現了230個基點的利潤率擴張。

And I think the margin expansion was mainly due to the better utilization, operating leverage and the cost control and as well the more profit contribution from East Buy. As you know, we started to do the cost control since March 2025 last year. So in the last 11 months, I think we have seen a very good result and which helps to drive the margin up. And so our focus on operational efficiency and discipline, the resource management has been the key driver of the margin expansion.

我認為利潤率擴張主要來自更好的產能利用、營運槓桿、成本控制，以及東方甄選（East Buy）帶來更多的利潤貢獻。如各位所知，我們自2025年3月起開始進行成本控制。因此在過去11個月，我們看到非常好的成效，並推動利潤率上升。因此，我們對營運效率與紀律、資源管理的聚焦，是利潤率擴張的關鍵驅動因素。

Next quarter margin the Q4, I think we remain optimistic on margin expansion in Q4, even though we will -- there will be some -- like certain one-off expenses in the coming quarter in Q4 related to the structural adjustments, the consolidation between the overseas test prep and the consulting. This is one-off expenses.

至於下季，也就是第四季度（Q4）的利潤率，我們仍對Q4的利潤率擴張保持樂觀，儘管我們將——在即將到來的Q4會有一些——例如與結構性調整相關的特定一次性費用，涉及海外考試培訓與諮詢業務之間的整合。這些屬於一次性費用。

Even so, we still remain confident in the fourth quarter margin expansion for the whole group. So this is Q4 margin guidance. As for the margin outlook for the next year, the new fiscal year, I think we will focus on the profitability across all the business lines and drive to be achieved margin expansion I in the coming years.

即便如此，我們仍有信心整個集團在第四季度實現利潤率擴張。以上是我們對Q4利潤率的指引。至於明年，也就是新的財年，我們將聚焦於各業務線的獲利能力，並在未來幾年推動並實現利潤率擴張。

I think we are quite optimistic about the margin expansion for core educational business and the -- we expect to be East Buy will generate more profits in the coming new year. Jenny?

我們對核心教育業務的利潤率擴張相當樂觀，並且——我們預期東方甄選（East Buy）在即將到來的新一年將產生更多利潤。Jenny？

Alice Cai, Citi.

花旗，Alice Cai。

Stephen, congratulations on the strong result. And may I ask the question on capacity expansion plan for Q4 and also for FY27.

Stephen，恭喜取得強勁的業績。我想請問Q4以及FY27的產能擴張計畫。

Yeah. The expansion, I think as we guided the starting time of this fiscal year, we plan to open 10% to 15% new capacities. I think the net add of the new learning centers in the first three quarters was 8%. And -- so this is -- that means in the first three quarters, the net adds 8%. So I think the whole year is the net expansion is somewhere around 10% to like 13%, 14%.

好的。關於擴張，我想如我們在本財年開始時所指引的，我們計畫新增10%到15%的新產能。前三個季度新增學習中心的淨增幅為8%。——所以這是——也就是說前三個季度淨增8%。因此我認為全年淨擴張大約在10%到13%、14%左右。

As I said, we only allow the cities with the good performance of the top line, bottom line last year to open more the learning centers. And we care more about the better utilization and the margins of the –whole group so I think we still focus on the -- we put the new student enrollments into the existing learning centers. And so I think if you show the utilization rate, it will be up for the group. And next year, I think we will continue to open somewhere around 10% or even a little bit more learning centers in the new year.

如我所說，我們只允許去年營收端、獲利端表現良好的城市開設更多學習中心。我們更重視整個集團更好的利用率與利潤率，因此我認為我們仍聚焦於——把新增學生報名導入現有的學習中心。因此我認為若看利用率，集團層面會上升。而明年，我認為我們將持續在新一年開設約10%或甚至略多一些的學習中心。

But on the other hand, don't forget, we do have a lot of the online and the OMO products and offerings. We do some online businesses -- we even don't need the existing learning centers. So I believe in the coming new year, the utilization rate will continuously go up going forward. Alice?

但另一方面，別忘了我們也有大量線上以及OMO（線上線下融合）的產品與服務。我們有些線上業務——甚至不需要現有的學習中心。因此我相信在即將到來的新一年，利用率將持續提升。Alice？

Lucy Yu, Bank of America Securities.

美銀證券，Lucy Yu。

This is Lucy Yu from Bank of America. I have a question on margin as well. So you mentioned that there will be one-off restructuring expense in the coming quarter. Would you please like quantify how much would that be in either US dollar term or in the margin or as a percentage of revenue, but that's in the May quarter?

我是美國銀行的Lucy Yu。我也有一個關於利潤率的問題。您提到下個季度會有一次性的重組費用。請問能否量化其金額（以美元計）或對利潤率的影響、或占營收的百分比？這是指5月季度。

And also, you mentioned your new strategy that will possibly lower the selling and distribution expense or the marketing expense next year. So what's our target on sales and marketing expense for '27?

另外，您提到新的策略可能會在明年降低銷售與通路費用或行銷費用。那麼我們對27財年銷售與行銷費用的目標是什麼？

Yeah. I think the one-off, the expenses in the coming Q4 relate to the structural adjustments of the overseas related business. I think the negative impact on margin is roughly 50 bps to 100 bps. So roughly $10 million to $15 million is a one-off. But even we -- even so, but we still remain the confidence to get the margin expansion for the whole group in the coming Q4. What I mean is we include the -- even though we include the one-off expenses into the forecast, we still get margin expansion in Q4.

好的。我認為即將到來的Q4一次性費用，與海外相關業務的結構性調整有關。我認為對利潤率的負面影響約為50到100個基點。因此大約1,000萬到1,500萬美元屬於一次性費用。但即便——即便如此，我們仍有信心在即將到來的Q4實現整個集團的利潤率擴張。我的意思是，即使我們把一次性費用納入預測，我們在Q4仍可實現利潤率擴張。

And your question about marketing expenses plan next year, yeah, I think the next -- we are doing the cost control. And also, we put more focus on the products quality enhancements. So we don't need to spend crazy money on marketing going forward, like what we did in the last three quarters. And then in the coming year, we expect that the marketing expenses as the percentage of the revenue will be down. So it's another factor to help the margin. Lucy?

至於你問到明年的行銷費用規劃，是的，我們將持續進行成本控制。同時，我們會更聚焦於提升產品品質。因此未來我們不需要像過去三個季度那樣在行銷上花「瘋狂」的錢。而在來年，我們預期行銷費用占營收的比例會下降。因此這也是另一個有助於提升利潤率的因素。Lucy？

Yikun Zheng, Citic.

中信，Yikun Zheng。

Congratulations on the strong results. My question is about the momentum of K-12 business. And remember, last summer, our K-12 business has gone through some deceleration. So how do we think of the growth trend and competition for K-12 business in this summer?

恭喜取得強勁的業績。我的問題關於K-12業務的動能。大家記得去年夏天，我們的K-12業務曾出現一些放緩。那麼我們如何看待今年夏天K-12業務的成長趨勢與競爭情況？

Oh, the K-12 business. Yeah, I think we'll beat the guidance again of the K-12 business in Q3. I think we -- actually, we beat the guidance in like two to three quarters in a row. And I think in the Q4, we still -- we are very optimistic about the K-12 revenue growth. I think the reason is, this year, we changed the strategy. We put more focus and resource on the product quality enhancement, and so I think it drives the student retention rate up and drive the utilization rate up.

哦，K-12業務。是的，我認為我們在Q3的K-12業務再次超越了指引。我想我們——其實我們已經連續兩到三個季度超越指引。而我認為在Q4，我們仍——對K-12營收成長非常樂觀。我認為原因是，今年我們調整了策略。我們把更多重點與資源放在提升產品品質上，因此我認為這推動了學生留存率上升，也推動了利用率上升。

And so in the Q4, I think our K-12 business still got the revenue growth about, let's say, 15% to 20%, K-9 like the 20% plus top-line growth and high school business, let's say, 15% to 20%.

因此在第四季，我認為我們的 K-12 業務仍然取得了約 15% 到 20% 的營收成長；K-9 大約是 20% 以上的營收成長；高中業務大約是 15% 到 20%。

So I think going forward, even in the next year, we're -- next year after, I think we still get a very healthy growth of K-12 business. Because now I think our quality is better than that of last year and also the student retention rate is up. And so that's why we don't need to spend pretty money on marketing to recruit a new student enrollment. And so I think we're quite optimistic about the K-12 business, the growth going forward.

所以我認為往前看，即使在明年——以及再下一年，我認為我們的 K-12 業務仍會維持非常健康的成長。因為現在我認為我們的品質比去年更好，而且學生留存率也提升了。因此我們不需要在行銷上花很多錢去招募新的學生報名。所以我認為我們對 K-12 業務未來的成長相當樂觀。

Elsie Sheng, CLSA.

Elsie Sheng，里昂證券（CLSA）。

Stephen, congratulations on the strong results. My question is about overseas business. So I noticed that the revenue growth of the overseas test prep has been accelerating over the past two quarters. Could you give us more color on the reason behind? And is it because the demand is coming back? Or is it because we take more market share? And what's the outlook for the overseas growth in the fourth quarter and next year?

Stephen，恭喜你們交出亮眼的成績。我的問題是關於海外業務。我注意到海外考試備考業務的營收成長在過去兩個季度有所加速。能否請你多分享一些背後原因？是因為需求正在回溫？還是因為我們取得了更多市占？另外，第四季以及明年的海外成長展望如何？

Yeah. Due to the negative impact of the economic environment and the international situation. I think yes, our overseas business was negatively impacted by the outside environment. But I think the -- our team of the overseas have shown the resilience in almost everything -- and so we -- given the coming Q4, I think the overseas business will get like year over year will be flattish or low single digits ,what I mean is the revenue increase.

是的。由於經濟環境以及國際局勢的負面影響。我認為是的，我們的海外業務確實受到外部環境的負面衝擊。但我認為——我們的海外團隊在幾乎各方面都展現了韌性——因此，展望即將到來的第四季，我認為海外業務的年對年表現大致持平或低個位數成長；我指的是營收的增加。

And so thanks for the -- we have a great team to do the great job in almost all the cities. And next year, I do believe we can do even better. Because since last quarter, we started the consolidation of the overseas test prep and the overseas consulting.

因此也要感謝——我們有一支很棒的團隊，在幾乎所有城市都做得非常出色。而明年，我確實相信我們可以做得更好。因為從上個季度開始，我們已啟動海外考試備考與海外留學顧問業務的整合。

So going forward, I think we will provide a better one-stop service and product to students. And also, we will do some cost control to save some fixed cost expenses. And also in the coming new year, I do believe the overseas in this margin will be up.

所以往前看，我認為我們將為學生提供更好的「一站式」服務與產品。同時，我們也會做一些成本控管，以節省部分固定成本費用。另外在即將到來的新年度，我也相信海外業務的利潤率會提升。

DS Kim, JPMorgan.

DS Kim，摩根大通（JPMorgan）。

Stephen, congrats on the strong did. Actually, all my questions have been answered already. So let me just ask a couple of follow-ups.

Stephen，恭喜你們表現很強勁。其實我所有問題都已經被回答了。那我就再追問幾個後續問題。

First, you mentioned a $10 million, $15 million one-off expense in 4Q. Can I just double check, it would be purely contained in 4Q? Or can it be additional one-off spilling over into next year? I think it's just one-off, but just to provide some confidence and going forward to the market on our margin expansion next year, just to clarify.

第一，你提到第四季會有 1,000 萬到 1,500 萬美元的一次性費用。我想再確認一下，這會完全落在第四季嗎？還是可能還會有額外的一次性費用延續到明年？我理解應該是一次性，但想請你再釐清一下，讓市場對我們明年的利潤率擴張更有信心。

Second, you mentioned the expansion 10% to 13%, 14% expansion. Can I double check is that number of centers or the size of classroom, like area size expansion? And more importantly, what does this group level expansion means specifically for K-9, like class capacity, if you will, this and next year?

第二，你提到擴張 10% 到 13%、14% 的擴張。我想再確認一下，這個數字是指中心數量的擴張，還是教室面積（例如面積大小）的擴張？更重要的是，這個集團層面的擴張，對 K-9 具體意味著什麼——例如班級容量（capacity），今年與明年各是如何？

I think the one-off expenses, what I said is I think majority of the one-off expenses, it will be happening in Q4. So it's a one-off. But even we consider the one-off expense drag, but we still get the hope of margin expansion in Q4. And -- but it's better to the future because we spent some one-off expenses in Q4. But as a result, we reduced the fixed cost expenses in the coming year. So that's why I said we will drive the margin up of the overseas business in the coming year.

我所說的一次性費用，我認為其中大部分會發生在第四季。所以它是一次性的。但即使我們考慮一次性費用的拖累，我們仍然希望第四季的利潤率能擴張。而且——從長遠來看更好，因為我們在第四季承擔了一些一次性費用。但相對地，我們在接下來一年降低了固定成本費用。所以我才說，我們將在明年推動海外業務的利潤率提升。

And your second question is about the capacity. Yeah, what was -- yeah, what I'm saying is in square meter size. So this is a net add. And then most of the capacity we build up as in the K-12 business. And -- but don't forget the K12 business, the top-line growth will let's say -- it's not official guidance, but it's based on our current estimation, I think the next year top-line growth will be somewhere around 15% or 20%, let's say, close to 20% or even more. So we still have the leverage. If we open like 10% to 15% of the new capacity, we still have the leverage to drive the average utilization rate up going forward.

至於你的第二個問題是關於產能。是的，我所說的是以平方公尺面積來衡量。這是淨新增。而且我們新增的大部分產能是用在 K-12 業務上。另外——但別忘了 K-12 業務的營收成長，我們預期——這不是正式指引，但基於我們目前的估算，我認為明年的營收成長大概會在 15% 或 20% 左右，可能接近 20% 甚至更高。所以我們仍然有槓桿空間。如果我們新增約 10% 到 15% 的新產能，我們仍有槓桿在未來推動平均使用率提升。

So -- and I think the -- as for the cost and expansion discipline, I think the local team is going to support my job I believe they will do a better job in the coming year, even they have done a great job in this year. So I do believe they will do more or better job in the coming new year on cost control and control of the expansion plan.

所以——至於成本與擴張紀律，我認為地方團隊會支持我的工作；我相信他們明年會做得更好，儘管他們今年已經做得很出色。因此我確實相信，在即將到來的新年度，他們會在成本控管以及擴張計畫的控制上做得更多或更好。

Yeah. I think I absolutely agree with you that like it's kind of -- we need to do that hard to make the hard decision to optimize our cost structure into next year. But just to double check, I know it could be a little sensitive, but broadly speaking, the one-off, when we say this kind of optimization of our workforce and the staff that's one-off, right? So it's not like we are ongoing spending money on restructuring. It's just really that we had to make our decision, and there was some related cost to it in 4Q. Is that fair understanding?

是的。我完全同意你的看法：我們確實需要做出艱難的決定，將成本結構優化到明年。但我想再確認一下，我知道這可能有點敏感，但大致而言，這個一次性費用——當我們說這類人力與員工的優化——是一次性的，對吧？所以不是說我們會持續花錢做重組。而是我們必須做出決策，並在第四季產生一些相關成本。這樣理解是否正確？

Yes. Yes, correct.

是的。是的，沒錯。

[Jane Yuan], CICC.

[Jane Yuan]，中金公司（CICC）。

Stephen and Sisi, congratulations on this quarter's strong performance. I noticed that on the new allocation business side, revenue top line growth remained strong, but I see a slight moderation in the number of paid user growth for the learning device. So could you help us understand what's behind the shift?

Stephen 和 Sisi，恭喜你們本季表現強勁。我注意到在新配置業務方面，營收（top line）成長仍然強勁，但我看到學習設備的付費用戶數成長略有放緩。能否請你們協助我們理解這個變化背後的原因？

Yeah, I think this -- because of the disclosure, the difference -- so I think the -- what I'm saying is we want students -- the one paid users pay more money and enroll more subjects at the same time. So it's better than before.

是的，我認為這——是因為揭露口徑的差異——所以我認為——我們希望學生——單一付費用戶能付更多錢，並且同時報名更多科目。所以這比以前更好。

And secondly, we do have some -- like the seasonal or the timing difference issue. And so I suggest that you will look at the enrollment and the deferred revenue and the GAAP revenue in more long term. So that's why we gave the whole year guidance since this year. And so I think the trend is worth of big K-12 business. And in Q4, I believe the revenue growth will be very healthy, and we'll continue to grow the business even in the Q4 and the new year.

第二，我們確實也有一些——例如季節性或時間點差異的問題。因此我建議你從更長期的角度來看報名情況、遞延收入以及 GAAP 營收。這也是為什麼我們從今年開始提供全年指引。所以我認為這個趨勢對於我們龐大的 K-12 業務是有利的。而在第四季，我相信營收成長會非常健康，我們也會在第四季以及新年度持續推動業務成長。

Charlotte Wei, HSBC.

Charlotte Wei，匯豐。

Stephen and Sisi, congrats on a really strong quarter of results. So my question is regarding AI impact. On one hand, we can see AI clearly improve like operational efficiency and support margin expansion. On the other hand, so how do we expect like AI can change the core tutor formats, the EDU is currently offering. So like over the next 12 to 24 months, what kind of opportunities and threats do you see from the AI?

Stephen 和 Sisi，恭喜本季交出非常亮眼的成績。我的問題是關於 AI 的影響。一方面，我們看到 AI 明顯提升營運效率並支持利潤率擴張。另一方面，我們預期 AI 會如何改變 EDU 目前提供的核心家教/輔導形式？未來 12 到 24 個月，您認為 AI 帶來哪些機會與威脅？

I will ask Sisi to answer your question, Sisi is AI expert.

我請 Sisi 來回答你的問題，Sisi 是 AI 專家。

Okay. Yes. So actually, we are excited about the opportunity to implement AI technology into our business, it's a big opportunity for companies like us with capital advantages and also we can hire top people and also have the best educational experience in this industry. So we have the best position to implement AI technology into our area.

好的。是的。其實，我們對把 AI 技術導入業務感到非常興奮；對於像我們這樣具備資本優勢的公司而言，這是一個很大的機會。我們也能延攬頂尖人才，並且在這個產業擁有最好的教育經驗。因此，我們在把 AI 技術落地到我們的領域上，具備最佳的位置。

And three things we're doing, and we are making progress and also want to share with each of you. Firstly, we are implementing AI technology into all key business lines. So for not only those online products or hardware products like our intelligent learning device, we have all the AI functions in it, embedded into it and keep monetizing it and enhancing students' learning experience and improve the learning efficiency of our customers as well.

我們正在做三件事，也已取得進展，想和各位分享。第一，我們正把 AI 技術導入所有關鍵業務線。不僅是線上產品或硬體產品（例如我們的智慧學習裝置），我們都把各種 AI 功能內嵌其中，並持續商業化，同時提升學生的學習體驗，也提高客戶的學習效率。

And even in offline classes for young people, for young students and all ages, actually, they can implement some AI functions in the class, and we are collecting the data and combining it with our teaching and learning experience to have all the data to process more and more value to help us to even explore even more product opportunities in the future. So existing products are enhancing the quality and also enhancing the comparative advantage using the AI, implementing the AI technology.

甚至在面向青少年、年輕學生以及各年齡層的線下課堂中，也可以在課堂中導入一些 AI 功能；我們正在收集數據，並把它與我們的教學與學習經驗結合，讓這些數據被處理並產生越來越多的價值，幫助我們未來探索更多產品機會。因此，既有產品透過 AI 的導入，一方面提升品質，另一方面也強化比較優勢。

And second thing we are doing is to help us this year, especially this year and coming one to two years, our key theme is to enhance the overall efficiency, bring the healthy growth plus the profitability enhancement. The AI can put a lot of -- can give us a lot of help for each progress of our daily work for all the teachers, salespeople and teacher assistants, even functional department staff, the whole working process can implement AI technology to enhance the efficiency.

第二件事是，今年尤其是今年以及接下來一到兩年，我們的核心主題是提升整體效率，實現健康成長並提升獲利能力。AI 可以在我們日常工作的每個環節提供大量幫助：對所有老師、銷售人員、助教，甚至各職能部門的員工而言，整個工作流程都可以導入 AI 技術以提升效率。

So we have already seen some business, labor costs got reduced, or labor hours got reduced. And also we are doing some restructuring for certain business, for example, the overseas-related business and also some other business as well.

我們已經看到部分業務的人力成本下降，或工時減少。同時，我們也在對某些業務進行重組，例如海外相關業務，以及其他一些業務。

So we want to use -- implement more and more AI technology into the working process to benefit from this efficiency improvement. So this is the second thing. It's an ongoing work. So we will continue closely following the trend of AI technologies evolvement and keeping -- using it into the whole working process. Teachers are saving more and more time so that our teachers utilization can also improve together with the trend.

因此，我們希望在工作流程中導入越來越多的 AI 技術，以受益於效率提升。這是第二件事。這是一項持續進行的工作。我們會持續密切追蹤 AI 技術的演進趨勢，並將其運用到整個工作流程中。老師能節省越來越多時間，因此老師的利用率也能隨著這個趨勢一同提升。

And third biggest thing, actually, we are also exciting and waiting for the results is that we have several piloting team. They're working on some new products, implementing purely AI technology. So we can get rid of or depends very, very little on human source, but we can combine the AI technology with our teaching and learning experience and certain content so that we can come up with some innovative, actually educational products, which is different from currently what we are doing for offline. But using the AI technology to bring students the learning experience similar with offline face-to-face teaching but using AI technology.

第三件也是最大的一件事，其實我們也非常期待並等待成果：我們有幾個試點團隊。他們正在開發一些全新產品，純粹導入 AI 技術。這樣我們可以擺脫或極少依賴人力資源，但同時把 AI 技術與我們的教學與學習經驗以及特定內容結合，從而推出一些創新型教育產品，這些產品將不同於我們目前在線下所做的事情。而是用 AI 技術，為學生帶來類似線下面對面教學的學習體驗。

So we're exploring some opportunities here now. And hopefully, in coming several months, maybe we can see some new products coming. Yeah. So -- actually, the company are devoting a lot of new resources into the AI area. It's an ongoing process. But definitely, together with our strategy, we'll put more -- implement more of the AI technology keep catching up the trend and benefit more going forward.

所以我們正在探索這方面的一些機會。希望在接下來幾個月，也許能看到一些新產品推出。是的。所以——其實公司正在向 AI 領域投入大量新增資源。這是一個持續的過程。但可以肯定的是，配合我們的策略，我們會投入更多——導入更多 AI 技術，持續跟上趨勢，並在未來獲得更多收益。

Timothy Zhao, Goldman Sachs.

Timothy Zhao，高盛。

Great. Congrats on the solid results. My question is regarding your longer-term margin profile as you have discussed a lot about the new initiatives, expanding the full life cycle of the customers and AI can help improve our operating efficiency and including the overseas test prep and cannot integration. I'm just wondering if you can share any updates on your view on the longer-term operating margin of EDU business and use educational business.

很好。恭喜取得穩健的業績。我的問題是關於你們較長期的利潤率走勢。你們談了很多新舉措，包括延伸客戶全生命週期、AI 有助提升營運效率，以及包含海外考試培訓與整合等。我想請問，能否分享一下你們對 EDU 業務與教育相關業務長期營業利潤率的看法是否有更新？

Thank you, Tim. The margin question. As I said, the coming new year, I think we're quite optimistic about the margin expansion because of the higher utilization rates and even the better leverage -- operation leverage and also the -- because of the cost control, we reduced the fixed cost and expenses. And so in the next year, the margin will be up.

謝謝你，Tim。關於利潤率的問題。如我所說，接下來的新年度，我認為我們對利潤率擴張相當樂觀，原因是更高的利用率，以及更好的槓桿——營運槓桿；同時也因為成本控制，我們降低了固定成本與費用。因此在明年，利潤率會上升。

And I do believe we will get the margin expansion in the next three years. So we do hope we can get better margin step by step in next three or even long term. So -- and I think next quarter, I will give the guidance of the -- detailed guidance of the margin next quarter, for the next year, but we're quite optimistic about the long-term margin expansion going forward.

我也相信未來三年我們會實現利潤率擴張。所以我們希望在未來三年，甚至更長期，利潤率能一步一步改善。另外，我想在下個季度，我會就明年提供更詳細的利潤率指引；但我們對長期利潤率擴張的前景相當樂觀。

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

我們現在接近電話會議尾聲。接下來我把電話交給新東方執行總裁兼 CFO Stephen Yang，請他做結語。

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

再次感謝各位今天參與。如有任何進一步問題，請隨時聯繫我或我們投資者關係團隊的任何代表。謝謝。

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

今天的電話會議到此結束。感謝各位參與。您現在可以掛線。