New Oriental Education's Stellar Performance: Q2 Revenue and Profits Show Significant Growth
Shares of New Oriental Education & Technology Group (NYSE: EDU) rose approximately 3.4% on Wednesday after the company reported outstanding second-quarter results for fiscal year 2026, surpassing market expectations and driving the stock higher.
Revenue and Profit Exceed Expectations
In the second quarter of fiscal year 2026, New Oriental reported an adjusted EPS of $0.45 per ADS, which is about 32% higher than the consensus forecast of $0.34. Revenue for the same period grew by approximately 14.7% year on year, reaching $1.19 billion, slightly above the market expectation of $1.16 billion, indicating a strong growth momentum.
Significant Improvement in Operating Efficiency
The company's report shows that the adjusted operating margin expanded from 2.8% in the same period last year to 7.5%, with operating income soaring by 244.4% year on year to $66.3 million, indicating a marked improvement in operational efficiency alongside a healthier profit structure.
Outlook and Guidance Adjustment
In light of its strong performance, New Oriental has raised its full-year revenue forecast, expecting total fiscal 2026 revenue to be between $5.29 billion and $5.48 billion, above analysts' previous consensus. For the next quarter, New Oriental anticipates revenue between $1.31 billion and $1.35 billion.
Business Highlights and Growth Drivers
Domestic test preparation business grew by approximately 12.8% year on year, while the new education business recorded nearly 21.6% growth. Enrollment in non-academic tutoring courses also increased significantly to around 1.058 million, reflecting the robust growth trajectory of the company's core education business.
Continued Shareholder Returns
As part of its shareholder return plan, New Oriental is executing a share repurchase program worth about $300 million, having repurchased approximately 1.6 million American Depositary Shares (ADS) with a total value of about $86.3 million, contributing to enhanced capital efficiency and shareholder value.
