New Oriental Education & Technology (NYSE: EDU; 09901.HK) reported unaudited financial results for the first quarter of fiscal year 2026 (ending August 31, 2025), with revenue reaching $1.523 billion, up 6.1% year-over-year. However, net profit attributable to shareholders declined 1.9% to $240.7 million.

**Q1 FY2026 Performance Highlights** - **Core Education Business**: - Overseas test preparation revenue grew 1% YoY. - Overseas consulting revenue rose 2% YoY. - Adult and college student business revenue increased 14.4% YoY. - **New Education Initiatives** (including non-academic tutoring, smart learning systems, and education technology) saw revenue growth of 15.3% YoY. - Non-academic tutoring expanded to 60 cities, attracting 530,000 students, with top 10 cities contributing over 60% of revenue. - Smart learning systems reached 452,000 active paid users, with top 10 cities accounting for 50%+ revenue. - **Cultural Tourism**: Operated in 55 cities, targeting K12 and college students, while expanding offerings for seniors in 30 provinces and internationally.

**AI Integration & Expansion** CEO Steven Zhou highlighted successful AI-driven learning solutions, emphasizing enhanced student experiences and operational efficiency. The company plans further AI integration across services.

**Q2 FY2026 Outlook** CFO Louis Yang projected: - **Revenue guidance**: $1.132–$1.163 billion (9–12% YoY growth). - **K12 Acceleration**: - K9 new business expected to grow ~20% YoY, with high school business returning to double-digit growth. - Middle school segment outpacing elementary due to past investments and product improvements. - **Overseas Challenges**: Conservative guidance of 4–5% decline in test prep/consulting, though actual performance may exceed expectations.

**Profitability Focus** Non-GAAP operating margin expanded to 22% (+100 bps YoY), driven by cost controls and contributions from subsidiary East Buy. Yang expressed optimism for further margin expansion in Q2 and FY2026.

**Financial Metrics** - Operating cash flow: $192.3 million; capex: $55.4 million. - Cash reserves: $1.282 billion, with $1.570 billion in term deposits and $2.178 billion in short-term investments. - Deferred revenue rose 10% YoY to $1.907 billion.

**Full-Year Forecast** Reaffirmed FY2026 revenue guidance of $5.145–$5.390 billion (5–10% growth), with K9 business expected to exceed 20% annual growth.

Yang concluded: "From Q2 onward, accelerating revenue growth will sustain throughout the year, supported by quality improvements and operational discipline."