New Oriental's Financial Growth Revealed in Latest Quarterly Results for 2025
New Oriental Education & Technology Group Inc., a prominent private educational service provider in China, recently unveiled its financial results for the fourth fiscal quarter and the end of the fiscal year, concluding on May 31, 2025. The company reported a 9.4% increase in net revenues for this quarter, amounting to USD 1,243.2 million compared to the previous year. Excluding revenues from specific sectors such as East Buy private label products and our livestreaming business, the revenue growth rate accelerated to 18.7%, indicating strong performance in core educational initiatives and other significant offerings.
However, it wasn't all plain sailing for New Oriental's financial performance. The company experienced an operating loss of USD 8.7 million, a stark contrast to an operating income of USD 10.5 million from the same quarter last year. When adjusted for revenues from East Buy and livestreaming, the loss deepened to USD 15.9 million compared to prior profits of USD 7.5 million. Moreover, net income—an essential indicator of profitability—suffered a 73.7% drop to USD 7.1 million. These adjustments led to a notable decline in net income per American Depository Share (ADS), falling by approximately 72.6% year-over-year.
Despite facing challenges, the fiscal year showed overall growth with total net revenues hitting USD 4.9 billion, a 13.6% increase from the previous fiscal year. Operating income surged by 22.2% to USD 428.3 million, showcasing the underlying strength of New Oriental’s core educational business, leading to an operating margin increment to 8.7%—up from 8.1%.
As Michael Yu, Executive Chairman of New Oriental, stated, the year ended on a high note, particularly with a noticeable growth in overseas test preparation and study consulting services, which saw increases of about 14.6% and 8.2% respectively. The domestic test preparation segment that focuses on adults and university students also blossomed, growing approximately 17%. Additionally, the company launched educational initiatives that experienced revenue growth of 32.5% year-over-year, enrolling approximately 918,000 students across 60 cities in their non-academic tutoring courses.
New Oriental has continued to pivot towards integrating technology within education. In this effort, the organization is leveraging artificial intelligence (AI) to enhance product capabilities and overall user experience. Their recent launch of new AI-powered learning devices and systems has added a contemporary touch to their traditional educational services, addressing the evolving educational landscape in China.
The financial outlook for upcoming quarters remains cautiously optimistic. The company expects total net revenues for the upcoming fiscal quarter to fall between USD 1.464 billion to USD 1.5072 billion, equating to a year-over-year increase of about 2% to 5%. This forecast reflects strategic priorities for long-term growth, suggesting sustained revenue improvement as New Oriental navigates the private education market’s complexities.
In a move aimed at rewarding shareholders, New Oriental also announced a new three-year shareholder return plan, which will allocate at least 50% of net income to dividends and/or share repurchases. This initiative, approved by the Board on July 29, 2025, showcases a commitment to creating shareholder value as the company progresses into the next fiscal year.
In conclusion, while New Oriental faces challenges in terms of profitability in the short term, their broader strategies emphasizing growth and innovation appear to set a robust foundation for future success. By focusing on improving product offerings and leveraging technology, New Oriental is well-positioned to adapt to market changes and respond effectively to the educational needs of its customers.
However, it wasn't all plain sailing for New Oriental's financial performance. The company experienced an operating loss of USD 8.7 million, a stark contrast to an operating income of USD 10.5 million from the same quarter last year. When adjusted for revenues from East Buy and livestreaming, the loss deepened to USD 15.9 million compared to prior profits of USD 7.5 million. Moreover, net income—an essential indicator of profitability—suffered a 73.7% drop to USD 7.1 million. These adjustments led to a notable decline in net income per American Depository Share (ADS), falling by approximately 72.6% year-over-year.
Despite facing challenges, the fiscal year showed overall growth with total net revenues hitting USD 4.9 billion, a 13.6% increase from the previous fiscal year. Operating income surged by 22.2% to USD 428.3 million, showcasing the underlying strength of New Oriental’s core educational business, leading to an operating margin increment to 8.7%—up from 8.1%.
As Michael Yu, Executive Chairman of New Oriental, stated, the year ended on a high note, particularly with a noticeable growth in overseas test preparation and study consulting services, which saw increases of about 14.6% and 8.2% respectively. The domestic test preparation segment that focuses on adults and university students also blossomed, growing approximately 17%. Additionally, the company launched educational initiatives that experienced revenue growth of 32.5% year-over-year, enrolling approximately 918,000 students across 60 cities in their non-academic tutoring courses.
New Oriental has continued to pivot towards integrating technology within education. In this effort, the organization is leveraging artificial intelligence (AI) to enhance product capabilities and overall user experience. Their recent launch of new AI-powered learning devices and systems has added a contemporary touch to their traditional educational services, addressing the evolving educational landscape in China.
The financial outlook for upcoming quarters remains cautiously optimistic. The company expects total net revenues for the upcoming fiscal quarter to fall between USD 1.464 billion to USD 1.5072 billion, equating to a year-over-year increase of about 2% to 5%. This forecast reflects strategic priorities for long-term growth, suggesting sustained revenue improvement as New Oriental navigates the private education market’s complexities.
In a move aimed at rewarding shareholders, New Oriental also announced a new three-year shareholder return plan, which will allocate at least 50% of net income to dividends and/or share repurchases. This initiative, approved by the Board on July 29, 2025, showcases a commitment to creating shareholder value as the company progresses into the next fiscal year.
In conclusion, while New Oriental faces challenges in terms of profitability in the short term, their broader strategies emphasizing growth and innovation appear to set a robust foundation for future success. By focusing on improving product offerings and leveraging technology, New Oriental is well-positioned to adapt to market changes and respond effectively to the educational needs of its customers.
Topics Consumer Products & Retail）
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