New Oriental Education & Technology Group (NYSE:EDU) reported fiscal 2027 first-quarter revenue growth that exceeded the upper end of its prior guidance range, supported by its core education operations, East Buy e-commerce business and newer initiatives.
Total net revenue increased 23.1% year over year to $1.87 billion, while non-GAAP operating income rose 21.2% to $406.8 million. Operating income increased 20.5% to $374.7 million, and net income attributable to New Oriental rose 13.5% to $273.2 million. Non-GAAP net income increased 16.5% to $300.9 million.
Basic and diluted earnings per ADS were $1.76 and $1.74, respectively. On a non-GAAP basis, basic and diluted earnings per ADS were $1.94 and $1.92, respectively.
Education and New Businesses
Executive President and Chief Financial Officer Stephen Yang said both the core education business and East Buy expanded their operating margins year over year, citing improved operational efficiency and higher utilization of learning centers. However, he said East Buy’s rapid revenue growth increased its weighting within the company’s consolidated results, affecting the overall group margin because of the changing business mix.
“All of our business lines continue to maintain healthy margins,” Yang said, adding that investors should evaluate the individual businesses separately for a clearer view of their underlying performance.
- Overseas test preparation revenue increased about 8% year over year.
- Overseas study consulting revenue increased about 7%.
- Revenue from adult and university student programs rose 22%.
- New educational business initiatives delivered 25% revenue growth year over year.
The company’s non-academic tutoring business has expanded to about 60 cities, with its 10 largest cities contributing roughly 60% of the business. Its intelligent learning system and devices business is also available in around 60 cities, with the top 10 cities accounting for about half of that business.
Yang said the company invested $28.2 million during the quarter to maintain and improve its online-merge-offline, or OMO, teaching platform. New Oriental also launched the first phase of its proprietary AI-powered personalized learning platform, which generated what management described as meaningful sales during its first 25 days after launch.
In response to an analyst question on enrollment trends, Director of Investor Relations Sisi Zhao said a year-over-year decline in non-academic tutoring enrollment reflected timing differences. Enrollment growth was stronger in the prior quarter because students registered earlier for summer and autumn courses, while revenue is recognized on an accrual basis.
East Buy and Consumer Initiatives
East Buy continued to expand its private-label and livestreaming operations. Yang said the private-label lineup now includes more than 1,000 stock-keeping units across food, nutrition and health, apparel, skincare and other categories. East Buy has also expanded its Douyin channel matrix to more than 30 channels.
The company currently operates four offline East Buy experience stores and is advancing a campus-store rollout. It has also established front warehouses and is testing one-hour delivery in Beijing and Shanghai.
Yang said East Buy’s non-GAAP operating margin and non-GAAP net margin expanded year over year in the first quarter. He added that the business’s revenue growth is expected to accelerate in the fiscal second quarter compared with the first quarter.
New Oriental is also developing New Oriental Home, a family-focused application that combines education services, East Buy offerings and cultural tourism products. The program had more than 1.678 million registered families by the end of the quarter and had launched in 69 cities, including Chongqing, Hangzhou, Guangzhou and Xi’an.
Zhao said more than half of registered users had proactively redeemed points across 10 learning and family-oriented offerings. The program’s cumulative activity participation rate exceeded 90%, while campaign activation during the quarter reached 33%. Management said the platform could help lower customer-acquisition costs and improve cross-selling across business lines.
Costs, Cash and Outlook
Operating costs and expenses increased 23.7% year over year to $1.50 billion. Cost of revenue rose 28.1% to $817.0 million, selling and marketing expenses increased 30.7% to $262.2 million, and general and administrative expenses rose 12.6% to $420.7 million. Stock-based compensation expense increased 31.3% to $30.6 million.
Net cash flow from operations was approximately $195.4 million, while capital expenditures totaled $65.8 million. As of Aug. 31, 2026, the company held $1.75 billion in cash and cash equivalents, $1.44 billion in term deposits and $2.42 billion in short-term investments. Deferred revenue rose 11.2% year over year to $2.12 billion.
The company reiterated its fiscal 2027 revenue guidance of $6.45 billion to $6.68 billion, representing year-over-year growth of 14% to 18%.
Yang said New Oriental expects learning-center expansion of 10% to 15% for the full year, primarily in existing cities. He said expansion for the K-9 business is expected to be roughly 15%, while the company focuses on utilization, student retention and cost control to support further margin improvement.
Shareholder Returns
New Oriental said it had fully used the $300 million authorized under its fiscal 2026 share-repurchase program as of Oct. 27, 2026, repurchasing approximately 56.2 million common shares, including shares represented by ADSs.
The board also approved a fiscal 2027 ordinary cash dividend of $0.20 per common share, or $2.00 per ADS, to be distributed in two installments. The aggregate dividend is expected to total about $300 million. In addition, the company has authorized a new share-repurchase program of up to $200 million over the 12 months following board approval. No repurchases had been made under that program as of Oct. 27, 2026.
About New Oriental Education & Technology Group (NYSE:EDU)
New Oriental Education & Technology Group Inc (NYSE: EDU) is a China-based education services provider founded in 1993 by Michael Minhong Yu. The company operates schools, learning centers and online platforms that serve students, families and adult learners across China.
Its offerings have historically included test preparation for examinations such as the TOEFL, IELTS and other standardized tests; overseas study consulting; language training; educational services for primary and secondary students; adult and vocational education; and educational technology.
