New Oriental Beats Forecasts, Raises Guidance on Strong Pivot

BEIJING – April 22, 2026 – New Oriental Education & Technology Group Inc. (NYSE: EDU) today announced powerful third-quarter financial results that surpassed Wall Street expectations, signaling that its strategic transformation continues to yield impressive returns. The Chinese education giant reported a nearly 20% surge in revenue and a 45% jump in net income, prompting the company to raise its full-year guidance in a show of confidence.

The results paint a picture of a company successfully navigating the post-regulatory landscape in China, having diversified its business from traditional academic tutoring into a multi-faceted enterprise spanning non-academic learning, advanced educational technology, and a thriving e-commerce arm.

A Diversified Engine Fuels Record Growth

For the third fiscal quarter ended February 28, 2026, New Oriental posted total net revenues of $1.42 billion, a 19.8% increase year-over-year. Net income attributable to the company soared by 45.3% to $126.8 million. This robust performance was driven primarily by the company's successful pivot into new business areas.

The "new educational business initiatives" were the star performers, with revenues growing by 23.3% year-over-year. A key component of this success is the expansion of non-academic tutoring courses, which were rolled out in approximately 60 cities and attracted an impressive 458,000 student enrollments during the quarter. These offerings, which move beyond traditional exam prep, align with China's broader push for quality-focused, holistic education.

Even as it innovates, New Oriental has maintained strength in its traditional domains. The domestic test preparation business for adults and university students grew by a healthy 14.5%, while its foundational overseas test preparation services saw a 7.4% increase.

"We are pleased to share of continued acceleration in our revenue growth," commented Michael Yu, New Oriental's Executive Chairman. "We are sharpening our focus on our core education business, prioritizing enhancements of teaching standards and product quality. Simultaneously, we will optimize our cost structure and operational efficiency to drive high-quality, efficient, and sustainable growth."

The company's intelligent learning systems and devices also showed significant traction, with approximately 367,000 active paid users across 60 cities, demonstrating a growing market appetite for tech-enabled learning solutions.

Beyond the Classroom: East Buy and AI's Deepening Role

A significant part of New Oriental's comeback story is its bold foray into sectors beyond education. The company's livestreaming e-commerce subsidiary, East Buy, continues to be a major pillar of its diversification strategy. According to CEO Chenggang Zhou, East Buy is focused on offering premium products to Chinese families through a sophisticated multi-platform approach.

"We launched multiple live-streaming accounts on Douyin, creating a comprehensive multi-account matrix including East Buy Home, East Buy Fruit & Vegetables, East Buy Nutrition & Health, followed by other vertical channels," Zhou stated. This strategy allows for targeted marketing and a richer customer experience. The company is also doubling down on private label development and exploring offline expansion to build a more resilient and integrated retail ecosystem.

Parallel to its e-commerce success, New Oriental is deepening its commitment to technology, particularly artificial intelligence. Zhou noted the company's progress in "embedding AI into existing educational offerings, refining AI‑powered products, and deploying AI to improve operational efficiency and support for our teaching staff." This tech-forward approach is not just a buzzword; it's a core component of the company's strategy to enhance its Online-Merge-Offline (OMO) teaching system and maintain a competitive edge in a sector increasingly defined by technological prowess. This focus is shared by competitors like TAL Education Group, which has also heavily invested in its own AI-powered learning tools, indicating a broader industry trend toward intelligent education.

Fortifying Financial Health and Shareholder Confidence

The strong top-line growth was matched by significant improvements in profitability, a key indicator of the company's operational discipline. Non-GAAP operating income rose 42.8% to $202.9 million. More impressively, the non-GAAP operating margin expanded by 230 basis points to 14.3% compared to the same period last year.

Executive President and CFO Stephen Zhihui Yang attributed this to "enhanced operational efficiency and improved utilization within our educational business." He added, "Targeted structural optimizations have enabled fixed cost reduction and driven greater operational efficiency, steadily elevating our operating profit margins and strengthening our foundation for sustainable, profitable growth."

This strong financial footing has allowed New Oriental to reward its shareholders. The company confirmed the upcoming payment of the second installment of its fiscal 2026 dividend, amounting to $0.60 per ADS, scheduled for early June. Furthermore, its share repurchase program is well underway. As of April 21, 2026, the company had bought back approximately 3.3 million ADSs for roughly $184.3 million, representing a substantial portion of the authorized $300 million program. These actions underscore management's confidence in the company's long-term value and its commitment to delivering shareholder returns.

A Confident Outlook in a Rebounding Market

Buoyed by the strong quarterly performance, New Oriental raised its financial outlook for the remainder of the fiscal year. The company now projects full-year total net revenues to be in the range of $5.56 billion to $5.60 billion, representing a year-over-year increase of 13% to 14%. For the upcoming fourth quarter, it anticipates revenues between $1.43 billion and $1.47 billion, an increase of 15% to 18% over the prior year.

This optimistic forecast reflects the success of its diversified strategy and its ability to capture growth in a transformed market. While the Chinese education sector remains competitive, with rivals also reporting strong rebounds, New Oriental's blend of educational services, technological innovation, and e-commerce diversification appears to be a winning formula. The raised guidance suggests that the company's leadership believes this momentum is not only sustainable but is set to continue through the end of the fiscal year.