New Oriental Education & Technology Group, Inc.

Good evening, and thank you for standing by for New Oriental's FY 2023 Third Quarter Results Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be question-and-answer sessions. Today's conference is being recorded. If you have any objections, you may disconnect at this time. And I'd like to turn the meeting over to your host for today's conference, Ms. Cici Zhao. Thank you. Please go ahead.

Hello, everyone, and welcome to New Oriental's third fiscal quarter 2023 earnings conference call. Our financial results for the period were released earlier today and are available on the company's website as well as on NewsWare services. Today, Stephen Yang, Executive President and Chief Financial Officer, and I will share New Oriental's latest earnings results and business updates in detail with you. After that, Stephen and I will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the view expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on New Oriental's investor relations website at investor.neworiental.org. I will now first turn the call over to Mr. Young. Stephen, please go ahead.

Thank you, Cici. Hello, everyone, and thank you for joining us on the call. It's our great pleasure to announce that upon the completion of the restructuring process and the introduction of our new businesses, we have managed to deliver a set of remarkable financial results this quarter, with both top line and bottom line beating the expectations. The result is also boosted by the macro trends of economy recovery as the pandemic subsides. Business activities are resuming and people regain their confidence in consumption. While we observe the demand for our products and services is gradually increasing. We have also achieved a gap operating margin and non-gap operating margin of 8.8% and 11.7% respectively for this quarter. our key remaining business have continued to demonstrate solid recovery. In particular, our overseas test prep and overseas study consulting business have performed exceptionally and recorded continuous year-over-year revenue increments, thanks to the strong post-COVID recovery across our restructured business model, streamlined cost structure, coupled with emerging new business have not only helped us yield better than expected margins in this physical quarter, but also effectively diversify our business and enable us to offset certain historical seasonality. As we head into the fourth quarter, our solid profitability, strong performing remaining business lines, and emerging new business initiatives in this quarter reaffirm our belief in sustaining a healthy growth of our market share. and pursuing innovative endeavors as we restlessly serve the encouraging environment of recovery. Now, I'd like to spend some time to talk about the quarter's performance across our main business lines and new initiatives to you in detail. Our key remaining business got a promising trend, and the new initiative has shown positive momentum. Breaking it down, The overseas test drive business recorded the revenue increase of 13% in dollar terms, or 23% in RMB terms EOB year for this quarter. The overseas test drive business recorded the revenue increase of about 5% in dollar terms, or 13% in RMB terms EOB year for this quarter. The adults and university students business recorded the revenue decrease of 3% in dollar terms, or 5% increase in RMB terms year-over-year for this quarter. As mentioned in the previous quarters, we have also launched several new initiatives which mostly revolve around facilitating students or around development. I'm glad to share with you that these new initiatives have continued to exceed our expectations by sustaining a positive momentum and generating meaningful profits to the group. First, the academic tutoring courses which we have offered in .