New Oriental Education & Technology Group, Inc.

Good evening, and thank you for standing by for New Oriental's fiscal year 2024 first quarter results earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host today, Ms. Sissy Zell. Please go ahead.

Thank you. Hello, everyone, and welcome to New Oriental's first fiscal quarter 2024 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 Securities Litigation Reform Act of 1995, forward-looking statements involving 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 findings with the SEC. New Rental 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 Rental's investor relations website at investor.newrental.org. I will now first turn the call over to Mr. Yang. Stephen, please go ahead.

Thank you, Cici. Hello, everyone, and thank you for joining us on the call. It's a great pleasure to announce the new rental has painted an encouraging start of fiscal year 2024 by delivering a set of robust financial results this quarter, with top-line performance beating the high end of our expectations. Following a tireless year of trial and development, our multi-pronged business lines have pivoted towards a stable recovery and anchored fruitful yields. mainly benefiting from the strong post-COVID recovery of demand, consumption, and traveling. While our new business has begun making meaningful contributions to the company's revenue, thereby invigorates growth and margin expansion. Our bottom-line performance has also achieved a promising growth. Our operating margin and non-GAAP operating margin reaching 18.6%, and 22.3% restructuring for this quarter, depicting a solid resilience across our business lines, thanks to our ongoing efforts in brushing up on operational efficiency and cost control. The delegated plans of our restructured business model, better utilized resources and streamlined cost structure have sharpened our capability to yield better than expected margins in this fiscal quarter, as well as enliven our exploration and ingenious ventures. Coupled with the company's sustainable profitability, resilient business lines, and emerging new initiatives, we have firm conviction in maintaining a healthy growth of our market share and creating sustainable value for our customers and shareholders in the long term. Now, I would like to spend some time to talk about the quarter's performance across our remaining business lines and new initiatives to you in detail. Our key remaining business secured a promising trend, coupled with a positive momentum in our new initiatives. Breaking it down, the overseas test trap business recorded a revenue increase of 52% in dollar terms, or 62% in RMB terms year-over-year for the fiscal quarter of 2024. The Overseas Study consulting business recorded the revenue increase about 27% in dollar terms or 35% in RMB terms year-over-year for this quarter. The Eidos University students business recorded the revenue increase of 26% in dollar terms or 34% increase in RMB terms year-over-year for this quarter. As mentioned in the past quarters, we have launched several new initiatives which mostly revolve around facilitating students all around development. I'm pleased to share that these initiatives have continued to exceed our expectations by yielding consistent growth and meaningful profits to the company. Firstly, the non-endemic children business, which we have offered in around 60 existing cities, focus on cultivating students' innovative ability comprehensive quality we're happy to see increased penetration in those markets we have tap into especially in higher tier cities with a total approximately four hundred and thirty eight thousand student enrollment recorded in this physical quarter the top ten cities in China contribute over sixty percent of the revenue of this business secondly the intelligence learning system and device business service designed to provide a tailored digital learning experience for students has been adopted around 60 cities. We're thrilled to see improved customer retention and scalability of this new business with approximately 181,000 active paid users reported in this quarter. The revenue contribution of this initiative from the top 10 cities in China is around 60%. On smart education business, educational materials and digitalized smart study solutions have continued to contribute material results to the overall advancements of the company. In summary, our new education business initiatives recorded the revenue increase of 103% in dollar terms or 117% increase in RMB terms year over year for the first quarter of 2024. In addition, beginning in this fiscal year, we're pleased to announce a newly integrated business line, which will be comprised of all of our tourism related business, targeting diverse age groups. This includes our well-grounded study tour and research camp business for students of K-12 and university ages, as well as our newly established tourism business that mainly serves middle-aged and senior audience. Upon consolidation, this tourism-related business line will utilize new rental strengths of knowledge sharing, start teachers, and reputable branding to visualize our capability in serving customers for all age groups. It's our great pleasure to share the performance of New Business Line in detail. Our study tour and research camp business, an initiative that aims to offering students of K-12 and university ages the opportunity to utilize their free time to broaden the scope, knowledge, and cultivate subject interest, has achieved encouraging growth in this summer. Thanks to the strong post-COVID recovery of demand, resumed consumption and traveling, we have conducted study tour and the research camp in over 50 cities across the country, with the top 10 cities in China offering over 55% of the revenue share of this new initiative. We finally expect a new business to contribute minimum revenue in this fiscal year. In addition to success of our study tour and the research camp offerings, we also began venturing into the tourism business to expand our reach to old age groups, including the middle aged and elderly individuals. During this physical quarter, we piloted a number of top quality tourism offerings in featured provinces, including Zhejiang, Sichuan, Shanxi, Gansu, and Henan. And we are sincerely grateful for the increasing traction that these novel adventures have gained. As we are still at a very preliminary stage of planning, testifying and evaluating the visibility of this business in selected districts, we will keep you posted should there be timely updates on this new world. With regard to our OMO system, we have persisted in revamping our platform and leveraged our educational infrastructure and technology edge on remaining key business and new business with a vision to provide advanced diversified education service to customers of all ages. During this reporting period, a total of $45.6 million has been invested in our OMO teaching platform, which equips us with the flexibility to maintain top-notch service to students during the pandemic. During this reporting period, Easterby has embraced a multi-platform strategy through an official debut on new platforms, including Taobao and its own app, in order to enlarge its customer base and amplify its brand influence. East Buy consistently adhered to developing its private label products that are healthy, tasty, high quality, with good value for money, and has attained instrumental breakthroughs with streams of new products rolled out each month. From groceries to daily necessities, East Buy's live streaming e-commerce has not only helped customers reap good bargains, but also helped farmers, producers, and local enterprise sell their products through strategic marketing strategies. In addition, the brand continued to join hands with local governments to promote unique agriculture products from region to region, nurturing public appreciation towards diverse cultures through inventive content. It also pioneered a new mode of live streaming that incorporated with the product traceability by which our lead teams would unearth the regions of our private label products, factories, and orchards. Our live streams have thereby offered assurance to the customers through guaranteeing products authenticity and visibility. With regard to the company's latest financial position, I'm confident to share with you that the company is in a healthy financial status with cash and cash-equivalent term deposits and short-term investments totaling approximately $4.6 billion. On July 26, 2022, the company's board of directors authorized the share repurchase of up to $500 million of the company ADS World Common Shares during the period from July 26, 8th, 2022 through May 31st, 2023. The company's board of directors further authorized the company to extend its share repurchase program launched in July 2022 by 12 months through May 31st, 2024. As of October 24th, 2023, the company repurchased an aggregate of approximately 6 million ADS for approximately $193.3 million from the open market under this program. Now, I will turn the call over to Cici to share with you about the key financials. Cici, please go ahead.