New Oriental Education & Technology Group, Inc.

Good evening, and thank you for standing by for New Oriental's FY 2024 Third Quarter Results Earnings Conference Call. At this time, all participants are in listen-only mode. After matchments prepared remarks, there will be questions and discussion. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I'd now like to turn the meeting over to your host for today's conference, Ms. Cici Zhao.

Thank you. Hello, everyone, and welcome to New Oriental's third 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 involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public findings 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 websites at investor.neworiental.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. We're pleased to announce that New Oriental has achieved robust growth this quarter that has surpassed our expectations. The remarkable top-line performance this quarter has spoken volumes about sustained recovery across our diverse business lines, while steady expansion of our new business made healthy contributions to the company's revenue. invigorating our portfolio of innovative endeavors. New Oriental's bottom line performance has achieved encouraging yields, with operating margin and non-GAAP operating margin reaching 9.4% and 11.7% for this quarter, respectively. Thanks to the combined efforts of our restructured business model, by the utilized resources and streamline cost structure. Bolstered by a vital growth across all business line, our commitment to maintaining a healthy market share growth stands firm as we strive to create 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 line and new initiatives to you in detail. our key remaining business have attended a promising upward trajectory while the new initiatives secure positive momentum. Breaking it down, the oversea test drive business recorded the revenue increase of about 53% in dollar terms or 59% in RMB terms year-over-year for the third fiscal quarter of 2024. The overseas study consulting business recorded the revenue increase of about 26% in dollar terms, or 31% in RMB terms year-over-year for this quarter. The adults and university students business recorded the revenue increase of 53% in dollar terms, or 60% increase in RMB terms year-over-year for this quarter. Our multi-pronged new initiatives, which mostly revolve around facilitating students around development have continued to deliver continued growth and meaningful profits to the company. Firstly, the non-academic children's courses, which we have offered in around 60 visiting cities, focuses on cultivating students' innovative ability and comprehensive quality. The markets we have tapped into have reported elevated penetration, especially in higher tier cities. With a total of approximately $355 student enrollment recorded in this quarter, the top 10 cities in China contribute over 60% of this business. Secondly, the intelligence learning system and device business, a service designed to provide a tailored digital learning experience for students to enhance learning efficiency, has been adopted in around 60 cities. We have observed enhanced customer retention rate and scalability of this new initiative business with approximately 188,000 active paid users recorded in this quarter. The revenue contribution of this initiative from the top 10 cities in China is over 55%. Our smart education business, educational material and digitalized smart study solutions have continued to contribute material results to the overall advancements of the company. In summary, our new educational business initiatives reported a revenue increase of 73% in dollar terms or 80% increase in RMB terms year over year for this quarter. In addition, as mentioned in the past quarters, we inaugurated a newly integrated tourism related business line as one of our creative ventures. tailored with diverse offerings of cultural trips, study tours in China and overseas, as well as camp education. New Oriental's cultural tourism business shared the spirit to provide premium quality travel experience that are infused with joy from cultural exchange, knowledge sharing, and personal fulfillment. Within the new business line, Our study tour and research camp business for students of K-12 and university age achieved inspiring growth in this quarter. We have conducted study tours and research camp in over 50 cities across the country, with the top 10 city in China offering over 55% of revenue share of this business. We also pilot a number of top-notch tourism offerings to expand our reach to all age groups, including the middle-aged and elderly individuals across 25 featured provinces. As we're still at the preliminary stage of the planning, testifying, and evaluating the availability of this business in select regions, we will keep you posted should there be timely updates. With regards to our OMO system, online merge offline system, we have to persist in revamping our platform and leverage our educational infrastructure and technology edge on remaining key business and new initiative with the vision to provide advanced diversified education services to customers of all ages. During this reporting period, a total of $25.5 million has been invested in our OMO teaching platform. which equips us with flexibility to maintain arrival service to students. With regards to the Easter Buy, Easter Buy attained sustainable growth momentum in this quarter thanks to a rapid development of its private label products. As part of the ongoing expansion strategy for an early venture like Easter Buy, we have devoted substantial investments to support the growth of the company including the optimization of the Easterby's multi-platform strategies, supply chains, product offerings, as well as quality control to safeguard on product quality and regions. We're glad to see the Easterby has further enlarged its customer base following the latest establishment of time with the Yuhui channel on Douyin. In addition, Further enhancements in Easterby have been made through our comprehensive organizational structure, strategy hands for professional talents and app upgrades. All of which strengthened Easterby's private label products and live streaming e-commerce. The resources we committed into Easterby have thankfully nourished improved user management and loyalty. And we look forward to leverage these inputs to propel further growth of the platform that promise premium offerings and sustainable growth for our customers. With regards to the company's latest financial position, I'm confident to share with you that the company is in a healthy financial state with cash and cash equivalent term deposits and short-term investments totaling approximately $4.8 billion. On July 26, 2022, the company's board of directors authorized the share repurchase of up to $500 million of the company ADS work common shares during the period from July 28, 2022 to May 31, 2023. The company's board of directors further authorized the company to extend its share repurchase program launched in July 2022 by 12 months to May 31, 2024. As of yesterday, April 23, 2024, the company repurchased an aggregate of approximately $6 million ADS for approximately $195.3 million from the open market and then the share repurchase program. Now I will turn the call over to Cici to share with you about the key financials. Cici, please go ahead.