New Oriental Education & Technology Group, Inc.

Good evening, and thank you for standing by for New Oriental's full year 2024 fourth quarter results earnings conference call. At this time, all participants are in listen-only mode. After the 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 this time. I would now like to turn the meeting over to your host for today's conference, Ms. Ceci Tsao. Please go ahead. Thank you.

Hello, everyone, and welcome to New Oriental's fourth 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 our News Square 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 views 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 has been 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. Stephen Yang. Please go ahead.

Thank you, Cici. Hello, everyone, and thank you for joining us on the call. Before we begin, we would like to firstly extend our gratitude to those who have been supporting and believing in New Oriental. We understand there might be some questions with regards to the latest separation of Easter by and time with Yuhui. Before we go into New Oriental's performance, we would like to stress that this decision was carefully made upon a considerable amount of transparent communication with Dong Yuhui, who has been a beloved colleague of ours and drove instrumental growth of East Dubai. As we sent Yuhui our best regards for his new venture, the company remains fully dedicated in forging a stable path of healthy growth for the platform, devoting our very best to live up to our customer-centric promise to offer a diverse range of premium, healthy, delicious, yet cost-effective products to our customers. Anchored by the exceptional teams, far-reaching partnerships, over 400 SKUs, and distribution channels, which we thankfully built over the years, strategic pivot to expand our multi-client presence are in the works. And we will continue to leverage Easterby to propel knowledge sharing, product dissemination, and culture promotion to our valued customers in the long term. For more details, please refer to Easterby's latest announcements. And now, let's deep dive into New Oriental's fiscal year 2024 performance. For New Oriental's financial results of this fiscal quarter, We are pleased to announce that the company has achieved a healthy growth in our key businesses with a solid top line growth of 32.1%. Strong demands have fueled stable recovery across our business lines, while our portfolio of innovative ventures have invigorated the company's revenue with healthy contributions. New Oriental's bottom line performance has achieved the yields with operating margin and non-GAAP operating margin reaching 0.9% and 3.2% for this quarter, respectively. Except for Easter Bites investment in private label products and certain costs and expenses related to the platform of time with Yuhui, our spending accelerated capacity expansion and newly integrated tourism-related business as well as additional incentives to the management and staff have led to a short-term impact on our operating margin this quarter. However, coupled with the increasing market demand, we strongly believe we made the right move to input the right investment. We anticipate that the pressure on margins for the educational business will reduce in the next fiscal year. as we continue to improve the utilization of facility and operating efficiency. We expect our operating margin of the company, excluding Easterby, will expand year-over-year in the first quarter of 2025 and deliver satisfactory operating profit for the full fiscal year 2025. Now, I would like to spend some time to talk about this quarter's performance across our existing business lines and new initiatives to you in detail. Our key remaining business secured an encouraging trend, and new initiatives have shown positive momentum. Breaking it down, the overseas test drive business recorded a revenue increase of 18% in dollar terms were 23% in RMB terms year-over-year for this quarter. The overseas study consulting business recorded revenue increase of about 17% in dollar terms or 23% in RMB terms year-over-year for the first fiscal quarter of 2024. The adults and university students business recorded the revenue increase of 16% in dollar terms were 21% increase in R&B terms year-over-year for this quarter. Our new initiatives, which mostly revolve around facilitating students' all-round development, have continued to sustain a strong momentum in their respective ventures. Firstly, the non-academic tutoring courses, which we have offered in around 60 existing cities, focuses on cultivating students' innovative ability and comprehensive quality. We're excited to see further penetration in those markets we have tapped into, especially in high-tier cities, which total approximately 875,000 students' enrollments reported in this fiscal quarter. The top 10 cities in China contribute over 60% of this business. Secondly, the intelligent learning system and device business has been adopted in around 60 cities. We're happy to see stable customer retention and scalability with approximately 188,000 active paid users reported in this quarter. The revenue contribution of this initiative from the top 10 cities in China is over 55%. Our smart education business, education material and digitalized smart study solutions have continued to contribute material yields to the overall advancement of the company. In summary, our new educational business initiatives recorded a revenue increase of 50% in dollar terms or 57% increase in RMB terms year-over-year for this quarter. In addition, the newly integrated tourism-related business line One of our creative endeavors is tailored with diverse offerings of cultural trips, study tours in China and overseas, as well as the camp education. Within the business line, our study tour and research camp is for students of K-12 and university age continuing to achieve sustainable growth this quarter. We have conducted the study towards the research camp in over 55 cities across the country, with the top 10 cities in China offering over 55% of the revenue share of this new business. We also piloted a number of top-notch tourism offerings to expand our reach to old age groups, including middle-aged and elderly individuals across 27 featured provinces. As we are still at a preliminary stage of planning, testifying, and evaluating the visibility of the business in selected regions, we will keep you posted should there be timely updates. With regards to our OMO system, we have proceeded in revamping our platform and leveraged our education infrastructure and technology edge on remaining key business and new initiatives. with a vision to provide advanced diversified education service to customers of all ages. During the reporting period, a total of $30.5 million has been invested in our OMO teaching platform, which equips us of the flexibility to maintain arrival service to students. With regards 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 $4.9 billion. In addition, we would like to highlight the company's board of directors approved a share repurchase program in July 2022, under which the company is authorized to repurchase up to $400 million of the company's ABS or common shares through the next 12 months. The company's board of directors further approved to extend the effective time of the share repurchase program to May 31st, 2025. As of July 30th, to 124. The company repurchased an aggregate of approximately 7.3 million ADSs for approximately $296.1 million from the open market. Now, I will turn the call over to Cici to share with you about the key financials. Cici, please go ahead.