New Oriental Education & Technology Group, Inc.

Good evening and thank you for standing by for New Oriental's FY2026 5th Quarter Results Earnings Conference Call. At this time, all participants are in 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. Now I'd like to turn the meeting over to your host for today's conference, Ms. Cici Zhao.

Thank you. Hello, everyone, and welcome to the first fiscal quarter 2026 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 Rantos' 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 uncertainty. 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'll 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. Before diving into the details of our first quarter results, I would like to share that after periods of testing and trawling various business models and offerings, formulating the right strategy and direction for New Oriental, We're pleased to see that the company has now entered a stable growth trajectory. This quarter, we recorded an encouraging set of the results that exceeded our expectations, mainly driven by our strong capabilities, enhancing operational resilience and sustainable profitability. This quarter's total net revenue has increased by 6.1% year over year. Bottom line wise, We are delighted to see that our efforts to manage costs and streamline efficiency has yielded tangible success, with non-GAAP operating margin reaching 22% this quarter, representing a year-over-year improvement of 100 basis points. Our key remaining business remains solid, while our new initiatives have continuously demonstrated positive momentum. Breaking it down, for the first physical quarter of 2026, oversea test practice recorded the revenue increase of about 1% year-over-year. Oversea study consulting business recorded the revenue increase of about 2% year-over-year. Our adults and university students' business recorded the revenue increase of 14% year-over-year. At the same time, our continued investments in new education business initiatives, primarily centered on facilitating students' all-around development, have delivered consistent progress, further driving the company's overall momentum. Firstly, the non-academic children's business, which focuses on cultivating students' innovative ability and comprehensive qualities, has now been rolled out to around 60 cities. Market penetration has grown steadily, particularly across high-tier cities. The top 10 cities contribute over 60% of this business. Secondly, the intelligent learning system and device business, which utilize our past teaching experience, data, technology to provide personalized and targeted learning and exercise content to improve students' learning efficiency has been tested in around 60 existing cities. We're encouraged by the improved customer retention and scalability of these new initiatives. The top 10 cities contribute over 50% of this business. In summary, our new educational business initiatives recorded the revenue increase of about 15% year-over-year for the first quarter of 2026. Moving to the integrated tourism-related business line and breaking it down, both domestic and international study tours and research camps for K-12 and university students were conducted across 55 cities nationwide, where the top 10 cities contributed over 50% of our revenue. In parallel, we provide a series of premium tourism offerings primarily designed for middle-aged and senior audiences. across 30 feature province in China and internationally. Our product range has also been extended to now include cultural travel, China study tour, global study tour, and camp education. With regards to our OMO system, our efforts in developing and revamping our online merging offline teaching platform continues. These efforts aim to deliver more advanced and diversified education services to our customers of all ages. A total of $28.5 million have been invested during the quarter to upgrade and maintain our OMO teaching platform. Beyond OMO, we continue to focus on our venture in AI. Our newly launched AI-powered intelligent learning device and smart study solution marks significant steps of our ongoing pursuit to transform education through technology. Encouraged by the positive market feedback, we have been and will continue to refine and embed AI across our offerings to strengthen New Oriental's core capabilities. Simultaneously, we're also leveraging AI to streamline internal operations thereby boosting efficiency and providing enhanced support for our teaching staff. As the industry leader, we're dedicated to driving long-term revenue growth through dual focus on products innovation and operational efficiency. In upcoming quarters, we look forward to sharing tangible results and positive highlights on performance that are backed by our investments in AI. Now, with regards to the EastBuy's performance, in fiscal year 2026, EastBuy strategically invested in its private label portfolio, centered around a promise to deliver products that are healthy, high quality, and good value for money. As we reach EastBuy's product categories, our blockbuster offerings namely the nutritious food product line, has particularly stood out. We have strengthened our capability through rigorous end-to-end quality management from sourcing to after-sales service, which resulted a greater market recognition for our private label products. During the reporting period, EastBuy further advanced its EastBuy app and membership platform, connecting our loyal customer base to premium products and services. As the business continues to evolve steadily, Easterby has intensified its focus on improving operational efficiency and profitability metrics to align closely with the group's corporate strategies. Now I will turn the call over to Cici to share with you about the key financials. Cici, please go ahead.